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The Most Important Question For Founders is "Why?"
Why you? Why this? Why now? Why, why, why? (#23)
Every time a founder pitches me their startup, there’s one question I ask:
“Of all the things you could be doing with your life, why this?”
I’m genuinely curious to understand why someone decided to start a particular company. If there isn’t a real purpose of some kind, I question the likelihood of success.
Every startup journey goes through ups and downs. It’s beyond a roller coaster ride. And when things get tough, founders that don’t have a genuine purpose to what they’re doing, a real passion for the problem they’re solving, are more likely to give up.
Here are some example answers that I find suspect:
“It’s a huge market.” - Cool. Ultimately to win big you need to be in a big market (although you don’t need to start there), but this isn’t a great reason to start a company.
“It’s a super hot space right now.” - OK, but so what? Remember Web3? Metaverse? Those hype cycles didn’t last very long, but a lot of pretenders jumped into those industries. Most have abandoned ship and are now on the AI train. 🚂 Choo choo! All aboard! There’s nothing wrong with riding a trend, but if that’s the primary reason you started a company, you’re in trouble.
“I think we can make a lot of money doing this.” - Money is good. I like money, but I can almost guarantee that whatever you’re doing is not the easiest way to make it. Startups are not get rich quick schemes.
“The incumbents are big, fat & lazy.” - Oh ya? And you’re the one that’s going to take them down? Cripple Amazon? Obliterate those Fortune 100 insurance companies or banks? Not only would I not overly focus on competition, I wouldn’t bet against them either.
“We’ll scale quick and exit to Google.” - Maybe. There’s also a chance that I could play in the NHL, despite my age, poor skating and less-than-capable physique. Google (and other big companies) do acquire startups, but betting on that is silly. (Side note: This is why I don’t like seeing an “Exit” slide in a pitch deck which describes who you think will buy your company.)
On average, it takes ~7-10 years for startups to scale and go public (i.e. win really big.) Very few get there. Most startups exit for under $100M, but it still takes them many years to accomplish.
To be clear: It’s a fucking grind. Being a founder / startup CEO / startup executive is an intense journey.
And the opportunity cost is very real. I’ve spent many years of my life doing things that don’t matter, wasting my time. There was a period of about ~6 years (1999-2005), early in my career, where I coasted and didn’t accomplish very much. During that time I was making decent money, but largely unhappy. Often I felt completely stuck and wasn’t sure what to do next. I waited around for “luck” to kick in, hoping for a miracle to land in my lap. When I finally moved on from that situation I promised myself never to waste time again.
So why are you doing what you’re doing?
What’s the underlying motivation?
Why do you care about the problem you’re solving?
Another way I think about this: Even if you do win (leaving the definition somewhat open), who cares? You’ll care because presumably you’ve made a lot of money. Your investors will care for the same reason. But is that it? It’s reasonable to assume your customers will care (you can’t scale without creating some amount of value), but is that enough? Have you truly left the world better off?
To be clear, I’m not suggesting everyone has to cure cancer or solve the climate crisis (although we need more amazing people doing both.) I’m not a bleeding heart liberal that wants to sing kumbaya while holding hands and wonders why we all can’t get along (it’s because many of us are assholes, greedy and petty, and stuck with our beliefs on race, religion, society, cultures, etc.)
But there are certain things that I have a hard time getting excited about. And I’m often left wondering, after a founder pitches me, why they care. Which is why I ask. 😊
Sidebar: Fall in love with the problem, not the solution
I believe Ash Maurya, author of Running Lean and founder of LEANSTACK was the first person to say this. And it’s completely true.
It’s so easy to:
Get enamoured with building stuff (because building stuff is fun!)
Without really understanding the pain point you’re solving
Or if anyone cares enough about that pain point to use your solution
Or to decide if it matters enough to you in order to persevere through the slog
You need to obsess over the problem. And understand it very deeply. I’ve written about this before:
Beware of Big Problems
I believe you need to fall in love with the problem.
I also believe it’s important that you have a real reason or purpose behind why you’re trying to solve a problem (otherwise, why bother?)
This line of thinking leads founders to tackle really, really BIG problems and that can be problematic. They want to save the world so they go after the biggest problem they can.
Unfortunately those problems are what I call “universal truths.”
A universal truth is something that pretty much everyone knows (and largely agrees on). For example:
Recruiting top talent is tough
Most people aren’t eating healthy enough or exercising enough
The planet is heating up and that’s bad news for everyone
Realtors don’t seem to do a lot for the percentage they take
Our health system is broken
You can’t solve a universal truth, at least not initially. As the saying goes, “There is only one way to eat an elephant: a bite at a time.” (Apparently this was said by Desmond Tutu.) When you go after a universal truth you’re trying to boil the ocean, and most likely you have no unique insight or unfair advantage that allows you to do so.
