Angela, I like this post and the suggestion that in startups the line between what is “business” and what is “personal” is less clear than it may be in later stage ventures. I really like your suggestion to try to understand how a potential team member interacts with partners/friends/etc., as I do think this is incredibly revealing in terms of how someone deals with conflict. However, while this may be a good place to start, I also think that context really matters and that knowing how someone behaves in the confines of his/her home/personal life could actually be more misleading than revealing. Assuming that certain behaviors would carry over into the workplace was the downfall of a few of our case protagonists in class! I think the most important thing is for founders to be open in their communication, recognizing from the beginning that it is impossible to keep emotion and what is “personal” out of business.
Jay, this is really interesting. While I would have expected “No Market Need” to appear on the list of why startups fail, I don’t think I would have expected it to be first on the list and the reason for the demise of almost half of all startups! While things like running out of cash, losing to a competitor, or poor product development are either somewhat out of the control of the founders or the results of mistakes made during execution of the idea, determining whether there is in fact a market need seems like it should be a founder’s number one priority and the difference between a “go”/”no go” decision. I am sure there is an element at play here of founders convincing themselves that the market “doesn’t know they need it yet”, because they are so wrapped up in what they think is a truly revolutionary idea. Any other suggestions as to how to get founders to take a step back and assess whether their idea is really a good one? How do you challenge someone who is so convinced they are right? Is this statistic really just a reflection of ego?
David, great post. While I agree with Lynn that the answer to your original question is most likely “it depends”, I found your points around the benefits of founding a company, even after failure, to be quite interesting. Though there are many Founders who don’t focus enough on the risks inherent in starting a business, there are also many would-be Founders who don’t take the plunge for fear of what happens if things don’t end up working out. Though I believe there is some element of pride that may make it difficult for a “failed Founder” to knock on the door of a more successful competitor, I also think this is an extremely compelling exit option. You will bring a very relevant (and perhaps very rare) skill set/industry insight/relationships to that competitor, who would most likely be eager to have you on board. If you truly believe in the product or service you were trying to bring to life and someone else has figured out a way to do it better, your original passion for the concept should be enough to help you overcome that pride. Though having these exit options may not make the decision to found a company less selfish, it does make the risks feel less frightening!