Founder Fridays No. 37
Helping founders scale smarter.
Happy Friday. This week’s briefing is focused on growth.
Do Things That Don’t Scale
A lot of would-be founders believe that startups either take off or don't. You build something, make it available, and if you've made a better mousetrap, people beat a path to your door as promised. Or they don't, in which case the market must not exist. Actually startups take off because the founders make them take off. There may be a handful that just grew by themselves, but usually it takes some sort of push to get them going. A good metaphor would be the cranks that car engines had before they got electric starters. Once the engine was going, it would keep going, but there was a separate and laborious process to get it going. So, Paul Graham’s (founder of Y Combinator) most important advice for early stage startups is to do things that don’t scale. Read this iconic essay to understand why. Paul Graham (9 minutes)
Marketing Like Steve Jobs
If there was just one actionable advice for someone who wants to market like Steve Jobs, it would be to focus on the story. Make sure that your marketing efforts are centered around a compelling narrative that your audience can relate to. Start with a relatable problem, build up to the solution and weave a story around your product. A great story will capture people's attention and help you to connect with them on an emotional level, which is crucial for effective marketing. Hypervisualized (4 minutes)
Knowing When to Quit
For many founders, grit is a trait that is valued above all others. The value of grit has been well articulated; it’s a major predictor of success across fields. But we largely neglect the important flip side of grit: knowing when it’s time to quit. When do you cut your losses and move on? This question is particularly important for high achievers and people who are naturally gritty. If you’re in this group, you’ve probably gotten where you are by being persistent. But there’s a fine line between perseverance and stupidity. At some point, it’s not worth stubbornly pursuing something if the expected value (potential outcomes x probabilities) is negative and you are forgoing better opportunities. This article covers three main points: knowing when to quit, holding yourself accountable and navigating your next steps. These lessons are applicable to anyone pursuing a goal — personal or professional — but most of the examples I use are career-related. Accelerated (14 minutes)
Founder FAQ: Is venture capital right for my startup?
Simply due to the economics of VCs, only a tiny fraction of hyper-growth companies will ever be considered. If you read the startup press, it may feel like every company is raising VC funding; that’s not an accurate representation of reality. According to the National Venture Capital Association, less than 1% of businesses receive VC funding. Even in 2021, which was a record-high year for VCs, the $150 billion in total U.S. VC funding was only around 13,000 companies. The truth is that a vast majority of startups don’t raise VC money. The question is whether VCs are right for your company. This article will shed some light on that question. Westaway (6 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term by term and give you negotiation tips so that you can speak to investors with confidence.
Move Fast. Don’t Break Things.
Hi! I’mKyle. This newsletter is my passion project. When I’m not writing, I run a law firm that helps startups move fast without breaking things. Most founders want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a flat, monthly fee so you can control your costs and focus on scaling your business. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm.Click here to schedule a 1-on-1 call with me.
Great post about the pitfalls of VC funding for startups. I hadn't seen or heard of SV-SB before. One addition to make to you list of alternative funding sources is revenue based investment. Check out the writing Jamie Finney does on Substack thru the Innovative Finance Newsletter. This is a great option to boost growth.