5 Signs You're Sucking as an Entrepreneur

From Inc.com
4th Dec 2012

How to tell if your start-up is on the wrong track

These days, when I’m talking to entrepreneurs that are making a lot of the same mistakes I was making back then, I’m shocked how oblivious they are to their own suckiness. But I was that way too. There’s something about being an entrepreneur that lends itself to self-deception and delusional optimism. Entrepreneurs thrive in environments where any rational person would say, "This is impossible," or, "It can’t be done." With pride, they naturally ignore anyone who says that they are not capable. So, it’s not surprising that they are often unable to see how they are coming up short.There have been times that I’ve been a really sucky entrepreneur. My first company, OpenVote, was a Web 2.0 company that made Facebook apps. For years, I said that it failed "just like all the other Web 2.0 apps of that time," but really that’s just a convenient excuse. It failed because I sucked as an entrepreneur.

Here are five signs that you are sucking at your start-up:

1. There's not enough growth. As Paul Graham has eloquently pointed out, growth is the purpose of a start-up. If you are not growing, you may have a problem. And Graham offers some clear metrics on growth: 5% week-over-week growth is pretty good; 7% is doing well; and 10% and above is outstanding. Of course, revenue growth is the best kind. But in the early stages of a company, growth of page views, registered users, customers—any of these show you’re headed in the right direction.

2. You're slow to change gears. Sometimes your company isn't growing quickly because you are still building a product. But are you iterating quickly? In other words, how long does it take you to test out a new hypothesis? When we were building OpenVote, we launched version one in October 2007. We learned a lot, and then when we launched a second version six months later. Meanwhile, we had raised enough money to last us about 18 months. That means we could only do two to three experiments before we ran out of cash. And that’s why we sucked. We were iterating so slowly that we didn't have a fighting chance of finding the right product for our market.

With 42Floors, we pivoted much more quickly. We had seven bad ideas before landing on our current business model. (Inc. Magazine wrote an article about the process.) We would learn from potential customers, create a prototype of the product, test it out on people, come up with some conclusions, and then make a call on whether to continue or iterate. Each idea took about three weeks to develop. In other words, it’s OK to have wrong ideas, but it sucks if you don’t iterate quickly enough toward the right idea.

3. You're not talking to customers. If you don’t talk to your users, you suck and there’s no other way to fix it. You need to talk to users. Better yet, you need to leave the office and talk to them face-to-face. At 42Floors, we built fake websites to test whether people would like a feature before we actually built it. Instead of spending months on engineering, we spent a couple of days on design work that allowed us to get real feedback before moving forward.

4. You focus on vanity metrics. The fakers always want to talk about metrics that don’t matter: page views, team size, or money raised. Or worse, they’ll name drop advisors or investors. The metrics that matter most are those that will directly contribute to your business model. Grabbing a great advisor is important, but it’s a lot less important than increasing your revenue. When you focus too much on the vanity stuff, you can trick yourself into thinking everything is coming along swimmingly when it really isn't.

5. You're going it alone. I’ve noticed a stunningly high correlation between people who are sucking and those who don’t educate themselves or seek out advice. There’s no excuse for that. You should have advisors who are constantly pushing you to be better. You should talk with peers at other start-ups that are out-performing you. If you aren’t surrounded by people who push you to be better, you’re going it alone. And the real danger of doing that is not just that you’ll fail, but that you won’t realize that you’re failing.

So, it's moment of truth time. Take a hard look at your company’s progress, and how you've been running things. But remember—even if you’re sucking now, that doesn’t mean you always will. In fact, a little bit of honest self-reflection may be the single best thing you can do to get yourself on the right track. And maybe, with hard work, you too can suck a little less.

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