Really, there’s nothing I’ve done in my life that is harder than being a founder CEO. Nothing. It’s 100x harder than being a VP. Even if the actual work is easier. It’s 100x harder than being a VC. Even if delivering top returns as a VC is maybe even harder than as a founder.
But I can also clearly now say looking back that being a founder CEO has been the most fun, and definitely the most rewarding, thing I’ve ever done. Especially the memories of doing the unlikely and the impossible with your co-founders and the folks on the management team you’re closest to.
Given that almost bipolar combination of experiences … and that in SaaS it’s just plain harder, because there are so many more functional areas you need, early … how can we have more fun?
It ain’t by buying a foosball table.
Here’s what I’d do, and how I help the founders I work with. My guide:
- #1 Make Sure You Have a Great, Equally Committed Co-Founder. Otherwise, Just Wait. If you haven’t started yet, but are anxious too … don’t settle on your co-founder. Don’t either hire someone not good enough, or good enough — but not committed enough. It’s a 7-10 year journey. Better to wait 6 months that start the journey with someone that isn’t going to carry about weight. More on that here, here and here.
- Raise Enough Capital for An Extra 6 Months. However much capital you raise (if any), however you do it … raise enough for 6 more months. You probably won’t need it. But it will dramatically de-stress things. Which will let you both invest more aggressively. And have more fun doing it. Stressing over money one more day than you have to (and it’s always stressful, until the day comes when it isn’t) … wastes time, energy and is simply un-fun. I constantly meet very fundable founders looking to raise $750k. My only advice? Raise $1.5m if you can. Pretty much always. It’s just so much more time at this phase. ‘Cause you’re gonna need at least 24 months really to just get it right. More on that here.
- But — if at all possible, Skip a (Venture) Round. Dilution does eventually take its toll. People are lying if they say it doesn’t. Some of it is inescapable, and in which case — don’t worry about it. But the real play here isn’t to raise or try to sell less in a financing round … that’s pretty hard given that most investors have minimum bite sizes. The real play if you can is to somehow skip an entire round of dilution. By hacking your way to $1m in ARR. By growing so fast from $1m to $10m you skip a round. Whatever it is. Most of us can’t. But if you can — one less round of dilution actually will de-stress your life and make it more fun. Because you won’t worry in the back of the mind about one step too many of dilution. More on that, with case studies, here.
- Hire Great VPs the Moment You Find Them. Even If It’s Way Too Early. I know some of this seems like contra to other advice on SaaStr, but I mean it very specifically. Don’t hire a VPS from Salesforce today if you’re at $500k in ARR. That’s not going to work. But if you think you just need a manager, a director in a certain role … and you truly find the perfect VP … hire her tonight. Do not wait. Nothing will move the needle more post Initial Traction that a Great VP of Product, Sales, Marketing, Customer Success. 10x better than a simple line manager. Because they will be so accretive — and get you to the next stage faster. And carry some of the load. More on that here. Don’t underhire in SaaS (more here). It just adds to your stress and takes the fun out because it’s one more thing you have to micromanage longer than you should. Which will burn you out.
- Avoid Shiny Pennies From $1m to $10m ARR. This is in some ways the toughest phase, as we’ve discussed. More on that here. Too many customers with not enough resources. Too many demands, too many feature gaps, too many holes. You can’t keep up. To some extent, it’s trial-by-fire. But my #1 big of advice is No Shiny Pennies. Whatever works at $1m is still going to work at $10m. There are 10x as many customers in the whole entire world that will buy the exact same product you had at $1m ARR. Don’t waste energy on new verticals, new product extensions, new anything from $1m to $10m — unless you have at least some existing customer traction already in those areas by $1m ARR. Once you’re at $10m ARR, you’ll have fat in the system. You can experiment more. But don’t mess around getting to Initial Scale.
Every company is different.
But in SaaS, for a given ACV, they mostly scale the same way from $1m to $10m, and then $10m to $100m.
Try the above 5 tips to have More Fun and Less Stress. Which will equal More Success.
pennies image from here
(Cross-posted @ SaaStr)