I’ve screwed up a lot of startups on faith.
One of the key tenets of entrepreneurship is that you start your company with insufficient resources and knowledge.
Faith-based Entrepreneurship
At first, entrepreneurship is a Faith-based initiative. There is no certainty about a startup on day-one. You make several first order approximations about your business model, distribution channels, demand creation, and customer acceptance. You leave the comfort of your existing job, convince a few partners to join you and you jump off the bridge together.
At each startup I couldn’t wait to do this. No building, no money, no customers, no market? Great, sign me up. We’ll build something from scratch.
You start a company on a vision; on a series of Faith-based hypotheses.
Fact-based Execution
However, successfully executing a startup requires the company to become Fact-based as soon as it can.
Think about all the assumptions you’ve made to get your business off the ground. Who are the customers? What problems do they have? What are their most important problems? How much would they pay to solve them? What’s the best way to tell them about our product?…
Ad infinitum. These customer and market risks need to be translated into facts as soon as possible.
You can blindly continue to execute on faith that your hypothesis are correct. You’ll ship your product and you’ll find out if you were wrong when you run out of money
Or you can quickly get out of the building and test whether your hypothesis were correct and turn them into facts.
In hindsight, when I was young, this where I went wrong. It’s a lot more comfortable to hang on to your own beliefs than to get (or face) the facts. Because at times facts may create cognitive dissonance with the beliefs that got you started and funded.
Customer Development
This strategy of starting on faith, and quickly turning them into facts is the core of the Customer Development process.
