The 10 Ways Startup Advice Is Flawed

iStock_000002891255SmallBoy is there a lot of startup advice floating around these days. To be sure, I routinely feel bad about adding to it. And yet I’m about to do it again.

This time, I’m going to itemize 10 ways that startup advice — typically presented in some form of “I did this, then I got really rich and/or famous, so if you do the same thing, you’ll also get rich and famous” — is flawed.

Startup Advice: The Bad

1. Maybe the thing they did really didn’t cause them to get rich. A lot of startup stories are after-the-fact rationalizations or outright myths. As they say in Latin (and on the “West Wing”): Post hoc ergo propter hoc. In other words, just because something takes place after something else, doesn’t mean the two have a causal relationship.

  • 2. Maybe they got lucky. After all, as my grandmother used to say, “Even a blind pig eventually finds a truffle.”
  • 3. Maybe they did the thing they said and it was actually a bad idea, but they were in the right place at the right time. A lot of powerful businesses (especially network-effects businesses) are largely resilient to incompetence.
  • 4. Maybe the thing they did worked, but only in conjunction with some other unnamed factor. For example, many visionaries partner with a heads-down, practical type.
  • 5. Maybe the thing they did worked, but it only under certain circumstances. For example, perhaps it worked in their industry and not in yours, or only in certain phases of growth, or for certain kinds of teams.
  • 6. Maybe the thing they did used to work, but it doesn’t anymore. For example, perhaps competitors now know how to counter such a move.
  • 7. Maybe the thing they did worked, but for a different reason than they think. For example, perhaps it was the feedback of their customers, not their grand original idea, that was key to success.
  • 8. Maybe they didn’t really do the thing they said they did. Most of the mythological startup stories are highly misleading. Many of us remember the past the way we wish it had been rather than the way it actually was.
  • 9. Maybe they’re not really rich and/or famous. A lot of startup energy goes into what I call “success theater” –- that is, convincing the world that you and your startup is successful. Next time you’re listening to a guru, ask yourself: How do I really know that they’re successful? What is their definition of success? What’s mine?
  • 10. Maybe they have an agenda. Ask yourself: Does this person stand to benefit if I follow this advice? The VCs I know and trust are honest and very pro-entrepreneur, but I routinely hear others give advice that entrepreneurs should be suspicious of. Fundamentally, their incentives are based on having a portfolio of startups. As an entrepreneur, you have a portfolio of one. Think about that the next time a VC advises you to swing for the fences.

  • Startup Advice: The Good

    I hope by now you’re wondering: If all that is true, why should I listen to you? Indeed, you don’t know how successful I’ve really been. You don’t know if the things I say I did really contributed to that success. And most of all, you don’t know what my real agenda is.

    Startup advice can, however, be very valuable — the key is to look for actionable advice that can be applied in small batches, has a measurable outcome and is based on coherent principles that you understand.

    Actionable advice proposes a set of behaviors that you’re capable of emulating. I laugh when I hear advice that starts with “Raise significant capital from the top one or two VCs” or “Raise money from VCs you’ve already worked with.” Not everybody has that option. So advice along those lines is interesting but moot.

    Advice that works in small batches can be tested and applied over time. Ask yourself: “If this theory is wrong, and I attempt it, am I doomed?” I have found that most good ideas are good in parts, too. Can you try listening to customers just a little bit, and see how that goes? Can you try a slightly more agile release process? Be especially wary of “all-or-nothing” advice. Few things in life are truly that binary.

    A measurable outcome doesn’t necessarily mean hard data. It just a way to assess the effect of the advice you’ve taken. To that end, small batches really help, because you can try lots of different kinds of advice, and pay attention to the correlations between outcomes. This kind of associative, intuitive process is something at which humans excel. Use it.

    And finally, find a coherent set of principles that makes sense to you. Extreme Programming is an especially good example of this. Each of the practices is based on a set of clear principles, and these principles suggest a series of interlocking practices –- each one reinforces the others. Lean Thinking, Boyd’s OODA loop (maneuver warfare) and Customer Development are other good examples.

    But most importantly: Be wary of advice that you don’t understand. If you don’t understand the principles behind what you’re being advised to do, you won’t be able to tell if applying them is working or not.

    Eric Ries is a serial entrepreneur and author of the blog Startup Lessons Learned.