One strategy for acquiring customers I’ve heard early founders mention is to use marketplaces. Think Upwork, Etsy, Amazon, eBay . . . There’s lots of demand waiting on these platforms if you can provide what users are looking for. This strategy has merit and can be useful, but there are things to consider:

• Customer relationship – The relationship is often between the customer and the marketplace. The customer is loyal to the marketplace, not the merchant or vendor who provides the good or service. Some marketplaces even restrict merchants from doing offline transactions with customers they acquired on the marketplace.
• Learning – In the early days, it’s important to get feedback from customers and fine-tune your product to achieve product–market fit. Not owning the customer relationship can make that difficult.
• Why – Marketplaces don’t usually share data about what’s driving behaviors on their platforms. Vendors seeing what’s happening but they don’t understand why it’s happening. Not a big deal if things are going well. Terrifying if things are going badly. It’s hard to fix something if you have no idea what’s broken. And growth planning is extremely difficult because you don’t know what drives your growth.
• Expansion – When you talk with your customers, sometimes you learn about opportunities to add value. It’s the land-and-expand approach. Get your foot in the door and grow the relationship over time. This is difficult to do with customers acquired via marketplaces. Not impossible, but difficult. Instead of growing by selling more to existing customers, you have to constantly acquire and service new customers.
• Experience – Marketplaces often control the experience for customers. The experience is built for the masses, so it may not be an optimal customer experience.

Marketplaces are great for tapping into demand and supporting a thought-out go-to-market strategy. They aren’t a replacement for a go-to-market strategy and they aren’t ideal for all company stages. Founders (especially early ones) should be mindful of the importance of owning the customer relationship and factor it into their decision about whether to acquire customers via marketplaces.

Most start-ups fail because they run out of cash. They can have great press, a great product, and even customers . . . but still run out of cash. Understanding the cash situation is the founder’s responsibility. At CCAW, I received a cash flow report every morning. I always knew exactly how much was in the bank, down to the penny. Cash is a company’s oxygen. When you run out of oxygen, you suffocate.

In the early days of a start-up, the founder is responsible for cash. If investors are the sole source of it, the founder pitches to investors. If customers are the sole source of it, the founder sells to customers. If cash comes from both sources . . . you guessed it, the founder is pitching and selling. Absent product–market fit and a defined sales process, the founder is the rainmaker who keeps the bank account in the black.

Raising capital is a core part of the job for early founders. If you’re considering starting a company or you already have, take this responsibility seriously. If you don’t, your journey will be short.

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Yesterday I talked about the importance of founders simplifying their pitch. I didn’t mention another critical aspect of pitching: founders should convey their passion when they pitch. I’m not talking screaming or doing anything inappropriate. Just make it clear how much it means in a way that’s authentic.

Founders are evangelists for their companies. Especially in the early days. They’re who will get others excited about buying from the company or even joining it. Effective evangelism requires passion and enthusiasm, both of which convey conviction. Founders often lay everything on the line to start a company. When they pitch, their listeners should understand that the venture is so important to them that they’ve taken on an almost incomprehensible level of risk.

If you’re a founder or want to be, make sure your passion comes through in your pitch (in a way that fits your personality). If people can’t tell you’re excited about your company, it will be hard for them to get excited.

Founders are always pitching their companies. Most people think you pitch only when you’re raising capital, but that couldn’t be further from the truth. Hiring your team, convincing customers to pay you, finding vendors, even talking about your new company at Thanksgiving dinner . . . all are forms of pitching, just to different audiences with different purposes.

It’s really important that founders be able to articulate clearly what their company does. Someone outside your industry (like Grandma) should be able to say, “Oh, that makes sense.” When people understand what you do, they find it easier to support you.

If you’re a founder or want to be, consider simplifying your pitch (and trying it out on Grandma). It could end up being the most valuable tool in your arsenal, at least in the early days.

Speed matters to a start-up’s chances of success. Let me explain. Most founders have a defined runway, even if they don’t realize it. They have a certain number of months or years to achieve a certain amount of traction (e.g. get 20 customers). If they don’t do it, it’s game over. Think of a plane during takeoff. If it doesn’t reach a certain speed and elevation before the runway ends, it’s in serious trouble. Game over for a founder can mean running out of cash, other resources, or family support.

Getting traction requires work. Founders have to execute. Doing nothing will lead to failure. Founders understand all of this. But what some don’t realize is that speed of execution is equally if not more important. They can take the right actions, but if they’re too slow about it the outcome won’t be what they’re aiming for. Founders have to be aware of time and make sure they’re executing and making progress toward their goals quickly. Otherwise they’ll find themselves staring at the end of their runway.

If you’re a founder, be mindful of how quickly you execute. If you’re not moving along at a good clip, consider tracking it and discussing it among your team.

