5 Foundational Pillars of Starting & Growing a Company — From the Experts
Last year, a group of MBA peers and myself discussed how we could use our waning time as students to gain insights into the earliest stage of the founder experience. We had already entered business plan and startup competitions as well as started a weekly pitch night for our boundless product ideas. Despite this, we were looking for another vice to further satiate these desires. As very few of us had been on founder teams before, we decided to call on what MBA’s do best; listening to the stories of those who have come before us. This ultimately culminated in a research project that gathered startup insights by listening to stories from the Seattle founder community.
It was inspiring how immediately willing many of Seattle’s top entrepreneurs were to share their journeys, full of their own successes and failures. To protect their intimate advice, I will not use any names or companies. Instead, I will disclaim that what follows is my best effort at distilling the guidance from these experts, however impossible that task may be. We were able to hear from more than 40 founders in the Seattle area. The Founder’s current roles included a CEO of a business that had successfully IPOed all the way to founder’s in the first year of their startup. We are indebted for the time and stories each one of these amazing founders shared with us. Without further ado, here are ‘5 Foundational Pillars of Starting & Growing a Company — from the Experts’
Mission Statement
In 3 words: purpose begets passion
Many of us have probably heard the stories of start-up founders maxing out their credit cards to keep their business’ going. Some others have even started entirely separate side hustles to fund the original business. Before I had interacted with many of these founders, I always wondered if they were all just a little crazy. The answer, as it often goes, was simple as it was impactful; their mission over-rode what many of us would consider rational thought.
Of all 40+ founders we talked with, not one failed to talk about their purpose. Some called it a ‘mission statement’ others, a ‘north-star’ or perhaps most simply ‘why the f*** I do this’. Regardless, the message was simple: love the mission and the rest will follow. “It will sound cliché,” prefaced one founder “but the day you follow your purpose in life is the last day you ever work again.” Another founder made the point in his own way that if your problem statement doesn’t frustrate you to your core, no one will ever care about your solution. He said, “Mark Zuckerberg hated not getting invited to parties… cue Facebook.”
My takeaway: more Jerry Maguire, less Michael Scott Paper Company
Team
In 3 words: listening is fundamental
Stories about team formation were endlessly unique. One team we talked to started by doing P90X together in their apartment gym (and no, their product had nothing to do with fitness). A billion-dollar company we talked with was founded during Seattle Startup Weekend. The two main storylines were (1) champion diversity and (2) cultivate open and honest communication at all costs. A founder shared, “the quieter our room got, the closer I knew we were to the end.”
One of my favorite anecdotes about the team formation stage was when one founder shared a kernel of wisdom about equity structure. They said, “the only wrong answer to founder equity is an even split.” They went on to suggest a foundational discussion between team members that outlined roles and responsibilities from which equity structure mirrored. It was logical as it was profound.
My takeaway: organizational culture starts on day one with the founding team
Product
In 3 words: just do it
One founder shared a major takeaway from his first three failed startups; spend less time perfecting your first product (also called an ‘alpha’, ‘beta’ or ‘MVP’) and just get it to market. “You will never be able to predict what customers think about your product until you start asking,” he said. This prompted him on company number four to push out an entirely manual version of the product where he created a no code interface for customers to use. The ‘automated service’ was him in his car performing what he hoped the app would one day be able to do.
One of my favorite product insights came from a founder who said, “in the earliest days, don’t get caught up in how you are going to make your product work. Be completely focused on what the customer needs.” When I asked if that could lead to some aspirational products for which there was no existing technology he said, “customers move at the same pace or probably even slower than technology.”
My takeaway: Listen. Create. Iterate. In that order.
Customer
In 3 words: the Bezos way
Customer obsession has always been a prerequisite for sustained success. Amazon may have popularized this phrase, but it reigns supreme over the business community as a whole. One founder may have said it best when describing how they differentiate against the competition and said, “Whoever knows the customer best wins.” Customers have a reputation of being a fickle bunch. Founder after Founder emphasized the importance of seeing this as an opportunity to be perpetually dynamic as a company, product, and leader.
Another interesting anecdote came from a female founder who talked about how knowing your customer will counteract being too early or late with product timing. She explained using customer data to pivot or iterate on different versions of your product will ‘bring you into the now.’ It reminds me of a quote offered by Greg Daniels (writer of the Office) who said that making changes in American comedy was like ‘steering a cruise ship’, you have to do so ‘one degree at a time’.
My takeaway: was Vine TikTok with less customer discovery/implementation?
Capital
In 3 words: thoughtfulness and accountability
There is a vast array of opinions on how, when, and why to take outside capital for your startup. My own analogy, formulated from hearing many different Founder opinions, is that taking capital is similar to brand endorsements for athletes. In your first few instances of raising, unless you are the next Lebron it will be difficult to get the big-name brands. Search for thoughtful partners that genuinely believe in you and want to help you get there.
My other favorite anecdote came from a founder that continues to be a role model as a Founder. When asked about capital, instead of talking about the raising process, he focused the conversation on holding himself accountable for the deployment of that capital and his relationships with those partners. He said, “If I put in my deck that I was going to do X in month 1, Y in month 2 and Z in month 3, I make sure to update them after month 1, 2 and 3 telling them how we achieved X, Y and Z. If for some reason we haven’t gotten there, I outline a plan to get back on track.” Across his 4 startups to-date investors have repeated their capital commitment in each one.
My takeaway: seek capital like you would a Co-Founder, treat capital like a personal loan from your best friend
In Summary
1. Craft a mission statement that means the world to you. Design your team, your culture and your strategy around the pursuit of this mission. Don’t compromise.
2. Collect a group of leaders you think are amazing at what they do, care about solving the problem as much as you do and will build great teams around them.
3. Just listening is not enough; amplify the voices of your team.
4. Don’t champion diversity because it is topical, champion diversity because it will make you better.
5. Craft your product based on knowing your customer better than anyone else. Know that your best chance at winning is listening to customers and iterating effectively.
6. Have a voracious appetite for critical feedback, it will make everything you do better.
7. Don’t be afraid of bringing on capital when you need it. Be afraid of not getting a thoughtful partner in return.
8. Meet your commitments. Be honest and open about the journey. People will forgive failure. They won’t forgive lies or lack of accountability.
I hope these insights are as helpful to you as they have been to me. Finding success as a founder seems a little less daunting when you blend the lessons of others into your own foundation. Thanks again to everyone who shared their stories with me.
