Introduction

Everyone has a framework, a basis by which they make decisions and navigate the uncertainty of the world. Frameworks are developed over time through knowledge and experience. Learning is a process in which we can incorporate new knowledge and experience into our existing framework. Working on a startup opened the floodgates to new knowledge and experience rushing into our frameworks about building a company. In a small amount of time, it allowed us to understand how to rapidly gain new experience and knowledge….BY OURSELVES! After a decade and a half of following a syllabus or expecting grades, we had free range to explore ANYTHING and EVERYTHING. The summer was a unique experience that has rapidly impacted our framework on both the startup and the process of starting up. Here we attempt to communicate some of those lessons that are now in our framework of starting a startup.

Here are five lessons that we learned:

  1. Good problems are the start of bad ideas, which are the start to good ones
  2. Good or bad….get a reaction!
  3. Ruthless honesty and prioritization
  4. Disprove your idea first: urgency, market size, feasibility, and then competition
  5. People are customers and customers are people

Lesson 1: Good problems are the start of bad ideas, which are the start to good ones

Before the summer, our thinking of how good ideas came about was that one would encounter an idea and immediately be able to tell whether it is good or bad. Through the process, we saw just how wrong that thinking is. Reducing an idea to good or bad takes out the nuance and complexity of problems in a way that is almost offensive to those affected by it.

Starting with the idea and not the problem first is the biggest mistake we made at first and the one we often see others make. Problems drive innovation…they give us a reason to come up with an idea, not the other way around.

To be able to assess the quality of a problem, it requires potentially significant research and deep thinking about the problem. When we realized the first idea we were working on initially wasn’t working because it wasn’t an important enough problem, we decided to take a step back not just from the idea, but the entire problem space. We spent far too much time working on an idea and not on the problem. People told us this but we were stubborn; we sure as heck could have saved more time if we listened to this earlier. But, given how common and easy it is to fall into the trap, we are glad we experienced it ourselves. In the wise words of George W. Bush: “There’s an old saying in Tennessee-I know it’s in Texas, probably in Tennessee-that says, fool me once, shame on-shame on you. Fool me — you can’t get fooled again.” Let’s hope we don’t get fooled again with this.

After stepping away from our first idea, we decided to come up with a list of at least 50 problem areas that were exciting to us. No problem was too dumb or outlandish. We got a free license to complain about anything and also channel in complaints we’d heard from friends/family/coworkers and anyone with a problem. Some problem areas were bizarre…like how do you help people deal with their most urgent biological needs when they need it most. As the famous children’s book confirms, it is a universal problem. When we started digging into problems that on the face seemed simple, we discovered complexity and nuance, even in the problem space of bathrooms. We could very quickly iterate on any single problem in our list to an even more refined problem statement or compelling adjacent problem. Although we ended up honing our list from 50 to 10 to 3 front-runners of problems to work on, we realized that we could have picked almost any problem and turned it into a bad idea with a little work. Although we would still be far from a good idea, a bad idea is the starting point. Instead of struggling to get “good ideas” on paper, coming up with problems and then bad ideas for those problems was actually quite easy.

Lesson 2: Good or bad….get a reaction!

As we wrote in our journey blog, the first idea we worked on was better processes for patching vulnerabilities to increase cybersecurity. This idea SOUNDED like a good idea to everyone, but wasn’t a RADICAL idea to a single person. The problem wasn’t “hair-on-fire,” but the solution seemed logical. We realized that our bar for what excitement around a problem or solution looked like from a stakeholder was far too low. Getting a mid-way response SEEMED like a good sign, something like: “looks great, keep in touch” or “you guys might be onto something”, but it turns out that is the worst response. It’s even worse than getting shut down because it gives you a glimmer of hope rather than a direct answer that could save you from dozens of hours of work. Furthermore, if someone is strongly OPPOSED to the idea, your idea may be unique and something that hasn’t been done before. So a strong reaction is better than a weak one.

After realizing that we couldn’t build a company or thesis from mid-way responses, instead of worrying whether the response was negative or positive, we tried to evoke STRONG reactions. Strong reactions guided us effectively. It wouldn’t be uncommon that we would start talking to a stakeholder on the phone and they’d just unleash a 10 minute monologue about the difficulties of the problem. The passion, energy and frustration from them was a clear sign that the problem mattered a lot to them and these strong reactions helped shape a solution.

As one of the guest speakers, Steve Blank said to our cohort: “If at the end of your meeting with a stakeholder, if they aren’t refusing to let you leave until you give them your solution, it’s not a big enough problem or a good enough solution to that problem.” We first thought of that as an unrealistic bar, but as we started to ramp up, we really started to feel that…where stakeholders wouldn’t let us leave the table until we had decided on next steps.

Lesson 3: Ruthless honesty and prioritization

The easiest person to lie to is yourself. When you are dedicated to making something work, you want to fall in love with each idea and truly believe that it is the answer to all the world’s problems….but that’s unrealistic. We have learned through the process, just how important ruthless honesty and prioritization is.

On the honesty front, it’s about being inflexible when you decide what your true North Star is for that sprint. For example, we would set a goal of what we wanted to learn by the end of the week and how we would go about learning that. Each week, we would assess not only whether we achieved that goal, but if that was the right goal in the first place! By learning to accept that we were initially wrong, we were able to get better at setting North Star questions to drive our inquiries. It was extremely helpful to be in a cohort and have weekly meetings with our investors…the cohort and investors kept us honest and in check. It’s easy to believe your version of events, but it’s hard to convince smart people the version of events that always paints you in the best light. Having this sounding board is key.

