Weld has been going for two years now, which makes it a natural time to reflect for me. It has been the most intense learning journey in my life and feels like more than just two years time.
Sometimes it has felt like being on the top of the world, and sometimes it has felt like an endless desert walk through the Sahara.
Despite reading almost any book on entrepreneurship I could get my hands on in the last 10 years, from Zero To One to Founders At Work to Hard Thing About Hard Things, and being part of building Pleo from pre-seed to unicorn, I have yet found myself making tons of mistakes. Mistakes that have been tough and I didn’t expect, but that are easy to make in the heat of the battle building a startup, despite my prior experience.
Feeling the startup up- and downsides on my own body over the last two years, has given me a few hard-won insights that I want to share. Some of which I use as principles to become a better startup founder - I hope they will be useful to you as well.
#1: The startups that win, have the fastest feedback loops.
And the startups that have the fastest feedback loops are great at embracing repeated failure. Learn to strive in the discomfort, doubt and vulnerability of rapid iteration, i.e. failure. It’s not a pretty process, but I believe it’s the path to excellence.
The speed of iteration seems to be the biggest determinant in finding product-market-fit in the early days of a startup. Ideally, you can validate ideas in days or weeks.
At this point in time, it’s important you have a team of driven problem solvers, that likes to execute and move the needle, instead of sitting in long meetings to plan, talk, brainstorm, ideate and similar low-impact activities. More on hiring later in this post.
“Building many rockets allows for successive approximation. Progress in any given technology is simply # of iterations * progress between iterations.”
Elon Musk, CEO at SpaceX
#2: Be aware whether a decision is reversible or irreversible
Being a startup founder, you make many decisions daily. It’s important to become great at determining when to act quickly vs. slowly. A useful tool for me is to evaluate how much it would cost to undo a certain decision - the higher the cost, the less reversible it is, and the more diligent and careful you should be in this decision-making.
Examples of irreversible decisions in startups includes, but are not limited to, which investors you choose, which co-founders you work with, which strategic partnerships you enter and whether you decide to hyperscale your company.
At the other end of the spectrum, reversible decisions include, but are not limited to, most hires, marketing experiments, product features and office location.
I’ve made too many of mistakes of both being too fast at making irreversible decisions, and too slow at making reversible decisions, however I’ve become much more mindful of reversibility-cost when making a decision.
“Some decisions are consequential and irreversible or nearly irreversible – one-way doors – and these decisions must be made methodically, carefully, slowly, with great deliberation and consultation. If you walk through and don’t like what you see on the other side, you can’t get back to where you were before. We can call these Type 1 decisions. But most decisions aren’t like that – they are changeable, reversible – they’re two-way doors. If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups.”
Jeff Bezos, CEO at Amazon, 1997 Shareholder Letter
#3: Be very explicit and upfront about your company values and what you expect from people
90%+ of company values I’ve seen are absurd nonsense. “One Team”, “Curious, “Kind”, “Innovative”, “Hardworking” are not company values, since they are so generic that they are not for or against anything. They drive consensus-thinking and don’t encourage tough decisions, which will end up with a misaligned team running in different directions.
When you are a startup, you don’t have anything. The least you can do for yourself is to stand for something.
Are you for or against remote work? Are you working 30 hours a week or 80 hours a week? Are you product-led or sales-led? Are you on a VC track or not? Are you optimizing for long term or short term?
When these are clear, be explicit about it towards your existing team and new hires. It will naturally attract the right people for your company and discourage the wrong ones.
I’ve always seen Revolut as a company with clear values. Their former CRO Alan Chang describes clearly what he wants from people:
"I am probably working 70-80 hours a week and if I am not working I am thinking about working. The whole team is very focused on execution and works very hard. We make it very clear before anyone considers joining that we are trying to build a generational company that will change the industry forever – you can’t do that without hard work."
Alan Chang, former CRO at Revolut
Whether you subjectively like that or not, it succinctly describes the workplace and what expectation you should have.
If we had been more direct with our expectations to people from the beginning in Weld, I believe we would have avoided quite a few mis-hires.
#4: Have a high bar when evaluating your product-market-fit
It’s easy to get tricked into thinking you have product-market-fit. Probably because you see what you want to see, and you haven’t analyzed your business in depth. For Weld, that led us to scaling the team too fast, too early.
My best advice is to stay lean, until you are very certain that you are on to something, both with healthy product adoption (e.g. usage metrics) and business model (e.g. CAC to LTV).
Keep striving for excellence and a strong foundation before expanding your company. If you scale with mediocre product-market-fit, you’ll likely end up as a zombie startup.
“My definition of product-market fit is you are drowning in demand - your product is being used by so many customers that you cannot handle all the new people knocking at your door!”
Michael Seibel, Managing Director at Y Combinator
#5: Sell your own product from day 1
While building Weld, it’s become evident to me how important it is that founders lead from the front - especially in the early days. Until you have at least €5M ARR of sales, you can’t expect your employees to magically fix your business. You have to get out there yourself.
Startups operate in wartime, in particular when you’re just getting started. That’s why I think founders should sell their own product from day 1, since it will create the fastest feedback loop in order to find product-market-fit.
Your sales team won’t be set up for success, if you can’t repeatably sell your own product. Only scale sales teams for real after €5M ARR.
“I mentor a lot of CEOs and entrepreneurs, and when I see that product is the number-one thing, the only thing that matters, that's a real red flag.”
Marc Benioff, CEO at Salesforce
#6: Gather a team with an opportunity mindset and extreme bias towards action
First, finding the right people is hard. Do it slowly. Adding too many people too quickly to an organization will have tremendous coordination costs, and will slow down the pace of iteration.
As I believe the fastest feedback loops win, I suggest hiring a team that values action over perfection, results over process, MVPs over meetings, autonomy over clarity and who sees opportunities instead of problems.
The people you surround yourself with will make or break your startup. Make sure you have a team of people who are not only skilled but also share the same values, work ethic, and drive as you do.
You will inevitably hire the wrong people at some point, and my best advice here is to dismiss them quickly. You will sense how they react to a fast pace with deadlines, KPIs, accountability and short meetings already within the first few months.
“I've seen every idea. Ideas are irrelevant. You are judged on execution, and the number 1 way to prove that you can execute is by executing.”
Michael Seibel, Managing Director at Y Combinator
#7: Be obsessed with your ideal customer profile (ICP)
Building a startup is often chaotic, so it’s important to keep focus on what really matters: your (best) customers.
I’ve often been derailed from this focus myself in Weld, due to e.g. raising capital, hiring, financial planning, performance management, internal coordination and meetings etc., and it hurts the core business since an early stage startup is very reliant on you as a founder.
Having a razor sharp focus on (i) understanding and defining your ideal customer, (ii) building the best product for them and (iii) finding always to distribute it efficiently with a healthy business model, and iterating over this fast, is almost all that matters in the end.
“A startup is a company that builds some kind of technology that people want. The mistake that a lot of founders make is to build something they think users want, but that users don’t actually want.”
Paul Graham, Founder of Y Combinator
Starting a company is a challenging and rewarding journey. Along the way, there are many lessons to be learned, and my experience with Weld has been no exception.
Although there’s a big difference between reading about something vs. feeling it on your own body, I hope my reflections have been useful for you! 😊