2018: NUGGETS OF WISDOM FOR STARTUP SUCCESS
As an early stage venture investor for the past two decades, I have been fortunate to work with many outstanding startup teams, venture capitalists, and industry leaders. The transition from 2017 to 2018 provided me with a window for self-reflection on the patterns of success and failure that I have observed in technology entrepreneurship.
This article shares a collection of my favorite short quotes about building great companies. While written from memory, these practical cogitations and utilitarian gobbets of information are a combination of my original writings, third party quotes, general startup community wisdom, and my New England immigrant family folklore. Many of them will be familiar to my colleagues, friends, and family. They are being shared to help startup teams achieve commercial success while also being the best versions of themselves as they strive to create a better future for a world in need of their gifts. Enjoy.
Ambition precedes success.
Transparency builds trust.
The 3 pillars of success are IQ, EQ, and hustle.
Business success requires a good idea and great execution.
Growth is the magic elixir of value creation.
Fundraising success is not business success.
Raise venture funding when you have good news coming.
Make sure you can answer “why you?” and “why now?”.
Sometimes “no” means “try harder”.
When you close VC funding you become responsible for producing an exit.
The path to success is rarely a straight line so adapt to succeed.
The difference between vision and dilution is execution.
Time is the enemy. Execution is king.
In startup time the worst decision is no decision.
Good enough is always better than perfect.
The more we make excuses the more we believe in their validity.
People who are helpful to their mentors get more and better mentoring.
The reward for good work is more work.
Simplicity is the ultimate sophistication.
Authenticity sells itself.
Always be selling, but believe in what you are selling.
It is all dress rehearsal until somebody buys something.
Customers want outcomes, not technology.
People do not buy rationally.
People buy from an incumbent to not get fired.
People buy from a startup to get promoted. Deliver so they get promoted.
People buy solutions, not things.
Selling is listening.
Do not sell scared.
Do not sell past the close.
Pricing is a judgement problem, not a math problem.
Price is a proxy for quality.
Value equals customer benefits minus costs.
Your best salesperson is a happy customer.
Make your customer champions successful.
Advancing careers is how companies win.
Motivation trumps talent.
You own your pipeline.
Try one more time.
Small markets yield small outcomes.
Large markets often appear small before they exist so dare to believe.
Creating a new hyper-growth market is often easier than disrupting a large mature one.
Commodity markets based on lowest price and scale are hard on startups.
The value of the market leader is often more than all others combined.
Gross margin is nature’s way of telling you if you should proceed.
Focus on metrics rather than goals.
Track the metrics that create value rather than those that show if a company is valuable.
Be the best in the world at one thing, then expand from there.
There are profitable businesses, and there is everyone else.
Profitability equals independence.
Competitive advantage is tactical and transient.
Durable advantage is strategic and takes vision.
“If it ain’t broke, don’t fix it” is an excuse for inaction.
Continuously improve everything.
The highest praise for a product is “it just works”.
Simplicity is the ultimate elegance.
Build something that people need.
Success is inversely proportional to the thickness of the board deck.
Board members must review all materials in advance of the meeting.
Assign your board members specific tasks and get them to do measurable work.
Operating plans are a snapshot in time and subject to change.
Innovation occurs in waves.
Market opportunities are a point-in-time.
What worked in the past is unlikely to work in the future.
First to product/market fit is more important than first to market.
Chase success, not the competition.
Being too early is the same as being wrong.
Great companies make lots of mistakes, but quickly stop repeating them.
Great companies are builders of talent, not consumers of employee work.
Success takes a village.
The team is the tangible asset.
Productive teams are collaborative inclusive, and empathetic.
Not for one, but for all (Non sibi, sed omnibus)
With diversity comes strength.
Hire based on ability to contribute and attitude, not on background, ethnicity, gender, orientation, or religion.
Hire character. Train skill.
Hire a VP HR, a CFO, and a VP Customer Success early.
Define a compelling vision worth fighting for, then make it a shared vision.
Be missionaries, not mercenaries.
