What Scares A Founder The Most
September 17, 2013 § Leave a comment
Founders take a lot of risk. They constantly live on the edge of failure. It gets a little better after achieving product-market fit. But before then, you are doing a dance with failure. And during this highest risk period there is nothing that scares founder more than…False Positives
What’s A False Positive?
False positives come in many forms. Here are a few examples:
- “I would totally use that product.”
- “Dude, that idea is sick, I would use it for sure.”
- “Everyone I know would use that.”
- “If you added this feature, I will use this product.”
The common theme among these quotes is that they all come from people not using your product. The quotes feel great when you hear them. But you must resist every urge to believe them.
Who gives false positives?
- Your friends
- Your family
- Many investors
- Customers that aren’t asked to commit to anything
- Random people you interview or poll that are not asked to make a hard commitment to guarantee fulfilling poll responses
Why is this the scariest thing?
Rejection isn’t scary. Actually, rejection is great for a founder. Getting “no” is the point of an MVP in my opinion. Founders are resourceful people, and can fix most issues. But one thing we can not do is create time, and time is your most valuable asset. Founders don’t have many swings at the plate. So we must optimize the first attempt at starting a company. Chasing false positives is deadly.
Why Do False Positives Happen?
This is actually easy to figure out. Founders fall in love with their idea. It is often something they have thought about for a while. And so they (unknowingly) have a confirmatory bias in doing research. They either dismiss negative responses or don’t set up real tests to invalidate assumptions. This last point is the key to avoiding false positives.
How to Avoid False Positives
While it might sound simple in a blog post, I guarantee you avoiding false positives is very hard to do. It is very hard to be a founder and also be willing to learn that your idea or product is not needed by the market. Often you have been successful at everything you have done, and so it seems odd that this would be different. That being said, these are good steps to take:
- Never put any weight in what your family and friends tell you. They love you too much. They are biased. Ignore everything they say because they are not representative of your customer. This seems obvious but I can’t tell you how many first time entrepreneurs tell me, “everyone I have told this idea to thinks it is amazing.”
- Always ask for skin in the game for a “yes” from a tester. This is the point of an MVP. To test assumptions based on willingness to make a firm commitment. A commitment from the customer can come in many forms:
- An upfront financial commitment is the best signal. This is hard to get, but a site like Kickstarter is a great option if it is a consumer, non-service product. The story of Zappos’ MVP is a great example for an e-commerce site. But there are other great examples here.
- Time commitment is also a good signal. People’s willingness to continue to use your MVP is a demonstration of value creation.
- Reputation commitment is a good signal, especially for B2B products. Finding a person willing to advocate for your product to their boss/peers means you have identified a pain point. People are often more concerned about their reputation than time and money.
But You Gotta Ask!
It is amazing how many young founders that I meet are unwilling to ask for a commitment from their testers. Some don’t even disclose what the price will be. They are simply afraid of the answer and this makes their worst fear come true.
What people say and what they do are two totally different things. Ignore everything people say. Without a commitment, you have nothing.