The Great CEO Within: The Tactical Guide to Company Building

by Matt Mochary

There are many reasons to create a company, but only one good one: to deeply understand real customers (living humans!) and their problem, and then solve that problem.

Your partner’s purpose is not to be value-add forever. As your company grows, you will likely find people with far greater skills whom you will hire. That’s okay. Your co-founder’s purpose is to help you achieve success in your march to product-market fit.

Y Combinator has another strong belief: founding teams should never grow beyond six until there is true product-market fit. Product-market fit (PMF) is the milestone of having created a product that customers are finding so much value in that they are willing to both buy it (after their test phase) and recommend it. Metrics that show whether PMF has been achieved include revenue, renewal rates, and Net Promoter Score.

There is no magic metric, but for a B2B company, it’s hard to imagine PMF at anything less than $1 million in annual recurring revenue. Why not grow beyond six team members before reaching PMF? Three main reasons: morale, communication and organization, and speed.

By contrast, with six or fewer people, the environment feels like a team in battle. Chaos is expected. So when chaos is actually encountered, the team meets it with glee. People who join small teams crave the challenge of new things. They want things to be hard.

Startups don’t usually fail because they grow too late. They usually fail because they grow too early (i.e., before they have achieved product-market fit).

Inefficient leaders waste a lot of time reaching out about or responding to one-off issues in real time. A much more efficient method is to batch your issues and discuss them all at once. This does not apply for urgent issues. Those need to be addressed immediately. But by addressing many issues on a regular basis, urgent issues will soon disappear.

Schedule two hours each day (i.e., put an event in your calendar) to work on your top goal only. And do this every single workday. Period.

It is critical to be on time for every appointment that you have made or to let the others involved in the meeting know that you will be late as soon as you realize it. This is common decency, yes, but it has a greater importance.

Whenever you find yourself saying something for a second time (to a second audience or in a second situation), it is highly likely that you will end up saying it again and again in the future. To vastly improve the quality of the communication and reduce the amount of time that you spend communicating the information, write it down.

In a First Round Review article titled “How to Become Insanely Well-Connected,” Chris Fralic of First Round Capital says that he reserves one hour each week for follow-ups and outreach, most of which include appreciations. I recommend that you do the same.

Trust dissipation is correlated with geographical distance. Humans are hardwired to trust their close friends the most, their immediate peers next, the people they meet in person after that, and the people they meet via videoconference last.

the best person for this role has high EQ, medium technical understanding, and a fantastic work ethic. I’ve found a good indicator of their ability is if they understand (or can quickly learn) SQL.

The biggest thing I overestimated was the average person’s technical literacy.

Building a company will take a physical and mental toll. All the work you put toward your company will be for naught if it costs you your health. It is incredibly important that you focus on both your physical and mental health, and take active measures to improve them.

So start by placing your liquid assets in a brokerage firm. Then invest all the cash into US Treasuries while you decide on your investment strategy.

No matter how original and innovative your ideas might be, and no matter how efficient and productive your own habits might be, you won’t be able to build a truly exceptional organization alone.

Just as individuals develop habits, so do groups. And just as with individuals, it’s much easier to start off with good group habits rather than have to change bad group habits down the line.

The choices you’ll face regarding your company will feel endless, from low-impact issues to major ones, and it can be tempting to rush through the decision-making processes. Don’t. Creating Buy-in

very common cause of inefficiency in startups is sloppy agreements. People don’t show up to meetings on time, and they don’t complete the goals that they declare (or they don’t declare goals at all). The result is a spreading virus of unproductiveness and decreased morale.

Your team members are smart. When there are problems, they know it. Hiding negative information from them does not make them feel better. If anything, it makes them more anxious.

Great leaders learn to access all three centers of intelligence: the head, the heart, and the gut. Resisting and repressing feelings is standard operating procedure in most organizations. Feelings are viewed as negative and a distraction to good decision-making and leadership. Conscious leaders know that feelings are natural and expressing them is healthy. They know that emotion is energy in motion; feelings are simply physical sensations.

People gossip to gain validation, control others and outcomes, avoid conflict, get attention, feel included, and make themselves right by making others wrong. In short, people usually gossip out of fear.

When people feel distrust or dislike for each other, it is usually because they don’t feel heard.

There is a simple fix. I only need to prove to you that I have “heard” you. And to do that, I only need to repeat back what you’ve said in summary form (by saying, “I think I heard you say…”) until you say, “That’s right!” Then you will feel heard. You will now be open to hearing what I have to say.

Remember that you are not making a product—you are solving a customer problem. It is therefore critical that you continually live that customer problem. Only then can you solve it well.

Remember, the key metric is output, not hours.

Here’s an easy way to do this: Whenever you find yourself doing something twice, write down exactly what it is that you did. If you’ve done something twice, you’re likely to need to do it again, and someone else may need to do it too.

A product manager is someone who both has the social skills to sit with customers and is (or can learn to be) technical enough to know what can and cannot be done technically.

Paul Graham of Y Combinator points out that makers (engineers) need long stretches of uninterrupted time to be productive, whereas managers are most effective when meeting. The compromise is to schedule days when no meetings are allowed.

The key is efficiency. And to be efficient, you must spend as little time as possible with the candidates you don’t hire (quick evaluation) and as much time as possible with the candidates you want to and do hire (building a relationship and onboarding/training). Remember that each minute you spend with a candidate you don’t hire is a minute that you aren’t spending with the candidate you want to hire.

Speed There is another key variable to making the recruit want to accept your offer: speed! A recruit wants to feel loved. The easiest way to accomplish that is to have a fast process from start to finish. Each day of delay sends the message “We don’t have conviction about you.”

Most companies spend extraordinary resources of time, money, and equity to bring on a new team member, and then almost entirely drop the ball on quickly getting that team member onboarded and up to speed on how the company works

The reality, however, is that most people don’t care about your product functionality. They don’t care about your features. They care only about their business results.