#77 Mike Maples: Living in the Future
Mike Maples Jr., a partner at Floodgate, shares mental models for evaluating startup opportunities. He emphasizes identifying founders "living in the future," validating value before growth, and building adaptable, truth-seeking teams to achieve breakthroughs and sustainable success.
Deep Dive Analysis
27 Topic Outline
Defining a Startup: Beyond a Traditional Company
The Three Breakthroughs for Startup Success
The Role of Insights in Startup Creation
Startup Teams: Jazz Bands vs. Marching Bands
Validating Value Proposition: Seeking Truth Over Selling
The Rarity of Founders Who Adapt Through All Phases
Developing Mental Models from Investment Wins and Losses
Key Questions for VCs to Uncover Founder Insights
Why Commitment is Crucial for Startup Founders
Exclusion Filters: Red Flags in Startup Pitches
Entrepreneurs as Artists: Noticing and Moving People
Understanding Mental Models for Better Decision-Making
Insight Model: The Earned Secret
Insight Model: Why Now (Technology and Adoption Inflection)
Insight Model: The Idea Maze
Insight Model: Think Wrong (Orthogonal Attacks)
Insight Model: The Myth of Total Addressable Market
Team Model: Disagreeableness and Mimesis
Team Model: Anti-Fragile Founders
Team Model: The Builder and the Persuader
Recruiting Contrarian and Undiscovered Talent
Value Model: Customer Experimentation and Truth Seeking
Value Model: The Herbie Model for Prioritizing Risks
VC Approach to Founder Relationships and Mistakes
Growth Models: Acquisition, Engagement, Monetization, Enlistment
Growth Model: The VP of Nothing
Fostering a Truth-Seeking Culture
10 Key Concepts
Startup Definition
A startup is not a traditional company with established brands, products, or supply chains. Instead, it's a group of founders with proprietary insights, living in the future, whose job is to achieve crucial breakthroughs to eventually become a company.
Insight Development
Great startups originate from a breakthrough insight, which typically occurs when someone 'living in the future' notices something missing. This is about finding something valuable about the future and starting a movement, rather than looking for gaps in today's markets.
Value Hacking
This phase involves figuring out what unique product can be built that people are desperate for, solving a problem in a novel and noticeably better way. It's about seeking and discovering the truth of your value proposition, not just selling.
Why Now
This concept explains why a startup idea is viable at a particular moment, comprising two components: technology inflection (an enabling technology never existed before or exponentially improving) and adoption inflection (enough people are using or about to use a technology/product).
Idea Maze
Coined by Balaji Srinivasan, this mental model involves systematically examining all previous attempts at an idea's boundary. It helps founders understand why prior attempts worked or failed and why their current approach will succeed where others didn't.
Think Wrong
This model suggests taking the opposite approach to what incumbents do, creating an 'orthogonal asymmetric attack.' By charging or operating in a fundamentally different way, a startup can disorient incumbents who are structured around conventional business models.
Myth of Total Addressable Market
For startups, markets are not mappable territories but rather movements yet to be created. Quantifying TAM is often wrongheaded because the market grows as more people join the movement, driven by the potential energy of a novel insight.
Mimesis
A theory by Rene Girard, mimesis suggests that most human desires are not innate but arise from seeing others care about something. Great startup founders often exhibit a lack of mimetic behavior, prioritizing truth-seeking and their vision over seeking approval from the crowd.
Anti-Fragile
Coined by Nassim Taleb, this describes things that get stronger when stressed. Anti-fragile founders thrive under pressure, improvising creative solutions in dire situations, much like MacGyver or James Bond, rather than panicking.
Herbie Model
Inspired by 'The Goal,' this model identifies the slowest constraint (Herbie) in a system. For startups, it means focusing on progressively eliminating the most critical bottleneck (e.g., product-market fit issues) before investing in other areas like growth, to ensure efficient progress.
10 Questions Answered
A startup is fundamentally a set of founders with proprietary insights, living in the future, aiming to achieve breakthroughs, while a traditional company has established brands, products, and market positions.
Great startup ideas usually come from a breakthrough insight, where someone 'living in the future' observes a significant missing element or problem, rather than actively trying to 'think of a startup' in the present market.
