The Startup Genome Report: How Your Startup Can Be the Titanic and Avoid the Iceberg

Saturday, September 3, 2011

So you want to run your very own startup! Good job, my friend. Good job. 

Me, too. But there are steps that need to be taken first, young wunderkind. 

Steven Blank, Silicon Valley entrepreneur extraordinaire and author of the very famous "Four Steps to the Epiphany," has a guest blog post on ReadWriteWeb where he reveals a former summer associate's Internet startup benchmarking project. And you thought this Klout meme was just for people blogging and tweeting on the Internets. 

The Startup Genome Report, launched by former Blank student Max Marmer, takes a similar approach to measuring greatness as attempts like Klout, only it is more crowdsourced and based on interactions with people on the web in the classic customer development style created by Blank. 

Blank's summation of discoveries from this newly launched venture:

One of the biggest surprises is that success isn't about size - of team or funding. It turns out Premature Scaling is the leading cause of hemorrhaging cash in a startup - and death. In fact:
  • The team size of startups that scale prematurely is 3 times bigger than the consistent startups at the same stage
  • 74% of high growth Internet startups fail due to premature scaling
  • Startups that scale properly grow about 20 times faster than startups that scale prematurely
  • 93% of startups that scale prematurely never break the $100k revenue per month threshold

You may or may not find this useful, but I come from the perspective of having participated in a phenomenal startup idea poorly managed. What makes this useful to me is that on one level it is a discovery process that acts as a delivery mechanism. 

What I mean is, while Max is taking in value, he's also giving value back. It's not a one-sided hire. 

If you want to make a successful company in any vertical, and you use the web, you want to take a very close look at this model, because I think this is the wave of the future.  You put something out there for other people, who put something out there for you, and you both benefit, in vastly different ways. 

Sounds a little like a relationship, right? Exactly. 

One thing that can lead to lack of success in any venture is believing that one idea rules uber alles; not allowing the members of your team to take a passionate stake (of work, not funding) in the cause you sought them out to partake in. That creates resentment. 

Resentment kills an enterprise. When the leader pushes out employees with micromanagerial thinking and lack of trust in the new ideas he / she supposedly hires employees to execute and deliver, the ship goes the way of the Titanic.  

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