It’s never too early to work on something toward which you’re truly passionate.
Too many founders start out focused on building the business they want or expecting when and how to make money.
Bless them for playing, but that’s not how startups work. Those are the people who fail not because they’re wrong, they fail because they quit (the venture they wanted can’t be so it must not be worthwhile).
Market Timing is a false premise and anyone who thinks otherwise is bullshit.
Why? You can’t time the market unless you have perfect information and perfect information is impossible, it’s a concept. It isn’t possible to know ALL the competition, the market demand, the pace of innovation, global economic implications, societal changes, regulatory changes, and so forth.
Perfect information is when we know everything we need to make the best choice. A lot times when economists build theories or models of the economy, they assume everyone has perfect information. But there are a lot of reasons why we might not have perfect, or even decent, information.
Chess is a game of perfect information – you and your opponent see the entire board and know everything there is to know about the positions of the pieces.
Poker is a game of imperfect information. All you know about your opponents’ is how many cards they have and that they do not have yours.
The number of people I’ve talked with who found the COVID-19 quarantine a blessing because it caused a boom in their business is astounding. No one could have predicted and timed that; likewise, as we’re unfortunately seeing more so in today’s recession, businesses are suffering and collapsing for unpredictable reasons.
Successful founders are mission-driven and passionate about what they do. There is no right time, there is only what we do now based on much information as we can get, manage, and act upon.
Who’s Advice do You Trust?
I was struck recently by an article well received, but which actually revealed the Venture Capitalist perspective shifts with the wind, “12 VCs reveal the ways they are telling their tech startups to slash costs and preserve cash amid the economic downturn.”
VCs used to say focus on growth! Build the moat! Go Big.
We can forgive startup founders for feeling whiplash. After years of their venture investors telling them to grow at all costs, suddenly there is a new edict that the industry hasn’t seen for upward of a decade: cut costs and extend their runways to “avoid a death spiral,” warned the Silicon Valley investor Sequoia Capital recently– Ben Bergman; Business Insider
All of a sudden, VCs are saying, ‘Extend runway so you can keep going as long as possible!’
So, they were genuinely correct before now? Time the market to the traction you have and the investment *we* just made, go big! But they’re miraculously correct now?
Granted, circumstances of the economy have changed but we know VERY well that among the best times to start a venture is during a recession, just as among the best times to start a venture is during a boom.
How on earth can both be true?? Dynamics of the market offer pros and cons which as an entrepreneur, you can merely assess, and then leverage or avoid accordingly.
Be careful of sage advice trumpeted from on high (yes, even *my* advice) because they aren’t doing what you are doing. Appreciate that maybe, VC advice gets more exposure simply because they write big checks and the press likes to socialize their opinions because readers like to consume them.
Think about BOTH popularized sentiments:
- How many companies raise insane amounts of money in order to GROW and go big because the timing is right, only to flame out and disappear?
- How many companies deserve capital but can’t get it because of “timing” and yet they continue plodding along, growing, until suddenly something pops?
- How many companies raise money OR plod along and yet they just need to go home because they’ll never make it… “timing” proved years ago that what they’re doing isn’t going to work. Yet, they’re still trying to hope for the right timing??
The only advice I can offer that has seemed consistently true in my long time working with startups is that it is TEAM > MARKETING (which is your source of information) > EXECUTION > LUCK
“Timing” is affectionally associated with Luck because why? Right time / right place… they just happened to be there when the pop helped them. And so, is this newfound VC advice really suddenly found brilliance? Is it practical advice for founders or is it just a reaction to current circumstances? Or is it just VCs trumpeting what entrepreneurs have always known? That all founders passionate about what they’re doing, aren’t in it to succeed now… they’re in it to succeed. And if that takes 10 days or 10 years, what they do is they pivot and evolve and shift priorities over time, continuing to learn and create value, until it works.
If the timing is no longer right for the business model, change the business model. If today finds that regulations force a different approach, change the approach. If the economy doesn’t support pay as much or now for what you’re doing, then develop your audience and community more until the economy comes around
Dynamics of the market offer pros and cons which as an entrepreneur, you can merely assess, and then leverage or avoid accordingly.
IF the problem is real, which is to say, if the problem is actually an *opportunity* that still exists and that you can overcome, then the reason (the mission) you started hasn’t changed. What might have changed is HOW but not WHY. Business owners start businesses to do WHAT, HOW – to make a living. Startup founders venture forth because of a WHY and WHO that can be better… to maybe figure out HOW… to hopefully make money, someday.
VCs are right, thanks to the economic implications of today, always extend your runway as long as possible. Trying to time the market and accomplish it NOW, or go big NOW, is a fool’s errand. You cannot predict all that might happen so if you’re determined to find success and make a difference with the opportunity before you, ensure you have the time, and resources, to do so.
[photo used with permission: Martin Vorel via Libreshot]