Because if I'm scared to say it, it's probably worth saying

February 23 2010

The Missioneur Series #2: The one-eyed startup entrepreneur

This is the second post in a five-part series on missioneurs, a new community of startup and social entrepreneurs.

The premise is that startup entrepreneurs and social entrepreneurs need each other. Alone, too many of their great ideas are struggling and failing. Together, they can fill in each other’s blind spots, build stronger companies and make greater change.[Missioneurship image]

A new post in this series will be published every day this week. Blog subscribers will receive them one day early by email or RSS.

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Yesterday, we discussed the epidemic of startups and non-profits dying needlessly – and why it’s time to do something about it.

Now let’s talk about the startup half of the epidemic, beginning with the single biggest reason why so many promising startups end up in the deadpool: the obsession with execution at the expense of ideas.

Ted Leonsis, former Vice Chairman of AOL, said it best in a speech at the 2007 Wharton Entrepreneurship Conference.

“Ideas are a dime a dozen. It’s all about execution.”

The same advice could just as easily have come from dozens of the most respected thinkers on startup entrepreneurship.

Execution means many things to them, but above all it means focusing on the practical over the sentimental. It means focusing on the day-to-day details of product development, sales, marketing, HR and finance — things that are critical for bringing an idea to life.

Their assumption is that most needless startup deaths – the ones where great ideas don’t make it – are due to too much vision and not enough execution.

So their model CEO is what you might call the “Chief Execution Officer,” one part visionary and nine parts operational.

The Chief Execution Officer’s recipe for success looks something like this, which I could have plagiarized from hundreds of startup how-to’s:

  1. Find an urgent and compelling need in the market
  2. Design a solution to meet this need (this is where the idea comes in, 1 part out of 10)
  3. Identify the key assumptions you are making
  4. Sanity check those assumptions with potential customers and people who know the business
  5. Build a prototype if you need one for assumption testing
  6. De-risk each assumption as quickly and cheaply as possible with real users and customers
  7. Raise money if and only if you must
  8. Continually iterate on your product until you’re ready to come out of beta
  9. Scale by developing new products and new markets, repeating the systematic method described above
  10. Grow, prosper and eventually exit

This recipe is popular in part because it works and in part because it soothes many of a startup’s key players.

Investors like it because it offers clear milestones they can understand and track. Engineers like it because it mirrors their own approach to problem solving, reducing a complex and chaotic system into a series of controlled experiments. Entrepreneurs like it, at least in part, because it depersonalizes success and failure.

Not everybody likes it, though. The two groups who like it least also happen to have the greatest say in whether a startup succeeds.

Customers hate it, and so do your key recruits – the linchpins of your marketing, sales and technology teams who can drive an order-of-magnitude more value than a typical hire.

Customers hate it because they don’t want to buy products, features, benefits or solutions – the things you get when you execute well. They already have the basic things they need in their personal and professional lives, and so they want something more.

They want experiences that move them. They want relationships with real human beings. They want to do things that are meaningful to them. They want to clarify their sense of identity.

They want to buy from people who inspire them, surprise them, challenge them and indulge them.

The same thing is true for the exceptional people you need to hire. Sure, sometimes they work for the money. But the best people work for experiences, relationships, meaning, personal growth and a sense of identity.

These are all ideas.

They are ideas that hard to engineer and hard to fake. You can’t just follow ten easy steps to come up with the ideas that inspire customers and recruits choose you, be loyal to you and evangelize what you’re doing.

You need to be inspired yourself. These ideas need to come authentically from who you are and what you believe in.

Most startup entrepreneurs can’t see this. They have blocked off that softer part of themselves so that they can focus on execution.

This is why it’s so easy for startup entrepreneurs to build gimmicky technologies for TechCrunch readers or bland B2B products in spaces they don’t really care about. Meaninglessness feels normal to them.

So they execute, execute, execute and then wonder why they it’s so hard to stand out, get traction, impress investors and woo the brilliant tech talent that everyone else wants. Even when they execute so well.

