June 16th, 2021 | By: Wil Schroter
Show me a startup that was once hot and I'll show you a Founder that got totally distracted by their own bullshit. As Founders, we're in the business of making dreams come true — particularly our own — so when everyone around is telling us how amazing we are, it's really hard to wake ourselves up and realize none of it is real.
Once hot startups all had a moment when everyone was praising what they did. The reason they are "once-hot startups" is that in the very moment they needed to be the most focused, they went off track believing their own press. It's a challenge that as Founders, if we understand, we can put ourselves in a position to avoid altogether.
When things are going well, we assume we've finally "made it." We figure all of those tough moments and hard decisions are finally paying off. We see all of those charts going "up and to the right" and assume that trajectory is just the beginning.
To put it simply, when we're "up" we're blind. What once-hot startups have learned is that it's hardest to lead when none of the leading indicators are showing caution. When we're moving artificially fast where we're not doing the deep dive we need to do on strategic decisions, key hires, or just the basic sanity check of "How long can this keep going?"
When we're down it's super easy to do — our eyes are wide open. Every indicator is screaming for attention, as people quit, customers leave, and the management team goes from high-fiving to infighting. We need to be able to have the same sharp focus when things are going well as we do when shit hits the fan.
We see the same thing happen when we start getting a few early wins. Whether it's a successful test of our MVP product in the first few months or two successful quarters of growth in a row. We instantly start projecting those early wins to assume more wins will follow.
Except they usually don't. Those early wins are like a hot streak at the blackjack table. They feel great, they energize us — but they aren't an indication as to how the rest of the journey will end.
Veteran Founders among us know early wins are just that — an early win. We appreciate them, but we don't project them. We recognize they may never happen again, and if they do, they may never be this fast or impactful. Instead, we continue to plan for the downside while working toward the upside. We want to be around long enough to play another hand.
There's nothing like a ton of people telling us how awesome we are right now — it's so damn validating. It doesn't matter if it's investors, customers, the media, or even our own team — we love being told how genius we are for coming up with this idea.
But validation doesn't pay the bills. All of those early congrats are actually distractions. We're the same idiot we were last year, we just happen to be working on something that's working today. The short-term validation makes us happy, but it doesn't advance the product or our startup.
Every once-hot startup had a moment where everyone was falling over themselves to tell them what a genius they were. Sometimes those Founders got so wrapped up in the validation they lost sight of the fact that all of that validation was predicated on them completing the journey, not just starting it. And let's face it, we don't get paid for starts, we get paid for finishes.
What we need to learn from once-hot startups is that our outcomes are measured over 5-10 years, minimum. Whatever people are telling us, or how well things are going, are just one momentary uptick in our stock price. The only way we truly come out ahead is by keeping our heads down, our mouths shut, and our foot on the gas.
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Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.