Can Do vs. Should DoJun 5, 2007
More than at this time last year, I am finding myself asking about the motivations behind starting companies. It can sound like a hokey question, but the motive is pragmatic: I’m trying to determine if the company was created because it can be built or because it should be built.
A “can do” company is built around some sort of feat of strength; often a show of technical prowess. It’s as if the founders are saying, “Look what we can do!” I have seen many impressive companies over my career which were clearly the result of “can do” thinking. They developed feature-filled, fully-internationalized, highly complex products, all-things-to-all-people products. Very few of those companies (or products) still exist.
“Should do” companies are based around a real need. They solve a problem, scratch an itch, relieve pain. Here at First Round Capital, we have companies in our portfolio that save you and me money, that can prove additional sales volume they drive for online retailers, that help other companies manage and monetize their web APIs, and who simply help their users remember things. Each one of these companies can point to a particular set of customers and tell me exactly what they do for them.
We appear to be at the part of the cycle where more folks are starting companies because they can rather than because they should. If you cannot explain why your company should exist, you may want to rethink your strategy before you get too far.