For several years now we have received (mostly lowball) acquisition offers that I always quickly waved off: summit or die trying, right? Lately, though, I’m taking them more seriously. I’m ready to stop climbing. In fact, I just gave myself the hardest deadline of my life: I will sell my company, my baby, The H Hub, by May 15th, 2020 to the highest bidder.
When I step down as CEO it will have been four years, almost to the day, since I started the company. Apart from four years being a nice round ‘chapter’ (like high school, college or medical residency), it’s also exactly 10,000 hours worth of work which is meant to be the amount of time needed to master something.
As I sit here writing this, I find the irony almost comical – it took me 10,000 hours to fail at something, not master it. But as I torture myself with all the things I wish I’d done differently, I am struck by how many lessons accompany the myriad missteps. By how much I’ve grown.
We oddly live in an age where entrepreneurship is romanticized. Make no mistake, it will rock you to your core. But for those about to embark: what takes most decades, you will absorb in years – from business operations to self-actualization.
And so, here’s my best shot at condensing 10,000 hours into five simple learnings:
1. You have to love yourself before you love a company.
Like in love, starting a company shines a light in places you aren’t used to looking. The darkest cracks of your being, your deepest insecurities – all revealed. It’s a fantastic thing to be twisted and tickled until everything is out in the open. For the first six months, while you’re getting others on board, the company resembles a 3D rendering of your soul – the good and the bad all laid bare for supporters, investors, and employees. I wish I’d known what was in store. I wish I’d believed in myself more, and strengthened the levies before the storm.
One of my favorite quotes is this one by Einstein, “The question that makes me hazy: am I or the others crazy?”. I like it because it perfectly describes the existential tightrope entrepreneurs have to walk. You are both a visionary and a fool. You have an equal chance at changing the world or having it laugh in your face. As within life, to find balance on this tightrope is to find your voice and your rhythm. We are all good enough and not good enough. Relish your good modestly and accept your bad without bitterness. You’ll fall to your death otherwise, well before your time.
2. What you don’t do is more important than what you do, do.
There’s a franticness to being a founder. A feeling that you should always be doing more. You never, ever turn off. That feeling, though, often causes you to start down paths you oughtn’t and overcomplicate things you shouldn’t. Napoleon would famously leave his mail unread for two weeks. “If it’s unimportant it will have solved itself by the time I read it”, he justified.
I learned from a fellow founder the power of restraint a bit too late. The power of doing less. Of saying no. In my four years as founder, dozens of software features were built when they didn’t need to be, agency projects taken on that ended up costing us money, and people hired for roles we didn’t really need. When you are scared, confused, or stifled, say no to the next five things, cut 80% off your to-do list, or let a few employees go. More often than not, you need to futz with the company more than the company needs to be futzed with.
3. Team is everything. Don’t start without an all-star lineup.
The v1 of our software was built by a lone, full-stack developer in Korea. He barely spoke English, I had just heard of Java two weeks prior to starting, and it was a disaster. Today, I am surrounded by people who I have cried with. People who believe. People who are deeply talented.
When people ask what my favorite part of being a founder is, the answer is easy: I get to be the hub (yes, the company is called the Hub, too) of a powerful wheel filled with the most talented people I know. I have learned about product process from Jason, user flows from Jaymi, nurture sequences from Becky, chillness from Keith, persistence from Caleb, quiet confidence from Shannon and about teamwork, bravery, fortitude and friendship from all of them.
4. Beware the “swinging doors”, that’s what’ll cost you the most energy.
I always say being a founder is like being the ‘head waiter’ at a fancy restaurant. You have to cross those two little swinging doors that separate the kitchen – where there are grease fires, swearing chefs, and pork chops being dropped on the ground – and the dining room – where you have to justify a piece of salmon costing $34 or reassure a patron that their pork chop will just be a few more minutes.
Cooking for the dinner rush with an under-experienced kitchen staff is hard. Selling perfection to a snooty customers is hard too. But crossing between the two worlds drains you like you wouldn’t believe. Being knee-deep in shit inside the company while being neck-deep in an investor’s ass creates levels of cognitive dissonance entirely foreign to my peers who work a 9 to 5.
5. LTV / CAC is all that matters – in entrepreneurship and in life.
This is my favorite lesson.
Life Time Value (LTV) is the amount a customer pays to your company over time. Customer Acquisition Cost (CAC) is the amount of money it takes to acquire that customer. The goal is to acquire customers for less money than they will pay you over time. In fact, a good rule of thumb (before you spend money on “growth”) is to acquire customers for a third of the cost they will ultimately pay you.
The single most important thing you must do to succeed as a startup is to find users with an abnormally high Life Time Value (your “passionates”) and learn a) what your passionates have in common and b) why they love your product so much. Then you can find other people like your passionates and pitch the new customers what the old ones found so damn compelling. That’s how you figure out your “product-market fit” and build a sturdy base ready for growth.
Startups are like people, though, and often they waste time and money trying to get everyone to like them. If a founder spends money acquiring customers who don’t absolutely love the product, the customers will churn before they can justify their acquisition cost. The company will fail because it doesn’t know who it’s customers are or how to make them happy – it doesn’t have “product-market fit”. If you’re a founder you must only focus on those customers who will love you. If this sounds familiar it’s because it’s a fundamental rule of life – figure out who you are, figure out the kind of people who love you and fuck the rest.
I love talking about startups. And I loved being a founder. If you ever want to talk shop, vent, or hear about our journey my email is email@example.com