Over on Twitter, Andy Sparks asked repeat founders what they wished they knew at the beginning of their first company. It's a great question. I've co-founded two startups and been the first employee at a few more. In particular, I knew nothing at the beginning of the first one. It's all been a learning curve since then.
Here are my answers, which will hopefully help a first-time founder or two get up and running a little faster:
Execution is everything, so every founder must bring a concrete skill to the table. Everyone must have something they can do for the company on an ongoing basis. A lot of people think it's enough to have a great idea. It's not: it's all about how you execute on that idea. If there's a founder who doesn't have a meaningful way of rolling up their sleeves and bringing your collective vision to life, they're dead weight. Examples of a meaningful skill: engineering, design, marketing, sales. Examples of a meaningless attribute: having an MBA, wanting to be the boss, being a scrum master.
And because execution is everything, don't outsource it. Your technical skillset should be in-house. So should your design, sales, and marketing. You don't want to lose that expertise or have it locked up in a contracting organization. If your founding team isn't able to rise to these tasks, fix that first.
Your co-founder is your partner. Like any lifelong relationship, you need to choose wisely. Forget how you interact at the best of times; how do you get along when things are going badly?
Every member of your early team is a co-founder. Whether in name or not, every single person you hire is an entrepreneur. Treat them as such - and only hire people you would trust to operate in that capacity. That includes their skillset, but also their demeanor. How do they cope with risk? Can they disagree without fighting with each other? Human dynamics are the most important part of any business (and any community).
As a founding team, your job is to de-risk the business. Constantly. That means with respect to whether people want what you're making; whether it can be a viable business; whether you can build it in a scalable way with the time, team, and resources potentially at your disposal. If you run out of money, you're adding risk. If you don't have a product, you've added risk. If you're building something you don't know if people want, you're adding risk. Understand your risks and continually bring them down to as close to zero as possible.
Culture is key. Set it early. Culture is a set of norms that define how you think about problems, look after your colleagues, and collaborate at work. It can't be an afterthought. A company with a sales-orientated culture will be able to solve different problems to one with an introspective, design-orientated culture, and will attract different kinds of people. Culture also defines how inclusive you are, and what kind of behavior is tolerated at the workplace. As you grow, it will affect how the company solves problems in a scalable way: the founding team can't always build everything, so you need to make sure you're setting the groundwork for the right approach to be taken without you.
I vastly prefer teams with the following cultural attributes: human-centered rather than building problems without understanding their user deeply; introspective and collaborative rather than extroverted and competitive; inclusive and empathetic; a no-blame ethos that encourages failure and quickly accepts when a tactic isn't working. Aggressive, overwhelmingly male workplaces are not the place for me, and it's never the kind of organization I seek to build.
The price of blind, positive thinking is death. You have to acknowledge evidence. If you ignore it because your beautiful idea just has to work - well, you're basically dead already. Conversely, you have to be guarded against being dissuaded without evidence, too. Your smarts, creativity, and experience are important, but can't operate in a vacuum. Get data and act on it.
Focus intently on what makes you special. There are so many things that go into running a startup - from the legalities of forming a business and raising money to orchestrating servers and building product - that you shouldn't try and do it all from scratch. Don't off-road except for the stuff that really matters. Use off the shelf services; be a Delaware C-Corp (or PBC); don't build your own front-end framework or create your own database engine. Keep it simple, so that you can spend your time on the core service that sets you apart - and to make it easier for others who work with you. Investors need to do less diligence on a Delaware C Corp; if you use React rather than your home-spun framework, more developers will be able to get up and running faster; etc.
Throw out "if you build it, they will come". It's not about hunkering down and building something cool. It's about creating value through solving someone's problem really well, in a way that they probably could never have conceived.
Throw out the lean startup. Really. Qualitative learning and building deep relationships is far more important than false doors and statistical analysis. Technology is all about people. Get to know them well.
A million dollars isn't cool. You know what's cool? A hundred thousand dollars. If you want to build a venture-funded startup in particular, you'll need to make sure the market is worth billions of dollars. That doesn't mean you should try and take on the whole market on day one. A bunch of founders say their product is "for everyone" - and it doesn't work at all. How can you possibly sell to everyone? It's far more effective to pick a small, niche group, solve their needs, and grow from there.
Pay attention to sales cycles. Who is the customer? How do they buy? One startup I worked on aimed to help people run academic courses. One possible customer could have been universities - but you needed to sell to the procurement office and be evaluated for the next academic year. At its worst, the sales cycle was 18 months, by which time the startup could be dead. Meanwhile, people running private communities were unconstrained and could sign up at any time. Testing and selling was far faster, and within the scope of a cash-strapped early-stage startup.
Ignore hustle porn. Articles about venture funding and building venture funded businesses, including this one, are typically little more than junk food. Read them, but you're not absolved from making your own decisions. Every business is different, and stories are not always reality. Just like following an influencer's perfect life on Instagram, you may find that the details are different to what has been presented. Throw out the performative bullshit: you're here to build a business, not to look the part.
Photo by LagosTechie on Unsplash
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