What I Wish I Told Myself Earlier as a Startup Founder

About Me

It has been nine years since I founded my first startup in 2015, and it has been another memorable journey following my first eight years in Enterprise Technology Consulting. It took me quite a long time to transform from an engineer to an entrepreneur. Only in the past 1-2 years have I felt closer to understanding what it means to be a businessman.

With a decade of experience as an Enterprise Architect, I transitioned into the startup world nine years ago. Since then, I’ve founded four tech businesses. One didn’t make it (AI Chatbot), but two are still active and profitable (AI EduTech & API Developer Tools), and I’m currently bootstrapping a new one related to Agentic AI.

Recently, I was invited by my former university's Entrepreneur Center to share my startup experience with a pool of new founders. I decided to focus on my experiences and struggles with my inner self, rather than on how to build a great business—there are many domain experts who can do that better than me.

This blog is a written version of my 30-minute talk conducted in 2024 titled "What I Wish I Could Tell Myself Earlier as a Startup Founder," and I hope it will be useful to any first-time founders. I welcome any comments and discussions so we can grow together.

Let's travel back to 9 years ago now!

1. "Focus your time and money on a few key important things"

Starting out, everything is new and interesting as a startup founder, and you want to taste and do everything. Multitasking or multi-project management is common, especially for someone from Professional Services like myself, where I was managing multiple multi-million dollar project deliveries back in my technology consulting days.

However, in the startup world, this approach can be a double-edged sword. Startups are supposed to solve a specific problem 10x better instead of just 10-20% better. It's easy for a startup team to get sidetracked by different things, but you need focus to improve continuously. It's not a linear process—the effort to get your product better from 40% to 50% may be 10x more difficult than going from 30% to 40%.

Given the typical resource constraints of a startup team, it's crucial to laser focus on the core part of the problems instead of starting too many battlelines. It is difficult to say NO to opportunities, especially those that promise quick money. But once you are more clear about your true value, you will find out there are way more things you can delete than you can imagine.

Focusing on a few high-conviction bets is essential. Concentrating your efforts allows you to make significant progress in areas that truly matter. This approach ensures that you’re not just busy but productive, making meaningful strides toward your goals.

2. "Results are what matter most; don’t let a good lesson learned excuse poor outcomes"

In today’s startup culture, methodologies like Agile management and lean startup concepts are becoming increasingly popular. Lessons learned and retrospectives are critical for a team to grow and improve. However, it's essential to avoid romanticizing lessons learned from failed projects. While learning is valuable, we must remember that outcomes truly matter in business.

As a startup, you likely have a limited cash runway, whether it's self-funded, supported by angel investors, or backed by VCs. You can't afford too many failures. Every failure and success counts, and you must ensure that each experience drives you towards tangible results. Don't let the process or lessons learned become an excuse for poor outcomes.

While it's vital to learn from experiences, the ultimate measure of success is the outcome. It’s easy to get caught up in the process and the lessons learned, but at the end of the day, results are what count. Always strive for tangible outcomes and use lessons learned to improve your strategies and execution.

3. "Move fast and launch your product early to get feedback—don’t wait for perfection"

As an engineer or builder, you want your product to be great in your eyes because it reflects who you are. However, while you may be one of your own product's users, you are typically not the major revenue generator. This leads to a key challenge: how to discover the real user needs?

There is no standard formula for this, the only way to get real user feedback is to launch your product and track user behavior via data and analytics. User interviews can help, but most users are incapable of articulating their real needs precisely. It takes time to iterate and discover true needs through objective analytics and data.

In the early days of my startup journey, I misunderstood the concept of a Minimum Viable Product (MVP). I focused too much on the reusability of modules and components instead of the core goal and purpose of the MVP. This is very common for people from engineering backgrounds. The key is to launch quickly and iterate based on real user feedback, and technical debt isn't an absolute evil at this stage.

4. "Marketing is crucial—know your audience, target them well, and position your product to meet their needs"

Marketing is more than just communication and promotion. Some builders may think marketing is a secondary priority, coming after the product and seen as another sales effort. It's embarrassing to admit, but only recently did I delve deeper into what B2B marketing truly involves. The STP Model (Segmentation, Targeting & Positioning) reminded me that marketing should be tied to the core of your product.

As an engineer or first-time founder, you might try to generalize your solution for every sector and all kinds of users, which sounds great in theory but often leads to failure. Segmentation, Targeting, and Positioning (STP) are crucial and should be considered in the early stages of your startup. You can target a broader audience once you have more resources, but this is unlikely in the early stages of your business.

This focus also relates to your overall strategy and team hiring as you scale. Claiming that your product can solve everything for everyone is a dangerous path that can lead to achieving nothing.

5. "Keep communication clear and roles well-defined in your team. We are building a business, not a family"

You may start with a team of 2 or 3, where everyone covers for each other. Titles and organizational charts might be more for show, as you all act as generalists—whoever is free takes on the task. For example, engineers might do customer support, non-tech staff might handle UX work, and founders might make cold calls for sales.

However, as your team grows, clear roles and communication become critical. Without well-defined roles and effective communication, the team and business growth can bottleneck. In a small team, it's easy to work closely together and communicate verbally. But when your business scales, you need clear communication protocols and accountability.

It's also important to recognize that business is business. Some startups begin with a mindset of building a family, expecting unconditional love and support. This approach can create issues for new team members who are focused on performance. Growing up with Japanese manga and anime, I envisioned a team that would grow and stick together forever with unlimited potential for improvement. However, this is generally not the case in a real business context.

6. "You need an exit plan; you won't be married to your business forever"

An exit plan is crucial, especially if you intend to attract investors. As passionate as you might be about your startup, it's essential to understand that you won't be involved with it forever. Planning for an exit, whether through acquisition, IPO, or other means, helps you set long-term goals and align your strategy accordingly.

Life circumstances can change—marriage, the birth of children, relocation—making it important to have a plan in place. Considering an exit strategy early on doesn't mean you're planning to fail or shirking responsibility. It's a normal and necessary part of business planning, ensuring that you build a sustainable business that can thrive without your constant involvement.

Recap

- Focus, Focus, Focus: Concentrate on a few key important things.

- Results Over Process: Prioritize outcomes over just having a good process.

- Fast Iteration and Early Launch: Move quickly and get early feedback.

- Marketing and The “STP” Model: Understand, target your audience and position yourself effectively.

- Building a Business, Not a Family: Maintain clear roles and communication as an elite team.

- Have an Exit Plan: Plan for your business's future and your eventual departure.

These lessons are some of the key extracts from my startup journey that I believe can be inspiring for first-time founders, especially those with an engineering background like myself. There are many more lessons learned along the way, but keeping your faith and pushing forward is crucial.

Keep going, and never stop learning! Looking forward to the 10th year of my "startup" journey.

By Patrick C.S. Fan, 2024. Let's get connected to grow together.

• https://www.dhirubhai.net/in/patrickcsfan/

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