Advice to founders: Is my startup successful because investors like it, or do investors like it because it’s successful?
When you start something new, you embark on one of the oldest adventures in history: the search for meaning. However, the meaning of this new project is very different for each stakeholder involved. It certainly has meaning to you, some meaning, if you started it; but unless you’re creating something purely for your own satisfaction, this new project needs meaning for other people as well.
That’s where the other party comes in. It doesn’t matter if you’re creating a service, a product, software, hardware, or a stationary piece of art. If there’s another party, a customer, a spectator, a user, they need to be able to give meaning to this thing you created.
Unless you’re lucky enough to have resources, chances are you’ll need a benefactor or patron to get started. They’ll give you the capital you need to acquire tools, materials, and added-value resources: paint, brushes, code, partners in crime. These patrons may very well become partners in crime themselves, and are seeking the same thing you are: meaning. Their product is capital and expertise. Their meaning may be to achieve a goal, like ending world hunger or slowing down climate change, and/or to increase their capital.
But your patrons, your investors, are not your users. The meaning they get out of your project will only come to fruition if you succeed in providing meaning to your users.
This post was going to be a long analysis of how Euthyphro’s Dilemma extends to startups, like a cat that chases its own tail, and how piety in startup world may sometimes be misconstrued as an unnecessary lust for attention from the investing world. Too complicated.
Value, value, value
Instead, let’s talk specifics. Self-serving products don’t get too far. If you care about your project, your baby, and about the investors who support you, don’t build meaning for your investors: build meaning for your users. The moment your users get meaning from you, you generate value. Value is your users’ time, feelings, life, money; it lives in your users’ mind whenever they think about you and your project because you affect them in a positive way.
We’ve talked about the meaning that your project represents to your investors and to your users. What about you?
Well, the meaning and value of your project to you can be a number of things. It can be your desire for success or external validation, or even your passion for a particular problem you’re trying to solve or industry. It can be anything, but whatever it is, the meaning to you is what powers your drive to keep working and keep looking for your users’ meaning.
Don’t make the mistake of thinking your users’ value is the same as your value or your investors’ value. That’s a big part of how startups fail. You’re not your own user. That’s a fallacy. It doesn’t matter if your users are in the same profession or industry as you are. You’re the creator and builder of this project, period. You’ll never be a user. Users don’t care about your feelings, don’t get attached to bad ideas, and don’t get attached to the hard work you put in your company. You do.
So be ignorant and willing to learn. Search for your users’ meaning admitting you don’t know it. Ask them, talk to them, experiment until it clicks. Good investors will guide you in that direction, will explain similar patterns to you, but will not tell you how to run your company or build your product. If they do, that’s not a good sign.
Escape the bubble
I worked at a VC once, a long time ago. It was a fun job, but I was too young to understand we were doing it all wrong. A line of startup founders walked through our offices every day with the ambition to create something amazing with our capital and advice, but instead, we were advising them to pattern match with what “investors were looking for”. Because they were breathing this environment all day, every day, they convinced themselves that investors knew what value meant for their users.
That’s the only problem of starting a company in San Francisco. San Francisco is both ground for startup creation and for investment, and the two are very different from each other. The appeal of capital and exposure confuses founders frequently with the wrong incentives and immerses them in a culture where they begin to fantasize that their users are the investors and founders they talk to every day.
To make matters worse, FOMO in Silicon Valley is real and you may actually get money from investors based on how your product appeals to them, not to your users. That’s the carnivore plant of startups. It’s sweet and appealing at first, but a great way to fall into a trap. Good investors will make this face 😬 and do this with their shoulders 🤷♀️ if you ask them what you should be building.
There are 2 proven ways to steer yourself and your team in the right direction:
- Be ignorant and admit your ignorance. You’re not your user and never will be. Embrace that fully. Don’t be cocky.
- Immerse yourself in your users’ culture and be curious. Be curious, ask questions, establish relationships with your users, use data, question your existence on a weekly basis. Rinse and repeat. Experiment. Show designs to your users and ask for their opinion. Have them play with prototypes. Look for users who are honest and don’t care about your feelings.