Startups are like firewood

post by Adam Zerner (adamzerner) · 2023-03-05T23:09:35.066Z · LW · GW · 2 comments

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One TV show I like to watch when I'm relaxing at night is Primal Surivor. The premise is that this guy Hazen Audel is placed in remote locations and has to, well, survive.

In watching it, something that really struck me is how important fire is. It provides warmth, but that's obvious. It also lets you cook food. Also obvious. Provides light. Obvious. Something that wasn't obvious to me is that the smoke keeps bugs and predators away.

Maybe the thing that struck me more is how much Hazen's day revolves around fire. It's always something he's thinking about. Especially as sundown starts to approach. He needs a place to sleep at night and the place he'd choose to sleep often depends on where it's most practical to start a fire.

Starting a fire turns out to be much harder than what I would have thought before watching the show. I knew it's not as easy as just turning a fireplace on, but I had this idea in my head that skilled people can whip one together easily enough in five minutes or so. That's not how it works though.

In reality, it's a somewhat involved process. This may be overly simplified and partially incorrect, but here is how I see it.

• It's difficult for big logs of firewood to catch fire. You need a medium-sized fire to already be burning to provide enough "oomph" for the big log to catch fire.
• It's correspondingly difficult for medium-sized logs of firewood to catch fire. You need a small fire first to provide the necessary "oomph".
• Before small logs catch fire you need even smaller twigs to catch fire.
• For twigs (kindling, I guess) to catch fire you first need some tinder^[1] to catch fire.
• For tinder to catch fire, you need a spark.

I think this is a really good analogy for startups.^[2]

Here's an example. I have this idea for a startup that could be huge. The goal is to disrupt and eventually replace marketing and sales. To give you a sense of how huge that is, worldwide, companies spent something like $800B on advertising. In the US it's $200B. And that's not even considering sales.

Now that's one ginormous piece of firewood! What would it look like for it to be burning? Well, imagine something like The Wirecutter on steroids. Call it The Logcutter. Consumers would be able to go to The Logcutter, say a few things about what they're looking for, and receive trustworthy, reliable recommendations about what product is best for them. If consumers had that, I think it'd seriously, seriously dampen the impact of sales and marketing. And companies would be willing to spend a lot of money to avoid being excluded. They'd be forced to. They're already spending about 11% of their revenue on marketing anyway.

But how do you get that huge piece of firewood to catch fire? Good question. I'm not sure, and I think that this says a lot about startups.

You could try to take the "accelerated" route and do it in one shot. Pour a bunch of gasoline on it and use a blowtorch. Or flamethrower. This, I think, is analogous to utilizing venture capital money. Normally venture capitalists want to fund you in stages though: seed, series A, series B, series C, series D. This idea is big enough to require something like a series C or D from the beginning though. Ie. by paying lots and lots of people to research products and write reviews.

At the other end of the spectrum, you could take the "organic" route and start off by getting some tinder to catch fire.^[3]

Maybe something like this. You start off with food reviews. Right now reviews are written by idiots like me on Yelp. What if they were written by people who actually knew what they were talking about? People who graduated from some accredited culinary school, perhaps?

To start super small, you can, say, publish the Ultimate Guide to Pad Thai in NW Portland. Find a bunch of culinary school grads. Send them free pad thai for dinner via Uber Eats + $10 in exchange for a review. Get three reviews for every Thai restaurant in NW Portland. Use the reviews to construct that Ultimate Guide to Pad Thai in NW Portland, which hopefully would spread via word of mouth. At $30/review, 20 restaurants and 3x reviews/restaurant, that's $1,800. And there's your tinder.^[4]

Once the tinder is on fire you could use that to get the kindling to catch fire. Maybe by expanding to different dishes, and to other parts of Portland.^[5]

From there the kindling can be used to ignite some small pieces of firewood. Maybe by expanding to different cities.

Then bigger pieces of firewood would probably mean expanding to products other than food. Like how Amazon started off with books and expanded to... err... everything.

This analogy helps explain a thought I've always had about startup ideas. If your "idea" is just a piece of firewood without the acompanying kindling and tinder, well, it isn't really an idea.

To me, an idea is a hypothesis. How do you hypothesize that a fire will come to life? "Here's a piece of firewood" isn't an answer to that question. It begs the follow-up question, "Ok, but how will the firewood catch fire?". If you don't have any answers to that, or if your answer is "Oh I'll figure that out along the way", then I say you don't actually have an idea. You don't actually have a hypothesis about how the fire will come to life.

You could of course define "idea" differently, but I'd probably argue that the alternate definition is wrong [LW · GW].

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1. Hey, whad'ya know, that's where the dating app Tinder got it's name! ↩︎

2. I have a feeling that it's a good analogy for other stuff too. I'm just having trouble figuring out what. Maybe things that require coordination, like meetups and nonprofits. It's not great, but bike lanes are another thing that came to mind. Having one of those "bicycle highways" is awesome, but if there aren't good bike lanes available for people to navigate from their home to the bike highway, no one will end up using that bike highway. ↩︎

3. This process makes me think back to Do Things That Don't Scale. Screwing around with tinder and with rubbing sticks together hoping to get a small spark obviously won't scale. You'll eventually need some big pieces of firewood to scale. But you do need the tinder to get started. You do need to rub sticks together to get started. You need to do things that don't scale to get started. ↩︎

4. I want to emphasize how difficult getting a tinder to catch fire is! As Liron Shapira describes, getting even one user is actually hard. "In my experience, over 80% of startups that “launch” something get zero users." Similarly, getting a non-metaphorical piece of tinder to catch fire is also really hard. The material is difficult to find. It takes a lot of knowledge, creativity, resourcefulness and hustle. Same with creating the spark. ↩︎

5. If you are someone like Pieter Levels and have a large enough following, you might be able to skip to this step. Not really, only sort of. But that's why, IIRC, Courtland Allen of Indie Hackers recommends entrepreneurs work on building a following, eg. on Twitter or a blog. ↩︎

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