Hindsight is 20/20. When you look back on any project or endeavor, you get a better idea of what was important and what wasn’t.
The same is true with startups. After working on a business for a year or two or more, you have a better idea about what was worth worrying about and what wasn’t as big of a deal.
Since entrepreneurs are the most qualified to give other entrepreneurs advice about starting a business, I decided to ask 25 entrepreneurs about the number one thing they wish they’d known before founding their first startup. Below is a collection of this advice. It’s invaluable whether you’ve recently started a business or you’re looking to start one. Enjoy the post, and leave a comment if you have a question or a response.
That you’re not supposed to know how to do anything right, and that’s o.k.
It wasn’t till I sold Spheric and started working on Flowtown that I realized that you didn’t need to know how to do anything in the beginning - you just needed to get good at finding the right answers quickly. If you focused on learning, getting the right advice, in near real time - then you could take on any challenge. It’s quite liberating once you realize that.
I wish I knew how to price test. When we first released the product we based pricing based off of what we wanted to charge, versus optimizing price to achieve maximum revenue and profitability.
At one point in time our customer base requested a lower pricing option. We did it because their was a high demand for it. Although it increased the total number of signups, it decreased our overall revenue. If we knew about price testing during that time, we wouldn’t have made this big mistake.”
I wish that I knew how difficult it is to acquire a customer, get them to pay for your product and believe it’s as magical as you think it is.
Most startup founders count on customer acquisition as a foregone conclusion, yet it’s the number one thing that keeps them up at night for the first 2-3 years if not longer. Every part of that process is deeply challenging for a company. It also doesn’t happen quickly.
A few tips on how to navigate early stage customer acquisition challenges:
1) Talk to every person in your target market that will speak to you. Know their needs better than they know them. Your most valuable insights will come from talking to customers daily.
2) Marketing to potential customers is a series of experiments. Before you start, define what success/failure looks like. When the experiment is over, rinse and repeat.
3) Surround yourself with team members and advisers that will hold you accountable to the business’ metrics and finances. The success/failure of the business depends on these people. You must trust them completely because you don’t have time to look over their shoulder.
Wow, the number one thing…
My business partner, Steve Bristol, and I really used to put in major hours the first years of the company. We were working 80+ a week. After working ourselves to a point of being burned out we realized that if we put in 40 x 2 hours the company didn’t move forward 2x faster. In fact those extra 40 hour were less productive than the first 40 hours. The reality is you’ll never be “done” with your work, you’ll never finish all the tasks, build all the features and have the perfect design. At the end of the day, around 4 pm, we close our laptops and go home. Never forget work is here to enable your personal life fruitful.
Also I no longer care how famous I become, I don’t care about being filthy rich or being on the cover of magazines. I care more about making our customers and employees happy. The only people I care about being famous to are my children and wife. I do still, even at the age of 32, still strive to make my parents proud of me. I’ve let go of the burden of trying to focus the company to a $500 million company, I’m happy being the co-founder of an unknown software company.
1) Only hire people you’d want to hang out with during personal time.
2) The first 10 hires set the tone for the whole company.
3) Don’t hire people that are getting a salary bump up by working with you.
4) Don’t wear white pants after labor day.
The number one thing I wish I knew is that the people around you affect your success more than you would ever imagine.
Focusing on who you spend time with on a day to day basis, working with doers instead of talkers can make or break the progress of your business and more importantly self-improvement. Be selective who you choose, Jim Rohn put it best:
"You are the average of the five people you spend the most time with." Jim Rohn
I wish I would have better known the value of my time. A ‘10 minute chat’, which always leads to a much longer chat, was so easy to say yes to. It took me years to finally start saying NO to things that would take me away from what really needed my attention. No to meetings. No to interviews, and no to extra projects (for extra money.) When I implemented my daily to-do lists my whole day/week/month changed. I would only accept opportunities if they could come after my to-do’s were completed.
Part of this realization came from a quote my grandfather once told me,”If you are not 10 minutes early, you are 10 minutes late.” He meant this for many reasons; Showing up to meetings, flights, phone calls, the gym and so much more.
So, that’s it; time is the most valuable thing you have. Make sure you invest it wisely.
