Acquiring paying customers is a challenge for most companies and especially for early-stage companies. The brand isn’t well known, and resources don’t allow them do marketing the way they want. Customers that early companies do acquire are precious.

A few weeks ago, I chatted with two smart founders who have an interesting software product. Their platform helps consumers resolve a particular issue efficiently. The issue is something most people will experience only once in their lifetime, if ever. The downside to not resolving the issue is high, so the software creates value for consumers. Once the issue is resolved for a customer, though, they become an ex-customer and no longer contribute to revenue. This creates a challenge: the founders must constantly attract new customers. Their high marketing spend reflects this. This company will likely be successful, but it will be harder to scale than, say, a company that attracts and retains customers who pay monthly for many years.

Acquisition and retention of customers are important issues for founders to think about. Not all business models support ongoing customer payments for years, and that’s okay. Whatever business model a founder chooses, though, they should have a strategy to acquire customers in a cost-effective way and, if possible with that model, retain them.

I’ve been interested in residential real estate for years. I love researching different markets and following trends. Like everyone else, I’ve watched as housing prices have risen rapidly over the last few years. First-time home buyers in major metro areas are finding the supply of starter homes extremely tight, which is making affordability a challenge (there are other factors too). A few weeks ago, I read this article explaining that the problem’s not just in major metros.

Supply and affordability of starter homes are big problems waiting to be solved. I’m not sure what the right solutions are. Once they’re figured out, demand for them will be huge. Solving these problems won’t be easy, but it’s a massive entrepreneurial opportunity.

I suspect we’ll see more innovation as the problem becomes more painful. I’m looking forward to following the space and the innovative solutions founders create.

I was getting an investor’s perspective, and he said something that resonated with me. He’s a big fan of taking risks and trying things. Planting seeds, he calls it. He never knows whether the seeds he plants will germinate or, if they do, what they’ll become. One may grow into something massive. He’s lived this way, and it’s worked out well.

I agree, to a point. It’s important to try new things. If you don’t, the chances of having an outsize outcome are minimal. As Wayne Gretzky said, “You miss 100% of the shots you don't take.” On the other hand, I think trying to do many things at once isn’t ideal for most of us. You can spread yourself so thin that the thing that could be a winner doesn’t work because it isn’t getting enough attention.

My approach? Try new things in hopes that one will grow to be something big—and give each one the sun, soil, and space it needs to germinate and thrive.

I love to understand founders’ origin stories. It’s always interesting to hear what led someone to start a company. I recently chatted with a founder who found the diaries of her father after he passed away. As she read them, she discovered that he’d had an idea for a product. He’d thought through much of it and documented it in his diary. He never executed on the idea, though. His daughter decided she wanted to pick up where he left off. Today she’s building a company around her father’s idea.

This story stuck with me. Her father took the time to document his thoughts for much of his life. He did it for himself, but his diaries had a big impact on others too. Those journals gave his daughter a better understanding of him after he was no longer with her. They also served as entrepreneurial inspiration. They were a gift that keeps on giving: they helped the author, his daughter, and now his daughter’s customers.

This founder was passionate about what she’s working on, and now I see why. I look forward to following her progress as she’s a credit to her father!

My buddy Bob called me today and described a project he’s working on. He’s having a hard time acquiring a key piece of it—he’s been searching, but he keeps coming up short. As he talked, I thought of another friend, Sarah, who deals with these kinds of items all the time. I got a picture of the item and sent it over to Sarah. She immediately responded with a product Bob might like and a source where he could view other similar products.

Bob didn’t have knowledge or experience in this area. He expended a ton of effort over countless hours trying to fill that gap. This slowed his execution of his project. Sarah, on the other hand, has the relevant knowledge and experience. She was able to point Bob in the right direction with minimal effort, which will hopefully get his project back on track.

This simple story was a reminder: knowledge gaps can impede execution. If not knowing something is slowing me down, I should find someone who can fill my gap so I can keep executing. Kudos to my buddy for reaching out. I couldn’t fill his gap, but I’m glad I knew someone who could.

I had an interesting conversation today with a founder who’s taking the hassle out of tasks most of us hate doing. His business is experiencing tremendous growth this year. As we talked about it, I realized he’s built a great workflow management business. He’s solving for a consumer pain point and helping the small businesses that do certain tasks for consumers run their businesses more efficiently.

