What's your unique insight?
(at minute 14:01)
The more time I spend around startups the more I value the origin story of the founding team. And I’m not alone here. Pay attention to the VCs that you most respect. When you listen to them interview startup founders and the founders immediately launch into a product demo or describing traction, you’ll often hear the investors stop the founders and ask them to “go back to the beginning” to discuss how they arrived at the idea.
Why is the origin story to important?
The origin story is so important because it’s the best way to get the founders to describe their unique insight into the problem that they are solving. And this unique insight - and how they arrived at it in an authentic way - is one of the most important foundational elements of a startup.
The most famous startup-related quote about this topic is from Peter Thiel...
As I gain more experience with startups, I focus more and more on (a) how the team arrived at their special insight in an authentic way and (b) how powerful do I believe their special insight is.
One of the most common examples of a powerful origin story is Airbnb. 100% of people when they first heard about this service thought it was a terrible idea. Why would lots of people stay on the couches of strangers and why would lots of people rent out their couches?
The uniqueness of their special insight - because they had arrived at this insight in a very authentic way - gave the team confidence to keep building a startup when everyone was telling them how bad their idea was.
Something else related that I’ve grown to appreciate in my life is the simple value of stories. When I was young I use to wonder why non-profits would focus their funding pitches on individual people (ie “Meet Tom…here’s what we are specifically doing for Tom and how it’s impacted his life.”).
It seemed like using aggregate/cumulative data would be better (ie “We’ve impacted thousands of people with our services, so we must be having a huge impact.”). Yet non-profits (and other types of organizations) tend to focus on individual customer stories.
What I’ve come to appreciate is that it is easier to get humans to pay attention when you can grab them emotionally than when you appeal to their intellect. And this is much easier to do when you focus your narrative on a single story.
One last point about unique insight. I often hear founders talking about “the problem” that they are solving and often this problem is either a very high-level, macro problem (eg “over the next decade most consumers will pay for retail purchases with their smartphones") or they didn’t arrive at their special insight in an authentic way, so their description falls flat (eg “every young person that I ask says that they want a local events guide because they never know the best things to do over the weekend").
It’s kinda like learning an important life lesson personally the hard way. Once you learn it, you speak about in a very confident way. When a founder has a truly unique insight that they’ve arrived at in an authentic way, you can feel it because they believe it deeply.
Having a founding insight this deep has advantages for the entire life of the startup, but is particularly important in (a) giving the founding team a north star to keep them motivated in the early days and (b) making it much easier for the founding team to make basic decisions quickly because everything has to be aligned with their unique insights. And, of course, this authenticity of purpose is felt by customers.
In this podcast a founder describes a series of personal experiences that gave him special insights about how customers feel about existing offerings as well as how current providers operate. This unique insight gave him confidence that he could create something better.
Get Right to the Lesson
I’d recommend listening to the entire thing, but to get right to the point go to minute 14:01 of this podcast.
Thanks to these folks for helping us all learn faster
Chad Laurans, founder & CEO of SimpliSafe (@SimpliSafe)
NextView Ventures (@NextViewVC)
Jay Acunzo (@jayacunzo) of NextView Ventures (@NextViewVC)
Please let me and others know what you think about this topic
Email me privately at firstname.lastname@example.org or let's discuss publicly at @davempayne.
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