There’s no shortage of quippy maxims about being a startup founder — you’re building the plane while flying it, changing the tire while the car’s still moving, plunging into the deep end — you pick your favorite.
But no pat turn of phrase can quite capture the chaos that comes from building 0 to 1 and beyond. On top of having to find a winning idea and create a stellar product in the first place, founders bear the weight of what can feel like a million different responsibilities — finding early hires, building a culture from the ground up, acquiring customers, and raising money. Seemingly every day, novice founders are faced with an endless list of things they’re learning to do for the very first time — and the stakes are incredibly high.
Any way you slice it, embarking on the first-time founder path is a bumpy journey, but you don’t have to go it alone. That’s why we’ve combed the Review archives for some of our favorite pieces of advice specifically tailored for folks taking up the mantle for the first time.
From the thrilling highs of idea inception to the chaotic jolts of navigating user feedback and hiring top talent, this guide offers tactical tips directly from founders like Drew Houston of Dropbox, Marco Zappacosta of Thumbtack, Christina Cacioppo of Vanta and Tim Chen of NerdWallet. While now an incredibly successful bunch, these folks were once first-timers themselves, and viscerally remember the growing pains.
Each offers the frameworks they’ve relied on at every twist and turn, as well as useful examples from their experience in the driver's seat. Alongside the advice from founders, experts like executive coach Alisa Cohn and marketing maven Arielle Jackson add their finely-tuned tactical advice from teaming up with hundreds of founders over the years.
While there’s no exact formula for first-time founder success, read on for a thorough guide on how best to handle your first entrepreneurial roller coaster ride.
START WITH A PROBLEM THAT MEETS THESE THREE CRITERIA
Even before founding Dropbox in 2007, Drew Houston was a problem solver. As an undergrad, he signed up to beta test an online game and eventually landed his first engineering gig when he discovered a host of security vulnerabilities that needed fixing.
With over 700 million users today, Dropbox is a fairytale success story of a scalable product born out of a simple idea. And while the road has been far from smooth, Houston credits much of the triumph to what he learned back in college: To build a great company, you need to start by solving a problem.
“Dropbox’s conception was pretty simple,” he says. “I got fed up with the lack of seamless storage solutions for my files and wanted to build something to fix that.”
But not every seemingly simple idea is necessarily bound to be good. To find the worthy ones, Houston offers a list of criteria to help new entrants choose their projects wisely:
- It just pulls you. While perhaps not as scientific as the typical founder’s advice, this gut feeling shouldn’t be overlooked. “Sometimes you just get this feeling that you have to work on something, and you can’t stop thinking about it,” he says. “You need that hunger no matter what, because eventually the honeymoon period wears off and you realize, ‘Oh, actually this is a ton of work.’” Having an issue you’re compelled to solve helps keep fuel on the fire.
- You think it can go far. In short, the problem needs to be something that other people (lots and lots of them) will care about — not just you. “With something like Dropbox, it was immediately like, ‘Wow, this is a product that anyone with an internet connection could use.’ Everyone needs something like this, they just don’t realize it yet.”
- It optimizes for learning. To find a problem worth solving, go where you feel you’re going to learn the most — even if that means diving into a completely unfamiliar space. Consumer demand and scalability are driven by solutions to complex problems — not easy ones that anyone with a computer and a few minutes could solve. “It’s okay if you do things wrong at first. You can learn a lot from that. Ask yourself, ‘Where can I find an environment where I can work really hard and that challenges me to learn?’”
To find more tips on how to grow your company from an idea to a solution, read the rest of Houston’s first-time founder manifesto here.
LET GO OF YOUR ENTREPRENEURIAL EGO
While the earliest stage of being crazy enough to set out on the entrepreneurial journey requires a healthy dose of self-importance, too many new founders take this past its expiration date.
