Founder Fridays No. 85
Founder Fridays No. 85
Validation -- Don't Punish Talent -- The Dunning-Kruger Effect
Happy Friday.
Validation
Here are three steps to validate your startup idea quickly: 1) Write down your idea clearly and concisely. Distill it to its essence in a sentence or two. 2) Turn your idea into a specific, testable hypothesis about market engagement. Estimate your target market size and the percent that must convert for success. 3) Run experiments to test your hypothesis with real potential users. Try a "painted door" website or a "Wizard of Oz" demo. Analyze results to see if you achieved your target conversion rate. Following these steps involves articulating your idea, making it quantifiable, testing it with real people and deciding whether to proceed based on the hard data you gather. This rapid process validates whether your idea resonates before you invest months of effort building out a product. Tech Explorations by Aman (6 minutes)
Don’t Punish Talent
Leaders naturally want their highest talent on the most important projects, but by continually turning to the same people, they unintentionally punish them with overwhelming requests. This causes burnout in the top performers, while others feel slighted or delighted at not being asked, leading to jealousy or laziness. Leaders are often unaware of the impact their choices have or ignore it to deliver outcomes. The best leaders guard against this by spreading work more evenly, coaching up others to create more expertise through experience. They stay attuned to top talent, making sure not to ask too much. The goal is to develop the team's capabilities broadly, not just rely on the same few people repeatedly. Doing so builds a stronger, more resilient team. Admired Leadership Field Notes (5 minutes)
The Dunning-Kruger Effect
The Dunning-Kruger Effect was first described by psychologists in 1999. One side causes beginners to overestimate their abilities at new skills until attempting them reveals the true difficulty. The other side leads experts to overestimate how much others understand the nuances of their field, using insider jargon that beginners just pretend to grasp. This effect creates overconfidence in novices about their capacities and confusion for experts about explaining concepts clearly. Understanding the dual impacts of Dunning-Kruger helps calibrate both self-assessment and communication to the appropriate level. People often overestimate their abilities. It’s your job as a marketer to move your buyers closer to real understanding with every step of the customer journey. Why We Buy (8 minutes)
Founder FAQ: What is an EIN?
Obtaining an EIN is a crucial step for any startup that plans to hire employees, open a bank account, apply for credit or file tax returns. Applying for an EIN is a simple and free process that can be completed online with the IRS. Make sure to have the necessary information about your company and the responsible party on hand when filling out the application. By obtaining an EIN, your startup can ensure compliance with federal tax requirements and have the necessary documentation to apply for business licenses and permits. Westaway (5 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term by term and give you negotiation tips so that you can speak to investors with confidence.
Convertible Note: Guide / Video
Is the Billable Hour Right for Startups?
Most law firms bill startups by the hour because that's the status quo. But while it may work for big companies, the billable hour is likely the wrong model for startups. Why?
It incentivizes inefficiency. Firms are motivated to pad hours rather than work efficiently. This adds unnecessary costs.
It rewards busywork over results. Startups care about outcomes, not hours logged.
Costs are unpredictable. With fluctuating monthly hours, legal spend is hard to budget.
It stifles innovation. Hourly billing gives no incentive to find better solutions. Startups need forward-thinking counsel focused on results. That's why we've ditched the billable hour for transparent flat fees.
If you're ready to explore a law firm with a better billing model, let's talk.
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