Dear SaaStr: What Are the Realities of Early Stage Startup Life?
A few things that surprise you as a founder:
- Things at the beginning and even later are sort of … slooow. Yes, lots is always seemingly going on at a start-up. But the reality is, major releases happen only a few times a year. Really Big sales deals don’t close every day. I first came from a services business where everything was fast and mission-critical (IPOs, $1b acquisition, financings, big corporate deals). In the services side, everything had to be done that week, and everything truly was mission-critical. I had trouble transitioning to start-up life. Yes, a thousand things are always going on in a start-up, with not enough people to do them. But the most mission-critical things evolve relatively slowly. Even running out of money generally takes time.
- Bootstrapping can be mind-numbingly slow. Many bootstrapped or barely-financed start-ups I’ve worked with often take 4+ years to get to the first $1m in ARR. Can you do it? Are you that committed?
- Far more people and human issues than you’d expect. Small teams can be very rewarding, but also fraught with drama. The old expression “everyone knows when the CEO has a cold” is certainly true. If a founder is upset, everyone knows. If a single critical engineer, or salespeople, or marketer is frustrated … everyone knows. And it impacts everyone. The collective happiness of the team is so important. And every day, you have to take its pulse and work on it. You don’t have to do this in a Big Company or most services businesses.
- 10x employees are real. And you have to find them. I know “10x employees” has become a slightly toxic term, but the fact is, it’s still true. If you’ve been a founder of a successful start-up, you know that. Every successful founder I know has hired and found a few key folks that really did have an incredibly high impact on success. They don’t work more hours. They just are so much more incredibly valuable in their output. They can build that incredible feature no one else could build. Or close that critical customer that you don’t quite deserve. Or push out that incredible growth marketing campaign no one else thought would work. Or convince a key customer to triple their spend with you next year. Etc. etc.
- You have to learn to hustle. Really hustle. Later, once you have a brand, customers will find you. But not until then. One way or another, you are going to have to hustle to find the first 10–100+ customers.
- Founder conflict is so destructive. Many successful start-ups have survived founder conflict. E.g., Facebook, Quora, etc. But it often almost wrecks the company. Wherever and whenever possible, make sure you and your co-founder are both truly committed for the long-term AND that you both share the same values. More here: A Simple Commitment Test For You And Your Co-Founders | SaaStr
- The most agile teams often win, not the first ones. Find a way to have one. It’s often not first-to-market that wins. Rather, the most agile teams often win. Because they can, often time, ship so much more high-quality software. If you can ship 4x the quality features of your competitor each year, then in 4 years, that’s at least 16x+ the features. Probably more as the team gets even better. Maybe 20x more features than a less agile team, 4 years down the road.
- Around Year 3 or so, your brain is rewired. At some point, running a successful start-up, even a modestly successful one … just changes you. It is so all-consuming. It’s not the hours in the office. (I actually worked the most “in office” hours when I was in a services business for my first job). But thinking about how to win, 24×7, literally changes how your brain works. Years of always thinking about your start-up. On every run. In the shower. On Saturday nights and Sunday mornings. It changes you. Not overnight. At first, it feels like just another job, but a bit different. But at some point, maybe around Year 3, your brain gets rewired. And you’ll probably never be able to go back. You may never be able to “turn it off” again. There is good and bad in this.
- Eventually, family often comes second. Even if you can’t admit it. In the beginning, when issues are relatively few, family will continue to come first. The truth is, there is only so much to worry about in the early days. But later, this changes. Few founders admit this in public, but almost all of them admit it in private. Even if family is first nominally, the reality is, getting from $0 to $100m+ in ARR is so all-encompassing and all-consuming, your family still … eventually comes second in overall mindshare. Not necessarily in nominal priorities. You might still cancel that customer meeting to go to back-to-school night. You might still never miss drop-off or pick-up. You might still never miss a soccer game. But when you are at that game — you’ll probably be thinking about that customer meeting more than the game itself. In that sense, family eventually comes second.
- The competition is often better, at least in some areas. But that doesn’t mean they can kill you, or even catch you. Brands last decades, even in software. And happy customers will buy more and more from you. Even if the competition has caught up.
- You’ll look back, and it will be the relationships and experiences that matter the most. And will stay with you forever. Some of your colleagues will turn into life-long friends. Whenever you get together, you’ll remember that crazy sales trip. The nutty feature that turned out to be the winner. The time you almost went under … but didn’t. You’ll have a shared language, a shared set of life experiences, that is much richer than college or grade school or some random other, less all-encompassing job. Making money is great and building something that matters is even greater. But it will be the experiences and relationships that truly stay with you. And that’s something really special.