The Five Secrets of Startup Success
“Everybody fights, nobody quits” — Johnny Rico, Rico’s Roughnecks
I recently gave a talk at the Startup Leadership Program “Seeking Funding” night in Palo Alto (you can find my slides here). I spoke for a bit about my own journey from startup co-founder to having two successful exits and wanted to share with my broader audience. There are five things that that made our startup successful:
- Blood, sweat, and tears
- Ability to argue passionately but commit to solidarity
- Make Your Own Luck
- Persistence and Determination
- Prioritization and Work/Life Balance
Let me be honest — while we did in fact do these things surprisingly often and consistently — it took me years to realize that these were fundamental to our success.
Let’s take a deep dive on each.
Blood, Sweat, & Tears
Blood — It is going to cost you a lot personally, physically, intellectually, and emotionally. You are going to miss out on a lot of salary, you are going to pay your employees before you pay yourself, and you are going to pay your employees more than you pay yourself. Startups seeking venture funding are not a lifestyle business, so be prepared to put way more into the company than you get out of it. If you are bootstrapping your business like I did, then prepare for an even rougher ride.
Sweat — You will wish there were only five working days per week and eight working hours per day. You must have a strong bias toward action and avoid analysis paralysis at all costs. Remember, when in doubt, do something! Facebook had the startup mentality right — move fast and break things(but unlike Facebook, realize that philosophy does not work once you have attained significant inertia).
Tears — You are going to fail, a lot. If you are not failing, then you are not trying hard enough. But every failure needs to drive you crazy, every punch to the gut needs to make want to keep going, and when you get tired — that is the time to sprint.
Ability to Argue Passionately but Commit to Solidarity
You have to have the mentality of a pit fighter (against your competition, not your team), the compassion of a nun, and the wisdom of a sherpa, in order to inspire those around you. That means you need a team around you, and if you want to succeed, you need to build up a management team of equals/co-founders. You are looking for people who are individuals but team players, opinionated yet respectful, highly intelligent yet not egotistical.
Yes, you need people to just get work done, but you absolutely have to create a team of equals around you who are going to challenge you every day. You need to hire your potential replacement at least one out of every three people for a startup (ok, this is an arbitrary number, but I’m making a point, not proving a theorem). That means even if you are not hiring for a team lead, director, or executive, you are hiring people with that potential.
Finally, and without equivocating, you must be able to argue passionately but leave the room unified in decision, compromising and building a consensus from different perspectives. If you can’t do this, quit now. Don’t give me the “but Steve Jobs didn’t compromise” line — he was the exception, not the rule. The other 9,999 founders who acted like jerks are now unemployed and their startups lay in ruin.
Listen to your executive team, and realize you are never always 100% correct, just as they are never always 100% wrong. Your job is to figure out what percent is right vs wrong and build a consensus — this is a dilemma, after all, not a problem w/ a single right answer.
Furthermore, if you find that are always 100% correct, then either (a) you have a serious ego problem or (b) you need to fire everybody in that room immediately and hire different people who are going to argue with you.
If it helps, this of it this way. Enthusiastic debates strengthen your position. Your team’s collective cranium is your Generative Adversarial Network (GAN) that is probing weakness against your proposed approach. Through this attack, you are able to fortify your position before before you go out to build it and test it, thereby discovering your performance envelope and next steps.
But you are only trying to make something that survives the initial onslaught, not something that is 90% correct the first time out. When in doubt, iterate quickly — the waterfall design approach is now buried with the dinosaurs.
But hash it out first, come out stronger for it, and you have to be 1000% on board when you leave that room. If you wage a political battle and try to undermine your colleagues after you leave the room you are a monster and need to get out of running a company. This is all said assuming the argument inside the room was competent and all sides were vetted/considered, and everybody got a little of what they thought needed to be done, and not just a bone.
Finally, remember — every success you achieve is because you have a good team. Every failure is because you screwed up.
Make Your Own Luck
First of all, luck is real, and you need to find it.
Sometimes people truly are really very lucky, they are in the right space at the right time, they literally win the lottery, or they meet someone with way more money than brains/patience/time. Good for them, let them have it. Most of the time, you have to make your own luck.
Luck is really the culmination of every choice you made previously that put you in the time and space that allowed you to recognize and win the opportunity before you. For instance, yes, I happened to be at Stanford developing technology in the lab at the exact same time the Navy was trying to bring digital video to UAVs. But before that I had to get into Stanford, which means I had to get good grades and get even better recommendations. I paid for undergraduate and graduate school myself (until I got an RA position, that is). I worked full time while in college. This put me in a position to be at Stanford and meet my co-founders and take the opportunity to start a company. Yes, it was lucky I met Paul and Chad, but I put myself in that position to meet them.
You also need to be almost precognitive, but this just means you think ten moves ahead. Wayne Gretzky is often held up as an example of not playing against the play on the field, but against the play five seconds from now. You need to develop the same level of intuition and ability to read the trends in the market and your customer base way before they start telling you about it — because if they are telling you, they are also telling your competitors. So you have to position yourself there first.
Furthermore, the margin of skill required is isn’t as wide as you think it is. My favorite analogy comes from tennis. An elite player ranked #1 in the world will win 90% of their matches, but only 55% of the points. That means the difference between the #1 player and the #200 player is a 5% performance margin. Think on that for a while and how it applies to the way you approach business decisions, particularly in trying to never settle less than the “100%” right solution.
Persistence and Determination
At the risk of repeating myself, I cannot stress enough the importance of everybody working hard and not giving up. One of our favorite quotes around the office was “Everybody fights, nobody quits” from Starship Troopers.
Or consider this observation from Calvin Coolidge: “Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent.”
You must show these traits each and every day that you come into the office. You are never going to quit, you are never going to stop working, you are never going to accept the status quo (even after you disrupt it), and you are going to be harder on yourself than anyone else around you.
Prioritization and Work/Life Balance
I hate to be the bearer of bad news, but this is a truth every successful founder knows — forget about work/life balance being what it means to everybody else. You have to define what that means for you. Be honest with yourself, your partner, your family, and your friends. It is just not going to look like what they consider to be balance.
You must make your company your #1 priority, and you will have to figure out what works. That means sometimes it is going to seem like you are ignoring your others for weeks on end, and that is because you are going to spend that week between Christmas and New Years focusing only on them.
In other words, there is going to be lots of yin, not a lot of yang.
Also — this is on you! Don’t expect your entire company to have the same definition of what work/life balance means. Don’t even demand it. They get to go home early. You do not. And when you find the right management team/co-founders, you will all burn the midnight oil together.
I found achieving balance on a daily balance to be impossible (and kudos to those of you who can do it, I cannot). If that means four weeks on work and one week paying attention to the others in your life, then so be it. But make it work, and most importantly, be honest with those around you and make sure to set expectations appropriately.
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This article originally appeared in TheEntrepreneurd.
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