“It’s easy to slip into that ‘I know this best’ or ‘I have to solve this myself’ mode,” says NerdWallet founder Tim Chen. But building a company poised for success means giving away your legos — when you’re making decisions, shaping the culture and architecting your product strategy. In his guide to shifting from first-time founder to seasoned exec, Chen outlines some of the areas where ego is bound to crop up.
- Ego in decision making. First-time founders tend to succumb to the delusion that they can add value to every decision. Yet in order to keep the machine humming, a little disengagement can go a long way. “I used to be involved in everything,” says Chen. “Up until we were about 200 people, I’d interview every single person, and you can imagine how much that slowed us down.”
- Ego in company culture. When you assign something or someone a negative label, your ego prevents you from seeing the truth. If company culture isn’t taking the form you expected, it’s important to take a step back and get curious about what's going on instead of immediately trying to change things. That might mean evaluating whether or not you hired people who are a good fit, or it could be a more introspective practice about how your own behaviors might be poisoning the well. In short, don’t listen to the ‘my way or the highway’ chants from your ego.
- Ego in product building. Chen stresses the importance of user feedback, taking it a step further by telling first-time founders to put it above their own ego. “Of course, you need to start with a really crisp thesis on what you’re trying to build,” he says. “But you have to balance that with listening to your customer, who sometimes ends up telling you that the assumptions you had as a founder flat-out aren’t true.”
As a founder, your job is contingent upon your ability to improve at the pace that the company needs you to — ego is the only thing that can stand in the way of that.
Executive coach and author Alisa Cohn has 20 years of experience teaming up with founders — and to help folks put their ego aside, she never strays too far from this question: “What does the business need from you right now?”
“You can be a successful CEO with all different behaviors and styles. You can be loud, you can be soft, you can be charismatic. But what’s consistent is the need to change as the company grows,” says Cohn. “How do you need to show up differently today to achieve that five-year vision of who you need to be in order to run the kind of company you want to build?”
If you’re not partnering with a coach, Cohn suggests reflecting on these questions on your own:
- What three words would you want people to use to describe you?
- Your company is a mirror. What do you want to see there?
- Where do you need to dial up or down the elements of your leadership style?
- What are your superpowers and what is your Achilles’ heel?
Cohn shares plenty more tactical self-reflections for founders, along with advice for bringing in other folks around you to collect the feedback you need to hear.
PRIORITIZE FIT OVER TALENT FOR EARLY HIRES
“Early founders, myself included, tend to over-index on talent and under-index on fit,” says Marco Zappacosta, co-founder & CEO of Thumbtack. “It’s so hard to recruit when you’re two people with no brand, no money, experience, or traction — that’s a tough sell. So you often hire the most talented or skilled person you can get.”
Zappacosta — who founded Thumbtack after graduating college and has held the same role for the past 15 years — learned the hard way that skill isn’t everything.
“What causes relationships not to work isn’t a lack of talent, it’s a lack of fit,” he says. “Interpersonal issues don’t crop up because one person is smart and the other isn’t. Folks just have different approaches. It’s not right or wrong, it’s just left or right.”
When there’s high fit on a team, there’s high trust, and with that trust comes the ability to make decisions quickly.
This is especially important in the early days, when the cultural tone is still being set. “Building the culture starts with who you hire,” says Zappacosta. “And if you hire the right ones — people who mesh with the work style and are attracted to the idea — you can have a really great culture start to grow around that. “I didn’t always appreciate the impact one person can have on the vibe of the place. Had I known that earlier I would have been more maniacal about who we brought on in the early days.”
As the founder of Rupa Health, Tara Viswanathan decided to codify these hiring values early on — and still sticks with them today. Here’s how she approached the exercise: “I looked at the people who I respected the most and who I worked the best with, as well as checking these against myself to see if these criteria held true for me,” she says.
Each value has a corresponding interview question that probes the candidate’s aptitude, as well as what a good answer looks like versus a red flag (which you can see in the full write-up here).
- Holds High Standards: Not only do they hold high standards for themselves, their work and their teammates, but they also enjoy being held to high standards.
