Of all the roles and responsibilities an early stage startup CEO has, the most important is finding product market fit. A good heuristic to use is to continually ask, “Is what I’m doing getting us closer to product market fit.” If not, it’s a sign that the thing you are doing is not the most important thing to be spending time on.
- The focusing illusion makes you think what you are focusing on is the most important thing
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Willingness to Pay Should Be at the Core of Product Design
The core thesis of Monetizing Innovation is that product failure is rooted in the failure to put the customer’s willingness to pay at the core of product design. Designing around the price—which measures value and priority—helps guide product design based on the customer. Companies often build the product and then do marketing and pricing, but that amounts to a leap of faith at best and a painful disconnect that leads to failure at worst.
When Things Are Going Well it Feels Like Users Are Pulling You
When things are going poorly it feels like you are pushing your users. Sales are harder, finding new users is harder, etc. When things are going well it feels like users are pulling you. Users are driving you to get what they need, everything feels easier.
Emotional Intelligence Is More Important for Entreprenuerial Success Than General Mental Ability
A recent meta-analysis study compared the impact of general mental ability and emotional intelligence in entrepreneurial settings and found that emotional intelligence was twice as important for explaining success.
Founder-Led Sales Helps Identify Product Problems
When a founder leads initial sales at a startup they can quickly respond to each scenario, position the product, and answer questions. If a salesperson is the only person doing initial sales they will need a script and training to do it well. If it’s not going well it’s difficult to tell if there is a problem with the product or a problem with the salesperson.
The Path from Concept to Product Is an Annealing Process
Curtis Yarvin wrote in a blog post announcing his departure from Urbit, that building a product is like an annealing process. It starts as gas (an idea, amorphous and unconstrained) and ends in metal (a product in the hands of users). In the process, it can cool too fast causing structural weakness requiring heat to temper it (iteration and refinement).
Solo Founders Are Less Likely to Pivot
The likelihood of pivoting seems to increase as the number of founders increases. Solo founders are the least likely to pivot compared to co-founders of 2, 3, and 4. The most likely to pivot is when there are 4 founders.
You Should Be Able to Get from Seed to Series a on Your Network Alone
Most early founder-led sales will come from the founder’s personal network. Once you are bootstrapped with a few customers, you should also receive referrals from them (if you are not, that’s a signal that you don’t have something people love). For B2B startups charging high 5 figures, low 6 figures per installation, you should be able to close all of the sales you need (learning and adjusting along the way) to get from seed stage to raising your series A.
How Much to Pay Yourself as an Early-Stage Founder
This question comes up a lot from founders starting a company and raising a seed round—how much should you pay yourself?