Folklore /ˈfəʊklɔː/: the traditional beliefs, customs, and stories of a community, passed through the generations by word of mouth.
Each competitive realm has folklores. Stories of fame, success, and paths to notoriety. In golf, we know the story of a young Tiger Woods demonstrating his putting skills on national television at the age of 3.
In acting, we tell stories of the crazy dedication by Matthew McConaughey that willingly embodies his characters to an extent that they fuse.
In science, we tell stories of the lifelong obsession of Jane Goodall, who lived in the jungle studying chimpanzees.
In the modern world, folklore is more influential than ever. Because when we have access to infinite information, stories echoed by communities stand out as authentic and real.
Folklore shapes our beliefs about the realm that it depicts. The story of Tiger Woods primes us to believe that becoming a professional golfer is hard. Unless one has demonstrated remarkable talent from an early age, becoming the next Tiger is impossible, we believe. Consequently, most parents would not support the idea of their kids dropping out of university to start a potential career in golf. Nor would the trainers, or even their friends.
The story of Matthew McConaughey means few people suffer from the delusion that becoming a movie star is easy. And few career advisors would recommend trying.
The story of Jane Goodall tells us that becoming a renowned scientist requires lifelong immersion. And the few who embark on this quest, understand the sacrifices.
Golf, Hollywood, and Science share the characteristic that making a living, let alone becoming a top performer, is hard. We understand the odds, the sacrifices, and the obsession. And most stay away.
Startups share the same characteristic of being hard. Making a living, let alone making it onto the unicorn list, is as difficult as becoming a Jane Goodall. In 2020, 120 startups became unicorns. It is estimated that about half a million startups are founded per year. That is a chance of 0.024%.
Even when we decrease the ambition from unicorn to just raising a series-A, the numbers illuminate the hardship. In Denmark in 2020 (where I live), we had about 12 series-A investments in Danish startups. It is estimated that 500-something startups are founded each year in Denmark. That is a chance of raising a series-A of about 2%
However, the facts do not shape the perception of the realm of startups. Startup folklore does. And unlike Golf, Hollywood, and Science; teachers, parents, peers, and career advisors seemingly support everyone to pursue a startup. For a long time, this puzzled me. But I have come to understand the phenomenon to be the power of folklore.
Startup folklore is heavy on stories of people materializing billion-dollar companies by conceiving of a good idea. These stories make us believe that the idea is what matters. Equal to talent in golf. Dedication in acting. Or obsession in science. If you have it, you can make it.
The forgiving thing about this belief is that everyone has ideas. Not everyone has talent, dedication, or obsession. But everyone has ideas. Thus, startups can be done by everyone, the logic goes.
Unfortunately, the facts tell a different story. But more importantly, those of us who have spent a lifetime working with startups know that ideas have very little to do with success. Instead, the foundation for success is ‘original insight’. And not everyone has it.
The misconception has the effect that many people are attempting startups without having the foundation to succeed. But that is not the problem. Because, through this experience, many people obtain the lessons for later success.
The real problem is that because everyone thinks they have a chance of startups, equally many people think they can mentor and advise startups.
Few people think they can mentor and advise golfers, actors, or scientists. We understand it requires intimate understanding, expertise, and experience.
Ultimately, the victims are startups. Because when true startup expertise is neglected, many programs and organizations created to help startups are useless.
In these places, startups meet mentors who are interested in startups. And sometimes passionately so. But interest does not equal expertise. Founders do not need cheering, idea jamming, and being retold the content of books they could otherwise buy. Well, sometimes founders need those things, but it won’t be enough.
Founders need insight into the unique challenges of their business model, their stage, and their team composition. They need experience from analogous startups and sparring from people with battle scars and costly paid learnings from years of doing what the founders are about to attempt.
Startups are one of the hardest realms of human activity. To truly help startups, we must see past the folklore, and organize real help to startups. And only by recognizing that startup is an area of expertise, it can be done.
And if you are a startup founder: Evaluate the help being offered. See past the self-proclaimed titles of accelerator, incubator, advisor, mentor, business angel. They mean nothing! Find out who is behind them and evaluate them as if your life depended on it. Because it does.
Check out Accelerace and Overkill Ventures where I serve as a General Partner.