The Five Commandments of a Startup

Jeff Haynie
Jun 20 · 4 min read

Reading Tomasz Tunguz’s recent post, “Why Product Innovation Slows After The Series A,” I was reminded all over again why innovating in the face of growth is hard. Pinpoint is my fourth venture-backed startup. I’ve been through several Series As, which is why the most recent one didn’t come with quite the same pitfalls that Tunguz lays out. Together with my co-founder and our leadership team, we had a decent sense of what was coming, and we laid the groundwork accordingly.

When it comes to advice for startups, there’s nothing new under the sun. You’ve probably seen flavors and variations of what follows, along with lots and lots of other rules and tips. For us, what mattered was deciding the best of the bunch, based on lived experience. Internally we refer to these as our operating principles. Given their importance to us, it may be just as accurate to call them [echo voice] The Five Commandments.

1. Sell aspirin, not vitamins

We can debate whether this is just another way of saying, “find product/market fit.” What I like about this phrasing is that it’s more specific and prescriptive. Where pain is, buyer urgency is too. Everything we build must clearly, immediately and directly answer the urgent questions facing our target segment.

Can’t a company make money selling vitamins? Sure. Look at the market for luxury goods. (Or for that matter, actual vitamins.) But if you’re a tech startup, the urgency is on proving your market, proving your fit. I’ve run companies where what we were selling was going to be essential — future tense. It was technologically advanced stuff; we were selling into the next S-curve. When that curve arrived, our stuff would matter, all true. But it’s a lot harder to prove fit, to show growth, when customers can look at your product and say, “Interesting. Let’s talk next quarter.”

2. Just because we can doesn’t mean we should

This commandment proceeds from Dave Packard’s famous observation that more companies die of indigestion than starvation. If your company is anything like ours, you have lots of good ideas, with more to come. Our job is to curate the best of the best, and focus only on those. Products don’t win by having the most features; they win by having the best features.

How do we distinguish great ideas from the merely good? See the first commandment.

3. Build the best team (really)

Every company says this. Hire good people, duh. But there’s an important nuance. You need to hire good people early. The best teams start from a core of smart, trustworthy people, who in turn attract more similarly talented people. Good people beget good people.

And since the reverse is also true, the best teams fix any hiring mistakes before the culture is hurt. If you’ve gotten to thirty or more hires without having to let a single person go, what you’re saying is, We’ve achieved perfect hiring. Maybe. But it may also be a sign your build-best-team rigor is slipping.

4. Customer loyalty > Customer acquisition

This one sounds a little counterintuitive. We value having fewer, very happy customers over more, averagely satisfied ones. Our job is to build what’s essential to our customers — aspirin, not vitamins. If we find ourselves with customers who are merely OK about the product, something is wrong. Adding more customers will be harder, and probably only erode loyalty.

Tunguz identifies “inertia” as a key reason innovation slows after a Series A. Specifically, the release inertia that comes from needing to explain each new enhancement to a widening customer base. We’ve mitigated this inertia by adhering to this commandment. (And used our own product to find and fix other kinds of inertia.) Having a wide spread of customers with diverse needs is a good problem to have — just be careful in how early in the company’s journey you have it.

5. Scale for growth, not for show

Tunguz cites CEO distractions as another innovation-slower following a Series A — ”fundraising, recruiting, press, hiring, managing, board meetings” etc. As CEO, I can attest to the risk. This commandment exists in large part because of it.

It’s surprisingly easy to slip into a lot of distractions because you convince yourself, “Well, these are the things one does after a Series A…” It’s not exactly unheard of for startups, following a successful funding round, to begin orienting their thinking toward the next round of funding — often at a cost to what actually makes sense for the business. (I’ve seen business development departments created on the basis of little more than, “That’s what companies at our round of funding do.”)

This is why we repeat like a mantra: Growth comes from value. There are no shortcuts. Ad spend, PR, sales hires — these have a chance to contribute only if value is proven. My attention and our Series A dollars are reserved for things that deepen value to customers; anything else comes second.


Interested in learning more about how Pinpoint uses data science to advance the way people and teams deliver software? Check us out at https://pinpoint.com or hit me up at jeff@pinpoint.com. Our mission is to help organizations build software better.

Jeff Haynie

Written by

co-founder, ceo of pinpoint (pinpoint.com). open source developer, serial entrepreneur and angel investor. previous co-founder of @appcelerator, @vocalocity.

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