There are two versions of the future of reality as a startup founder. Yours and not yours. It’s your job to prove to the world that your version of the future deserves to exist, which is no small task. It takes much longer, and is much more difficult than most admit. Even when it looks like you’ve proven it the whole thing could come apart at the seams. One thing is for sure, in the beginning, if you’re doing something that matters, almost everyone who you talk to won’t believe your view of reality. But person by person if you get them to believe your version of the future you prove it a bit more. From my personal experience, and from my friends who are building startups, you prove it in stages.
Proving “It” — “It” is the hypothesis you make of the world. The world really needs ______. The first person you need to prove “it” to is yourself. Why does the idea need to exist? The way I’ve proved my hypothesis to myself in the past is reducing it to the most fundamental concept. What is the one reason why people would tell someone else about the idea? The best way I’ve found to do this is finding a few people who might use the product, and ask them if they would use it. If they say “Yeah but I already use ____ for that” or simply “Why?”, You should to think long and hard about whether enough people need something marginally better than what you’re about to create. The second thing I do is find a few people who have a lot of domain expertise in the area of your hypothesis and get their thoughts. They might be a bit jaded, but they understand the existing challenges your hypothesis will face. At this point most people won’t believe you. They either won’t understand the idea, or they’ll tell you all the reasons why it won’t work. Be realistic about the “why nots”. If you can’t prove to yourself that what you’re doing is way better than alternatives, then don’t do it. If you still think it’s a good idea, then get to work proving “How”. Save the jaded feedback from your domain experts for later, because that’s how you’ll avoid mistakes other people have made in the past.
Proving How — Once you’ve proven that your idea is something that might make sense to pursue, build the crappiest version of it you can, as quickly as you can, and get people to use it. This is “How” you deliver your idea. Your idea might be awesome, but how you translate it into real life could be fundamentally flawed. You want to smoke test whether the translation of your idea makes sense. If your idea is a consumer product, try to get 25 people to sign up for your site or install your app and use it. If you can’t find 25 people then you’ve got a problem. If they aren’t using it, find out why not. If it’s a paid product, try to get 3-5 people to pay you for it. If they don’t want to pay it means either you didn’t prove “it” or you did a really bad job at proving “how”. Ask them what they would need to use it, or pay you. There’s something exhilarating when people are using your product for the first time even if they hate it. Most of your users probably will, but your goal is to find the people who don’t hate it and get as much feedback from them as you can. These users are the starting point of your version of the future.
Proving Utility — Beyond your initial users, you’ve got to keep the momentum, by getting more users to use the product. At the same time you’re most likely not just improving how you deliver your product, but what the product is itself. The measurement of success in this stage is “Utility”. This is how much people actually use your product. Sometimes a product is awesome the first time you use it, but is to hard to use over and over again. You have to prove that this idea is something that people actually want to use on an ongoing basis. Once you start proving it’s actual utility people start to tell other people about your product. They don’t just buy into your version of reality but, they want to share it with others. At this point more people might believe in you. In this phase, maybe the. This might sound a bit counterintuitive, but the best questions you get when you’re proving utility are “I would use it if it had ______”, or “It sucks because it doesn’t have _______” . This shows that people are coming around to seeing your version of the future.
Proving Value — How valuable is what you’ve built? This is the litmus test for any startup. It also might take the longest to figure out. Who will pay for what you have? This is arguably the most difficult time for any startup. Many startups pivot in this phase. You realize that you are onto something interesting, but you can’t quite figure out how best to capture its value. It’s more important than ever to be honest with yourself about whether your reality can sustain itself. If you are having challenges in this phase, talk to as many people with domain expertise as you can. Especially people who have failed. This is where they come in handy — they help you understand mistakes that you should not make. Experimentation is also key in this phase. If you’ve raised money, depending on how much your investors believe in you they’ll either continue to fund you or push you out to the pastures. In some cases, investors would put scale before value. I’d put value before scale any day. Proving that your idea can actually sustain itself, or you can sustain your idea is in many cases what separates the startups that succeed, and startups that fail. It’s when a startup crosses the chasm from being a startup to being an actual business. Opinions tend to differ whether you should ramp, after you’ve proven utility, or get your startup profitable in this phase. If you want your startup to organically grow then don’t ramp yet. If want to roll the dice on what your startup might look like risk then raise money and slam on the pedal. Either way, the most exciting part of this phase is that your reality is that people are starting to take your reality for granted. Even most of your haters start to believe. And you’ll know that they do, because they start to ask “What if REALLY BIG CO. decides to get into this business?” or “Is it sustainable?” or “How big can it be really?”
Proving Scale — While much of the startup coverage and VCs would suggest that proving value should come to after scale, the numbers prove that the successfully scaling before identifying value in startups is the exception and not the rule. Only in exceptional markets for exceptional companies do big funding, valuations, and headcount allow us to ignore the fundamental laws of business physics. Fred Wilson wrote this weekend about the “valuation trap”. As founder you’ll eventually have to prove “Scale”. Becoming a sustainable business as the market leader in a growing market or a market you created should be every founder’s Hoop Dream. Much like winning the championship, you’re on top of the world, but now everyone’s gunning for you. The hardest part of proving scale, is that you’ve never really won.
All founders start with having to prove it. A few founders like Musk, Bezos, Zuckerberg, Brin and Jobs, took their startups to scale and have been on top because reality is the one that they literally created. Most quit because shaping reality is probably one of the hardest things you can possible do. But it’s important to remember there was a time when no one believed in their realities except them.