I hate failure. All entrepreneurs do. So do investors. So do employees and customers. We all prefer to work with and invest in successful teams.

But hating failure doesn’t preclude embracing it, which is why I have always loved the Failcon conference.

Accepting and embracing risk and failure goes to the core of what makes some people and geographies more entrepreneurial than others. This is why Silicon Valley has been so hard to replicate across the world – many cultures simply do not accept business failure. One of the facts we learned at the conference is that CEOs in France and Germany can be banned from practice for up to 5 years if their company fails – the equivalent of a lawyer getting disbarred. (If that were true in Silicon Valley, half of us would be unemployed!)

I though I had something unique to offer with the ccLoop story, so I jumped at the chance to speak. Slides below:


I will give a brief summary of a few points I made, but these justify much longer blog posts (tell me in the comments which ones you would like me to elaborate on).

You probably need a hacker and a hustler

Starting a company without a co-founder is hard, but not having the “hacker and huster” skillset among the founding team is even harder. Sure, two technical founders is better than one, but a technical founder paired with a very skilled “business” founder is a homerun.

Most startups do not spend enough time on product validation and customer acquisition, so if you don’t have someone great at it spending 100% of his/her time on it, you probably are not going to make it. At ccLoop, we needed more than just me doing it, and more than just a couple of days a week.

Don’t choose a “high degree of difficulty” idea

Executives at companies get fired if they don’t manage to create revenue and profit growth. Projects to achieve these are at the top of their objectives. Softer propositions like “help your employees work better together” usually are not even on their to-do lists.

And most large new businesses are built by riding a large new wave (social, mobile, cloud) that generates a set of large new markets in its wake.

At ccLoop we both didn’t ride a wave (email is hardly new) and didn’t help companies generate new customers and revenue. This is a reason why so many collaboration companies and email companies fail – old technology solving non-urgent problems.

You are probably doing a crappy job at customer validation

Sure you went to the Lean Startup conference. Sure you read the Steve Blank books. Maybe you even went to Failcon. You keep getting told “talk to customers,” so a couple of times a week you go have a coffee with a friend of a friend who works at a larger company, ask a bunch of questions, go back to the office, tell your co-workers, “they seemed to like it” then get back to coding. Fail!

At ccLoop we should have had more customer meetings, dug deeper, and been more skeptical of all of the positive feedback we got (what people say is very different than what they do).

Build a product people can’t live without

It is easy to build a product that people “like,” but unless you have a product that people can’t live without, you don’t have a product that will create virality or that people will pay for. I will defer to one of guru Sean Ellis’s posts on the topic: Using Survey.io. Getting lots of happy users isn’t enough. They need to be so happy that they would be actively disappointed if you took the product away from them. At ccLoop, we had lots people who liked our product, but few told us that we’d rock their world if we took it away. Better to have lovers and haters than just a lot of “likers.”

Social proof is not proof

Sure, generating some PR and a great list of investors and advisors is helpful, but it does not guarantee nor reflect success. The world is full of “hot” companies that probably intimidate you with the logos on their website and their TechCrunch coverage, but many are already failing.

Sure, generate some press and buzz – it helps you get a few customers and attract employees and investors, but it doesn’t matter much at the end. What matters is the experience the user has with your product and if they decide to come back, share it with their friends, and pay for it. For ccLoop, the buzz we generated would have been helpful if we were in a position to grab and engage the users it brought in, but since we didn’t it mattered little.

Know when to compete against the big guys

Most startups shouldn’t worry about competing against Microsoft, Google, and Facebook – if you are working on the right idea your competition will be other startups.

But every so often you may find yourself in a market that is destined to be “owned” by one of the biggies. How to tell? Leave it to your customers – if they say they like your stuff but really wish it were a feature of something they already like and use and will switch as soon as it is, you may be on the wrong track. Twitter provides many examples – they company gets bashed for competing against its ecosystem, but much of that ecosystem was working on ideas that were never long term businesses. (As a user, do you really want to leave Twitter and go elsewhere to attach a photo to your Tweet?)

At ccLoop, we found ourselves competing against Google Groups and then the spectre of Google Plus, which was enough to slow down lots of our customers – they expected to get our functionality for free and integrated and supported by Google.

I highly recommend the conference – I hope to go again in the future, but I honestly hope it is as an attendee, not a presenter!