Entrepreneurs can be a deluded, stubborn bunch. And those traits won’t bring success, according to Ben Parr, tech journalist, sci-fi writer, and editor-at-large at Mashable.com (@mashable).
The San Fransisco-based Parr (@benparr), an “aspiring world changer” who is also “working on a yet-to-be-announced project,” was in Ireland to speak at the 7th Dublin Web Summit (@dublinwebsummit) being held this week.
In a witty, fast-paced talk, Parr outlined his seven reasons for project failure:
If you build it they will come. Some entrepreneurs think merely building a site is bound to attract customers. “I am here to tell you that is a load of crap,” he said. The product must be useful, and it must be marketed. Even Apple with its legions of boosters still spends on marketing, Parr said.
Marketing does not fix a bad product. Entrepreneurs need to address problems customers actually have, but most enter the market to address their own problems. Steve Jobs famously said he did not listen to focus groups. But he did talk to users and spent a lot of time trying to understand their experiences.
Data is king. “Test and iterate,” Parr said. Measure and study your results. If the data says there’s no market, then there is no market, he said. Get these results in sooner rather than later since “it is better to fail early.” Fail fast is advice often given by successful entrepreneurs such as Jonathan Siegel or Mike Schroepfer.
You haven’t brought on the right people. Venture Capitalists will scrutinize the start-up’s management team. They want to be sure the people can make the project a success. Echoing advice given the same week by Adele Hinze of Angel Holdings (@angelholdings), Parr advised entrepreneurs to chose their investors carefully. “You don’t just take money because the money is there. You need someone to add value,” he said. It often makes sense to take less money if the investor adds higher value, he said.
Right place at right time. While web businesses can be founded anywhere, they all gravitate to Silicon Valley once they grow. This happens across industries and includes media moving to New York, or fashion to London, Paris or New York. Proximity is better for networking and can also lead to chance encounters with industry insiders, Parr said. “You need to think about where you need to be,” he said.
You made a bad pitch. Parr said he gets 400-500 investment pitches a day. He rarely looks at them, and said cold pitches are about as successful as cold sales calls. Referrals are the best way to get in front of investors, he said. Other problems bad pitches, bad research, or overly long pitches.
You suck. “Sometimes your idea just does suck,” Parr said. And sometimes the investor is his worst enemy. Traits there include inflexibility, not listening to outside advice, and not changing products to meet evolving needs or research. However, he did quote Jobs again, who said perseverance separates great entrepreneurs from the also-rans.