Starting up is really hard. Depending on where you get your statistics from, startups’ survival rate ranges from 10 per cent to 40 per cent. Success is typically hard to replicate, but failing is very common.
In fact, in 2006, Paul Graham wrote an essay titled “The 18 Mistakes That Kill Startups”. You might know him — he started Y Combinator, an amazing startup accelerator in Silicon Valley that invested in companies such as Dropbox, Airbnb, Stripe, Reddit, etc.
Thirteen years on, this list remains highly relevant as when it was first written. You can find the seminal essay in full here. Without going too deeply into the essay, here is a nifty graphic that illustrates the 18 mistakes (full credits to Adioma, they did a fantastic job).
Nifty huh? And I love the fact that Paul Graham managed to summarise all of these mistakes succinctly into six words or less. He also wrote it easy enough that you’d be able to grok the points immediately based on the headings. The reasons for failure may be seemingly obvious, and yet people still commit them.
Reframing the 18 mistakes
However, the purpose for writing this is not to rehash what the essay says. It’d be an insult to his wisdom. What I invite you to think about is this addition I made to the drawing:
I have partitioned the mistakes mentioned in this image into three categories: human, finance, and market.
Finance mistakes come after fundraising, which is something that you shouldn’t worry about at this stage. Finance problems are happy problems since you’d need finance first before encountering these mistakes. Market mistakes are inevitable; it’s how you respond to market movement and trends that will determine whether you live or die. That’s why the most successful startups have to pivot several times before they land on their gold mines.
Also Read: Why you shouldn’t become an entrepreneur
After subtracting those two categories, that leaves you with human mistakes. Do you notice something? Close to half of the mistakes listed are because of people. In fact, out of the 18 mistakes, eight of them are human mistakes.
Personally, I think the number one reason for startup success (and failure) is people. Without good co-founders, a startup will never ever take off. As such, it is important to understand why human mistakes occur and how we can avoid them. Caveat: the following discussion will apply more for tech-based startups, and less for product-based startups though some of the lessons will still be applicable.
Why do human mistakes happen?
Before we start the discussion, let’s take a look at the following founders as food for thought:
On the top row, you have founders who have made waves with their respective products worldwide. The bottom row shows our homegrown founders (yeah #teamsingapore), who are no slouch either with their work impacting Asia in their own ways.
While it seems like these accomplished young men have nothing in common besides their success (and great smile), these founders actually had zero programming background. However, they recognised that and took time to learn coding so that they could develop their products. Therein lies my take on what sets the good from the great — non-technical founders who have technical knowledge.
On a related note, here’s a meme I made, inspired by the aspiring founders that I’ve encountered in various places and events:
You laugh, but it’s true.
If you’re a business co-founder who has a tech co-founder but doesn’t know how to code, you’re still not out of the woods. Chances are, your tech co-founder will say one or more of the following lines when you work with him/her:
- “You don’t understand what needs to be done/built”: business co-founders typically underestimate the components required in a tech product.
- “Stop distracting me”: product development is hard work, and during the early stages distractions can be a fatal thing. You shouldn’t have to bug your tech co-founder when you just want to change a single word on the landing page.
- “That is impossible to build”: you can’t just wave your hands and expect magic to happen, man
- “That is impossible to build in such a short time”: lack of understanding of how to build a product leads to unrealistic expectations and deadlines.
These little annoyances build up over time, culminating in co-founders fighting. On a related note, I watched a TVB show, on which there was a scene where the main character’s girlfriend broke up with him. She explained to him the reason for her breakup using a food analogy. When she ate her sixth egg tart, she felt full not because of the sixth egg tart but because of the preceding five that she ate. Interpret that how you will.
I’ve seen enough startup co-founders falling out over time because they fight over such things.
Getting technical reduces risk of startup failing
With whatever I have presented so far in mind, I strongly hold the opinion that the solution to solving most of the eight human problems turns out to be learning how to code. By knowing how to code, you:
- avoid hiring bad programmers,
- know what platforms/tech to choose,
- speed up launching,
- getting your hands dirty with your co-founder,
- reduce risk of fighting,
- demonstrate that you’re as invested in the product as your co-founder.
By knowing how to code, you also set yourself apart from other founders. The least you can do is to take some time to get technically acquainted so that you can have better conversations with your co-founder. On top of that, you can now set realistic expectations for your startup and co-founder. The best thing is that your tech co-founder won’t be alone, and doesn’t have to make the hard technical decisions all by him/herself.
“I have no time to learn to code”
You might protest that you have better things to do than to take the time to learn coding. Is this a fair reason, given that you expect your tech co-founder to code?
Consider this — you want to run a startup. Generally, it requires you to spend time, effort, and money into building a product before reaping returns exponentially. It’s usually illustrated in the J-curve (credits to INNONIC for the beautiful illustration):
This curve applies not only to startups, but also to anything that requires significant investment before reaping returns. As such, why don’t you consider yourself as a tech startup as well? Similarly, take some time, money, and effort into learning a new skill which you can then apply over time. The returns of being technical is exponential.
Also Read: 5 things successful entrepreneurs never do
I hope this perspective helps you in your startup journey (or starting one). Make sure you’ve great co-founder relations and brush up your technical knowledge so that you don’t end up fighting with your tech co-founder.
After all, when things go awry and everything doesn’t seem to work out, the only thing keeping you sane and strong will be your closest friend and ally, your co-founder. And that is the ultimate key in avoiding the pitfalls of starting up.