The #1 killer of startups: (lack of) patience

In this post, I want to take you with me into one of the patterns I have seen emerging whilst working within dozens of different startup ecosystems.

^{Background: I specialize in long-term start-up > scale-up strategies, primarily in the B2B Software space. Over time I’ve worked with dozens of founders and investors in many different verticals, from one day to multiple years. My last ‘stint’ over the previous three years was leading a secondary business unit within a Medical Device Software company into a spinoff as its CEO.}

Wardley Mapping

As a generalist, I use a lot of frameworks and mental models to analyze the situation I am in. All models are wrong, but some are very useful. So you don’t use them by the letter but to find a common language. The most useful framework I have worked with for many years now to lay the land of an ecosystem is called Wardley Mapping.

I’m not going to explain what Wardley Mapping is right here _{(just go to learnwardleymapping.com)} but one of its base constructs is that it allows you to place agents, be it a process, a company, a product, … according to their maturity levels. These levels are defined in stages called, genesis / custom / product / commodity

Every product category that has ever existed goes through these stages. I’ll briefly explain what these stages mean as that does make sense for the rest of our storyline here:

• Genesis: we are in the research phase. Can something actually be done? Is what we are trying to achieve technically possible? Can it work?
• Custom: the first integrations into a system. We are implementing the concepts with a/some customers. Can we prove that bringing value is repeatable? What is the difference between what we thought we needed to build and what the market actually needs?
• Product: custom implementations are expensive and the competition will be able to serve the value cheaper if I don’t productize my custom learnings. Can I make the business model scalable and competitive?
• Commodity: all the startups have died or are already acquired. Business is fully automated, failures are no longer allowed, and margins are on the road to zero.

Respect the market’s tempo, or end up in the Startup Graveyard

I have seen a lot of start-ups, especially the innovative ones, failing right at the cusp of the custom > productized stages. They invested too much too early, are already oversized, and have a product that is not what the market is asking for. I’ve started to call this the startup graveyard. This is also one of the reasons that the ultimate market winners are RARELY the ones who invented the concepts. 9/10 unicorns entered the market late!

Here’s the kicker to what these stages mean: they come with consequences that are very hard to be accepted by (visionary) founders and their investors alike.

1. You are never alone as a player; your product is part of a product CATEGORY. It’s the evolution of the product category that will define the speed of adoption. You have ways to influence the speed but you do not control this speed.
2. As long as the value is not proven repeatedly, the business model will change! It makes absolutely no sense to start building a scalable business model, let alone executing that, before you find a collective product/market/fit*.
3. You are not the one that decides which features are going to be eventually the category defining things. It makes no sense hardening your development rigorously in the early days. Stop wasting your precious energy. Technical debt on things you may need to throw away or re-architect are fine. Design for change!

_{*: number 2 is the most challenging when talking to/with investors. It usually takes at least two/three years in B2B to truly find what the future business model will have to be. And rarely is it the €100MM revenue they all want you to promise … The exceptions exist but they are extremely rare! I truly wish we could focus more on building sustainable businesses than the current risk capital based systems allow us …}

Strategy gameplay is the key to survival

A Wardley Map in itself is a point-in-time snapshot of your situation. That’s why we call mapping the search for situational awareness. And it evolves continuously. In my opinion, teams that actively use mapping should revisit their maps at least once every 6 months. The great news about Wardley mapping is that knowing where you are, helps you make great strategic decisions goring forward. I always call it playing poker with the knowledge of what is in the other players’ hands.

I’ll dive deeper into some of these gameplay tactics in a follow-up post later this week!

And never forget:

People overestimate what they can achieve in one year, but underestimate what can be achieved in ten! Take your time and trust the process.

If you are interested in any of the insights I can bring to your company, I do recommend you have a look at my service page and schedule a meeting. https://hansdeleenheer.com/services/