5 Lessons for early stage Founders
Originally Posted: 21st October 2019
A fair chunk of my career has been spent working with founders of startups across various industries, and in that time I’ve accrued quite a bit of observations and notes to compare and contrast with my own experiences and path so far.
At the end of the day, each founders’ path will be pretty unique as it’s a function of many variables that define their startup’s own particular situation.
The intention of this article is to present a few learnings that seem to transcend across these unique paths and isn’t a map to success, but hopefully some additional inspiration to get you going along your own path.
After some careful thought and a bit of internal bickering, I’ve pulled out what I think are the top five learnings that I think can be helpful for the early stage founder!
Hire the right team
Armed with limited funding, limited time, and constantly trying to balance the spend, there is the obvious temptation to skimp on your team — either from a time or financial perspective.
However, it’s worth it in the long run to ensure you have the right team members in the right places with the right capabilities. It’s possibly the hardest part of the job, but if done right it reduces long term risks to the business.
This means a few things:
- Thinking through team structure and talent availability in the market
- Establishing a hiring process designed to get the right people, in the right seats on the bus
- Ensuring that the wrong persons are able to be removed effectively
- Ensuring that the right persons are involved in the process to make the most effective hiring decisions
- Thinking about the overall culture you are building and how that should influence the hiring process
Check out my article on hiring for a technical team here
Don’t stop fundraising
So you’ve just gotten the first round of investment closed, your team is celebrating, and you’re all planning out the next few months. Things are looking up and there’s some room to breathe!
The adrenaline of putting that new capital to work and turning your team’s vision into reality is mounting. It’s at this point many founders can make a costly mistake and neglect activities and plans for attracting and closing the next investment round.
The road from seed through product development to market entry and then levels of scale is a long one, which will require constant funding. The more funding, the more your business can do to build a larger market share. You don’t want your team to be caught with major financial bottlenecks along this road. Faltering on this path often leads to startup purgatory and eventual failure.
As such, it follows that a savvy founder always needs to be in fundraising mode:
- Networking with new leads to investors
- Up-to-date investor pitch deck and 30-second ‘elevator’ pitch at the ready
- Regular marketing campaigns targeted to reach new potential investors
This is a lesson that should also carry through to future rounds of investment as you continue to build and scale the business.
Establish and monitor key performance metrics
Data driven decisions are key to getting your startup from early stage to scale and beyond. While these will change as your business evolves, it’s critical to identify these early on and have a process in place where you and your team regularly review business health to decide where attention is needed.
KPIs should paint a holistic view of your business’ health across financial, employee morale and engagement, customer satisfaction and performance, market share and performance, etc. It’s worth putting detailed thought into this based on your specific business and market setup with your team.
- Establish initial KPIs
- Set up systems for getting these KPIs updated at some interval
- Set up regular analysis and meetings with team to make decisions based on KPI levels
- Set up points to re-evaluate KPIs being used based on evolving business
Company Structure, Policies and other Legal Considerations
Often overlooked, and only appreciated when things go wrong — another essential area to keep on your radar from the start is the legal setup of the company and its policies.
The following are some core aspects to consider:
- Company is setup in accordance with legal requirements in the territory you will be operating
- Policies in place to prohibit sexual harassment and discrimination
- Are the correct steps being taken to secure the company’s intellectual property and assets?
- Employee contract templates and confidentiality statements
- Agreements with co-founders are properly documented
- Customer contract and SOWs templates based on different engagement models
Always Keep learning
This one’s easy to forget, especially when your days are packed as you and your team are racing to get to market. However, you’ve chosen a great team and your startup is quickly evolving and learning about the market — you won’t have all the answers.
As a founder it’s imperative that you always keep learning and adapting so you can help your startup adapt to new learnings across technology and market.
- Hold company wide meetings to encourage ideas and opinions
- Establish an ‘Open door’ policy with employees
- Keep reading and learning about what other founders are doing and some of their approaches
- Attend networking events to find out what other businesses are doing in your industry. They may have already encountered some of the problems you are trying to solve!
Conclusion
A founder’s ultimate responsibility is keeping their team focused on making constant progress towards the vision. This is a wide umbrella, but these 5 points will help your early stage startup create a stable, secure environment that enables your team to focus on building and scaling your product.
While these are discussed in the context of an early stage startup, I also see these extending into later stages of a startup.
I know a few founders, including myself, that could have benefited from knowing these sooner rather than later. Hopefully you find these helpful when considering your startup, best of luck!