Startups that do well often follow a set of common principles. These principles influence how they develop products, build teams, raise money, and get customers. The most successful startups, though, are exceptional and often seem to go against these principles in various ways. For founders looking to learn from the experiences and paths of other startups, this can cause confusion and lead to bad decisions.
I think this happens because of how hard it is for outside observers to understand the full context of why given decisions are made in other organizations. It is also nearly impossible to separate causation and correlation, even with perfect understanding of the rationale behind a decision. I've spoken with many founders who point to outcomes at other companies as justification for decisions that they are making with their own companies. These founders rarely give enough weight to to factors like timing, luck, and the impact of particularly skilled employees or founders in producing those outcomes.
That creates a paradox. One of the best ways to learn how to succeed is to follow good examples set by others. At the same time, following those examples can often lead to very bad decisions that harm companies. Figuring out which examples to follow, and how to follow them seems hard.
There is, however, a clear framework for figuring out what to do. First, don't do anything just because you see someone else doing it. For instance, there are many successful jerks, but that doesn't mean you should be a jerk. Some companies succeed while spending huge amounts of money, but you should probably spend as little money as possible to achieve your goals.
Second, when you see a successful company doing things that appear to break from sound principles, look at those examples through the lens of your own company and circumstance. If you take the set of things that exceptional companies do, and overlay it on the set of things that make sense for your business and team, you'll end up with the set of things you can learn from exceptional companies and mimic. You can do this even without perfect knowledge of causation, because simply knowing that something is possible is often enough, given the right people, to achieve it.
You can also look at your existing practices and plans to discover whether or not you have to change them. First is to look at the decisions you are making at your company and ask whether or not you've derived them from the logic of your own business, or if you're doing them only because you saw a successful company do something similar. If it's the latter, you then have to figure out if those decisions make sense in the context of your business without the benefit of outside examples. This is especially hard to do because you can't use your own exceptionalism as a reason for doing something. People and companies aren't exceptional because they say they are. They are exceptional because evidence shows them to be so.
What's really happening when you run this exercise is that you're deriving decisions for your company from first principles. Things other companies do may provide some ideas, but the best decisions come from focusing on what will help your company succeed on its own terms.
As your company grows, you may realize that many of the things you do don't line up with the principles you initially thought would govern your company. That's a good thing, because it means that you've figured out the pieces of your business that are exceptional. While you can't copy exceptionalism, proof that it is possible is everywhere. You can use examples of that proof to help make decisions, but ultimately, you'll have to create it yourself. And if you can create it, you have a good shot at building a great startup.
Thanks, Geoff Ralston, for your help writing this.