If you’re building a startup, you’re probably making a lot of decisions. And most of them probably don’t matter so much.
That’s why the guy working on the perfect business plan for 5 years while doing his 9-to-5 is even more clueless than you think.
When you’re running an early-stage startup, you are usually operating in an uncertain environment, with extremely scarce resources and your data samples are probably too small to be statistically significant.
Given those constraints, spending a lot of times building a list of pros and cons, attributing each of those points a probability percentage and an importance score, and picking the optimal path is kind of useless.
Decision theory won’t help you, buddy. This is real life and it’s going to be messy.
The reality is that you have no clue where each path will lead and the last thing you should do is stop running. You’re a kid running away in a dark forest, and you feel the breath of an ogre in the back your neck. The smartest thing you can do is to avoid slowing down at the crossroads.
Furthermore, you have a gigantic advantage over the incumbents. Making a mistake probably won’t cost you much, as you’re not making much money. If your daily sales drop by 50% as a result of your mistake, you lose $50 assuming your daily sales are only $100 and you learn something valuable.
This is a huge advantage, as your competitors might not be able to afford the same learning, since they might lose hundred of thousands of dollars by doing the same mistake.
It’s especially true for fintech startups like Hardbacon, that are at an immense resource disadvantage compared with the financial institutions they are (on some levels) out-innovating.
Fintech startups like Hardbacon can strive despite their huge resource disadvantage because large banks just can’t afford to take any decision lightly. Everything must go through so many gatekeepers that it’s extremely long and hard to implement any kind of changes. In their cases, it kind of make sense to hire consultants, or even to have an internal consultant (which are a thing, can you believe it?) to prepare a report, in order to increase the odds of making the right decision.
Everything is Good on The Fucking Menu
When I go to a restaurant, I either pick a meal by putting my finger at random on the menu or asking what’s the waiter’s favourite meal and ordering just that. I’m rolling the dice and guess what? I don’t remember being served shoelaces or anything disgusting for diner. What matters in term of dining optimization is the restaurant you pick; what you order inside the restaurant rarely does.
Similarly, what matter for a startup is the co-founders and early employees you pick. That’s why I put in place a Google-like recruitment process for the digital marketer we’re looking for, but won’t spend a 5 minutes deciding if we should use software A or software B for our marketing automation. The right answer is probably something like betting on the cheapest or the one we’re already familiar with. A or B will do the job, so why waste time on this?
Another decision that matters a lot is the problem your startup is solving. You should think long and hard about that, preferably before launching your startup.
Even product decisions should not be overthought. The truth is you need a good hypothesis, and a way to test it. You also need to spend time talking to your customers.
But since you’re probably going to be proven wrong a couple of times before you get it right, don’t waste too much time deciding between two features. Build one of them and see what happens.
At the beginning, usage data is not statistically significant, so look at those data points, but more importantly, call your customers to understand why they use or don’t use this or that. But the thing you really need to do is spend your time doing and not deciding.
Most of the time, you should probably just listen to your gut when making a decision for your startup. What’s important is to act swiftly, as moving fast is one of your main competitive advantages. Or roll the dice. Whatever works for you.
In other words, stop wasting your time reading articles about other startups and get shit done. And make mistakes. If you don’t believe me, I’ll leave you with a quote from George Patton, one of the best generals in US military history : “A good plan, violently executed now, is better than a perfect plan executed next week.”