Stop Innovating (On The Wrong Things)

oh. This is an interesting manual. This is an instruction manual. Alright. Welcome to Dalton Post Michael. Today, we're gonna talk about how do you avoid innovating on the wrong things. So to set this up, right, we're in the innovation economy. Oh, definitely.

Right? Definitely We're major innovation. It's right here. Innovation That's what's happening. We encounter a lot of founders who believe that they need to take what I call innovation juice and spread it across innovation juice. Where I'm trying to insult it. And they have to spread it across every freaking problem they encounter.

And I think that there's only a limited amount of innovation energy that any company can have. There's only so much juice is what you're It's like I set that up. And we have maybe encountered some places where you should maybe just use the best practices. Yeah. How I think about this.

Making a startup work Yep. Is a miracle. Yes. Yes. And the fact that you got product market fit and made something people want, you you literally performed a miracle to do that. It is amazing. Yes. People would or so, you know, people would die to get what you got.

Yep. Now, the odds that you are going to be able to perform five miracles at once is much much much lower. Much lower. And so, you want to focus the miracle juice on the single miracle, which is making something people want and making a product. Right? Yes. You guys see what I'm saying? Yes.

Solving a real customer problem. And then, all this other stuff. Yes. Yeah. Just do best practices. Please don't innovate. Yes. Like, you don't need to have a low likelihood of success miracle.

Like, you don't wanna have to be right on these long shot bets Yes. In five different ways. Yes. And I think it's interesting because I think that I encounter some people who somehow are more religious about these side bets. Right? It's like, well, I'll only do a start up if I can locate it in Bumble fuck nowhere. Or I'll only do a startup if, I get to do this weird corporate governance thing.

Or I'll and I'm like, what you're really saying is, like, I'll only serve my customer and help them with the really important problem in their life if I get this other random thing that the customer doesn't give two shits about. Right? And that always kind of blows my mind. It's like it's it's in some ways, business is really about being selfless and, like, putting your customer first.

But it's like, I'll only put my customer first if I get to look at this startup in New York. And I'm like, that's obviously putting yourself first. I think let's start with.

the most common anti patterns we see. Sure. Right? Like what is the one are the ones you see the most, man? What's what's offender number one of where people are trying to innovate where they probably shouldn't be? I I would say one that I see on the YC application that I love is when it's like some kind of weird incorporation. Yes.

So, you know, we incorporated it as a Wyoming LLC. And I'm like, this was a voluntary red flag. Like, is like Yeah. Why.

would you do that? And like sometimes they'll even write, well because like, da da da da da. And you're just like Well I think my theory is there's a lot of smart people, again, they want to innovate in different ways. Sure. And they'll look at something like corporate law and the existence of the Delaware c corp and be like, I, someone that knows nothing about this, could do Yes. Yes.

Obviously And everyone else is doing Delaware c corps. Yes. That's not for me. I'm gonna do a and then crazy things happen. Right? And so, probably corporate governance is not the best place to innovate. One thing that's been funny, headline ripped from the news, is people looking at the corporate structure of OpenAI and.

being like, oh. This is an interesting This is an instruction manual.

A nonprofit that owns a for profit. Would not recommend that strategy. Even the people that work working there, I mean, even Sam himself has suggested that that was perhaps not the wisest choice. And so again, the point here is the miracle of making something people want is the hard part. Yeah. But if you're just doing like a startup, you know, Delaware c corps are pretty good. Yeah.

You know, I see another one because, know, corporate governance, that covers, you know, your investment docs and where you're incorporating and all that kind of stuff. You're investing, blah blah blah, your your classes of shares. Like, I sometimes see founders doing crazy stuff.

I see another one that you brought up though, which I really love is the, I'm gonna make this startup, but I'm also gonna disprove every piece of startup advice. Like, I love this. Like, I'm only willing to help my customer if I can simultaneously prove.

that all of the startup advice is incorrect. Yes. And it's like, what? Like And so yeah. So the example of that is just to take something that is, like, widely considered useful or true Yeah. And try to prove the opposite of it. Yes. You know?

Like, my thing will be reliant upon making the small town that I live in the center of the startup ecosystem or something. Yes. Somehow there'll be other some other bet they're making Yes. That involves a super contrarian thing Yes. That has nothing to do. I can think of an example of these, by the way. Yes.

One of these was, I remember a founder doing something unrelated, again, I'll keep this anonymous. Yeah. But they were like, the real thing, the real bet we're trying to make is the hydrogen economy. That no one will use gasoline or solar, or wind, or, or, or. But then, in the future, we're gonna use hydrogen everywhere. There you I was like, hey man, maybe don't mention that.

