16 December 2009

What Startups Can Learn From Sailors (Pt. I)

I’m a simple guy. I basically have just two passions in life: startups and sailing.

Last fall, after nearly a decade spent working with startups, my wife and I embarked on an extended ‘sailing sabbatical.’ On a pre-dawn October morning, we sailed under the Golden Gate Bridge, pointed the boat south and explored Mexico, then headed west across the Pacific to French Polynesia.

It was a fantastic trip, and a long one. Traveling 7,000 nautical miles—at an average speed of about 6 knots per hour—gives one plenty of free time to think. I spent an inordinate amount of this time reflecting on the similarities between sailing a small boat and running a startup.

A few startup / sailing parallels, cliches, and lessons learned from the journey:

The Value Of Charting A (Flexible) Course
Before leaving San Francisco, we spent a good amount of time figuring out exactly where we wanted to go, and then we laid out a plan for each leg of the journey. This process was daunting at first, but it helped us manage our timelines and budget. In addition, it helped keep us safe; as with startup navigation, many offshore hazards are “known” and can be anticipated or gleaned from people who have done it before.

For example, on our first major passage from San Francisco to Cabo San Lucas, we charted our route to avoid the major shipping lanes just outside the Golden Gate. We entered waypoints in our GPS to skirt around Southern California islands, and researched protective anchorages along the Baja peninsula for rest stops. We plotted our course in detail, but we also baked in enough cushion to allow for mid-course corrections or delays. In addition, every time we entered an unfamiliar port or narrow anchorage, we had a contingency or ‘escape’ plan if things suddenly went awry.

Startups can benefit from this approach. Mapping out markets, setting waypoints and milestones, and preparing for ‘what if’ situations helps keep a young company moving forward while avoiding hazards. Successful startups recognize the value of creating a strategic plan to help guide the way, and they develop one that is flexible and can be readily adapted to reflect new information and real-time situations. Finally, they learn from precursors—both by studying other firms, and by integrating “experience” into their company’s DNA through seasoned hires or a strong advisory board.

Build The Boat For The Task At Hand...
Prior to departure, we outfitted our boat in anticipation of all sorts of events—everything from minor mechanical issues to potential catastrophes. We upgraded key components like the rigging and sails, and had backups for most systems—if our nav equipment shorted out, we had a handheld GPS. If our steering went out, we had an emergency tiller. If our boat sank, we had a life raft. Limited by our budget, we kept things exceedingly simple, but in the end, we were (relatively) prepared to take on the high seas.

For startups preparing to venture forth, replace the words ‘right equipment’ with the words ‘right talent.’ Just as a boat requires good sails, rigging, and steering gear to be sea worthy, a startup needs, at a minimum, enough technical skills to
develop the product and sufficient marketing skills to sell the product. Indeed, the most potent founding team is made up of a hardcore engineer and an energetic, passionate evangelist. The rest can be outsourced or added later, but without product skills, the startup will be swamped by the first set of customer demands, and without sales skills, it will drift invisibly through the market.

…But Be Quick To Untie The Dock Lines And Cast Off.
Even with the best planning and preparation, no sailor is ever fully ready for the challenges of the open ocean. This awareness can have a paralyzing effect, and if you walk the docks, you’ll meet a sizable number of sailors who wax poetic about future voyages, but who never actually leave the safety of their slip. There is always another piece of gear to save up for, or a myriad of ‘boat projects’ keeping them in the harbor.

At some point, inertia must be overcome, often suddenly and without restraint. We knew we couldn’t possibly anticipate every mechanical issue; no boat is ever fully shaken-down. We also knew we didn’t know it all; some things we’d have to learn on the fly. Yet when our departure date came, we sailed off anyway. The anxiety that had enveloped us for months dissipated within a few hours of our departure. We were off and running, and it was exhilarating.

Similarly, good startups prepare, but they also pull the trigger; they hoist the sails and
go for it. There is always a balance between planning and action, but successful startups err on the action side. They know that “perfect” is the enemy of “good enough,” and that the benefits of launching a little bit too early far outweigh the costs of missing a market window. Thus, they get to market with the minimum set of viable features or services, and build from there. They learn and grow as they go. They embrace the challenge and scrutiny that comes with being out in the open, exposed. No startup success story was ever written by staying in the garage.

