Software Engineer → SaaS Founder

In May 2015 I quit my job as a software engineer at Facebook to start a company. Canny is going pretty well, but if I could go back, I’d definitely do things differently.

I can’t go back. But I can share what I’ve learned to help you avoid making the same mistakes. 😊

The market comes up with ideas, you don’t

With statistics like 92% of startups fail within 3 years, you have to be pretty darn confident to start one. As a result founders tend to have huge egos. This makes it easy to believe you’re special, and that your ideas are special, when they aren’t.

I’ll admit it, I used to think this way — that entrepreneurship meant coming up with a brilliant, unique idea and building it. This couldn’t be farther from the truth.

Your idea doesn’t matter. What matters is what the market needs: What problem will real people/companies pay you to solve? How will your solution be better than what’s already out there?

Answering these questions forms the foundation of your business.

How do you answer them? Definitely not by sitting in your apartment dreaming up ideas. You answer them by talking to people. Not friends. Not family. Talk to people you’d like to sell to.

Don’t go into these meetings trying to validate your idea. Instead, try to reveal pain points. Once you’ve heard 10 different people describe the same burning pain point, you know you’re on to something.

This alone will get you farther than so many companies because you’re guaranteed to build something people need.

Get to know your customers

Understanding the pain points of your customers is a big part of “customer development”. I put this phrase in quotes because I had no idea what it meant until a year after becoming a founder. I probably should have read The Lean Startup. You probably should too!

Customer development is a lot more than just a way to generate great ideas. It’ll come in handy at every step of the way. It turns hard, open-ended questions into easy ones:

• Who should we sell to? → Which individuals experience the pain point we solve? PMs at startups? Sales people at big companies?
• What should we say on our landing page? → Who are we selling to? Which words do they use when they describe the pain point?
• How should we price our product? → How much value are we adding to our target customer?

Validating ideas is just the beginning. Customer development is the foundation of your entire sales and marketing strategy. Without it you’re just guessing.

Sales isn’t actually that bad

Engineers love to hate on sales. It makes sense — most of us are introverts, driven by building outstanding products/infrastructure.

I actually think engineers just hate the idea of sales, but for the most part haven’t tried it. I was certainly in this boat before starting a SaaS startup.

While we’re stereotyping, most engineers I know love games and strategy. It goes nicely with being good at logic. To me, sales is just another strategy game. You win when you close the deal.

Let’s say you want to sell your product to a company for $1,000/mo.

Here’s how you “win”:

1. Figure out if they’re “qualified”. Will your product deliver at least $10k/mo of value to them? Get a meeting with any employee who can answer this question. If they’re qualified, go to step 2.
2. Meet with a “decision maker”. This is a person who has the authority to buy your product. Ideally the person in step 1 introduces you to this person. If not, try to get someone you know to introduce you. Worst case, message them directly. Remember, you’re trying to make them more successful! They should want to talk to you.
3. Convince them it’s worth the price. This is why I said $10k of value for a $1k price. If you can spend $1k and get $10k, you’d be stupid not to. Case studies can help show how your product creates that much value.

Now, doesn’t that sound fun? Okay, maybe I exaggerated a bit. Still, there’s a ton of strategy in successfully getting and running those meetings.

If you’re just starting out, I’d urge you to make your first dollar as soon as possible. Once somebody you don’t know pays you for what you’ve built, you know it’s worth something. And it feels great! You’re officially adding value to others, and you’re getting paid for it.

Network, network, network

I never appreciated the value of my network until I started a company. Having a great network makes pretty much everything easier. It’s like steroids for your startup.

Here are just a few ways your network can help you crush it:

• People are way more likely to meet with you if someone they know introduces you. This makes life way easier for customer development and sales.
• Those first few retweets or upvotes on Hacker News can make a huge difference for your marketing efforts.
• When it comes to fundraising, most investors won’t even talk to you without an introduction, preferably from someone who has made them money.
• Recruiting great talent is insanely hard. It’s easiest to hire people you know.

And the list doesn’t end there. This is why you should go out of your way to build relationships with everyone you can.

Especially if you’re an intern or still in college — you’re amongst a group of highly talented peers who are just starting their career. Someday these people will grow to be great engineers, decision makers, managers, founders, etc.

This advice goes for full timers too. Several of my peers at Facebook have since left to start great, inspiring companies. They’ve been generous enough to be early users of my product, introduce me to leads and investors, and offer their valuable time and advice.

Expand beyond the product mindset

When you’re a software engineer, your job is to build stuff. That’s why, after you leave to start a company, it’s easy to fall into the default mindset of “What should we build next?”.

This mindset is going to slow you down. You’re no longer just responsible for the product — now the entire business. As a founder there’s an endless number of things you could be doing. Writing code is only one of them, and not always the right one.

Building the product will be by far the easiest and most fun thing you do. One of the biggest challenges will be getting people to use what you’ve built. This problem is very rarely solved by building more features.

Pick your North Star Metric, a single metric that represents how much value you’re delivering to your users. Instead of asking “What should we build next?”, ask “How can we drive our north star metric?”.

You don’t need to raise money

It seems like the default mentality in Silicon Valley is “I’m starting a company, so I need to go raise half a million dollars.” This just isn’t true.

Raising a round typically takes 3–6 months. That’s right, months. In that time, you could do customer development, find a great problem to solve, build an MVP, launch it, and get paying customers. Or, you could raise $500k. Which sounds more impactful?

By bootstrapping, you’ll learn how to grow while keeping costs aggressively low. This is great for building a capital efficient company from the start. Ironically, this will help you raise at more favorable terms later on. Not to mention you’ll own more of your company.

Of course, you can raise. It could put you in a future position where you’re able to grow much faster. Just know that you don’t have to.

VCs want you to go big or die. Going big typically starts around $100m of annual revenue. As a founder, there are lots of good states between dead and $100m per year.

Good luck!

I love the breadth of experience you get as a founder — sales, marketing, fundraising, recruiting, and much more. What are you waiting for? Go meet with some potential customers!

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