I think we have almost completed our efforts to stamp out venture tourism at 1871, our digital startup factory, in Chicago. There's a right way to do these things, but it's not by the bus load or by constantly bothering and interfering with the busy people who are trying to build their businesses. This isn't what we mean when we talk about the desirability and inevitability of disruption. Seeing the sights is nice, but doing real work together is what gets the right things done. If it was a straightforward or easy process, everyone would be doing it instead of talking about trying to do it or pretending to do it with fancy coffee makers and free beer.
And I'm also hoping that we're seeing the last few groups of corporate executives who think that 1871 is an entrepreneurial petting zoo where they can stop by for a short visit while they're downtown before a ball game or dinner and, apparently as a result of some new form of osmosis, have an ounce or two of innovation juice rub off on them and also discover that maybe a few drops of digital disruption have made it into their own systems. Here again, success and results are a matter of analysis and application rather than attitude and artifacts. You can't win a race with your mouth and all the pretenders and the props in the world won't change that simple fact.
But unfortunately putting an end to most of this superficial stuff in our place hasn't really solved the broader problem because it's just oozed out into the world at large and you've got a bunch of bozos taking their bullshit on the road and way too many people willing (for their own reasons) to help make that happen. Week in and week out these days, there's a tech event everywhere you look and a bunch of promoters and sponsors trying to sell tickets and fill seats along with a million media outlets looking for cheap content and talking heads to wrap their ads around. It appears that they'll basically take anyone they can get to talk about tech topics whether they have anything valuable to say or know what they're talking about. And putting five no-nothing speakers on a series of panels doesn’t make things any better any more than combining two lukewarm cups of coffee makes a hot drink.
I know that this isn't a new phenomenon in any respect, but it really hurts our industry in particular (where a lot of older buyers and conservative executives are already reluctant and skittish to commit to new solutions) to have a situation where (a) the real talents are head down and too busy working their butts off (often in stealth mode) to participate in these circuses and, as a result, (b) the vacuum is being filled by wanna-bes and wishful thinkers who have loads of time on their hands because their own businesses are going nowhere. I find it especially interesting that a lot of these guys are the very big talkers who've never built or exited even one successful business on their own, but they're more than happy to tell you all day long how you should be building yours.
And - the saddest thing of all - is that a large reason that their own startups suck is that they're always on the road talking themselves up and focusing on manufacturing "buzz" instead of taking care of business. All the marketing in the world won't turn a pig into a prince if there's no substance behind the smart talk. And all the "promotion" that these guys keep saying is critical to get the word out about their companies (in order to justify their non-stop trips and travel) doesn't help make payroll or get the products built.
Great buzz comes from real results and the best solutions and not from the guys with the biggest set of lungs. It's even worse when they don't know what they are talking about and end up giving their audience a brutal mixture of bullshit and bad advice in the bargain which is obviously not a good deal for anyone.
I've just suffered through 3 or 4 of these business implosions and in every case you can point to an entrepreneur who was too busy spewing this stuff and drinking his own Kool-Aid to realize that his business was slipping through his fingers and down the drain. These screw ups come in all sizes and shapes, but here are 3 primary potholes and pieces of bad advice that you want to be sure to avoid. Remember that it's much smarter to miss the pothole entirely than it is to get a great deal on the tow truck that eventually pulls you out of the ditch.
(1) Don't fake it before you make it
Recently, I read about one of these blowhards explaining to an audience that – not too long ago - he didn’t have a real product or service (as if he does today), but he was out there trying to sell investors and other gullible people his unbuilt and ultimately unscalable “solution” (which he was trying from demo to demo to have his back office people pull off manually in real time) as a form of market research in order to determine if real customers would buy the actual, to-be-built, service in the future.
We actually saw this guy’s “pitch” a while ago and had a really good laugh afterwards that he could seriously imagine that anyone with the slightest technical know-how wouldn’t understand instantly that there was no “there” there. Nonetheless, at the talk, his sage advice to the listeners was to “fake it until you make it” which has to be the worst single thing you could suggest to anyone who was serious about building an actual business rather than just trying to raise some money from a bunch of people too stupid to look under the hood of the operation and see that there was nothing there.
And, what’s worse, is that this kind of loose and ignorant talk encourages other young and eager entrepreneurs to tell investors and prospective customers just the rosy parts of their story and a few fibs and a white lie or two in the process of their pitches thinking that this is the way to get their deals done. It’s never been a good idea to assume that the guys with the dough are dumber than you or that they can’t see through these kinds of stories. You may feel better at the end of the meetings and think that you pulled it off, but it’ll be just short of forever before you get a call back from these people so I wouldn’t be celebrating or holding your breath.
(2) Nail it before you try to scale it
We try to work with our 1871 member companies and – where possible – to use their products and services ourselves. Most of the time this approach has worked out well although I certainly understand how hard it is in relationships like this for the parties to be wearing multiple hats. But, in some cases, it’s been a disaster and the single largest cause has been that the entrepreneur is so focused on expansion and growth that he or she drops the ball in the base business and fails to do a first-class and reference-ready job of taking care of the existing customers who are the real bread and butter of the business. If your biggest backers and strongest supporters aren’t happy and satisfied using your service, you shouldn’t be worrying about how soon the San Francisco office will be up and running. The market will wait for a superior service – but if your foundation is flawed and falling apart, you’re not going anywhere. Ultimately, no one remembers who the first provider was; it’s the best one that wins the gold.
The second part of this particular pothole is a variation on the same theme. If the dogs are eating the dogfood, make more dog food and keep selling it until you get to a size that matters and a level of operations where you are self-sustaining and not burning cash. Taking your foot off the sales accelerator and starting to worry too soon about the next version of the product and how many killer features your tech guys can think up and add to it is a great way to lose your way. Telling prospects that you’re already working on the next version of the product (because you’re so smart) isn’t a way to pull them into the boat; it’s an invitation for them to wait until V.2 is there and ready to go. They don’t want until you get things right or be your inadvertent beta testers or the victims of your learning curve – sell them what you can deliver today and then build on their real desires and demands for your future enhancements and offerings.
(3) Don't be a mile wide and an inch deep
Trying to be all things to all people is always a formula for failure. Try to do a very few things really well in your products and services and in your business. Trying to solve too many problems and serve too many masters is foolish. Feature and function elaboration (especially when it’s superficial and not deep) is just an ugly form of pollution and something that is driven almost always by your tech team and rarely by your customers or serious prospects. Unserious prospects will bend your ear for hours about all the things that they would like the product to do and – just as soon as it does – be sure to call them back so they can buy it right away. This is why I always say that there’s an infinite demand for the unavailable. Real buyers and especially new buyer hate feature creep – it makes it hard for newbies to get started and costs time and money in training, mistakes and adoption. Not every product or service needs email built in as well. Do a few things really right.
PS: “You Get What You Work for, Not What You Wish for”
