The Secret Killer of Startup Ideas: Mexico Month Part 5

This post is part 5 of the Mexico Month series, reflections on running a project to help founders and knowledge workers learn how to grow businesses with AI in Guadalajara, Mexico in Fall 2024.

Part 1: Invisible Architecture of Opportunity
Part 2: Business Lessons from a Guy with a Face Tattoo
Part 3: Agave and Anarchy: My Day in Tequila
Part 4: Notes from a Fever Dream: Mexican Wrestling in Guadalajara
Part 5: The Secret Killer of Startup Ideas (YOU ARE HERE)

A simple mental model to increase your odds of success

When you’re building a business, you need to keep two lines aligned: one line represents what the customer thinks, and the other line represents what you think. These two lines are the foundation of your company’s success.

When they diverge—when what you think and what your customers think are no longer in sync—your business drifts away from solving real problems. And once that happens, failure is not far behind. Further down this post, I’ll share some strategies to prevent divergence from happening.

I just ​wrapped up a startup program​ where I coached a cohort of founders in Guadalajara. Below is a story from one of those companies that illustrates this idea.

A Dead in the Water Pitch

A founder took a seat next to me and kicked off his pitch with a melodramatic line: “What if I told you we’ve invented the world’s most intelligent desk?”

My first reaction wasn’t excitement or curiosity—it was confusion. I had no idea what he was talking about, and confusion is one of the worst reactions you can create when pitching your idea. If your audience doesn’t immediately grasp what you’re saying, they won’t be excited by it.

As he continued, explaining that his team had developed a smart desk that automatically adjusts its height, tracks productivity through sensors, and integrates seamlessly with your devices, my confusion turned into skepticism. The idea sounded promising in theory, but when I asked how many desks they had installed in real offices, his answer was zero. They hadn’t even tested it in a working environment yet.

Instead of building a scrappy prototype and gathering real feedback, the founders were caught up in creating a perfect version with a multi-year product roadmap. They had spent time and energy thinking about polish and detail, but they had no real data drawn from reality.

They could have taken a basic desk, added some sensors, and tested it in real office settings to learn what users really need. They could have simply gathered feedback on the concept and how it felt to use. But they didn’t. This is a common trap that founders fall into: focusing too much on perfecting the product in their minds and not enough on gathering data from the real world.

This is where their lines had already started to diverge.

It’s ok if your first prototype looks like this.

Diverging Lines, Failing Businesses

The example from Guadalajara is one I see often. When founders stop gathering real feedback and get stuck inside their own heads, the line between what they think and what their customers think starts to drift apart.

It’s not just startups. Even large, established companies can fall victim to this. Look at J.Crew. Their customers loved the quality of their fabrics and the attention to detail in their clothes. But in a bid to cut costs, J.Crew switched to cheaper suppliers, and the quality of their fabrics declined. Customers noticed. What had once been a beloved brand started to falter because the company had lost touch with what their core audience valued most. Their lines diverged, and the business suffered.

Or take YouTube. In its early days, the platform was ad-free, with the focus squarely on users. But as it grew, the company optimized for advertisers instead. Today, frequent ads disrupt the user experience, pushing some users away. The company’s focus shifted from user satisfaction to serving external interests, and that’s when the lines started to separate.

Another example is Netflix. While the platform was once known for offering high-quality content at a reasonable price, things have changed. Prices keep rising, but the quality and selection of content haven’t kept pace. Netflix is optimizing for corporate metrics rather than viewer satisfaction, and it shows. Users are frustrated, and the company’s lines with its customers are drifting further apart.

This phenomenon even has a name—“enshittification.” It happens when a company optimizes for an outside group, like investors or advertisers, at the expense of the people who actually use the product. And once the lines diverge, it’s hard to bring them back together.

A paywalled article about enshittification…with a cookie warning (Source)

How to Keep the Lines Aligned

So how do you avoid this trap? How do you keep your business aligned with your customers’’ needs? It’s simple: stay close to them. In the Guadalajara example, the founders didn’t need a perfect product. What they needed was to get something into the hands of drivers and learn from real-world feedback. Every conversation, every test in the field, is a chance to keep your lines close together.

You don’t need custom sensors and a flawless design. You need iteration and direct feedback to market test your product and service.. Testing scrappy, imperfect versions of your product will reveal far more valuable insights than any internal discussions ever could. Be hypervigilant about knowledge of your customers: observe how they react to prototypes, pay attention to user data, measure what parts of your communications gets engagement.

Some companies fight the divergence of lines by ensuring their leaders stay in touch with customers. They get their CEOs make their VPs and execs take customer service calls or respond to trouble tickets to stay grounded in what customers are experiencing. These are just a few of the ways you can keep the lines close.

The Takeaway

The further apart your thinking drifts from your customer’s reality, the more your business is at risk. Whether you’re running a startup or managing a big company, the principle is the same: if your lines diverge, your business will fail.

Keep those lines together. Doing so will increase your odds of success.

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Thanks to early readers: Mark Connolley-Mendoza, Joel Hestness