Growing a business is hard work. More than 9 in every 10 startups will fail. They’re pretty terrible odds.
What can a startup founder do? I think a founder requires three distinct types of knowledge and it’s important not to mix them up if you want to improve your odds.
An obvious first step is to know why startups fail in such high numbers. There are, of course many reasons, but the biggest single reason is making something that people don’t want – or don’t want enough. This happens because many startups are “idea-centric”, that is, they put their energies into executing their idea rather than checking if there is sufficient demand for the idea. It’s an amazingly common mistake that too few founders seem aware of.
But knowing why startups fail is not the same as knowing how to stop your startup from failing. Many startup I’ve worked with are familiar with the common failure and success stories. They have read The Lean Startup (by Eric Ries) and therefore “know” the “build it and they will come” approach is the recipe for disaster. Further, they know they need to validate demand, validate their product and validate their business model. They just don’t know how.
So, the second step is less about knowing what you need to do and why and more about knowing how to do it.
In the case of a startup, there’s a lot of “how to” knowledge to master here. If fact, there’s a bamboozling range of tools and techniques that founders must learn. The practical knowledge of how to run customer interviews without bias, say, or how to do effective keyword research to locate the best and worst customer niches, requires a lot of rapid learning. Furthermore, it’s harder to find this sort of “how to” knowledge than the stuff expounding the basic principles. That said, it is available and a lot can be learned from books and websites – given time, effort and application. The issue is that it takes time and this is typically what most startups lack.
But even if a founder does manage to master this practical, how-to knowledge in a variety of areas, there’s still a problem: how to use it well in your company, at this particular time, at this particular stage, with these particular requirements.
To succeed here, you need more than the knowledge of what you should do and how you could do it. You need a different type of knowledge altogether. I’m going to call it expert knowledge. Expert knowledge isn’t just more “knowing that” and “knowing how” knowledge. It’s typically a unique combination that enables its possessor to do things well – with experience and expertise. It’s based on accumulated experience and typically requires the exercise of judgement. It helps you know what to do in a particular situations in the smartest way possible.
There are many people who are familiar with the principles of running a businesses well. There are also many who know how to do specific things like keyword marketing. But if you want to grow your business, it’s invaluable to work with people who possess genuine expertise in a range of areas.. They know the theory. But more than that they have applied the theory themselves over and over and learned what works, what doesn’t, what might, what might not. Experts don’t always know all the answers. Every business is different; every business has different requirements. But experts know the right questions to ask. They know the shortcuts that can be taken and when not to take a shortcut. They will see opportunities you may miss and help you avoid pitfalls that could pull you down.
If you want to improve the odds of startup success, there’s lots you need to know and lots you need to do. But if you want to do what you need to do well, I always recommend to startups that they get themselves genuine experts. They need specific expertise in specific areas, and they need general business expertise. And a business expert in this context is someone who has navigated the path to startup success before.