Item — HN Reader

There are many truths here, but I keep seeing HN articles with variants on the following piece of advice:

"As a founder your sole aim is growth. If you don’t have growth now, you are failing."

That's only half-true.

To simplify a bit, there are two types of startups in the world: Twitter, and the hoverboard.

Twitter is easy to build, but the question is: does somebody actually want it? Twitter startups are all about market risk.

Conversely, if you could build a hoverboard, then of course people would buy it. Hoverboards are awesome. The question is, can you actually build it? Hoverboard startups are all about technical risk.

The advice to focus on nothing but growth applies to startups where market risk is the dominant risk. You need to validate that there's actual demand for your product. And that's where advice like "If you don’t have scale, you probably don’t need (much) technology", "try no-tech," "[edit] static content and embedding some forms" applies.

But if you're building Tesla, or a cure for cancer, or self-driving cars, or most enterprise products, or any number of startups which require a technical breakthrough, you literally cannot focus on growth from the start. The minimum viable product for these types of areas may take months or even years to build. The experiments you should run for those types of startups should validate technical assumptions: for example, can we make a battery energy-dense enough to power an electric car? Or they should validate market demand through customer development, which is actually quite useful in many areas such as enterprise sales where achieving growth may take 6-18 months even in the best case.

In general, when you hear startup advice, it's wise to remember whether the author's startup comes from the world of technical risk or market risk. The right things to do for each type of startup are often complete opposites, and it's easy to get confused since most people give advice based on what worked for them, but don't necessarily include the context which circumscribes where the advice applies.

As always, Steve Blank said it first and better: http://steveblank.com/2009/05/28/vertical-markets-2-customer...

"The advice to focus on nothing but growth applies to startups where market risk is the dominant risk."

Yep. But there's also a class of startup that we might call the Secret Hoverboard: it's the sort of problem that looks like a Twitter ("would people want to get more stuff delivered if it only costs $5?"), and when you poke at it with the stick of "doing things that don't scale", you see strong consumer demand -- market validation! Secretly, however, there's a hoverboard-sized technical problem between manual labor and profitability (e.g. "if we can just get our fleet of bicycle messengers operating with X% efficiency we can deliver anything by bicycle for a flat $5 surcharge, which will undercut the business models of all existing delivery services!")

These are tricky, because people are so used to market risk being the dominant factor that they can be fooled into believing that the strong consumer demand means that the rest is easy. But really, it's telling you that people love to get something for nothing, and the market got the solution right the first time.