Advice for startup founders: prepare to fail

Nevertheless, it seems difficult to overcome the cold start problem. Chen cited the example of Tiny Speck, which later became Slack. Tiny Speck has it all: a star team, an exciting release, and $17 million from respected investors (including Anderson Horowitz, where Chen works).It also attracted many people to try this game, called glitchThe problem is that it can’t let people stay.

What is the difference between Glitch and Slack? On the one hand, Slack’s timing worked: it anticipated the need for distributed labor and text logs. But it also benefits from tiny atomic networks. People join the team, and as these teams become familiar with the product, they are likely to continue to use it. (According to Slack, the magic number is when a team exchanges about 2,000 messages.) Later, the company grew by encouraging the company to adopt Slack throughout the workforce, integrating multiple teams into a unified job Place tools.

Of course, network effects alone cannot explain the success or failure of startups. Slack is just one of many workplace communication applications with similar ideas. Not everyone has achieved the same success. “For every successful release like Slack, there will be more failures,” Chen admits, “and they usually stumble in the first place.”

Both Cold start problem and Prediction failure Provide autopsies of several failed companies, but this still leaves readers scratching their heads. Chen pointed out that some start-up companies can achieve network effects because they provide free, convenient, and easy-to-use services. Other startups succeed for the opposite reason: their products are exclusive, invite-only, and difficult to obtain. In his case studies, Ananth identified the problems of various startups, but did not provide useful predictions to avoid these pitfalls in the future.

Another book in 2021 tried to describe the startup failure more fully. Tom Eisenman, who has been teaching entrepreneurship at Harvard Business School for the past 20 years, surveyed 470 failed startup founders to understand why their companies are heading south. Their answers constituted his book, Reasons for business failure.

Eisenman opposed the idea that most failures were attributed to the founders, and even criticized venture capitalists for focusing too much on finding the “right people” with courage, determination, and industry acumen. On the contrary, he believes that failure is more down to misjudgment of market demand, too fast growth, and too idealistic vision (all things, especially those encouraged by venture capital). Like any outstanding business school professor, Eisenman has prepared a large number of case studies. He pays particular attention to start-ups founded by his students-post-mortem analysis seems to be almost personal.

Reasons for business failure Six reasons for problems are provided, including ignoring customer research, finding the wrong stakeholders, and falling into the “speed trap” of growth at all costs. Eisenman emphasized that these errors can be avoided. But more importantly, like Ananth, he advises founders to understand that failure is usually part of the package. At the end of the book, he made suggestions on how to deal with failure when it is inevitable.

In today’s entrepreneurial environment, raising capital may be easy, but then it will be difficult. Will these books help startup founders or investors avoid disappointment? Maybe, but just like millions of health books help humans avoid diseases. Diagnosing common causes of death is one thing. Learning to live healthier is another matter.

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