Caution: Be careful what you read as a founder
A bit of unsolicited advice for founders based on my own mistake.
A piece of unsolicited advice I try to share with each founder I work with is to obsessively focus on learning about what’s directly in front of you and ignore the rest. An issue I struggled with when I was building my last company was that I spent a lot of time learning about parts of our startup journey that were far out into the future. For example, I’d read dozens of articles on topics like raising a Series A, scaling to 500 employees, or the intricacies of different M&A tactics. At the time I thought I was helping our company. I wanted to be able to answer any question an investor, cofounder, future employee, or inquisitive relative could throw at me. A CEO needs an answer for everything right? In hindsight, I believe I was wrong.
I should have had the strength to say I don’t know to certain questions because it wasn’t what was directly in front of us.
Q: Hey Greg, what do you think the value of the company would be when you raise your Series A? (I was asked this a few times)
The answer I gave: Well John, based on one of our biggest competitors and a traditional revenue multiple for SaaS companies…. blah blah blah
The answer I should have given: We haven’t thought about that yet. We’re focusing on getting our first 50 customers at the moment. Do you know any business owners in industry X?
Q: Hey Greg, how much cash do you think you’ll need to get to $20MM ARR? (I was asked this a few dozen times)
The answer I gave: Well Susan, based on our MRR growth over the past year and deals that are in our pipeline I think we’ll need…. blah blah blah
The answer I should have given: We haven’t thought about that yet. We’re currently focusing on getting to $5K MRR. Do you know any business owners in industry X?
In hindsight, I was asked hundreds of questions that I could have made useful to our business. Instead, I answered the question that was asked as best I could. I probably missed the mark on most because it was informed by what I read and not by a genuine strategy.
Perhaps I was reading about the company I wanted and not the one I had.
User growth was in front of us. User retention was in front of us. Raising our seed round was in front of us. I certainly read as much as I could about these topics as well but I can admit I was not laser focused on them. They were part of a broader education approach I was going through. Thankfully in our case I don’t think it hurt our company. I’d be shocked to learn if any company truly suffered because you went down the wrong Medium rabbit hole. However, I think my point still has value. Let’s face it, it can be fun to read about raising huge sums but if you can’t succeed making the baby steps towards that you’ll never get there.
So, what’s right in front of you?