On the prioritization front, we had to quickly triage all the tasks of the business at all times. Given that our team was only two of us, we realized that there was no way we could do EVERYTHING at every single moment. We decided not to build a website for a long time, not because we didn’t think it was worthwhile, but because it wasn’t the most pressing thing. Our North Star goal was to talk to as many stakeholders as possible and if we were able to get high conversion on our outbound meeting request, then we didn’t need a website yet. Also, since we weren’t exactly sure of what the problem we were trying to solve was, then making a website to only have to remake it later would be a waste of time…something we learned during our first iteration of the company when we were working on a totally different space.

Lesson 4: Disprove your idea first: urgency, market size, feasibility, and then competition

As we got better at being ruthlessly honest and prioritizing, we started to shift from trying to validate to trying to invalidate. We decided to adopt the mindset that our goal was not to find what worked, but all the things that didn’t work. The absence of finding reasons why it didn’t work would be the starting point to discovering reasons that it might. Once we isolated the reasons it wouldn’t work, it was clear that there were some obstacles that might be difficult, but not impossible. We just had to decide whether or not they were worth doing.

We adopted a pretty simple process to check how good an idea was. We would assess the urgency of the problem, the market size (or the scale of the reward), how technologically/operationally feasible it was, and whether other people were willing to overcome the same obstacle and their success in solving the problem. If the problem was urgent, had a large market, had some degree of feasibility, and not enough people working on solving it, it was an idea worth pursuing. Each step of the way was trying to identify why the problem WASN’T urgent, why the market was SMALL, why it was technologically/operationally intensive, or there were far too good competitors. When we started this process, we were able to easily whittle down all our list of ideas to a couple based purely on a few of the criteria.

  1. Urgency: Assessing urgency is where we had to be the most honest; we needed someone DEMANDING a better solution for it to truly be urgent. Anything less was not enough. When we spoke to business owners about their staffing issues, they lamented that if they didn’t get their workers, they’d have to shut down. The problem we were tackling was an existential risk that easily cleared the urgency criterion.
  2. Market Size: The market size criterion was interesting because it helped us define what services we would provide to those with the problem and more importantly, what services we wouldn’t provide. By crafting back of the envelope assumptions and numbers with a little bit of research, we could estimate just how much money there was to be made by doing the services we outlined. Instead of relying on some market research number or making a WAG (wild a** guess), we came up with our own numbers. Throughout the summer, we shifted our understanding of the importance of market size from it being about a number to it being a directional indicator of “how worth” the problem was….it gave a sense of just how worth the problem was tackling and how important it was to customers. Prior to the summer, market size numbers were nonsensical to us…they seemed like just a random pie in the sky number, especially after we had seen pitch decks where someone would be tackling the “pet sneaker market” and claim that it was $8.5B. We realized that by conducting the market sizing analysis in a diligent way, it was actually one of the most useful parts of invalidating or validating an idea.
  3. Feasibility: For thinking about the feasibility of an idea, we thought about three different factors: technical feasibility, operational feasibility, and financial feasibility. The technical feasibility refers to how easy the idea is to build out, and how much we can leverage existing technology. The operational feasibility refers to how difficult it would be to execute the idea. One example of this is that to help with certain visas for immigration, you need to apply through the government, which can take up to a year. We quickly ruled these visas out. Lastly, financial feasibility refers to how much it would cost. Building software is cheaper than building houses, and we had limited cash.
  4. Competition: When it came to the competition criterion, we realized having competition isn’t bad…this should NOT be the only reason you invalidate a problem space. Instead, current competition serves as an indicator of where the industry is headed. Furthermore, the market must be big enough to support multiple businesses. Thinking about competition and how we approach a crowded market is something we didn’t really spend too much time on since our idea was in a niche market. Even in our small niche, we could identify at least 30 possible competitors to some degree who operate at semi-scale. Nobody had built a billion dollar business yet which was both a good sign and a bad one. Good in that perhaps there was a lot of opportunity, bad because perhaps people had tried and it’s not there. In our case, there was only one venture backed company in the space and they were still at the Series A…there is still a lot of room for a differentiated view to catch up…at least we think so?

Lesson 5: People are customers and customers are people

he most fun part of the startup process was meeting people. People from all walks of life who all had amazingly interesting stories and lives filled with things we could have never experienced if not through them. We heard stories of multi-generational businesses, Americans living paycheck to paycheck, stories of immigrants hailing from across the world, and so many more. The humans we were able to connect with made it so easy to forget that we were working on a startup. And perhaps, sometimes that was a good thing.

It is easy to think of an amorphous entity called a “customer” who would be willing to pay us money for our product or service. Through the summer, however, we realized that if we truly wanted to have a successful product or service to someone’s problems, we needed to know THEM. They are the people we should be thinking about at all times. We stopped thinking of people as customers and started seeing them as people, and listened and understood their stories.

We stopped calling these “customers” by the name of their business, but more so on a first name basis. We learned about their lives, what excited them, what scared them about the future, and why they did what they did. We heard inspirational stories of a 3rd generation farmer who wasn’t sure whether he’d see the next harvest, an 80-year old woman continuing to run legal processes for her family’s farm, and an aspiring immigrant who secretly studied American culture so he’d feel like he belonged when he got here. But, similarly, we heard stories that struck fear. Stories of abusive labor contractors who took advantage of workers who didn’t know the rules, stories of scam artists stealing hundreds of thousands of dollars from immigrants, and just how messed up the policies around foreign labor were. We are grateful to all those who we learned from…their stories have forever changed our lives. Startups might seem like they are about technology, big money, and front covers of magazines, but in reality it is about the people.

Conclusion

This only scratches the surface of what we learned. We are grateful for the people who have helped us learn these lessons, from our investors to our mentors to our customers to our teachers to our accelerator cohort…and most importantly grateful to each other for being partners on this continual learning journey.