Startups are all about using limited resources wisely. Often founders think this refers to money, but in reality this refers to time. Founders need to move fast while always having more work to do than time available. This means a razor sharp focus is required to get the right stuff done at the right time.
If a founder has a ‘building a startup’ mentality, they often get distracted by the paraphernalia of setting up a company. Examples include getting business cards printed, designing a logo, creating a perfectly designed site, creating a product that can scale to thousands of users, finding a lawyer, talking to investors, attending networking events. This can keep the early stage founder very busy. But, what does it actually build? It creates a shell of a company, a mirage of what a startup should be.
In the first weeks of a startup, founders need to have a product mindset. They need to get building and testing their product with customers. The goal is to find out if you are building a product people want and to iterate until that is true. Unless you can create something people want, you have no startup. Think of pets.com and Webvan who created the shell of a business — thousands of staff, hundreds of lorries, HR policies, infrastructure etc — but missed the fundamental basis of a startup, a product that people wanted.
Make sure you’re optimising for the right outcome
Sometimes first time founders can want to build a startup so badly, they forget the right outcome is not to have something that looks like a startup. In fact, building a startup is often hiding from the fact that you need to build a product. It’s easier to do HR strategies and worry about mind mapping than it is to worry that everything you’re doing is totally pointless because customers don’t care.
In those first 100 days, the outcome you are aiming for is a strong hunch, backed up with evidence, that potential customers want what you are building.
People don’t talk about wanting certain startups to exist. Most of the time they are thinking about what products they would like to exist to solve a problem (although in reality they probably aren’t thinking about this at all).
For us, a poor outcome at the end of ?Entrepreneur First (EF) is to have a fully functioning startup, but without a product that anyone really wants. The opposite, to finish with a product that people want, but no logo or business cards, is ideal. You can build the ‘startup’ infrastructure later.
Demolish and destroy
It is a well known phenomena that people get attached to things they have or are given. This endowment effect ?happens in building startups and from what I have seen it’s more prevalent when people are in startup mindset rather than in product mindset. A startup building mindset creates baggage. Baggage weighs founders down and prevents innovation and iteration.
Let’s break that down. When founders are in startup mindset, it is highly likely they have built a significant number of ‘assets’ that they feel some level of ownership towards. Maybe it’s a brand or logo, a name, a reputation etc. Suddenly this ownership becomes a burden. In very early stage startups, there is an expectation of creative destruction where you have to scrap what you have created to build something better. Creative destruction is easier and less painful when there is less to destroy. If a founder has the product building mindset, all they have at stake is the product they have been building. Yes, it’s still painful to have to iterate on this and potentially to completely change it, but it’s still significantly less painful than destroying the numerous assets connected to ‘your startup’.
It’s not easy
At? EF,? we have seen many early stage founders struggle to get this mindset right. Founders need to remind themselves constantly that time is their most valuable asset. They need to constantly ask themselves whether what they’re doing is really the best use of their time and are they focusing on building a product that people want?