How Logic and Determination Intertwine in Startups

9 11 2007

In a startup, you are constantly searching for the areas where you can affect the final outcome with the maximum impact for time and resources invested.

I just came to some new realizations why success is best based on both smarts and determination. At least, it’s certainly the case in the sandbox of web startups. You’re smart, but everyone else is too. And no one can outrun Google.

Sometimes, you feel out of control. Unfortunately, there is a lot of truth to this statement. However, it’s not really because you are actually out of control. Rather, the result is uncertain. And the ability to take on this uncertainty is where startups have the advantage (see Vinod Khosla video below).

The success of any enterprise is usually a function of a couple of the following:

  • Smarts. Analytical, that is.
  • Determination.
  • Luck.

Luck is the worst factor to base a business on, especially if we’re talking about taking control of your destiny. We’ll ignore luck for the time being. I do believe you largely make your own luck by putting yourself in the right place, at the right time. It’s something to consider, not something to base a business on.

You could also take an existing system, and apply great determination and hard work. This does work. But sometimes it leads to zero-sum games, although sometimes it doesn’t. And I’m sure most everyone has seen countless examples of hard workers that don’t succeed, beating their heads against the wall on something that just won’t work.

You could also just be smarter than everyone else. Come on, I’ll just move on from this one.

Breakthroughs occur when you successfully merge smarts and determination.

To me, here’s why:

  • IF Event A THEN Outcome X

The simplest logic. Where determination comes in is the ability to bring Event A to fruition.

Where experimentation comes in:

  • IF Event A THEN Outcome X ELSE (New Paradigm)

Josh Kopelman wrote a while back about Domino Rally Business Models that rely on multiple events to occur to result in a particular outcome:

  • IF Event A THEN (IF Event B THEN Outcome X)
  • IF (Event A AND Event B) THEN Outcome X

Add in likelihoods, and this is the basis of a basic risk-reward calculation. Domino Rally Business Models are rough because the likelihood of a particular outcome with so many dependencies is staggeringly low. Reduce the dependencies. Or plan for multiple outcomes:

  • IF Event A THEN Outcome X ELSE Outcome Y

No matter how you cut it, there are always contingencies. In fact, the existence of contingencies simply means you are trying something new that might fail, something that might change the world.

The obvious, common pitfalls:

  • False logic. “If I get the NYTimes, TechCrunch and WSJ, then I will sell 1,000 units.”
  • False assumptions. Don’t assume something will happen. If there’s any chance it won’t, it belongs in the logic.

Breaking it down into the business-speak terms:

  • Get your logic right – strategy
  • Make appropriate plans to accomplish specific events – tactics
  • Work your ass off to try to make sure specific events come off – execution
  • Plan your outs – experimentation

If you frame it this way as a logical being, you’ll see why people’s simplification that “keep trying, and you will eventually succeed” and “you only need to succeed once” is actually very true. Try enough times and it becomes overwhelmingly likely you will succeed, provided your logic is correct.

Finally, watch this great video from Vinod Khosla. Great thinkers don’t need to always be speaking on big stages to have astounding thoughts. My favorite part is when Mr. Khosla basically says that entrepreneurs are religious. He also says that they are inherently great salespeople, not because they went to the school of selling but because they religiously believe in what they are selling. Amen and keep the faith!

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