- Jumps in the Deep End: They have an “ask for forgiveness, not permission” mentality. They get their hands dirty and are a proactive problem solver not defined by a job title.
- Be Curious: They are open-minded about potential solutions to a problem. They approach new topics and ideas with curiosity.
- History of Hustle: There are clear examples in their past where they have had to figure things out on their own and take chances. They’ve proven they can be thrown a curveball and still make it happen.
- Be Human: Bring your whole self to work. Treat people with kindness. Optimize for friendly.
GET SPECIFIC ON YOUR TARGET CUSTOMER
In 2018, Ryan Glasgow said goodbye to the life of a serial early-stage PM and set out to build the ultimate customer insight tool. As the founder and CEO of Sprig, Glasgow and his team found success in a crowded space by taking the time to narrow in on a specific target user.
“The surveying and product research space was hardly a new category,” he says. “We needed to go much further than just creating a modern surveying tool in order to get people’s attention.”
To get more detailed on who you’re serving, Glasgow recommends new founders take three key steps.
- Figure out who to build for. The first step in sifting through a crowded market calls for some segmentation. By dividing up the space into distinct audiences, groups who are underserved become easier to spot, and the next step becomes evident. “When we did the market segmentation at Spring, I discovered this huge opportunity to serve product managers, and it was a segment that was growing really fast,” says Glasgow. “Then when I looked back at my own experiences and talked to other PMs, it confirmed that there weren’t any existing solutions on the market to solve their specific needs — so that’s who we needed to focus on.”
- Figure out where to play. A role or type of person isn’t targeted enough. To build a successful profile, you need some more specific demographics. “When I did more segmentation, I saw that the most underserved product management market segment was actually with the larger companies, so we took it a step further and narrowed our lens even more,” says Glasgow.
- Figure out what they need. Even the most precisely narrowed-down customer persona can have multiple needs. Glasgow recommends finishing out the targeting process by naming which one(s) you’re going to focus on specifically. “So for us, we were focusing on product managers in the high-growth to at-scale companies segment, and we were looking to solve their need for more accessible qualitative data.”
From day one, set out to build solutions that address a highly specific customer segment and meet very specific needs. That’s how you build a differentiated product.
More from Glasgow on the eight product hurdles every founder must clear.
BALANCE YOUR INPUTS FROM EVANGELISTS AND DOUBTERS
In the early days of exploring ideas for what would eventually become Bowery Farming — a digital agriculture company with a mission of bringing local foods closer to communities — Irving Fain conducted his fair share of exploratory conversations.
With no prior experience in vertical farming and, at the time, it being an industry that wasn’t exactly mainstream, Fain was keen on collecting a mix of perspectives to parse through.
One of those early conversations was with a Columbia professor who was a strong believer in Fain’s idea. “We ended up eating Buffalo wings at an Irish pub in the Upper West Side, talking for an hour and a half about how inevitably vertical farming was going to be the next great thing,” says Fain.
It was the kind of spark that could quickly send Fain off to start building. But as energizing as those kinds of chats were, Fain strongly advises new founders to balance them out with voices that aren’t so enthusiastic to get the full picture of what they’re stepping into.
“You don’t want to fall victim to confirmation bias,” he says. “It’s equally important to find people who don't believe in what you're doing to help you operate from that base level assumption that what you’re doing shouldn’t work and then trying to prove that wrong.”
For Bowery, that took the form of Fain sitting down with an equally reputable professor who thought the idea was impossible. “There should be hundreds of reasons why this can’t work — that’s fine. It doesn’t mean you don’t do it. But it’s better to know them ahead of time,” he says.
It’s important to look at all sides of the equation. To think through all the things that could go right, but equally, and maybe more importantly, all the possibilities that can go wrong. If you haven't done that as an entrepreneur, you're not asking enough of the tough questions and you're not looking hard enough at your idea.
Find more of Fain's tips on starting a company in a space you’re not an expert in here.
