The Perils of Climbing the Wrong Hill: Navigating Hype and Timing in Startups

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Hatched by Glasp

Aug 16, 2023

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The Perils of Climbing the Wrong Hill: Navigating Hype and Timing in Startups

In the world of startups, timing is everything. The moment when a startup's significance expands ahead of its lived reality is known as hype. Hype can either make or break a consumer startup, depending on when it is applied. While it may be tempting to embrace hype, it is crucial to exercise caution and avoid it for as long as possible.

Hype acts as a subsidy on engagement in a consumer social network. It creates an aura of importance and inevitability, enticing users to invest their time and engagement in a platform. Users pursue status-seeking behavior, expecting future rewards for their early adoption. However, this can lead to a skewed focus on optimizing for the wrong things, as the actual average experience on the network may not catch up to the hype fast enough.

The danger lies in applying hype too early in a network's evolution. It becomes difficult to predict how consumers will engage once the hype subsidy is removed. The risk of climbing the wrong hill becomes evident. If a product's flywheel has weak components that hinder its growth, the network may experience a sudden drop in engagement when the hype subsidy disappears. It is crucial to have a product and flywheel that is truly working before succumbing to hype.

Avoiding early hype allows startups to be underestimated from the outside. This underestimation provides them with more time to figure things out and develop their product. Companies like Pinterest, Robinhood, and Etsy were initially perceived as niche, but they leveraged this underestimation to their advantage. By the time incumbents realized the potential of these startups, it was too late for them to react effectively. Being underestimated gives startups the opportunity to build a solid foundation before facing intense competition.

Unlike economic subsidies, hype is best utilized after achieving product-market fit. Premature hype may yield short-term benefits but can ultimately lead to failure or a challenging path to recovery. Startups should focus on reaching product-market fit and establishing a strong foundation before considering hype as a growth strategy.

To navigate the perils of hype and timing, here are three actionable pieces of advice:

  • 1. Prioritize product-market fit: Invest time and resources in refining your product until it meets the needs and expectations of your target market. This will ensure a solid foundation for future growth.
  • 2. Embrace underestimation: Use the advantage of being underestimated to your benefit. Focus on building a strong user base and refining your offering before drawing attention from incumbents.
  • 3. Measure success beyond hype: Look beyond the immediate buzz and hype. Evaluate your success based on sustainable growth, user engagement, and long-term viability. Remember that true success lies in building a valuable and lasting product.

In conclusion, startups must be cautious when it comes to embracing hype. Timing is crucial, and premature hype can lead to suboptimal outcomes. By prioritizing product-market fit, leveraging underestimation, and measuring success beyond hype, startups can navigate the challenges and pitfalls associated with early hype. Remember, it's better to climb the right hill, even if it takes a bit longer to reach the top.

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