When I was a first-time founder, I built what I wanted, tracked the wrong metrics, and spent cash too fast.
I still remember sitting at my desk, on a call with my co-founder. We had just finished a six-month sprint towards launching our product, adding users, and fundraising. We weren't successful in the raise, only raising a portion of what we needed with only a couple of weeks of cash left. We both knew it was over but just sat on the call in silence. It was a gut-wrenching and also relieving moment, a hard feeling to describe.
What no one tells you is the period following a failed venture - when the most challenging questions start becoming clear.
Don't forget the business while you're busy "building a startup"
If you're like most founders, you likely are never short on ambition.
As entrepreneurs, the mindset is to think big and work like hell to make it happen. Unfortunately, this inadvertently results in founders staying busy over being effective. Focus is everything. A lack of focus can be determinantal, but focus doesn't mean being busy. Busy is an output of the work we plan to do; when it's the wrong work, we fail. Conversely, knowing what to work on and finding ways to be effective as a founder can keep you on the right path, increasing your chances of success.
Now, here are the most important lessons I learned as a first-time founder.
#1. Build What Customers Want
If your idea isn't solving a real problem, then no one will use it.
This happens when founders build what they "believe" people want vs. what people actually want.
It's a long road to product-market-fit, failing to listen to customers will only make that road longer or worse, bring it to an end.
"Oftentimes the question of why something won’t work uncovers the element that actually does make it work."
#2. Find Your One True Metric
If you focus your entire startup on just one metric, you'll be able to prioritize every decision that comes your way.
It will help you avoid distractions, and will give you a clear idea of what "success" looks like.
Finding the metric that matters most arms you, to be honest with yourself and the health of your startup - when things aren't going well, you'll know it.
"..Denial is the silent killer of startups. But if you hold yourself to growth targets, you can't remain in denial. The numbers, good or bad, are staring you in the face."
#3. Don't Run Out of Money
You never want to be in a situation where the money runs out before your business does.
If your business requires more time or resources than anticipated, having more cash in the bank gives you additional options on how to proceed without an immediate crisis.
Spend within your means, stay as lean as possible, and keep a rainy-day fund. You never know when you might need it.
“In the early days, know that it's only about cash. That's all the money you have to spend and should be spending.”
We don't remove the risk
Failure is a fact of life for every startup.
Even if you're doing everything right, there's a chance that things just won't work out as planned. However, if you build the solution your customers want, follow your one true metric, and have cash in the bank, you always have a shot!
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