“Cherish those who seek the truth and beware those who’ve found it.” – Voltaire

I remember showing up with my startup team to an investor meeting at Santa Barbara Yacht Club as a 20 year old, ready to get handed $500,000. We were confronted with the first question, “What exactly would you do with the money?”

We spewed off a few things we’d thought of and our words came out flat and hollow. We had nothing to back up our claims, no real data or understanding, no evidence. We’d been playing an intellectual game of ideas separate from the real world of facts. What we wanted (investor money) was battling with the truth. A few more tough questions broke the meeting and we walked away empty handed.

In data science, signals describe something real, and noise is everything else that gets in the way.

Entrepreneurial Noise is all the tasks, activities, and words that don’t contribute to a startup’s success.

Creating noise is easy. It’s thinking up all the reasons your startup idea is great and why people should love you. It’s putting “founder” in your Tinder bio. It’s having a popular idea that sounds good, a logo that looks good, and being the CEO of nothing. It’s identifying personally with your idea, being convinced without evidence, and ignoring criticisms that could unravel you. It’s being “busy”. It’s being “sales-y”. It’s acting on secret delusion.

People produce noise to look important, smart, attractive, and prestigious. Noisy entrepreneurs aim to prove they’re correct over learning what’s true.

Entrepreneurial Signal is what creates value in a startup. 

Creating signal is difficult. It’s solving a REAL problem and capturing some of that value. It’s a deep understanding of execution and trade-offs. It’s found on a search for reality, instead of a search to confirm your ideas.

Finding truth can be painful, it can mean the idea you’ve staked your identity on is bad. It could mean you’re a failure or stupid. The truth is painful to any ego.

 

Here are 3 tactics to filter noise I’ve learned by watching and contributing to startup teams-

 

1) Become a humble explorer.

 

Humble exploration is detaching yourself from your ideas and treating them as assumptions to test for truth. Noisy entrepreneurs have untested assumptions about the problems they’re trying to solve.

It’s convenient to look at problems as 2-Dimensional, — “Depression is a problem, a mental illness.” 

But problems are a many-dimensional maze, it’s more– “Depression is disruptive, but for some it allows them to look objectively at what isn’t working so they can fix it. “Happy” people aren’t motivated to make necessary, beneficial long term changes. In some contexts, Depression is defined by psychiatrists as a cluster of symptoms that can be “solved” partially with SSRIs, but in other contexts, with this type of person… (an understanding of context).”

Problems are underestimated cluster-fucks. The problem-space includes all the people and systems involved, in this case– individuals and their brains, thought patterns, social circles, habits, evolutionary biology, socioeconomic data, psychotherapy theories, drugs, insurance companies, etc. It’s even philosophical, “Is happiness the ultimate goal?”

Humility is useful. Understanding perspectives other than your own is the only way to work through the maze of complexity.

2) Build a challenge network of mentors and investors.

People who have built real things understand noisy pitfalls (i.e. pursuing an idea that sounds good despite a lack of personal interest or mission), and they know what signal looks like (i.e. they’ve built successful companies). 

A challenge network is there to ask hard questions to point you toward truth. 

Questions range in difficulty from, “How do people currently solve this problem.” to “What is your sales and marketing strategy?”

 

Often the hardest question is one word that digs deep– “WHY?”

 

“The market is 8 billion dollars.” “WHY?”

Signal is giving a strong answer, “We calculated it by estimating the number of gyms in the US, asking a few of them what they spend on software, and knowing this is an assumption likely to change as we learn more.”

“We’re changing our website.” “WHY?” 

“We need a better spreadsheet purchase option, because we learned in an interview that junior VC analysts use spreadsheets for this task. This was also validated in some of our user tests.”

 

Noise is not having an answer and still saying something.

Fortunately, questions you can’t answer give you places to start looking. 

“How do companies budget this type of solution?” from an investor becomes your own question to a customer, “How do you budget this type of solution?”

 

3) Get out of the building (and your own head)-– Learn the real state of the world through interviews and online research.

Both interviews and online research are looking for: 

1. People’s honest perceptions of problems and solutions. 
2. History– Many ideas have been tried before, learning what those attempts did right and wrong is valuable.
3. Changes to culture or technology- Ideas change with the adjacent possible, a video streaming site wouldn’t work at the beginning of the internet, but with faster speeds YouTube was born. 
4. All the complexity of the space.
5. Other people’s ideas to test.

Online research is good for understanding what people search, ask, and talk about on the internet (look at google trends, google ad keywords, related searches, reddit communities, forums).

The complexity of the space is found in interviewing people living it. It’s hard to get an overview of an entire market or industry. You stumble from one interview to the next, learning one concept at a time, until you’re an expert. You learn what “HIPAA regulation 30-3” is and how it affects the life of the person in front of you. It’s learning a new language, entirely new connections between words and concepts.

Good product interviews are 90% problem exploration and 10% solution exploration. Be able to answer–

What do the people living in the space think about the problem? How do they currently solve it? What kind of person are they? What do they do and think in their day-to-day? What Medium articles do they read? What words do they use? What are their motivations? What is the stack of papers on their desk? What are they afraid of?

Try to get at the truth without any selling or leading the witness.

Finding signal in entrepreneurial noise comes from a perspective shift. It’s an acceptance of the fact that the idea in front of you might not be all you’ve imagined. It’s having the courage to let go of doubts and temptations to produce noise. Finding signal transcends entrepreneurship; it requires you to listen, empathize, and think critically about problems and solutions. It’s useful to find signal in your relationships, in your political ideas, and in every aspect of life.