#Transformers: Transforming startup culture [video]
by Charlie Mathews (@CharlesLeeZA) The success culture that surrounds startups is killer when you’re crushing it, but the pendulum may swing to utter despair when you’re struggling. This is why a pragmatic, centred approach to building a business is transformational. Gabriel Luna-Ostaseski is a true master of scale who helped Uber grow. Here’s his sure-fire process for creating products and services with a solid product- market fit.
Starting a new business venture or brand is one of the hardest things that a human being can do. Yet it’s also one of the most-thrilling, and -rewarding. On an entrepreneurial adventure, you’re likely to journey through the long night of the soul, question everything you know and reinvent yourself. More than once.
“Transformers Transform 2020” is a special series produced by MarkLives and HumanInsight and sponsored by the Association for Communication and Advertising (ACA), running Jun–Sep 2020. Our objective is to explore and map new paths for brands and marketers to transform, adapt and build resilience while the world adapts to covid-19 and its resultant social, political and economic toll. This is an independently managed, journalism-driven research project.
Being an entrepreneur exposes people to risk, largely because the failure rate for startups is so very high. Research by Failory reveals that, in the time you took to read the intro to this story, at least 40 new startups were created [pre-covid-19 — ed-at-large]. The Ultimate Startup Failure Rate Report for 2020 showed about 137 000 businesses were being created daily. That’s some 50m in one year. But here’s the crunch — only 10% succeeded. Ninety percent didn’t make it, which meant 123 300 new businesses fail every single day.
Failure has a bad rep
In a world obsessed with material success, failure casts a bruising shadow. The important question to ask is what happens to the founders of the hundreds of thousands of failed firms in their more-desperate moments? This is why demystifying success and failure is critical, if not life-saving.
Success culture can be toxic and punishing, particularly given business journalism so seldom unpacks the crushing disappointments. But Failory is a collective where mistakes become teaching stories that enable entrepreneurs to learn from others to avoid more pain.
Community is important because it reminds entrepreneurs that they aren’t alone — that asking for help is okay, particularly when life or business doesn’t work out. There’s a blog related to this that every founder should read. Written by Sean Percival, it tells the entrepreneur-cum-author’s struggle after he helped a founder who then took his life. When it’s not all good, ask for help scratches hard at the underbelly of achievement and details the depression and despair that founders can face.
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“To the other founders out there, please know this if nothing else:” the author and former Myspace VP of online marketing. “Having a startup today is not about crushing it. It’s about not getting crushed. We are always on the brink of making it big or losing everything. Your company sits atop a pendulum, and you won’t be able to control how it swings. Every other founder and startup is going through the same challenges you are. You are not alone.”
Success culture can prove toxic
Another blog about being a CEO, The Show, writes about this continual one-upmanship and ceaseless striving to appear successful. “We all know why we put on the show of course. We’ve all heard the importance of putting on a brave face and acting ‘as if’. But it seems to me the show has reached proportions that would be comical if they weren’t so tragic,” writes Francisco Dao, Impossible Trips founder, adding, “Every day I see entrepreneurs posting about ‘hustling 24/7’ and ‘can’t stop, won’t stop’. I’m sure they mean well, but for everyone out there who’s struggling, watching others put on a better show just adds to their feeling of inadequacy. For many, watching the show just hurts.”
This is why one of the most-useful experiences I’ve ever had as a serial entrepreneur was an ‘intensive’ hosted by Heavy Chef on growth, presented by a true master of scale, Gabriel Luna-Ostaseski, who consulted with Uber in its earlier days. The VC and serial entrepreneur has developed a pragmatic process for developing a minimum viable product. This process forces entrepreneurs to think long and hard about product-market fit, and how to mature services or goods that hit a market sweet spot.
A pragmatic guide to product-market fit
Economies are underpinned by supply and demand, which means building a brand is about creating what that customers want. Luna-Ostaseski’s thesis is that people buy stories, not products, and it’s an eight-step plan for building a compelling narrative and seeing whether your idea will fly.
- Create an ideal customer profile by truly understanding your market
- Identify your customer’s top three pain points, the very problems your brand will destroy
- Show me the $$$$ (money, time, resources) of the problem/cost of apathy
- Define the status quo — what’s the context you’ll operate in
- Contrast the old and the new — define the usefulness you’re bringing to market
- Define your proposition in 25 words or less
- Deliver empirical evidence of your ability to crush said customer pain points
- Build real customer stories of why you’re wonderful
In this interview, Luna-Ostaseski looks at why product market fit is so important, without which one doesn’t have a workable business model. The interview was conducted by Fred Roed, Heavy Chef founder, whom we thank for sharing.
- #Transformers Transform 2020 • Sponsored by the ACA
- #Transformers video interviews on transformation on YouTube
- #Transformers video interviews on transformations on Facebook
- Download the #TransformersTransform2020 pdf
As an entrepreneur, Charlie Mathews (@CharlesLeeZA) has worked in growth teams with Naspers, Microsoft, and Tutuka.com (the global prepaid card company). Mathews has also successfully founded and exited two marketing companies. Published in Rolling Stone magazine, Guardian UK, and SA’s Greatest Entrepreneurs, edited by Moky Makura, Mathews wrote for Daily Maverick during the title’s legendary startup era. Today, Mathews is the founder and CEO of HumanInsight, a research, insights and learning company that helps brands better understand, and serve — humans.