On June 5th Venrock co-hosted an event with Plato called Product Unplugged, which was an off the record session providing mentorship for early stage startups on all things product. We had over 85 applications for the event, but space for only 40 attendees, so we’ve decided to share some of the insight from the event to a broader audience in a series of posts from my colleague Ethan Batraski and I.
We’re going to use the fireside chat interview I conducted with Sami Inkinen, co-founder of Trulia and founder of Virta Health, as a guide for sharing some of the insights unearthed at the event, and I’m going to focus on the following topic:
What advice do you have for first time founders?
Sami had two pieces of advice, which are to take care of yourself and focus on the big stuff. If I can add to Sami’s list, I’d say early stage founders should relentlessly focus on shipping their product, talking to users and iterating on their feedback. Let’s unpack this advice a bit more.
Take care of yourself
First let’s define “yourself” as one’s mental, physical, and emotional well being. Taking care of yourself isn’t just about exercising, though that may be important, it’s also about the things one needs to do in order to mentally and emotionally give their best to their startup. Think about it this way – as a founder part of your responsibility is to look after your people and ensure they are doing their best work, but no one is thinking about your well being, so it’s even more important that you do so for yourself. If you don’t and your emotional, physical and mental well being degrades then your performance will too, which will impact your company and your employees pretty significantly.
Here are a few practical steps one can implement for self care:
- Periodically assess your well being by asking others and through your own self reflection. I’d suggest doing this every month, as it will help you catch issues before they get too serious. If you don’t stop to assess how you’re doing you won’t know what to start, stop or continue, so this is a critical first step. The basic question I would ask both yourself and others is: what differences have you noticed in me over the past n months, both positive and negative?
- Know when you do your best creative, deep, and meaningful work. Don’t waste your creative / deep thinking time checking emails or doing mundane work. Instead, use your natural rhythm to your advantage. If you do great deep work in the morning, then reserve that time for it and cancel meetings / don’t check email then. If you’re more of a night owl then set up your day such that you can be productive then. The things to focus on during these deep thinking times are, as Sami suggests, people, strategy and cash. To make these times most productive, it’s a good idea to work toward something, e.g. a fundraising plan, a culture manifesto, updating the company strategy, etc. Otherwise you may end up wasting time / getting distracted by email or the latest fire happening around you. I often will give myself deadlines and due dates on important but not urgent projects because I’ve noticed they otherwise don’t get done.
- Select investors and board members that care about you personally and not just about the performance of the business. By surrounding yourself with people that care about your well being you’ll increase the odds of staying healthy, and if you’re healthy your company has better odds of thriving. But don’t stop there, I would also suggest having active conversations with your investors and board members on your mental and physical health, involve them in your pursuit to operate at the highest physical, emotional, and mental levels — your incentives to do this are fully aligned.
Focus on the big stuff
Sami defines the “big stuff” as people, strategy and cash. Let’s look at each in turn below.
People: this is about hiring the best people and creating a culture wherein employees can do their best work. There is a lot written on this topic and I’d suggest my friend Patty McCord’s book on building the Netflix culture as a start. One thing Sami mentions that I definitely agree with is to define your culture early as this will help you hire your first employees and they will help you hire the next wave of employees, so it’s extra important to start early. Although it is tempting, don’t copy the culture of well known companies like Netflix and Google. We tried that at Coursera (not necessarily consciously) and it was a disaster. What we realized is that a culture is a system, so you can’t copy bits and pieces of someone else’s culture and claim it as your own. Instead a culture should be unique or it won’t be authentic to your company and thus won’t stick. To start off your process you can use the following questions to guide your journey of creating an authentic culture:
- What behaviors do you want to incentivize?
- What behaviors do you want to disincentivize?
More tangibly, this can be boiled down to thinking through the values you want to reinforce through hiring, promotions and firing. This isn’t just about having some fancy sounding values to put on your wall, but rather this is about making explicit your actual reward systems.
Strategy: this is about charting a course and ensuring everyone is moving in the right direction. I wrote about this here and one thing I want to call out is to remember that when setting a strategy or vision it’s not just about the tactics of what you hope to accomplish over the next n month, but also the story telling. Employees want to feel the strategy as much as they want to understand it. And employees want to be involved in setting it, which doesn’t mean they get to decide, but rather that they can be heard and contribute. As Ben Franklin said, “Tell me and I forget. Teach me and I remember. Involve me and I learn.”
Cash: this is about ensuring your company is well capitalized to achieve its goals. This can mean focusing on fundraising or it can mean focusing on revenue or costs to achieve profitability. That said, for early stage tech companies this will no doubt mean fundraising. There are two important parts to fundraising, especially for A & B rounds: #1 how much cash do I need to help me get to my next fundraising milestone? and #2 which firm / partner do I want for the next 10 years?
On cash, this post does a great job of deconstructing the data and suggests you need enough cash to last you 18-24 months. Why? (other then that’s what the data suggests) I’d guess the reason is because it often takes longer and is more expensive (either because you want to spend to accelerate growth or because you need to spend to accelerate growth) to find product / market fit and hit the milestones that earn a company the right to raise another round of financing at favorable terms.
On the firm / partner, one common piece of advice I’ve heard is to do your fundraising as quickly as possible so you can get back to building your business. While I think it is better to take this approach than to always be talking to investors, for the A & B rounds, where Board seats are more prominent, it is good to take one’s time and really focus on selecting a partner. Starting a company is a 10 year + endeavor so finding people you want to spend time with and learn from over 10 years is very, very important.
Ship, listen, iterate
The entire reason you exist is to solve a real problem in the real world for real people. If you don’t ship you won’t do that. And if you don’t listen to real people (especially those that are outside of Silicon Valley) you might not be solving a real problem for real people. And if you don’t iterate someone else will do it better than you.
Here’s a 4-step process I follow to get this done:
- Have a hypothesis. It all starts with an idea that can be stated in the form of a hypothesis. An example hypothesis is, “by rerunning classes more frequently, we’ll get more students completing them”. Often these ideas are inspired by consumer research, prior AB tests, analyses, competitors, etc.
- List out assumptions. What are all the open questions and assumptions about potential customers that underpin your hypothesis? List out all the assumptions and figure out a plan for how to gain insight into each one. Often this is done by talking to potential customers, both those that might be interested as well as those that might not.
- Construct a minimum viable test. What is the most efficient way to test the hypothesis? Note that this might not always mean that the test is cheap. Sometimes one needs to test something more expensive, but that should mean there is an even bigger potential reward. The goal of this step is to quickly and efficiently validate the hypothesis.
- Measure, learn and ship-it or pivot. Once the data is collected on the original hypothesis, there are roughly two choices: 1. continue to build out the original idea, testing even more hypotheses that explore that same theme, or 2. pivot if the idea does not seem to show any promise. Regardless, at this point it is wise to essentially start over again at #1.
Throughout this process consumer research and behavioral data (data on how people currently use the product) are essential tools, as are sessions where colleagues can point out ways in which the hypotheses might not be valid. The goal is to continually refine an instinct about which hypotheses will work and which won’t.
I hope the insights we are sharing from the Product Unplugged event are helpful! Please drop us a comment with your advice for early stage founders or with your questions. And have a read of Ethan’s post where he dives into Sami’s take on “What is product market fit?”
Stay tuned for future topics on:
- When is the right time to define and cultivate a unique culture?
- How do you deal with investors?
- The Most Important Factors to Product/Market Fit
Advice for First Time Founders was originally published on LinkedIn, where people are continuing the conversation.