12 Things Not True About Startups

It is time to kill some of these startups myths for good

Author

Mark Birch
October 11, 2024

There was this bizarre practice that developed in the Pacific after World War 2. Because of the vastness of the region, military forces would drop food, tools, medical supplies, and weapons from the air to the islands scattered across the ocean to supply their troops.

What these militaries did not know however was that many of these islands were populated by primitive tribes. With little prior exposure to such technologically advanced people, the tribespeople thought these air-dropped supplies were gifts from the gods.

When the war ended, the militaries had no more use for the islands and the shipments stopped. Without an understanding of the geopolitical situation, the native populations created highly choreographed rituals to lure the “foreign gods” to deliver their cargo once again. Some of these rituals were quite elaborate, including building mockups of planes and mimicking Western clothing styles.

These rituals came to be known as “cargo cults”. The anthropological definition is a belief system in which followers practice rituals to cause a technologically advanced society to deliver goods. The term later made its way into the tech world to refer to programming practices where developers use code that serves no purpose other than because it worked somewhere else.

Cargo cults can spring up anywhere. You may have heard of the phrase “it worked that way in the past” as justification for using a particular process or methodology or technology. When you dig into why such a choice was made though, there is usually no justification other than it is what they know and feel comfortable with.

The same holds true in the startup world. Even though startups should be about innovation and disruption, we often fall into the trap of rituals that feel comfortable. Take venture capital for instance. Though they say out loud they want to support disruptive ideas, they more often just fund what is trending and safe rather than what is groundbreaking.

Lots of advice given to startup founders feels like a cargo cult. This is not to say it’s wrong. The advice started out as true and then the world changed. Over time, we learned more, tried different things, and realized there are multiple ways to succeed. You just need to understand the context.

As I jump back into startups again, I wanted to revisit 12 of these common “startup truths”. While each of these can be valid choices, plenty of startups have proven otherwise and paved the road for others to take a different approach.

  1. You need to raise funding – When technology was not as accessible prior to the Dot Com era, you often needed millions of dollars for the people and equipment to get started. The Internet and cloud changed that. This spawned a trend in indie hackers and bootstrappers that are building awesome products and companies such as MailChimp, Shutterstock, and Zoho without the need for funding. VC’s want to fund businesses that can be billion dollar exits. If that’s not your path, you are better off funding yourself through customer revenue.

  2. You need a technical co-founder – In the past, a non-coder would have had a hard time building a tech startup. They either would learn to code or hire freelancers. Neither of these are ideal (I know from experience), so the advice was to bring on a co-founder that was technical. Technology has since advanced, and non-technical founders are now able to build decent MVP’s and even production scale products without knowing how to code. Generative AI has radically changed what is possible through tools like ChatGPT, Claude, and others to write code and design the cloud infrastructure as Sherry Jiang is doing to build her startup Peek.

  3. You need a co-founder – The startup road is a lonely journey. It feels safer to build with others. Neither of these are good enough reasons to add co-founders though. Most of the internal friction in startups is due to co-founder fights and founder divorce. I definitely felt like splitting with my co-founders multiple times. Many VC’s push solo founders to find co-founders, but statistics show that solo founders have lower failure rates and better long-term outcomes. With AI tools, there is even less need to add people as AI can act as another founder!

  4. You need domain experience – This was an expectation years ago when the tech industry was less accessible for an outsider. For some industries like bio tech and deep tech, it is mostly true that you need industry knowledge and experience. But as we have seen with Airbnb, SpaceX, and Uber, startup founders do not need to be experts in the industry. They simply need to love the problem and be tenacious enough to learn quickly and adapt.

  5. You need to go all-in and burn the boats – There is a belief that you are not really a startup founder until you quit your job for your startup. To build something from the ground up is incredibly hard, so this seems sensible. It can be reckless if you exit your job too early. Many founders started working on their ideas as side projects while employed, doing customer research, going to hackathons, and launching small experiments to test the market. Having a salary gives you a financial buffer when you do leave. Once you have some positive signals, then you can burn the boats and be fully focused on the startup.

