Lessons from a first time founder
I recently went through the journey of ideating, building, launching — and eventually shutting down — my own startup, Mischief, all in 1½ years.
I actually wrote this right after we shuttered in the Fall of 2019, but I didn’t have the stamina to publish it. Now, with a bit of distance, I’m ready. My hope is that this serves as a guide for those sitting on the fence debating taking this journey themselves.
Creating a company was an exhilarating experience that supercharged my learning curve at a rate greater than any job could have. Being a founder grants you intern level experience in 20+ roles. 😛 Jokes aside , I’m a better leader, recruiter, salesman, product manager, designer, and communicator for having gone through it.
First, some context: Mischief was a social commerce platform that let viewers buy games during live streams (think Twitch + similar platforms). The goal of the platform was to give game publishers direct sales opportunities to their players via live streaming. There were some SaaS components on the backend that highlighted analytics of what were the most performant channels. This put those marketing budgets directly into the pockets of gamers, not storefronts or Google Ads.
This post mortem is going to be mostly about the insights I had from being wrong, since the most learning comes from when we hit speed bumps.
That said we have a ton to be proud of…
- Launching a product on a bootstrapped budget
- Learning how to design and doing all of the MVP work myself in Figma
- Recruiting a super talented team of 8 from the likes of Disney, Twitch, Apple, and Jet
- Developing partnerships with major publishers in SEGA, Warner Bros., Square Enix, PUBG, and others
- Onboarding over 3,000 streamers and spending $500 in marketing to do it
- Generating revenue at a conversion % that was 2x+ what I’d seen in traditional eComm
- Going from 0 investors in my network to meeting 100+ (less an accomplishment and more a reflection on how many doors I relentlessly beat down 😊)
Now to gaze into the mirror at the less pretty things. Mischief shut down because we ran out of runway. There were a lot of contributing factors though that led to us not being able to close that funding and hit future milestones. At the end despite acquisition offers, I was out of steam and decided to shut the company down.
I’ll try and cover these topics as I encountered them.
Choosing co-founders is a marriage: Don’t force it
Some people get lucky and go into a co-founding relationship blind and it works out. However, for most people , the reason their business fails is because the founding team falls apart. If you can at all help it, it’s preferable that you have worked together and know each other’s quirks / working style.
On paper, myself and my co-founder had a lot of complimentary experiences. We really got along, had the same sense of humor, and had a nice fire & ice temperament on how we generally approach problems (I was generally the more impatient one). However, there were several critical things about running a company we disagreed on. Over time it became more apparent that we had different visions on working styles, organization, etc. that led to an agreement to separate. Some of our skill sets were a bit redundant as well that led to a skill gap on the founding team where we had to pull in early employees who weren’t able (understandably) to put in the same long hours which led to delays.
In retrospect — we were both forthcoming about these differences of opinion at the very beginning. However, we both wanted it to work — that we thought we’d be able to change the other person’s opinion. Listen in the beginning, you’re not going to change that person’s mind. People don’t work like that. We ended up eventually splitting with myself continuing the business as a solo founder. Had I known that would have eventually happened, I likely wouldn’t have started the business to begin with. Being a solo founder was a much lonelier journey and one that was far less “fun” to get me through the hard times. Working together with my co-founder was far more enjoyable than shouldering the burden alone.
Most importantly, have a technical co-founder. There needs to be someone in the trenches with you putting in the 80–100 work weeks who has as much upside as you. We had a CTO who got cold feet at the 11th hour, but we decided to charge ahead anyways. Things move so quickly in this environment that you require someone with the ability to hack solutions quickly. In my opinion, the most solid co-founding team’s that I’ve seen are a product manager (with biz dev + marketing chops), a designer — optional if the PM & engineer have some design skills, and an engineer. That tripod should be able to functionally deal with any problem thrown at them.
