Art, Science, and Story-Telling in the Age of Entrepreneurship
You know that the number of startups has reached a critical mass of sorts when academic studies start appearing in an attempt to document the "science" of entrepreneurship, as opposed to its "art."
Another way to put it might be "data replacing anecdotes."
Which brings us to the recent study called the Startup Genome Report: Cracking the Code of Innovation, coauthored by a team of professors from Stanford and UC Berkeley.
The report was based on surveys of over 650 Internet startups and identified at least 14 key factors that help determine success, including the finding that balanced teams of one business founder and one technical founder raise 30 percent more money, experience almost three times greater user growth, and are less likely to scale "prematurely" than unbalanced teams.
There are plenty of other insights here, including that it typically takes a startup two to three times longer to validate its market than the founders anticipate, and that "premature scaling" is the most common reason startups perform poorly.
At the most fundamental level, according to the report, it boils down to this: "Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth."
In that context, it occurs to me there is an additional factor not mentioned in the report (or at least if it was, I couldn't find it) and that is that a successful startup also needs to be able to tell its story well.
Now, admittedly this wanders off into the "art" of entrepreneurship more than the science, but as one involved with early-stage Internet ventures for over 15 years now, I've rarely encountered a successful venture that didn't have a compelling narrative to share with the public — call it a founder's myth if you will — and let me give a specific example.
Airbnb, which we profiled here recently, certainly is one of the rock stars of the current tech boom, and its story starts off like this:
"The same week that industrial designers and roommates Joe Gebbia and Brian Chesky quit their day jobs back in 2007 to try and become entrepreneurs, the landlord of their SoMa apartment hiked their rent. Faced with a sudden need to make some extra cash, they hit upon an idea. They knew that a major design convention was opening in town and that the hotels were fully booked. So they contacted the attendee list to offer airbeds in their apartment for people having trouble finding a place to stay..."
You probably know what happened next.
From both a story-telling and a business perspective, this one works. The founders discovered a way to address a common problem or two (Where can I stay when I travel? How can I pay my rent?) by leveraging Internet technology to establish a new virtual marketplace that functions well out in the physical world.
That it has become so big so fast certainly is a surprise to the founders and everyone else, but that's the beauty of entrepreneurship, right?
Driving the almost overwhelming proliferation of startups nowadays, as the Startup Genome Report notes, is that the barrier to entry in terms of cost has been dramatically reduced. It doesn't take a lot of capital or equipment to start a company right now.
So I guess the moral of this story is: Get a good idea, find a partner with a complementary skillset, grab a mentor, and start building your own piece of the future.
Along the way, don't forget to write down, or better yet videotape what you are doing, because sooner or later — actually probably the first day you show up along Sand Hill Road — you're going to need to start telling the rest of the world your story.