Rejection Is A Beginning, Not An End

In 2010, my then-co-founder and I flew to Seattle to participate in “Techstars for a Day.” For those who don’t know, Techstars is a prominent and selective startup accelerator. During “Techstars for a Day,” they host companies they’re considering admitting. It’s an unofficial finalist interview of sorts.

As we flew across the country, we were confident we’d be accepted. After all, we were finalists and we were awesome. How could Techstars not accept us?

To make a long story short, we were wrong; we weren’t awesome, and Techstars did reject us.

My co-founder and I were both pissed because… well… rejection sucks. However, while it felt like a crummy ending to an exciting opportunity at the time, in retrospect, it wasn’t the end of anything. It wasn’t even the end of my relationship with Techstars.

Nine years later, I was invited to be a mentor for companies in the Techstars Raleigh/Durham accelerator. Meeting the new class of Techstars portfolio companies — which I did last week — gave me an opportunity to see the ways in which my own knowledge of entrepreneurship has evolved. For example, here are four ways in which the companies I mentored know more than I did when I was applying to Techstars, and another four things they still need to learn:

4 Things the current Techstars entrepreneurs were better at than me:

  • Introduced themselves with concise explanations: Every company I met introduced themselves by telling me what they did in a few quick sentences that made their basic premise easy to understand. I mention this not just because they’d honed their elevator pitches in ways I wish I had when I was in their position, but also because it took me years to learn the value of explaining things simply, clearly, and directly.
  • Prioritized traction: After explaining what they did, most of the entrepreneurs I met shared stats about how many customers they already had and how many enterprise deals they were busy negotiating. Yes, I was skeptical of their numbers because early companies often misrepresent traction, but at least they knew to talk about it. I didn’t know that when I was at their stage. I was still in a naive “if you build it, they will come” mindset.
  • Pre-meeting research: Most of the companies made a point of referencing something they’d read about me online, which meant they’d taken time to do research before their meetings. In my early days of building companies, I rarely did that, and I’m sure it cost me opportunities.
  • Always follow-up: I’m writing this post within a week of my mentoring sessions and I’ve already heard from most of the companies. They’ve thanked me for my help and asked if they can add me to their regular “progress report” emails. In contrast, I’m still terrible at following up and updating people… just ask my previous investors!

4 Things the current Techstars entrepreneurs still need to learn:

  • Customer acquisition is your product: All the entrepreneurs I met wanted to spend the entire time explaining their products. I had to interrupt them to ask questions about their customer acquisition strategies, and none had good answers. But they had plenty to say about their “amazing” user interfaces and “revolutionary” features. Uggg.
  • The customer wasn’t the user: My personal startup motto is: if the person paying for your product isn’t your end user, it’s a bad business model. And yet, more than half the companies I met were selling to people who weren’t their end users. For example, they’d be pitching a medical device that insurance companies would pay for, doctors would prescribe, and patients would use. While I realize these kinds of models exists (i.e. prescription drugs), they’re particularly challenging and require tons of startup capital..
  • Making it about them instead of their customers: Too many of the entrepreneurs I met wanted to tell me their personal stories. They shared why they were building their companies, how they’d gotten started, and what motivated them to keep working. In contrast, none of them mentioned their customers or their customers’ needs without my asking. That’s selfish. We don’t build startups for ourselves. We build startups for other people.
  • Having too many answers: The entrepreneurs I met answered every question I asked; none of them were willing to say “I don’t know.” They all either believed they knew everything or believed they had to appear as though they knew everything. In either case, they were wrong. As a Techstars applicant, I thought I had to know everything, and I was wrong. As a Techstars mentor, I realize I can’t know everything. A willingness to say “I don’t know” is critical for entrepreneurs because it helps us avoid making the kinds of false assumptions that often kill our companies.

Observations like the ones I’ve described above, and my ability to make them, help me recognize the kinds of things I’ve learned since getting rejected from Techstars. Even if, five minutes from now, someone successfully persuades me I’m wrong about all of the lessons I’ve shared, it doesn’t change or diminish the role my Techstars rejection played in my personal education and growth. Had Techstars not rejected me and my company, all the subsequent events in my entrepreneurial career that followed wouldn’t have happened — I got accepted to a different accelerator, I raised venture from different investors, I hired different employees, I moved to a different city, and so on.

