VC to Operating: 7 Things I’ve Learned in my First Year at a Startup

You may have heard that life is measured in dog years at a hyper growth startup. The rumour is true. My past one year at Element AI has felt like five, and the company continues to forge into new territory at break-neck speed. After 4 years as a VC at OMERS Ventures, I made the nerve-wracking jump to startup land last year with the hopes of amplifying my learning and operational experience.

While I’ve lived through the perils of entrepreneurship (and failing) before, this time has been different. Working at a company that’s at the forefront of democratizing a world-changing technology has brought on a unique set of challenges. Here’s a few things I’ve learned along the way so far:

1. Hiring is hard. Really f@#k!ng hard.

Finding the best person for the job is really hard and extremely time-consuming. It’s so tempting to make concessions when you’re strapped for resources and drowning in a 25 page to-do list. But DO NOT do it — making a wrong hire is extremely costly in terms of wasted time on training, impact on culture, negative signalling around employee churn and the opportunity cost of ending your search too early for the right candidate.

When evaluating a candidate, I’ve found the most important aspects to be culture-add (vs. fit), experience and raw skillset (hire for slope, not the y-intercept). The latter is critical — we’ve made some fantastic hires that may not have had the typical CV we were looking for but are so insanely smart and hardworking that they quickly figured things out. In addition, regardless of the candidate profile, ensure you seek out off-the-record references (mine your LinkedIn network). It’s already helped me dodge a few bullets.

Once you do hire, having the right mechanisms in place from an org design perspective is paramount, including things such as on-boarding, IT, payroll, and training.

2. Culture really does eat strategy for breakfast (and lunch, and dinner).

At its core, a company is simply a collection of people. It really doesn’t matter how many smart people you have in your company or the carefully crafted strategy that you’ve laid out — if your team doesn’t know how to work together effectively, trust each other explicitly (disagree and commit) and rally around a common mission, your days are numbered.

In principle, seek to understand before seeking to be understood. It’s so easy to discount an opposing point of view or blame your teammates when something goes awry. This is exacerbated with the classic divide between Sales and Product.

To build trust amongst your teammates and have them work towards a common goal, over communication is key: share information, give feedback and consistently re-iterate the company values, mission and vision. More importantly, don’t wait for someone else (i.e. management or HR) to fix the problem — culture and organizational mindset has to permeate throughout a company both top-down and bottom-up. It’s the only way it can be ingrained into the DNA of the organization.

3. Data is your best friend.

In startup land, things are usually undefined, fast moving and experimental. As such, the ability to constantly learn and iterate is essential to identifying things that are broken and discover new opportunities.

The only way to do that is with data. Start collecting data early and often on relevant internal and external activities. Everything from the average time it takes to hire a candidate to the number of meetings it takes to close a deal — having reliable data over a defined time period is key to assessing performance and uncovering patterns and trends.

Even if you don’t have any formal systems in place, track it in a spreadsheet or google doc. Anything is better than nothing. Most importantly, don’t just collect it for the sake of it, be purposeful and use it as a forcing function to evaluate and reflect on what’s working and what’s not.

4. It’s not just about the vision, it’s also about how you weave it.

One of the most amazing things I’ve gotten to see over the past year is our CEO (JF Gagne) paint the company vision to customers, partners and investors. As a VC, I was used to sitting in company pitches, but this experience has been unique — it’s not often that you get to be at the forefront of defining the next version of the industrial revolution. There is an art to storytelling and distilling a complex, futuristic concept into a simple (and exciting) idea that people can rally around.

It is an essential part of being a CEO that not many people appreciate. It’s one of the core functions in combination with setting the vision, building a team and fundraising. Getting people to suspend traditional beliefs and buy into something that does not yet exist, is truly a heroic feat and separates the good from the great leaders.

5. Good things take time…and patience.

In the era of instant gratification, it’s important to remind ourselves that “Rome wasn’t built in a day.” You will need to accept that v1 of your product is not going to be perfect and that it will take numerous iterations (and thus time) for it to come even close. Things that may seem simple at a surface level often have multiple layers of complexity hiding beneath it. Patience is key.

6. You can’t do it alone.

#Team. It’s one of the most important assets you have in a startup (or in any company, for that matter). It doesn’t matter how smart or experienced you are, you CANNOT do it alone. Any “star performer” is only able to excel because they have a team behind them that allows them to. By taking all other things off of that person’s plate, this team affords the star the ability to spend the time, effort and mindshare required to do a kick-ass job. There is simply no room for an individual mentality in a startup. At Element, we’ve often used the mantra of “we before me”, and it’s reflective of the mindset necessary in order to succeed.

7. Let some fires burn.

Echoing the lesson from one of Reid Hoffman’s podcasts — it is impossible to put out every single fire that is burning in your company. You simply don’t have the bandwidth and more importantly, not all fires are equal. You need to be deliberate about which problems to address, as there are some that will consume your company (e.g. a breakdown in communication between sales and product) versus those that are not ideal but you can still live through in the interim (e.g. minimal brand presence in the market).

Learning to prioritize problems based on your company’s stage of growth, internal operations and market dynamics is essential. Moreover, you need to be comfortable with the fact that there will always be things within the company that are in a state of flux — it’s the very nature of a startup.

In terms of lessons learned, the list above is only the tip of the iceberg — I could go on writing for days. However, by virtue of being at a startup, I’m not sure where I’d find the time (this post is already 6 months late!) =)

Excited to see what the next year has in store. Stay tuned for more updates!