The danger of the mediocre success when testing startup hypotheses (2023)
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The danger of the mediocre success when testing startup hypotheses (2023)
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Re: The danger of the mediocre success when testing startup hypotheses (2023)
#2His point is that when it's only halfway working you're not sure how much more effort to put in because you're not sure how it's going to pay off.
Re: The danger of the mediocre success when testing startup hypotheses (2023)
#3His point is that when it's only halfway working you're not sure how much more effort to put in because you're not sure how it's going to pay off.
Or an isolated success that makes you double down on what was essentially a fluke.
Re: The danger of the mediocre success when testing startup hypotheses (2023)
#4His point is that when it's only halfway working you're not sure how much more effort to put in because you're not sure how it's going to pay off.
With a clear definition of success, halfway working is, by definition, failing.
Re: The danger of the mediocre success when testing startup hypotheses (2023)
#5> One of the wisest and most important pieces of advice I received as a startup founder was this: “The worst outcome is a mediocre success”.
…in a zero interest rate environment where there is a bunch of money sloshing around looking to roll the dice multiple times.
Re: The danger of the mediocre success when testing startup hypotheses (2023)
#6> make sure that there’s a well-defined distinction between success and failure. Don't fall in the messy middle.
I agree this is the right thing to do, but it isn’t always possible to do for a given experiment. For instance, with the cold-calling example, how do you ensure that it’s either a smashing success or definite failure a-priori? Is there a principled way to choose the threshold number of conversions? Do you just pick an arbitrary number? What if the result is just below your threshold? With some experiments I think the only way to win is not to play. Happy to be corrected if anyone has a solution
Re: The danger of the mediocre success when testing startup hypotheses (2023)
#7His point is that when it's only halfway working you're not sure how much more effort to put in because you're not sure how it's going to pay off.
Or an isolated success that makes you double down on what was essentially a fluke.
I agree this is a “bad end”, but I don’t think we can fault ourselves for flukes. Sometimes you play your poker hand _perfectly_ given all the information you have, and a random stranger just has better cards against all odds. I think you just have to be ready to accept some flukes, and continue to make the best decision with the info you have
Re: The danger of the mediocre success when testing startup hypotheses (2023)
#8> One of the wisest and most important pieces of advice I received as a startup founder was this: “The worst outcome is a mediocre success”. …in a zero interest rate environment where there is a bunch of money sloshing around looking to roll the dice multiple times.
The economics of venture capital is that mediocrity gives a near zero return, and thus should go to zero as an investment
Re: The danger of the mediocre success when testing startup hypotheses (2023)
#9it's a good article, but misses the point.
you can't apply the scientific method early in a startup. You never have enough data and all the factors included change too quickly.
what you need is conviction. if it works for 1/100 calls, and you believe in the idea continue iterating. Also, observe what your peers are doing, you probably don't need/want to innovate on sales or business model.
Re: The danger of the mediocre success when testing startup hypotheses (2023)
#10> So when a startup comes to me with an idea for an experiment, the one thing I tell them is: make sure that there’s a well-defined distinction between success and failure. Don't fall in the messy middle.
Mediocrity is often enough to put food on the table. The world is full of companies aiming to survive for a few more quarters with their little mediocre product. And once a company embraces that idea there's usually no going back.