3-2-1 Traction:
Cofounders, prototypes, and (believe it or not) yoga pants

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Hey Reader 👋

Well, it’s Memorial Day in the US, which means summer is basically here. To help you get to the beach faster, I’ll forgo the banter.

Let’s just dive in. 👇

I. three ideas from me

The answer is often a prototype.

In other words, before you build it, ensure you have the right “it”.

Because you never do from the start.

While 95% of startups fail, startups that cycle through 10 prototypes reduce their failure rate by half.

By. Freaking. Half.

And it might sound like a lot of prototypes, but that’s because most people misunderstand what we mean by prototype — they’re thinking MVP.

But prototypes are actually semi-realistic facades of the product, and they’re typically nonfunctional. They give the customer some measure of the experience of the actual product without actually delivering the final product.

And it works for any kind of startup, from an AI-powered SaaS platform to a residential gutter cleaning service.

It’s pretty hard, to be honest, but it’s not very complicated:

1. Hypothesise — what is the moment of greatest value in your product? What will make customers exclaim “wow!”
2. Prototype — create the lightest weight possible facade of that experience.
3. Test — have real customers engage with it. Don’t show; have them do.
4. Learn — did you get the “wow”? What’s the next iteration?

Rinse, and repeat.

It’s more than I can cover in a short snippet, but I have two recommendations:

First, check out the book The Right It by Alberto Savoia, on Google’s “pretotype” process for identifying successful products. It’s got a strong software bias and its own terminology, but it’s solid.

Second, and much more shamelessly, I have a rapid prototyping cohort kicking off next month. It’s a 6-week bootcamp where we’ll workshop the prototyping process together — by applying it to your business (or idea).

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The first question of entrepreneurship: why am I doing this?

It’s the personal North Star, and it impacts every subsequent decision you’ll make.

Roughly speaking, there are three kinds of companies you can build. Three “whys”:

• Scalable startup
• Lifestyle business
• Side hustle

A scalable startup is what usually comes to mind first — they’re high growth, and the goal is a really big exit. Most of us think software, but it also includes consumer packaged goods, med tech, and anything else where there are tons of customers and the cost of production decreases with the quantity served.

A lifestyle business looks similar at first glance. It could be any of those categories, but could also include services. But they won’t scale as large — either due to a smaller total market, unit economics, or the intrinsic motivation of the founder (e.g. “work-life balance”).

Lastly, a side hustle is a much smaller endeavour, usually bringing in supplemental income for the founder, and without the aspirations of the first two — freelance services, micro-SaaS, and bespoke creations come to mind.

You may be wondering why I’m mentioning this. Isn’t it self-explanatory?

On paper, it is. Behaviourally? Not so much.

If you want to build a scalable startup, you’re trading short-term income for a long-term payoff — the big exit. The cliché is that you’ll live for a few years like most people won’t so you can spend the rest of your life living like most people can’t.

It also opens the door to venture capital, changes the kinds of markets you’ll pursue, your perspective on competition, et cetera.

For a lifestyle business, you’re sacrificing venture capital and a big exit, but you can pay yourself sooner (and more), the pressure is softer, and the timeline less crunched. It’s not a means to an end, but the end in itself. Thus, a lifestyle you’re building where you’re own boss in a profitable enterprise.

And a side hustle is… well… to the side of something else. It’s not the main show.

Each of these three choices creates unique constraints and opportunities. Trying to build one while acting like you’re building another will not only make you miserable, but it will kill your business.

So, what do you want to build?

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You shouldn’t look for a cofounder.

One of the most common questions ecosystem builders get asked is how they can find a co-founder for their startup.

They’ve got a thing they’re working on, they hit a roadblock, and it’s time to call for reinforcements. I get it — it’s too much work to do alone. At some point, you will need help.

And that’s the problem — you need help now.

To me, this is the equivalent of going to a bar, turning toward an attractive stranger, and saying, “what do you say we get married and make a baby?”

It’s not that it can’t work but… all things considered, would you really want it to?

Because, honestly, a cofounder relationship shares much more in common with a marital relationship than it does with an employer relationship. This is not only due to the complex interpersonal dynamics and the degree to which your fates are intertwined, but also to the way they are recruited:

It starts with an acquaintance, and you enjoy spending time together. Then you collaborate more, and do more things together. Then you start working exclusively with each other. And then you slowly make greater and greater commitments, until you eventually launch a new “product” into market together.

Romantic AF, right?

In other words, it’s just a thing you do — it’s a long-term networking play. So start now.

Because the worst time to be looking for a cofounder is when you need one.

II. two ideas from others

​What is product strategy? ↗​

I got my start in the startup world doing product strategy, which is the art and science of how we realise the product vision, while not killing the company in its pursuit.

Most startups don’t struggle too much with the vision part — it’s usually part of their raison d’être — it’s why founders get up in the morning and do what they do.

And most founding teams have robust product roadmaps filled with ideas and tactics.

But they have nothing to connect the two.

It is such a big gap that my last company’s unique value prop was tied directly to helping founders with product strategy.

But it’s not complicated. Another way to say strategy is just “informed choices”.

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​Lululemon Tried to Become a Tech Company. It Didn’t Work Out ↗​

There were too many lessons in this article, and it was difficult to choose just one. But here it is:

In 2020, sensing a permanent shift at the height of the pandemic, Lululemon dropped $500 million to buy the “Mirror” — a $1,900 plain-looking mirror that broadcast fitness classes on its surface for $50/mo.

What at first seemed brilliant soon proved folly:

• the clothing retailer didn’t know how to sell a tech product;
• gadgets and subscriptions have completely different supply chains;
• the razors and blades subscription model only works with long-term retention; and
• people eagerly returned to in-person fitness classes at the first opportunity.

Remember that whole feasibility thing?

We spend the most time talking about the first question (is it desirable?) and quite bit of time talking about the second (is it viable?).

But just because feasibility is third doesn’t make it unimportant. It’s just not first.

It was a product that was immensely desirable, and theoretically profitable, but was ultimately crushed under the weight of a shifting cultural zeitgeist.

Lululemon slashed prices by half, reduced their earnings expectations, and then… just stopped talking about it.

It’s a classic case of insufficient imagination answered by a thought experiment that founders would do well do master: what could go wrong?

Because the Mirror’s problems were myriad, yet none took a magic mirror to foresee.

III. one question for you

Personally, I’m building a scalable lifestyle business — a lifestyle business centred around what I want to do, but which will scale well beyond my personal time. I’m giving up equity investment and an exit.

That’s why I’m doing things like the rapid prototyping cohort.

Two shameless plugs is my limit. I’m out, y’all.

See you next week.

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