Five Important Things You Will Learn at the Founder Institute
First published Oct 13, 2014 in a newsletter for ShapeTrace supporters.
My entrepreneurial journey is like a bird learning how to fly. In the beginning, a bird has to build strength in its body and wings, and develop the confidence to fly. That’s why I am really happy this week because my new company has reached a milestone. I’m graduating from the first Toronto cohort of the Founder Institute, which is the world’s largest startup accelerator program focused on building enduring tech companies. The program adopts a CEO-sourced startup approach in Silicon Valley, and takes a founder from a business idea to a minimum viable company in an intense three month incubation period. By design, our class size decreased from 46 people to a final 10 founders as a result of the pace and intensity of the curriculum, which causes people to leave. Observing entrepreneurs have said that in three months, we’re getting a few years of experience, and they wished they had this when they were younger. Does that mean graduates are guaranteed success? Not even close, but at least we’re pointing in the right direction and a little less naive.
Here are five important things you will learn in the program.
Make sure you solve a painful problem and get validation. And more validation. And more validation.
All people can come up with business ideas, but only entrepreneurs will take action on them. And those few will learn that 99% of those ideas are not fit for a business. So how do you determine if your idea will lead to an enduring company? As one CEO mentor said, "Fall in love with the problem (to deeply understand it)". This problem should be so painful that when you have the right idea, people throw money at you to solve it. At the start, the best way to find out if your idea is great is to do customer validation. This means, you want to talk to as many potential customers and experts understand the root of the issue, then test whether they would buy your solution. Validation is so important to the Founder Institute that to remain in the program, you will easily talk to 100+ people.
However, you learn to be extremely careful because most people have a low “say-do” ratio: they will commit to something verbally, but will rarely follow through. On top of that, most people don’t know what they want. Thus, getting validation means asking smart questions to affirm your business idea, your revenue model, and getting a real commitment all at the same time. The best test is when people give you money immediately for your product or service (friends and family don’t count).
You get a taste of an entrepreneur’s life.
The Founder Institute program is designed to stress-test you and your business. The motive is to make you fail early and cheaply because there’s nothing sadder than to realize your idea is terrible five years later with no savings, a product no one wants, and strained personal relationships. During the program, you start to experience the emotional roller-coaster of running a business with the elations of small victories, bouts of self-doubt, long working hours, and the beginning of an obsession. You start seeing the sacrifices that you'll make to ensure that your business succeeds. But sacrifices are not solo efforts, and be careful not to alienate the things that are important to you such as your health and family. As a taste of things to come, the Founder Institute likes to say that running a real company is much harder than its program, and you begin to understand why.
You learn to execute and develop a sense of urgency.
You begin to develop high productivity-forming habits along with an increasing sense of urgency. By design, the Founder Institute program has you complete tough weekly assignments with vague instructions, forcing you to make fast, efficient, and smart decisions. Plus, it isn’t school so there’s no professor or teacher to spoon-feed you, to answer your questions, or to bargain with. As the CEO of a business, you learn to seek your own counsel and trust your judgement to make your own decisions since your startup team is waiting for a direction. You’re seen as the master of executing.
You learn that “good enough” is better than perfect, as long as you learn and iterate very quickly. The program curriculum touches upon all the basics of building a company in 12 weeks, which is much too fast for quality work. However, the point is that you’ve created a foundation, and you’ve developed the habit to improve rapidly.
You realize the power of peer advisory boards.
It's extremely helpful to have a peer advisory board with members at a similar place in their business. Being the leader of an organization is a lonely experience, yet you have to show a brave face to your subordinates. Peer advisory boards give you a forum to share your victories, express your fears, and ask for feedback with people who understand your business and personal situation. In addition, you’re often caught up in the details of your business that you may not see the big picture too clearly. As a result, the collective brain power of many people is more powerful than yours alone, and they bring you back to reality.
You will get a ton of business advice from mentors, clients, peers, and strangers: be open to all of it, then filter.
When you start a business, you start receiving advice from all directions. The Founder Institute assembles CEO mentors, who provide honest feedback on your business based on their start-up experiences. Usually, their advice is foundational and long-term. Your peer advisory board provides a more intimate evaluation of your present situation. Friends and families are vested in your success so they want to help with any advice they have. Of course, talking to potential clients is the most important activity to learn how to solve their biggest problems.
Yet, you have to take all the feedback you received and filter it because a little knowledge is dangerous, even if it comes from CEOs and clients. You have to re-interpret the filtered results since most people know what they dislike, but don’t know what they actually want. However, if you find yourself constantly defending the same position over the same issue with different people, then the problem is likely your stubbornness. Instead, open your mind, genuinely explore the advice, determine if someone has identified a problem that you haven’t, then make a decision. At this point, trust your gut and your judgement because you know your business better than anyone else in the world.
As I finish the Founder Institute program, I'd like to acknowledge all the people who have helped me along the way because no one can succeed alone. I’m glad it’s over because I’m eager to move forward and concentrate on building my company. Just like a newborn bird, we’re testing our wings for flight, and we’re learning how to fly. We’ll see you in the sky very soon.