There Are No Rules
Innocence (or ignorance) brings forth innovation
“Rules direct us to average behaviors. If we’re aiming to create works that are exceptional, most rules don’t apply. Average is nothing to aspire to.” - Rick Rubin
The best companies are one-offs and break the mold.
You can’t write playbooks, develop a how-to guide, or make a course to teach someone how to create an iconic company.
As startups have gone more mainstream over the past decade, there’s been a growing library of startup conventional wisdom. Entrepreneurship classes, startup gurus, and accelerators have sprouted like mushrooms across the globe. Countless books have been written analyzing previous successes and trying to draw out the patterns.
Build where you have founder-market fit. Get a technical cofounder. Build an MVP. Put it in the hands of users. A/B test. Growth hack your way to 100k users. Hit $1m ARR. Grow 3x YoY. Rule of 40.
Rules are valuable for creating an incremental startup that is somewhat successful, but creating something exceptional requires breaking the rules.
Some of the most impactful technology companies of the past decade: Bitcoin1, Anduril, OpenAI, SpaceX, and Uber all broke the rules in their own way. Even the most important companies that came out of an accelerator like Y Combinator (Stripe, Airbnb, DoorDash, Coinbase) were the earliest ones that wrote their own playbooks that other companies now follow as prescribed strategy.
Bitcoin: literally no proof-of-work blockchain existed. Open-source, permissionless, and dependent on decentralized contributors to build the protocol, with very little development done after the initial phase.
Anduril: defense tech company at a time the Valley hated defense and the government wasn’t buying technology products from startups for large contracts. Co-founded by a guy who built a VR headset.
OpenAI: non-profit research lab that turned into a company generating billions of revenue and pushing the edge of AI innovation.
SpaceX: like Anduril, had to build its own government sales playbook, not to mention invent new technology like reusable rockets. Founded and driven initially solely by a centimillionaire’s whim, usually a surefire sign of a company that will go up in flames.
Uber: took advantage of ZIRP and a frothy investing market to run a blitzscaling and regulatory playbook that will never be replicable again.
The next great startup won’t follow the rules of conventional wisdom either.
The reason companies pitched as “X for Y” (ie Uber for X) never work on a generational scale is by defining themselves in such a way, they’ve already artificially limited their scope. They are constrained by an external locus, atrophying potential impact.
By contrast, the best founders and companies live unconstrained.
“I felt like a lot of startups are actually created and remembered by the rules that they actually break. If you look at a company like TikTok, for example, they did paid user acquisition to grow their user base. That was considered to not be a practical thing to grow. And so you always had to take advice and really assess that for your own company.” - Apoorva Mehta, CEO at Sunrise, former CEO at Instacart
This goes to back to a fundamental point-of-view I learned originally from Ho Nam of Altos Ventures: startups are not an asset class that you can create and stamp out through a predictable playbook. Most will fail, even the ones that aren’t actual financial zeros. The one that reach escape velocity and generate outsized impact, both financially and in the real world, are exceptionally rare.
Rick Rubin writes that “innocence brings forth innovation. A lack of knowledge can create more opening to break new ground…experience provides wisdom to draw from, but it tempers the power of naïveté.” Companies led by experts in the field are often trapped by their knowledge: the lack of childlike wonder and openness to innovation obstructs the possibility of breakthrough innovation.
What does this mean for founders?
It means thinking for yourself, not always differently. In some cases, the conventional wisdom will be absolutely correct and you should follow the rules. But in others, possibly the most important moments, you will have to rely on your own intuition, your own thought process, and make the decision for yourself and the company you’re building.
Beware of general advice, especially from investors who are simply extrapolating from a few cases they’ve seen over the years. Pattern recognition and general advice/playbooks are one of the things investors pitch as their value-add, but it’s a detriment if applied blindly to your situation or company. That’s why the best investors and board members like Mike Moritz and John Doerr are socratic, not prescriptive, in their conversations with founders.
Relying on paid advertising for growth is terrible, except when it’s not for Tik Tok.
Signing uneconomic deals with large partners like Whole Foods is terrible, except when it’s not for Instacart.
Tinkering for years to make your product perfect without any revenue is terrible, except when it’s not for Figma.
Thinking for yourself means taking risks like buying your own nationally chartered bank rather than being a pretty UI on top of legacy banks and banking infrastructure. I don’t know a lot of the details from the outside looking in, but Column feels like a bigger and more ambitious swing than most Silicon Valley fintechs because William and Annie Hockey are thinking for themselves, eschewing the traditional path.
It’s the difference between being a home cook following a pitch-perfect recipe from the New York Times or a Michelin Star chef creating a new dish that changes the expectation for what’s possible.
Thinking for yourself means being a live player. There are no rules or playbooks that lead to becoming an original outlier.
“The artists who define each generation are generally the ones who live outside of these boundaries. Not the artists who embody the beliefs and conventions of their time, but the ones who transcend them. Art is confrontation.” - Rick Rubin
There’s freedom in that if you choose to accept it.
Forge the path for yourself.
You may just have a lot more fun doing it that way.
And when it’s done, you can say that what you created was truly yours: it was a singular expression of you that the world now can enjoy.
If you’re a founder pushing the boundaries of conventional wisdom, living unconstrained by rules, and building the next category-defining company, reach out pratyush [at] susaventures [dot] com. I promise I won’t tell you what to do, but I will try to ask you good questions.
Not a technology company, of course, but the point remains.