What would you ask a Venture Capitalist and author who has raised over $1B and directly invested in more than 125 different companies? How about, “What can I do to kill my startup?” In this week’s episode we talk with Paul Ahlstrom, the managing director of Alta Ventures and co-author of Nail It Then Scale It, to discuss his wealth of expertise and the 3 startup pitfalls that will guarantee you fail.
Talk Points:
Three pitfalls that will guarantee you fail:
Launching your product or service without the specific customer in mind. Don’t just fall in love with your idea and fail to continually think about exactly where it intersects with the customer’s pain you’re trying to resolve.
Going head to head with a market leader for the same customers without being better. Disruption comes from below, through going after an unserved customer. Don’t try to innovate and then go after the very same audience as the giants. It’s much easier to go after non-consumption that consumption. As that new market grows, it will niche the market above it and create M&A opportunities.
Scale it before you nail it. In other words, doing good and obvious things in the improper order. This will cause an inordinate cash burn rate. (By the time you get through a certain amount of cash, your company should be worth more than the amount that went in!) Starve, starve, starve the startup before you nail the PMF.
Key startup hypothesis: For (name your customer) that have (name your problem) we do (name your solution) unlike (name your competitor) through these benefits (name your benefits).
Big Idea Canvas: "Before you try nailing and scaling a startup of your own, you need to be sure that your idea passes the 'who cares' test."