What comes to mind when someone mentions "startups"? The archetypal image of two guys in a garage cranking out a tech-based, soon to be VC-backed startup in Silicon Valley is one of the many myths of the entrepreneurship world that drive away a lot of potential entrepreneurs.
It is apt that the theme of this past Sunday's 11th annual Entrepreneurship Conference focused on rethinking entrepreneurship and breaking the myths that have taken hold in the ecosystem. Though there are many, two myths that surfaced a lot of discussion centered on validating the idea and funding the startup.
Validating the Idea: An idea may seem like a breakthrough to the founder, but it often is just that - a breakthrough to the founder, but not to the customers. Whether it is through a minimal viable product (MVP), surveys, or interviews, customer feedback is critical in the early idea validation stage. It's great when the customer is "shaking your neck saying this is the greatest thing since slice bread," said Andrew Parker, General Partner at Spark Capital. However, that is rarely the case. And, contrary to popular belief, the customer isn't always right. It is important for founders to distinguish between "good" and "bad" customer feedback. The latter happens when "customers don't know the market as well as you," said Alex Douzet, CEO and Co-Founder of The Ladders. Rather than trying to incorporate every customer's feedback and requests, founders should listen to their customers' pain, and then solve it. Dan Barry, a former NASA astronaut, Founder of Denbar Robotics, and Co-Founder of 9th Sense, said, "Having a long-term vision of where I want to be...guides me as to which feedback to use and which to throw away." The long-term vision helps to filter out feedbacks that are unnecessary distractions. The exception is when "customers give you an idea you didn't think of" and can improve your long-term vision, said Lisa Sun, Founder and CEO of Project Gravitas.
Funding the Startup: Getting cash seems like the obvious next step after building an MVP. After all, without funding how can founders take their product to the next level? The problem is that some founders equate getting funding to being successful, forgetting that they're still far from the finish line. Other founders who get "too much money too fast" will start to get sloppy, said Douzet. "If we had money, we would had made more mistakes and been more inefficient," added Pablo Varela, Founding Partner, C7. In other words, founders who bootstrap in their early years learn how to be smart and disciplined in how they allocate their resources. They end up spending more time fine-tuning their products and business models, rather than spreading themselves thinly across too many initiatives. Sometimes, the faster you go, the faster you get nowhere.