Some startup founders pursue ideas that are truly revolutionary, bearing little resemblance to any companies built before. If you’re in this camp, it’s not worth doing a ton of research into your industry or even your potential customers. Just build something, get it to market, and let the real learning begin.
Truth is, most startups don’t fit this description. They’re evolutionary, building on the efforts and results of previous ventures. There’s no shame in building upon what has been done before, and in fact, it can be a great way to improve your chances of success. By talking to people with experience in similar businesses, you can learn about the strategies and tactics that generate the best results, the challenges and pitfalls you’ll need to avoid, the numbers that matter, and the people most likely to be of help. People with industry insight can help you avoid big honking mistakes. They can help you see around corners. Here are three types of people with inside scoop, and how to reach them:
1) Investors. Some venture capitalists and angel investors focus on specific industries, investing in the same types of companies again and again. Some have even built and sold their own business in the same sector they’re now investing in. Tools like Angellist and Crunchbase make it pretty easy to figure out who is likely to back a particular type of venture. Landing a meeting is tougher, but if you’re like most good entrepreneurs, you’ll network your way in. Tell them you’ll be back in a year to pitch them, and ask what you’ll need to show them to land an investment. In the meantime, ask for introductions and advice. There’s something in it for them, too. Investors like to see the next wave of startups and watch how they perform over time before making commitments.
2) Ex-competitors. The founder of a direct competitor probably won’t share their hard-won insights. But an ex-employee might be willing to make a little money on the side as a subject-matter expert. LinkedIn can help you figure out who to target. You can also find subject-matter experts through a site like Evisors or BlueChipCareer.
Schedule short sessions with a few different experts to get a sense for what they really know, and what they’re open to sharing, before committing to more time with the most helpful people. And remember, you don’t have to be unethical to learn an industry’s secret sauce. If you don’t feel comfortable asking for information about a person’s ex-employer, stick with questions about their competitors, or about the industry in general.
3) Indirect competitors. Another great source of intel is from companies that do the same thing you do, but in other markets. This works best for companies with a tight geographic or customer focus, so there’s little chance you’ll wind up vying for the same business. You can find these companies via listings on sites like Inc.com or Crain.com, through industry associations, or through the sources mentioned earlier. I’m often pleasantly surprised by how far one founder will go to help another. It’s a kind of startup karma. Ask for help from a founder with experience in your industry today, and you may be the one paying it forward in a year.
Got tips on how to see around corners? Please add a comment below.