Demonstrating traction is important for any company, and especially an early-stage one. A lot of founders communicate it through standard metrics like revenue, number of customers, number of users, etc. Those are fine, but they aren’t the only indicators of traction. If you’re still trying to find product–market fit, giving people insight into your journey can be a great way to show that your company is gaining traction.

If you don’t have product–market fit, you’re no doubt talking to customers often to better understand their problem and what they need in a solution. Ideally, what you learn leads to changes in your product or service. Customers react to those changes positively or negatively. If you’re getting closer to what customers want (and will pay for), that’s traction. It’s not as easy to get across as, say, revenue—because it’s not quantifiable—but it’s still great traction.

If you’re an early founder and someone asks about your traction, consider sharing what you’ve learned during your journey toward product–market fit. Your customer and revenue numbers may not be going up yet, but what you’re learning could signal that you’re on to something big!

I spoke with an entrepreneur in Europe this week. She’s solving an interesting problem that her background makes her highly qualified to tackle. We talked about her journey to date, including her previous fundraising. Her experience was similar to that of other founders: raising capital from investors in Europe took a lot of time and energy, which slowed progress on her product. Toward the end of our chat, she expressed interest in learning more about US venture capital funds.

The pandemic has forced investors to ditch the face-to-face meeting requirement. It’s pretty much all video calls these days. I’ve seen how this is allowing founders to easily connect with investors in other states. Investors are now interested in writing checks into states and regions they used to ignore because of geographic distance. Boundaries have fallen and more investors are looking to invest nationwide.

My chat with this founder got me thinking. Will we see a surge in international investing as well? What does that mean for founders and investors? Making international investments is more complex (or so I assume). I’m not sure what direction this will go, but I’m excited by the potential and plan to pay more attention to this.

This week I listened to another investor share her views on early-stage investing. At this stage, there isn’t much of a company. It’s just a few folks, an idea, and maybe a product or service. There likely aren’t customers, users, or meaningful quantitative data to inform the investment decision. She believes early-stage investment is about evaluating the following:

• Narrative – What series of events did the founders experience or observe that led them to a problem or unique insight that others don’t see?
• Story telling – How well do the founders communicate how they view the problem, how they want to solve it, and the impact their solution will have?
• Team – How strong is the team? Do they have what it takes to solve the problem? Do they have sustaining motivation and passion to weather the ups and downs of the journey to the solution?

I really like how this investor approaches evaluating early-stage investments. It’s simple and makes sense. Early-stage founders should consider these three points when they’re deciding whether to pursue a problem and when they’re pitching.

Today marks the end of my fifty-third week of working from home (mostly). Here are my takeaways from week fifty-three:

• Expect the unexpected – Life throws curveballs sometimes. That’s OK; it’s just the way life goes. This week life threw one at me, but in the end, the situation worked itself out for now. Can’t let these set me back or put me off my game.
• Process – Whenever I do something involved on a fairly regular basis, I like having a process. When I don’t, I get frustrated and feel like I’m not making the best use of my time.  
• Admin time – I spent time this week doing admin stuff that I was behind on. I even got to inbox zero. I like having a chunk of time every week for this kind of work. Decluttering makes me feel like I’m on top of things.
• Spring – The sun shone a lot this week, and I loved it. Lots of pollen in Atlanta, too, but I can deal with that when it comes with great weather.

Week fifty-three was productive and upbeat. The month and quarter started out on a good note. I hope they end on one too!

This week I had unrelated conversations with two entrepreneurs who’ve bootstrapped their companies. They now have paying customers. One of them is looking to raise venture capital, and the other recently raised it. Bootstrapped companies survive on customer cash flow. There typically isn’t a surplus of cash on hand. This means founders are often focused on how they’ll keep the lights on. The runway is usually a few months long, if that.

Both founders are now faced with the possibility of an infusion of cash and 18 to 24 months of runway to execute a long-term vision. Until now, neither has had the luxury of thinking that far ahead. Homing in on their vision hasn’t been as smooth as they’d hoped. They’re finding it difficult to shift their mindset from survival to articulating the full potential of their company and a plan to get there.

Bootstrapping versus raising capital from investors isn’t a one-size-fits-all decision. It’s specific to the entrepreneur and their situation. Founders should know that the path they pick to obtain capital will influence how they’re able to think about their business. Bootstrapping fosters a survival mindset and thinking only a few months out. Raising capital from investors allows for long-term planning and execution.

There are exceptions to every rule and founders can be wildly successful on either path, but this is something founders should consider when they choose the source of their capital.

I recently listened to a founder’s pitch to an investor that went off the rails as soon as the founder opened his mouth. The investor struggled to understand what the founder was trying to communicate. The entire meeting was painful to watch. A few hours later, the same founder pitched another investor, and the meeting went great. What was the difference? At the beginning of the second meeting, the founder sought to understand his audience by asking a few simple questions. This allowed him to deliver his pitch in the way the audience preferred. The change was small but powerful. Here are a few questions founders can ask to help understand their audience:

• Have you had a chance to review any of our materials? Founders often assume investors have reviewed their pitch deck, one-pager, product demo video, etc. But sometimes investors haven’t received the materials or haven’t had an opportunity to review them. They’re human; they miss things. Some are just busy and run out of time. Understanding what they know about your company (if anything) is important. Filling in gaps is different from starting with a blank canvas.
• Where would it be most beneficial for me to start? Some investors want to dive straight into the solution you’ve built and the business. Others want to understand the founder and their journey that led to founding a company. Beginning the conversation with what matters most to the audience greatly increases the likelihood that they’ll clearly understand what you’re trying to do.
• Would it be more helpful to stay high level or to explain the details? For technical founders who live in the weeds of their technology, this is an especially important question to ask. Some investors love the technical details, while others love the big picture. It’s important to understand this and deliver your pitch at a level that interests them. Miss the mark and the conversation could spiral downhill fast.

