Ten Lessons from Twenty Years
The first founder I ever worked for -- Gregg Kaplan at Redbox -- kept a list of lessons learned / principles from his years building and operating companies. As a young kid not too far out of school, I was impressed by the weight of that wisdom, accumulated and distilled over many years, and sought to do the same myself. So I made observations and kept notes. I became a student of the startup game.
(very few of them are original, but they are all critically important if you want to win and enjoy the journey)
My ten lessons from twenty years in high growth startups:
Be boring. My first job was at a well respected research and advisory firm out of Washington DC. I still remember the look on my boss's face when I left to join my first startup in Chicago -- highly dismayed, slightly haughty. The concept was just so... uncool. "You're leaving to rent DVDs out of a vending machine?" Hell yeah I was, and that very uncool concept skyrocketed to $2B+ in revenue and you can still find those Redbox kiosks all over America. From there it was coupons, local mom and pop businesses, groceries, dent repair, SIM cards. Tech startups have a certain cultural cachet to them, but if you're doing it because of the cool factor, you're doing it for the wrong reasons.
No drama / low drama. Startups are businesses, that sell products, that are created by people. Startups are also a pressure cooker, an environment where the likeliest outcome is that the whole endeavor fails. The natural state of people in a high pressure environment is not flattering. There's finger pointing, blame, gossip, politics, judgment. Counteracting that natural state and creating a no drama / low drama environment, led by team first principles, is incredibly hard -- but creates immense value. Seek out those environments. Seek out those leaders. Fire people that enjoy or create drama.
Motivations are everything. Startups are the art of willing a thing into existence that wasn't there before. To distort reality in that way, you need to influence -- investors, partners, customers, media, friends and family, employees. Maximum influence comes from understanding individual motivations deeply. What drives that person? Wealth creation? Social prestige? Learning? Novelty? Risk seeking? Risk elimination? Providing for their family? There are no right or wrong motivations. Figure them out. Don't judge them. And tailor your message accordingly for maximum influence.
Clarity carries the day. Startups are chaos and confusion. They are always changing, new people are always joining. It's no wonder that if you ask ten employees the same question -- say, who is your ideal customer -- you often get ten different answers. The winners are the ones who create clarity among the confusion, and give the entire company and stakeholders a shared mental model for understanding and simplifying the messy reality. Clarity creates alignment creates efficiency.
Extreme conviction and brutal skepticism. Consider this the new product variant of the famous Stockdale Paradox. For any new product launch to be successful, whether a company's core product or a new line, whomever is leading it has to be almost religiously convicted in its ultimate success. Otherwise, why bother? If you don't believe, why will your customers or investors? But you also need to simultaneously be your own harshest critic. Build a list of all the reasons the product will fail (there will be many) and disprove those reasons one by one. The trick is keeping the skepticism and criticism internal while presenting unshakeable conviction to the outside world. It's intellectual honesty combined with performance art.
Hire slow fire fast. Nothing creates more damage than a bad hire. Let me repeat: NOTHING creates more damage than a bad hire. So take your time filling roles, and hold a high bar. The hiring slow piece is much easier than firing fast. We all want to believe in infinite human capacity for change and growth. We love a great turnaround or comeback story. And they do happen -- but they are exceedingly rare. I can count on a single hand the amount of times where someone actually bounced back from the "you're about to get fired if XYZ does not improve notably" conversation. It's really hard, and the unfortunate odds are that if that person has the capacity to drive that type of growth in a short period of time, they likely would not be in the situation the first place.
Let fires burn. I absolutely love the This is Fine meme where the dog is sitting in a burning room enjoying a cup of coffee. That's a startup! Things are on fire all the time. Having the calm and discipline to identify which ones are dangerous and need to urgently be put out, versus those that are merely troubling / inconvenient and you can let burn for now, is critical. It's also hard because the best startups attract Type A, highly perfectionist people with unreasonable standards. But, the desire for perfection and a clear understanding of what things should be like (Plato's ideal form) cannot override the reality that startups are resource constrained, and trying to put out all the fires is sure way to run out of time and money and needlessly exhaust your best people in the process.
( _____ ) times never last. This is glaringly obvious to anyone who lived through the 2020/2021 pandemic bubble (it was a bubble) and the following 2022/2023 VC freeze. But it was always true that nothing ever lasts -- the good times don't last. The bad times don't last. The boring in-between doldrums don't last. You can do well by riding the right secular trends, but it's never the smooth up-and-to-the-right hockey stick that's popularized in the tech press. If you're lucky, it's more like a very squiggly up and down line that's generally heading more up than down. The lesson here is about mindset. When you're in the good times, don't get lazy and coast (although it's tempting). When you're in the bad times, don't get discouraged or defeatist (although it's gloomy). Just. Keep. Going.
Knowledge is a skin. I generally don't like snakes. They creep me out, and I have this recurring nightmare that I'm going to get strangled by a boa constrictor. But, their skin fascinates me. It cycles through new --> increasingly protective and useful --> increasingly constraining and limiting --> shedding and discarding --> fresh again with new growth potential. That's startups, that's your career in startups, particularly as it relates to knowledge. You constantly have to acquire knowledge, but be highly aware of when it becomes constraining and a limit to your growth or your startup's growth. Then shed it. Develop a process for intentionally shedding it. Otherwise your own hard earned knowledge will stunt you and your company.
Don't fool yourself. Fate vs free will has always been interesting to me. I wrote a mediocre thesis on it for my high school senior year AP English class. In startups, you might call fate luck, and you might call free will talent, or ambition, or genius, or something of the sort. No doubt both play a role. But never confuse the two, and be honest with yourself. If your startup is crushing it, but you can't point to exactly why -- it's probably good luck. Enjoy it (maybe take some money off the table if you can) but don't misattribute it to your own genius. If your startup is struggling, rigorously assess the various mistakes (there will be many), but if that doesn't fully explain it -- it's probably bad luck. Don't beat yourself up. Power through until the luck turns.
