A famous serial entrepreneur's key tips for success

The fall of the Berlin Wall, November 1989
Gerard Malie | AFP | Getty Images
The fall of the Berlin Wall, November 1989

Two of the most influential moments of my career as an entrepreneur came in decidedly non-entrepreneurial settings — revolution in the streets.

When I was a kid, and through an impossible set of circumstances, I was a staffer for the then-Secretary of State James Baker and his team. These were tumultuous times — not unlike today, in fact — and while my tasks were mostly administrative in nature, I learned about vast and surprising change just by watching.

One crisp fall day I was asked to sit in on a briefing on Germany held by the best experts we had at the time, with decades of experience and access to best intelligence. That October, Eastern Europe and the Soviet Union were in the process of a massive unwinding, and Germany sat geographically and historically right in the middle of it all.

The meeting had one headline: While change was happening rapidly and unpredictably, the Berlin Wall would take a decade to fall. One month later it fell.

Cut to Arab Uprising

Some 20 years later I was judging a start-up gathering in Cairo, Egypt. These remarkable, audacious and courageous young people with near-universal access to software were building globally competitive enterprises — at scale and under the radar. In the midst of my being enthralled by them, the leader of Tunisia — who had been poorly navigating mass protests for months — left the nation for good. Revolution was in the air. It felt, in many ways, like 20 years earlier.

My last night in Egypt, I had dinner with some of the leading local State Department "experts" in Egypt, some older business leaders and two young start-up entrepreneurs. The only question on my mind, as you can imagine, was could the revolution that just happened in Tunisia come here. The government types and older executives told me how different Tunisia was from Egypt — how the leaders were different, how the armies were different, how the people were different. There might be a few isolated protests, but nothing more. The young entrepreneurs sat quietly until I asked them what they thought. They both looked at me, smiled and said, "I'm not sure why we're that different." The next week, the two joined millions in Tahrir to overthrow a regime with millions of their countrymen.

Three lessons:

1. Beware the experts.
They are human and no different than the rest of us but with a specific lens and context of experience. And, in fact, the longer they've been at it, the longer they risk suffering from "narrative bias" — they build patterns in their own mind, stories of how the world works, that often causes them to miss the obvious data and change staring them in the face. Great advisors and their pattern recognition, of course, can be invaluable. They, however, aren't running your enterprise.

2. Seek, in particular, smart people who disagree with you — adamantly.
We are all subject to narrative bias. The act of creating a new product or service requires a story; building something that was never there before requires an explanation. But one's ability to form a coherent thesis can slip easily into inhaling one's own fumes. And a good, charismatic leader can easily surround herself with a highly talented team who breathe the same. It is not fun having someone claim your idea is BS, but it is essential.

3. Trust your instinct and act.
I often pick off amazing young entrepreneurs who for whatever reason did a stint with a consulting company. They are very good at weeding through experts without being spun off-kilter by 360 degrees of advice. They are humble at seeking counterfactual data. But they also let a paralysis set in. So in the end, as the cliché goes, start-ups are like building a plane in the air — one has to fly with their own navigation and instinct. No one knows more or cares more about the problem you are solving or new service that delights people in ways they hadn't thought possible. Move.

Easier said than done

I wish I had taken my own advice more regularly over the last decade.

A group of co-founders and investors created my last company, HealthCentral.com, based on direct personal experience. I lost a family member to cancer and a dear friend to bipolar disorder. There was a cacophony of health information online, highly clinical and near impossible to navigate. But in the midst of it, I found small communities of people who were going through exactly what I was.

Not "cancer communities," but families of a loved one with adenocarcinoma, which metastasized to the brain.

Not "depression communities," but "how you can best be a friend of someone with bipolar disorder."

They made me much more effective in helping those I loved. We never met, never knew each other, but they were the most effective resources I had.

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Our start-up idea was unleashed by technology impossible even a few years before. As co-founders, we asked, What if we built a platform of such communities of people, match them to each other and the best information, not only to help people in clinical need but to guide them in their daily lives? Couldn't this expand to any areas of interest? In fact, wouldn't it also be a superb business for marketers, who could target messages to those who would most value it?

It sounds wonderful, but the process to put it in motion was brutal. The experts told us to remake existing platforms like WebMD. They were wrong.

We convinced ourselves we understood our communities and customers better because we made a platform that was good for them. We were often wrong.

We lived it all — the near-death experiences, the self-doubt, the mistakes in hiring and firing, the feeling of impact when things work and the success of mentoring others to be their own entrepreneurs. But we listened, we argued the data, we pivoted more than once significantly, and we also trusted our core instincts, experiences and desire to solve a big problem we cared about.

It worked.

Five years in, we sold the company.

By Christopher Schroeder, venture investor and former CEO of three technology/media enterprises. Schroeder is also a member of the CNBC-YPO Chief Executive Network. Schroeder is now focusing on emerging growth markets and is the author of "Startup Rising: The Entrepreneurial Revolution Remaking the Middle East."

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