Understanding the audience goes a long way toward helping founders communicate effectively and gain support. The questions above will help accomplish that, but it’s by no means an exhaustive list. Plenty of other questions would also work. Regardless of what you ask, I’d limit it to two or three questions.

Large companies can be attractive targets in a startup’s customer acquisition plan. Partnership deals can allow small companies to benefit from the sales machine at big companies (at a cost, of course). They often have tons of salespeople and existing customer relationships that are hard to replicate. Landing a big company as a customer can be equally as helpful. They may sign a deal that brings with it revenue that’s significant for a startup. And using their logo can help you close other deals.

Today I spoke with a founder who had a large company as a customer, to the tune of millions in annual revenue. Then one day the middle managers at the larger company decided to end the relationship. Overnight the revenue evaporated. The founder was scrappy and able to make things work in the end, but the situation was stressful, to say the least.

Targeting large companies isn’t a bad strategy for startups. It has tons of upside. If things go really well, a large company can account for a material amount of revenue. Founders should be aware that if that happens, a single relationship can make or break the company.

If founders pursue big companies as customers or channel partners, they should keep a close eye on what percentage of revenue originates from a single relationship—and continue seeking other customers, of course, to mitigate risk.

One of the toughest situations I had to navigate as a founder was a key team member threatening to leave my team. During a strategy session about an important topic, Bob and I saw things differently. Neither of us backed away from our position, and it turned into a heated debate. We were respectful of each other, but later that day I received an email from Bob saying he would like to leave the team because we didn’t see eye to eye. Bob was extremely smart and talented. He owned all the details of a critical part of the business. Translation: it would be hard to replace Bob, and a critical part of the business would come to a standstill if he left.

I didn’t realize the seriousness of the situation until I read Bob’s email. I immediately realized that it could spiral out of control unless I handled it correctly. I got Bob on the phone, and we listened to each other’s viewpoints (instead of pushing our own). I told him I valued him as a team member, and we agreed to sleep on things.

I felt there was more there, so over the next few days we talked it over and got to the root of his frustrations. I learned that it had nothing to do with what we were originally debating. The company was growing, and Bob’s role was becoming more demanding. He didn’t understand why he was being asked to take on many new responsibilities. This was news to me, but once I understood the problem I came up with a solution.

I realized I hadn’t articulated my vision for where the company was going, so the extra work didn’t make sense to Bob. He didn’t understand how he fit in. He just felt overworked. I started communicating my high-level vision more clearly and frequently to the entire team so that everyone would understand their importance to making the vision reality. I transitioned certain responsibilities away from Bob and hired someone to work closely with Bob and take them on. We put the plan in writing and agreed to it. Everything was back on track. Bob and the rest of the team understood the vision and were satisfied.

That situation was a great lesson. I learned that being a leader is not just about being hard-charging and executing. It’s about people, too (other people—not just you). Leaders need to have emotional intelligence and awareness to understand what your team needs (even if they can’t—or don’t—articulate it) and provide it.

Cultivate this ability in yourself. Your team will run through walls for you.

Years ago, my company had reached an inflection point. We were trying to grow, but everything was starting to break. It felt like we were taking one step forward and two steps back. I wasn’t sure how to handle it all. One day my mentor nonchalantly told me, “You’ll figure this out and be good in a few months.” At the time I was stressed out and doubting myself, so that comment took me aback.

In our sessions together, she pushed me hard and pointed out things about me that I’d never paid attention to. She knew I had the ability to deal with the situation even when I didn’t see it in myself. She pushed me to a level I didn’t know existed and helped me make the most of my abilities. True to her prediction, I was on top of the situation in a few months.

I’m not the only one who’s excelled because of this type of relationship. Professional athletes have done so forever. They have the physical abilities, but others help them make the most of them. Coaches, trainers, and a litany of other staff members play a vital role in their preparation and success. They help push the athlete to a level they otherwise might not have reached. Name an exceptional athlete—I’m pretty sure their success owes a lot to others pushing them.

If you’re trying to do something great, consider surrounding yourself with people who believe in you and will push you. Those nudges might just be what you need to go from good to great!

Making tough decisions is what founders and CEOs sign up for. It comes with the territory. Tough decisions are tough because they hurt people. However, there’s a distinct difference between a tough decision and a dishonorable one. I was chatting with a founder in a difficult spot who may have conflated the two.

His company is facing a challenging time and he needs to reduce his staff. That was a tough decision, but it was one that he had to make for the company to survive. I asked how he intends to handle the transition of departing employees. He said he plans to pay severance but not sales commissions earned. The team worked hard in anticipation of being paid commissions, and now they won’t receive them. The founder has the money to pay them, but he’s choosing not to.

Downsizing the team to give the company a fighting chance at long-term survival is a tough call. It sucks, but it has to be done. If it’s not, the company could die. Some won’t understand this decision now, but they will if the company starts thriving and hopefully hiring again. Not paying people what they’ve earned is different. No matter what happens in the future, everyone will remember how part of the team was treated on the way out. It shows the company has questionable values. It’s likely to lead to a variety of unintended consequences. It’s not how people should be treated and is simply the wrong decision.

Founders will find themselves in tough spots during their entrepreneurial journey. Navigating these situations will require tough decisions, but founders shouldn’t use them as an excuse to detour from personal or company values. They should still do the right thing.