The Startup Serve: Lessons for Building Ventures

Following my recent piece about Roger Federer's commencement speech, I received several questions around how this pertains to venture building. As a veteran navigating the startup landscape for the past decade, I've accumulated my fair share of battle scars alongside some wins.?

This experience compels me to offer a deeper perspective on the factors that differentiate successful ventures from those that falter. Unlike the realm of professional tennis, where the greatest champions sit with a 54% success rate, the startup world is a far more unforgiving arena, with really only 10% of ventures succeeding. This stark reality underscores the need to delve deeper into the factors distinguishing the successful few.

It's important to dispel a common misconception: success isn't solely a product of harder work compared to failures. Having delved into the narratives of successful founders and their investors, three key elements emerge:

1. The Brutal Logic of Economics: The foundation of any venture rests on the underlying industry. Does it possess healthy margins and offer a viable position for the venture to compete and generate value for investors? Industries saturated with just 500 players vying for survival present a brutal uphill battle. Why do some ventures thrive while others falter? A significant factor lies in the underlying industry structure. Are you sailing downwind or paddling upstream?

2. Quality Execution: Assuming a favourable industry structure, quality execution becomes paramount. A book that has profoundly influenced my thinking is Frank Slootman ’s Amp It Up: Leading for Hypergrowth. He offers a sobering assessment of a common pitfall among young CEOs: "They just think, ‘I hire a bunch of people, and then I sit back and wait for greatness.’ They have no idea that they have to relentlessly drive every second of the day, every interaction, and seek the confrontation." This underscores the imperative for CEOs to be deeply involved, actively shaping the company's trajectory.

3. The Role of Luck (and Making Your Own): The final element is more intangible – luck. However, it's not entirely separate from execution. You, as the startup, influence your own luck. Landing that ideal first customer or hiring a team of superstars to propel the venture forward are lucky breaks, really. Divine intervention isn't a requirement, but creating opportunities to be "lucky" is crucial. Choosing the right path, presenting yourself effectively – these are conscious actions that shape your own fortune.

Here's where Federer's 54%-point win statistic becomes relevant. Execution is about maximising those wins. But the industry structure and that sprinkle of luck play a significant role too, just like in Federer's relentless pursuit of victory despite not winning every single point.

Building a successful venture requires a strategic blend of these elements. By channelling the spirit of Federer's focus and relentless pursuit of excellence, while acknowledging the role of external forces, you significantly increase your chances of emerging victorious in the unforgiving world of startups.

~ Per