The Easy Startup Lie Always Beats the Hard Startup Truth

Illustration: Getty Images.

I got so angry I invented a new term: sketch startup.

I usually write these posts to dispense strategic and tactical startup and business advice, the kind that’s difficult to follow. As you can imagine, advice that’s difficult to follow doesn’t exactly burn up the Internets. On the other hand, I feel like I could write about startup scams and sketchery all day, every day, and get a lot more people to read me.

As it is, I only write about the sketchery when something really pisses me off.

Like this did.

How To Make $100,000 on a Side Hustle

A friend of mine passed along something they found on a legitimate startup ecosystem website. It was a pitch disguised as a how-to wrapped up in a blog post. It was written by someone I didn’t expect it to be from — at least credentials-wise; I don’t know the poster. So I read the whole thing, because it “felt” like the stupid make-easy-money sketchery I’ve seen a million times before in a million different varieties.

To my disappointment, it was exactly that. But instead of getting angry and burning bridges, I decided to break it down and lift boats.

Here’s how a sketch startup works. It’s like a scam, only not as bold, and usually nothing illegal is happening. People just lose money the old fashioned way, by spending it on someone’s unproven idea to game a system for pure profit.

Step 1: Are You Tired Of…?

A sketch startup can be anything from a bait-and-switch 12-step-style program to a “real” startup incubator or accelerator.

They take many forms, so they’re hard to spot right away, but almost always, the first thing you notice is that they bash the “real” startup process and how antiquated it is, what with all its hard work, capital requirements, and high failure rate.

The case I was sent did that on, like, every level, from throwing barbs at Silicon Bros to the insider jargon to the boomerism of VC firms. Hey, I hate that stuff too! Tell me more.

Step 2: Make “Guarantees”

I’ll explain later why I put “guarantee” in quotes. TL;DR: Because legal shit.

The next step requires proposing an alternative business that anyone can do, from anywhere, on their own, with no startup costs or experience, and make a “guaranteed” boatload of money.

Two things are important here:

  1. The concept for the alternative business has to revolve around something hot that’s just gone mainstream – something where the end reader has seen a lot of headlines but maybe not read a lot of the articles. Like A.I. But in this case, it wasn’t A.I.

  2. You have to word the alternative part of the business carefully, because the kind of alternative business I described up there turns out to be a Ponzi scheme like 99% of the time.

Step 3: Give Step by Step Instructions

Like I’m doing now.

You will almost always find vague step-by-step instructions for building… let’s call it “the box,” but not the important stuff that goes in it. You get all the details on the fun stuff. Pick a company name, get a logo, get the off-the-shelf software that does everything for you, then get started.

Problem: You’re still staring at a blank sheet of paper, and now it’s a pretty expensive blank sheet of paper too, especially if you take the time to do all the legal work and financial forecasts and… never mind, this is supposed to be easy, right?

Step 4: Here’s the Secret!

At some point, they have to expose an idea that draws a nice, straight invisible line from Step 1 to 2 to 3 to profit! It’s got to be an idea that maybe no one else has ever thought of before.

Now, I’m not saying it always goes down like this, but this is usually where Mr. Ponzi whips out his pyramid.

In the case I read, it took my startup brain, old and grizzled as it is, a fraction of a second to realize: “Oh. You’re all just selling to each other. Then you run out of greater fools.”

The base of the pyramid can be buried really deep. And sometimes, as indeed it was with the case I read, you actually have to have some experience in the business, the industry, and the proper business model to see the scheme that quickly. But, for the average person, all it would take is an hour’s worth of due diligence.

They’re counting on you not doing due diligence.

Here’s the best part of the case I read. The poster admitted, very offhandedly and quickly, buried in another point and tossed out like part of an overarching strategy, that they weren’t making money yet. All of this noise about six and seven figure side incomes, and they weren’t even generating their first penny of revenue.

Mr. Ponzi Has Gone High Tech

Always be skeptical. I learned at an early age that promises that sound too good to be true are never true. Not “rarely” true. Never true.

Thanks, Dad.

But I also learned, mostly on my own, and sometimes the hard way, that the best promises usually aren’t promises at all.

They’re hints.

I put quotes around “guarantee” every time I used it because a guarantee was never stated, just implied. The poster never said “I made $X”, they implied that YOU could make $X. The sketchers that do claim to make $X are either a) lying, b) cheating, c) gaming or…

Capturing Lightning In a Bottle

When I wrote my first article for a major publication, it broke all sorts of records, and that sound you’re hearing is me patting myself on the back. The article exploded because it was well-researched and well-written, dove into a timely topic, and essentially scored the equivalent of an A+ on every search engine algorithm.

I haven’t done it since. I can get close. But those times are few and far between.

I could spend the rest of my life trying to replicate that lightning in a bottle moment – by gaming titles and topics and word choice and SEO until I “cracked the code.”

Or I could just believe in my talent, work really hard, and try to write valuable shit every time I write.

It’s a metaphor for every type of business that has ever existed at any point in time. Catalysts happen. Lightning strikes. It’s magical when it happens to you, especially when you’re in a position to capitalize on it.

It almost makes you want to bottle it and sell it.

And some people try to do just that.