Why This Blog?
A startup is 1% idea and 99% execution.
- Widely used one-liner of unknown origin
The quest for mitigating execution risk
Early stage ventures carry tremendous execution risk. Everyone can have an idea but few master the intricacies of execution. There are several reasons early stage ventures fail but most reasons can be narrowed down to one of the following:
- An early stage venture/startup needs hypothese-driven validated learning and customer development to create a product that meets customer needs.
- An early stage venture should not be run the way a large company is run. Innovation and optimization require different management styles.
- Creating a business on a network (the internet) is fundamentally different from creating a business in the offline world and requires creation of an entire ecosystem of players
- In a traditional business, value is created by the business. On the internet, value is created by the users and other partners.
- A traditional business markets its products/services on a channel. An internet business does so on a network. A network is fundamentally different from a marketing perspective because every node is a potential consumer as well as distributor.
- Value in traditional companies is created through optimized processes. Value in internet businesses is created through optimizing interactions on the network.
- Monetization of a (potentially) infinite scale business with low unit costs (most internet businesses) is very different from monetizaiton of an industrial business.
- Finally, internet businesses are multi-sided and need the creation of an ecosystem. Non-network businesses work in a linear fashion moving from suppliers to firm to buyers.