How did these entrepreneurs acquire this knowledge? How did they have answers to questions I didn't even know I should be asking?
The answer: they had startup cheat codes. (Sadly, it's not as easy as the Konami code.)
The hard way to earn those codes is experience. You struggle through a problem, follow conventional wisdom until you prove it's not working, make all sorts of mistakes, and then, eventually, stumble onto a solution that succeeds. It's agonizing, but sometimes it's the only path available.
The cheat is to have connections to people—mentors, advisers, friends, family, partners, employees—who've been through the problems you're facing before and can give you a map out of the woods and onto a path that works. You need to be willing to listen. You need a network whose problems and solutions match. But when you can short-circuit the painful quagmire of stumbling through an issue alone, it's gold.
That's one of the biggest things I've learned about startups: 'it's dangerous to go alone'. You want people around you who've been through this before and are willing to openly share their experiences.
That's why second- and third-time entrepreneurs have such better track records than their first-time peers. And why investors are so much more likely to back a founder who's been through the game at least once before.
This book is one really long cheat code. I wrote it so that you don't have to repeat the mistakes I've made. So you can leapfrog the wasted months, the wasted cash, and the heartache too many of us endure. So that if you don't live in a geography with lots of other startup founders, you can still get the inside scoop. To unlock these cheat codes, you'll need context, stories, data, and thorough explanations. And I won't share just the tactical tips and tricks; I have to include the ugly, heartbreaking realities, too. If I held back out of fear or a desire to make myself or my company look
better than it is, I'd be failing you. That's why this book is so transparent about the things founders don't normally discuss. Money. Depression. Layoffs. Failure.
I'll tell you how I turned down a life-changing acquisition and how I regret it to this day (hell, I'll even show you the email). I'll walk through how we raised money and explore why it's so rarely the right move (and why it may even have been wrong for us). And I'll show why so much of classic, Silicon Valleystartup advice is flat-out wrong, mangled by survivorship bias, and only applicable to a tiny subset of companies and founders (even though it's dispensed to everyone with one-size-fits-all uniformity).
The next seventeen chapters are here to dismantle the shady logic born from the oversimplified, opaque stories of what startup success looks like. Instead, I'll share real stories, show real numbers, and offer real solutions.
HOW THE VALLEY FOOLED US ALL
The aggrandized archetype of the "startup founder" is powerful and pervasive. These entrepreneurs pull themselves up from nothing and create jobs, wealth, and world-changing tech despite their meager beginnings.
It's also total bullshit.
University of CaliforniaBerkeley economists analyzed shared traits of entrepreneurs and found that, in reality, most come from backgrounds of wealth and privilege. (I complain about having no friends as a kid, but let's be clear: I had a friggin' Nintendo game console. In 1989. That's basically the child equivalent of a free coke hookup in the '80s!)
But anyone can succeed in the gold rush of tech startups, right? That's the whole point, isn't it?
Nope. Sorry. More BS. More than 75 percent of early-stage technology companies fail to return their investors' capital (nevermind make a profit), according to a Harvard Business School cohort analysis. If we look at only tech-centric, venture-backed startups, it's more than 90 percent! Even surviving the first few years was no guarantee of success—a full 50 percent of the companies still alive in year 4 went under.
Founders are usually young, just out of school, yeah? Nope. The Kaufman Foundation found that most founders are between thirty-five and forty-four years old, not the twenty-something college dropouts epitomized by popular culture.
If this data has you questioning the way you think about startups...good. It should.