If you’ve heard of the startup Juicero, chances are it wasn’t because it was billed as the next big thing in juicing. More likely is that you became aware of it when an article about the startup published in Bloomberg in April went viral.
The article pointed out in rather plain facts that the $400-dollar wifi-connected juicer which had garnered $120 million in funding wasn’t, in fact, very impressive. The scoop that you could squeeze the pre-packaged juice packets as effectively with two human hands as with its expensive, proprietary hardware seemed to point to one of the downsides of the innovation and investment landscape in Silicon Valley at present: sometimes, hype ends up being more prominent than reality.
As Quartz recently noted, Juicero’s woes may have gone viral, but it’s far from an isolated phenomenon: “Juicero is hardly alone. WeWork, a company that provides shared offices, believes space can’t be measured in square footage. Color, a social-media hopeful, raised $41 million for its “multilens” “elastic network.” Quirky, a sort of Kickstarter for inventors, received $170 million by promising to make anyone into Thomas Edison.”
It’s true that innovation is a beautiful—and necessary—thing. And with so many problems to be solved in the world, we need it more than ever. Indeed, if people didn’t have the courage to imagine how the future would be, we wouldn’t have the likes of Facebook or Google, not to mention lightbulbs or vehicles. But in the startup age, where money and hype flow freely to people who are adept at garnering attention, earnest founders and entrepreneurs should be slightly more discerning about the kinds of ideas they throw their heart and soul into.
Whether you’re an investor looking to back the next big thing, or a visionary who is trying to decide which idea to invest your time in, here are some questions to ask yourself while an idea is still in its infancy on how to avoid a good idea that becomes blown out of proportion.
Is the Idea just Hype or Does it Have Legs to Stand on?
Who does your idea serve? It’s true that not every idea can appeal to everybody. However, raising $120 in funding for a $400 juicer—something that very few people can afford, let alone want—is clearly a very specific niche. Generally, if you’re creating something solely for a moneyed, privileged demographic, keep your idea in perspective. Rich people investing in ideas for rich people doesn’t achieve the greatest of results, so if you’re trying to avoid criticism it’s important to keep this in mind.
Beware of hubris. There is nothing better than feeling immensely passionate about something you’re creating. But if you’re a first-time entrepreneur who is barely 25, perhaps be a little humble when you start talking about “changing the world”, at least publicly. While it’s true that people younger than that have been responsible for world-changing inventions—just look at Mark Zuckerberg—chances are they didn’t set out to create something that billions would use. They just had a good idea, and followed it. Similarly, think about the process more than the end goal, and you’ll avoid getting a big head.
Keep your funding proportional. Business models used to be based on sales—in other words, if you didn’t have money coming in the form of revenue, you couldn’t expand. However, in this era of startups and investment, the opposite seems to be true: startups can get loads of funding before they’ve ever proved there is a large usership that wants them. If you want to avoid being an over-funded startup that’s running on hype, focus on your users (not your dollars) from the outset. If your funding is growing faster than your usership, consider having a moment of honesty about your long term future.
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