These industry insiders can help you avoid big honking mistakes when launching your start-up.
Some start-up founders pursue ideas that are truly revolutionary, bearing little resemblance to any companies built before. If you're in this camp, it's not worth doing a ton of research. After all, why spend your time trying to predict the unpredictable? Yes, you should make some hypotheses about who your early adopter customers will be, and what they want most. And yes, you should talk to some of those customers, to make sure your hypotheses are in the ballpark. But instead of conducting extensive research, focus on getting a basic version of your product or service to market as quickly as possible so you can see how customers react. That's when the real learning begins–as per the Lean Startup approach popularized by Eric Ries.
Truth is, most start-ups are evolutionary, building on the efforts and outcomes of previous ventures. While many founders pride themselves on being innovative, there's no shame in building upon what has been done before. In fact, it can be a great way to improve your chances of success. By talking to people with experience in similar businesses, you can learn about the strategies and tactics that generate the best results, the challenges and pitfalls to avoid, the numbers that matter, and the people most likely to be helpful partners, consultants, advisors, investors and employees. In short, people with industry insight can help you avoid big honking mistakes, and follow best practices instead of learning by trial and error. They can help you see around corners. Here are three types of people with inside scoop, and how to reach them:1. Investors
Some venture capitalists and angel investors focus on specific industries. For example, they may invest in consumer e-commerce companies again and again. Maybe they've even built and sold their own business in the industry. I often advise founders to reach out to these investors long before asking for checks. It's pretty easy to figure out who the investors are, using tools like Angellist and Crunchbase to find out who backed specific ventures. Landing a meeting is tougher, but if you're like most good entrepreneurs, you'll network your way in. Tell them you'll be back in a year to pitch them, and ask them what you'll need to show by then to land an investment. Ask for introductions and advice in the meantime. There's something in it for them, too. Investors like to see the next wave of start-ups and watch how they perform over time before deploying their capital.2. Ex-competitors
The founder of a direct competitor probably won't share their hard-won insights. But an ex-employee of a competitor might be willing to make a little money on the side as a subject-matter expert. Search LinkedIn for people who used to work at a competitor. Offer to pay for their time on a phone call, or find subject-matter experts through a site like Evisors or BlueChipCareer. I recommend scheduling short sessions with a few different experts to get a sense for what they really know, and what they're open to sharing, before committing to more time with the most helpful people. And remember, you don't have to be unethical to learn about an industry's secret sauce. If you don't feel comfortable asking for information about a person's ex-employer, stick with questions about their competitors, or about the industry in general.3. Indirect competitors
Another great source of intel is from companies that do the same thing you do, but in other markets. This works best for companies with a tight geographic or customer focus, so there's little chance you'll wind up vying for the same business. You can find these companies via listings of leading companies by industry on sites like Inc.com or Crain.com, through industry associations, or through the sources mentioned earlier. I'm often pleasantly surprised by how far one founder will go to help another founder. It's a kind of start-up karma. Ask for help from a founder with experience in your industry today, and you may be the one paying it forward in a year.
Got tips on how to learn from prior ventures? Please add a comment below.
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