Things I learned while building my first startup
(Originally posted on medium)
It’s been the most interesting time of my life. For what it’s worth, here’s what I think I learned in a year of building a venture-backed startup with 15 amazing people and a product used by companies all over the world.
Cheating product research
Making a good product is hard. You can’t fly by instruments, because at first, there aren’t any. You can get a basic sense of direction by building something you’d use yourself. This way you already have some idea of what’s missing and what would be awesome to have. Our major de-risking trick was to build something that we knew at least one person would buy: ourselves. I know it sounds like chickening out of product research, but hey, startups are hard so I’ll use any unfair advantage I have.
Far-sightedness versus near-sightedness
I was disappointed to find out that customers don’t buy visions and frankly they don’t give a damn for your revolutionary ideas about software. They buy things that work today, meaning features and immediate results. So you must take small steps along the path customers carve for you if you want to be relevant. But you can’t let them lead you completely, you still need to see far ahead and nudge everything towards a destination that exists only in your head. This is a hard, schizophrenic, mind-bending design process. One of the hardest things in my life today is the constant choice between being far-sighted for one thing and near-sighted for the other.
Growth versus optimisation
The geek inside me wants to optimise. It’s a comfortable space. Have something, tweak it to make it better. Be smug about it. When that something is 100 signups, best spend your time getting another 100, instead of improving conversion by 0.5%. In the beginning, growth is the only thing that matters.
Measure everything. You never know when it’ll come handy. But it’s easy to fall into the nerdy trap of trying to interpret everything to soon, and improve every single metric. This isn’t helpful. Find out the one thing, the one metric, that impacts your growth the most and throw all your weight on it. Every three months, re-evaluate what is the one thing that matters most. With all your team. Features, marketing, time, every single person in the team pushing the biggest lever for growth. You’re not strong enough yet to be pushing two levers at once.
I learned to not shy from asking people to pay for our stuff. If you think they won’t, then you’re building the wrong thing. Build something people want to buy. When you find a few of them, make them very happy. It should be bloody obvious, but in the startup twilight zone it isn’t, and in your early days of despair you’ll take anything for “traction” even if it’s a random bunch of freeriders sending you in the wrong direction. Ignore them and listen to the folks with credit cards in their hands.
Selling versus explaining
Some people think I’m a good salesman. I’m not. I just cheat my way out of having to sell. Here’s how to cheat in sales: (1) Make something awesome that makes a ton of sense, and (2) Explain how it works and why it makes sense. Tip: the first part is the tricky one. All other methods of selling are too fragile to build an entire company upon them.
A self-evident future
The best way I’ve found to explain what we’re doing to investors is to walk them through a self-evident vision of the future. Help them think about why the current status of our market cannot remain the same in 5 years, and what it will probably look like when it changes. Then I only need to show them that the future looks remarkably like what we’re building today. How do you make your vision self-evident? If you ask this question, then your problem is not the pitch, it’s that you don’t know why you’re doing what you’re doing.
Inane argument killer technique
VCs will find a million ways to explain to you why this will never work, or it won’t work so well, or it will work but it won’t be scalable, while insisting that it must have “a mobile strategy”. I have discovered a technique for insta-killing these inane discussions. It’s called “the graph with actual customers and revenues that grow faster every month”. In my experience, until you have a (real) graph like that, don’t even bother. When you do, you’ll never grow tired of hearing “please go back to that slide”.
Startup misery folklore
80-hour weeks, all nighters, eating ramen noodles, maxed out credit cards, sleepless agonising nights tortured by 3-week runways.. I say that’s bollocks. Build a happy workplace, strive to be efficient, have a sensible business model and pay your people enough to live comfortably. What makes you a startup is that you’re innovating and building something from scratch. Having a shitty lifestyle is just a shitty lifestyle no matter how much hipster-sauce you dip it in.
No compromise on people
You want to disrupt an industry by going up against companies whose stationery budget for the year is bigger than your seed funding. You’re not going to do it with average people, so this is one area you can’t compromise. Making the company attractive to bright folks, actively searching for them and inspiring them to join and stay is probably the single most important job of a startup CEO. If you get that right, everything else becomes so much easier.
Doing things differently
Don’t. There are so many things to do, and if it’s your first time running a company, it’s tempting to do it “my way”. Formulaic aspects of running a startup are formulaic because they work well this way. By all means, you need to do some things differently, but differentiation has an impact if it’s intentional, calculated and in small, precise doses. Doing everything differently looks more like you’re doing random shit and you have to ask to ask yourself if that’s indeed what you’re doing.
Drawing first blood
Investors, advisors, employees, your network.. if you’ve done a good job they are all people that can and will support you, put more power behind your every thrust. However, you have to draw first blood. Take the first risk, open the first door, sell the first client, articulate the vision, ask for what you want, be on the frontline. You’re the poor guy with the machete at the head of the expedition clearing up a path through the jungle. Don’t expect anyone to do this for you or on your behalf.
Strength and determination
Running a startup is a constant struggle to persuade all sorts of people to ally with you and trust you. Investors, customers, employees. They don’t care if you’re having a “dark hour” or you’re being crushed under the burden. Nobody cares to ally with the weak and the wounded. No matter what, you must appear strong, determined, going places. This can be really hard sometimes, so it helps if you’re a little crazy-determined to start with.
I learned how to say no. It’s a survival skill.
Yes, it’s hard, but so are all amazing and rewarding things and it’s only possible if you enjoy it. And I am enjoying it, dammit. Every moment of it. Even the really crappy ones.