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Why a Startup is Like a Search Engine

You Start Out with Only Assumptions. Your Job is to Find Out if They're Right.

You’re driving your car to work. You’re taking a hot shower in the morning. You’re buttering toast.

            Whatever it is, you’re performing some boring, innocuous task when it hits you – that golden lightning bolt of creative insight – and you have it. You have the one genius idea that you know is going to make you millions of dollars, change the world, and transform your life forever. So what do you do? You form a startup. You can already picture it: you’ll put together a fancy slide deck, pitch to investors and raise millions in seed funds, sell your company, then retire to the beautiful islands of Fiji.

            There’s one problem with your storyline, though: what struck you in the shower that morning wasn’t just an idea – it was an assumption. You had a stroke of business insight that you assume to be correct and brilliant. By all means it might be, but it’s equally likely that it’s wrong. And the job of your startup is not to execute on your new business idea – it’s to find out if that idea is right in the first place.

            As Steve Blank says, that’s the fundamental difference between a startup and a large, established company. A startup is based on a collection of unproven ideas – they could be right, they could be wrong. Some startups get their assumptions correct right out of the gate and go on to earn millions of dollars almost immediately. But as a founder, you have no way of knowing if that’s you – you have to find out through experimentation.

            This is the crucial thing. As a founder, your mindset and goal has to be one of discovery: your only job is to find out if your assumptions are right, and if they’re wrong, your job is to find the right assumptions and pivot. A startup is like a search engine: it’s job is to seek out and find the correct value proposition, customer set, and business model. Then, only once it’s found those things, can it focus on execution.

            So what does this mean for you? As a founder, it means you should always be questioning your business and that you shouldn’t jump to execute too quickly. Constantly ask if your value proposition is actually what your customers want, or if you’re touching the right customers for your value proposition in the first place. Ask if your monetization model is right, if your organizational model is right, and if your marketing strategies are right. And most importantly, don’t just answer these questions yourself – get the data from your customers, even if it means letting them use a sub-functional beta product. The important thing is to find the right assumptions, and the only way to do that is to iterate, test, and repeat. 

 

Thank you to Rawpixel for the photo.


 

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