Mental Prep for the Startup CEO
I recently watched a YouTube video featuring Dalton Caldwell and Michael Seibel, one of many in an excellent series produced by Y Combinator. The title is “What Does It REALLY Mean To Do Things That Don’t Scale?”
I had a pretty good idea as to what they meant before watching, and I’d encourage you to watch too as I agree with the vast majority of their guidance. Beyond the notion of starting companies around solutions to problems that are challenging to scale, as solving these problems present great opportunities, there’s an important discussion here about what life is really like for the vast majority of technology startup CEOs.
Some of my favorite comments:
Most smart people who want to be CEOs don’t realize that the startup experience, early on, is the exact opposite of what they imagine.
You skimp on everything.
You do things that don’t scale just to prove it’s possible.
You don’t get paid in cash, and maybe even bankroll the business on credit cards or a mortgage.
You personally handle customer support (pissed off early customers dealing with products that don’t yet work as advertised).
You decide whether to clean toilets yourself or pay a janitor.
There’s a certain mental mindset required to commit oneself to this kind of life. Few really smart people also want to get their hands really dirty and get in the guts of it all.
Which leads me to the first part of the discussion that I really want to focus on: the portion related to “Mental Prep”. In addition to the excellent comments they make, I’ll add a significant one of my own:
Be prepared for the “inevitable unexpected event.” This is something you never considered, you never saw coming, and I guarantee it will happen. I can’t tell you exactly what it will be, but you WILL have to deal with it. It might be an opportunity, or it might be an obstacle. The decision you make at that point in time will likely be the difference between success and failure - in a field where 90% of startups fail, and every one of them had a plan going in (many of them well thought out and backed by experienced investors). If it’s an opportunity, it may force you to take a risk that feels extremely uncomfortable. If it’s an obstacle, it’s one that will give you the feeling that your business is about to die - until/unless you come up with a creative solution. Regardless, hopefully you’ll learn from the experience, and either come through in a stronger position, or be prepared to come back even more determined to succeed.
Making the right choices in the face of these inevitable unexpected events is more likely if one approaches them with a solid foundation, certain core values and approaches that make one more comfortable dealing with uncertainty and change, and a strong network of relationships. I’ll have more to say about this at another time. However, part of building a strong foundation is the experience one gains before they find themselves in the startup CEO role.
This is one discussion point of Caldwell & Seibel where I disagree, at least partially. They pretty much dismiss the value of working in big companies first, and while I think I understand why they say that, I come to a different conclusion. I totally agree with them that big company culture is not a good template for life in a startup, and from that perspective, not helpful for when you launch your new company. I also agree that the solutions big companies are seeking are totally different (as are the types of problems they are typically concerned with), and the level of support you have under the umbrella of a big company is also very different, and one you’ll have to learn to live without.
However, there are a host of critical benefits to be gained by spending time working at a big company in your chosen field before launching a startup. By working at a big company first you could learn a ton about how your industry works. You get a chance to view best practices and consider how you might modify them if given the opportunity. You get to build key relationships with customers and KOLs. You learn relevant skills on every aspect of functional management of an operating business. You meet people you might want to recruit to join you on your journey when you decide to launch your startup. You also develop an understanding of the universe of big companies that might want to acquire your startup, and what are their strategic needs, and perhaps even meet some contacts there than can help you build future strategic partnerships. Finally, you’ll meet some very accomplished and talented people who you can learn from, and benefit from them sharing the wisdom gained from being in the business for many years.
For these reasons I strongly believe that working for a larger company in your chosen field - ideally an industry leader - is a preferred path prior to launching out on your own, even if it doesn’t provide you with a template for what you’ll encounter in the first few years of your startup experience.