Give Yourself Runway to Get Time on Your Side
Today I talked with an investor who started a company as a side project. He knew that a particular problem existed because he lived it. It was a problem he was passionate about. He decided to work with his cofounder nights and weekends to get the solution off the ground. It was almost four years before the timing was right for their company to take off. Macro events shone a light on the problem, and lots of people were suddenly in search of a solution. The company has since raised capital and is thriving.
My big takeaway is that timing markets is incredibly hard, even for an investor. You need the right problem but, to gain traction, you also need the timing stars to align. Founders should be mindful of timing and give themselves runway. This investor’s approach was to give himself enough runway by keeping his day job. He had no idea when the timing would be right, but he and his cofounder kept building as they patiently waited. Giving themselves enough runway proved to be a prudent decision.
Observations from Watching Companies Pitch in Person
Last week I attended a local start-up event in person. The audience heard a few companies pitch and asked the founders questions. I hadn’t been to one of these in quite some time. Today I followed up with everyone I connected with at the event. A few observations:
- Energy – Start-up energy is a powerful force. It’s magnified when you get more people in a room who are passionate about building or helping others build. It’s hard to re-create the energy of being in person at a start-up event.
- Context – You can learn a lot about someone by watching how they interact with other attendees. This can’t be replicated via video and is very difficult during one-on-one meetings. I’m able to see another dimension of a person in these group settings.
- Efficiency – Video allows you to have back-to-back meetings, maximizing the number of one-on-one meetings you can have in a day. In-person events are efficient in a different way. They allow you to reconnect with many people organically. They allow you to meet and have the attention of people you otherwise wouldn’t be able to chat with. And they allow you to more efficiently connect people who may benefit from knowing each other.
- Memorable – Even if it’s a brief chat, an in-person connection is always more memorable than a digital one. People are more likely to remember people they’ve talked with in person.
- Hybrid – Don’t get me wrong—if attending in person isn’t an option, there’s value in attending virtually. Offering both attendance options is great because it makes events more accessible to more people.
People like interacting in person, and that was evident at this event last week. I’m looking forward to attending more in-person events this year.
How One Founder Used His Audience to Bootstrap His Startup
Talked with a founder who has taken an unusual approach to building his start-up. He read about a space and was intrigued. Deciding he wanted in, he did an unpaid apprenticeship before eventually setting up his own operation. He started having problems managing the operation and built manual solutions. He realized other people had one of the same problems and, to help, began sharing what he’d learned. He created and openly shared videos and written materials. He realized the manual solution wasn’t a long-term fix and that tons of other people—based on the consumption of his content—were having this problem. He decided to create software to solve the problem.
Once the product was created, he needed people to use it. Instead of spending lots of money on marketing to acquire customers, he went back to the people who’d consumed his content. He told them about his new software and asked them to give it a try. A few hundred took him up on the offer and became paying customers. He’s now getting feedback from those customers so he can improve the product and attract more customers.
I like this founder’s approach. He discovered a problem in his space by getting his hands dirty, and he built great founder–market fit too. He then shared what he learned with others and built credibility with a passionate user base. By understanding the space very well, he positioned himself to create a superior product, and he quickly got people to try it with minimal spend on marketing because he already had an audience. All in less than a year without raising any outside capital from investors.
I think this founder has put himself in a great position to build a massive company in his space.
Cofounder Considerations: How Do They Handle Adversity?
I’m a big fan of cofounding teams. It took my being a solo founder to understand that every individual has gaps, but teams can be well rounded. The areas where I was individually weak were where my company could have done better (e.g., marketing). Building a cofounding team is easier said than done, though, especially for nontechnical founders. Finding a complementary cofounder is hard—many people aren’t sure how to evaluate fit.
One of the things I try to understand when evaluating a founding team is how they individually handle adversity. When things are going well, everyone is happy, and it’s easy to get along. It’s when things aren’t going well that friction becomes more evident. Adversity can bring out another side of people and push cofounder relationships to their breaking point.
If you’re a founder looking for a cofounder, consider taking time to understand how candidates have historically handled adversity. Their past isn’t proof of what they’ll do in the future, but it will give you insight into how your relationship might look if times get tough.
Weekly Reflection: Week One Hundred
Today marks the end of my one-hundredth week of working from home (mostly). Here are my takeaways from week one hundred:
- February – Monday is the last day of the month. The first two months of 2022 have gone by quickly.
- Perseverance – This week was a reminder that perseverance pays off. When things look uncertain or bleak, perseverance can help you get to the other side.
