I got together with an entrepreneur the other day that was looking for some advice. He admitted that he had spoken to a number of angels and VC’s about the product he was working on, and their initial response was a fairly dismissive “I’ve seen this tried many times before”.
I’ve said those words before as well, both directly to entrepreneurs as well as in our internal conversations about companies. But I’m convinced that “it’s been tried before” is a terrible way to dismiss a startup idea.
The reason is that this statement allows you to be way too intellectually lazy. It essentially says “I’m not going to think deeply about the challenges of the problem or proposed solution, I’m just going to assume it won’t work because others before it failed.”
This is fundamentally flawed for a couple reasons.
First, things change. That’s the point of technology. What wasn’t possible before becomes possible now. Even if technologies themselves don’t change, industries are constantly shifting as technology changes the rules of the game. If you hope to invest in tech, or be as disruptor, it’s actually a great thing to go after an opportunity where no one has been successful in the past if the context surrounding the problem has changed significantly.
Second, almost all companies have been tried before, and almost all startup companies fail. The fact that others before you failed is probably true for more than half of all successful company. Great companies are the exceptions, so pointing to the norm doesn’t tell you much unless you go deeper.
The fact that many others have tried to tackle a problem in the past actually shows that there’s demand, and that others have cared enough about the problem to quit their jobs and try to solve it. Maybe they were wrong, but maybe they were very right about most things, just made some poor choices along the way.
This is not to say that you shouldn’t have respect for the past – I think we have a lot to learn from what came before us. Just as I’m disappointed when folks say “it’s been tried before”, I’m also surprised when founders are unable to articulate why “this time is different” when they are embarking on a well trodden path. Conversely, I am always impressed when I hear detailed, knowledgable commentary on a sector, and why other attempts to solve the same problem failed (plus what needs to happen to drive to a different, successful outcome). This Tweetstorm from Nathan Hubbard, former CEO of Ticketmaster on the challenges with Seatgeek (and also why Fansnap had challenges) is a good example.
So, for founders that are starting companies in spaces where “it’s been tried before”, my advice is to acknowledge that this true, and focus on either
a) what has changed to make now the right time for this company (apparently the #1 question asked by investors at Sequoia) and/or
b) what you are doing better or different than those that came before you
Usually, the answer isn’t a laundry list, but one of two critical things that set the company apart from what has failed in the past. And if investors don’t want to engage in an intelligent conversation about these things, then move on.