Echo Chamber Vs EcoSystem : Some Common Pitfall In Startup life

In Entrepreneurship by Ashish Sinha13 Comments

A couple of week back I attended fourth meet up of Delhi Barcamp . It was a great event by every yardstick . Cool venue (Amity University) ,Excellent turnout of campers ( more than 200 people participated) , some great demos , few informative sessions , inspiring talks. Add excellent food, Free T Shirts, and After event Beer Party from sponsors and you have a recipe for a excellent day. Isn’t it ? But at times I was sad .

It was my fifth Barcamp . I have attended all four meetups of Delhi Barcamp and also participated in First edition of Barcamp Bangalore. Apart from that I have attended 5 meetups of Mobile Monday Delhi, which is a Barcamp for Mobile enthusiasts. This experience of attending so many of startup centric event has given me an perspective, I can see a pattern . almost like a pre written script . I want to share the same with the readers of this blog .

These events start with a very enthusiastic crowd of participant , entrepreneur present their product , I sit through the demo , I like the idea, find their UI & Workflow to be intuitive , Team seems to be competent and enthusiastic about the potential of their venture ,they answer with an air of self assurance which makes every one look up to them ,skeptic in the room usually don’t speak much , Atmosphere in room is supercharged. Its hard not be excited . in the end there is a round of thunderous applause ,entrepreneur is beaming . Everyone in room thinks that they have just witnessed history in making . On my way out I see the startup guy talking to a Junior associate of a VC Fund (these guys are always there and they get paid for that . I envy their job ). They swap business card and talk for 10 -15 Min .
I guess this guy secures an appointment . Few months down the line I see them again ,at another meet up, they are still struggling , most of them are not funded yet but they are still convinced about the vision, couple of month later I learn that one of the founder has quit or the company has started doing some consulting project for a Big Name IT Firm or for another VC Funded startup .next time I meet them I notice that they avoid talking about their venture beyond “its doing well” and . I have seen this happening so many time that it has seize to surprise me now .This makes me SAD . Very rarely I have seen any company bouncing back from that phase.

Now don’t take me wrong . I have only the greatest respect for anyone who has the guts to start a new company. My analysis may sound harsh, but remember that anyone who gets as far as this is clearly a star for me . (stolen from here) But I seriously think there gotto be a way to avoid this fate. Not a 100% fool proof strategy, not a slam dunk but

A rational approach which increases any startup’s odd to avoid such fate.

With this thought in mind I spent last few days smoking, thinking about the acts of these companies , I called couple of the promoter and had a candid conversation . what emerge out if this discussion was the fact that its inevitable , you will encounter this phase in your startup journey,you have no choice with that, you have a choice in how you deal with it . Here are some strategy which I feel should help

Echo Chambers

Echo chamber is a term given to the phenomena where we a single message is repeated so many time that it creates an illusion of affirmation from multiple source . Once you are in echo chamber you overestimate the strength of message and literally everything is ok as long as you can hear an echo from somewhere .

Much of your initial years in a startup [especially of web2.0 type startup] are spent in such echo chambers , a close knit community of entrepreneurs, aspiring entrepreneurs. on top of that there is a whole industry coming out of organizing these startup events .In short propensity and probability that you will stumble in to an echo chamber has never been higher .Now we all know that statistically 99% of all startup will fail, so putting it very bluntly 99% of what you hear in these echo chamber is a recipe for disaster . Trick is to identify these echo chambers , use it for what they are good for and move on . Allow me to elaborate.

echo

Once your product is out in wild and you are out there promoting it you will feel following issues

  1. Motivational : Team looses enthusiasm for idea due to stagnancy in growth .
  2. Team Dynamics.
  3. Financials : Team Might Run out of cash .

Motivational

I admit I don’t have solution for each one of these issues but I believe that Most of the above mentioned problem can be addressed by a sustained growth in user base . Once you have 100-500 people logging on to your site or your site is crashing every fortnight or you see 50-60 support request or

feature request in your inbox daily .there is hardly any scope for such stray thoughts . There is no big motivation than a challenge which can be addressed with in your competencies. Which is the most exciting company on internet ? Which is the most troubled starup on internet ? same answer :Twitter . but as long as they have passionate users I don’t see any threat to their survival. Like Guy Kawasaki says “Sale fixes a lot of thing“ .

Now how this issue is being addressed inside of echo chamber? By participating more in it. Its like runnig on steroids . eventually it will take the toll . Have you ever wondered how you come across same faces in all the event? Where will the growth come from? Lets get this thing straight: In India Internet is not mainstream. Majority of people don’t log on to internet with a mindset of exploring new sites . Most of them are accessing net from cybercafé and know where they need to go before login. How to reach them ? I mentioned some tips in my previous post here .