- Atlanta founders – I met with a number of founders today. Thanks to them, I realized once again that Atlanta has smart, interesting founders who will likely build some amazing companies.
Week one hundred was steady. Looking forward to week one hundred one!
Every At Bat Won’t Be a Home Run
I talked to a second-time founder recently. She had a modest exit from her first company and wants to build another, bigger company. She’s hard at work, and I can tell from our conversation that she learned a lot from her first journey that she’s incorporating into her new start-up. She made painful mistakes and has had time to reflect on them, which has allowed her to grow as an entrepreneur.
Many people don’t realize that a lot of successful entrepreneurs don’t hit a home run during the first at bat. They may hit a single, or even strike out, many times. All those at bats are learning opportunities (some of them painful) that hopefully will set the founder up for the grand slam.
If you’re a founder and you don’t knock it out of the park the first time, that’s OK. Remember, it’s a failure only if you didn’t learn anything.
Network to Fill Your Gaps and Stand Out
I talked to a founder who’s had an interesting journey. He built a great product and company. Before becoming a founder, he worked in corporate America and aspired to start his own company. He had a problem in mind that he wanted to solve but realized there was a lot he didn’t know about building a start-up and raising capital. With no connections to those worlds, he decided to focus on networking to forge some. He developed a list of people he believed could help him and began meeting with other people who might know them. Over the course of a year, he ended up meeting most of those on his list, and they invested in his company and introduced him to their networks. He then hired a team and built the first version of his product. He was off to the races.
The big takeaway from his story? The power of networking. He was intentional about building his network to fill his gaps. He hustled to find a way to get in the room with people who had the knowledge and relationships he needed to achieve his goal of being a founder. This resonated with me because networking—building relationships—is something most can do. A little bit of effort and consistency usually have an outsize return, though, because so few people do do it. Taking the initiative and being consistent will set you apart and sometimes are all you need.
This founder’s journey, like every founder’s, is unique. If you follow his example, there’s no guarantee you’ll have the same outcome (you still have to execute). But his story shows that relationship building is a powerful tool in the arsenal of founders and aspiring founders.
Should We Be Rethinking Recruiting?
I’ve been learning about labor market challenges for the last few months. They’re a big problem—but also an opportunity. (Without problems, there’d be no opportunities for entrepreneurs, right?) Flexibility is a high priority for workers, and that’s affecting businesses’ ability to meet customer demand. There’s still lots for me to learn, so I’m digging into this more.
Today I began to think about the issue from a different angle. How people think about work, where they work, and when they work has changed significantly in the last two years. Yet, the way workers are recruited hasn’t changed much (minus Zoom), as far as I know. There’s probably an opportunity to improve how companies attract candidates, evaluate them, etc. I’m wondering whether part of solving the labor challenge is rethinking recruiting and aligning it more closely with today’s labor market.
SMBs in Laggard Industries
I chatted with a founder who’s solving problems for the trucking industry. He has a great understanding of the industry and can build a solution to solve its problems. I love to understand the unique insight a founder has that will allow them to succeed. This founder shared that most truck drivers aspire to more. They want to be entrepreneurs and run a trucking company, not just one rig. Yet they don’t have the know-how or tools to go beyond one rig.
Talking with this founder illuminated the probability that there’s a large opportunity to help entrepreneurs build small and midsize businesses (SMBs) in laggard industries. More people are embracing an internal locus of control and, with it, the belief that entrepreneurship can be the vehicle that gives them control of their life. A solution that allows these entrepreneurs to do more with less, or to do something they otherwise couldn’t do, will likely build a loyal customer base and a big business.
I listened to a friend share his founding story. Part of the story was that he put every penny he had into getting his business ready to open. Translation: he was all in. The audience asked questions about various things that could go wrong and what he would have done if it hadn’t worked out. His response was simple: “You can’t think like that.” He focused on making it work and winning. Sure enough, it worked. That business has been thriving for years.
The simple statement “You can’t think like that” says a lot about how my buddy thinks. He has a winner’s mentality. He doesn’t worry too much about the hurdles or the what ifs. He focuses on winning and doing what’s needed to win. He’ll push himself and put it all on the line in the name of winning. I’ve known him for years, and he’s overcome adversity repeatedly. He’s successful, and I attribute a large part of his success to his winner’s mentality.
Building a company is hard. A lot of things must go right for your business to succeed. Some are in your control, and some aren’t. One thing that’s totally in your control is how you think about yourself and what you’re doing. Think about yourself as a winner. That simple shift in mindset can have a big impact on your outcome.