Visions are lofty dreams. Missions are measurable goals to get there.
Your recruitment timeline matters.
Have a plan to hire in the right sequence.
Work hard to hire good people, then give them a reason to stay.
Invest heavily in your recruiting skills.
Be an exceptional interviewer.
Hire for slope and growth potential rather than specific skills.
Evaluate fit based on functional skills, domain-specific skills, and intangibles.
Define a hiring and disqualifying criteria.
The basis of competition for talent is quality of mission and equity upside, not cash compensation.
Be generous with equity and you will create a much larger pie.
Onboard employees so they feel important, included, and empowered.
False positives in hiring are expensive.
A defining attribute of winning entrepreneurs is grit, but…
Grit is a byproduct of setting a worthy goal that you believe in and are willing to endure hardship to achieve.
With shared struggle comes steep growth and strong bonds.
Treat collaboration as a merry-go-round rather than a see-saw.
Productive employees regularly receive constructive feedback from their management.
Successful founders evolve from building a great product to building a company that builds great products.
Build teams that do not need you.
Trust is earned.
Trust requires truth and transparency.
Trust is the invisible glue that binds a high performing team.
Treating people well is great for business.
When someone shows you who they are believe them.
Just say no to bozos.
Company culture matters.
There is no right or wrong culture, just functional or dysfunctional culture.
A good culture makes people feel safe and respected so they can be their best.
Employees do not listen to what you say, they watch what you do.
Culture is defined by the stories employees tell each other when the leadership team is not there.
Company values are defined by who gets rewarded, promoted, or let go.
Changing company culture requires rewarding the good and social pressure to stop the bad.
It is better to foster a sense of shared purpose than to create a sense of urgency.
True politeness is defined by actions, not words.
Trust and kindness motivates cooperation.
Do not tolerate meanness.
Never use unprofessional language.
Correct messages delivered in a caustic manner are irrelevant.
It is better to be successful than to be correct.
When we are open to criticism what we receive is good advice that helps us win.
Be skeptical of “transformative moments” unless they are preceded of significant periods of sustained effort.
To flourish people must be seen, heard, and find meaning in what they do.
Create a culture of freedom and responsibility that rewards results.
Success is not created by dominating the meeting, but by delivering the result.
Powerpoint cultures promote good pitching skills.
Reading and writing cultures promote fact-based decision making.
Whether it be personal or organizational, the biggest sin is abuse of power.
Execution speed is a defining characteristic of market leaders.
It takes a lot of hard work to become an effective leader. Do the work.
Leadership is building constructive relationships.
Leadership can be lonely. Eat with others.
Leadership is reading people.
Leadership is listening well.
Leaders know that their success depends on everyone around them.
Leaders listen to find how to help the other person.
Leaders actively listen with intent and a bias for action.
Leaders invest time in people.
Leaders are approachable.
Everyone is always Leading.
Altruism is intrinsic to Leaders.
Leaders help each team member to succeed.
Leaders help their team recover from failure.
Leaders provide the right guidance at the right time.
Leaders get the best out of their team.
Leaders promote team members that make others around them better.
Leaders create learning opportunities for their team.
Leaders are mood-aware and actively modulate their mood to stay constructive in the face of adversity.
Leaders take blame and give credit away.
Leaders get their team more into their work rather than try to get more work out of them.
Leaders make sure their growth curve stays ahead of the company’s growth curve.
Bad Leaders lie.
Disavow Leaders who lie often.
Leaders always eat last.
Build a great company and options will come.
An IPO is a financing event, not a liquidity event.
Franchise companies are “10 baggers” after IPO.
Founder CEOs produce more “10 baggers” than all others.
Companies are bought, not sold.
Large companies try to buy small companies for cheap when they are ready to scale.
Acquisition interest is a right-of-passage.
Say no to acquirers if the battle has been fought with them and you have won.
Acquisitions work when there is minimum product overlap, compatible cultures, near term wins to justify the decision, long terms synergies to keep the people, and a fair deal. Geographic proximity is a big plus but not required.