I knew that it takes time to build a product, but I also wish I had known that it takes time for users to adopt a product. While there maybe early adopters who can get wedded to your product, mainstream adoption takes a lot of time, and effort. Mainstream adoption requires people who aren’t early adopters, those who are more reluctant to change, to discover your product, understand the value proposition, be willing to try it out, then actually use it and pay for it, and finally develop enough of a following to want to tell other people about it. This cycle takes a while because it requires a product to be solid, for a user to develop a relationship with your company and your product, and then finally develop enough attachment to want to talk about it with others.
While marketing efforts can plant the seed, a lot of time needs to pass where the product is out in the market, in order for mainstream adoption to take place. Giving things time is hard for a founder to process, because as a founder you want to think you are in control, and can make things happen, but sometimes you just have to be patient and wait!
Build a public working prototype as quickly as possible and then iterate furiously.
Our plan at BetterDoctor was to build the first MVP product in two months and get it to release it publicly. We got this done, but it was so light on the viability side that we could only release it in closed beta. Closed beta meant very few users and little real world feedback.
In the end it took over six months before we finally launched the first beta product, which was still very much an MVP. Now after a year we have released BetterDoctor search service nationwide and have a stable platform to build upon. Today we can release new features in couple of days and test them with real users immediately.
Year is a long time, and if there is any way to get the product to consumer hands sooner you should try to do it.
I wish I knew how big the opportunity was so I could have better planned to take advantage of it. Now that my company is older and more structured it is great to be able to focus on strategy, rather then just reacting all the time. At the beginning if I had stepped back and developed and funded a better plan I could have saved myself making a tonne of mistakes. That being said these mistakes are what my education is built on and learning from them is why I think I will continue to be successful. (I would like to have made a few less mistakes though.)
Don’t guess at price. So much is dictated by the way you price your product and many first-time Founders default to what they “think” customers are willing to pay for it (myself included). Focus on the value you are creating for your customers, not on what it costs you to deliver your product or service.
It also turns out that there are entire methodologies designed to help you extract the ideal pricing structure from your target market (Google “von westendorp”). Equally as important is finding out what product features your customers find most valuable.
By combining “willingness to pay” data with your customers’ most desired features, you’ll have a grounded approach for uncovering the pricing structure that attracts the right customers and drives the most profits for your business.
Ideas are great, but it is extremely important to think backwards from distribution. Ask yourself, who would use this, and how would they hear about it?
A lot of times, that will uncover the critical features you need to build into a product to make it useful enough for a user to tell their friends about it.
Look backwards in time.
The things that first time entrepreneurs spend the first few days of their life as a founder worrying about usually don’t matter. When I talk to new founders today, I generally get questions about how to structure the company legally, whether they should leave work now or wait for a bonus to appear, et cetera. Experience shows that these things do not make or break companies.
Instead, I wish first time founders would spend the critical first few days of their life is a founder thinking about their customers. What those customers need, and understanding that intimately better than the next guy, will make or break your company. The best way to do this is to look backwards in time. Pretend it is four years from today and you have a successful company, and ask yourself: is the question I am agonizing over right now likely to be the thing I will agonize over four years from now? The answer is usually no.
Seek out the most critical opinions of your plan that you can find. The natural tendency for a first-time entrepreneur is to fall in love with an idea and then look for friends and colleagues to support it. After all, who wants to have a fledgling idea crushed by naysayers? But these are exactly the types of folks you should be looking for.
Have them shred your plan and designs from top to bottom. If you find yourself agreeing with them and having doubts, then your plan (and possibly you) may not have the mettle to make it. But if you are able to defend it with conviction, repeatedly, then you probably have both the moxie to last through the long, tough grind you’re facing, as well as a plan that just might work.
It’s well known that “premature optimization is the root of all evil”, but somehow I failed to recognize that when we spent a lot of time playing with different databases before we even had any customers. In the beginning it’s ok to validate your assumptions with a half-baked product.
