Getting Started and Managing Rejection

Written by Sean Murphy. Posted in 1 Idea Stage, 2 Open for Business Stage

Q: An incubator rejected me because they didn’t feel I was working on an important problem. While I can respect their decision I feel that I need to prove them wrong by making my idea work.

A: It’s your startup: your interests, experiences, and skills have to be a part of the equation.

If you find your idea energizing I would not worry about the incubator admissions staff rejecting it: whatever your idea you will find most people you talk to rejecting it until you get all of the kinks worked out. The incubator may well be right, but that does not mean you should not still pursue your idea if you find it energizing.

If you persist in customer discovery you will find ways to improve your initial product idea (and more than likely refine your target customer and how you talk about their problem and your solution) and it will become more compelling.  I think you have to follow your own interests not work on someone else’s plan. This does not mean that you should ignore a customer when they tell you that something else is a bigger problem for them and would you mind helping them with that instead. But investors–I think in this case the incubator is acting more as an investor than a customer–tend to follow fashions than what’s genuinely needed.

I would try and find at least one other person who is energized by it as a team of two has a much higher chance of success and if you can’t convince at least one other person in three to six months then perhaps you should reconsider.

When you consider who might make a good business partner or co-founder select first for shared values.  Don’t worry as much about the idea, in fact you can spend time helping them with their great idea and vice versa and over time you may find a way to blend them. You can do this with two or three people at once on different ideas just to get a better sense of what it would be like to work with each of them.

Don’t let someone’s rejection “put a chip” on your shoulder. They have doubtless forgotten about you and it’s not a path to value creation for the most part. I see a number of entrepreneurs pursuing an idea to prove someone wrong in an argument that they had months–or worse years–ago.  This can  also lock you into an unwillingness to improve your idea, because changing it means that the incubator was right.

At the same time you may be tempted to set too high bar for yourself by the incubator’s rejection: don’t feel that you need to find a compelling idea before you get started. Just start with an idea that energizes you. Start where you are with what you have available to you. Saras Sarasvathy’s model of effectual entrepreneurship is the best one I have seen so far for the mindset that’s required in very early ventures and new markets.

Relationships are as much of an asset as knowledge. Pick a group of people you have an affinity for and talk with them about problems they face with tasks that they are trying to accomplish or their job or firm as a whole.

Look for problems that group has where collecting and documenting the work-arounds and partial solutions has value. This normally means that the group as a whole knows that they have a problem and are looking for a better solution. For example,  I am working with a team that is helping caregivers address what doctors refer to as the polypharmacy problem (and you or I would call “grandma has a big bag of pills to take every week”). There are many ideas and solutions already available that have various degrees of impact and effectiveness: documenting what helps and when has value in and of itself.

Look for groups that have not adopted a particular solution and probe for what’s missing or what’s wrong with the value proposition. It’s also useful to look across industries, what has been adopted in X but not in Y.

For B2B markets always do a workflow analysis. Understand what their business, processes, job content, and task look like before and after the introduction of your solution. Calculate the impact using their description and their estimates for quantities and frequencies and then probe for the implications:

  • “It sounds like this is costing you $100K every quarter.”
  • “It sounds like it’s taking two of your people full time to fix this problem who could be working on something else if this error went away”
  • “It sounds like you are losing 30 minutes a day on this”

Allow them to tweak their numbers. Asking them how much they would spend without doing a workflow analysis is essentially asking them to figure out the full impact in their head, it deprives you of the opportunity to explore the implications and determine the real value drivers.

You have to play your own game using your own unique skills and focus on creating value. Don’t be afraid to team up or even work for another startup or another large firm as a way to learn more rapidly.

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