Meet Dave*. With financial backing from investors, Dave launched a startup that delivered an innovative solution to a problem vexing a specific market segment. His customers either didn’t realize they had a problem, or they’d learned to live with it because developing a solution was beyond their reach.
Dave’s dream was realized: He transformed an idea into a product his customers couldn’t imagine living without. His investors were elated as the startup was showing promise. His employees were stoked to work at a startup that didn’t suck.
Then, at what seemed like the height of popularity, product quality slipped. Customer complaints quickly flooded in. Disgruntled customers demanded refunds. New customer acquisitions zeroed out. A fast-following competitor seized the existing and potential market.
Dave’s investors demanded immediate change. Dave asked his employees to brainstorm solutions. But no one could agree what the problem was [read: who was to blame]. Brainstorming quickly devolved into a less bloody version of Reservoir Dogs.
Dave vented his frustration to his management consultant friend, Heather. He explained how his dream—quickly and without warning—had become a nightmare. He confessed that he never imagined how difficult running a startup would be. He feared investors would pull their funding and he’d be forced to fire his employees. He was scared to fail.
Heather offered several thoughtful solutions, but Dave dismissed each one with an excuse:
• “That doesn’t apply to us; we’re different from other companies.”
• “That might work for bigger, more established companies, but we’re a startup.”
• “That won’t work; it’s too constricting and would rob us of our agility and creativity.”
• “We don’t have the people/time/money resources to implement something like that.”
She’d heard each of these counterarguments before, so she asked Dave how he could so quickly dismiss the solutions. “I can’t take a chance on something I’ve never heard of,” Dave said.
“Let me put that in perspective for you,” Heather said. “You invented and brought to market a solution you expected customers to adopt despite that it was previously unknown, but you’re rejecting these solutions because you’ve never heard of them.”
Sadly, “Not Invented Here” (NIH) Syndrome is all too common among startups. Here’s how it creeps up on you.
1. Reject proven, old-school management techniques
How many times have you heard the phrase “pivot or persevere” or talking about how they employ “validated learning”— all traditional management practices.
Don’t get me wrong, I’m a huge fan of Ries’ work. He’s empowered entrepreneurs and investors with practical knowledge. What should concern you is this: Think about the more-than-a-decade that passed between the birth of Agile and LSS and their recent popularization and adoption. Now consider how many businesses failed in the decade-plus between those two points. Consider how many businesses potentially rejected Agile and LSS as solutions to what ailed them. Consider the role NIH played in the failure of those businesses.
2. Confuse early stage swagger with long term leadership skills
What drives Dave’s NIH? Hubris, inexperience, and myopism. Here’s the conundrum: Those traits also drive entrepreneurialism; whether you’re fully funded or bootstrapping, launching a startup is an audacious undertaking that requires a certain personality type.
As a successful entrepreneur recently told me, “I did it because no one said I couldn’t and I didn’t know any better.” But the darker side of those traits is evident in my serial entrepreneur friend’s words: “I’ve done well ignoring conventional advice. It might not be why I’ve succeeded, but I’m not inclined to change.”
Like many founders, my friend’s emotional attachment to his startup creates a seemingly-impermeable barrier to change. His emotional side overrules the rational side thus denies the problem could be solved by something “Not Invented Here”. Yet, instead of railing against externally-devised solutions, his position was that “simplicity trumps formulas and formality”.
3. Believe your startup is a special snowflake
Dave had a dilemma staring him in the face. Yet, consider how much precious, irreplaceable time he wasted employing irrational counterarguments. Let’s twist the lens a bit: All things being equal, if a doctor said “I’m going to prescribe physical therapy” would Dave respond with “That won’t work, my body is different from other bodies”?
Allow me to channel Fight Club’s Tyler Durden: Your startup’s problems are not beautiful and unique snowflakes. They are the same problems faced by hundreds if not thousands of companies around the world. And so those tools and methods successfully employed by companies both large and small around the globe might just work for you. And if they don’t, well then you just eliminated something that doesn’t work.
*Names have been changed to preserve the last scrap of dignity this guy has.