The Bubble that Matters
A few days ago, Tom Tunguz had a great post on why the "is it a bubble?" question shouldn't matter to startups. I agree with him: focusing on whether there's a bubble in the startup ecosystem is counterproductive, and founders should just concentrate on building great companies efficiently regardless of the macro environment.
There is, however, a bubble question that I believe founders should think about frequently. That question is: "am I operating in a bubble and ignoring the feedback, cues, and contexts of other people?" This is the type of bubble you don't want to be caught in, but one that you have complete control over.
Unfortunately, the more time you spend working on something, the easier it is to forget that other people don't share your background. If you're finishing your PhD and a stranger asks you about your research, you'll probably use a lot of jargon that won't make much sense to a layperson. If it's your wedding day, you're likely to stress out over messed up little details ("omg, there were supposed to be only two red flowers in each bouquet, not four!") even though your wedding seems perfect to all of your guests. The deeper your expertise, the more disconnected you become from laypeople.
The problem can be particularly acute for founders because there are so many areas where it's easy or tempting to ignore the outside world. For example:
If you're trying to convince an engineering candidate to join you, it's natural to focus on what you love about your company instead of what the other person might value. Instead of walking away convinced, they walk away thinking that you're self-absorbed.
If you're pitching to investors, it's easy to forget that they might be unfamiliar with your space and might not understand the trends or acronyms or terminology that you take for granted. Instead of walking away impressed, they walk way confused.
If you're selling to prospective customers, it's easy to go on and on about how awesome your tech is or how proud you are of your product. It's much harder to remember to ask questions and to understand the other side's specific challenges and desires. Instead of walking away excited to buy, they walk toward your competitors.
Operating in bubble typically stems from one of two problems: either it doesn't occur to that you should be asking questions to better understand people's backgrounds and motivations, or you know that you should be asking questions, but you don't ask because you're afraid you won't like the answers.
If you're afraid of the answers, go read pretty much any startup postmortem. Most companies that fail don't fail because they couldn't build a great product or because the founders weren't excited enough. They fail because they didn't build the right product (didn't address customers' wants and needs) or couldn't build a strong team (didn't address candidates' wants and needs), or couldn't raise enough money to build anything meaningful (didn't address investors' wants and needs). Many of these failures don't come from being unable to satisfy people's wants and needs, they come from assuming that the wants and needs of others are the same as your own.
If you're not afraid of hearing people's answers, then reflect on whether you're asking enough questions. Try to analyze everything you do with Beginner's Mind. That is, put yourself in the shoes of someone completely unfamiliar with you, your company, and maybe even your whole industry. What would a person like that think about your investor pitch? What would they think about your website? Your UI? Your sales pitch? Unless you're explicitly trying to use your pitch to qualify candidates, customers, and investors**, you need to put yourself in other people's shoes as much as possible.
Economic bubbles pop, and operating bubbles pop just as painfully. You run out out of money or struggle to find product market fit or become increasingly frustrated with not being able to grow your team and your company. The best solutions to avoid operating in a bubble in the first place are approaching everything with a Beginner's Mind, being empathetic, asking lots of questions, and listening carefully to feedback. While you have no control over the economy, you can control your ability to put yourself in other people's shoes.
** Sometimes you're intentionally using your pitch to qualify people, and that's okay. For example, if you're pitching a startup in the oil & gas sector and only want to talk to investors familiar with that space, then it might be fine to fill your pitch with O&G terminology and jargon since that would help you filter out the investors you don't want to talk to.
Thank you to Sean Byrnes for giving me feedback on this post.