Advice to First Time Founders (and Maybe All Founders)
When I was a first time founder 12 years ago, I received a lot of bad advice. Here’s the advice I wish someone had given me when I was first starting out:
Short Version
1) Take all the advice you receive with a grain of salt — including this. No one will know how to build your business better than you.
2) This is YOUR company. Not your investors’ company, not your employees’ company, not your customers’ company. Don’t make decisions to please any of these other people.
3) The vast majority of startups pivot or evolve in some way. No matter how good your initial idea is, you will almost certainly learn a lot more as you get out there, experiment, and engage with potential customers. Keep an open mind, be cautious with your cash, and expect that you’ll learn things along the way.
4) Sell something as early as possible. Startups that ship tend to keep shipping. The longer a company goes without shipping, the higher the chance it never will.
5) If this is your first startup, choose an easier product — something you can get out fast. Investors invest in traction, so you need to get that traction as quickly and inexpensively as possible. If you burn all your money and don’t have any sales traction, you will have a very hard time raising more money.
6) Your biggest problems will be people problems. The scarcest resource in your startup is your own mental energy. If you are up at night thinking about issues with your team members, that sucks your energy away from thinking about how to propel your company forward. Cut problematic people ASAP.
7) Great things are built by small teams of exceptional people.
Longer Version
1) Take all the advice you receive with a grain of salt — including this. No one will know how to build your business better than you.
Certainly, listen to advice; some of it will absolutely be helpful. But always combine it with your own knowledge and make your decisions based on everything you know. Never take anyone else’s advice as gospel.
The tendency for a lot of young (and/or first time) founders is to believe that all these impressive and experienced people out there know more than you do, and can provide special knowledge that will make your company successful. They don’t, and they can’t. You think about your business 24/7/365. These other people will think about it for a micro fraction of that time. They also don’t have the same incentives, nor care as much as you do.
In particular, executives from bigger companies are very good at speaking in a way that *sounds* smart and authoritative. Although what they say sounds good, it’s almost never actually helpful for an early stage startup. Startups are messy — you have to flail around and try a lot of things to find your way. The politics and polish that matter in a big company, don’t matter in a startup.
Same for VCs. You will encounter VCs that have had past success and seem very smart, and they will give you lots of advice about how to run your business. The reason they do this is because capital is a commodity (every VC provides the same product) so VCs all feel like they have to compete based on “value add.” The advice they give you is their attempt at showing you how smart they are and how much value they will add. But their priority here is more about sounding good (and selling you), than actually being good.
When I was a first time founder, I made the mistake of spending a lot of time with these types of people, and it all ended up being a huge waste of time and energy. Looking back, I wish I had spent that time just trying things, building, and engaging with customers. Even worse, I felt the need to make these people happy by acting on their suggestions. Which leads me to…
2) This is YOUR company. Not your investors’ company, not your employees’ company, not your customers’ company. Don’t make decisions to please any of these other people. With every decision you make, think to yourself: do I believe this is the best decision for MY company?
I encountered multiple crossroads in building my startup where I thought the right decision was X, and someone else — an investor or a team member said, “no, you’re wrong, we should really do Y.” To please these other stakeholders, multiple times I did what they wanted, and I really really regret it.
Maybe they were right; maybe my plan was wrong. But the startup ended up failing, and I always wonder: would it have been successful if only I had been stronger, overruled these other people, and done what I thought was right?
Always do what YOU think is right. It’s your company. You are the one that will have to live with the outcome of the decisions you make. You will absolutely make mistakes, and that’s ok. You will learn from them and get better. But the worst thing you can do is pass the buck to others. They won’t lead your company better than you will, and you are the one that will have to live with the consequences.
Listen to the advice you receive, but then make the decision yourself — not for anyone else.
3) The vast majority of startups pivot or evolve in some way. No matter how good your initial idea is, you will almost certainly learn a lot more as you get out there, experiment, and engage with potential customers. Keep an open mind, be cautious with your cash, and expect that you’ll learn things along the way.
The worst thing that can happen is you spend all your money developing your initial idea, to only discover a better opportunity just as you are almost out of money. Spend slow to start. Once you are certain of your product/market fit — that’s the time to lean into it and increase burn.
4) Sell something as early as possible. Startups that ship tend to keep shipping. The longer a company goes without shipping, the higher the chance it never will.
Lots of founders get stuck in development mode for too long, thinking the product needs to be perfect for a customer to consider using it. This is also the sign of being in a bad market — one that is saturated and competitive, where there are lots of other polished products you have to compete with. If the product needs to be perfect to sell, you’re in a bad market.
The very best markets are ones where the customers need a solution so badly that they will rip the crappiest, most unfinished product out of your hands. The way to find these markets, where customers are desperate for a better solution, is to constantly experiment — pushing the most basic, unfinished products into the hands of a variety of different customers — and seeing how they react.
In fact, in some markets that are particularly desperate, the customers will actually pay you to build the product for them. Non-dilutive funding!
The best markets feel easy.
5) If this is your first startup, choose an easier product. Investors invest in traction, so you need to get that traction as quickly and inexpensively as possible.
Remember: Elon Musk didn’t start with Tesla and SpaceX. He started with Zip2, where he was able to build and launch the initial product himself and get traction before he raised money. He used his profits from selling Zip2 as the seed capital for X.com (which later merged to create PayPal), and then he used his profits from PayPal as the initial funding for Tesla and SpaceX. If he had started Tesla/SpaceX first, no one would have given him money.
You need to find your Zip2 before you try to create your Tesla/SpaceX.
6) Your biggest problems will be people problems. The scarcest resource in your startup is your own mental energy. If you are up at night thinking about issues with your team members, that sucks your energy away from thinking about how to propel your company forward. Cut those people ASAP.
It might be painful in the short term; maybe you need that person. But I promise you, in the long run, you will be thankful to have gotten rid of them. You will find more great people. You will never get back that energy that was wasted on people problems.
As they say: far more startups die of “suicide” than “homicide.” I.e. your problems from within are much bigger problems than anything on the outside — like competitors. Solve your inside problems first, and you will already be far ahead of 90% of startups.
7) Great things are built by small teams of exceptional people.
Especially in the pre-product/market fit phase, there’s an inclination to believe “if I just hire this person, they will solve my problem.” It’s very easy to hire more and more people, thinking that if you get enough people around you, they will somehow work together to build a product, sell it, and make your company successful.
This never works. Only you can figure out what to build and how to sell it.
I have never seen a big team come together and make that initial leap from zero to one. It’s not only that they are not able to do it. It’s also that a big team will distract *you* from spending *your* energy on finding product/market fit too. You will end up spending all your time managing people and their problems, rather than talking to customers and building.
Product/market fit is a tricky thing to find, and there is no straight path to find it. You just have to get out there, talk to customers, build, and experiment.
The startups I have seen reach outstanding product/market fit have all been small teams of highly motivated, committed, exceptional people.
