Coding is not enough - Silicon Valley startups need to get out and sell says top investor

Coding is not enough - Silicon Valley startups need to get out and sell says top investor

Summary: Paul Graham is founder of the very successful incubator Y Combinator and a deity among startup communities. His rare blog posts are always closely scrutinized.

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TOPICS: Start-Ups
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Paul Graham's latest post is: Do Things that Don't Scale.

The word "scale" is code for software automation. His post is about startups that believe that all they need to do is launch their web service with sufficient attention online and users will sign up for their beta in droves and growth will hockey-stick into a raging success.

But it doesn't quite work that way.

The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can't wait for users to come to you. You have to go out and get them.

He's talking about getting out and about and selling services - a distasteful activity in the geek engineering community which is why he uses "recruit users manually."

He points at Stripe, a very successful startup, and its aggressive recruitment of users as a shining example. However, Tripe is an exception to other startups.

They'd rather sit at home writing code than go out and talk to a bunch of strangers and probably be rejected by most of them.

Which is why they are engineers, if they wanted to talk to strangers and be rejected they would have become salesmen. This is why only funding startups led by engineers is not a good idea.

To try and make things easier for them, Mr. Graham says that if they choose to build a business that is relevant to them, and it'll be easier to sell. 

If you build something to solve your own problems, then you only have to find your peers, which is usually straightforward. 

Selling to your peers in the engineering community is even worse than selling to others. It's very gauche. It's going to be very hard. 

Isolationist innovation

Mr. Graham's advice to choose a business idea that they understand is a problem. The Ivy-league educated, mostly white and Asian males that makeup nearly all of the startup teams are running out of ideas for services they want for themselves.

That's why there are so many dating apps, to-do lists, email managers, map apps, music DJ, photo, video uploading apps, etc. Their experience of the world is very narrow, and it's not improving because they don't get out much, they aren't participating in their local communities. There's lots of ideas out there.

There's lots of problems to be solved just down their streets and around the corner, in the cities of Silicon Valley, in the public schools, in the daily struggles of local residents. 

For example, there's an urban ghetto marred by poverty and violence in the heart of Silicon Valley - East Palo Alto. There were eight shootings there recently. There's plenty of hard problems to be tackled there.

Or in the public schools of Silicon Valley. They are basket cases instead of being showcases. Lots of work to be done there.

But the startup incubators keep their young teams isolated, they are often gropuped into dorms, and their workspaces are in featureless business parks.

Similarly, the large tech companies make sure to isolate their workers. Huge busses scoop them up in the early mornings and drop them back in the late evenings. They are kept inside the campuses with free food and gyms – deliberately isolated. 

Little or no participation in the real world leads to a paucity of ideas. Which is why I occasionally write "Culture Watch" articles to remind startups that all businesses are cultural artifacts and they need to know how they fit in. 

Despite their incredibly high failure rate, the isolationist culture of startups shows no signs of changing. 

Innovation emerges from necessity

The future innovative businesses will come from dense urban regions because that's where are aware and engaged in real world problems.

Silicon Valley's insular "echo-chamber" bubble-wraps its technologists from even their local communities. This insular culture is by far the biggest threat to the future of Silicon Valley.

Mr. Graham should tell his adoring legions of young engineers to "get out into your neighborhoods, find real problems, and solve them."

If you can make it here you can make it anywhere

If they can be successful here, in solving key problems of education, urban living, administration of services, etc, that Silicon Valley communities face daily – they can be successful elsewhere too because the same problems are found in all other communities and cities the world over. That's scale. But they need to get out and about. They need to be in it to know it.

Do things that matter. Things that matter to a lot of people sell themselves. 

Things that matter scale very well. Do things that scale.

Topic: Start-Ups

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  • Silicon Valley startups need to get out and sell says top investor

    “They'd rather sit at home writing code than go out and talk to a bunch of strangers and probably be rejected by most of them. Which is why they are engineers, if they wanted to talk to strangers and be rejected they would have become salesmen. This is why only funding startups led by engineers is not a good idea.” There is so much refreshing truth here, and the ramifications permeated many of the startups I worked with across the last decade. Here are a few of the consequences: 1. Incessantly coding, instead of conducting customer-facing meetings that might create market validation or even necessitate a pivot, engineers may be blindsided when commercialization efforts stagnate, or slow beyond one’s rolodex. Real sales traction begins when you sell someone who never heard of you before your (virtual?) knock on their door. 2. Post-sales customer service or Lead Nurturing often seem ancillary to this group. Honestly, I have no issues with pride in workmanship, and developers should be proud of their code. However, assuming customer service is not required to retain customers is a fallacy regardless of how stellar a solution’s code may be. Most end-users will never see code, could care less, rather rely on a solution working “Automagically!” When a service disruption occurs, or QA misses a bug, or your latest release is not copasetic with IE(X), a real relationship with your customers will improve retention. 3. Perhaps related to #2, in a rush to automate and obviate human contact, a branch on the product roadmap will be focused on automating the new client onboarding process. Theoretically, this makes complete sense, improves efficiency and potentially margins. In practice, it is like replacing yourself with an Avatar once you start seriously dating your new girlfriend. That might make you more scalable, however you do not share in the powerful relationship-enabling emotions that frequent the start of something new. Take some time to consider where in the onboarding process might human touch points create important ROI. Automate the tedious stuff like data-entry or signatures. People create lasting relationships. What do you think? http://startupexecutives.tumblr.com/
    John M Sutton