May The Wind Be Always At Your Back
A key characteristic of a good sailor is that she uses nature and the elements to her advantage, instead of fighting against them. An example is the daily effect of tides and currents. If you are entering San Francisco Bay against a 4 knot ebb, and your boat does 5 knots, you’ll essentially be treading water, whereas if you enter on a flood, the current will whisk you to your destination. A macro-example is in using predictable annual weather patterns to find the best wind to carry you across the ocean—or to avoid seasonal hurricanes.

The startup metaphor is that like the tides and seasonal winds, markets can be studied, and in many cases, predicted. Markets have repeating, cyclical trends and patterns that can be used to help make decisions. Are you trying to sell into a declining or contracting industry—i.e., sailing against a current? Could you take another tack, and point the boat in a more favorable direction? Another example—is VC funding for your space drying up? Can you adjust the shape of your sails, make do with less, and keep moving forward? In short, working with and not against the forces outside your control will make the journey a whole lot easier.

“You Take The Good, You Take The Bad…”
The popular image of sailing is of a spirited, beam-reach blast on a bright sunny day, or a pleasant sunset cocktail hour at anchorage. This is, in fact, reality—10% of the time. The remaining portion is comprised of either not enough wind or too much wind, weather that’s too cold or too hot, cramped quarters, seasickness, and conditions that are either extremely boring or way too ‘exciting.’ However, when the sailing is good it’s great, and it is these moments that keep you going the other 90% of the time.

Similarly, the popular image of a startup is of a fun, hip company that launches to great fanfare, quickly scales its customer base, and is acquired by Google at an astronomical valuation. The reality is much different; popular perception doesn’t reflect the hours of both chaos and tedium, of slaving away in cramped C-class office space on uncomfortable chairs, of fighting to stay afloat and meet payroll while running on Ramen and Red Bull.

Nonetheless, a few key moments—closing the first paying customer, raising a venture round at the 11th hour, or presenting to the accolades of peers at a conference—make it all worthwhile. Savor, celebrate, and then remember those moments during times of stress.

No Rest For The Wicked
While passage-making, both captain and crew must be constantly “on”—scanning the horizon for larger ships that that could present a collision hazard, listening for unusual boat noises, watching the barometer for any sudden weather changes, and repeatedly checking all the gear, gauges and equipment for signs of wear or distress. It’s pretty amazing, actually—you develop senses you didn’t know you had, and you tune in to the littlest sounds and rhythms. But there is no way to turn it off, no pause button, especially on long passages (our longest, the Mexico to Marquesas leg, was 22 days of open water). In short, you’re “all-in” and “always-on.”

Running a startup is much the same—all consuming. I’ve never known a successful founding team who ran their startup as a 9-5 job. They take it home, they take it on vacation (if they get one), they live and breathe it 24/7/365. As in sailing, this takes some serious adjustment, but you soon get used to it, or you head home.

The key for both sailors and startup founders is to find an optimal pace and rhythm, a measured trot that can be maintained without burnout or exhaustion. Further, it’s critical to conserve energy, and not waste effort on unnecessary or trivial concerns. To mix up a few metaphors here, both sailing and entrepreneurship are best viewed as a marathon, not a sprint. By accepting that you’re in it for the duration, your daily rhythm and attitude will adjust to meet the challenge.

The Only Constant Is Change
For sailors, the most dangerous moments generally occur not on the open ocean, but rather, when sailing along a coast or when entering a bay or atoll. Sailing near land means there are things you can hit-- rocks, shoals, reefs, and sometimes even whales. Sometimes you find yourself caught in a situation where wind and currents are working against you, and it takes all your effort to simply stay in place, with no forward progress. It's like running on a treadmill. But as frustrating as it can be, staying in place also means you are not sliding backward, and being pushed onto a lee shore (a common cause of shipwrecks).

It is during these moments that we take comfort in knowing that even the worst weather conditions will, eventually, change. Tidal flows reverse direction at least once per day, and storms always pass. The lesson here is that when things are bad, keep plowing ahead—survive to fight again another day—conditions will improve. Likewise, when things are good, enjoy it, because again, the only constant is change-- eventually, another storm will form. Hopefully the metaphor for both thriving and struggling startups is obvious.

…to be continued (as I mentioned it was a long journey!)

3 comments:

  1. Nice post indeed :)
    Let's share stories on Puerto Vallarta when you return.

    ReplyDelete
  2. I stumbled across this while doing research on "valuation" and was dumbfounded (in a GREAT way)! I am a fifth generation Scow racer and have recently formed a start-up. I found the whole article so very relevant! Thank you for taking the time....you have really touched me, Nathan. I think you'd really enjoy the book "First you Must Row a Little Boat"?

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