No sleepwalk to success
Engineering success in a technical startup
I’ve spent 20 years investing in and working with deeply technical founders at a very early stage. Looking back, there seems to be one overwhelming determinant of success for those technical teams. In my experience, success is highly correlated with how obsessive a founding team is about developing an extraordinarily efficient go-to-market (GTM) machine. At first blush, this statement may seem obvious. I even hesitated if it was worth trying to write about it — as I feared I would get accused of stating the obvious. But I’m going to attempt it. If it changes the trajectory of one company, it’s worth it.
The all-arounders, the humble, and the sleepwalkers. There are three types of technical founders. Group one (a tiny minority) are genuinely obsessed with achieving GTM success. Let’s call this group “the all-arounders.” These all-around athletes completely understand the entire spectrum of success drivers for their company: engineering, product, cultural, and commercial. Group two (another tiny minority) are aware that they do not understand what being obsessive about commercial success actually means. I considered naming this group “the paranoid” (because it is accurate) but let’s call them “the humble” instead because it’s more optimistic. The point is that a very small number of technical founders are truly aware of the realities of what commercial success means and equally aware of how little they know about how to actually get there. Unfortunately, the vast majority of technical founders fall into group three, which I’ll refer to as the “sleepwalkers”. These founders are blissfully unaware of what true GTM excellence looks like and feels like. Invariably, however, they are blind to their own ignorance. It is a classic case of a painful blind spot — they just don’t know what they don’t know. How could they?
No one sleepwalks knowingly. The reason this is tricky is that no founder ever thought that commercial success was not important. No founder ever would willfully do less than he or she could to achieve commercial success — but they end up there because they don’t know what could be done. Again, how could they? They are technical people and — in many cases — they are having just enough commercial success that they convince themselves that they are on a steep enough learning curve that things will work out. This post — and this message — will fall on deaf ears 90% of the time because most founders will read this and decide that they are in group one or two. Very very few will admit that they are in group three.
The journey to success. Without exception, everyone starts in group three. Everyone (including the most experienced and hard-bitten sales professional) begins their career as a sleepwalker — unaware of what great looks like and therefore unable to figure out how to get better. The first step is to graduate from sleepwalker to humble. The good news is that as soon as a founder realizes that he or she is a sleepwalker — truly internalizes how unaware of commercialization they are— they are no longer sleepwalking. The graduation from group three to group two by embracing humility is the critical step that unlocks the rest of the journey. From there, the progression to all-rounder is feasible and — even — likely. Once a founder who is obsessive about achieving GTM success achieves humility, the natural desire is to iterate until greatness is achieved. This can take many forms, but it usually involves constant iteration and experimentation, as well as a constant search for truly outstanding (top 1%) GTM talent to bring that DNA into the organization. That sort of organizational DNA transfusion is the best (and probably the only) way for an outstanding technical founder to become a truly all-arounder. A word of warning: It’s very easy to believe oneself to be humble. Being genuinely humble is far harder.
Don’t have faith. Have a plan. Far too many founders remain stuck in group three, sleepwalking their way to middling GTM success. This is the real reason so many companies get stuck at $1M ARR, $2M ARR, even $10M ARR. Ask any Series B investor and they will tell you that going from $10M ARR to $100M is extremely hard and very very rare. The fate of the vast majority of companies is to get stuck — and the only way to avoid that is to continually obsess about achieving top 1% GTM performance. Regardless of your current revenue levels, customer satisfaction, number of github stars, daily usage, or whatever other commercial success metric you track, the most likely outcome is that you will get stuck. Ensure you are in group two by being constantly paranoid and exceedingly humble. Seek out the top 1% talent and advice you need to maximize the odds you can get your business on a pathway of continued growth. Though it may sound harsh and painful, the best advice is to not have any faith in what you have achieved thus far. Instead, build a plan for continual improvement of the GTM machine and the human DNA that is building it.
GTM will almost always triumph over product. One way to understand this dynamic is to consider the scenario of a market with two competitors, Alpha and Beta, both selling essentially the same product to the same market. Alpha has a good product and a phenomenal top 1% GTM team. Beta has a phenomenal top 1% engineering team and a good GTM team. In the early phases of founder-led sales, Beta might rack up some wins with some customers who can see that Beta’s product is superior to Alpha’s. But over time, Alpha will crush Beta nine times out of ten. As time passes and revenue scales, the impact of GTM relative to product/engineering continues to increase. Achieving 2–3X revenue growth multiple years in a row is extremely hard. Beta will do well for a while, but Alpha will ultimately catch up and leave them in the dust.
The inverse analogy. For the technical founder reading this and wondering about how to actually do this in practice, I’ll offer the following analogy. Imagine a non-technical founder/CEO who is outstanding at sales. She knows all the top customers personally, has tons of experience scaling up a GTM operation, can raise unlimited capital, and can sell ice to Eskimos. Now imagine she has a great idea for a unique technical product whose time has come. She can do everything but actually build that product. On the technical side, she needs help. The path forward is, of course, blazingly obvious: this CEO needs a technical co-founder, a CTO, someone who can fill in the blindspots and manage the technical/engineering/product aspects of the company from A-to-Z. There is no way that the CEO could herself develop that expertise base in a reasonable amount of time. When the gap is technical, the answer is obvious. When the gap is GTM, however, it’s harder to see because most of us are still sleepwalking. We think we can perform the function (or learn fast enough), but the reality is we probably can’t.
Developing a top 1% GTM machine is just another engineering problem, but with a completely different and unfamiliar set of inputs and outputs. Here, the inputs are people (GTM team members), sales enablement, positioning strategy, pricing, marketing tactics, etc. The outputs are ultimately psychological: a human decision to buy something. The goal is to tune all the inputs to drive the purchase decisions at as high a pace as possible. The process of personal growth from sleepwalking to humility to being an all-arounder appears to be easiest for technical founders who embrace GTM as yet another (albeit unfamiliar) engineering challenge that they can struggle with and master.
The role of venture capital in engineering GTM success. Our role as VCs for highly technical founders is to guide them through the process of personal growth I’ve laid out above. We’re basically selecting for founders that are in group one or group two, but sometimes we also work with founders who are just about to transition out of group three. In all cases, humility is something that can be expanded. Humility is like an empty space that can — over time — be filled with greatness. This is particularly true for brilliant technical founders who lack GTM experience. The more humility we can build around GTM excellence, the more potential for GTM excellence exists. At Angular, we are blessed with an outstanding network of GTM advisers and a ton of experience helping founders navigate that journey. Like any journey worth undertaking, it is not an easy one. The hard part isn’t explaining what an ICP is. The hard part is waking a sleepwalker.
I’ll return to where I started: For technical founders, extraordinary success is highly correlated with how obsessive a founding team is about developing an extraordinarily efficient GTM machine. This insight is, however, a lot less obvious than it might appear because — especially for technical founders — it’s extremely unlikely that a first-time founding team knows what a top 1% GTM operation looks like. Most founders, sadly, remain blissfully unaware of the gap between their understanding and what it would take to achieve greatness — and that is what ultimately leads most companies to get irretrievably stuck on the journey to scale. To achieve top 1% commercial success (and VC returns demand that), technical founders must cultivate the humility that will ultimately enable them to grow into all-round athletes that can go all the way.
If this is you, let’s talk.
