Every time you turn around it seems like some company, that started from their parent’s garage, is worth over a BILLION dollars. (I could think of a thing or two to do with that kind of money….)
For most of us, obtaining this kind of wealth could only be realized if you became a professional athlete or an actor/actress. But with so many companies like Facebook, Uber, Stripe, and Airbnb, it’s easy to think that you’re one idea away from hitting the jackpot.
But that’s not the only reason you want to create a startup … right??
The Most Important Component to Startup Success
Whether you are new to the startup industry or you’re a seasoned vet, there is no shortage of investors, CEO’s, and other experts willing to offer advice on what it takes to succeed.
Many will say it’s all about building a solid TEAM or having a lot of early TRACTION. Yes, these are important, but I’m going to tell you what will ultimately determine whether your startup thrives or dives.
Ready? ….. It’s your “WHY”.
I know, I know … You probably like “what is this dude even talking about.” Let me explain.
Purpose = Profit
There are a few things in life that are guaranteed. Death, taxes and that if you choose to create a startup, it be an uphill battle. Every single startup, at some point or another, faced some form of opposition that could have put them completely out of business.
Google — At one point attempted to sell its company off for $1M to Yahoo so they could go back and focus on their studies at Stanford.
Airbnb – In 2008 Airbnb wasn’t getting much traction and they were low on cash. The founders had to sell boxes of cereal — yes boxes of cereal — just to keep their doors open.
Pandora – Pandora was turned down by investors more than 300 times!
When you are faced with adversity, WHY you started in the first place will help you get to the other side.
This is something that won’t be preached widely in the industry. It won’t be on any applications for pitch competitions and is overlooked when creating executive summaries, but there is one thing I can guarantee. If you don’t identify “why you’re doing it” in the beginning, it will find you later down the road.
It sure did for us.
It’s easy to tell yourself that you’re truly passionate about your idea and give the same pageant response when others ask. The question is, does this align with what your gut is telling you?
“Keepin it Real” With Yourself
Sue Shellenbarger quoted a study in 2010 which showed that as early as age 3, children have what researchers call a “positivity bias”—a tendency to see themselves as something other than their abilities and to exaggerate positive traits in others.
I personally don’t see this a bad thing as we all need to encourage ourselves. But this isn’t the same as telling yourself that you are doing something for one reason and it’s actually something completely different.
I told my co-founders, investors, friends, and family that our startup was created to help struggling restaurant owners. But if I’m honest, I just wanted to raise money and be featured in TechCrunch. I wasn’t able to truly be honest with myself until I was polishing silverware at a restaurant in an attempt to keep the company going.
It’s better to face the facts now than to wait 5 years when you’ve already sacrificed so much. Here are a couple of questions you should ask yourself before doing anything else as it relates to your business.
1. Do I have a background or a set of life experiences that align with the problem that I’m solving?
2. Am I empathetic to the people who are faced with the problem I am solving?
3. If this business doesn’t make any money would you still care about solving the problem?
Nobody can give you the correct answer to these questions. You are the only person that can answer these questions and determine whether or not they are “Good” answers.
The Reason it Matters
If you answered “no” to one or more of these questions, you might be headed down the wrong path. Here are few reasons why:
1. You will pivot for $$$
A pivot is a term used to describe a change in direction. Pivots are good and will happen multiple times during your startup’s lifecycle. However, pivots should be driven based on customers’ needs and market demands not just what’s going to make you money.
Our startup Swapsidy pivoted to six — Yes 6! — different product ideas not because of what customers were saying, but because what potential investors said. Being the CEO, I was more concerned with raising money than I was solving a problem for our customers.
It didn’t work out and rightfully so.
2. You won’t listen to your customers
The customers you service are the lifeblood of your company. Creating a product that solves their problem should be a top priority. If you don’t have a personal connection to the problem or to the people that have it, then what they say won’t matter much.
Instead, your business decisions will be fueled by money, public opinion, or something else. Sure this may work for some time, but your customers will quickly switch to another offering as soon as one becomes available.
3. You won’t be eager to learn more about your market
One of our start-ups helped restaurants run more profitable promotions, but honestly, we couldn’t have cared less about the restaurant space. We learned just enough information to ensure that we didn’t sound stupid when talking to potential investors and customers.
A genuine interest in the problem your solving and the industry is a must! If you want to be in business for a long time then you need to continue to learn.
To sum it all up
The last thing we want to do is discourage you from turning your idea into the business of your dreams. We just want to see it happen! If you are connected to the problem, you will continue to push through when times get tough.
Now it’s difficult to build a team that is as equally passionate about the same things that you are. We are all motivated by different things, but it’s especially important that the founders have a genuine passion for solving the customer’s pain points.
Do you think you need to be personally connected to the problem your startup solves? Let us know in the comments below!