Relentless Common Sense
Startups are an exercise in relentless common sense.
A portfolio founder asked me the other day: “What are some non-obvious mistakes to avoid, when building a startup?”
My answer was: actually, there are very few mistakes that aren’t obvious. Sure, you may get some of the tactical decisions wrong, and you never know all the answers. But most of the big stuff is actually pretty straightforward.
Straightforward doesn’t mean easy! Things can be simple to describe and understand, but difficult to do well. There are no “secrets” or “traps” or “magic” – it’s just the relentless application of common sense and good judgement and clear thinking from first principles. And I do mean relentless: every single hour of every single day. You can never take a break from the discipline this requires. That’s what makes it hard.
The most common ways that founders deviate from this common sense include: losing focus, slowing down, hiring too many people, not listening to the market, mismanaging their finances, and not taking care of themselves. These are all “obvious” but people still make these mistakes all the time.
Here are my own principles on all of these:
1. Focus
- “What is it that really matters here?”
- Stay focused on the most important tasks
- Say no to good ideas, so that you can work on great ideas
- Prioritize ruthlessly
- Avoid distractions and “shiny new toys”
- Lean into what you do best
- If you find something that works, just keep doing it
- Diversification doesn’t make sense for early-stage startups
- It’s very hard to do multiple things well in parallel
- Don’t optimize or automate too soon, do things that don’t scale
- Learn to tune out all the noise, hype and nonsense
- Consistency of effort has a huge compounding effect over time
- Pay attention to little details
- Constantly ask yourself if you are working on the right things
2. Speed
- Speed is your biggest single advantage
- Speed of iteration gives you more opportunities to learn
- Learning leads to better products and happier customers
- Speed boosts morale, attracts talent, avoids burnout
- Speed beats incumbents, outruns rivals, delights customeres
- Create and demonstrate a culture of speed across the company
- Inculcate a bias to action, ownership, urgency across your team
- Don’t overthink or delay – just get stuff done
- Don’t overcomplicate things; beware of analysis paralysis
- It’s better to act too soon rather than too late
- Be careful and thoughtful about imposing structure and process
- Most decisions are reversible; don’t hesitate to cut losses
- Be on time
3. Team
- Hiring rarely solves fundamental business problems
- Adding more people usually slows you down
- Hire slowly and carefully
- Missionaries are better than mercenaries
- Attitude (enthusiasm, hard work, rate of growth) matters
- Hire people who are okay with rapid change and incomplete info
- Company culture will emerge whether you like it or not
- So it’s better to plan and design it from the start
- Culture flows downhill; exemplify what you want to inculcate
- If someone isn’t working out, best to accept it and move on fast
- Look for under-appreciated talent, it’s everywhere
- Protect, nurture, empower and reward your best employees
- Incentives matter
4. Market
- Don’t fool yourself
- Spend as much time as possible listening to customers
- Don’t build a “solution looking for a problem”
- Add immediate concrete value, but also build towards a larger goal
- Have a definite, coherent, inspiring vision of the future
- Every decision has tradeoffs, and that’s okay
- Don’t avoid, deny or ignore uncomfortable issues
- Trust your instinct, it often foreshadows the data
- You have to sell all the time, to all the people; embrace it
- Brand, reputation, trust are precious, hard to build, and easy to lose
- Don’t worry too much about the competition
- Look for win-win opportunities: the world is full of them
5. Finances
- Revenue solves all problems, and should be your highest priority
- Spending is a one-way street – easy to increase, hard to cut
- Low burn is the single best way to boost your odds of success
- Low burn gives you optionality and control of your own destiny
- Be frugal but not too frugal; use common sense
- Raising venture capital is a means, not an end
- Beware of no’s that sound like yes’s
- Everybody is selling, pitching, talking their book – all the time
- Choose partners aligned on outcomes, horizon and risk appetite
- Be on top of your finances from day one
6. Burnout
- Startups often fail because the founders burn out
- Burnout can be mental, physical or emotional
- Boredom, discouragement, exhaustion, stress are all real
- Take care of yourself first – sleep well, exercise regularly, eat healthy, rest & recharge, take vacations, spend time with loved ones
- Enjoy your day-to-day work
- Take one step at a time
- Understand your own motivations and preferences
- Work with people who energize you, not drain you
- Positive energy is contagious; so is negative energy
- Beware of “all-or-nothing” thinking and “should” thinking
- Constantly learn and level up, to stay energized and excited
- Fall in love with the problem, not the solution
- Find joy in the journey, not the destination
They probably sound very simplistic and cliched, but they’re not easy to do consistently! I find it’s helpful to keep reminding myself of these principles.