Long-term thinking

The shortest path is the riskiest one

Survival first

As a founder, your main short-term goal is to generate revenue and survive. A lot of founders fall into the trap of a short-term mindset, willing to generate visually attractive figures without building solid foundations or entering into deals that will destroy their ability to create a competitive position in the market.

What does that mean exactly? Being short-term-minded is not only about signing contracts to make a few extra dollars but mostly about faking a position on the market you do not have because you cut corners.

In this post, I am not attacking the founders trying to make money selling services or working part-time: we have all been there, and it's okay. I am exclusively talking about the work on your core products and company and making the hypothesis that you are already building your venture. Starting with a service business is one of the best ways to get to know the industry's actors, and is not short-term thinking at all.

Fake it and never make it

The common first short-term mindset mistake is failing to iterate on your client and market hypotheses. It's important to ensure that your quick-to-deploy fancy algorithm meets client needs. Later in the book, we will detail a systematic strategy for finding a good market and underserved, needy clients.

Short-term thinking companies (especially VC-backed ones¹) will deploy a fancy, good-looking product and generally solve the problem people could not care less about, just bringing a hype-touch on top of existing, old-school solutions. I recently came across a YC-funded Web3 data-driven social network analytics company. The founder received substantial funding and added a pointless web3 layer on top of a solution that brings no differentiator. That founder thought short-term and spent thousands in ads to build fame rather than a client base. What does decentralization bring to the analytics marketing space? For real? Nothing. Nobody cares about the time you spend coding it.

The shortest path is crowded

The shortest path to solving a problem is the one that all your competitors will take mechanically. When you encounter a challenge in a specific industry, it’s only a matter of time before you identify the similarities among all the solutions. You will realize that they almost all address the same problems while overlooking the most complicated or recent issues that clients face. Let's consider an example from cybersecurity and threat analysis.

Various solutions in the market offer threat analysis and automatic scanning of the Dark Web and underground sources to ensure large corporations do not leak any sensitive data on onion links. Only a few of these solutions provide original, technically advanced, operational capabilities. While numerous Dark Web and Deep Web scrapers exist in open source, they quickly break and fail when faced with the newest websites and emerging threats. Moreover, the 1% you cannot access holds 90% of your value. A few years ago, a French company named Cybel Angel developed a proprietary, complex algorithm enhanced by human intelligence to find the needle in the haystack. They gained a preferential position in the market and established themselves as a reference point.

They chose the longest path instead of the shortest. They embraced the tougher route and focused on long-term goals. When you compare their analysis with that of their competitors, they likely share 99% of their results; however, their custom algorithm, tailored to the specific problem they address, gives them an edge. Their competitors, who opted for the shortest path and built inexpensive solutions on weak APIs or poorly maintained open-source projects without introducing any original ideas, can no longer compete.

When you create software, the shortest path typically involves a flashy, easy-to-deploy front end paired with a copycat back end that offers no original solution. While you can generate early revenue with such solutions, sooner or later, the market will expose you, and you will lose access to the best deals—those that require genuine curiosity, deep work, specific knowledge, and patience to build the necessary solutions without shortcuts.

Forbes to jail pipeline

In many industries, one can describe the shortest path route as such :

1. Deploy an easy solution nobody needs: Bring a superficial feature and over-communicate on it. Bring non-needed digitalization to a marginalized public. Bring useless front-end features for price sensitive customers.

2. Convince your first clients by offering your product for free: Get trapped in price-incentive marketing. By doing this, you cut the single best feedback provider humanity ever invented: markets, and its actors with skin in the game, which means money in general.

3. Focus on your communication, and ignore your clients' feedback: Gain the credibility of people not paying for your product while losing your client's trust.

4. Build a good, fake image, and provide a useless, dying solution: Feel like an impostor.

5. Bonus: Give conferences - or TedTalks - on entrepreneurship when you know you are failing: Be an impostor. Collect booby prizes-

6. Extra-bonus: Start a Ponzi-scheme and go to jail.

This is bleak, isn't it? I enjoy being a bit dramatic, but I hope you don't miss the main point here: Short-term thinking keeps you out of the market where your clients are. It also leads you to spend your time on social networks, seeking peer validation, without producing anything of real value. I'm not saying that sales and marketing are unnecessary. However, as a founder, you should be guided by client feedback and solid market knowledge to ensure you are engaging with real customers rather than just online bystanders. Communicating with your clients is different from speaking for your ego. Building an audience based on knowledge and trust so that people buy your product is distinct from meaningless self-promotion. Again, the issue lies not in what is done, but in how it is done.

If you choose the shortest path and make no tough decisions at the beginning of your journey, you will owe the market a debt and pay for it to your competitors. Markets are collaborative and cannot be described as a static piece of cake that economic agents are sharing. Still, they can quickly become a deadly zero-sum game if you stop innovating. In other words, if you take a shortcut and bring no differentiation or hard-to-get-somewhere-else value, you will end up fighting with other short-termist sharks. Easy decisions, hard path; tough decisions, easy path.

Unfortunately, it is very common to see founders spending a solid amount of time on ego-boosting activities—usually cringe-worthy—and sugary articles about their own company that they try to publish in local newspapers or sometimes more prestigious ones. Those founders, usually VC-backed but not always, will sport their booby prizes like medals of honor and flood your social network threads with everything they did well. If you do this, you may fall into a dangerous trap, believing your fake narrative because social networks distract you with compliments. The market not only gives the best feedback; it gives the only one.

I recently saw the CEO of a cash-burning, money-losing Colombian company posting about all the positive financial indicators from his 2022 fiscal year. I'm not sure he believes it himself; he seems intelligent and competent. The worst part is that his solution generates solid revenue and addresses a real pain point, but it still doesn't cover the high expenses.

While posting on social media is necessary, it should not be your primary focus. I understand that you need to sell your vision to investors, but why post about losing cash and take pride in that? How does that help your clients? I may sound old-fashioned, but any activity that is completely useless to your business or your end clients is not worth pursuing, in my opinion.

The only genuine compliment comes from people’s readiness to pay for your solution or invest in your business. However, I'm skeptical about investments too, since most investors use other people's money, which typically comes from pension funds collecting someone else's retirement savings. There’s no personal stake involved. No skin-in-the-game.

You should prefer a real, solid penny to a dream million-dollar comment on LinkedIn from a hotshot VC congratulating you on your St. Valentine hybrid office event. Think long-term and focus on what generates honest feedback. It may be slow and laborious, but it's what allows you to iterate and create tangible value.

Make tough decisions at the beginning; it will help build strong foundations.

Tackle what nobody else wants to solve.

Build in public, but with honesty, be patient in being praised, don't say your solution is the best, and patiently wait for clients to say it.

Praises may never come, but you should not care if you generate revenue and follow your ethical principles.

Spend the minimum sufficient amount of time on your socials and way much more with your clients.

Your posts' comments are not feedback; they are fake diplomacy.

Choose the most challenging path, avoid the shortest one, or end in crowded, low-margin spots.

Keep the faith

1. In this blog, they will receive some lost bullets, all the time. I feel no remorse.