Watching promising new companies fail - and a good chunk of even the most promising startups ultimately do - is not a lot of fun. It can be instructive, though. While many startup deaths are beyond the control of the startup itself - e.g. the technology doesn't pan out, or someone else gets there first - others are variously the result of entrepreneurial mistakes. And like the rest of us, good entrepreneurs can and often do learn and ultimately profit from their mistakes.
Today, my subject is one of the most painful of entrepreneurial mistakes to watch, a mistake that is too common and (to make matters worse) by its nature tends to play out like a train wreck in slow motion. It's what I call Hamlet syndrome. The startup that fails not on account of poor execution, but rather on account of not executing at all.
What makes Hamlet syndrome so frustrating is that after it happens you are left with the sense that the afflicted entrepreneur never even gave himself a chance to succeed. In most startup failures, even those that can be laid squarely at the feet of the entrepreneurial team, a dispassionate observer can at least come away thinking that the entrepreneur went down swinging.
Observing Hamlet syndrome, on the other hand, is like watching a batter, in the big moment of the big game, spend a lot of time fiddling with his glove, looking for signs, stretching, and stepping in and out of the box - interspersed with staring blankly at three called strikes before walking back to the dugout.
Ok, a couple of real (but disguised) examples.
Our first victim is a brilliant scientist with a long track record of good ideas, many of which have been turned into successful products. More recently, she developed some really interesting imaging technology with a broad range of potential applications, across a variety of industries from metallurgy to medical imaging to 3D printing. (Entrepreneurs with target rich ideas are particularly susceptible to Hamlet syndrome.)
A threshold question for this entrepreneur, was obvious: what application in what industry should I go after first? Obvious though the question may have been, the answer was much less so. And so … the entrepreneur did a little research. And then did a little more research. And then did a lot of research. And then … well, let's just say after several years of waiting on a decision, I just walked away. That was two plus years ago, and I haven't seen anything in the news to suggest that the entrepreneur ever did pick an application or a market.
Startup two had developed a really fascinating set of algorithms for manipulating data that dramatically improved the accuracy of all kinds of forecasting models. Startup two's entrepreneur had some of the target rich marketing challenges of startup one, but even more than that could not settle on a business model. Was the business about enabling customers to make better predictions, or about making better predictions? After two plus years of debating the point, and increasingly complex analysis of the pros and cons of each approach, I am beginning to doubt there will be an answer before the window for this entrepreneurial idea closes.
I am not unsympathetic to either of the entrepreneurs in these two examples. Given all of the known, and unknown, unknowns inherent in any worthwhile startup opportunity, the possibility of making a critical mistake is a near constant source of stress. And surely picking the wrong application or market or business model is as fraught with risk and implications as any.
But as big as decisions about applications and markets and business models are, in almost every case the only decision that is certain to be wrong about any of these things is not to make any decision at all about these things. It is axiomatic that you can't miss a target you never shoot at - but perhaps more to the point, neither can you hit a target you never shoot at either. In the startup competition, if you wait until your aim is certain, someone is almost certainly going to claim the kill before you pull the trigger.
Don't be another victim of Hamlet syndrome. Pick a target market; spec an MVB with a compelling value proposition; decide on a business model; and pull the trigger. You may be wrong, but if you haven't taken too much time and money to figure that out, chances are you'll likely get at least one more shot.