By, Julie Pitt
“Where do you want to be in five years?” We’ve all been asked this question in a job interview. If you’re like me, you probably made something up on the spot about ascending into leadership, or expanding your skillset. I have a confession to make. I loathe this question. Honestly, I don’t know what I’m doing. I have never had a plan.
When I really examine this question and how it relates to my success, I can confidently say that lack of a plan has never been a problem for me. I distinctly remember when I left my last government job to take a position at Netflix. My boss at the time told me: “you will go to industry, get burned out, and be ready to return and become a Civil Servant.” The opposite happened. Within a few months of joining Netflix, I overcame the feeling that I was out of my league. I became energized, realizing I was capable of things I never thought possible.
Still, if someone told me at the time that I would someday start a company, the last thing I’d say would be “yep, that’s my master plan.” I would have told them that such a move “just isn’t in my nature.” And yet with every career move since, I have ventured into the unknown and come out the other end resembling more of an explorer and less of a comfort seeker.
Maybe that is why I feel like now is the right time to start a company.
The Next Phase
It is no secret that most companies fail. Overconfidence and optimism are well documented in entrepreneurs who delude themselves into thinking that unlike most people, they will be successful. I claim that I am only slightly delusional. I accept that I am entering into this venture against extreme odds. However, if the only thing I walk away with is an exciting adventure and the wisdom of hindsight, I will feel as if my time was well spent.
At a personal level, I want to know, is this “it” for me? Is there an “it”? My gut says no, but only time will tell. Since humans like me easily forget moments of sentiment and determination, I shall lay out a series of testable hypotheses that I can assess as we form and evolve our company. I admit that most of the “testing” will be subjective. My hope is to counteract the human tendency to fit an explanation to past events, by making predictions before those events unfold. Before diving into those, let me set the stage.
The Partners
My two co-founders and I have worked together closely at two companies in the past, over a span of 6-8 years. We have observed each other’s successes, but have also worked through problems together under extreme stress and pressure. We have a good idea of our individual strengths and quirks, and have given one another very candid and sometimes painful feedback. Fundamentally, we are starting from a mutual basis of trust founded on years of experience working together.
All three of us have some runway in the form of personal funds, where we can each go for some time without a paycheck. This allows us to start without external funding. We all have very marketable strengths from our past industry experience, such that we can advise other companies on building successful products, avoiding pitfalls along the way. Given the immediate demand for our expertise, consulting is our primary business.
At the same time, we are all passionate about developing an innovative product that people will love. We don’t yet know what that will look like. Our current strategy for exploring this space is to set aside time for R&D projects that will yield a clear signal on which direction to go. Admittedly, it can be extremely difficult to balance these efforts against a growing consulting business, so one open question is whether we can pull this off.
Business Hypotheses
Within the above context, I make the following predictions.
Hypothesis: If each partner has motivations that are aligned, all will act in the best interest of the company. Nobody will try to “cheat” and nobody will feel shortchanged.
This one especially applies to small startups. I want to make the distinction that when forming a partnership, it is unreasonable to expect that everyone will contribute equally in all areas. This means that assuming you have the right mix of people and strengths, each person will contribute those strengths and that as a whole, nobody feels like they are pulling extra weight. If it feels like someone is slacking off, the question should be why. I would posit that the reason most assuredly comes down to that person’s motivations no longer aligning well with those of the other partners.
Hypothesis: Having a sane and disciplined process for evolving company vision and strategy is more important than having “the right” vision and strategy.
In essence, you don’t know what you don’t know, and that’s OK. I believe it is best to acknowledge what you know and what you don’t, form a strategy based on available information, but quite quickly adjust as more information is available. What I’m stressing here is that the governance process for evolving a vision and strategy is more important than having the right ones from the beginning.
Hypothesis: Exploring open-ended problems in time-boxed increments with measurable achievements can lead to innovative solutions that ultimately provide business and/or consumer value.
When exploring an unknown space in a business setting, some questions are bound to come up. Is this a fruitful path to explore, or is it a dead end? If it is a fruitful path, how long will it take? Usually these questions don’t have answers, especially at the beginning.
I claim that the best approach when embarking on an expedition like this is to put checkpoints on the calendar, in advance, to assess whether to kill the project, keep going, or make a course correction. A goal or testable hypothesis should be set for each time increment and assessed at each checkpoint. Even if it’s as simple as “I will have a working vocabulary of technology XYZ in 1 week”, your ability to decide what to do next after 1 week will be dramatically improved.
Hypothesis: The business will unwind gracefully and amicably if the exit is discussed and agreed to in writing at the outset.
This prediction is based on advice I have heard from a number of entrepreneurs and professionals. Even when you are working on the basis of mutual trust, talk through all the ways your business can spontaneously combust and decide how to handle them before emotions and tensions of the situation are involved. In other words, let your thinking brain decide, rather than your emotional brain.
Hypothesis: Giving something away spreads the seeds of serendipity far and wide. Most of those seeds will wither and die, but some will bloom in surprising ways.
To prove this one, all I need to do is provide an example of what I judge to be a fortuitous encounter, relationship or other windfall that results from this blog. Another question that has come up between the three of us is, how much free advice should we give before engaging a client? My stance is that we should not worry about this. If a 20 minute conversation with a prospective client solves all their problems, we should feel good that we helped them. It would also be a signal that either their problems aren’t that challenging or our advice isn’t as valuable as we think it is.
Hypothesis: Growing a company very slowly means you can work sane hours and have a life.
This is one of those questions I have wrestled with for years. I have a natural tendency to immerse myself in whatever I am doing. I know that to be a healthy person for the long term, I need to balance that with family, fitness, hobbies and other pursuits. On top of that, commuting to the Silicon Valley is horrendous for me and I’m not interested in moving. Can I work a normal workday and still create a successful business?
On the growth side, I often wonder how much of the urgency of delivering something quickly is manufactured by CEOs and leadership. It seems that at any particular moment, “the time is right and we must act now.” I believe that nimbleness and maneuverability are keen advantages in just about any business, but moving quickly in an unfocused way will lead to burnout with no real gain. Does a company really need to grow quickly to be successful?
Hypothesis: Enlisting the help of a good lawyer and accountant at the outset will save a ton of headache.
To prove this hypothesis, I need to produce an anecdote in which the advice of one of these professionals averted a major snafu. I am almost certain this will happen.
Hypothesis: It is possible to build a successful consulting practice while doing R&D for product development. The business can successfully transition from one to the other, or sustain both.
I am the least certain about this one. I have heard from other friends who have done consulting that sales and marketing eventually soak up much of one’s time when building up a client base. From my experiences so far, I can easily believe this. The delusion creeps in here because I must believe that somehow “it will be different this time.”
Summary
Some of these hypotheses will become evident quite quickly, and some will take months, if not years to be more or less conclusive. I will endeavor to give updates on these as events unfold. It is also more than likely that I will realize that the formulations of some of these hypotheses missed the mark, or that there are other ones that are truly relevant. At least now I have a starting point from which to compare my experience.
The Order of Magnitude 