Have you ever thought How these guys discover new sites ? TV , Newspaper & Email Fwd . Now you can say Big Deal !! I already knew that but If I had money to buy Advertisement on TV or Print would I be reading this article with such anticipation ? but what you probably don’t know is that in this era of proliferation of TV Channels its never been easier to come on TV and talk about your stuff . There is a dedicated TV show for young entrepreneur on a leading business news channel . and I know how desperate they are to have someone on their show who can produce good sound bite . Can you?

Every newspaper article , every tech feature in Business World has reporter’s email ID mentioned in foot note . How many times you have written to them ? and for the love of god don’t ask them to review your site on first email . Give them friction , add some analysis , use google, I am sure that reporter must have missed some aspect of issue in his article /story/feature ,bring that to her attention , establish your credibility and once you do that . You can ask for a plug . They will be happy to oblige .everyone is happy to oblige a smart young man with a dream . Problem is we put dream before establishing smartness. This dream before smartness thing works in echo chamber but outside of it ..Nah….Zilch…..Nada.

Find out maximum media outlets, establish reputation there and cash it at right time . Be aware it can be a full time job to explore and use these media outlet so make sure you enjoy doing it.

Team Dynamics

In most of the startups I have seen, there is an inevitable clash between founders at one point or another . Apart from familiar reasons like peer pressure, founder getting faint hearted or some personal tragedy . The other main reason of founder falling out stems from either stagnant growth or skill gap . We talked about growth issue in previous section .now lets talk about skill gap .

In most of the cases biggest skill gap is of missing Business development. Echo chamber is awfully bad at identifying and appreciating salesman. They seems to live in a denial, an illusion that blatant self promotion is a domain of low life . Look at how echo chamber response to a hint of Advertisement in Twitter . Your revenue is your headache . Echo chamber won’t worry about it . So sooner or later when founding team realize it then either one of the founder rise up to the challenge or they hire an outsider.

Problem with hiring an outsider is that trust is missing. Most of the founders expect him to pull a rabbit out of Hat .They never give him enough time to do the groundwork, establish a reputation for the venture , most of these Business development guys work with a time bomb ticking on their back .situation is so bad that once a two year old venture blamed their failure squarely on a Business guy who was with them for just 3 months . Fact is that they were looking for an excuse to quit. The Biz guy became an scapegoat .

Things are more tricky when one of the founder choose to play the role of Biz guy . Now this guy go out and try to sell idea to Potential Business partner like Ad network, distribution partner, syndication company, portals, enterprise user, big media companies, VAS companies and [god forbid] Telcos etc . Invariably he gets some free advice from these people. They tell him you need to tweak the product too make it appealing for them , they don’t commit but says that enhancement is the bottleneck in deal .

Now this guy comes back to office and tell the story to his partner , who fail to identify with the issue .Why?? Because this poor soul is still stuck in echo chamber. Where he was told that his product is Cool and near perfect in every sense. He might do the tweak for few times but since your client was non committal from the start , chances are that deal might not happen . After a few such iteration it will look like that Biz Guy is making an alibi out of product’s missing functionality. This is where the riff start. It may manifest as something else.

Key to avoid this situation is to understand that

  • You are not the only one facing this. it happens to everyone .
  • Some feedback from outside world are valid and other are just noise .learn to identify one from other. This post from Jason would help.
  • Don’t let the emotions be bottled up …Communicate .shout….scream ..than Pat on your co founders back .. smoke together and share a drink ..Bitch about the world and its VCs…Talk about Steve Jobs …Get back to an Echo Chamber….recharge your self and get back to work.
  • Get a mentor or some trusted common friend to rethink your execution and strategy .
  • If at some point you feel that Sales in not your thing than its ok ..Find a new guy but make sure he joins as a Founder and you have immense respect for him.

Financials

This is the most painful truth I have learned . Contrary to widespread notion Most startup don’t die suddenly they die a slow death . And most of them die not because there was no money ..they die because there was easy money which diluted their vision .

Yes I am talking about Consulting work . In startups you are your own boss . you don’t have a client on your head pushing for shipment . You can take your time. Invariably a Consulting assignment will knock your door . you are cash strapped so it will be tempting to go for it . Should you or shouldn’t you ??

Well there is no easy answer ? IF you need money you need money . It depend how hungry or desperate you are. Can you protect your original vision ? Can you resist the temptation of making consulting a full time activity . Think long and Hard its easier said than done . no matter what you think right now chances are that you will end up accepting these assignment . so here is few guideline if you got to do it

  1. Burn the bridge : Declare that you won’t be doing consulting project ever .put it on your website .
  2. Don’t devote more than 20% of your time on outside projects .
  3. DO Upstream consulting: Only take those project where client is a Big Guy in your industry . Do a project for Yahoo, HT Media, IBN ,InfoEdge ,Times Internet etc . This will bring dough and help you cause a blip on their radar . if they don’t buy you out right than chances are that you will catch attention of some key executive there which might be helpful for you in guidance and plug .
  4. Do Tactical Consulting: If you do consulting for another VC funded startup than ask the top guy to recommend you . VCs put a lot of weight on recommendation from portfolio companies .

