Startups should be called “experiments”

by | Jun 26, 2018

My 23-year-old son Ethan is the co-founder of a software startup that has taken him from San Jose, California to Manila, Philippines to New York City. He put his electrical engineering degree on the shelf to start his company, called Groundwork, almost a year ago.

Most people who meet him say, “Wow, a startup. That’s cool.” Sometimes even, “Congratulations!” I admire the ambition and courage of founders like Ethan, but congratulations aren’t in order yet.

Startups are popular and cool these days, but most people don’t really understand what it means to go your own way and start a company, including most startup founders. Ethan and his co-founder have had some “cool” moments, but it’s been mostly hard and uncertain. They are still figuring it out.

A startup is really hard and slightly crazy, even when you achieve some success. It’s a long journey. There’s usually no money in it for a long time. You learn many hard lessons that nobody taught you in school. Sometimes it works out and the startup stays alive and starts to grow.

The cool and popular startups we see are the 1% of the 1% (or less) that survive the gauntlet and grow to become bigger companies that garner big funding or have an IPO.

That leaves the other 99% of startups stuck in the struggle to stay alive long enough to figure out how to grow.

That’s where Ethan’s company is now. It might be where your company is too: up and running with happy customers, but no explosive growth yet. Mostly it’s about surviving long enough to try enough things to find what works and what can scale.

The most difficult part often isn’t the surviving, it’s the continual trial and error, being objective about what’s not working, and making difficult changes or brutal pivots fast enough.

For all the data we collect, Lean Startup science experiments we run and endless hours we spend in our businesses, entrepreneurs are only human. Our egos, gut instincts and passion can get in the way of solving the real problems that would help our businesses grow faster.

It’s just emotionally hard to change strategies, people, products, processes, or tactics after we have told the world (and ourselves) that we have figured it out. Our egos and emotions get in the way, slowing down our progress.

Which is why I find it more useful to just call startups “experiments”

Startups are Experiments, as in, “Hey, I just quit my job to start (or join) an experiment. We’re going to try a bunch of things and see how long it will take to figure out what works and what doesn’t.”

That would be easier on our egos, so we could make useful changes faster. More experiments, faster cycle times, better feedback, higher confidence, and more improvement. Less ego and emotion.

A failed startup is just an experiment that didn’t create a fast-growing company soon enough. That’s a successful experiment by its scientific definition since you have tested and proven something one way or the other. But it’s really hard to swallow as a dedicated entrepreneur with so much of themselves invested in a new business.

Your startup is really just an experiment with the hope of finding something that will scale. That’s the point.

Calling startups “experiments” would:

  • Reduce the emotional sting of brutal strategic shifts and major adjustments
  • Drastically speed up testing of tactics, experiences, messages, designs and stories to grow startups faster with less wasted investment
  • Communicate to angel and professional investors that the founders haven’t figured it all out and aren’t ready to “just add water” to scale up
  • Allow talented entrepreneurs to abandon their startup experiment sooner when it’s clear the idea, product or timing are not right
  • Reduce the self-inflicted suffering that entrepreneurs feel when a plan doesn’t work out as expected
  • Create more useful conversations with prospects and customers about the design of products and services to make improvements faster

Most startups (and big businesses) are just not getting enough reliable feedback and are not making objective product improvements fast enough.

The valuable FANG companies (Facebook, Amazon, Netflix, Google) each run more digital experiments in 60 minutes than most big companies run in a year. Their digital data resources, experimentation culture and fast cycle times have created the fastest-growing large companies in the world. Machine learning is real for them and it’s creating exponentially faster growth that isn’t slowing down.

When does a company stop being an experiment? If you ask Eric Ries, author of “Lean Startup,” even big companies need to run small experiments with “minimum viable products” to test their “leaps of faith” and not invest more until tests prove positive results. It’s emotionally hard for them too.

Pivots and continual testing are hard for me too. I’m passionate about my business and I take it personally. I often have a hard time admitting to myself that something isn’t working after I put in serious time and thought before launching it. Most entrepreneurs experience this; it’s slowing down our progress.

I have to remind myself that I really don’t know what’s going to work well in the real world until I try it and see. It helps me go faster when I don’t attach my ego to the outcome.

Our chances of startup success are multiplied if we can increase the number of small experiments before we make big bets—and by reminding ourselves that these are just experiments.

It’s not a good or bad part of me or my sacred startup, it’s just an experiment!