I was just reading Don Dodge’s post, How to get accepted at Stanford or Harvard, or how to get a job at Google or Facebook, which reminded me of the people who asked me about how to deal with the MIT Problem for Startups. The problem that Don describes is exactly that which we are facing in the startup world. There are way too many perfect SAT score, straight-A valedictorians vying for not nearly enough Ivy school entry slots; how does one get into the top school of their choice? Don’s suggestions are eerily the same advice I would give today’s group of super-genius MIT/Stanford/whatever graduate entrepreneurs trying to get funding.
Work on Something Truly Unique
Don says to Do something special. I agree.
There are way too many people chasing the same thing, or similar thing (even if you think you’re different and better, or more importantly can your customers figure out if you’re really better or different).
To woo an investor, you should find something to work on that is totally something NOBODY else has thought of. That not only makes you stand out because of your idea, but also it means that you’ve got a head start on any competitors that may follow or copy you.
Defensible, Unassilable Competitive Advantage
Along with uniqueness, you can think harder and work on something that has some truly defensible element to it. This is back to old school roots on building companies which is to have some sort of technological or business advantage that is very hard to replicate, requires rocket scientists (time to put your MIT/Stanford degree to work now!), and potentially can be patentable (even as much as we hate the current patent system). If nobody can copy you, or if it’s amazingly hard to copy you, or you make them pay you if they copy you, then you’ve probably got something there.
Some of you have complained that this is really hard, or even said that it would be an easier path to some sort of measure of success (ie. early exit, get a job at Google via acquihire, etc.).
First, entrepeneurism has never been easy. It could quite possibly be the hardest thing you’ve done. The genesis of entrepreneurism is the idea you come up with to work on. Given the proliferation of entrepreneurs today, you’ve got too many great minds chasing after ideas. All the easy ones are already being worked on. So you need to think harder and more creatively on a market need and/or problem to be solved that someone else hasn’t worked on yet.
Second, while there are many angels and early stage funds who would back you if your idea was smaller reaching, my goals with investing are unfortunately incompatible with startups whose trajectories are not world dominating. As a director of Launch Capital, I must think on how to maximize return for my investor all the time and the risk of failure at early stage means that a super-high failure rate forces me to invest only in ideas with large potential outcomes. And yes, finding world dominating ideas is very, very hard.
Don then offers up advice on what to do next, if you didn’t get into your school of choice:
There are many paths to success
Never stop learning
When a door closes a window opens
All this says to me that you should not quit, and that you should keep at it until you find something that makes sense to work on. This could mean that you should branch out beyond your current areas of experience to find that elusive idea that nobody else has worked on. It could mean that you should join up with someone who has found that elusive idea. Or perhaps you should work on something that is completely different than the area you’ve trained in. Entrepreneurism is not all internet or tech!
Certainly being patient can also bring rewards. Sometimes stepping away from all this idea generation can spark your creativity more than concentrating your brain on it until your head hurts from hours and hours of trying to figure out an idea to work on.
Or perhaps in a few years, entrepreneurism won’t be in vogue any more, and you may find that you’re one of the last few entrepreneurial folks standing. All those MIT/Stanford/etc. geniuses competing for money might just go do something else and it might become a great time to work on whatever idea you have.