Advice

Starting a company is a challenging process - you’re thrown into the deep-end with nothing but your wits to help you. Often, though, advice will be forthcoming. This post is about that advice, and how to spot the difference between good and bad.

Some advice is expert - your lawyer talking about your Ts & Cs, or a sysadmin giving advice on web-service redundancy. In these cases, you’d do well to trust the person’s professional judgement and follow their advice.

Other advice is not.

Some people, as part of their jobs, are trained to give substantive, concrete, and often completely baseless advice. In my previous life as a Management Consultant, we’d routinely give advice like “sell these 400 under-performing stores”. There is a certain reassurance in the tangible, solid nature of the advice; “Do this and you’ll be fine”. It absolves the recipients from spending more time thinking about the problem - the experts had provided a solution. As long as the advice wasn’t demonstrably wrong, everyone was happy.

Unfortunately, early-stage companies aren’t like this. If you waste 3 or 4 months misguidedly pursuing some market segment, or building a feature-set before you’ve determined that you’re really on to something, you’ll bankrupt your company.

This is why advising early-stage startups is so fraught with difficulty - experts from fields like law & accounting give substantive advice without really understanding the nuance of the market or the product. In fact, almost no-one else in the world is close enough to your customers to really understand their problems. These are the problems that you, as a startup founder, should be trying to identify & solve.

When my startup, GoCardless, was in Y Combinator, the advice we got was different. Despite having some of the best collective experience in early-stage startups on the planet, it was striking how rarely the partners would give this kind of substantive advice. Instead, they dealt in mantras & heuristics. At the time, this was incredibly frustrating - we wanted someone wise just to tell us what to do. It apparently doesn’t work like that.

Instead, they presented a set of rules which appear to maximise (but not guarantee) a startup’s chances of survival:

• “Launch early & talk to your users” (or, more completely “Build the absolute smallest thing that can be considered a complete application and ship it” )
• “Make Something People Want" 
• "Don’t Worry about Competitors”
• “Focus 90% of your time on solving your one biggest problem”
• “Don’t Talk To Investors (until demo-day)”
• “Be a cockroach” (or “Assume you won’t get money, and if someone does offer you any, assume you’ll never get any more.”)

Sam Altman recently published a list of these at http://blog.samaltman.com/startup-advice

When people come to you with a problem, it’s always tempting to give substantive advice. This must be even truer for the Y Combinator partners - these are people who’ve built & sold a number of highly successful businesses over the last 15 years. Yet, by and large, they refrain. In retrospect, I find that a really interesting phenomenon.

On the other hand, it’s troubling to see accelerators, especially in Europe, touting their vast “networks of mentors”. Experienced accountants give great tax advice, but dreadful startup advice. When it comes to acquiring your first 100 users, I’d stick with the mantras - “Launch early, talk to your users & make something people want.”