Sona's Field Notes #03: Principles Over Playbooks

Hello Founders, Investors and Ecosystem Builders,

The more I study startup playbooks, methodology and frameworks, the more I've become disillusioned by them. As a keen student of venture building, I endeavour to read widely around how to bring some structure to the madness that is entrepreneurship.

However, the more I try to use a lot of this thinking to enact a company of my own, the more I learn about the disconnect between frameworks and reality.

Much of this new wave of thinking has been influenced not by cynicism, but from listening to seasoned founders and reading incredible counterpoint essays that challenge the notion that the startup building process can be productised into frameworks and playbooks that allow for a repeatable way of building highly successful companies.

Navigating the entrepreneurship maze

The Idea Maze Is Useless is one such essay that has had tremendous impact on my thinking. In the piece, author and startup operator Cedric Chin critically examines the 'Idea Maze' concept popularised by American entrepreneurs Balaji Srinivasan and Chris Dixon.

This concept suggests that successful or 'good' entrepreneurs can navigate a complex maze of decisions, evading pitfalls tactically and learning from past industry failures to find a viable path to product-market fit.​

To unpack if this ability makes it easier to succeed in business, Chin conducted an extensive case study analysis on a wide variety of global companies (from tech businesses like Apple and TikTok to more traditional ones like Hersheys). What he found was that the journeys of successful companies are highly idiosyncratic, lacking consistent patterns and do not mirror strategies with each other. His case studies document some of the contrarian, difficult decisions as well as people and market dynamics that resulted in their success, all which had little to do with repeatable playbooks and frameworks.

Ultimately, Chin concludes that navigating uncertainty is an inherent inescapable part of entrepreneurship and that success often results from a series of ad-hoc decisions made in response to real-time feedback, rather than following a predetermined path. Hence, he suggests that entrepreneurs should focus on taking action and adapting to new information, rather than relying on abstract frameworks.

This sentiment is echoed by legendary investor and founder, Peter Thiel in his book Zero to One:

“Every moment in business happens only once...Indeed, the single most powerful pattern I have noticed is that successful people find value in unexpected places, and they do this by thinking about business from first principles instead of formulas."

Having spent a lot of time collecting an arsenal of tools and frameworks around startups, this essay was an important, startling reminder that there are no universal answers to something that is as varied as startups, especially when you take into account a host of external factors that influence them, notwithstanding founder values, political climate, public perception, cultural values and other macro conditions. This is why many common startup truths like 'talk to customers' sound trite. There is little advice that can be offered beyond that considering how each startup exists in contexts that are highly specific to it.

As Chin adds in his essay:

"Good entrepreneurs understand that the whole game of entrepreneurship is a game of improvisation. There is no knowledge to be had; no advice one can read. There’s simply no guaranteed answer to anything: you take lots of action to generate information and stay alive, and then roll with whatever comes your way. You are prepared to do this for years."

Returning to first principles

There has been an overemphasis on the search for replicable playbooks that can be used in Africa, whether it's insights from India or LATAM. I think main reasons for this include our sincere attempt to accelerate the startup economy by drawing learnings from as many parallels as possible and to 'de-risk' Africa as a continent worthy of more outside investment.

As much as these parallel learnings could potentially illustrate mental models of successes that could happen in Africa, they cannot be over-relied upon. Africa is not simply a time-displaced continent, reflecting for example where 'India was 20 years ago'. We exist in our own (business, cultural, people) context. In addition, 'de-risked' businesses is an oxymoron. There is no such thing as a de-risked startup. The very nature of business says that any product-market fit obtained needs to be defended daily, even if you're an incumbent.

Interestingly, playbooks are often cited by investors. I think this is because the majority of content around startups in Africa seems to be investor-driven as opposed to entrepreneur-driven. On a random day, you'll find LinkedIn littered with articles focused on 'how to be investor ready' or 'things investors look for in startups'. I find that this is in stark contrast to the content that dictates the narration of the startup ecosystem in places like the US or Europe, where founders and founder stories have a strong place in the startup narrative.

However, it's important to remember that investors have a different vantage point of entrepreneurship. Due to the volumes of companies they see and interact with, they have incredible insights from a top-down/macro view that any single entrepreneur might not have access to. However, being a founder necessitates that you have a bottom-up view of the market because what you're battling day-in and day-out are the everyday hardships of entrepreneurship.

This is why we need more founders taking the lead on conversations around building a company on the continent. Jason Njoku's analysis of his failed media business IrokoTV is an excellent example of this.

Frameworks as tools, not truth

"All models are wrong, but some are useful. What this means: models are just that, models should be used as a general framework, but you will never be able to capture reality." – Andrew Chan

I'm not arguing that frameworks have no utility to founders. It's instead an exploration of the idea that the search for playbooks or the use of frameworks cannot be used to dictate the shaping of an ecosystem. In reality, there are no universal playbooks for any part of company-building (G2M, PMF etc). However, how I think about these concepts now is that frameworks can help you think about specific problems and tactics can help you solve specific problems. But alongside frameworks, I now spend more time on case studies to understand how a business tried to exist in its specific context. Some great case studies I regularly refer to include Lenny's Newsletter for US startups or The Realistic Optimist for African/MENA startups.

This is an opportune time to reflect, especially since the roles of accelerators, incubators and venture studios are expected to evolve with the needs of founders, if they are to be a great partner to them.

We can't do this if we don't talk about the unique hardship of trying to even make one startup a success in the African context, never mind the hundreds of thousands we'd all like to see emerge and thrive.

Therefore, we must each gain firsthand knowledge by creating or investing in our own startups focused on market-driven innovations to determine their viability through direct experience rather than popular theories.

There are no shortcuts, I'm afraid.

I'm curious...

Have you found yourself trying to follow playbooks that don't quite fit your African business context? Or have you discovered principles that transcend geographic boundaries? I'd love to hear your experiences at sona@aria-africa.com.

Until next month, cheers!

Sona