Lost and Founder: A Painfully Honest Field Guide to the Startup World

by Rand Fishkin

Raising prices for your product every year or two and grandfathering in existing customers is a great way to increase loyalty and grow your profit margins. (We did this several times over the next few years; it worked like a charm.) If you want to raise money from an investor, ask for help with your business. If you want an investor to help with your business, ask for money. (From later experiences I can verify that, yes, this totally works.) Many voting rights for funded companies have some provision that gives special consideration to “preferred shareholders.” Usually, these are the investors, but smart entrepreneurs know this and thus will buy a small amount of preferred shares in their own companies during a funding round so they will also share these rights. The Hacker News website (https://news.ycombinator.com) has an algorithm that filters out high quantities of votes from a single geography. So if you want to ask your friends to help up-vote something to page 1, make sure they’re not all in the same city. (Also, make friends in other cities.) Recruiting for software engineers is best done directly by founders. Find people who look interesting, uncover a connection you have to them in your network, get an intro, meet for coffee, get them excited about your company, and if they’re not interested, ask who they know who might be. Not one of the group’s members had success with external recruiters (at least, not in the early stages). Oh, and Craigslist still works way b...

Recruit technical leadership with a teaching orientation. The best way to ensure that your CTO is going to make you a better CEO is to hire a CTO who likes to teach. Make it clear that you’re looking for someone to drive change and educate you and the team. Beware CTOs who try to “shield” you from the details. Being able to explain complex things simply is a job requirement.

Pro Tip: If you have any type of subscription or recurring revenue, make sure you measure LTV (Lifetime Value—the total revenue customers spend during their relationship with your firm) by referral source(s) and by the number of visits prior to conversion. If your stats look like Moz’s, you’ll probably want to adopt a similar, slow-burn conversion process.

The core values embodied in our credo might be a competitive advantage, but that is not why we have them. We have them because they define for us what we stand for, and we would hold them even if they became a competitive disadvantage in certain situations. —Ralph Larsen, former CEO of Johnson & Johnson

What might be surprising, though, is what Google found to be the eight behaviors consistent across strong people managers. Here they are, in order: Is a good coach Empowers team and does not micromanage Expresses interest/concern for team members’ success and well-being Is productive and results oriented Is a good communicator Helps with career development Has a clear vision/strategy for the team Has important technical skills that help him/her advise the team Number eight. Dead last on the list. That’s where the quality of technical work the managers themselves are capable of comes into play. It’s not that it doesn’t matter at all, but of managerial qualities, it sits behind every other crucial skill. On

That bias rapidly leads to thinking along lines like “Our core product is growing, but I bet we could grow even faster if we . . .” Filling in that blank is dangerous, because it’s almost always occupied by something that adds complexity and removes focus. Maybe it’s new features you believe could get you more growth, or a whole new product line, or the acquisition of another company, or a few R&D projects that could yield the next big thing.