After connecting small businesses with consumers, the founder realized that the business owners needed help executing the work efficiently. They’re routinely sent too few or too many jobs. Or the jobs would arrive late. As he listened to his clients’ challenges, his company built feature after feature until one day the small businesses ran everything through his company’s system. These businesses are now able to do almost double the number of jobs in a day because this system helps them execute more efficiently. The software is helping them grow their businesses.

I’m a big fan of workflow management businesses, especially those that empower small to medium-sized businesses (SMBs). I think we’ll continue to see more tools that empower SMBs to grow their businesses. I can’t wait to watch the journey of this founder and his company. I think they’re on to something huge!

I went to the store to buy an appliance today. I’m not knowledgeable about appliances, and I wanted to make the purchase and get on with my day. There were a ton of options. I narrowed it down to two or three based on price and features. In the end, I picked one based on the brand name. It was a reputable brand that’s known for making quality products. I got it home and tried it out, and it worked great. I’m a happy customer and will likely buy another appliance from that brand when the need arises.

Brand is important to a company. It’s what it’s known for and how people perceive it. Establishing a brand takes time, so early start-ups usually don’t have much of one. However, founders should be thinking about their brand from day one. How do they want to be perceived by their customers? What do they want to be known for? They should try to align their actions and strategies around the brand they want to build.

I’m not a marketing-minded person. I didn’t spend much time thinking about brand in the early days of CCAW. When I did, though, I knew we wanted to be known for quality products and exceptional service. At the time, we were selling some entry-level products of inconsistent quality that were difficult to warranty through manufacturers. These products weren’t aligned with our desired brand, so we stopped selling them. Our customer service satisfaction went up and our warranty claims went down, both of which did align with our brand.

If you’re an early founder, start thinking about the brand you want early on and reinforce it through your decision-making. You’ll be much more likely to build a company and brand that others respect and admire.

One of the pivotal decisions I made at CCAW was to hire other high-level thinkers in critical areas. We hired people to lead operations, technology, and product. CCAW was bootstrapped, so we didn’t have tons of cash available to attract the caliber of talent we needed. After much thought and many discussions, I decided to offer some of them equity compensation in the form of stock options. If we achieved certain milestones, their equity compensation would vest and they would have the opportunity to own part of CCAW. This was a good way to align all our interests. We worked toward the same goals.

Equity compensation is a very powerful tool. It can help you land high-caliber talent you otherwise couldn’t afford. When I chose to offer it, I created an employee equity pool. This meant that a certain percentage of CCAW ownership was available for the company to use to compensate employees. Before that, I was the 100% owner of the company. After creating the equity pool, I owned less of the company. I was OK with that.

Founders who want to build big companies will likely need to compensate talent with equity (unless they have substantial cash with which to offer market-rate salaries). Founders who are considering the equity route should research how much equity compensation is appropriate for the stage of the company and the experience level of each candidate. Offer too little equity, and the candidate might reject your offer. Offer too much, and you may not have enough equity left to offer other critical hires.

Company equity is complicated, but it’s something founders should consider understanding sooner rather than later.  

I have a good friend looking to start a B corporation who asked for my thoughts. I’d heard of them but didn’t know much. He explained that he wants to create a company that’s profitable but also socially responsible. He wants it to make purpose and profits priorities—not put profits over everything else. I spent some time learning more about B corporations. I don’t think they’re applicable to all situations, and there are a fair number of hurdles, but I like what they’re created to do.

A few months ago, I shared my thoughts on skilled workers making purpose a priority in their employment decisions. I think this trend will continue to accelerate, and companies that put profits and purpose on an equal plane will win in the long run.

People and companies are beginning to be driven by more than financial gain. This is a great trend, and I can’t wait to see how it evolves.

Had a great chat with a founder friend today. We’ve known each other a long time and were catching up. We agreed that personal things have affected how we’ve approached entrepreneurship. We both love entrepreneurship, but at times we’ve had to scale back what we give to it when people in our personal lives have needed our support.

Founders live, eat, and breathe their company. They often have little to give in other parts of their life. When I started CCAW, I was fine with giving my all to it, and my family was too. They were supportive. They cheered me on as I worked crazy hours. But there came a time when they needed more from me. I adjusted and directed a lot of my energy away from CCAW and toward them. When their time of need passed, I refocused on CCAW.

The entrepreneurial journey isn’t traveled just by founders—their loved ones are along for the ride. If you’re considering entrepreneurship, be sure to think about the people you care about. Will they be OK with your giving so much of yourself to your new thing? And will you be there for them when they need you more than your business does?