I was talking with a founder the other day and they were espousing all the great things about their startup. By and large I was sold on the idea, but there are some functional issues I have large concerns about. To remind the readers it’s not about how much money you bring in, rather how much you have left over after paying for the required resources. This particular venture seems heavy on the resources.
At this point the founder jumped in and said, “But just look at the success of…” and started waxing lyrically about the success of a type of business that is tangentially associated with what they’re doing. The argument being that if this type of business is obviously so successful then they have nothing to worry about. The thing is… in one of those odd turns of fate… I actually know A LOT about the business example this person gave. It just so happens I have around 20 years experience around that industry, and have had many a long conversation with owners of those types of establishments. What appears to be a successful industry is really one driven by passionate owners. There are very successful establishments to be sure, those are outliers and are basically a wall papered version of the industry. The example given was literally one of the worst examples I could think of. I’m very happy owners are passionate enough to keep the establishments around, but I wouldn’t touch one with someone else’s ten foot pole in regards to business.
This is something to keep in mind when using examples for describing your venture. The shorthand way of describing a new startup is to say, “It’s the _____ of ____ “. Before you start throwing out examples you should make sure to nail down which examples are really the most appropriate. It’s too easy to assume another type of business is successful simply because it shows the marks of success. A nice building, employees, and a company car may be paid for through revenue, or… the owners ever expanding debt limit. A line of argument that sounds good when talking with your peers may end in a gut check if you use the same examples with someone that happens to know more than you do about the examples given.
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