I know you are all super busy. So I put the key message I want you to get out of this post right in the title of the post. But I really do want you to read on and try to understand and internalize what I’m trying to say here, as it’s not obvious, and especially not obvious when you’re in that phase of your startup.
Startups are hard. We all know that. You of all people know it better because you’re living it. Over the course of having played a founding role in 6 companies (including K9) and having invested in over 30 companies (through K9) I’ve noticed one other thing that happens in startups that doesn’t get talked about. And that is that some founders get cocky. It’s not unexpected and it’s not unreasonable after the hard knocks we founders take in the early days. But success in a startup can almost make you believe that you’re invincible. That is an incredibly dangerous thing and can not only destroy your own reputation and credibility, but can also cause real damage to the company you’ve worked so hard to build.
In the early days, everyone thinks you’re crazy and no one believe in your vision of the future. But you keep trying. You convince the first co-founder to join. You convince the first investor (hopefully K9!) to invest. You convince your first employee to leave their high-paying job and take a chance on you. And most importantly you eventually convince someone to become your first customer. And then you get your next customer. And the next. And all of a sudden you realize that you’ve achieved the hallowed “Product-Market Fit.” People want what you’ve built and they’re willing to pay you real money for it. VCs are chasing you down to try and invest in your company. The press finally want to write about you now. Recruiting becomes easier. You’re actually bringing in real $$s into the company. Wow, things are looking up.
That is the point when founders start to develop a false confidence. A belief that they’ve figured things out. That they made all the right choices, and that they now know what to do. This is an incredibly dangerous place to be. It is even more dangerous when your company hasn’t scaled the executive team. This is when the company culture starts to get messed up, because the founder and the company has lost it’s humility. This is when the company starts to stop listening to customers. This is when the MBA-like tactics of maximizing growth and maximizing revenue come in. As the $$s flow in the company begins to lose fiscal discipline, and starts spending more than it should in the name of growth. Most VCs love that stuff because they want to see that hockey-stick growth (For the record, I do not. I want to see steady, healthy growth over time) and so they’re ready to let the company spend like crazy.
The ability to think out of the box, be creative, to not take no for an answer, to bend the rules — all of that is necessary in the early stages of the company. Without it you wouldn’t get this far. But at some point, you have to realize that you can’t continue to act this way as the company scales. Scaling a company takes time. And there are some things that cannot be sped up. Company culture cannot be sped up. Company values cannot be sped up. Company ethics cannot be sped up. When you hire people, they need to have time to acclimatize, to get to know their peers, to understand what is expected of them — professionally and in interpersonal interactions.
This is where I want to almost scream at the founders (because otherwise they will not hear it as there is too much noise around their heads) to slow down. Relish in the fact that they’ve built something amazing and valuable. And most of all they’ve built a team that is passionate about what they’re working on and who they’re working with. In that moment, stop, slow down, and think about how lucky you are. Yes, how lucky you are. Not how good you are. Not how awesome you are. But how lucky you are, that this little tiny idea that you started with is now finally working. And now remind yourself not to mess this up. And what will mess this up is if you let the success get to your head.
If you start drinking your own kool-aid, that you can do nothing wrong, then you will fail. In the words of Andy Grove — “Only the Paranoid Survive.” STAY PARANOID. STAY VULNERABLE. STAY HUNGRY. STAY HUMBLE. Don’t get cocky. Don’t get arrogant.
As a founder, if you succeed in building a highly successful company, you have figured out one path to success. But that path to success is *not* always the same. Nor does the same advice/formula apply to other companies. Just because a particular strategy worked for you, it doesn’t mean that the same strategy will work for everyone. Success is a funny thing. There are lots of different paths to it and following the same path will almost never lead you to the same outcome! The path to success changes with every journey, every attempt. Just because your internal GPS got you there the first time does not mean it will get you there the next time.
Lot’s of investors believe in investing in “repeat founders.” People who have already succeeded once. I believe that if you’ve succeeded once, you’ve learned a lot of good lessons that may help you along the way. So yes, it might increase the odds of you being able to deal with a situation you’ve seen before, but it does not imply certain success. In fact, if anything, you’re coming with baggage of how things worked the first time that may prevent you from thinking outside the box this time — something you were able to do in your first startup. It is incredibly difficult for someone who has been incredibly successful on their first run, to repeat that success a second or third time. I’m sure there are some examples of people who have done this, but I would argue that those that do succeed consecutively, have learned to stay humble.
One of the guiding values I set for myself when starting K9 was Humility. And in my first deck for K9 and on the About page for the firm, I put down: Humility: because arrogance kills. I firmly believe this. Arrogance kills.
If you’ve built a real business, celebrate it, relish it, but please don’t let it get to your head.
With love, respect, admiration, and humility,