Founders need to be 100% committed and willing to leave their current jobs, even if funding isn't secured, because startups are inherently difficult, and a lack of full commitment significantly reduces the chances of success.
A significant red flag is when a founder lies about something irrelevant to their business, indicating a difficult relationship with truth and reality. Another is giving away a product without a strategic reason, often due to a lack of confidence in its value proposition.
Entrepreneurs, particularly leaders, are often artists who notice things others don't and present their ideas in ways that emotionally move people beyond logic. They compel people to join a movement by helping them see themselves as the hero in a co-created future.
Mental models help VCs notice things they might otherwise miss, acting as a stress test rather than a single decision-maker. They help in understanding which risks are worth taking, focusing on the power of the insight and the team's capability for huge, low-probability outcomes.
Great insights help avoid competition by being non-consensus and right, giving the startup time to develop without threat. The best competitive strategies involve not competing directly, often by 'thinking wrong' and creating an orthogonal attack that disorients incumbents.
Contrarian thinkers are crucial because they challenge assumptions and notice emergent signals that rule-followers might miss. Great startups find undiscovered talent who are willing to be disagreeable and prioritize truth-seeking over approval, which large organizations often struggle to accommodate.
It requires avoiding ego and not trying to convince customers your idea is awesome. Instead, engage in detective work through various experiments (needs, solution, assumption, validation) to discover what customers are truly desperate for, even if it means invalidating your initial hypothesis.
The four gears are Acquisition (efficiently gaining customers), Engagement (keeping users interested and active), Monetization (making money from engaged customers), and Enlistment (getting customers to advocate for the product, leading to organic growth).
70 Actionable Insights
1. Don’t “Think” of a Startup
Avoid trying to force a startup idea by looking for market gaps in the present; instead, immerse yourself in the future and notice what is missing or problematic to uncover breakthrough insights.
2. Prioritize Truth Seeking
Define your decisions and objective function based on truth-seeking rather than approval-seeking, as this allows you to pursue novel ideas and challenge existing norms.
3. Live in the Future
To generate proprietary insights for a startup, immerse yourself in future trends and technologies to notice what’s missing or what problems will arise.
4. Achieve Breakthroughs Systematically
To succeed, a startup must achieve a breakthrough insight, a breakthrough value proposition, and a breakthrough killer predictable growth strategy, as these are foundational to becoming a viable company.
5. Focus on Founder Insights
Understand that a startup is fundamentally a set of founders with proprietary insights from “living in the future,” rather than a traditional company with established products or value chains.
6. Be a “Learn-It-All” Leader
As a startup leader, you must be a “learn-it-all,” willing to constantly upgrade your own and your team’s skills to adapt to how value is created differently at each phase of the company’s growth.
7. Combine Determination & Humility
Successful leaders possess a combination of determination and a lack of ego regarding their knowledge, coupled with a strong willingness to actively fill any gaps in their understanding.
8. Embrace Improvised Teamwork
Cultivate a startup team that operates like an improv jazz band, embracing ambiguity and improvisation, rather than a rigid marching band, as this adaptability is crucial for navigating the uncertainties of a startup.
9. Inspire a Movement
To build a successful startup, you must inspire people to join a movement they believe in and are emotionally moved by, as logic alone is insufficient to convince them to do something most people think is crazy.
10. Cultivate a Compelling Vision
Focus on cultivating a powerful vision that compels like-minded people to feel “in on a secret” and believe they can convert others, as this shared belief is more impactful than charisma in attracting followers.
11. Build for Desperate Needs
In the value hacking phase, aim to build something unique that people are desperate for, ensuring your solution is novel and an order of magnitude better to connect with those deeply in need.
12. Validate Value Before Growth
First, validate your value hypothesis by finding people who believe in your vision and are desperate for your product; only after proving this truth should you begin testing your growth hypothesis.
13. Create Irresistible Value
Aim to create a value proposition so powerful that your target audience would be irrational not to buy if they fully understood its truth, making growth a process of teaching rather than persuading.
14. Compelling Value Drives Growth
A truly compelling value proposition enables growth by “syndicating the truth” to customers, whereas a weak value proposition forces expensive marketing and persuasion efforts.
