Morale
There's a lot of external evidence that benevolence works. But how does it work? One advantage of investing in a large number of startups is that you get a lot of data about how they work. From what we've seen, being good seems to help startups in three ways: it improves their morale, it makes other people want to help them, and above all, it helps them be decisive.
Morale is tremendously important to a startup—so important that morale alone is almost enough to determine success. Startups are often described as emotional roller-coasters. One minute you're going to take over the world, and the next you're doomed. The problem with feeling you're doomed is not just that it makes you unhappy, but that it makes you stop working. So the downhills of the roller-coaster are more of a self fulfilling prophecy than the uphills. If feeling you're going to succeed makes you work harder, that probably improves your chances of succeeding, but if feeling you're going to fail makes you stop working, that practically guarantees you'll fail.
Here's where benevolence comes in. If you feel you're really helping people, you'll keep working even when it seems like your startup is doomed. Most of us have some amount of natural benevolence. The mere fact that someone needs you makes you want to help them. So if you start the kind of startup where users come back each day, you've basically built yourself a giant tamagotchi. You've made something you need to take care of.
Blogger is a famous example of a startup that went through really low lows and survived. At one point they ran out of money and everyone left. Evan Williams came in to work the next day, and there was no one but him. What kept him going? Partly that users needed him. He was hosting thousands of people's blogs. He couldn't just let the site die.
There are many advantages of launching quickly, but the most important may be that once you have users, the tamagotchi effect kicks in. Once you have users to take care of, you're forced to figure out what will make them happy, and that's actually very valuable information.
The added confidence that comes from trying to help people can also help you with investors. One of the founders of Chatterbox told me recently that he and his co founder had decided that this service was something the world needed, so they were going to keep working on it no matter what, even if they had to move back to Canada and live in their parents' basements.
Once they realized this, they stopped caring so much what investors thought about them. They still met with them, but they weren't going to die if they didn't get their money. And you know what? The investors got a lot more interested. They could sense that the Chatterouses were going to do this startup with or without them.
If you're really committed and your startup is cheap to run, you become very hard to kill. And practically all startups, even the most successful, come close to death at some point. So if doing good for people gives you a sense of mission that makes you harder to kill, that alone more than compensates for whatever you lose by not choosing a more selfish project. ....[read more]
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