Rule 3: Subordinate arrogance and myopia

There is a common attitude among founders. It can best be described as pride mixed with individualism topped off with a healthy dose of myopic vision.

Founders, myself included, launch companies because of valid disappointment with the offerings we see. We’ve looked at the marketplace, proclaimed that all other companies and products “suck,” and vow to do better.

This battle cry resounds at pitch days throughout Silicon Valley, from Draper University to 500 Startups to TechCrunch Disrupt. It is pervasive, partly accurate, but mostly dangerous. With a combative “take-no-prisoners” perspective, founders are often more likely to be loners alienated from potential partners and beneficial relationships.

Trust me; I learned the hard way.

In the early days of Loopd, we debated the value of working with more established event technology businesses, but instead chose to view them as “legacy competitors.” We redlined them on spreadsheets like prisoners in a firing line. We were young, energetic, and intent on taking down anyone along our warpath.

In our competitive analysis, we fine-tuned our messaging and sales pitch to counteract the competition, small and large companies alike. We looked at the market and one-upped it at every turn. If they had product features, we had more. If they had a website, ours was better.

Throughout our daily scrums and casual office banter, this attitude of superiority reigned supreme. We were convinced that the competition would be easily beat, that they were limping along on the virtual cusp of obliteration. And even if they weren’t, customers would surely flock to our new technology. With ease, we would win over the marketplace with our shiny new products and mind-blowing capabilities.

We were wrong.

As we launched our product in a self-created oblivion, we discovered that our most promising prospects actually liked our competition. They were reluctant to change “vendors” (as we recoiled at being called).

Instead of taking the event marketing world by storm, we had to put in the time and play by their rules.

Networking giant Cisco put us on a waiting list for a controlled proof-of-concept demonstration that took place in Germany in 2015. Database company MongoDB required us to integrate with Cvent, the largest event technology company at the time.

AOL was working with another startup and tried to pair our capabilities. They would not even take our calls.

This was all an education we neither anticipated nor wanted.

Because of complexity and time constraints, event planning is often handled by advertising agencies, marketing firms, and production houses with large armies of capable staff members. Along the way, Loopd was often relegated to subcontractor status with these third-party handlers and distanced from the actual customer after those initial few conversations.

While we could always excite prospects with sales pitches and products, we struggled to sell the vision. Companies felt more comfortable when our product folded into larger, more conventional product offerings and was managed by these third-party event planning firms. Without question, this hurt our ability to develop key relationships with customers.

Was this outcome predictable? It could have been if we had listened.

Along the way, some experienced entrepreneurs prepared us for this potential market reality. Scott Lipsky, former business development VP at Amazon and a serial entrepreneur with an IPO and mega-merger on his resume, encouraged Loopd to work with existing companies to develop the best market fit. In an email in September 2014, Scott cautioned us with this:

“. . . In my opinion, you have little choice but to partner with existing market players to get in, and you have to educate people lots (which sucks) . . . I know your vision is to do hardware + software & provide a total solution to some market. Getting over privacy barriers and achieving critical mass (so that your customers and their users will get the obvious benefits) are big deals. And very expensive to achieve. Less so if you find a partner and just license/sell your tech or company to them. Which could be a great path for you right now.”

Now, five years after launching Loopd, we see with the clarity of retrospect. By selling Loopd and working for a large event technology company, I recognize the wisdom of Scott’s insights and why we were wrong to dismiss the competition in those early days.

Sure, Loopd digital badges and software met a market demand and were more advanced than our competitors’ products, but we lacked the leverage. Larger companies could offer one-stop shopping by selling a broad range of products. They were established, respected, and hard to beat.

For so many years, we tried to contend with their velocity. We fought tenaciously, but were exerting effort in all the wrong ways. If we had instead overcome our own arrogance, we could have harnessed the power of the competition earlier and partnered together to achieve more.

At Loopd, we began with sales and then business development. We did it backwards. While this mistake wasn’t fatal, it certainly crippled our revenue and hurt our time to product market fit.

Subordinating arrogance and myopia enables you to find potent marketplace allies before you launch. By starting with business development, you can find opportunities and partnerships to scale your product in a larger company’s pipeline and then focus on sales once the demand arises outside the partner pipeline.

This catalyzes your company’s ability to get into an industry market quickly, gain product market fit, and scale exponentially.

The first brand-driven marketing campaign launched by LOOPD in September 2013

The first photoshoot produced solely by the Loopd team in August 2014

I hope you enjoyed this preview to my new book Takeaways: Secret Truths from Leading a Startup. Don’t forget to subscribe to OWN IT to access the first ten rules.

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