The interesting thing, which we’ll explore tomorrow, is that the softer side of entrepreneurship is second nature to social entrepreneurs. That’s why startup entrepreneurs have so much to learn from them.

The problem for social entrepreneurs is that ideas aren’t enough either.

Social entrepreneurs tend to lose sight of the hard practical realities of building something that can last. So they are trapped in a cycle of begging for money, battling bureaucracy and avoiding the technologies they need because either they can’t afford them (they think) or don’t understand them.

Tomorrow, in part 3 of the series, we’ll dig into why so many social entrepreneurs are struggling and how startup entrepreneurs can help. This third post is called, “The one-eyed social entrepreneur.”

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      • talsraviv
        Blake,

        In trying to create a symmetrical ying-yang of personality types, you're misrepresenting startup entrepreneurs.

        Social entrepreneurs may be missing half of the equation, but I don't think the same is true for commercial entrepreneurs. We fail from executing #4 poorly, because we are too inspired by our idea.

        The problem is the opposite: entrepreneurs are too quixotic, and aren't objective enough.

        It's true that social entrepreneurs have a lot to learn from commercial entrepreneurs, but it's not a two-way street. Commercial entrepreneurs are already human as well.

        Tal
      • There's a big difference between an idea and a mission. I agree that some entrepreneurs, especially rookies, get fixated on their idea. But they usually don't get fixated on the question of why their idea matters, which is at the heart of a mission. Being fixated on this question is very healthy, because why an idea matters also raises the question of who it matters to -- and this gets to the heart of unmet market needs.
      • It seems that the problem has to in part be economic. If you start a startup for the mission, you'll likely be content if the business does just well enough to keep everybody paid and happy and progress toward your mission. If you do even better, awesome, but you don't feel like you have to be the next Google.

        If you're an angel or a VC, though, and you want a 100x or more return on your money, that kind of attitude just isn't going to cut it. Most VCs want to fund home runs or go home--they aren't interested in developing a portfolio of solid doubles and triples. Funding boring entrepreneur-bots whose goal is money and growth in themselves, without a strong mission component, at least means that their incentives are aligned even if they're one-eyed.
      • I'm wondering myself exactly how VCs and angels play into this. You're right that if you're goals aren't aligned -- if the missioneur cares above all about mission and the investor cares above all about returns -- you're in for some problems. So in a sense, it may be easier for many investors to fund moneypreneurs.

        That said, we are starting to see more investors looking at multiple bottom lines. And I happen to think that there are a lot of mission-centric business opportunities that can deliver VC-sized returns.
      • I've been struggling with this myself with Enjyn, trying to decide under what conditions, how much and who's money I'd be willing to take, and what's the right time... so far we're lucky to have a start with F&F money, but that's only going to go so far, and my big goal is to find a mission-oriented angel who beleives in what we're doing for artists before then... if necessary, I'll take someone else's money and hope for the best, but I really don't want a blind pile of money that only cares about my exit strategy... We do have a mission, and I think the money needs to align with the mission, while the mission needs to understand that it has to have real money making potential to be viable. Maybe not 100-1000x return on investment, or maybe it does but not in 2-4 years, but most of those projections are hyperbolic and ludicrous anyway, and customers will respect a company with a mission in a way they wouldn't respect a purely profit-seeking beast.
      • It's really hard to know how to think about financing a mission-driven startup partly because it's still largely uncharted terrain.
      • Blake, I like where you're going with this. Two things though:

        1. I think this line of reasoning has its limitations. I don't think it applies to any and all startups. I'd like to hear your thoughts on that.
        2. It would be great to see some real examples to back up what you're saying. I think I can understand most of your claims, but I'd like to see examples where people who have seen success and held on to that softer side.
      • 1. I agree in the sense that some startups can get by without a real (or remarkable) mission, but that they would probably do better with one. Others will need a mission to have much of a chance.

        2. I have a bunch of examples and I think I'm going to put some of them into part 4, the one that describes a missioneur. The interesting thing is that most of the companies we feel strongly enough to love -- and that other people feel strongly enough to hate -- embody a mission.
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