A version of this article previously appeared on Forbes.
Brian Coryat, Founder and CEO of Local Market Launch and former founder of ValueClick (NASDAQ: VCLK) recently spoke as part of UCSB’s Distinguished Lecture Series. His talk was entertaining and informative and contained a number of witty entrepreneurial insights, such as: “Startups are like high school. Both are fun, but mostly in hindsight.”
You can watch a 10-minute excerpt from Brian’s talk, HERE.
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The Bucket, The Water And The Hill
During the course of his talk, Brian mentioned that, “Startups are like pouring a bucket of water down a hill. You can influence the water’s path to some extent, but once it leaves the bucket, the water has a mind of its own.”
Brian’s point was that you can stand at the top of a hill and target a specific spot at the hill’s bottom, but once you begin pouring, the water’s path will be subject to the many known and unknown vagaries of the hillside.
Brian’s statement struck me as brilliant. After contemplating it for a bit, it became clear that his analogy contains a number of worthwhile startup lessons.
There are obviously aspects to pouring a bucket of water down a hillside that you cannot influence, just like external factors that impact your startup. Conversely, there are things that are under your control. At the risk of torturing Brian’s straightforward analogy, let’s examine the controllable issues that bucket pouring and startups have in common.
Where To Pour – The site at which you begin pouring will have a tremendous influence on where the water ultimately flows. On a rocky hillside, the water will quickly rush to the bottom, leaving hardly a trace. Poured over sand, the water will be absorbed before it can reach the bottom. In addition, the hill’s slope will also affect the water’s course.
Entrepreneurs face a similar choice when deciding which market they should enter. A variety of dynamics, such the market’s rate of growth, competitiveness and maturation will impact your startup. Skilled entrepreneurs appropriately anticipate and leverage these exogenous factors to their advantage.
How Fast To Pour – If you dump the water out quickly, your bucket will be empty in a matter of seconds. Entrepreneurs are only allowed to refill their virtual buckets if they have proven they are productive stewards of the water they use. Waste the water and your time pouring it down a hillside will be short lived. Conversely, if you pour too slowly, the de minimis trickle will never gain enough momentum to reach the bottom of the hill.
Entrepreneurs are always limited by time and (almost) always by money. Properly allocating these two precious resources separates the startup women from the girls. Startups that spend a small fortune at their outset, in the hopes of “making a splash” often end up with little to show for their efforts, other than an empty bank account and a collection of disappointed investors.
Alternatively, entrepreneurs who are overly cautious will lose the race to those who appropriately invest their capital and achieve a return on every dollar they spend.
Path Of Least Resistance – Water effortlessly tumbles down a hillside, fluidly modifying its course, based on obstructions in its path.
Big companies often have both the time and money to crush market obstacles in their path. Startup executives must be wily and figure out how they can go around, under or over the challenges that lie before them. Pragmatic entrepreneurs are comfortable allowing markets to develop organically, even when unexpected developments are counter to their initial. Intractable market forces, which you cannot reasonably influence, should be embraced, and not ignored.
Follow my startup-oriented Twitter feed here: @johngreathouse. I won’t tweet a photo of a killer burrito I am about to devour – just startup stuff.