A college student interested in entrepreneurship wanted advice on how to best position himself to found a start-up. He asked about my journey and if corporate America helped position me for success. Here are a few things I shared with him:

• Corporate America – The experience was good. It gave me some credibility. It showed me how a well-run company operates at massive scale. I left with company experience at an enterprise level. My goal was to build my company to the scale of the companies I’d seen in corporate America. The strategies they used worked for them, so I used many of them at my start-up. Unfortunately, I didn’t realize that it takes time to get to that level. Things that work at an enterprise level aren’t what got them to that level.
• Start-ups – Corporate America didn’t prepare me for start-up life. I had no idea what I was signing up for. I had a massive gap in my brain where it would have been helpful for start-up knowledge to be. It took me years of learning by doing and talking to people to understand start-up life. I learned to move quickly and break things. Done is better than perfect. And a host of other things.
• Passion – Find a problem you’re passionate about solving. Your passion is what will carry you through the bad days (plenty of those in your future) and motivate you to take the leap (and the next leap, and the one after that). All the preparation in the world is worthless if you’re not trying to solve a problem you’re passionate about.

I went on my journey by making the best decision I could with the information and resources I had at the time . . . and doing it again the next day . . . and the next. It wasn’t perfect or pretty, but I wouldn’t change a thing. I learned so much about entrepreneurship, myself, and life on the journey that was amazing. Everyone’s journey is different and that’s the beauty of it. There’s no right or wrong approach. Only the one that works for you.

Today marks the end of my forty-fifth week of working from home (mostly). Here are my takeaways from week forty-five:

• Pace – This week’s pace was swift. It felt like everything hit at once. There was lots of activity in a variety of unrelated areas.
• A little win – I’ve been working on a project since last spring. It’s been challenging, but I had a little win this week. It was nice . . . it felt good to see my hard work pay off a little. I still have tons of work to do on the project, but this win stoked my motivation.
• Learning from mistakes – I read this post and it stuck with me all week.  It was a reminder that a mistake is a learning opportunity, which is a good thing. If I want to learn, I must accept that I’ll continue to make mistakes. And I do! The key is to not make the same ones I’ve made before.

Week forty-five was a normal week. A little busy, but pretty normal overall.

Early in my founder journey, I knew I had customers and that I could get more of them if I hustled. But for ages, I didn’t take time to figure out how big the market I was going after was. When I eventually did, I learned it was huge—over $30 billion. I also learned how competitive it was. Everyone wanted a piece of it. It was a cutthroat space. These insights forever changed how I thought about my business. I would have to fight tooth and nail to grow.

Today I spoke with a founder who’s solving a problem that he says inflicts 10% of the human population. A huge market. And a severely underserved one. People facing this problem want help but can’t find the solutions they need. This combination—huge market, little competition—is unlike what my company faced. If this founder can create a solution that solves this pain point effectively, the field is wide open. It’s a great high-growth opportunity if he can execute.

If you’re building a company, what’s the 30,000–foot view? How big is your market? How much competition is there? Knowing the answers to these questions is important. It may not change what you do, but it can have a big impact on how you do it and how fast you’re able to do it.

When I spoke recently with an investor in a medium-sized city in the Southeast, I asked him about his tech ecosystem. He thinks his city is moving in the right direction, but it keeps running into a couple of major barriers:

• Nontechnical founders – He comes across excellent founders regularly, but they can’t build a technical product. They struggle to find technical co-founders. If they don’t give up, they hire a development shop. His portfolio companies haven’t had great results with outside development shops, even when they have strong founders.
• Funding – The community has wealthy individuals and families. Their wealth derives from legacy industries that have historically been economic drivers in the city (not so much anymore). Founders struggle to raise funding because people who have the means to invest don’t understand tech start‑ups. It’s gotten better, but they’ve got a long way to go. They’re actively organizing a network of angel investors so people can educate one another.

I was happy to hear that this investor is working hard to help tech start-ups succeed in his city. Our conversation reinforced something I’ve thought for a long time. The South has talented founders, but to succeed they need support. Funding is a big piece. So is community to help them connect more easily and form well-rounded founding teams. I’m looking forward to working with this investor and others across the South to help founders reach their full potential!

Today Jeff Bezos announced that he will step down as CEO of Amazon later this year. Last week, I wrote about journeys cycling around. I couldn’t help but think about that post when I read the announcement. Jeff will still be involved with Amazon. He’ll be chairman of the board (to which the CEO reports).

Jeff pointed out that this transition will give him time and energy for other initiatives outside of Amazon, including the Washington Post, Blue Origin, and Bezos Day One Fund. It sounds like Jeff is working toward the “rebirth” I discussed in last week’s post.

Amazon is an amazing entrepreneurial story. The fact that Jeff led this company from the idea stage to over 1.3 million employees and a $1.7 trillion market capitalization (i.e. valuation) says a lot about him. He’s a legendary founder who I suspect will go on to do even more amazing things after Amazon.