Anyone close to me knows that I’m a massive geek when it comes to note taking. Something about summarising, synthesising and storing interesting ideas gets me excited.
As I kick off the founder journey in the coming weeks, I decided to summarise the key pieces of advice I’ve gathered over the last few years through conversations with founders, books, podcasts and my own experiences. Some may be subjective, but they all resonate with me as principles worth keeping in mind.
Important caveat: Letting learning lead to knowledge instead of action is far too easy (I’m often guilty of this). The gap between what we preach and what we do is often very real, and I frequently hear myself giving advice to others that I know I should follow more closely myself.
When it comes to the world of startups, planning, theorising and asking for advice quickly have diminishing returns and a high opportunity cost. The best information and learning comes from doing stuff in the real world.
I have pulled together the list below because I’m the kind of person who finds it helpful to have principles to reference. That said, if anyone is contemplating spending a few days reading some ‘how-to’ style books vs. building a scrappy MVP to get real-world data, then it goes without saying that the latter wins without question.
- Focus deeply on the problem: Successful businesses solve a problem. We so often get caught up in ‘business ideas’ when the reality is that the initial idea doesn’t really matter provided it is grounded in solving a real problem. Building a successful product is about putting yourself in the shoes of your customer and cultivating deep empathy for their struggles and pain points. You cannot tell users their problems and they cannot tell you the solution. Spend a disproportionate amount of time with your users and target customers .. talk less and listen more … and be truly honest with yourself as to whether this is genuinely a burning problem.
- Carefully define your target customers and then do everything to make them happy: In the words of Kevin Kelly, focus on your 1,000 true fans. You can’t be everything to everyone when starting out. Carefully define the archetype of the users you are focusing on first (ensuring that the definition is very narrow), then obsess over pleasing these people. Go deep not wide, and save expansion for down the line. Great companies are built in multiple chapters.
- Recognise there is rarely an “uh-hu” moment: Do not wait for the magical ‘uh-hu’ moment to come in order to take action. You will learn so much more through execution than by planning. For so many organisations, the starting and end points are often very far away from each other but this can only be seen in retrospect.
- Separate ideation and pragmatic thinking: It’s much easier to tame a wild idea than to animate a dead one. When searching for innovative solutions, we have a tendency to limit our creative scope through an automated pragmatism that shoots down our wildest ideas before they have time to blossom. Split ideation into 2 phases: (1) Removing all constraints, ignoring the rational brain, and dreaming up the most wonderfully extreme solutions possible (2) Bring in the pragmatic self to pull these apart and see what, if anything, can be retained.
- Focus only on the Product: When you are starting out, spend all of your time and energy building the best possible product. An outstanding product or service matters so much more than anything else in the early stages. Resist investing time in marketing, hiring, business development or raising money, unless these are absolutely pivotal to product development (note that product dev here includes product distribution).
- Make learning your north star: As the founders of Entrepreneur First suggest in their book ‘How to be a founder‘, the one important conversation between the founding team each day must be: “What did we learn today?”. If you’re not learning daily, you’re focusing on the wrong thing.
- Choose a large growing market: Building an average company in rapidly-growing market is significantly better than creating an awesome company in a stagnant or dying market. Do the research up front to ensure you place yourself in an attractive space. Think about this as living in the future. If you are simply searching for white space in today’s markets, you will be trying the same thing as other people and will be very unlikely to find any breakthrough.
- Dominate a niche in your market: Your aspiration should always be to create a monopoly. Continue refining your starting market and region until you land on a market that you can tip in your direction and fully dominate.
- Leverage network effects: Network effects are the most important scaling factor in business. Develop a product or solution that incorporates a network-based model at its core. Aspire to develop something where the ‘sharing’ of your product is fundamentally tied to the way in which it is used.
- Develop a bias towards action: Put systems in place to test your ideas as quickly and seamlessly as possible. You can’t think yourself out of most decisions, and will often gain invaluable insights by testing in the real world. Make a lot of fast, recoverable mistakes and you’ll prevent most of the fatal ones. As Amazon describe, distinguish the one-way doors (e.g., hiring) from the two-way doors (e.g., feature build). Go slow through the former and run through the latter.
- Define your unknowns and make them known: Building a business can be boiled down to identifying all the things you don’t know, figuring out how to make them known, and then knowing them. When starting out, there are so many unknowns (Who are my customers? Could my competitors build the same solution? Will our solution add value to the users?). Write these down, prioritise them, and then figure out a scientific approach to gathering information to make them known (a great book on this is the Startup Owner’s Manual).
- Uncover and articulate a unique insight: Many successful organisations are built on some unique insight. It may not be known immediately, but over time you should start to understand what this is and why it is unique. Ideally, your insight should create a value proposition so strong that all you have to do is teach it to people and they will be on board.
- Measure the right thing: As the saying goes, what gets measured gets improved. Spend time understanding what the right metrics are that most closely tie to the success of your product/service. Beware of vanity metrics.
- Don’t overthink launch – just get it out: No one cares – don’t wait until the product is perfect to start getting feedback. Many successful companies flop at their launch. The sooner you can get things in the hands of the users the better.
- Build a ‘purple cow’: Marketing in today’s world should be the result of building exceptional products. Your customers should fall in love and become the ones who spread the word. This does not happen from making marginal improvement to existing solutions as the switching costs are simply too high. You need to go all-in and try to build the 10x solutions that will turn people’s heads – the ‘purple cow’ as Seth Godin describes. This will become your biggest marketing tool.
- Don’t raise money unless you need to: Think about how you can structure your company so that all you need to pay for is the living expenses of your co-founders. If possible, build something to solve a problem and then use capital to scale in order to meet the growing demand. As soon as you take money you introduce inertia to change and additional pressure. Many companies will rush to raise money as a signalling tool of success.
- Team is everything: The single most important thing is having a great team. Early hiring decisions should not be rushed. Either you should not be hiring, or you should only be hiring. Develop a rigorous process to avoid biases, be fair and transparent, and aspire to hire people smarter than you.
- Become a business owner, not an operator: Aspire to make yourself obsolete over time. You should be able to leave your business for a week and not worry about anything breaking down. If ultimately you want freedom, then understand how to implement robust systems, hire great people, and empower a team.
- Understand there is no one correct approach: The universe of good ways to start a business is so wide. Don’t try to replicate the paths of successful entrepreneurs, but do try to understand the principles of what constitutes a good product or service.
- 7’s kill companies: Hold an extremely high bar when hiring. There is a saying that “7’s kill companies”, meaning that an individual with a 5/10 performance will draw enough attention to necessitate action, whilst an 8 or 9 will add value in the desired way. The biggest risk is hiring people in the grey zone who may end up sticking around as there are no obvious red flags, but who ultimately force convergence of company-wide performance down to this level over time.
Stillness & Scale 