The Startup Playbook summary

Introduction

The Startup Playbook by David S. Kidder Build a successful startup by entering markets early, solving real problems, and staying relentlessly focused on customers. You've probably heard of the professional social network LinkedIn. But do you know the story behind its start?

Most people couldn't tell you how such huge companies begin. Contrary to what many think, the key isn't simply being in the right place. It's about being there early. This is a lesson from Reid Hoffman, the founder of LinkedIn.

He's also invested in several successful startups. His secret is to spot a trend before it becomes obvious to everyone else. When he invests in startups, he looks for companies whose value has yet to be fully recognized. That can be a sign that an important trend is only beginning.

When Hoffman was starting LinkedIn, many people thought his idea would fail. Newspapers and headhunters already fulfilled employment needs. So why was another website necessary? Hoffman's idea seemed bad partly because it came so early.

This made it harder to find investors. But it also greatly diminished competition. Being early creates uncertainty. It can also create opportunity.

Another reason LinkedIn became so successful was Hoffman's ability to anticipate solutions to obvious problems. If you've got a great idea, chances are someone else has tried something similar and failed. That doesn't necessarily mean the idea is bad. It means you have to understand why it hasn't worked.

Then you have to determine what you can do differently. When LinkedIn got started, people were skeptical about the value it could offer its first users. With so few members in the network, what was there to gain? This is a typical problem for many startups.

A network becomes valuable when many people use it. But attracting those people is difficult when the network is still small. Hoffman found a practical solution. He developed a function that allowed new users to scan their email address books for LinkedIn matches.

They could immediately see who was already on the network. They would also see options to invite friends and colleagues to join. This reduced the effort required to build connections. It also gave new users an immediate reason to participate.

The network grew quickly. And as it grew, it became increasingly useful to everyone already inside it. The lesson is broader than LinkedIn. Entering a market early can give you an advantage.

But being early isn't enough. You must identify the obstacles preventing adoption. Then solve them before they stop your growth.

create mental snapshots of the future and protect your early idea

Create mental snapshots of the future and protect your early idea. If you want to succeed in business and life, you need to know where you're going. Sara Blakely, founder of the company Spanx, knew exactly where that was for her.

She created mental snapshots. These were visions of herself having accomplished ambitious goals. She didn't always know how she was going to accomplish them. But she could use those mental snapshots to keep moving.

They could renew her faith in her ability to get there somehow. For Blakely, imagining the destination came before knowing the exact route. She dreamed about being on the Oprah Winfrey Show when she was still in high school. She carried that dream with her for years.

Then in 2000, Oprah named Spanx as one of her favorite products. The mental snapshot had become reality. A clear vision can give you direction when the path remains uncertain. But vision also needs protection.

No matter how excited you are about your business idea, be careful about sharing it too openly. It's normal to want to tell everyone about a great idea. You may hope their enthusiasm will reinforce your own. But the opposite can happen.

Instead of receiving support, you may find yourself constantly defending your business model. Every skeptical remark can pull your attention away from building. Think of how Blakely's parents reacted when she told them she wanted to sell footless pantyhose. They were extremely skeptical.

Even though she had clearly invested a lot in her idea, they couldn't see its potential. Their skepticism didn't make the idea wrong. It simply showed how difficult an unfamiliar idea can be for others to understand. There's another risk that comes with sharing your idea too freely.

Someone might take it and pursue it themselves. That's why you should be selective about whom you talk to. Especially while your business is still taking shape. You don't need universal approval before you begin.

Sometimes the better strategy is to protect your conviction. Keep building until the idea becomes strong enough to demonstrate its own value.