10 Learnings From Founders At Work
Founders at work by Jessica Livingston is a lot like watching a documentary about the lives of founders in the early days of tech startups between 1980 and 2005. Here are 10 very recurrent themes & learnings that emerge from the 30-odd success stories & my take on it basis personal interactions with 100+ founders over the last 5 years — very useful learnings especially for first time founders , some of which I had to learn the hard way in my last startup NutriPal that I recently had to wind up
- Almost none of the stories were centred around the founder’s early obsession with marketing or making quick money — it was either an obsession with the consumer/ a problem (Hotmail / Tivo/ Blogger ), or with building a great engineering org where you yourself would want to work at, or just a chance encounter with something that went viral unknowingly (Hot or Not!)
Obsession is irrational, & goes much beyond market sizing & identifying money-making opportunities.
2. Most of the stories are about young founders, on an average 25 years of age. The lack of commitments (financial & otherwise), slight naiveté mixed with infinite energy, is a recipe for success as a tech startup founder.
It seems that your late 20s are a great time to build, with a sweet spot of financial cushion, connections & youth & naiveté working in your favour.
3. The co-founders in almost all stories were friends or ex colleagues, hardly any exceptions there.
It seems that partnering with someone who you barely know from before, rarely works. Which is why I am extremely skeptical of setups like entrepreneur first etc
4. The number of times that ‘luck & timing’ have been quoted with examples by the entrepreneurs themselves, is insanely high. It almost feels like startups are about chasing the right market with the right team with enough customer obsession, for a long time until you get lucky- there is literally nothing else that matters on a macro level.
Rarely any of the stories talk about starting up with projections of getting to X run rate & making Z money in Y years. Most were on the lines of ‘let’s try this to see if it works’
5. VCs are almost always talked about as ‘necessary evil’, with words of cautions on a) not raising too much money b) not knowing the terms well c) regret of ceding control, being repeated. At the same time, most of them closed their financing quite early on & did not bootstrap for more than a few months. You can’t play bigger games without having the muscle to iterate for 2 years.
6. The stories are a healthy mix of problems they identified themselves in their last job, identified as a user themselves , & the ones identified as a market opportunity- to say that one way is better than the other might not be right.
7. Almost none of the stories talk about being able to pull off in-spite of a mediocre team. The fact that the best ones , though they draw only 30% higher salary than the average or good ones, are 150%-200% better than them, is repeated . And this applies not just in engineering but across- though applies all the more strongly in engineering.
It is ok to go slow on hiring, or even downsize back to 1–2 people after tough times (like Blogger , or the more recent Gumroad story), or outsource or have freelancers working with you until better options emerge, but you have to have the best talent working with you- there is no substitute to that.
Adding on to this, given the current environment when it comes to hiring engineering talent, apart from being competitive & working on an interesting enough problem (hygiene), getting folks who are previous/ future founders among the initial 10–15 people in the team, might be a hack worth exploring.
8. Consumer tech, most of the success stories were of product-led growth/ viral growth, with a few also because of very strong early partnerships. Both of these should be the only focus areas in the pre PMF days for any consumer startup- the 2nd one is often ignored at the cost of paid channels & it is very tempting to do that.
9. Very few of the founding teams were MBAs or management consultants, reiterating how these experiences don’t add much value if you want to be an entrepreneur. The hacker mentality seems to be the most important skill set in entrepreneurship.
10. Pivots are not the exception, but norm in the first 2–3 years of startups. Pivots could be minor, like pivoting in the same category, or even drastic, where you move on to a different category altogether, but only because of a strong market or consumer insight on the way.
Founding teams need to be conditioned to be extremely comfortable when these happen, as long as done logically. Most founding teams face churn at pivot stages irrespective of money in the bank.
Highly recommend reading Founders At Work , & hoping for it’s second edition to come out with 30 stories of post 2005 era!
