When I was just starting in business, I received some passive-aggressive encouragement from my mentor Tom Cain. At the time, I was renting space in Tommy's basement to house my new company. Tom--or Tommy as I called him--was an old ad guy who didn't like to mince words. 

The encouragement was unsolicited. I had just returned from a presentation to the board of directors of a multi-billion-dollar company. Tommy found it amusing that a 23-year-old man child (that was me) had somehow talked his way into a board room to pitch a new product. 
The feedback sounded like this: "Michael (Tommy said), do you how I know you will be successful? (How Tommy?) Because you're too G**damn stupid to know you shouldn't be doing what you are doing!" (Uh, thanks?).

And so began the career of a startup addict. 

Tom Cain was right. I WAS too stupid to know that I shouldn't be doing what I was doing. And for about a decade, this naivety was my competitive advantage. But getting "smarter" has been a long and sometimes painful journey. To quicken your path and save you some of this pain, here are three startup lessons I wish I had learned sooner than later. 

Pick the Right Wave

The best surfers to watch are the ones who consistently pick the right waves. You can be the #1 surfer in the world, but if you pick the wrong wave, you will look like an amateur. Conversely an average surfer who picks a great wave looks like a pro. 

Great startups pick the right wave. They do their research and invest their time and talent in solutions that are desired by millions or solve a problem worth billions of dollars. Unfortunately, too many startups invest in niche challenges. Just like surfing, even if you are great businessperson who works seven days a week, that wave will never, ever get you to shore. 

Before starting a company, ask yourself: 

  • How much pain does this idea relieve?
  • How many people have this pain?
  • How much would they be willing to pay to make the pain go away?

Unless the answers to each of these questions makes you want to dive right in, pick a different wave. 

Pick the Right Partner

Most startups are created by visionary leaders who have the temerity to believe that they see an opportunity that an entire industry, full of really smart people, has somehow missed. These leaders are like Walt Disney, who imagined the community of the future despite the fact that he'd never built a community before. 

But our strengths have an equal and corresponding weakness. For example, I call visionary entrepreneurs Idea Monkeys because they respond to any challenge with more ideas--even when their initial idea is working just fine. 

Companies that consistently scale have more than just Idea Monkeys in the C-Suite. One of those seats is always occupied by an operational Ringleader that keeps the company in balance with the metrics, systems and discipline it takes to grow a small idea into a big one. In other words, Walt Disney was successful because he chose the right partner; his operationally brilliant brother Roy. 

Choose the right partner and you have the makings of the happiest place on earth. 

Don't Try Change Behavior

(Understatement alert!) Bill Gates has lots of money. So when the 4th richest person on the planet says, "I have lost a lot of money trying to change behavior", I listen. 

Too many new products and services fail because they do not snuggly fit into the way people currently do things. (Understatement alert 2.0) Startups do not have the time or capital to reprogram human behavior. That's why smart--and successful--startups make existing behavior a little bit easier, a little bit cheaper or a little bit more delightful. 

If you are depending on people to do things differently in order to take advantage of your new product or service, prepare to have even less money than Mr. Gates.