Escrow holdbacks exist to not be paid.
Cash is king.
KNOWING WHEN TO STOP
Bad news does not age well.
Share bad news early.
Sunshine is the best disinfectant.
Numbers do not lie.
Unit economics tell the story.
It is hard to make it up on volume if you lose money on every sale.
There is rarely one bad quarter.
An inspired effort by a committed team is not always enough.
If a company becomes a waste of resources it is time to stop.
When a team can no longer see a path to success it is time to stop.
If you are selling yesterday’s solution to tomorrow’s problem it is time to stop.
If you are a technology company with no shot at technology leadership it it time to stop.
By the time you call the question you already know the answer.
Concrete turkeys do not fly.
The top talent leaves first.
Accept funding if you think you can win.
Do not take a bridge that is a plank.
Where there is hope there is a reason to proceed.
There is no shame in an inspired effort that does not yield.
Failure is forgiven. Deceit is not.
Do not romanticize failure. Failure sucks. Learn from it and move on.
Failure is a good teacher if you are a good student.
Life is about the present and the future, not the past.
Get up quickly when you get knocked down.
Great athletes have short memories.
Always we begin again.
Attitude is a choice. Choose to be positive.
Optimism is a force multiplier.
Beware the boundary between optimism and delusion.
Help make others successful.
Most people are too scared to commit. Don’t be like most people.
Listen to your mind when you first wake up. It is trying to tell you something.
The universe loves the benevolent brave. Be both.
Effort in, results out.
Talent is earned, not given.
Build your dreams or someone will hire you to build theirs.
Read more, fail less.
My dreams do not work unless I do.
Gratitude is perhaps the most important emotion.
Convey genuine appreciation.
Resilience is a muscle that strengthens with optimism, gratitude, and exercise.
Egos get in the way of ideas.
Brilliant people discuss ideas. The rest discuss people.
It’s not what you do, but why you are doing it, that matters.
Auto-pilot is the default setting that we typically operate on, but it rarely leads to the future that we want.
Courage is specific and personal.
Be a great listener.
Listen more, talk less.
Listen with intent.
Attack issues, not people.
Speak to the eyes, and only to the eyes.
People who are learning machines win.
Learning is fundamentally social.
Surround yourself with people you can learn from.
Lack of knowledge and lack of intelligence are not the same.
Learning makes you feel younger.
Freely share what you learn with others.
When you want to motivate, persuade, or be remembered, start with a story of human struggle and eventual triumph.
Smartphones make you dumb.
Beware anything that wants to turn you into their “product”.
How you spend your time is the truest test of your priorities .
Your calendar is your most important tool for enforcing your priorities.
Good time management is good business management.
Email is not a deliverable.
Ask before you tell.
Build buy-in on deliverables, then hold people accountable.
Reduce deliverables down to one task, one owner, and one due date.
Actively observe your mood so you can control it.
Be positive in the face of adversity.
Praise in public, punish in private.
It is more important to do something you believe in than to do something you enjoy.
Your friends know you in good times. You know your friends in tough times.
People are either givers, takers, or traders.
People can change, but they must want to.
Make the bad days better and the good days the best.
Working more than 60 hours/week has diminishing returns.
Work smarter, not harder.
Good exercise, food, and sleep help you thrive at work.
Life is too short for bad coffee.
Avoid food with barcodes.
Live a creative life.
Find what matters.
There is a lot to process here. I’ll declare success if even one of these aphorisms is sagacious enough to get you to ponder over an important topic or gets added to your quiver. There are of course exceptions to some of these. For example, building the Amazon franchise by selling a mature low gross margin commodity like books, launching Google as the Nth search engine without a clear monetization strategy at the outset. Sometime the right answer is to shove all conventional wisdom aside and just go for it. In the immortal words of Yoda, “No! Try not! Do or do not, there is no try.”
I would love to hear from you if you have a favorite “nugget of wisdom” or a reaction to one of these snippets that you would like to add to the conversation. Best wishes to all for a prosperous and fulfilling New Year.