Based on the cases in the Success/Failure module, here are my own personal takeaways on how not to fail. Or at least, give yourself the best chance to succeed.
- Prepare well and prepare often
One of the biggest learnings thus far has been the lack of preparation by founders right from the initial founding of the company. Many of these founders took for granted the amount of preparation need to validate product market fit, to identify the right customers, etc. They also don’t realize where their own blind spots lie. Maybe they were experts in technology but can’t always grasp or communicate unit economics. Maybe they take for granted the infrastructure required to communicate their vision.
Specifically, I believe that preparing for entrepreneurial success often starts before founding a company. Are you learning from successful founders? Are you thinking through your own leadership principles? Are you gaining the skills to shore up your weaknesses?
- Sweat the small decisions
As a founder, especially early on, every decision matters. From hiring down to key product decisions, each small decision can have a dramatic impact on the trajectory of the company. Its worth putting down guidelines (i.e., as GH Smart recommends for hiring), and quickly acting on those decisions that don’t work out. I think one of the most valuable skills a founder can have is the ability to toggle between the big picture and the minute details quickly and efficiently. Doing so allows them to have a pulse on the company while also understanding when to delegate accordingly. But having a mindset that “I’m going to get every decision right” doesn’t mean an irrationality of control, but could also mean “I need to cede this decision to those who know best”. We’ve seen many founders who have gone astray by not sweating the small decisions, choosing instead to gloss over them using their money, or lack of insight.
- Diversify with governance
Many founders view governance has a bad, constraining thing. But if done well, the proper governance can be instrumental in minimizing bad risks in a company’s future. Finding the right investors, aligning incentives among the employee base, and having a broad base of opinions are critical towards making the right decisions. Silicon Valley to some extent has recognized this. Many, often exclusive, communities of founders exist to diversify brainpower and to share best practices. Incubators differentiate their value by bringing in people who have been there, done that. And investors try their best to use their network to facilitate connections. Doesn’t always work, but people have realized that both informal and formal governance has a lot of value.
- Don’t be afraid of risk
At the same time, risk isn’t always bad. In fact, its required to turn an idea from a a small dent into a grand slam. In my view, the key is to understand the risk, experiment accordingly, and double down when needed. Many founders go big on one idea (i.e., Curt Schilling), without the proper understanding of the risks involved. Their risk perception can be skewed by personal wealth, hubris, or market forces. Yet, entrepreneurs have to be risk takers in order to succeed.