Every business idea has a place.
I responded to a comment on here recently. I linked it at the end of the post below. The question revolved around growing your company and what to do when growth doesn't meet expectations. I'm fortunate to see many founders work over the years (and learn from their mistakes and wallet 🙃). At some point, there will be a meeting where the founder puts his growth desires in an excel sheet and plots the revenue targets to get there each month. Then they give it to the team and tell them to go meet the targets.
There are three scenarios that can play out. The employees easily achieve the targets and therefore probably underperformed what they could have. Or the targets are on point and everyone is happy (then they get raised higher to be impossible). Lastly, as what happens the vast majority of the time, the targets were set with no basis in reality and the company ends up missing targets and becoming bitter. The successful founders I've run into are strangely the ones that I did not have this conversation with. They will first talk about what they can do, then calculate the ranges of money it could generate, and then put together the excel sheet based on realistic performance objectives measured from past performance. It's unrealistic to expect your engineering team to double their output if nothing changes from today. This is anecdotal of course because I am sure some founder has succeeded this way.
And so I come to my opinion. Every business idea has a place. Okay, every sane business idea that doesn't involve harming others. To the ones coming up with horrible businesses, focus.
Common start-up speak out there spends a lot of time validating your ideas and teaching you the doublespeak to make your idea seem innovative and modern. But in reality, this is not all that important. Any idea could be "successful" but it depends on what you find as successful. Many people here probably have dreams of having a billion-dollar company. Maybe others just want to make enough to support their families. If you match your goals with your capabilities and the market size, you'll probably end up successful. There are no promises of course, but at least there is a realistic shot.
Starting a business, and particularly one that revolves around writing software is "hard". I put hard in quotes because the tasks aren't that hard. What is hard is founders have to learn to confront their own selves. This skill becomes increasingly rare as the world buries themselves in generating idealized personas of what they want their image to be. A start-up founder has a lot of social sway in today's world. Has it gotten to your head?
Ideas don't need to be genius. In fact, most aren't. If you can't describe your start-up as "it's <insert known tech company here> for <slightly different thing that operates the same way>". Early-stage investors won't invest in an innovative idea until it's proven. This makes innovative ideas extremely hard to start. People have made millions from selling a rock as a pet. Now they are selling nothing in the form of NFTs. And people get rich!
Executing a slightly different alternative to a known idea can work. There are thousands of plumbers and mechanics in the world. Why does the internet just need one of everything? If you're happy not being a billion-dollar company, then this is a way easier target. Take a known market player and find something unique you can offer. Become a good second or third alternative for specific cases. You can even just copy-paste all their marketing techniques. Now you may call this cheating. It may feel weird to do. But isn't that a problem? Businesses should compete. Why in the tech space do we need to let industry players stay dominant? Let's change that.
But what if you do want a billion-dollar company? This is really rarified air. And thus, it's really difficult. If you make a tech business, it's even harder. I could go on and write about what you should do if you want to make a billion-dollar company. But I don't know. At least nothing repeatable and formulaic. But I do know a few reasons why other founders failed to achieve this.
And so that brings me to perhaps "6 hard to accept truths for founders". That's a bit clickbaity for me but oh well. I could probably boil it down to fewer or come up with more so I don't want to make it sound like this is some official number of truths.
- The problem they are solving isn't really a problem for anyone.
- The problem they are solving is so tiny and specific to a few people that there is no market there to get ahold of.
- They think they are being innovative but aren't (nearly everything crypto atm imo).
- They don't have the skills or temperament to make it happen. So many SaaS founders start their businesses with no idea of software development. These people get shredded and exploited for their money. Capitalism after all.
- The founder listens too much to friends and family that tell them their product is "great" when it's not. The founder develops an ego/bubble and ignores reality.
- Most software products are small companies and not billion-dollar ideas. I've been part of shutting down start-ups generating 1 to 10MM of revenue just because investors wouldn't get their money back even though it could have comfortably supported a few staff and been a real business.
I'll give some background to how this relates to me. I've been plugging away at www.meettrics.com for a few years in my free time. When I started I could see Calendly was about 25MM in revenue per year. Now they say that's up to 100MM. Calendly is not a product anyone NEEDS. When was the last time you couldn't schedule a meeting? It's just not that large of a problem. I'd never expect this product to make me a billionaire. If I pursue those goals I am going to get discouraged. But the reality is we are probably a decade away from having enough market size for such a size company for a small problem.
I was previously working on a CLM product (contract lifecycle management) and made some great success in early versions but had to abandon it for reasons out of my control. That definitely could have been a billion-dollar business. But the trouble is, I could not do it myself. It would take resources of hundreds of thousands to millions of dollars to get to the software level needed to support that product line. This is a ripe market in my opinion because it seems no one can really consolidate as the market leader.
But for all the ones looking for juicy ideas, I would not recommend pursuing it. Unless you have deep tech skills or the pockets and knowledge to hire them, don't. Money is easy but how do you tell the person you are hiring is actually working in your interests? A good interview test would be to implement multi-revision PDF signing... without using any libraries. If you can do that you MAY have a shot in this space. You could try. But it's a very expensive learning exercise to learn how to run a development team when you are funding it. Sure you can skimp on cost but then you won't even have the people to make what you want to happen. Tech is expensive. I'm hoping to make a dent in that and make it more affordable and show off needed company processes. Meettrics is built on top of Olympus which open-sources much of the core of Meettrics.
If Meettrics paid my mortgage someday it would be a smashing success for me. Expectations are low. I expect to be working on Meettrics for 5 years and I'm entering the third now. But I think it's a good MLP product with good feature overlap to Calendly and with a bit of UX polish and bug fixing will hopefully be a solid competitor. We are going more for a design / artistic angle and a metrics differentiator down the road (Hence Meettrics).
If you are realistic about yourself and your capabilities, you can make your business work. Maybe it won't be as large as one's ego desires. Maybe it's not as instantly gratifying as you wanted. But that's the fortitude the successful founders have in common. They can listen to harsh feedback about their business and adapt to realities to get to where they want to go. The moment a founder stops responding to harsh feedback is the moment the engines turn off. There may be a coast phase of growth for a bit but it will plateau or even fall.
Every business has a place. But is it a place you want to be?
