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Last week I was talking to an entrepreneur that had sold his company and was starting to do some angel investing. I cautioned him that angel investing should be viewed as charity and that the vast majority of angel investors don’t make any money, even if they invest in a reasonably large number of startups (> 20). Angel investing is fun and stimulating, but outside limited markets and exclusive deal flow, isn’t a way to make decent returns, let alone beat the public markets.

After hearing this, he asked why we don’t have more startup success stories. Here are a few thoughts:

• Low Odds – Less than .02% of venture-backed startups ever sell for $100 million or more. This is for startups that raise institutional capital, which has a bar that’s 100x higher than raising angel capital, and even then only 20 in 1,000 sell for a meaningful amount.
• Competitive Markets – Markets are brutally competitive. Every good idea already has 10 competitors easily findable on Google. Pricing, sales cycle, etc. are all impacted by competition.
• Challenging Customer Acquisition – With so many vendors chasing the same number of potential customers, customer acquisition becomes more difficult and costly. The number one reason startups fail is that they run out of money and the second reason is that they can’t sign up customers in a scalable and profitable manner. Customer acquisition is challenging.

What’s the solution to more startup successes? More startups. More tries. More entrepreneurs taking a chance. The goal: more startups with 10 unaffiliated customers. More micro success stories leads to more modest success stories. More modest success stories leads to more major success stories.

To have more startup success stories we need to start with many more startups.

What else? What are some more thoughts are why there aren’t more startup success stories?

Early last month an entrepreneur was taking me through one of his startup challenges. After listening for a few minutes, it was clear that he was optimizing too much for an edge case — a scenario that happens infrequently — and not optimizing for the greater good. Entrepreneurs are known to spend 10 years of their life trying to solve a problem that’ll save them 10 minutes.

Here are a few questions to ask regarding potential edge case optimization:

• How does this work help the mission of the business?
• Does this apply to the majority of our best-fit customers?
• Where else could our time be spent?
• What makes this edge case so important?

Beware edge case optimization. Entrepreneurs love to innovate, but need to do it where it counts.

What else? What are some more thoughts on edge case optimization?

After writing the post on The Slow Startup Movement last month, a number of people have reached out and expressed their support and interest in the idea. While startups are scalable, growth-oriented companies, many founders and team members want a sustainable work/life blend. With the slow startup movement, there’s an opportunity to develop a common language and share ideas to help like-minded entrepreneurs in pursuit of startup success and a life outside the startup as well.

Here are a few slow startup movement questions for entrepreneurs to consider:

• How do I run my business now? How do I want to run it?
• What’s my peer group value now? What do I want out of a peer group?
• What path am I on now? What path do I want to be on?
• If I could change anything and make my journey more intentional, what would I change?
• What am I working towards? What are my long-term and short-term goals?

At its core, the slow startup movement is about being more thoughtful in the startup journey and blending it with the overall journey.

What else? What are some more slow startup movement questions to consider?

Recently an entrepreneur was looking for ideas for a virtual assistant to help with several projects. After asking a few questions, it became clear that using Upwork for freelancers was a quicker, more efficient route. Instead of hiring a person with general skills for a set number of hours per week, hire specialists per project.

Here are a few common outsourcing projects for entrepreneurs:

• Data entry / list building – Build a list of target contacts
• Copywriting – Capture your ideas and transform them into content
• Editing – Take your content and polish it
• General help – Offload the basics that are better done elsewhere

Entrepreneurs would do well to outsource the non-core tasks and use a freelancer marketplace like Upwork.

What else? What are some more tasks entrepreneurs should outsource?

Entrepreneurs love to think big and brainstorm different what-if scenarios. Only, the big idea is often too broad and unattainable without meaningful incremental progress in a much shorter timeframe. Meaning, results are needed in the next 12 months to continue the pursuit of the 10-year vision.

Think about Tesla starting with an expensive electric sports car to prove the concept. Then an expensive sedan followed by a crossover. Only after those successes was a mainstream, mid-priced sedan possible.

Think about Uber starting as a high-end black car service in one city. Once that worked they added ridesharing and launching hundreds of cities. Now, Uber has expanded to food delivery and more.

Think big but start small. Take the 10-year vision and reduce it to a 12-month outcome with sufficient progress to continue.

What else? What are some more thoughts on the idea that the big vision needs incremental progress?

Back in 2008 Pardot was just starting to get off the ground with a few hundred thousand in recurring revenue and the makings of a big market. Excitedly, I applied to be a “member company” at a local startup organization by filling out an online application and trying to meet with people. No one would meet with me. We weren’t “the right type of company” and didn’t get accepted into the program.

Rejected.

Completely rejected.

I put my head down and went back to work. We didn’t need the blessing of another organization for us to be successful. With a strong locus of control we followed Andre Agassi’s mantra “control what you can control” and continued plodding along. Ultimately, the business was successful and we didn’t need validation from something else.

Getting rejected is an awful feeling but it didn’t stop us from realizing our vision.

Last week an entrepreneur mentioned that he was approached by a large company that was potentially interested in acquiring his startup. Not knowing what to do, he agreed to a call and asked a number of questions. Then, he got the big question: how much do you want for your business?

The best response to an inbound acquisition price inquiry is as follows:

We’re not for sale but what are you offering?

The idea is to set the tone that the business is doing well and going to keep growing independently. With that established, only then is the door slightly opened to see what the potential acquirer is thinking.

The next time a potential acquirer comes around asking questions, make it clear the business isn’t for sale but that you’re open to listening.

What else? What are some more thoughts on the best response to an inbound acquisition price inquiry?

Recently I was meeting with an entrepreneur and he started talking about their mission. After five minutes on the mission it was clear he was serious and dedicated to building a mission-driven business. First, what’s a mission?

From How to Write a Perfect Mission Statement, here are a few examples:

• Ben & Jerry’s: Making the best possible ice cream, in the nicest possible way.
• Disney: To make people happy.
• Instagram: Capture and Share the World’s Moments.
• Amazon: To be the world’s most customer-centric company.

A mission is the core aspiration of the business. The best mission statements are short, inspiring, and memorable.

Here are a few ways to know if it’s a mission-driven startup:

• Employees talk about “we” and not “I”
• Everyone in the company can recite the mission
• The entrepreneur is constantly connecting the actions with the mission
• There’s a sense of focus and drive in the team members where it’s clear that it’s more than “just a job”

Look for the rare mission-driven startup. Mission-driven startups grow faster, achieve more, and make a bigger impact.

What else? What are some more thoughts on mission-driven startups?