15. Identify Your “Herbie”
Identify the “Herbie” – the slowest or most limiting constraint in your startup (e.g., customer retention, product-market fit) – and prioritize addressing it, as all other efforts will be limited by its pace.
16. Eliminate Herbies for Fit
Achieve product-market fit by progressively eliminating all “Herbies” (slowest constraints) until growth becomes frictionless, at which point you can confidently invest in scaling.
17. Tackle Core Risks Early
The best founders identify the most important “boogeyman” risks to their success and tackle them early, as eliminating these risks significantly improves winning probabilities and company value.
18. Prioritize Outcome Over Ego
Avoid letting your ego influence customer interactions; instead of trying to convince people your product is awesome, focus on objectively seeking the truth about their needs and the value you provide.
19. Learn from Invalidation
Embrace invalidated hypotheses as valuable learning opportunities, recognizing that even negative data provides new knowledge, while experiments that merely confirm existing beliefs are a waste of time.
20. “Think Wrong” Orthogonally
Challenge incumbents by “thinking wrong” and doing the opposite of conventional approaches, particularly in business models, to create an orthogonal, asymmetric attack that disorients competitors.
21. Avoid Incumbent Value Networks
Do not operate within an incumbent’s value network, as they can easily lobby, co-opt, or handicap your business; instead, find fundamentally orthogonal approaches.
22. Disorient Incumbents with Orthogonality
Design your business to be so fundamentally orthogonal to incumbents that they would have to change their entire business model to counterattack, which they typically lack the internal skills or values to do effectively.
23. Employ “Sword & Shield” Strategy
Utilize a “sword and shield” strategy by having a unique go-to-market and customer context (shield) that incumbents ignore, giving you time to build unique skills (sword) that will eventually overpower them.
24. Exploit Incumbent Rationality
Recognize that incumbents often make seemingly rational business decisions, like ceding low-profit market segments, which can be exploited by startups to gain a foothold and eventually make the incumbent irrelevant.
25. Seek Non-Consensus Insights
Focus on finding “non-consensus and right” insights, as this is the best competitive strategy, giving you more time to develop your idea without the immediate threat of competition.
26. Identify Inflection Points
When evaluating an idea, identify both technology inflections (new or exponentially improving enabling technologies) and adoption inflections (widespread user adoption) to understand the crucial “why now.”
27. Ask “Why Now?”
To evaluate a founder’s insight, ask “Why now is the time for this to happen? Why hasn’t it happened before? Why won’t it happen later?” as a strong answer indicates deep understanding.
28. Recruit Early True Believers
After identifying a breakthrough insight from the future, actively recruit early “true believers” who share your vision to help build and accelerate the movement towards that future.
29. Conduct Needs Experiments
To understand customer needs, conduct “needs experiments” by interviewing 20 target market individuals; for the first five, only ask about their job and processes, saying nothing about your product.
30. Run Solution Experiments
After understanding needs, conduct “solution experiments” by discussing observed problems and asking if an automated solution would be beneficial, listening for their past attempts and failures.
31. Validate Pain with Past Failures
When conducting assumption experiments, a strong positive signal is when customers reveal they’ve already tried to solve the problem you’re addressing and failed, indicating a visceral pain point.
32. Seek Active Customer Engagement
During validation experiments, look for active customer engagement, such as them taking over to describe their ideal solution or eagerly asking when they can see your product, as this indicates strong resonance.
33. Charge for Half-Done Products
Charge a price for your product even if it’s “half done” to immediately determine how visceral the customer’s pain is and how compelling your value proposition is to them.
34. Show Full-Time Commitment
Founders seeking investment should demonstrate full-time commitment to their startup, as a lack of passion to leave a current job signals a lack of conviction to potential investors.
35. Demonstrate Unwavering Commitment
Cultivate an unwavering commitment to your startup, acting as if it will happen regardless of external funding, as this conviction attracts investors who want to join a movement already in motion.
36. Act on Regret Aversion
Take action when the regret of not trying something feels much stronger than the fear of failing, especially if you have a strong conviction that it should be done.
37. Require 100% Team Commitment
For a startup to succeed, every team member must be 100% committed, as the inherent impossibility of startups means a lack of full commitment almost guarantees failure.
