Entrepreneur Office Hours - Issue #10
Why you want Google to steal your product, why you need to stop being a "risk-taker," and why startups need both luck and skill.
I’ve got a confession to make. After finally watching Hamilton on Disney+, I got a wee bit obsessed with our first treasury secretary and decided I needed to read the Ron Chernow biography on which the musical was based. Since Hamilton appears on the $10 bill, and this is my 10th issue of Entrepreneur Office Hours… well… I felt compelled to include a picture of a $10 bill. For what it’s worth, I also feel compelled to explore whether or not we might consider Hamilton an entrepreneur, but I think I’ll save that discussion for a future issue since this one is already packed.
Below you’ll find articles covering everything from validating your startup idea to hiring developers. And, on Web Masters, I got to speak with Bo Peabody, founder of Tripod, about the relationship between luck and skill in startups, which was pretty cool.
In fact, why am I still rambling here? Let’s get you to the content!
But first… a couple more things: 1) please share this email with other people who might get value from it; and, 2) keep sending your questions about startups and entrepreneurship on Twitter, LinkedIn, or just reply to this email.
Every time I hear someone refer to entrepreneurs as “risk-takers,” I want to scream, “NO! THEY’RE THE EXACT OPPOSITE!” That’s because entrepreneurs are actually some of the most risk-averse people I know. Here’s why.
Bo Peabody - The College Kid Who Was Lucky… or Smart
In the late 90s, Bo Peabody launched a "homepage builder" called Tripod as an experiment. It went viral literally overnight, and Bo became known as an entrepreneurial wunderkind. But was it skill and smarts that helped Bo reach the pinnacle of startup success? Or was it just dumb luck? Find out on the newest episode of Web Masters.
Listen to Bo’s story on:
…or just search “Web Masters” wherever you listen to your favorite podcasts.
Never ask people what they think of your startup idea. It's a terrible way to validate a startup because people rarely know what they want. Plus, they'll often lie to avoid hurting your feelings. Instead, here are 8 data-driven strategies for validating whether or not a startup idea is worth pursuing.
Most young founders worry about big companies like Google stealing their “brilliant” startup ideas. But it’s actually the other way around. You want those companies trying to steal your idea. It a lot better than you probably realize.
Office Hours Q&A
My co-founder and I have an idea for an app we want to build that we think could be really popular for college students, but neither of us are technical. What’s the best way to find a developer to help us build it? Would it be better to find a third co-founder who’s technical and give that person a large amount of equity? Should we hire an employee and give a little equity? Or should we go with a contractor and just pay for all development work?
We don’t have a lot of capital to start with, so paying a salary or contractor seems difficult. Be we also don’t want to risk giving up too much equity too soon.
I’m choosing Answer D - None of the above!
Based on what you’ve written here, it seems like you’re getting ahead of yourself. Specifically, you’ve written: “we have an idea for an app we want to build that we think could be really popular for college students.” Two words stand out in that excerpt. First is the word “idea.” Second is the word “think.”
I’ve written extensively about my concerns about entrepreneurs who focus on their ideas. The gist of the issue is that the only people who care about ideas are entrepreneurs, and, in the context of building a successful startup, what entrepreneurs care about doesn’t really matter. What matters is what customers care about, and customers don’t care about your ideas. They care about their problems.
This brings us to the second word I mentioned being concerned with, which is “think.” If you “think” your imagined app would be popular for college students, it’s telling me you don’t know it to be true. You don’t have enough information about your customer, that customer’s problem, or how to articulate it. That’s a big issue you need to resolve before worrying about building anything.
In fact, it seems to me like not having access to someone who can build an app is actually a blessing in disguise. Specifically, as I’ve also written elsewhere, having easy access to coders encourages bad behavior. It allows entrepreneurs to jump straight to building products before they’ve validated a market opportunity.
Lucky for you, you can’t do that! Yes, I realize it doesn’t seem lucky. But, trust me, it is.
So instead of building a product, focus on validating your startup idea by proving market demand and your ability to access that demand. (Note: if you need help with doing that, you can use the advice linked in the article above about data-driven ways to validate ideas.) Once you understand the problem, who has the problem, and how to reach those people, then we can discuss getting a developer. That’s assuming, of course, you still need to develop something. It’s very possible that, In the process of learning about the market opportunity, you might discover a better way to solve the issue that doesn’t actually require creating an app.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!