Would I have been happier with the progression of my life and career had I been accepted to Techstars Seattle in 2010? I have no idea. Am I happy with my life and career now? Absolutely.

What that tells me — and hopefully tells anyone reading this — is that, in the moment, a rejection usually feels like something preventing us from reaching our goals. But we shouldn’t let it discourage us. After a bit of time we’ll be able to look back and see how our rejections were the starting points of new paths forward.

5 Entrepreneurship Myths I Heard From A High Schooler

A high schooler came by my office last week. He was on campus for some sort of summer program, and he was persistent about wanting to meet — including referencing statements I made on this website — so I welcomed him to stop by.

When I asked him why he wanted to meet, he launched into a mini-soliloquy about his goal of becoming an entrepreneur. It was a well-prepared speech, but it was filled with misconceptions.

Thankfully, he never once mentioned wanting to make lots of money, so that was at least one misconception I didn’t have to correct. However, he had plenty of other overly romantic notions about entrepreneurship.

The rest of our conversation focused on why and how he should reconsider some of those notions. It was a bit like telling a six-year-old that Santa Clause isn’t real, but hopefully it resulted in a potential young entrepreneur being better prepared to pursue his professional ambitions.

In the hopes of helping other young entrepreneurs who find this website, I decided I’d write a post highlighting some of the entrepreneurial myths my high school visitor and I discussed.

Myth 1: Entrepreneur is a job title

I’m not sure who the first person was who listed his professional title as “entrepreneur,” but I think I’m going to embark on a personal crusade to end the practice.

“Entrepreneur” isn’t a profession. It’s not like being a doctor or lawyer or architect, and you don’t attend “entrepreneur school.” Instead, entrepreneur is a label that gets applied to your work.

If you want to be an entrepreneur, don’t start calling yourself one. Instead, start building a business. Someone will call you an entrepreneur eventually. Just don’t be surprised if, when it finally happens, you discover that you don’t actually care about having the title.

Myth 2: Entrepreneurs don’t work for other people

Although people who own their own businesses don’t have bosses, not having a boss actually increases the number of people you’re accountable to.

First, and foremost, your customer is always your boss. When there’s no one higher in your organization than you, the responsibility for the happiness of those customers always falls on your shoulders.

In addition, if you build venture-backed startups like me, you’ll get investors. My investors are wonderful (and relatively relaxed) mentors, but they hold me accountable, and I’m always working for them.

Lastly, if you have employees, you’re working for them and their families, too. In fact, I guarantee no boss will ever make you feel the same level of obligation and accountability as an employee with a newborn baby.

Myth 3: Get an entrepreneurial education to prepare yourself for having a great idea

Too many young entrepreneurs I speak with think they need to study entrepreneurship so they’ll know what to do once they finally have their brilliant idea.

But that’s not how entrepreneurship works. Ideas don’t just fall from the sky, and no amount of classes or books (or blog reading) will adequately prepare you for what happens once you start a company. That’s not to suggest you stop learning. Just don’t expect all of your reading and research to instantly translate into entrepreneurial success. Some lessons you have to learn through doing… and failing.

Myth 4: You should get a job after college with the intention of leaving it in a few years to start your own company

An overwhelming number of my students (and high schoolers who want to become my students) tell me they plan to get a job when they graduate, work at the job for 3-5 years to “get experience,” and then leave to found their own companies.

That scenario might occasionally happen, but it’s really not the kind of thing you plan. Life is far too random. You might get a job, love it, and not want to leave. You might get a job, start a family, and no longer be able to accept the financial uncertainty that comes with starting your own venture. Or you might step off a curve and get hit by a bus.

Hopefully that last thing doesn’t happen, but, the point is, your professional life will be too uncertain to take such a rigid approach to entrepreneurial pursuits. Or, in truth, to any pursuits far in the future.

Myth 5: Your primary goal as an entrepreneur is to change the world

It’s not that I don’t believe in trying to help the world or that entrepreneurs shouldn’t strive to be a positive influence on the world. I do believe entrepreneurs can have a world changing impact. But “changing the world” shouldn’t be your goal. It can be an outcome.

Instead, focus on your company and the problems it solves. If you do that successfully, you’ll likely find yourself in a position to “change the world.” Or, at the least, you’ll be in a better position to pursue an idea that can.