We live in a golden age of start-ups. But a great idea, a big influx of VC cash or fantastic name recognition is no guarantee for success. For every Spanx, Zipcar or Flickr, there’s a Pets.com, kozmo.com or theglobe.com (remember those?) that crashed and burned. For his terrific new book The Startup Playbook, which came out this week, author David S. Kidder interviewed 41 founders—from TED’s Chris Anderson and Honest Tea’s Seth Goldman to Paypal’s/Tesla’s/Space X’s Elon Musk and Donorschoose.org’s Charles Best—to learn from them what factors helped them soar (and which could have brought them down). In our exclusive excerpt from the book, DuJour brings you up close to five amazing women founders who take us into their own playbooks for success.
Think for Recreation
One of my favorite things to do is to recreationally think. I could be sitting on my couch, feeding my baby, or taking one of my fake “commutes.” (I live three minutes from my office, but sometimes take a forty-five-minute drive on the way to give myself uninterrupted thinking time.) When you focus in that way and pay attention to all of your surrounding, it brings opportunities to the surface that you may have only seen in a vague and unclear way before. Every single person every day probably either sees a need or an opportunity for how a product could be better.
Cultivate a Limitless Vision
Whatever you can think, you can create; just have a very clear vision. I take mental snapshots of things that I want to manifest in my life, and they’re as clear as Polaroid pictures. I’m not clear on how I’m going to get there, but I’m 100 percent clear that I will get there. In high school, I take one very specific example, I told people that I was going to be on the Oprah Winfrey Show. It was clear as day. Once you have our snapshot, work on filling in the blanks to get to that place.
Seek the Right Kind of Feedback
Ideas-even million-dollar ones-are most vulnerable in their infancy; don’t share them with too many people. However, don’t hide your plan from people who can help you move it forward. When I came up with the idea for Spanx, I spoke with potential investors and people at the hosiery mills. If someone can help you in a specific way, don’t be paranoid: ideas are almost never stolen until they’re already thriving in the marketplace. Just don’t approach friends and family for validation or feedback, because then your ego gets involved too early on in the process. Instead of pursuing your idea, you’ll spend all of your time defending and explaining it, and that can be discouraging.
Take Advantage of Excess Capacity
If you think about the idea of “excess capacity” broadly enough, it’s very exciting. A marketplace is full of inefficiencies that you can tap into. The key I to identify things that used to be thought of as closed, single-purpose devices and discover other ways to leverage them. The great example of the past three years has been the explosive innovation in smartphone technology. Phones used to be devices that we used for one purpose, making calls, during a small percentage of our time. Now we use our smartphones many hours a day because the existence of “apps” has transformed them into multiuse devices. Find excess capacity, and you can fill it.
Enable Collaborative Consumption
In the past, it was too expensive to minimize excess capacity by sharing things. Finding the assets was too difficult; the transaction costs were too high. Today, we have access to the Internet twenty-four hours a day. Dividing things into small parts and selling those parts off has become viable for the first time. Information technology enables you to fill excess capacity by enabling “collaborative consumption.” Without that technological jump, collaborative consumption would be impossible as a business strategy.
Have a Passion for Solving Problems
Every founder needs to ask him or herself two questions. “What are you good at?” and “What is your market?” The market part is secondary. You begin with an idea and look for ways to implement it. As your thoughts become more tangible, you’ll come up against obstacles. A passion for solving problems will drive you to learn more about your idea, and think more deeply about how to overcome those obstacles. In the end, you’ll knock them down one by one. (Pay attention: some obstacles can’t be knocked down. Not all ideas are good ones.) The more you look into an idea, the more mind space it starts to take up. Pretty soon, you’re thinking about it all the time. That’s when the train has left the station and you can start bringing your idea to the market.
Cofounder: Flickr, Hunch (she’s now the chair of Etsy)
Make Something People Want to Use Every Day
Flickr is a social network. A lot of our focus went into building something that you had to go to every day and that you would invite your friends to join. We were building a community. There was no other way that it would work. But once you figure out that recipe, you just have to apply it over and over and over again.
Working on the Right Problem is More Important than Working Hard
My work and my life are seamlessly integrated, but that’s not the same as working twenty-four hours a day. There’s an ethos among entrepreneurs that working 24/7 is the road to success. Staying late at the office, working for the sake of working-there’s a sort of heroism around it. “Gosh, you know I never sleep. I was at the office until midnight last night.” I don’t believe in it. As I wrote on my blog, “Working Hard is Overrated.” If you’re working on the wrong problem, it doesn’t matter how hard you work at it. There are two things I go back again and again: having the right people and working on the right problem. Work heroics can be counterproductive; working on the right problem is so much more important than putting in hour after hour on the wrong problem.
A Side Project Often Becomes the Main Event
Very often, accidental side projects become the main product. Flickr is a great example. Twitter’s a fantastic example. There were not the main thing that the team had been working on, but they suddenly came to define the company. Once you have a great team, you can switch direction. (The common word these days is “pivot”.) You can throw out the thing you thought you came together to work on and build the new thing, the new idea that everybody falls in love with.
Be a Storyteller
Gittins jokes that her title should be “chief storyteller.” It’s through telling stories—about the business, the founding, the customers—that people take on the spirit of the company. Blurb holds its own town halls every month, where Eileen uses the occasion to tell stories about what she’s hearing out in the marketplace. Stories drive clarity and team aligment, and they get people motivated. Leadership is, in part, the art of storytelling—it’s a discipline, from your pitch to the story of the company; from personal stories to specific “sparkplug stories” that can be used to motivate your team.
Make Sure You Aren’t Seeing Your Idea Through Rose-Colored Glasses
Your bias will get you started, but it can also kill you. You need to practice tough love early—is this an idea for the next five to seven years of your life? Every entrepreneur needs to be in love with their idea, but you also have to be willing to listen to others telling you your idea is crap—that’s how your idea gets hones into a lasting opportunity. That’s the dichotomy: You’re simultaneously paring down your mission and reaching a point where you can’t not do it, in the process putting yourself out there nakedly for all the world to see- just as an artist would.
Think in Threes
What are the three questions you need to answer about your idea in order to validate it as a business, rather than just as a fun, cool thing you want to do? Coming up with these questions is as difficult as coming up with the answers, but limiting yourself to three is a forcing function. Stay focused on the three things that really matter.
Unpack the Entire Business
There is one question that every founder needs to ask. What is the size of the opportunity and can you reach it with your resources? The market needs to be fairly large, growing, and within your reach.
Founder: Acumen Fund
Identify What’s Broken, but Seize the Possible
While it’s important to recognize what is broken, it’s much more important not to overemphasize it. Instead, focus on what you want to create. Seize the beauty, the possibility, and see the infinite potential of what’s in front of you. Don’t waste time talking about why things are broken; create a new model and a community of people who are willing to help you build it.
Create Founding Partners
Create a partnership model that is about much more than funding. In addition to being financial investors, your partners need to be, and in fact, likely want to be, fully invested in building the entire venture, from helping with strategy to working with team members on specific initiatives.
Be a Pillar of Society
Remember you are standing on strong shoulders. Daily, I’m astounded at how dependent we are on the work and ideas of so many who have come before. So walk with humility and a reverence for the human endeavor. Know it is your job to help take forward in ways big and small.
Excerpted from The Startup Playbook: Secrets of the Fastest-Growing Startups from Their Founding Entrepreneurs by David S. Kidder, Chronicle Books (2013)