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Your start-up needs a Chief Miracle Officer (just maybe don’t call it that)

At a start-up I once worked for, I was continually frustrated by the CEO. I’d be working with the team, trying to make the product better by building new features according to a roadmap, and then the CEO would blow everything apart by announcing that there was some new opportunity on the cards that could be a real game-changer, and we all needed to drop everything and work on capitalizing on that opportunity. Out went the roadmap, in came a new bunch of ad-hoc requirements. The off the CEO would go to the meeting, the conference, the festival, and try to pull off something big just by talking to the right people. Occasionally something great would come out of it. Normally nothing would.

It drove me crazy. We never saw the CEO – they felt like an absentee boss, more interested in socializing than running a company. It seemed like we were eschewing any sort of a plan in favour of mindless lurching from one opportunity to another, in a way that prevented us from having any kind of clear product vision or strategy. I (privately) thought the CEO was a very intelligent idiot.

I was wrong.

Not about everything. That particular CEO handled things badly – by never letting our engineers finish anything before changing direction they scuppered morale over the long term, and the poor timing and phrasing of the “drop everything” announcements meant that the rest of the team tended to feel taken for granted and kept in the dark. (Shameless plug: I talk more about the morale impact of changing direction and how to minimise it in my book.)

But I was wrong about the essential value of what the CEO was doing, and to explain why we need to talk about miracles.

Let’s start off by defining the term. I don’t actually mean a Humean violation of the laws of nature. I’m talking about something not quite as strong. We get closer if we look at Nassim Taleb’s Black Swans. These are the events that you don’t even think of as unlikely because you don’t think about them at all, the ones where you can’t say how improbable they are because they fall outside how you calculate probability. Imagine a deck of cards, thoroughly shuffled. Draw 4 of them. If all four of them are aces, that’s highly improbable – about 1 in 270,000. If all four of them are blank due to a printing error at the card factory, that’s a black swan – and it’s pretty meaningless to try to define the probability of that happening.

It’s no surprise that start-ups and miracles are intertwined. Start-ups are (often) about disrupting existing business models, about changing industry paradigms, permanently altering the status quo in unforeseen ways. Which already sounds kind of similar to what a black swan is.

Antonio Garcia Martinez goes further, and claims in his excellent book Chaos Monkeys that for a start-up to be successful it always needs at least one miracle to occur:

To be a startup, miracles need to happen. But a precise number of miracles. Most successful startups depend on one miracle only. For Airbnb, it was getting people to let strangers into their spare bedrooms and weekend cottages. This was a user-behavior miracle. For Google, it was creating an exponentially better search service than anything that had existed to date. This was a technical miracle. For Uber or Instacart, it was getting people to book

Martinez goes on to point out that start-ups that rely on more than one miracle almost never make it.

But note that what he’s talking about are miracles where you decide what they’re going to be ahead of time. The Airbnb miracle described is literally their business model. The Google model is literally their product. Either one could have been written into the pitch deck at the company’s founding – after that, it’s simply a case of trying to make that specific miracle occur.

I want to focus on how start-ups need more black swan-style, unpredictable miracles, and specifically why they’re needed at the start.

You see, once you have a functioning product, a validated business model, and the beginnings of growth, you’re in a good position. Don’t get me wrong, you’re still faced with challenges left, right and centre, but you are at a place from which there is a visible path to success. What counts is how quickly you can walk that path and whether you can avoid the pitfalls that lie to either side.

But to get to that point with a product, a model, and growth, that’s really hard. How can you get funding without an MVP, but how can you build an MVP without funding? Where are the users going to come from who you are going to use to demonstrate that the product works? If you’re building any sort of network, how will you get critical mass of users to make the network valuable enough for users to adopt in the first place? If you’re building a marketplace, how do you entice either side before the other side has started? How do you convince people to come work for you before you have a team to build the things that will impress potential team members? Chickens and eggs and catch-22s abound.

The sad truth is, patience, hard work and perseverance won’t be enough. Those qualities will give you incremental advances, small steps, which would be fine if you were walking down a path, but you’re not: You’re trying to scale a sheer cliff. Small steps won’t cut it. You need to change the paradigm. You need a jet-pack.

And this is where the miracles come in. At the early stages of a start-up, what makes the difference between success and failure isn’t slowly making the product better by working your way along a product roadmap. It’s finding the game-changer. If you have no users, a better product won’t help, and nor will your slow-but-sure attempts to build up an audience on social media. But getting a shout-out from a tech mogul on Twitter might 10x your user base in an hour. Striking a white-label deal with a single big fish corporate client might deliver more revenue than a hundred small business subscriptions.

And this, ultimately, is what being a CEO is about in the early stages. It’s about doing everything you can to maximise your exposure to possible miracles. The miraculous game-changing thing won’t happen as you sit at a desk with your team. It’ll happen at that meeting, that conference, that festival. Their job is to be there, at the places where miracles could happen, putting themselves out there like a lightning rod in a storm. And the rest of the team? Well, like it or not, their job is to support the CEO as they run round trying to get struck by lightning, giving them whatever is needed to make them more conductive. It means short-term thinking, it means abandoning carefully wrought plans when a new opportunity arises, it often means doing some things worse in order to do this better.

But when you get right down to it, at the pre-seed and seed stages of a start-up, your Chief Executive Officer really needs to be a Chief Miracle Officer, and seeking out those miracles is the most valuable contribution to a start-up.


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Published inEntrepreneurship