I have encountered many great people over the course of my career and this is predominantly attributed to the fact that I have been lucky enough to work across several industries: pharmaceutical, finance, and the startup space. Having said this, in each industry (perhaps less so in science) I have interacted with people who learn the wrong lessons from events and regularly misinterpret moments where valuable lessons can be learned — this is particularly true of aspiring entrepreneurs/early stage startups. This probably sounds like an incredibly arrogant statement but please allow me to elaborate.
A Life Lesson
When I was seven years old, I was in class being taught Religious and Moral Education. Our teacher told us the story of Jesus feeding 5,000 people with five loaves and two fish, before asking us to reflect on the story for a moment. My train of thought proceeded along the lines of “what a great example to set, share your food with others and they will follow suit, it turns out that there is enough food for everyone if we share our resources!” (I suspect I was borrowing heavily from the Stone Soup fable). The teacher then asked us what we thought of the story and what it meant, I raised my hand and elaborated on my theory and reasoned how it was a great example of caring for others and acting in a selfless manner (I’m certain I wasn’t this articulate though…). To my surprise, our teacher then granted me a patronising smile before telling me that this was incorrect and Jesus had in fact fed everyone with five loaves and two fish. Admittedly, I had a fairly basic grasp of physics and biology but I couldn’t quite see how this could be. In retrospect, she must have looked at my dumbfounded expression and thought she was being helpful by offering up “Jesus can perform miracles” and “God moves in mysterious ways” before moving on to something else. This moment has stayed with me my entire life and here I am twenty-odd years on and still thinking of it from time to time. I couldn’t help but feel cheated by the interaction and have always thought that there is a great lesson to be learned from the story if you think about it logically (albeit this attribute is not readily exhibited by fanatically religious people…). Perhaps this paragraph grants more insight in to my personality and philosophy than I had originally intended but I will leave it as is. After all, I am many things but at my very core I will always be a scientist.
So how does the above apply to startup founders and entrepreneurs seeking investment?
During preliminary meetings with aspiring entrepreneurs/founders I often challenge their assumptions and query their business model. For the avoidance of doubt, what I am doing here is trying to understand: how you have arrived at these assumptions, your thought process, and also how ‘coachable’ you are. After all, if you take great offence to me calling bullshit on your assumptions then chances are we aren’t going to be able to collaborate going forward. Let me clarify my position, I am not a multi-millionaire investor, I do not know any more than you do (and am not pretending to be an expert any field) but I am a PhD scientist and validating/overruling assumptions is something I have spent my whole life learning how to do. When entrepreneurs tell me I’m wrong without backing up their argument I think of my evangelical teacher waving her hands and telling me “God works in mysterious ways”. Again, let me be clear by saying that the act of creating a business involves many, many unknowns but an ability to have arrived at some sound assumptions stands any entrepreneur in good stead.
Perhaps the above is best illustrated with a real world example. Around a year ago I met with a budding entrepreneur who told me about an app based idea that he had. After talking through the concept for a few minutes I asked him who he thought his users/customers would be. He dismissed the question off hand with the famous Henry Ford quote relating to customer insight
“if I’d asked customers what they wanted they would have said a faster horse!”.
I love this quote: it’s funny, implies that you should have faith in yourself, and always think a few steps ahead of the pack. For those of you in a similar position to the aspiring entrepreneur I’ll explain why the entrepreneur’s interpretation of “I know better than others” is off base and incorrect. You see, Henry Ford was a very clever man who quite rightly identified that people wanted to get from point A to point B in a more expedient fashion. The people with this problem were unable to think in such an innovative fashion and as such struggled to envisage a ‘horseless carriage’. The people with the problem were thinking in a limited and linear way where they were looking to subtly enhance their existing solution i.e. a faster horse. Henry Ford solved the same problem of getting from A to B but using a novel mechanism (side note — this is why your competitors are organisations that solve the same problem as you, competitors are not limited to organisations with the same solution as you!). This is why the quote is timeless and fitting. The quote is not an example of someone taking a shot in the dark because they love their own idea! If Henry Ford had taken a look at the problem and said “I know what people need… courgette spiralizers” then we wouldn’t be talking about him now! He correctly identified a problem and incorporated a novel solution; contrary to some interpretations he did not ‘tell people what they wanted’, he offered them a solution they didn’t know existed! As such, when entrepreneurs dismiss concerns of target customers with the above quote I instantly have them pegged as being evangelical and there is nothing I can do to pull them back — no matter what beliefs they have, fanatics do not like to reason.
The other misguided example that entrepreneurs appeal to when cornered (which comes up time and time again) is the Bill Gates, Larry Page, and/or Sergey Brin college dropout/maverick founder story. Don’t get me wrong I love the idea of telling everyone that they are wrong and riding off in to the sunset but these people didn’t do that!
“and what about Bill Gates, famous for dropping out of Harvard to start Microsoft? When Gates sold a new software program as a sophomore, he waited an entire year before leaving school. Even then he didn’t drop out, but balanced the risk portfolio by applying for a leave of absence that was formally approved by the university and by having his parents bankroll him.”
“Larry Page and Sergey Brin figured out how to dramatically improve internet searches in 1996, they didn’t go on leave from their graduate studies at Stanford until 1998. “We almost didn’t start Google… because we were too worried about dropping out of our PhD program.”
Adam Grant, Originals: How non-conformists move the world
What I have tried to illustrate above is not that entrepreneurs are stupid (far from it, some of them are the smartest people I am ever likely to meet). My point is that sometimes you should think like a scientist: can I back this statement up and do I have proof that this is factually sound? By continually challenging yourself with these questions many entrepreneurs will circumvent the issues and problems that their peers will blindly walk in to. You will save yourself a lot of heartache, money, and relationships by challenging yourself with the above and significantly improve your chances of launching a successful company!
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Calum Forsyth is the Director of the Enterprise Clinic at the internationally renowned Strathclyde Business School. After completing a Masters degree and PhD in Organic Chemistry, Calum transitioned to Management/Risk Consultancy with a global firm before specialising in supporting startups.
If you enjoyed this post, please follow me on medium and check out my other articles- https://medium.com/@cdforsyth/how-do-you-decide-who-is-worth-listening-to-when-nearly-everyone-knows-more-than-you-5ecc127ec83e#.7qdhed4to