Dear Fellow Founders,
I’ve been lucky to work as a founder, CEO, COO, CTO, and CPO at several successful startups, as well as an investor at a couple of big VCs. Over my 20-year career, I’m continually amazed at how much bad advice circulates in the startup world. My goal in these posts is to help founders reframe some of the less useful perspectives they encounter into something that might be helpful.
So, let’s start with the most common piece of bad advice: "That’s not how the market works." This is often followed by, "Your customers will never do X, Y, and Z," and concludes with, "Your business will never succeed." Whether it’s coming from angels, GPs, or operators, these sweeping statements ignore important nuances and can crush the very flexibility a startup needs to thrive.
Let’s unpack this one.
Every disruptive startup has probably been told this at some point: "The market doesn’t work like that." But why is this bad advice? Simple: if you're designed to disrupt, of course the market doesn’t work like this right now. That’s the point of disruption.
For 40 years, B2B sales ran on the Rolodex - think: prehistoric iPhone, but instead of apps, you had tiny index cards you could flip through one by one. It’s the original “swipe right” - except, instead of finding dates, you were looking for someone to sell printer paper to. But then came Salesforce.com and the CRM era, which made the Rolodex obsolete, except for a few stubborn execs and hipster millennials.
Investors who dismiss your idea or your startup because “that’s not how the market works” are operating on godawful logic, and you should ignore them. But beneath this sentiment lies an important question: Do you really understand how your customers will buy your product? If you’re targeting Enterprise customers, do you also understand how they’ll procure it?
Take supply-chain startups, for example. There are countless companies claiming they can make every Fortune 500’s supply chain as efficient as Amazon’s overnight. Let’s set aside how many can live up to their technical promises and focus on business practicality.
I once worked for a company with one of the largest supply chain operations in the U.S., processing hundreds of millions of dollars in inventory daily. As a technical leader, I was constantly approached by startups who tried to convince me that all I had to do was buy their product, deploy it, and sit back and wait for my next promotion. I never did business with a single one, because none of them understood how my company bought software.
1. They didn’t appreciate the complexity of our business or how to deploy their software in our operations. Supply chain is one of the most complicated processes in business. The volume of goods moving through a single company’s supply chain daily would make your neighborhood Costco look like a boutique. I was often told the setup was easy or plug-and-play, and I’d always respond: "We need to audit your software bill of materials, architecture, and product to ensure it’s compliant with our IT Sec and CISO policies, so send us all your documentation."
Enterprise companies are risk-averse. When I joined my first Fortune 500 company, my boss gave me valuable advice: "In a startup, if something fails, it’s okay. But here, if you break something, it could lead to a Wall Street Journal exposé and a $3B market drop in our market cap."
This mindset is widespread in Enterprise, where no top executive wants to update their resume. When evaluating supply chain startups, my first question was: Did they understand how to de-risk and deploy within our operation? If they downplayed the complexity or claimed easy implementation, it was an immediate pass. But if they acknowledged the complexity, they at least earned an email back from me.
Understanding your customer’s business process and risk tolerance is crucial—especially in Enterprise environments. If you ignore these factors, your solution won’t make it through the door.
2. I wasn’t the one who decided whether to buy. As the technical leader, my role was to convince the operations leader— the person actually responsible for uptime, productivity, and efficiency—that a startup's technology was worth the risk. If I ever felt confident enough to stake my reputation on a pilot, I still had to persuade the operations leader to put his reputation on the line as well. I’m an engineer – I’m naturally skeptical. Operations leaders make me look like the world’s sunniest optimist.
Downtime is the enemy, which means change is too. In a finely-tuned operation with interlinked processes, the riskiest move is to change anything. Logistical leaders are judged by their ability to keep things running smoothly. In software, 99.999% uptime is enough; in supply chain, that’ll get you an invitation to explore other opportunities.
Adopting new technologies requires a lot of trust between technical and operational leadership. Where trust is lacking, politics often fills the gap. If the leaders haven’t worked together long, there’s little incentive to take risks. Startups that didn’t understand the human side of the sales cycle or how decisions were made internally never gained any traction with me.
Understanding both the technical and operational needs, and building trust, is essential when introducing new technologies in complex environments like supply chain.
3. Even if technical and operational leadership aligned, procurement was still a hurdle. It’s not just about saying "yes" and signing a check. There’s a vendor management process, agreements, and a host of bureaucratic steps that Fortune 500s put you through before agreeing to work with you. To do one pilot with a startup, my team had to partner with supply chain operations, CISO, IT Sec, sourcing, and legal. And the startups we wanted to work with were often unprepared for the barrage of questions we had.
Really smart supply chain startups approached our Enterprise business this way:
- They identified areas open to R&D—like when we were building a new logistics facility, a great opportunity to implement new technologies.
- They propose small pilots that allow procurement via CAPEX instead of OPEX. CAPEX was easier for us to secure, making it simpler to push things through faster with less risk and personal exposure. While ARR is sexy for a supply chain startup, it meant the impossible task of securing OPEX for me, and that instantly killed most of the deals we explored.
- They understand that multiple executives from various departments need to agree. They tailor their pitch to each executive's language and metrics, equipping us with the right perspective to sell internally.
The best B2B startups know how to navigate Enterprise procurement and internal politics while minimizing risk. They get the importance of small pilots and speak the language of each stakeholder involved.
This story illustrates a simple point: manufacturing, supply chain, and logistics markets don’t really work the way SaaS companies want them to. I could easily look at any of those startups with ARR pricing and say “your business is going to fail. That’s not how the market works.” But in reality, with a little bit of thought and tuning, a business model or GTM motion that doesn’t quite fit the market could easily be transformed into one ready for scale.
And that’s the problem with categorical or definitive statements; we live in a world with multiple right answers and many pathways to success. Categorical advice is also often dismissive advice, which is frequently wrong, but also tends to hide the value of its underlying point.
“That’s not how the market works,” doesn’t help anybody. “You need to develop a more thorough understanding of how your customers purchase and procure new technologies” can be extremely helpful.
I’d love to hear your perspective on this, and also what other bad advice you frequently hear. Please let me know and provide your feedback in the comments!
Thanks for reading,
Collin