  6. You need to have an amazing idea – This is a persistent fallacy. In fact, almost every initial idea that ever turned into a successful startup could be considered a bad idea in the beginning. This is why most startups pivot, because you really have no idea whether an idea is valid and able to scale until you test it in the market. This was the story for Instagram, PayPal, Shopify, Slack, Twitter, and many others. It is better to think of an idea as a hypothesis to test. You then run experiments to get signals that give you a clearer path towards the actual idea. Focus less on the idea and more on executing your experiments and learning.

  7. You need to be in the Silicon Valley / Bay Area – Fund raising for my first startup from NYC was challenging because everyone said I needed to be in Silicon Valley. Today that is simply not the case. Yes, the Bay Area will always be the global startup capital, but many other startup hubs have emerged over the years like NYC, London, Singapore, Tel Aviv, etc. The thing that changed was the cloud made it easy to build from anywhere and investors came in to support startups in emerging markets.

  8. You need to be public with your idea – The trend of building in public has been growing over the years, driven by indie hackers like Pieter Levels. The problem is most of the “build in public” crowd spends more time being public and less time building. Content creation takes time, a luxury for startup founders. On the flip side, some founders think they need to keep their ideas secret. Ideas are meaningless, only execution matters (see point 6). Your idea gets better by talking about it with customers and having people you trust that you can turn to for unfiltered advice.

  9. You need a big launch – Launching on sites like Product Hunt and announcing your startup on Hacker News seems important. Sometimes this can pan out. The truth is that most launches result in little initial traction and fizzle out quickly, even with good planning. A better path is to plan smaller, more targeted launches. Then you can gather data and users over time, and if it makes sense, plot a bigger launch that would have more impact later.

  10. You need to hire a lot of people to scale – The zero-interest rate (ZIRP) era enabled very bad habits including aggressive spending on low-yield acquisition tactics and over-hiring. Once ZIRP ended, VC’s stopped funding startups that were recklessly spending for little results. The new strategy is to grow, but with the goal of early profitability built on sustainable go-to-market channels and restrained hiring. With Gen AI tools automating content creation and customer support, startups are showing they require fewer resources.

  11. You need to be younger – There is a cult of youth that infects Silicon Valley. There are advantages to being young, but research on the topic of entrepreneurship and age has shown that the average age of startup founders is between 35 and 45 years old. With age comes more experience, a larger professional network, greater financial resources, and plenty of lessons learned.

  12. You need to build with Kubernetes – Just kidding, I just like to poke the k8s crowd! One point though is that there are lots of opinions about the “right” architecture and stack to build your startup. Twitter is awash with noisy “platform” battles like cloud managed vs. self-hosting, React vs. Angular, Python vs. Ruby, etc. The best advice is to use whatever you are most comfortable with to get your MVP out the door as fast as possible. If the MVP gains traction, then you can consider whether it makes sense to switch platforms and technologies.

There are many other “startup truths” from pitching to joining accelerators to work culture, but these are the 12 I have heard brought up most often. What do you think though? Do some of these still hold true, or are there others you would add to the list? Let me know, I am always up for writing a follow-up!

Mark Birch

If you follow me on LinkedIn, you most likely saw the news that I will be moving to Taiwan (eventually). I picked up my Taiwan Gold Card a few weeks ago on a short tour through Vietnam, Singapore, and Taiwan for some events. The TL:DR is Taiwan has been building an impressive startup ecosystem, and the Gold Card is a program the government established to invite talented foreigners to work in and launch businesses from Taiwan.

My shiny new Taiwan Gold Card!

It will be a few months before I make the transition. In the meantime, I have a few trips lined up for events I will be participating in across the globe! My schedule as of now:

Let me know if you will be in any of these locations or attending the same events! Also if I can be helpful to you at all, please do reach out.