No shortcuts, no miracles

First time founders — understandably — make a lot of mistakes. One of the most liberating things about startups is that for a sufficiently determined team working on a sufficiently important problem, these mistakes are completely survivable.

Many of the most obvious and debilitating mistakes (not spending enough time talking to customers; not launching soon enough; not managing cash properly, etc) are sufficiently well documented that most well prepared founders I meet are equipped to avoid them. I want to focus, therefore, on a mistake that is less obvious and that, having worked with over 250 founders at Entrepreneur First, I see even the best first-time founders fall into. I call it the “step change fallacy”.

The step-change fallacy

The step change fallacy is best encapsulated in sentences of the form: “If we could only achieve X, we’d be in a totally different position”. X can take a dizzying array of forms:

- If only we can get [insert respected “influencer”] to try our product…

- If only we can be featured on [insert widely consumed media outlet]…

- If only we can exhibit at [insert prestigious conference or event]…

- If only we can raise money from [insert famous investor]

- If only we can partner with [insert top tier established brand]…

And what comes after the ellipsis is some sort of step change in performance, results or effectiveness.

These beliefs are tempting, but wrong.

They’re tempting because these activities do appear to be correlated with success. Great companies really do get a lot of press and really do raise funds from great investors! As such, going after these results can look like an efficient shortcut.

They’re wrong because they get the causation the wrong way around: these results are the consequence of lots of unglamorous hard work, not the cause of a miraculous step change in your trajectory. There are no (repeatable) shortcuts in startups.

I know I have been guilty of the step change fallacy at many points in our time building Entrepreneur First. Looking back, what’s striking is that when we have achieved milestones like these, (a) we’ve seldom been going after them directly and (b) even then, how little they’ve mattered relative to the day-to-day work we do on the programme.

Getting ready for the step change

One of the things that makes the step change fallacy so tempting is that successful startups do go through transitions that look very like step changes, at least from the outside. This is the “apparent overnight success” phenomenon: one moment a product seems niche, the next it’s ubiquitous (Slack is a great example of this in the last couple of years, as Uber was a couple of years before that)

Usually, though, what looks like a step change is actually an exponential growth curve becoming very steep. The difference is important: a step change has the appearance of a miracle; hitting the “hockey stick” portion of the exponential growth curve is the sudden, explosive payoff from a long period of often unnoticed hard work.

It is a very poor strategy as a founder to bet on miracles. Moreover, even if “miracles” come, if you’re not ready for them, you can’t make the most of them; they can even be damaging. Suppose you did get Marc Andreessen’s attention or hit the Reddit front page or made the Techcrunch Battlefield finals, would you actually be in a position to take advantage of it? Or would you soon be drowning in retention problems, user confusion and complaints?

There is a time when things like this can be transformational, but it’s very rarely in the very early stages. It’s far better in the earliest stages to focus fully — and patiently — on understanding your customers and the problem you’re solving — investing in getting ready — than to chase after an illusory step change moment.

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The best startups have a shortcut-free, miracle-free strategy. It’s less glamorous and harder work, but it’s how great companies are built.

Entrepreneur First supports and funds Europe’s most talented and ambitious technical individuals to build startups from scratch in London. Applications for our March and September 2016 cohorts are open until midnight on 31 December 2015.