Why Startup Founders Shouldn’t Shoot for the Moon

July 26, 2016

8:00 pm

Google’s moonshots are famous, but have been running into problems recently. Various Alphabet businesses have been shedding top researchers, replacing CEOs, or getting sold entirely. Sometimes shooting for the moon isn’t the most sustainable plan for a startup.

That’s what venture capitalist and world-class snapchatter Mark Suster believes, at least. In a recent blog post, he outlines the approach that leads to a healthy startup, and focused on just one point: When building a startup, founders should keep their eyes on a small, achievable goal.

What To Shoot For

From his blog “Both Sides of the Table”:

“I advise founders to focus on what I call ‘basecamp,’ which is the first level of success or validation at a startup. Raise only the money you need to arrive at basecamp and build only the team required to make it there.”

From their basecamp, a founder will be able to look ahead: Is the business actually shaping up to be something bigger? If not, it’s time to cut loses early.

Why This Works

The advice might seem counter-intuitive: Aren’t startups enthusiastic about moving fast and breaking things? But Suster has plenty of examples to show how building a startup works in actuality:

“Think about it: Do you think Uber knew when it started how big the potential of the business was? I can tell you from insider knowledge there’s no way. They started as an elite black-car service and only once they saw Lyft doing well in the peer driving market did they launch UberX. And Lyft? Nah. Started as Zimride, a way for people in Palo Alto to share a ride into San Francisco and vice versa.

Facebook was just about college campuses. Twitter was a podcasting company. And so forth.”

Suster goes on to discuss VCs, who take a slightly different approach: They’re always shooting for the moon, and that means that they expect little success most of the time, but huge, $3B+ successes a tiny fraction of the time. But founders need to keep their nose to the ground if they hope to slowly build up to a massive win. Well, with one caveat:

“There are exceptions. And his name is Elon Musk. But unless you are prepared to compete with NASA for space exploration, set your goals on planet basecamp.”

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Adam is a writer with an interest in a variety of mediums, from podcasts to comic books to video essays to novels to blogging — too many, basically. He's based out of Seattle, and remains a staunch defender of his state's slogan: "sayWA." In his spare time, he recommends articles about science fiction on Twitter, @AdamRRowe

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