In 18 months since starting Magma, we’ve invested in 18 companies. The biggest predictor of success so far is very simple: does the entrepreneur value doing the dirty work and is he or she willing and able to identify it and then do it.
Paul Graham calls it doing things that don’t scale. Sam Altman’s How to Startup class 8 is devoted to it. Successful entrepreneurs and VCs all have different names for it. But at the end of the day, it’s the same idea: the stuff that takes you from 0 to 1 and then 1 to 2 gets you on the path to validating your business and start to scale it without building software and business processes. (I wrote a blog post about doing the dirty work in an commerce company here.)
But many (most?) first time founders (including some in our portfolio) either don’t see the value of doing the dirty work or can’t correctly identify what the dirty work they should be doing actually is. It’s one of the biggest, if not the biggest, red flag that goes up when I meet entrepreneurs. If they’re not doing the dirty work on their own when they don’t have any funding, they probably won’t just start doing it when they do have our money in their bank account.
I’m not sure why, but I think it’s a combination of the following factors. Founders:
- Don’t see the value in the dirty work
- Think they don’t need to do it.
- Think they’re too good for it.
- Think that most successful startups didn’t have to do it, so why should they do it?
The biggest common factor with all four of these reasons is a big one: ignorance.
The most successful companies that many people think are overnight successes struggled for years trying to find success. Look at Airbnb. Dropbox. Whatsapp. And so many more. Most people think they’re overnight successes, but they’re really not. The media hypes up massive companies and talks about overnight successes, but overnight successes are the once in a decade occurrence. Even Instagram, which went from 0 to $1b, still took two years.
Many first time entrepreneurs think that you can skip from step 1 to step 100, just like the big successes that they see in the media, but the reality is that nearly all big successes that they see in the media actually went from step 1 to 2 to 3, to 2 to 4, to 5 to 4 etc etc. It’s almost never linear.
If you want to bet your time, effort, money that you’re the once in a decade company, go for it, but the odds are massively against you.
The second most common factor is that the entrepreneur just doesn’t have the stomach for the dirty work. It’s hard. It’s dirty. It’d called dirty work for a reason.
But if you do the dirty work, you still may not succeed. But at least you’ll find out fast and probably will be able to find a new, real opportunity in the process.