You’re most likely going to pivot
Our first idea was not a social commerce platform for streamers. While at Walmart building a game streaming platform — I kept hearing from publishers that they wanted greater insights into their consumer behavior and they wanted protection from walled garden retail stores (Xbox, Playstation, Steam, etc.). As the tech behind these platforms becomes — with no disrespect to the platforms — more commoditized, content becomes king again. After all, the architecture differences between a Super Nintendo and a Sega Genesis is a chasm compared to the nearly identical AMD GPU’s you find in a Playstation and Xbox today.
The idea to address this was to build a competitor to Steam that would unlock DRM (digital rights management) by allowing a secondary market for digital licenses of games. In plain English, think “Digital Gamestop”, except this time the publishers got a cut of each resale while you cleared the dust off your digital collection that you didn’t play anymore. I had tested the idea with contacts at game publishers, and with the right unit economics — they seemed excited by it. They controlled the rights to their games and users felt like true owners of their library.
I knew this platform couldn’t be created as a side project so decided to leave my job as to not create a conflict of interest with Walmart. We met with 10 VC’s about this first prototype, and eventually one was ready to issue us a term sheet as the lead investor.
I was having lunch with an executive at one of the major gaming platforms when I shared my idea. He told me plainly, “This is a terrible idea, there are 100 corpses of those before you that have tried this and failed”. Undeterred, I arrogantly pressed forward.
Over the next 2 weeks, I saw the entire VC market learn a secret that hadn’t yet been made known to me. Epic & Discord were about to launch their own games retail platforms which made my concept completely unfundable with two new goliaths in possession of fresh, VC-funded war chests. It turns out the aforementioned executive was doing me a favor by saying “swim for open waters little minnow”.
That VC backed off on that term sheet.
You are 1 Techcrunch article, 1 conference announcement, or 1 press release away from falling out of favor with a big market shift. 18 months after this happened, both platforms (particularly Discord) are struggling with their game stores and they are much larger brands than we were. Would we have stood a chance with that idea? Maybe. We’ll never know. However, to investors, it was a complete non-starter and everyone soured on our first idea which resulted in a pivot into what Mischief came to be.
Record and relisten to user research
Before building Mischief, I’d had light experience with user research. Besides hotjar, clickstream data, or customer surveys — I had no hands on experience conducting moderated user research for a prototype. I always had the aid of a trained researcher. It’s easy to make the mistake of thinking “how hard could it be” without realizing the ramifications of such a brash and naïve perspective on UX research.
Despite my bullish view on my own ability, I did reach out and bring on an advisor from Frog / IDEO who came highly recommended from a friend. He helped me think through non-biased questions to ask, taught me best practices, and helped me interpret results fairly.
All that goes out the window though when you’re listening to and replying to someone in real time. Listening, I mean really listening — is a trained skill that doesn’t come as an innate ability. Sure, I got the meat & potatoes correct. We learned that streamers 1) want growth and admiration for their channel and 2) want to quit their jobs and make it a profession. However, when it came to the second iteration of showing them wire frames we came up with… I led a horse to water. I made the fatal mistake of over explaining a feature. That is 20 seconds of context that isn’t available during a user sign up flow where you have 5 seconds to nail your landing or someone churns. I recorded the conversations, but didn’t go back and really evaluate the neutrality of the questions I was asking.
Explaining that an OAuth wasn’t stealing a user’s data, the decision to go with Stripe over Paypal which 95% of this user base used, and a complicated explanation of how to host their storefront ended up hurting our funnels and materially setting us back on timelines that we didn’t have much room for error on with a narrowing runway.
Last but not least, get out of your coastal bubble mindset. Even though our audience was a technical one in that they set up their own streaming setup, they were not aware of a lot of the tech tools in our stack. It’s not a given that the average American is going to know what Stripe is. They don’t care (or know) that they just raised a $250M Series F from a16z. This is an unknown brand to them and they don’t trust it. Meet people where they are and minimize the amount of behaviors you’re trying to get someone to change out of the gate. Whatever you think users are willing to change, halve it — you’re overestimating.
You have one primary user
Pick — a — lane.
You can’t fight a war on both an eastern and western front simultaneously. Eventually the walls will close in on you. By trying to make several users your primary customer, you end up making none of them your primary customer.
