Page 104 - 6 Secrets to Startup Success

The Pull of the Market 83

cessful startups his venture capital firm has funded, says that “none of
them looks identical to what we thought we were investing in.” Two
of history’s most celebrated entrepreneurs, Bill Gates and Paul Allen,
first started a company called Traf-O-Data but later saw the tremen-
dous market potential for a different business, something they named
Microsoft.

Like Dean Kamen and many others with inspired ideas, these en-
trepreneurs learned a powerful lesson: An idea isn’t great until the
market says it is.

Developing a Strong Market Orientation

Of all the factors that can help you get your business off the ground,
the most important will be the presence of a ready market, which can
be defined as a sufficient number of actual (versus potential) cus-
tomers who will pay, right now, for a product or service. There is no
room for abstraction on this simple point. Truly superior business
concepts always translate into living, breathing customers who will
pull out their wallets and hand over hard-earned money. Everything
else is a warm-up.

This is why hard work, cool technology, lots of funding, or supe-
rior talent won’t, by themselves, guarantee startup success. In fact, if
the market is right, these attributes might not even be necessary. A
founder with questionable skills, little money, and a B-grade product
might still launch a business by stumbling into a white-hot market,
which can disguise and cure a lot of ills. When J.C. Faulkner built D1
into one of the strongest mortgage companies in the United States,
during the late 1990s, he knew that some of his competitors made
money only because of a booming market. “When running downhill,”
he would say, “everybody thinks they’re an athlete.” He wanted his
team to be ready for the inevitable market downswing, and when it
came, D1 swiftly outran its competitors.

As a passionate founder, you must wrestle with a paradox. Passion
is an inner force, driving you from the inside out. But the surest way
to get a new venture off the ground is to build it from the outside in,
allowing market forces to pull and shape your idea into a thriving busi-

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