Welcome

Here are some of my thoughts on Tech Startups. I have worked in a number of Startups and I tend to see the same problems come up time and again. There are no silver bullets, but I have picked up some pretty sane advice along the way; sometimes the hard way and sometimes the easy way (someone else found out the hard way and told me about it). This is a collection of all that advice.

What is a Startup really?

We've spotted a gap in the market; we've felt some pain trying to do something, and we think "this should be easier" and we ask ourselves "why hasn't this been done yet?". And the answer may be a) that no-one has bothered to yet or b) people have bothered but executed badly or c) that it exists but for a different target market or d) that it is much harder than you realise and people have tried and failed (but we don't necessarily see the failed ventures) or more rarely e) that no-one has thought of it yet.

Ok we've got our idea, and we've done our research. We are going to be the best product that solves problem X for some kind of customer. The market is big(!) if we just get 1% of it we'll be huge. And better yet, once we solve X we can easily solve Y which opens up new markets and makes X even more attractive!

Ok so this is basically where every Startup begins. This is nothing special. We may be right, maybe there really is an opportunity, and it just takes us to apply ourselves, work hard, get some good people onboard and commit to making it a success.

But there is so much we don't know and so many things can and will go wrong. That's okay we'll jump over these hurdles. But what about things we can't jump over? like a recession? Well maybe we can plan for that or even benefit from it(!) but what about a global pandemic? What about a competitor starting up at the same time with more money and know-how? We could say these are all highly unlikely, and it would be really bad luck, and anyhow we miss 100% of the shots we don't take, right?

This is the tight rope we walk. We need to have vaulting ambition, we need to believe we are really doing something different and that customers should choose us. And we also need to know where we fit into the bigger picture: a) what problem do we solve and what do we not solve? b) what broader forces could help or hinder us? c) what competitors exist or could spring up and copy us?

Ok so we've got our idea, we've done our research, we know what we are doing and what we're not doing. How do we do it? This is the iceberg under the water bit. Sure, the business strategy can be extremely hard to make simple; but the hard yards is actually doing it. And I don't mean putting in the effort day after day. I mean it's one thing to have an idea and be able to explain it externally (sales) and internally (leadership); but it's a whole other thing to execute it.

So this brings us to execution.

The central question in a Startup is "what are we going to do differently?". Why? It ties together the business strategy (if we are to win business then why should our customer choose us over others?) and the execution (if we have limited time and money then what are we going to do differently to others in order to out-compete them?).

So for example, our product might be commodity but our differentiation is to have amazing customer service (e.g. disrupt the home energy supply market). That's the business strategy. The execution would be "how are we going to make an excellent customer service team?". Perhaps the incumbent also tried this but failed. Do we need to look to companies who already have amazing CS and copy them? Do we need to research everything there is on CS and come up with something new? Do we take an extreme stance like being very liberal with customer refunds because we believe that's a worthy investment in our brand and could generate great word-of-mouth PR for us?

If we aren't really intentional about our strategy and execution then we are going to be leaving a lot of our success down to luck. The answer to the question of "what are we going to do differently?" is often something like "we will ...work harder", or "...have a nicer user experience", or "...have this one feature others don't". Sometimes all three are combined into one nebulous product idea taking months/years to build before we've learnt anything about whether it's a valuable idea. This is a recipe for luck taking the steering wheel.

A lot of our success will be down to luck of course. But let's make sure we have the best shot possible! Let's be really clear about what we are aiming for as a business. Let's be really clear about what we value in our team culture and what we don't(!) (this bit is often left out). Let's be really clear about how we want to execute (e.g. we are going to be sales-heavy because we believe it's about first-mover advantage in this industry; or e.g. we are going to be engineering-heavy because we believe that product quality is the biggest driver of adoption and retention in this industry). This is what we mean when we talk about "being intentional" - don't let the decisions about these things just fall out of casual conversations or come from one book (or blog post!) that we've read. Do the work to discuss, debate and formalise these things, then communicate them over and over again.

Sometimes we fall for the cargo cult fallacy - ostensibly, that if we copy another successful company in everything they do, then we will be successful too. In fact, it's worse: what I often see Startups do is look at successful companies and how they currently do things (as opposed to what they did when they were early-stage) and copy that (like using OKRs or a microservice architecture) not realising that these were adopted as part of a scaling trade-off many years down the line.

We do want to learn from others and what they've done well. But before we copy what other people do, we need to figure out if what worked for them would work for us: a) are they a similar size company? b) are they in a market with similar dynamics? c) can we make the same trade-offs as them given our funding and runway? d) if we are copying some Y aspect, did they actually need to solve X first? or effectively, is copying them really as simple as copying the values they've published? In my experience, it is unfortunately not as simple as copy-pasting another company's approach. Again it's about the execution - the journey that that company went on to get to their set of beliefs that works for them - and it's very hard to simply copy execution.

Zooming back out, we want to be intentional about our strategy and execution. There are some sane basics that we can follow. There are frameworks for thinking about our business strategy. There are rules of thumb about culture and growing our team. And with a bit of awareness of how our Startup is different, we can apply these rules to our situation. So start with "what are we going to do differently?" and apply it to both business strategy and execution. Then we can grow our business intentionally and make meaningful trade-offs when they come up, as opposed to rolling the dice at every juncture and leaving a (larger) part down to luck.

So here goes. These blog posts go into detail on the various things we need to figure out. I hope I have come up with a set of simple and somewhat self-evident principles that serve as a guide. Ranging from the gritty technical details to the more hand-wavy strategy stuff... this is how to build a Startup with Shacks.