4 Principles of Successful Startups

An early-stage startup only needs two things: sales and development

Preston Badeer
Jan 23, 2020 · 4 min read
Image: MirageC/Getty Images

ew things are certain when launching a business, but there is a consistent strategy that I’ve seen used in highly successful startups.

It took me a while to understand the nuances of this strategy, when it works and doesn’t work, and its many different forms. But over the years of founding, mentoring, and working inside of these companies, I’ve come to recognize four principles core to successful startups.

Principle #1: Sales + Dev + Nothing

A friend of mine, Nate Watson, CEO of Contemporary Analysis, once told me that an early-stage startup only needs two things: sales and development. I’ve seen this proven over and over again.

Any other roles you’re hiring for, getting interns to do, or trying to do yourself are unnecessary.

Sam Altman of Y Combinator fame puts it this way:

If I had to distill my advice about how to operate down to only two words, I’d pick focus and intensity. These words seem to really apply to the best founders I know.

They are relentlessly focused on their product and growth. They don’t try to do everything — in fact, they say no a lot (this is hard because the sort of people that start companies are the sort of people that like doing new things).

“…relentlessly focused on product and growth,” or as I’m calling it, development and sales. If anyone knows what a good founder looks like, it’s Sam Altman.

What doing this wrong looks like…

It’s very common for founders to try to outsource tasks as fast as they can by bringing in help, like offloading finances to a CFO. This CFO now has to work full time doing what only took a small part of another person’s time.

To stay busy, they start working on more advanced aspects of the company’s financials. “Great!” you think, “Now we’re getting ahead!” Until suddenly your CFO needs questions answered, emails read, meetings attended, all in the name of “getting ahead” tasks that probably don’t need to be done yet.

This is just an example, it depends on your company, team, and situation. The point is simple: Stay focused. Sell only what you can build, and build only what you can sell. I see this sales-first focus over and over in fast-growing early-stage companies.

Principle #2: Stabilize

Get a job! Seriously, don’t go full time at a company with no revenue. Keep your job or go get one.

Get your business off the ground in whatever time you have left, your company will survive longer because of it. Running full speed for six months only to quit from lack of sales or funding is much worse than running at partial speed for 12 months.

Go full time once you have funding or some sales under your belt, you might not even have a great product-market fit yet, but you should have sales.

Getting revenue will give you confidence, motivate your team, stabilize your company, and eventually stabilize your personal finances.

Principle #3: Pitch or don’t pitch

Pitch decks can either be your most powerful ally or a black hole that absorbs your time, money, and energy while giving you nothing in return.

Pitches are a means to an end, whether it’s getting into an accelerator, getting funded, or getting partners and mentors.

It’s easy to quickly get lost in the deck, focusing on perfection and forgetting about the goal of the pitch itself. Build the deck for a specific audience and stay focused on the goal.

If you are focusing purely on fundraising or getting into an accelerator, make the deck your sole focus until you complete it. Build it, deliver it, and move on.

If you’re only considering fundraising or an accelerator, don’t spend any time on a pitch deck until you’ve made a decision. Get off the fence first, focus either on sales or building the deck.

Principle #4: Quality time over quantity of time

If you’re a solo founder, primary shareholder, or even a leader within the business, then you’re a major part of the company. If you’re solo, then for all intents and purposes, you are the company.

If this is true, then your health is the company’s health and your failure is the company’s failure. Believe me, your co-founders and employees know this already.

Working late, sleeping very little, and coming in early the next morning doesn’t just affect your output, it affects the company’s output. Eating based on taste instead of energy output doesn’t just affect your focus, it affects the company’s focus.

I’m not talking about “the company” as in the employees around you. I’m talking about the actual business. Revenue, churn, profitability, growth — however you measure your business. Those metrics are all affected by your health and it’s not vain to admit it. It’s necessary.

You can’t afford to focus entirely on getting healthy or entirely on building the business. Instead focus on efficiency: staying productive while being healthy. Maximize how you spend your time, not how much of it you spend. The best founders I know are masters of this.

The inspiration for this post was as a follow-on to the list of mistakes I wrote about in this post:

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