More on “not drinking the Kool-Aid”
Mark Suster has a good post on Not Drinking The Kool Aid after an event like TechCrunch50 or widespread press coverage, which is well worth the read for entrepreneurs. I had a few additional points to add:
1. Don’t pitch bloggers/journalists/other with your news clippings. Yes, you’re the new popular person in the school hallways, and you’ve had a huge traffic surge from TechCrunch. But, don’t pitch all the other publications in the world with those clippings, because that basically tells them that: hey, we’ve already been overcovered! We don’t need any more coverage!
2. Traffic spikes does not make a business. Inevitably, startups start sending out press releases and pitches after big launch events like TechCrunch50 and DEMO about how their traffic has increased 8 bazillion percent in the last month. Yes, your traffic will spike out of any conference, and particularly high profile ones. No, it’s not unusual, as everyone else also is seeing that spike. If you’ve suddenly signed up 5 big name, paying customers, that’s good. If you get 1 million random people visiting your web site because they can’t figure out what your Web 2.0 name is all about, that’s not.
3. Funding is not success. Congrats, you’ve just scored some angel or VC funding from all that exposure. Yes, we want to know about it (we love covering VC fundings). But, does that mean your company is successful? No. There’s more companies funded who go under than who successfully build a business or get an exit. Funding tends to be (but is not always) on the path to success, but the fact that you have $5M to build out your product doesn’t mean you have customers, revenues, or a successful market position. Many startups mistake funding (an investor believing in your plans and vision) for success (your company having a lead in a market and a firm business/list of customers).
4. The number of mentions of your company does not correspond to number of customers. Yes, you’re more popular than apple pie, and everyone has mentioned you in publications, on TV, etc. But realize that being popular does not equal having and signing up customers. Too often entrepreneurs tell me “hey, we’re now a success because we were mentioned on CNN/The LA Times!” or something similar. If you are looking for your 15-minutes of fame, maybe that is success for you. (All too often here, particularly in the LA area, Fame is more important than Fortune). But, don’t mistake fame for success in business.
5. Don’t let it all hang loose. A little bit of fame is intoxicating, and sometimes, entrepreneurs delude themselves into thinking they’ve got it made. Mark talks a lot about this, but I have constantly seen dedicated entrepreneurs — who, in the face of sudden exposure and press — suddenly lose sight of their business. Instead of those ten meetings with potential customers, they’re hanging out with name-that-celebrity at the Roosevelt. Instead of rallying their employees for that next product release, they’re jetting off to Palo Alto for another tech celebrity shindig. Keep your eye on the ball. As much as that hanging out/tech party might help your firm, that’s great. But if it’s not, watch out!