If everyone starts with the same knowledge, you’re on a level playing field (and why would you start a company that way?) If we all know most people aren’t exercising enough, what makes you think your exercise app is going to crack the nut on that? There’s an overflowing graveyard of health startups that went after the same universal truth as everyone else.
Ultimately if you’re passionate about making people healthier through exercise that’s a great reason to start a company. You’d be hard pressed to find someone that wouldn’t care about that. But you’ll need to dig deep to unlock a real insight, create an unfair advantage, and figure out how to win in a sea of sameness, because literally everyone recognizes the problem. Investors (who see thousands of startups per year) may groan out loud if you come to them with “another app that tracks something to make people healthier” because there’s no meaningful differentiation. More importantly, your users will too. They may try your new health app that promises to make exercise easier and magical for them, but I guarantee you they have a dozen similar apps on their phone that haven’t been opened in months.
Go niche first and expand from there
My suggestion is to identify a niche that you can dominate. Go from “let’s help everyone exercise more” to a specific user group that has specific problems. Now you have a chance of finding a meaningful insight and solving a problem that’s not a universal truth.
And you expand and grow from there—one niche market at a time.
You still have a “higher purpose” and a vision for making the world a better place, but you don’t attack it all at once; you take small bites.
While many people will suggest you need to go after the biggest market possible, I’d disagree:
Beware of Small Problems
I know—I just said, “beware of BIG problems” and now I’m saying the opposite. Unfortunately, both are true.
While I’m a big fan of niche markets, that’s not the same thing as small problems.
A small problem is one that doesn’t matter enough. People don’t pay for their 5th problem to be solved. Heck, they might not even pay for their 3rd most painful problem to be solved. You better be chasing something that really matters.
It can be in a smaller market to start. So find a small group of people who are in desperate need of your solution and you’re in the game.
A small group of people that don’t need your solution = fail
A big group of people that don’t need your solution = fail
A small group of people that really need your solution = chance of winning
A big group of people that really need your solution = winning
The Story Matters
I recently watched ten startups present on stage at an event. Each had 3 minutes. There was a panel that was providing feedback. The most consistent feedback that founders got was, “Why?” Or more precisely, “Why you?” Or even more precisely, “Of all the people on the planet, why are you the one to solve this problem?”
In some cases this is about expertise and pedigree—a research scientist that has dedicated 10 years of her life to studying rare diseases could very clearly justify why she’s started a company in that space. But a founder with no experience in solving climate change, without a team of experts, going into the realm of deep science? I applaud their commitment, but it’s hard to believe they’ll succeed.
There’s a reason why superhero movies always emphasize the origin story. It matters. The same is true for founders and their startups. If the origin story isn’t emotionally compelling, it’s hard to get an audience or investors engaged.
How do you tell your story?
Founders are always uncertain where to put the Team slide in their pitches. Some put it right at the beginning, others tuck it away at the end. I don’t think it makes a huge difference, but you need to accomplish two things when talking about the team:
Explain to the audience why you’re the right person for the job
Explain to the audience why your team is the right team for the job
Things that matter:
An intimate understanding of the problem (i.e. What do you know that very few other people know? What’s your unique, holy shit insight?)
Personal experience with the problem (i.e. “I used to be 300 pounds and unfit, so I changed my life with this exercise program. Now I want to bring that to everyone else.”)
Technical competency related to the problem / solution (Note: this doesn’t mean you worked at Google, or studied Computer Science at Stanford; it means you have unique technical capabilities compared to anyone else on the planet)
Past startup success — even if it’s not in the same field, this is relevant.
Things that don’t matter:
Irrelevant work history (even if you worked at great companies, it’s just not that exciting or meaningful—lots of people have worked at those companies)
Lots of logos (see the point above; but most team slides do this, where they’ll put a bunch of recognized logos in an effort to demonstrate credibility)
If you have an incredibly personal and relevant story, you should share it at the beginning. People will become emotionally invested in the pitch and your success. This is one of the ways to capture people’s attention, leveraging the Hearts - Minds - Wallets framework that I’ve shared in the past:
So Why You?
For the most part, it’s safe to assume there are hundreds (if not thousands) of others chasing the same opportunity as you. There are some exceptions to this, but generally there are a lot of people out there that have recognized the same problem you have, believe they can solve it and have started a company to do so.
So why you?
What stands out about you (and your team), what you know, and how you’re approaching the market? Why are you so passionate about this opportunity that you’ll persevere when others give up?
In almost every industry there is a startup graveyard of people that came before you—how do you avoid that same fate?
This is almost always what I’m the most interested in when meeting a founder or going through their pitch. Of course I want to understand the solution, use cases, the user / customer, go-to-market strategy, pricing, etc. but all of that is actually secondary to understanding the founder’s motivation. Honestly, everything else can and probably will change, but your motivation as a founder—who is now dedicating the next 5-10 years of your life to something—has to be rock solid for me to believe you have a shot.