Lessons from John Landry: How 2 Have a Successful Startup
Although all startups are unique, new ventures consistently face some of the same crucial early choices, such as adding co-founders and taking their first outside funding. If you knew which approaches to these choices give startups the best chance to succeed, would you change how you grow your venture? This past Tuesday, #How2Tuesdays moved from the Blank Center to Luksic Hall to accommodate the large audience for How 2 Have a Successful Startup. The man of the hour was Babson Entrepreneur in Residence John Landry, who is a serial entrepreneur, CTO, and investor. Drawing from his decades of experience in the world of tech entrepreneurship, Landry shared the recurring factors contributing to startup successes and failures. This was a How 2 Tuesday event filled with valuable insights, but here are some of our favorite lessons from Landry’s talk:
Best Way to Succeed: Avoiding Failure
Landry believes that the best way for startups to succeed is to avoid failure. He acknowledged that this advice is contrary to popular entrepreneurial literature focused on embracing failure as a learning experience. Although avoiding failure may sound simple or obvious, Landry showed us that there are many common but avoidable pitfalls which stymie startups. Based on entrepreneurial research and his own experience, Landry emphasized that the #1 reason startups fail is due to a lack of a market need. Entrepreneurs can avoid this fate by following the agile development process and remembering to keep their customers’ desires in mind, rather than misusing time and resources to develop a product that their customers don’t need.
Pitching to Investors? “Tee up the Problem”
As a serial CTO and investor, Landry has seen countless presentations from startups seeking funding from outside investors. He believes that many founders fail to set themselves up for fundraising success when pitching because they forget to take a step back and see things from their investors’ perspective. So what do investors want to see from startups? Building off of the importance of validating your market need, his main advice for pitching success is to “tee up the problem, then present the solution.” From his experience, this is the pitch structure which helps potential investors best understand the importance of your customers’ problem, and how your venture will grow by solving the problem.
“Do Things That Don’t Scale”
To gain initial customer validation and traction, Landry suggests that startups should go above and beyond by “doing things that don’t scale.” Although the eventual goal is to create a scalable model, Landry cites Airbnb as a company which found early success because it went the extra mile to succeed in its first test market of NYC, even if it meant doing things for customers that would not scale as the business grew. It was the positive word of mouth from these initial customers which helped catalyze their growth towards becoming the now iconic disruptor in the travel industry!
We hope you enjoyed these insights from Landry’s talk, and that you check out the Blank Center’s How 2 Tuesday events throughout the semester! On Tuesday, October 29, we’ll be hosting How 2 Negotiate in the Life of a Startup with Samuel “Mooly” Dinnar, instructor with the Program on Negotiation at Harvard, a research affiliate at MIT, and the founder of Meedance. Register for the event at https://h2eshipnegotiation.eventbrite.com, and check out this semester’s entire How 2 Tuesdays schedule at http://bit.ly/2019h2tuesdays.