Why drop-outs succeed in business


Our entire existence in this world hinges on survival. As we survive, we learn.

We pass on what we have learned, in the form of education.

Our education system is structured in a manner where we need to pass tests to prove our proficiency. Unfortunately, it is fairly simple to game the system. In a test all you need is for the examiner to believe that you have learnt.

Since we use examples to teach, we use examples to test. It is rather easy to learn up the examples and ace the test. You do not need to be a genius. (I am not saying that the same questions are used, but the same structures are used)

Coming from the background of having gamed tests, it is only obvious to seek to game the business as well. Take the best example that fits what you seek to do and solve the puzzle in much the same manner. We feel that if we are able to looking at sufficient examples, we would find a solution that fits. In the real world, this does not work.

When your maths teacher puts together the problems, he/she limits the number of variables that you need to deal with. The real world unfortunately has far more variables; some visible and some invisible. When one tries to study another business as an example they figure out the visible variables but for obvious reasons miss out the invisible variable.

This is what they mean when they say – “Don’t look at the success of another person; their story is different from yours”.

Customers seek value for their money. It is far and away the ONLY thing that the customer is seeking. That value may be delivered in the form of a better product, service, packing, feeling, etc. This is where the story of each startup differs from that of the other and gaming the system becomes extremely hard. It is the hardest test to pass.

A customer will not consistently put money in your hands unless he/she feels value delivery is actually taking place. The variables which lead to the perception of value are very complex to understand. Hence, it is dangerous to look at someone else’s success and use that as a template for your own.

There is no gaming the customer here. No examples. No shortcut. No optimum solution (which is part of the reason disruption occurs).

As Paul Graham puts it – The customer is like a shark, there is either meat or there isn’t.

The only gauge is to see, if the customer is happy after having paid for the product or service. That should be the only focus at the initial stages. Do people love using what my business offers? What do they love? What don’t they love? How to improve?

Drop-outs are usually not burdened with the baggage of learning how to ace the test. They respond to the movement of the market, they are more flexible and look to solve problems in their own way. They do not seek to do the things that others did to be successful, they just do their own thing. They do not know how to study examples, they only know how to respond to a given situation.

They trust their intuition, spend a lot of time understanding their customers and do the best that they can; which is the best way to run any business.

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