Friday, March 29, 2024

Top 4 things that are non-obvious for a first-time startup founder

Every startup company and every startup founder is unique and each startup journey follows its own path. It turns out, though, that many of the basic challenges you face, as founders, are pretty similar.

Here are five things that are non-obvious for a first-time startup founder:

1. Nobody makes real progress on a startup until the startup is a full-time job

It’s pretty common for you to get a phone call from a friend-of-a-friend, a founder with a new startup, and to hear that the founder has a full-time job at a big company, and that the startup isn’t really making any progress. Often, the startup actually isn’t all that new; the founder has been working on it, nights and weekends, for a year or more.

This is scary, and hard advice to follow. It’s not necessarily easy to say why it’s true that you can’t make progress part-time. Empirically, though, the evidence is clear. It is hard to find making a significant progress on their startup while they also still have a “real” job.

2. Don’t worry about competition

Founding a company is pretty much the same thing as being obsessed with a product and a market. It’s natural to know a lot, and to obsess about, what other people are doing that’s similar. First-time founders usually worry a lot about competition. They don’t want to talk to other people about what their startup is doing, because they think competitive companies might learn something useful. They spend a lot of time thinking about complicated partnerships or specific product development plans that are motivated by a desire to outmaneuver competitors.

It turns out that it’s almost always a huge mistake to spend precious time and brain cycles thinking about how to beat the competition. Startups fail for lots of small reasons, but mostly for two big reasons: they don’t make something that people are willing to pay for, or they don’t have a cost-effective way to tell people they exist.

3. Tech startup success depends surprisingly little on technology

For a long time a technology startups as a company have been particularly good at it and focused on engineering. But it turns out that engineering is the fourth or fifth most important competency of a tech startup.

Startups first have to make something people are willing to pay money or attention for. Then they have to let people know about the thing they make. Then they have to get very good at growing and accelerating everything the company does. Technology helps with all of these activities. But, by the same token, all of them are fundamentally about something other than engineering itself.

If you love writing code or designing circuit boards, it’s worth knowing that starting a company is a very bad way to keep doing those things. Founders usually have to step out of engineering roles as soon as a company gets a little bit of traction so they can focus on helping the company sell stuff, and then scale.

4. Fire faster

This is the hardest of these lessons to learn, for almost everyone. But it’s really important. Not everyone you hire will work out. And if you take too long to fire people who aren’t doing their jobs you do real damage to your team and your company.

Firing people goes against almost all the very good instincts and values that founders have. Founders are optimists. They think problems are solvable. Founders believe that working hard and caring about what you means that anyone can do pretty much anything. Moreover, they tend to take responsibility for fixing things.

But it turns out that unproductive employees are amazingly, unbelievably toxic to the culture and happiness of a small team. As a founder, the most important resource you have is cash to make payroll. But the second most important resource is the happiness and alignment of the people who come to work with you every day.

You owe your team the best possible work environment you can figure out how to provide. That means you either have to fire people, when they aren’t working out, or you have to fire yourself so that someone else can make those decisions for your company.

If you can do these things, you’ll put yourself in the best possible position to succeed as a founder and an entrepreneur.

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