Startups were largely meant to be an experiment. An attempt to solve a problem (that may or may not exist), or to bring to bear an idea whose time “has arrived”.
Experiments, though unlike many startups, have a hypothesis, are conducted largely in test environments and have the ability to come to a logical conclusion after their period of testing.
Most founders I know have survived at least 3-4 “near death” experiences at their startup. Most of the near death experiences come within the first 18 months of forming the company. Surprisingly, they dont come in the first 3-6 months, but after that.
A near death experience is categorized, as a point where the founders believe there’s no point in continuing to build the company any more and they would like to shut down. Most times it is because they ran out of money. A few times, even when they have the money, they decide to shut the startup down since what the founders signed up for is now different from reality.
I had a chance to work with many founders over the last 10 years, and the thing I have noticed about founders who survive the journey is that there are 3 things they all seem to have in common:
1. A bias for action, not deliberation. It is not as if you wake up one day and suddenly feel like your startup is going nowhere. The buildup to your closure is usually a series of events and feedback that points to inconsistencies with the assumptions you made when you started your venture. The best entrepreneurs have a very strong bias to take action on the data and quickly put new experiments in place to validate the new ideas and tactics.
2. They take an extremely short term (hours, day) view of their survival needs. There is an old saying in cricket, paraphrased – “When faced with a daunting score or a large total, instead of trying to focus on the target, focus on the next ball. Leave the rest to time. If you focus on the next ball and surviving the next ball it is likely you will worry less about the many other distractions that come with figuring out scale and other “to be solved later” problems.
3. They focus only on revenue generation activities, after cutting costs to nothing. I notice that many entrepreneurs say they cut costs to “bare minimum”. Which, in my opinion is still high. If you are spending any money at all (for development, marketing, etc.) you should cut them to zero until you have your revenue plan in place. They remove their “small office” space, eliminate “web hosting charges” but looking at creative ways to use free resources to “keep the lights on” without spending money.