How to make an app
You dont need money, you need help
Written by Ian Sharp PhD on November 11th, 2019
Dr. Sharp here and you are listening to The Good Doctor Sharp on DoctorsInTech.com
Today I'm going to talk about money.
Some people think it's holding them
back from succeeding with their software company.
They think the more money they raise,
the more likely their tech company is to succeed.
If you already know that's not true, then you don't need to read the rest of this post.
On the other hand if you hold this belief,
and want your belief challenged,
read the rest of this post right now.
Reasons for raising capital:
- to translate your idea into reality
- startups fail due to lack of cash
I'm here to make the case that all startups
also fail due to
lack of competence.
In the special case of software startups,
where costs are negligible, lack of competence
is the primary cause of failure.
How do you define failure?
When everyone gives up and stops trying.
I'm not talking about a bad product-market fit.
I'm talking about the failure of a good
product-market fit.
Firstly if you cant translate your idea into reality,
then you are not the right person to start the company PERIOD.
No amount of money is going to help you.
From the bottom of my heart, I want you to know
this now before you go any further.
I've
personally watched millions spent
to get an idea off the ground, ideas that could
be gotten off the ground for pretty much free.
So why weren't the companies created for free?
Because the people creating the companies were
operating outside of their "circle of competence"
How much money is it going to take for someone
who operates outside of their circle of competence
to get their idea off the ground? The answer is ...
"More money than necessary"
How much money does a shoe company need to
start a diamond mine?
How much money does a restaurant owner need
to make a snow shoveling business?
How much money does a hardware company need
to start a travel company?
The answer...
More money than necessary
"."
Hewlett Packard specializes in making printers.
How much money does it take a printer
company to start a search engine company?
11 billion USD,
ultimate failure, writing off 8.8 billion..
Was the cost more than necessary?
HP is a big company.
What about for people.
Is it easier to operate outside your circle
of competence as a small company or single person?
No.
After working with small companies of all sizes and
watching them fail, the answer is still
no.
The primary cause of failure
was a group of people trying to operate outside
their circle of competence - hoping an external injection of money
would solve their challenges. But it never did.
Money never solved their challenges
What they really needed was help; help to
operate outside of their circle of competence.
The money could not buy that help. Why not?
Possible reasons might include:
- The shoe salesman directs the diamond mine expert
how to mine.
- The restaurant owner directs the snow
shoveling company how to shovel snow.
- The printer company directs the search engine
company how to conduct enterprise search.
Money can cover up challenges for a while,
but does not solve educational lack in the long run.
I maintain challenges are solved by
educating yourself in competencies where you lack
and where you want to operate in.
I personally like how Elon Musk taught himself
rocket science so that he could operate a
rocket
company inside his circle of competence.
Elon Musk raised money for SpaceX, but would
the program still be moving along if Elon had not
taught himself rocket science? Nope.
When you expand your circle of competence,
you get to keep your knowledge for the rest of
your life and carry it with you into your next
venture.
Money, on the other hand, once spent - is gone for good.
Some people try to get the money back with lawsuits,
I have not seen that work out too well either.
And again, once the lawsuit money is spent, it
is also gone for good.
So why not instead invest your money to increase
your circle of competence?
Make the wisest investment of all,
invest in yourself today.
