Entrepreneur Office Hours - Issue #19
Why entrepreneurs struggle with fundraising, why most entrepreneurship advice is about product, and why you should build your company in a niche market.
I’ve got lots of #HotTake opinions this week. Apparently I’m in a mood…
Too much entrepreneurship advice focuses on product and not enough focuses on marketing.
Don’t build a company in a popular market or vertical. Find a tiny niche, dominate it, and live happily ever after.
Most fundraising advice is designed for the wrong audience.
Too many founders waste money on paid advertising.
Read on to see why I believe all these things are true. If you agree, share this issue with a friend. If you disagree, reply and tell me why I’m wrong. I love getting different perspectives!
I couldn’t raise venture capital for 3 years because I kept making the same mistake of following advice that wasn’t meant for my stage of startup. Are you doing the same thing without realizing it?
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Is This the Worst Way Inexperienced Entrepreneurs Waste Money?
Whenever an entrepreneur with a new company asks for advice about buying ads (on Google, Facebook, etc.), I always want to scream "NO! DON'T DO IT! YOU'RE BETTER OFF BURNING YOUR MONEY!" Here's why paying for advertising is one of the worst decisions founders can make.
Office Hours Q&A
I’ve been reading lots of your articles on Medium. They’re really interesting. Definitely a lot different than what most entrepreneurs are advising.
So here’s my question.
Most of the advice I get about entrepreneurship is related to building products. But you’re constantly focusing on marketing and customer acquisition. Why is that? And why do you think so many people prefer talking about products?
I find your perspective really refreshing and makes a lot of sense. But, at the same time, it seems so different than what everyone else is saying that it kind of worries me. Why aren’t more people saying what you’re saying about the importance of marketing over product?
Thanks for the kind words… I think? On one hand, you seem to like my perspective, but, on the other hand, you also seem to be suggesting I might be an idiot who’s completely wrong.
More importantly, if you’re not suggesting I might be an idiot who’s completely wrong, then I’ll go ahead and state it myself: I might be an idiot who’s completely wrong.
I agree that most entrepreneurship advice seems product-focused. Or, at the least, it’s business-focused. By that I mean if it’s not discussing product then it’s discussing hiring, company culture, fundraising, business models, competition, pricing, or any number of other things that have very little to do with customer acquisition strategies.
I’ve got a couple theories about why this is.
First, in the various articles and content I produce, I see some interesting trends in my readership metrics. Specifically, my articles about sales and marketing get significantly less readers than my articles about all those other things I mentioned above, with fundraising articles almost always being the most popular.
This tells me people don’t particularly like reading about customer acquisition. In that context, I wonder if some of the bias you’re feeling is a simple byproduct of feeding audience demand. Personally, I’m lucky to be in a position where I don’t have to care about how big my readership is because my online content/mentorship/advice is more of a hobby than a career. I get paid to teach entrepreneurship by Duke University, and I’m thankful for that. But not every content creator is equally lucky. Some of them rely on the revenue/opportunities they generate from their online content, and if the articles about product and fundraising get more attention than articles about customer acquisition, that’s what they produce.
Admittedly, that’s “benefit of the doubt” theory. I’m sure there’s some truth in it, but not as much as I’d like.
My second theory about why so many people are product-focused in their advice is that entrepreneurship has a built-in expectation of low success rates that enables people to keep focusing on product while hiding behind the caveat that “most startups fail.”
In other words, when you run around saying “most startups fail” and then give your advice about how to build startups, you’re setting yourself up to be able to say anything you want. After all, if your advice doesn’t work, rather than carefully trying to understand what went wrong, you can simply shrug your shoulders and say, “Well… most startups fail even if they do everything right.”
I don’t believe that. I think most startups fail because very few of them do everything right.
To be clear, I’ve got plenty of failed startups in my history. But I don’t look back at those failures, shrug, and say, “I just got unlucky.” Instead, I’ve spent years looking back at those failures and seeing what I did wrong. The biggest mistake I made over and over and over again was focusing on my product and my business while assuming if I had a great product, customers would magically find it. That was 100% wrong.
Customers don’t magically find products. As the entrepreneur, a huge part of your job is making sure people know about what you’re creating. Without that piece, it doesn’t matter how great your product is, when nobody knows about it, they can’t buy it.
Let me repeat that because it’s really, really, really important:
No matter how great your product is, when nobody knows about it, they can’t buy it.
I’m not arguing products don’t matter. I’m just pointing out something that seems blatantly obvious to me, but a lot of people seem to forget: awareness of a product is a single point of failure. In contrast, you can have a flawed product and still make sales. You can have a flawed business model and still generate revenue. You can fail to raise capital and still have a startup. You can have terrible company culture and still have a profitable company. But you can’t sell a product if nobody knows it exists. Period. End of discussion.
So that’s why I argue marketing and sales (i.e. the customer acquisition process) is more important than all those other things so-called entrepreneurship gurus are preaching.
And yes, I could be an enormous idiot. I might be completely wrong. But I don’t think I am. And I think your sense that I’m making a decent point is evidence you believe there’s something wrong with all the other advice you’re getting, too.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!