Neither this article not any other article in world can guarantee to solve all your problem . all we can offer is perspective [May be aggregated perspective J ] . I hope it will help you to avoid the mistakes committed by those who come before you . In the end I would like to share few lines I saw scribbled on a white board of a startup’s office

“ Ride a Wilde horse , Against the Sky

Hold Close to its wings , Before you Die

Whatever else you may leave undone

Just ride a wild horse , into the sun “

pic credit

Comments

  1. prabindh

    I loved this post. Its a pity we dont use all the opportunities. We just need to open our eyes. Thanks.

  2. Manas Garg

    As they say, there is no formula for success. And as you say, one can only give perspectives and not a recipe. What works in one situation may or may not work in another situation. Some things are about the execution style of an individual, some things are about the time and opportunities available.

    My general observation is that eventually, it boils down to the level of commitment the core team and the surrounding environment has for making the company successful. When there is very high level of commitment, ways open up even where none seems to exist.

  3. nishant

    This post is awesome, not just for the amount of gyan it contains but the way you have put it across. Also, the couplet at the end is plan amazing.

    I agree with most of it but differ at subtle points.

    1. I think its never the cash, its always the motivation. Even when it IS the cash its still the motivation to figure out that extra cash to stay afloat. It’s just that “running out of cash” is easier to understand/communicate and does not bear on your personal reputation (because its an external event) wheras “running out of motivation” is hard to put forth and also comes across as a personal failure.

    2. Totally agree about consulting. Starts need focus to move fast, consulting kills focus and slows you down. Slowing down delays traction/users etc. which then kills motivation which as we saw in 1. kills startups.

  4. chica

    Great read. I would like to add something which in my opinion is important too. I think startups should be able to objectively look at their progress, which is difficult since its their baby. But it certainly helps to be a bit removed from it and see it for what it is – a business.
    I wish I had a link to the article I read, my thought comes from reading about Like.com’s strategy. I believe they started as a company offering photo recognition software, but when they had another month to go with their funding money, they did a reality check and realized that their business would not work out the way they envisioned. So they did, what I think was very creative, they figured that the best way to continue further was to use their photo recognition tool for eCommerce and now they have a pretty cool site.

  5. Prashant

    @Prabindh:Thanks for the kind words .

    @Manas: Couldn’t Agree more ,Commitment and perseverance is the key .

    @Nishant: interesting point you made about “running Out of cash” Vs “Running Out of Motivation” . Although it never occurred to me that way ..but it now seems so intuitive [in hindsight :) ] .

    @Chica : Thanks for the Affirmation . Being objective about your own progress is very important but its very hard too. thats why wee have Advisory board and Directors . the post you are mentioning is from Munjal’s Blog http://www.munjal.typepad.com , you can find some of them at http://linkbun.ch/f3d . its a great read .

    @soo ,@arpit: Thanks . I am glad that you liked it .

  6. Asutosh

    Prashant,

    This is a great post.The echo chamber analogy is fantastic.I can recall a discussion with a friend who apparently is part of a VC firm .”If funding is critical for your venture to stay afloat/survive, then either shelve the project or rework on the bplan”. The echo chamber lulls you and makes you think that funds are easily available and any half – cooked idea can get funded.More thought needs to be applied in the planning stage and don’t just get carried away by the accolades you got for yourself in the echo chamber.

  7. Vivek

    Prashant,

    Excellent article, but…

    Isnt the echo chamber an inseparable part of the Web 2.0 phenomenon ? It is not just an Indian phenom.

    In the US, the echo chambers have VC money.
    In India, the echo chambers have VCs.

    I dont think we are going to see gatherings like Barcamp, Proto, where internet startups have the business side figured out.

  8. Rohit

    The complete poem by Hannah Kahn is:

    Ride a wild horse
    with purple wings
    Striped yellow and black
    except his head
    which must be red.

    Ride a wild horse
    against the sky –
    hold tight to his wings

    before you die
    whatever else
    you leave undone
    once
    ride a wild horse
    into the sun.

  9. Prashant

    @ashutosh: Thanks

    @vivek : Thanks , i agree with you but important thing is to understand that its wrong on our part to hope these events should do it . Its our responsibility . These events are primarily for concept validation and feedback .

    @Rohit: Thanks for the info ..i never heard of Hannah Kahn . will look for more of her work . Thanks .

Leave a Comment