by Sev Geraskin
Wed Feb 09 2022
Over the last couple of months, I chatted with over 100 startup founders and identified problems that might get in the way of progress.
As a startup CEO, you are a subject matter expert in your market niche and deeply understand the problems and opportunities. Thus, you are not married to your idea or product. You consider your idea valuable as long as it solves the problem in the market. Once the market shifts or the idea is invalidated, you move on.
Even if you solve a problem in your market, how will you reach your users? Is your product too complicated to explain and spread through word of mouth? Are you paying too much for user acquisition in a business where customer acquisition cost is the differentiator?
Too many startups measure their growth in free users, headcount, or other things. That's bullocks. 0 to 100 employees is not impressive. That's why so many people are getting laid off now. 0 to 1 million free users is also not remarkable. That's a guaranteed way to burn your capital on OpEx without discovering if any will pay for it. You are running a business, not a charity. 0 to $10 million ARR? Now, we are talking.
There is no such thing as development in a silo. You are disconnected from your market if you develop your product without user feedback for three months. Demand demos and transparency from your development team. Get them to partner with your customers and establish the feedback cycle early.
Are you relying on contractors? Mercenaries aren't going to protect your kingdom once you run out of money, and they sure ain't going to fight for you as hard as your home-grown troops. Read The Prince by Machiavelli. So yeah, you need a team, and to make it happen, you've got to give up some equity.
By focusing on getting the business fundamentals right, you set the right environment and tilt the odds in your favour to generate traction, increase cash flow, and raise that next capital round.