Like, we'll keep this between us. Maybe when you're That's the real secret sauce. Keep that. Maybe you should keep that on the.

the down low.

But again, like and the case was, like, maybe he's right. Yeah. But it had nothing to do with the actual bet of the startup. No. And to try to throw in this long shot bet that we're all gonna be using hydrogen for everything. Again, maybe he's right. I don't know. I don't know.

That seemed like a completely unnecessary risk or thing to innovate on. Yeah. And I and I think that what's so sad about these things is that.

I think there's a misunderstanding of how hard it is to make something that people want, where people think that they have these extra points, this extra juice to spread, to to do other things with. And I just I I always like to tell people, it's like, this game is so hard.

without this stuff. Like, why do you want the game to be harder? Like, I never understood that. Is it fun? Yeah. Well, okay. Let me give you example of something that's fun. Okay.

Sure. Like, nerd bait kind of stuff. Sure. Again, I I this is my recollection. Sure. But my recollection is that when, I believe it was Asana Yep. When they started, they wrote their own programming language Of course. First.

Of course. And why would you do that? Because it's fun. I believe they back that out. Again, correct me if I'm wrong on this. But a lot of times choosing very idiosyncratic programming languages or text acts Yep. People choose to do it because it's fun. And who am I to fault them for that?

But like that's like, it's like they're optimizing for like, wouldn't it be cool if we wrote our entire thing in this new.

idiosyncratic programming language? Yeah. That's such a weird it's like, I get it on one hand. And your startup should be fun. Right? Like, you're be doing it for a while. I get it on one hand, but I've never seen a founder who didn't have the most fun One of by helping their customer. Do.

you remember in the Reddit versus Dig wars, Dig made a lot of technical bets along these lines. Meaning, like, made a lot of very high risk Yes. Technology choices, while Reddit was just like, not Let's make a social news site that Well, I don't think they were taking any high risk choices. And so this again is an example where Yes.

Dig was taking on all this extra risk on something that had nothing to do with dig. com loading news stories. No. It was it was literally about the technologies they were choosing to power the website. Yes. Well, and the one I remember was when they did the revision, and they couldn't roll it back when their site didn't work. Yes. That is correct.

Yeah. They redesigned everything all the time. It was really impressive. I think the other thing that comes up a lot around innovation is business model and pricing. Yep. And I think this once again.

is not putting the customer first. You know? Hey. Let's say you're selling cloud compute. Right? Your customers have probably bought AWS before. Maybe you should charge like AWS does. Right?

Because maybe your customers will recognize that, and that will give them comfort. Yep. No. That's wrong. We hate AWS. We can't do anything like AWS, including pricing. So now your customer looks at this pricing thing and they're like, well, I really like your product, but I don't I don't understand. Your pricing page doesn't make sense.

Like Yeah. It's not even that they don't wanna pay. Yeah. It's that they they're like, I don't understand.

what you're saying or how this works. No. And I don't buy Floozles. Yeah. And then I get credits for Floozles and then I transfer them into the Yes. Like like super Yes. And by the time I'm at that page, I just wanna know what it costs.

And if I can't figure out what it costs, like how how do I you you I'm walking you invited me in your home and then you've shot me in the leg.

No. You invited me in home and I can't open the front door. Yeah. Like the door handle. Yeah. Like I don't don't know how to use your door handle. Yes. And I really wanted to come in.

I did. I was I was game. I had my my money. I was ready to buy something.

So I think that like so much of this kind of pop entrepreneur, Shark Tank y advice, right, I actually think comes from a different place. I think it actually comes from, like, weird branding. And, like, I think that, like, in the branding world, like, being different, being unique, like like, that is, like, a very, very important thing.

And, like, a lot of the examples in the branding world are people who did things, like, radically different and then, like, became successful. What I find funny is that a lot of the examples in the technology world are people who did things 80% the same and 20% At least 80%. At at least 80%. Eighty % was the was the minimum that they copied. Yeah.

And so I think one of the things that founders screw up is when they take advice that might work in fashion and apply it to Yeah. Software.

Cause yeah usability. If people can't use your thing. Like I remember back in the day people would try to innovate on the website design and how the cursor worked and like how you would even click buttons. And that was an example of probably not helpful innovation. No. And so watch out for unintentionally.

creating risk that you don't need to create. Yeah. And and I think that if you put your first your customer first, second, and third, you might look at some of these other things and say, do I really need to do them? Or better yet, let me do it on my second startup. Let's get let's get one successful startup out of the way, and then I can make programming languages.

I can hire people all around the world. I can do all kinds of crazy things. You can create nonprofits. I can build rockets. I can do all kinds of cool things. Yeah. Start up number two. Alright, Dalton.

Good chat. Thanks.