9 Important Lessons for Startup Founders
In the following post I summarise 9 startup lessons for founders. On my drive to work I was listening to the “Masters of Scale” Podcast by Reid Hoffman, founder of LinkedIn. In this episode he shares his lessons what is important for startup founders. Here my takeaways:
1. Rejection is unavoidable
At the beginning of your journey customers, investors and friends will tell you that your idea sucks. As a result, you need to learn how to cope with rejections. You’ll hear “No” frequently. The best ideas are often contrarian and people will have initially difficulties to see what you see. When it comes to raise money you want to hear clear “No’s” as opposed to the nice sounding “Maybe’s”. Obviously we all aim for “Yes” every single time we tell your story.
2. Hire the best people possible
The most valuable resource of your company are the people. Therefore, hire people which are smarter than you and don’t think like you. Diversity of thought is important but also difficult for most as many strive for a harmonious work relationships vs. high productivity environments. Curiosity, discipline and intrinsically motivated employees will solve the toughest problems.
3. Early in your startup do things that don’t scale
The AirBnB founders visited many of their early customers and took photos their apartments. This way they learned what their early customers liked about AirBnB and what they could improve. As a result they tweaked the design of each customer touch point so that customers had a delightful experience.
4. Raise more money than you need
VCs tell you the opposite but Reid reasons that you’ll run into unforeseen problems and opportunities. If you don’t have enough cash in the bank you might need to raise more to overcome the problems or seize the opportunities which will take a lot your valuable time. Furthermore, if you identified some form of product market fit you need money to fuel the growth.
5. Release products early
If you are not embarrassed by your products your released too late. This works well for software products where you can iterate your way to a better products. In contrast, if you bring a bad physical product to the market this will destroy trust of your customers. Having said that, Reid values speed and if you don’t release your product you will not get feedback and learn quick enough. A quote you might have heard from Hoffman states:”A startup is like jumping off a cliff and assembly a plane on the way down.” If you are not fast enough you die.
Zuck had an early mantra at Facebook:” Move fast and break things.” But nowadays even Zuckberg calculates first the cost of breaking things before actually breaking them.
In Switzerland, we value quality probably more than speed. For instance, many founders I talk to are afraid the release their product too early. They fear that if released too soon it might destroy trust of their stakeholders.
On top of this, we need to unlearn of being a perfectionist. Because, a good student is not necessarily a good entrepreneur. Therefore, startups need to learn quickly what customers value and what not. That is not always easy as customers can often not clearly articulate what it is what they really desire. Experimentation is an inexpensive way the only way to spark customers imagination.
6. A wrong decision is better than no decision
The US Air Force has developed the OODA Loop: Observe, orient, decide, act. Successful startups are fast in making sufficient good decisions most of the time. Above all, don’t strive for perfection, everything above 80% right decisions will do.
7. Make and break plans
The only constant is change. Andy Grove, co-founder of Intel, as a result, claims that the process of planning is valuable but the plan itself not. Be willing to kick your plan in the bin if you see the world has moved on.
8. Create a winning company culture
Reed Hastings, the founder of Netflix has months where he doesn’t need to make any decision. Which I never heard any CEO claiming. At the beginning of your venture you can talk to all the people all the time but if you company grows you can’t participate in every meeting and take all decisions yourself anymore. As a result, you need a system that allows people to make the right decisions. Consequently, clear and transparent values are important for future or new employees to have a good feeling what is valued and what not. Creating a winning culture sound like a logical thing to do but is far from trivial task. Here a post on how to spark innovation in your organisation.
9. Have grid and move forward
Despite all the difficulties you experience as a founder, above all, don’t give up. Show grid and power through difficult times. Talk to people for advice and listen to trusted people. Find the most efficient way forward.
At Matka we love technology but value even more human interactions. For startups to succeed you need people who support you without the expectation for anything in return. We talk everyday to startups and help them overcome not only technological challenges but also have an ear for their smaller and larger worries. We are inspired by founders which imaging a better world and we are proud to be part of their journey.
If you have a vision and didn’t find a technical co-founder yet we want to hear from you. We help you to move forward and come your vision one step closer.