My book, The Avoidable Startup Failure, is out and ready to pre-order, both as a signed and numbered first edition and as a Kindle ebook. You can find both here.
We hold beliefs so that we do not have to check everything at each step of our lives. You sit down without testing the chair. You get on the bus because the sign on the front says where it is going. Nearly all of it holds, and a day would be impossible otherwise.
Building a company is where some of the most ordinary beliefs turn expensive.
When I tell people I am writing a book about the startup failures that did not have to happen, they ask me about the causes. When I tell them that startups fail because they move, build and commit capital on assumptions nobody has tested, people nod. I can almost watch them leave the room while they are still in it. The words are abstract, the heads go up and down, and nothing lands.
So let me tell it as a story instead. It is my own.
I have always thought of myself as a rational person. It takes a sound argument to convince me, preferably with numbers in it. Someone told me recently that when I am given a lot of complicated information, they can almost see me building a model and sorting the information into it while I am still listening. They were right.
Early in my career I worked as a research scientist, and then I was asked to lead an international research project with teams in eight countries. The rational structure served me perfectly there. Everyone had already agreed on where we were going, and everyone was used to working scientifically. What they needed from me was to know what depended on what, who was doing what by when, and what would happen if something slipped. I gave them that, and it worked.
Then I moved into commercial roles, leading teams that were building things which did not exist yet, meant for people outside the company to use. I spent most of my time on rational argument, because I cannot talk about something I am not convinced of myself. My presentations made sense. They zoomed out far enough to show the shape of the thing and zoomed in on the details when a question needed it. Every slide followed from the one before, and I was ready for anything anyone might ask. People nodded, people looked impressed, some of them praised me.
After they left the meeting, nothing happened.
This went on enough times that I started asking the people around me for feedback. More than once I was told that I think fast and speak fast, and that I should slow down and check whether people are keeping up. So I slowed down. The nodding carried on.
It took me too long to see what the research project and the meeting rooms were telling me together. The structure worked when everyone already wanted the same thing. It did nothing when I needed to move people who did not.
The belief I had been carrying that whole time, without once looking at it, was that if the reasoning is sound, people will see it. For twenty years that belief had been true of exactly one person. Me.
I took the belief with me when I started a company.
At Tørn we had a long-running problem with how our suppliers used the platform. We believed a better product would change it, so we spent six months and a large amount of money rebuilding it. We hired developers, cleared the roadmap and launched.
Supplier behaviour barely moved.
The answer had been sitting in our own data for years. None of us were stupid. We all believed the same thing, and none of us thought to check whether the thing was true.
I see a version of that belief nearly everywhere I look now.
If we build this, and build it well, the rest will sort itself out. Customers will see what we see.
It is the most reasonable-sounding belief in the startup industry, which is what makes it expensive. Founders are builders. When they run into a problem, they build. When growth slows, they build more. When customers do not buy, they add features. When sales are slow, they hire salespeople.
Take that last one. Sales are slow, so the company hires a senior salesperson, and nobody stops to ask why sales are slow in the first place. The asking does not take long. Why are sales slow? We think we are short on capacity. What makes you sure capacity is the problem? Because the person selling for us now closes a decent share of the leads he gets, and he has no time left in his week to do more. So.. you are saying, there is a way of selling that works, and you could hand it to someone new? Yes, we have proof of that. Do you know where your customers come from? Yes. Is that proven, or is it where you assume they come from?
That last question is usually where it goes quiet. If the way of selling truly converts and the source of customers is proven, then capacity is the wall, and the new salesperson is the right hire. If either one is only assumed, the company is about to pay a senior salary to scale something it never confirmed. A salesperson lifts sales when the problem is too few people selling. When the problem is that not enough people want the product, the salesperson only makes it more expensive to learn that.
Every company like this has a belief it has never turned over. Ours was that a better product would change how our suppliers behaved. For twenty years mine was that a sound argument moves people. A belief like that feels too obvious to check, which is the whole reason it stays unchecked, and the reason the checking, when it finally comes, comes years and millions too late.
The part that still unsettles me is that the evidence was never hidden. It sat in our own data, long enough that we could have found it before the rebuild, before the raise that paid for the rebuild, before any of it hardened into something we could not walk back. We did not lack the answer. We lacked the habit of asking whether the belief under our feet was true, while asking was still cheap.
That habit of testing your beliefs by turning them into hypotheses is what I lost somewhere between the physics lab and the boardroom, and getting it back is what the book is about. At every stage there is a particular belief a company most needs to check, and it is the one that would cost the most if it turned out to be wrong. Founders tend not to look at those beliefs. They keep building and keep moving.
For us, the answer had been in the data the whole time. It just did not occur to us to look.
So here is something worth trying yourself. Think of a commitment you are close to making. A new hire, a new purchase, a new thing to build. Ask what belief that commitment is resting on. If it rests on more than one, name each of them plainly. Then ask the question we never thought to ask. Have you checked?