Mistakes founders make when getting started
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This weeks newsletter is all about the mistakes that founders make when they're early and getting started. Avoiding these mistakes (and doing a dozen other things right while navigating the ups and downs of founder life) is crucial for building a successful startup.
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Mistakes Founders Make When Getting Started
I comment all the time to founders I work with that I just wish we could have met and started working together at the very beginning of their founder journey.
Because by the time we’re working together, founders often have made key decisions that are very difficult, but sometimes necessary, to undo.
And many times, these “decisions” weren’t made consciously - they just happened.
So if this essay can save ANYONE from the pain of making one of these mistakes, I’ll be hugely happy.
And if you have made any of these mistakes, you're far from alone.
Here are 7 mistakes we made ourselves and see all the time.
#1 Founders don’t give themselves enough runway to reach milestones
Startups don’t really fail. The founders just run out of money. If you raise outside capital, you have this principle top of mind - you need to raise enough capital to give yourself a good shot of hitting milestones for your next round.
But what if you’re bootstrapped? The same principle applies, only now you’re dealing with your own capital. I see far far too often a founder leave a job and jump all in on a startup, only to have 6 months of runway. They not only don't have time to succeed, they burn through their savings.
As a founder, you are far better off finding ways to build on the side, nights and weekends, while you maintain an infinite runway through your day job.
#2 Founders don’t talk to enough people
When you have an amazing idea, the last thing you want is for people to tear it apart. But that’s exactly what you need to do. Before you buy a domain, or build a landing page, or start coding, find a way to talk to 10 people. Then talk to 100 more.
In reality, founders need talk to 100 people before they can reasonably decide if an idea is good or not (so also, don’t quit on an idea too early)
#3 Founders don’t think about the business model
We made this mistake early on with Day One. Not that we didn't charge for our product (we did that), but that we charged the wrong amount.
There’s a no-go zone in pricing where the price is too high to sell via ads, but too low to sell via sales. There’s obviously a lot of nuance around this, but fundamentally you have to think about price, lifetime value, margins and marketing from the start of any idea.
#4 Founders build too early and feel committed to that first thing
Once something is built, there is psychological attachment and a sunk cost fallacy to making changes. But I promise you, your first idea or product is not “it”.
What can be even worse is if the first thing you build works a little, and you get excited and keep building it, only for the thing to not really be it. It’s even harder to make changes when this happens.
The alternative is to talk to people, lots of people, and only build throw-away products experiments at the start.
#5 Founders look to others to solve their problems
Far too many founders want to hire for skillsets they don’t have, or as soon as one thing is working, hire folks to solve everything else. This rarely works. Founders need to tackle almost all of the challenges facing their business themselves - from product to marketing to fundraising and everything in between.
Only when it becomes obvious what/how to delegate and your business can support it should you hire - and even then, go slow.
#6 Founders often fixate on “sitcom ideas”
This is a term coined by Paul Graham (I think). Sitcom ideas are ideas that sound good (like what the writers of a sitcom would come up with that would pass the sniff test of an audience). In practice, these are ideas that founders think up in a weekend at a hackathon or in a college class.
The problem is that these ideas are only skin deep. They seem good, but there’s a reason why no one has built them yet. And these ideas are often in areas or industries where you don’t have deep expertise. So you don’t yet know why they’re bad. But they usually are.
Instead, you should start a business that solves a problem that is right in front of you. Ideally you have first hand experience. Often, it’ll be kind of boring, and probably “deep enough” into a specific industry that it won’t be sexy and most won’t get it. But you don’t need everyone to get it, just your customer.
#7 Founders have been overly influenced by venture capital
Founders today seem to think they need VC backing or validation to get started.
The reality is that almost every idea can be launched and started with zero capital, assuming the founder has the right skills and network. So the rational VC will wait until a founder launches the idea, makes progress, gathers learnings, and will fund that team vs the team with just an idea and no progress.
So don’t hesitate, get started, and by the time you talk to 100 people, and run a few experiments, you’ll know more than nearly everyone, you’ll have a real (not sitcom) idea, you’ll know what to build (but won’t have built it yet), and if the idea has venture scale, you’ll know exactly what and how to pitch VCs. Do that instead.