2016 is Over: Some Lessons for Founders

“And so this is Christmas, and what have we done”. So goes the famous song which many have heard.

I have engaged with hundreds of entrepreneurs over the past year (and invested in some). I thought I would try to put myself in their shoes and offer some perspective on what they need to be mindful of as they step into the entrepreneurial journey in a somewhat difficult environment.

A. Should I do a startup: Yes the funding market is tough, but that does not mean that you should not pursue your startup dream. The only caveat is: don’t do it just because… Ask yourself: “Am I solving a burning problem, or is it more of a fashion of the season problem? Have I validated the problem by talking to enough people? What makes me capable of solving this well relative to others? Would I do this regardless of funding, i.e. do I care enough to dedicate the next 5–7 years of my life to doing this not knowing when the rewards may come?” This is not the time for frivolous pursuits. Do not pursue funding as your first goal, rather start to seek the beginnings of product validation and traction.

B. Understand your Co-Founder: Its better to not bring on a co-founder rather than have someone on board just because… Do understand what are the complementary skills between the two of you and whether in combination you do carry a formidable enough skill and passion to begin cracking the problem. Look for signs where there may be a bad fit and think of severing ties earlier rather than later and fixing the problem. In this segment, do ask yourself: “Do I have the vision and inspiration to get good people to work with me?

C. People skills: I see too many founders who do not have any people, leadership skills and that is compounded by a lack of self-awareness in this area. Its okay if you are not a great manager from day one, but are you able to build trust, passion and a shared vision? If that’s not happening soon, cut your losses and go find a job. I am inclined to advise folks to consider working a bit for a startup prior to starting one, just so your personal calibration on what to expect is clear. Do seek mentorship, read up a lot on this area in parallel

D. The CEO title does not mean much: It does not really matter whether you are the CEO or you call yourself that. Remember the job of the leader in the business in the early stage is to be completely focused on validating the problem and intersecting that with the product iterations. This job is not to be delegated or outsourced. I have seen some founders use the ruse of CEO to over-delegate at the early stage, resulting in them not understanding customers early on and losing the plot forever.

E. Investors may not know better: As a startup founder, you are not insulated from the volatility of investor thinking which blows hot and cold with overall market sentiment. In the case of party rounds, you may have multiple voices that render opinion. You need to be in the trenches, closest to the problem and learn to stand your ground as you will always have more to lose (based on lost opportunity) than a portfolio investor.

I can be reached at deepak@wehventures.com. Happy to connect to discuss seed stage propositions or with potential co-investors.