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As a VC, if you could go back to your operational experience (as part of a hyper-growth startup), then what would you remind yourself to take note of?

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JASON LEMKIN

My top list:

  • Slow down big decisions — when you aren’t sure. You have to move fast and break things, but if the pit in your stomach says “maybe don’t do that” — slow that decision down. At least, sleep on it. My biggest mistakes were when I said roll the dice, but my gut wasn’t sure the downside risk was worth it.
  • Budget an extra 6–12 months beyond the longest timeframe you have budgeted. We raised 18 months of seed money. We needed 30, or at least, 24 months to get to a true business. It always takes longer.
  • Slow down the initial team formation phase if you don’t have it right. Fire fast doesn’t work so well with co-founders. No one has a perfect team to start, or ever. But if the initial team’s goals aren’t aligned … that never gets fixed. It’s OK to wait another 3 months to say GO if that means the team is stronger.
  • Charge from Day 1. Free users and “customers” provide terrible, distracting feedback.
  • Pay Up. Even when cash it tight, paying an extra $20k a year or more for a resource that is 2x-5x better is the best investment you will ever make.
  • Charge more. Your product either has value, or it doesn’t. Charging 20%-50%-100% more than you’d planned will help you learn that faster, and get to a viable business faster. Don’t charge less to get the ball rolling. That only helps with commodities.
  • Fire anyone that isn’t 100% customer-centric. Later, not everyone has to care about customers. But in the early days, everyone does. They will let the whole company down in SaaS if they don’t.
  • Resolve founder conflict. Founder conflict kills start-ups, though often slowly. You gotta fix this early.
  • Pay yourself as soon as you can. Working for free is OK in the early days, but later, it gives you an excuse to just “do your best”. Your best isn’t good enough. Winning the market is good enough.
  • Get better mentors — and pay them. You haven’t done it all before, at least not everything. And even if your mentors are centimillionaires — pay them (at least in equity). A so-so mentor or advisor is in the end a waste of time. But 1 or 2 folks that can truly help you think through the tough decisions — they are worth their weight in gold. And if you don’t pay them, they really aren’t on the hook to help. They won’t really care. Not really.

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Published on March 23, 2017
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