Consensus based technology entrepreneurship:
A general agreement about an entrepreneurial technology business opportunity: an idea, a business or consumer proposition that is considered successful by a majority of people in the technology ecosystem
Often opinion makers, founders and funders develop a consensus of opinions towards specific entrepreneurial ideas and evaluate opportunities narrowly within a pre-defined framework. This phenomenon is often further emphasised by the role of traditional and social media that transforms simple consensus into dangerous hyped consensus.
Consensus and hype are not ingredients for large, disruptive, sustainable entrepreneurial success.
Being an original thinker and challenging the status quo are the most exciting dimensions of entrepreneurship for both founders and funders.
It is of course possible to be successful founders and funders by following established consensus. Some founders launch companies by analysing existing ones, copying them and adding operational excellence and regional expertise. In the same vein, some funders base their investment strategy on joining “party deals” and blindly follow proven investors.
That said, it is important to recognise that extraordinary, game-changing and industry defining tech companies (i.e. Google, Facebook, Uber, AirBnB, Spotify) were not built by making operational or feature improvements to an existing idea or business. Rather, they were all non-consensus business ideas, applying brand new thinking and approaches to existing and new problems.
When those companies started, founders and a few funders had an idea that was not at all shared by the majority: they were clearly in the area of non-consensus. A good read on this topic is by Brian Chesky of AirBnB: 7 Rejections.
A simple framework to analyse consensus vs non-consensus thinking is below:
In order to unleash European entrepreneurship and take it to the next level, both founders and funders need to be able to get out of their comfort zones and push the envelope in the areas of non-consensus business building. If founders and funders rely on consensus and good execution, this may well achieve some gains and in some cases even good gains. However, extraordinary gains based on sustainable huge opportunities will only be achieved by pushing the envelope in the areas of non-consensus.
If founders & funders find themselves pursuing a non-consensus based business idea, there are 3 key things that they need to keep in mind:
1 — Fear of feeling alone
Deciding to work on a non-consensus driven business idea is often the start of a lonely road which can be very scary and might push both founders and funders to constantly challenge their decision making.
Founders and funders need to accept that non-consensus based decisions imply by definition a sense of isolation. There will likely be a large gap between T0 (time in which the decision is taken) and T1 (time in which it is possible to see the results of that decision). In a non-consensus tech venture the time between T0 and T1 can be extremely challenging.
Tip: Once the decision has been made to work on a non-consensus venture, both founders and funders must try to protect themselves from the noise of consensus. Try not to be influenced by what others say and think. This is tough because the noise can be high and can come from many directions: friends, press, other founders and funders.
This is usually the best time for founders and funders to stick together and feed off each other’s energy. This is a war against consensus and the best thing to do is to stay super focused and hide from the hype of consensus.
2 — The issue of knowing too much
Sometimes knowing too much is an obstacle because knowledge aligns itself with the status quo and therefore with consensus. This is why in some cases, young founders can come up with disruptive non-consensus based business ideas. This is also true for funders: who might have previously invested in the space and are not able to recognize a new idea because their brain is influenced by their old experience.
Tip: Founders with strong experience in an industry should always be sure to challenge their own thinking. The most traditional industries can be disrupted if approached from a new angle. Sometimes we observe spectacular failures from serial entrepreneurs who just work within the constraints of what they know, unable to free themselves from the past.
Similarly, some funders should not have the answers before asking the questions. Keeping the brain fresh and un-opinionated in front of a non-consensus business idea is often a key component of successful judgement.
3 — The cool factor
Sometimes there is a perceived cool factor in developing a non-consensus business idea: “I am working on the next search engine because Google sucks! Therefore, I am building the next Google”. Non-consensus business ideas emerge because founders and funders see something that other people do not see, rather than a desire to generate hype around a cool story.
Most founders and funders are not proud of the fact that their venture is a non-consensus one. They actually suffer the non-consensus dimension: it makes their life much more complex.
Tip: There is nothing cool about working on a non-consensus business idea. Avoid seeking publicity until product market fit is proven and focus on execution.Hype is not validation.
European founders and funders need to realize that in order to build extraordinary large sustainable businesses, they need to get out of their comfort zones, take risks and found and fund non-consensus driven ventures. Often European funders tend to be more focused on protecting the downside rather than helping to unleash potential of the upside. Similarly, founders are more focused on developing ventures with an exit in their mind, rather than focussing on the broad long term objective of maximization of shareholder value.
European founders and funders — let’s forget the hype, the news, the political posturing and all the rest. Let’s all focus on working hard to unleash the most successful non-consensus based entrepreneurial ventures!