38. Embrace Disagreeableness
Be willing to be disagreeable and prioritize the actualization of your vision over seeking approval, as this non-mimetic behavior is essential for challenging norms and leading truly innovative startups.
39. Cultivate Anti-Fragile Leadership
Strive to be “anti-fragile,” meaning you get stronger under stress and can improvise creative, kooky solutions in impossible situations, much like MacGyver.
40. Combine Builder & Persuader
Form a founding team that includes both a “persuader” (a leader who is a compelling storyteller) and a “builder” (a technical visionary who understands how to build and co-create the future).
41. Audience as Story Hero
When telling your story, realize that the audience is the hero, and your role is to guide them on a hero’s journey to co-create a better future, whether pitching customers, employees, or VCs.
42. Contrarian Recruiting Strategy
Employ “contrarian recruiting strategies” to find undiscovered talent who will one day be great, as these individuals are more likely to join a startup for less money and more risk than established talent.
43. Cultivate Entrepreneurial Artistry
Develop entrepreneurial artistry by being sensitive to emergent signals you weren’t explicitly looking for, perceiving them with the same depth an artist sees emotional things, and acting on these insights.
44. Harmonize Growth Gears
Manage growth by ensuring four interconnected “gears” — acquisition, engagement, monetization, and enlistment — operate in harmony, optimizing each for efficiency and predictable growth.
45. Accelerate Slowest Growth Gear
To optimize growth, identify the slowest of your four growth gears (acquisition, engagement, monetization, enlistment) and focus on making it no longer the slowest, as the entire system operates at its pace.
46. Predictably Scale Proven Model
In the growth phase, after validating what works, shift your focus to predictably copying and scaling that proven model, moving from experimentation to efficient execution.
47. Hire Growth Execution Experts
In the growth phase, founders should transition to a “VP of Nothing” role and hire experienced professionals who already know how to execute growth strategies, as on-the-job training is too slow for rapid scaling.
48. Foster Truth-Seeking Culture
Foster an egoless, reality-based, truth-seeking culture within your organization, especially given the abundance of data available today to uncover the truth.
49. Build Software-Defined Networks
Anticipate and drive the transformation of every economic sector from traditional hierarchical corporations to “software-defined networks” that integrate machine, platform, and crowd intelligence, as this model is poised for success.
50. Prioritize Future-Oriented Individuals
Dedicate your time to connecting with people who are “living in the future” and are actively working to bring forward new ideas, as this is where significant innovation and impact will come from.
51. Be Intentional with Time
Recognize that you have limited hours in a day and must actively decide how to spend them and with whom, even if it means saying no to maintain focus on your priorities.
52. Manage Follow-Up Obligations
Understand that increasing the number of meetings you take will proportionally increase your follow-up obligations, making it harder to complete everything if you try to help everyone.
53. Allow for Serendipity
Don’t be too dogmatic about who you meet; allow for serendipitous encounters to potentially discover unexpected opportunities or connections.
54. Develop Startup Mental Models
Recognize that traditional mental models for established companies often fail to predict startup success; dedicate time to developing and refining mental models specifically for evaluating the unique dynamics of startups.
55. Read, Be Curious, Avoid Mistakes
To become a great investor or decision-maker, commit to reading a lot, maintaining genuine curiosity, and actively working to avoid repeating past, avoidable mistakes.
56. Forensic Analysis of Decisions
Conduct forensic analyses of past investment decisions, both successes and failures, by reviewing original documents and interviewing founders years later, to understand what went right or wrong and identify patterns.
57. Analyze Successes Critically
When a decision leads to a big win, avoid “breathing your own fumes” and instead, critically analyze whether the success was achieved on purpose or by accident to genuinely understand the contributing factors.
58. Ask Revealing Questions
Focus on developing and asking questions that reveal the critical answers needed to make a positive decision, and simultaneously learn what information is irrelevant and should be disregarded.
59. Practice Humility in Evaluation
When a successful outcome contradicts your initial negative assessment (e.g., a “terrible pitch”), practice humility and re-evaluate whether your original criteria were truly the most important factors.
