Founding fallacies
Un-learning what "sounds right" and the historical revisionism in founding stories
Hi all —
In recent weeks I have been writing and talking about the widely-believed misconceptions about starting a company. These misconceptions are widely shared on Twitter, in books, in journalism, and in school. They are based on (deliberate or accidental) re-writing of history and what actually creates companies.
The Fallacious Founding Story
When you hear a company’s “founding story” it typically follows this plotline:
I had this life experience that caused me to decide to make a change
I had a radical vision for a different, better world
I built a product, team, and company
We executed scientifically, deliberately, hoping to get closer every day to our mission
We pivoted a little here and there, and got through some challenging times
But here we are, the original vision is now a reality
This kind of story - perpetuated everywhere you learn about startups - sounds right. It feels right. It makes sense in our “story brains.”
And that is the problem. These stories are told to make sense and be inspiring - not to represent reality. The problem is that we take these backwards-looking revisionist histories as forward-looking guides on how to build OUR companies. And, no surprise, they are counterproductive because they weren’t MEANT to provide instruction, they were MEANT to be inspiring.
The typical founding story has, at its core, a few errors that will inevitably send you hunting in the wrong direction.
What is causal? The founding story implies that the starting point was the founder’s vision. When in reality, companies are usually created by attacking some opportunity, then creating the founding story to make sense given what the business ends up becoming. In other words, the founding story is a dependent variable.
What does progress look like? The founding story implies that planning and scientific hypothesis-testing is important or even helpful, and that progress is linear. When in reality, it’s usually intuition, tinkering, luck, and surprises that create non-linear progress.
What does a successful company look like? I will dig into this more in the future, but it’s not clear to me that the structures of today’s “successful” companies tell you much about who needs to be hired or what needs to be built for a company to become successful. In other words, looking at the current product, org chart, or marketing for a successful company doesn’t tell you much about what got it there, what works, or what you should do.
The “real” founding story
So then, what is the real founding story? It seems to be:
We shipped the wrong thing
Then we figured out through random luck and chance what the right thing was
And we worked like crazy to build V1 of the right thing and grow it
Most parts of the product and most parts of growing it didn’t work, and even though V1 has been successful we way overbuilt it. Fortunately, the few things that ARE working really work, and so we’re just gonna let that take us where it will. And still try a lot of things, most of which won’t work. It’s really freakin’ hard to get things to work. And when things don’t work, it’s hard to stop doing them.
Based on what seems to be working and all the customer feedback, I kinda know where we should generally be headed? Maybe once a month we have a really good idea at minute 37 of a 30-min unrelated meeting and that’s what propels the business forward. But I’ll pretend this idea was all part of the plan.
To that point, we figured out an inspiring story to tell to be able to raise a lot of money and get press coverage. Cool!
If you say this REAL story out loud, you’re going to have a hard time raising money or inspiring people to join you. People like linear stories and certainty.
But this “real” founding story does seem to be closer to reality - the unspoken path to building a successful company.