Startup Flow and the Founding Team
I spent the past year working on a startup called Betchyu. It was a social wellness mobile app. Last month, my team and I decided to stop working on the app and move onto other pursuits. Since post-mortems for failed startup are dime a dozen, I’m going to take different route. Instead of focusing on all the things that went wrong with Betchyu, I thought it would be better to dive a little deeper. Over the next few weeks, each post will discuss a facet of my startup that could have been improved upon.
The theme that will run throughout all of these posts is the self-coined concept of startup flow. “Flow state” is the mental state that is characterized by the complete absorption of what one does. A person is in flow when fully immersed in a feeling of energized focus, full involvement, and enjoyment when performing an activity. But the concept can be scaled to analyze groups. If you’ve worked on an effective startup, you’ve probably experienced start-up flow. This happens when the entire team is on the same page and fully absorbed in a common goal. When everything is clicking, your team can get a week’s worth of work done in a day.
If I was to redo my startup to maximize the startup flow, I would begin by focusing on my founding team. Everyone will tell you that the team is important, but there aren’t many good posts on what the team building process actually looks like on the ground. There are many potential pitfalls throughout this process. Here are some lessons that would have helped my startup achieve the startup flow. Taking the right steps early on could have set the tone for the rest of our journey.
Create a founding team that can gets shit done: The classic breakdown of the startup dream team is the hacker, hustler, and hipster (also known as the programmer, business dude, and designer). The Betchyu founding team had a hacker and hustler, but no hipster. Prior to starting Betchyu, I had assumed that I could contract a designer to take care of all of our design functions. It turned out that the absence of a talented designer on the team was a huge challenge, impeding the startup flow. It seemed like everything we did required a designer. Whether it was branding, web design, the pitch deck, or the app itself without a designer, we were stuck. We spent too much time looking for good designers and too much money paying for them. Most frustrating was our inability to have a designer participate in the iterative process. In order to work effectively, we needed a more well-balanced team. Without a designer on board, the entire “startup flow” was stalled.
Do not raise funds before your founding team is set: I made the mistake of raising $20,000 from an accelerator before establishing my team. Dealing with incorporation and raising capital without a team of co-founders to execute a vision is just dumb. Even though I ended up connecting with a phenomenal programmer who ended up becoming my cofounder, the fact that I had already raised some capital ended becoming a frustrating time suck. With the raised funds, Betchyu was technically valued at $250,000. Without getting too much into the weeds, bringing on a co-founder to a startup that’s already raised capital can create a taxable event. It’s a guaranteed legal headache that is entirely avoidable. Headaches like these that take you and your team out of startup flow.
Everyone needs to be equally committed: I loved working with Daniel, my co-founder; unfortunately, during our first 7 months at Betchyu he was finishing up his degree and could not fully commit. I, on the other hand, was all in. This discrepancy lead to periods where there were empty pockets of time, without much to do until Daniel caught up. Instead of actually working towards our goal, I wasted time treading water. Getting a team that is fully committed and tuned in is key for a startup to achieve flow state.
When you split the pie, make sure it’s fair: In the debate on how to divide equity amongst co-founders, both VCs and entrepreneurs are all over the map. Some ardently oppose a 50/50 division of equity. Others think that this is the best way to go. At Betchyu, our starting point was a bit different. From the get-go agreed that we wanted to “do the right thing.” Instead of focusing on maximizing our individual slice of the pie, we had an honest conversation about our commitment to the startup and what value we would be adding. We ultimately agreed on a 60–40 split. The non-aggressive form of negotiation set a tone of mutual trust and respect amongst us as co-founders. It was the foundation the lead to a positive working relationship.
Mastering the art of startup flow starts with your founding team. It establishes your culture and sets the tone for the rest of your startup’s life. Just remember that this is only the beginning. This dynamic doesn’t just happen, it has to be cultivated. Once the team is set up, the focus needs to shift to working and communicating effectively.