GET CRYSTAL CLEAR ON YOUR PRODUCT'S FUNCTIONAL BENEFITS
Great startups deserve great brands. For a product to be positioned successfully, there needs to be clear communication around value prop.
To get this right, Arielle Jackson — First Round’s Marketing Expert in Residence who has helped hundreds of companies like Patreon, Loom and Front architect their positioning — urges founders to emphasize functional benefit from the get-go.
“You need to be really clear on what you do until people understand what you do,” she says. “Yet so many founders skip straight to emotional benefits, skipping over the functional messaging entirely.”
This can be particularly difficult for first-timers as they get caught up in their own excitement about what they’ve been working so hard to build. And while boiling your million-dollar idea down to a few bare-bones sentences might not sound the most exciting, it’s a key step for finding early success.
You have to make sure people understand what the hell it is you're talking about before you can move higher up Maslow's hierarchy in your messaging.
To help stay focused on the functional, Jackson suggests two exercises:
Exercise #1: Find your sweet spot on the Cinderella spectrum
Two things happen in the Cinderella fairytale. On the functional side, she has a fairy godmother who turns her pumpkin into a carriage. On the emotional side, she gets to live happily ever after.
Jackson recommends running through a similar brainstorm when thinking about product benefits. “List out all your benefits — emotional, functional, and anything in between,” she says. “Then if you’re an early-stage startup, stay focused on the functional side of the ledger.”
While your messaging shouldn’t be void of emotion altogether (Jackson likes to think that all great products bring their customer a little magic), make sure the message gets across clearly.
Exercise #2: Take the bar test
Put yourself in the shoes of the customer. How would they describe your product? Would it be easy enough to explain to a friend over a drink?
“If your message can't be said out loud easily, it's not done,” says Jackson. Yes, you need some level of language that’s deeper and speaks to experts in your target audience, but your first order of messaging is simple: tell people who you are and what you do without the jargon. That means speaking in plain English, ditching words like “enabling” or “leveraging,” and clearly addressing the problem you’re solving.
You can find more of Jackson’s brand-building tips for early startups here.
DON'T MAKE EARLY SALES HARDER THAN IT HAS TO BE
When Christina Cacioppo founded Vanta, her sales experience was close to zero. “The last thing I sold before starting the company was Girl Scout cookies,” she says. While navigating those early pitches was a tricky expedition through uncharted waters, Cacioppo emerged with three important lessons she imparts on other founders:
- Don’t do two sales calls when one will do. Cacioppo’s initial strategy for sales calls was a kick-off call to ask the prospect questions about their current solution, along with a brief explanation on what Vanta did. Prospects were generally skeptical that Vanta would actually work, and Cacioppo would excitedly schedule a follow-up to show them the ins and outs of the product. “I thought I was all set with this genius two-call sequence,” says Cacioppo. “But then one prospect told me, ‘That should have just been one call where you showed me the product immediately, and the deal would’ve been done in 30 minutes.’ And he was precisely correct.”
- Get early wins by selling to fellow founders. “It helps to sell to other founders because they're much more tolerant of the ‘let me show you what I built before I give the sales pitch’ approach,” says Cacioppo. “They’ve been there, so they're much more motivated by talking about a product than being sold on it.”
- Ask for feedback from salespeople outside of your org. Regularly asking other salespeople to review your process has the dual benefit of optimizing your pitch and keeping it fresh. “What I was doing worked some of the time, but I didn’t know how much better it could be until I asked for outside expert opinions,” says Cacioppo.
An effective kick-start to sales doesn’t require a robust background in pushing product. A tactical approach that leverages the founder network is more than enough to take your company from theoretical to money-making.
Read on for more insight on Vanta’s path to product-market fit here.
OBSESS ABOUT CASH
Rob Hayes joined First Round Capital as a Partner way back in 2006, and has backed early-stage startup founders building the likes of Uber, Square, Mint and more. He keeps his list of advice for new founders relatively short and simple. His most blunt: don’t run out of money.