60. Identify Worthwhile Risks
In high-stakes environments like startup investing, the primary goal is to understand and identify which specific risks are worth taking, rather than attempting to avoid all risk.
61. Uncover Founder Motivation
Early in discussions, ask founders about their core motivation for starting their venture to discern if their idea is rooted in a genuine, deeply felt insight rather than just a market opportunity.
62. Avoid Present-Focused Ideation
Do not actively try to “think of a startup” because this approach often anchors your ideas in the present, making it harder to develop truly disruptive insights that come from living in the future.
63. Beware Irrelevant Lies
Be highly cautious of individuals who lie about details unrelated to their business, as this indicates a difficult relationship with truth and reality, which is a major red flag.
64. Seek Mentorship for Avoidable Mistakes
Leverage mentors to help avoid common mistakes, improve processes like hiring, and strategically sequence risks and iterations, drawing on their database of successful and unsuccessful examples.
65. Tailor Monetization Strategy
Adjust your monetization strategy based on the specific type of product and market, understanding that approaches for consumer mobile apps differ significantly from those for B2B enterprise software.
66. Apply Mental Models for Decisions
Utilize mental models as frameworks to improve your thinking and decision-making, thereby maximizing the probability of achieving the best possible outcomes.
67. Discover Earned Secrets
Engage in the necessary work to discover non-intuitive insights or “earned secrets” that others overlook, as these unique understandings can form the bedrock of a powerful startup.
68. Focus Advice on “Herbie”
When advising founders, focus on identifying and discussing their current “Herbie” (the slowest constraint) rather than offering diffuse advice, to ensure efforts are concentrated on the most impactful issue.
69. VC: Avoid Involuntary CEO Replacement
As an investor, recognize that involuntarily replacing a CEO almost always makes the company’s situation worse, so this action should generally be avoided.
70. Empower Strong Founders
As a VC, empower strong founders by providing support without dictating how to run their business, recognizing that if a founder isn’t strong, the investment is likely doomed regardless.
8 Key Quotes
A startup isn't really a company at all. A startup is a set of founders with hopefully a set of proprietary insights that are a result of them living in the future.
Mike Maples Jr.
The future is already here, it's just not evenly distributed.
Mike Maples Jr.
In a company, it's more like a marching band. People need their sheet music, and they need to dance in formation and play their instruments in exact terms. Whereas, I don't know if you've ever been to New Orleans and seen improv jazz, but it's, you know, with improv jazz, you have a tune, but you're kind of going in a direction. And usually, the lead performer starts to do a riff and goes in a different direction, the rest of the band just kind of goes with them.
Mike Maples Jr.
Value hacking is this phase where you get this scar tissue and muscle memory, but it's incredibly valuable because now all of a sudden, you know how to deliver value in a way that nobody else knows.
Mike Maples Jr.
Most of the great startups come from a great insight. And a great insight usually occurs when someone is living in the future, and they notice something that's missing.
Mike Maples Jr.
Show me somebody who's not willing to look like an idiot and I'll show you somebody I can beat every time.
Lou Brock
Ego is about who's right. And truth is about what's right.
Mike Maples Jr.
Most of the great founders that I've known, they face these situations where they've got one hour left to find a million dollars in the quarter. And there's no book you can read about business that's going to tell you how to do that. You just have to completely improvise and be anti-fragile.
Mike Maples Jr.
1 Protocols
Customer Truth-Seeking Interview Process (Rule of 20)
Mike Maples Jr.- Identify 20 people in your target market segment who don't know you personally.
- For the first 5 interviews (Needs Experiments): Sit and ask them about how they do their job, saying nothing about your product or what you do. Observe and ask 'why' they do things.
- For the next 5 interviews (Solution Experiments): Acknowledge observations (e.g., 'I've noticed you asked the same five questions') and ask about the source of their methods and if different problems require different approaches.
- For the next 5 interviews (Assumption Experiments): Propose a potential solution (e.g., 'Wouldn't it be better if you could get that digitally without asking?') and listen for their reactions, especially if they've tried similar solutions and failed.
- For the final 5 interviews (Validation Experiments): Share a very early, 'thinking out loud' version of your system and ask for their reaction, looking for them to 'steal the whiteboard marker' and enthusiastically describe how it solves their problems.