Most of our tooling out of the gate was built to attract streamers. Through pure brute force of pounding the pavement and shilling my network, I was able to sign some big game publishers. However, the value prop to them was not incredibly compelling or an easy platform to use out of the gate. Yes we had 1,000+ titles at launch, but we were also missing thousands more. Streamers found large gaps in the catalog for games they were playing and we had some churn on users.
What we should have done is worked more with esports teams & agencies to onboard streamers so we could focus exclusively on building product to sell the publishers. I was convinced long term that these organizations were going to muddy the sanctity of our UX that I didn’t want their branding seeping into the product and making it confusing. I still think that was right, however — it was a problem for my future self that could have been undone once we had lived to fight another day.
Double (and triple) sided marketplaces are platforms worth building, but you should cut other folks into help you address the other sides of the market that aren’t your core customer. Always be honest with yourself on who is the primary customer and simplify the product.
Leaders eat last, but don’t starve yourself
You’re going to be asking your team to work late nights and long weekends, so it’s only natural that you feel inclined to be the first one in and last one out. That is good. You should feel a sense of responsibility for working harder than everyone else — after all, you’ve got the most stake as the CEO on the cap table. Go earn it.
If you’ve gotten so far as to see the importance of that statement, you’ve passed the test. However, you need to dial it back a notch and realize this is a marathon, not a sprint. I consider myself a very thick skinned person. I can count on one hand how many times before Mischief I had cried in my life. During Mischief, I probably matched that number in 1.5 years with the same amount of times I had sobbed in the 29 years that proceeded it. More often than not, these breakdowns came unprovoked. They weren’t because I lost a big sale, had a fight with a teammate, or anything of that sort — I just simply unraveled from the emotional burden of being responsible for 1,000 different things happening in parallel. Eventually, Atlas gives way to the weight.
Workout, keep date nights with your partner, go to drinks with friends on the weekends. Much like our beloved Sims from 1999, if you deplete that social bar — you’re going to lose it. Your team wants a leader that will go to bat for them, not a martyr that falls on their own sword.
Whatever your specialty was, you’re going to be rusty at it when you are an employee again
It’s been 1.5 years since I shut down my startup in Fall 2019. When I first took a job at Tally, I was definitely an outside dog. I worked odd hours, and I’d lost some of the stylistic refinement as a Product Manager.
After going through a lot of interviews to land at Tally, I realized I was rusty. I hadn’t done experimentation in a long time at scale, I hadn’t written a SQL query in over a year, etc. Whatever job you did before being a founder, you’re going to be a bit rusty at it when reentering the workforce. That’s okay. It’s a bit bruising to realize you let a few muscles go soft, however you’ve gained 100 new muscles that are going to compliment those and give you much greater context than other peers can possibly hope for in the long term. I’m a much better product manager with a much wider tool set for having gone through this founder experience. Just don’t expect to hop on the bike and pedal effortlessly on Week 1. You need to learn to become an inside dog again.
Have patience and humility.
Those new found muscles will kick in soon and your team will appreciate you for it.
There’s gold at the end of the rainbow
This may read like a cynical, self-loathing take on doing a startup. That couldn’t be further than the truth in how I reflect on this journey. I’m incredibly proud of what we built and what I’ve learned.
Nothing — and I mean NOTHING, can teach you as much about business, building great product, how to sell, and developing user empathy as starting a company. I learned a lot about what I’m good at, what I’m bad at, and what I want to do with my life from this experience. I’m a much better PM today after creating my own startup.
Finally, my network is worth its weight in gold now after all the people I met during this journey. You’d be shocked at how many colleagues and friends are willing to make introductions if you simply ask. Even a cold message to a CEO you admire may get a response b/c they likely remember being in your shoes at one point.
If you’re considering starting a company — I have lots of opinions and I’m happy to give some advice. Regardless of what you take away from these points, you’re going to have to repeat some of the same learnings if you go down this path.
Like when your parents warned you not to touch the stove, sometimes you just have to get burnt for the lesson to truly sink in.