“Right after a round closes, the champagne’s flowing and everyone’s excited — the last thing you want to do is plan out your spend for the next 18 months,” says Hayes. But you need to.
Founders should be worried about cash on hand all the time. Even if employees love you, they won't stay if you can't pay them.
His advice for keeping your head in the cash comes down to three simple tactics:
- Consider putting a venture debt line in place. Then forget about it just as fast. “You want it there, but don’t plan to use it,” he says. “Have the security, but pretend the money doesn’t exist.”
- Don’t include assumed revenue in your cash management plan. “I hear it all the time from new founders, 'This is where revenue will start flowing in, so we can do X, Y and Z,'” says Hayes. “I want to see a cash plan that assumes absolutely zero revenue, because you never know.”
- Share your cash plan (sans debt line and revenue) with your investors. This builds immediate accountability. You want a structure in place where, if something happens, someone will be there to ask, “What the hell is going on?”
“It's crazy how often people miss this,” says Hayes. “In the early days, know that it's only about cash. That's all the money you have to spend and should be spending.”
Here, Hayes shares more practical advice for first-time founders.
FINELY TUNE YOUR COMPETITOR RADAR
Today, he’s a three-time founder and currently helms Crossbeam, but back in 2008, Bob Moore was the first-time founder of RJMetrics — a data analytics company. It netted a modest outcome after getting acquired in 2016, but would be dwarfed by the eventual $2.6 billion Google acquisition of competitor Looker.
In his view, RJMetrics didn’t get lapped by Looker because the team wasn’t paying enough attention to their competitive landscape — they were paying too much attention. “When Looker came out of stealth in 2013, we didn’t even consider them to be our competition. But fast forward six years, and my co-founder and I are scratching our heads about how they won so big and we missed the boat,” says Moore.
The reason they ended up on that lower podium? “We got so heads down in executing on what we thought was a good idea in 2008 that in the course of those next eight years, the ground shifted underneath our feet. This entirely new way to approach the problem came forward,” he says. Rather than looking at the larger landscape and where they could capitalize, the RJMetrics team was worrying themselves over competitors who were basically doing the same thing as them.
Later on, Moore course-corrected and started asking a simple question: What’s the new product that would terrify us the most if it launched tomorrow? It’s a reflection that ended up prompting a small team at RJMetrics to spin out a new product idea, which turned into a substantial standalone company after RJMetrics had been acquired.
Resilient founders don’t ask “Which competitor are we scared of?” Instead, it's “What fully-formed company would be an existential threat to us, whether it exists or not? And if it doesn’t exist, why aren’t we building it?”
Read on for this three-time founder's reflections on resiliency.
LISTEN CLOSELY TO YOUR POWER USERS
Equally important to drilling down on specific customer needs from the outset is adapting those views based on feedback. Steve El-Hage cautions first-timers against sticking to their guns to the extent that they forget to listen.
As the co-founder of Drop, El-Hage admits he needed to “learn everything the hard way” as a first-time founder — and he experienced a slew of emotions as the company saw the highest of highs and the lowest of lows. In their first week, they did $12k in revenue and even got a fancy feature in the New York Times. But after a short period of promising wins, Drop’s revenue went down to zero and stayed there for eight consecutive weeks. "The worst part was that we were working way harder than we were before, but we just couldn’t get anybody to buy anything,” says El-Hage.
To right the ship when revenue nosedived, the founders started deep diving with the users who were so jazzed at the beginning. “It was a process of elimination — just replaying those amazing first three weeks. But everything was happening too fast for us to truly understand why those early successes were happening,” says El-Hage.
A common theme that came up in these conversations was the community aspect of Drop — so El-Hage decided to double down here — even though it wasn’t initially popular with their advisors.
“A lot of people that design products are in the mindset of, ‘I will magically imagine some perfect product and I will pass it down as a gift to my users.’ But it's usually the other way around — existing users talk about what they wish brands would do, but that feedback isn’t incorporated into the product.”
Read more about discovering the importance of user feedback the hard way here.