The one thing I wish I knew before founding my first startup would have been how to set clear and measurable goals. The problem with any startup is that there are a million unknowns. As you go through the journey of creating your company, you try and answer as many of those questions as possible and once enough are answered, you know you have actually created something. Along the way, it is easy to get lost. To make sure you don’t, you need to be able to set clear goals and measure the success of your actions. If you see something isn’t working, it is imperative that you recognize it as soon as possible and fix the issue or change course quickly. Goals and metrics are the only way to do so.
I wish someone had taught me earlier that you should be optimizing for speed and not cost. Everything in startups is about speed and your ability to move quickly. We were bootstrapped for a long time before raising a round, so we didn’t have much of a choice but to be super frugal, but I do wish that I learned that lesson earlier since it makes all the difference. If it takes an hour of your time to hack something together to save $20/month, then it’s not worth it.
Coming from MIT, I got lots of really good advice about starting a company - the importance of vesting, team chemistry, and building a good product. I wish that I had known more about the emotional roller coaster of startup life. Often when startups are portrayed in movies or TV shows, it’s a bunch of twentysomethings playing foosball all day and partying all night. What they rarely show are the lows that accompany those highs.
Never in my life have I been rejected as frequently or as vehemently as I have for Leaky. After all of the countless rejections, the scrapping to make payroll, and the cease-and-desist letters from insurance companies, what I learned was that you need fortitude to look past the temporary highs and lows to know that no gain or setback is ever permanent - otherwise, it would never be possible to get out of bed in the morning.
There will be a lot of ups and downs. When you feel down, stay calm and know that things will get better. When you feel up, enjoy the moment but save some of that for a rainy day.
I’ve been fortunate to have worked at multiple startups to know roughly what to expect. Reading Hacker News regularly gave me a good head start. Most every top rated advice you read there will come into play.
Be prepared that founding your first startup is likely the hardest thing you have ever done in your life to date. It’s not at all glamorous. Seek full support from your spouse (if you have one), and seek out co-founder(s) that you can fully trust and work well with. Ultimately, I cannot imagine a better professional experience than founding your very own company!
Starting NatureBox has been an amazing experience for me and I will be forever grateful for having the opportunity to start this company. I think it’s important for founders to know that when starting a company, they are about to embark on an emotional roller coaster ride. Managing your emotional state will become so hard but so important. When you hit a low point, remind yourself that it is just a bump in the road.
You can loose so much time worrying about things that don’t even matter. You’ll get good and bad news all the time and you’ll feel like your life depends on the success of your company but keep your head down and execute.
I wish I’d known that running a startup team is a lot like parenting. You check up on them, you wonder what they’re doing and you worry about them Skype-ing while driving. Often, you have to yell “Everybody calm down!” On some days, you have to remind them to buckle down and get their work done before dinner. On other days, you have to entertain them, so you take them to see movies and drive them to a go-karting arenas.
As a startup founder, you want to help your team identify their strengths on the job and support them. You want them to make mistakes and learn from them, instead of shying away from them. You don’t dictate, you ask, “What do YOU think?” You’re sensitive to the ebb and flow in their moods, you know when they’re discouraged or frustrated. You get frustrated yourself, but you express it to them constructively. Above all, like any parent, you want them to be happy. Ok, AND successful. Because I’m an Asian parent.
I wish I knew how important accurate metrics would become and that we could more easily support our reporting needs by preparing on day one. Over the last two years I’ve heard time and time again “we can’t track that easily because our app [ insert issue here ]. Had we decided early on what key metrics we would need to track and built the app to support our needs, we would have likely saved ourselves a world of pain.
The first company I started, a social shopping application, was a complete disaster. We built out what we thought was an awesome tool, but nobody wanted it. We wasted about $20k and about 1.5 years. From that experience, I realized that as much as there is a shortage of tech talent, the hard part isn’t the technology — it’s getting user demand.
If I were to have done things differently, I would’ve tested the market with little hacks before building out a product. I would’ve created landing pages to capture contact information of potential users and would’ve talked with them beforehand. I would’ve generated fake buttons that led nowhere or to a “coming soon” message to measure demand. In short, I wish I’d known to build as little as possible to test the market before building a product.
Are you a startup founder? Is there any advice you’d like to provide? If yes, leave a comment so we can discuss.
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