Hustle is the Single Most Important Thing
The conventional hiring wisdom prioritizes hard skills. However, at the earliest stages of a company, the sheer quantity and diversity of activities that are required to get things off the ground very rarely fit squarely in one person’s suite of competencies. Daily activity also evolves rapidly, and so hiring in someone who meets a specific set of needs at one particular point is likely to be defunct shortly after they arrive.
There are though several requirements that do persist as startups grow: the need for curiosity, creativity and strength of mind required to will something into existence. Co-founders and early team members need to make things happen, and I have learned that it’s soft not hard skills that do this: work ethic, curiosity, creativity. In my experience, years under the belt is not important, and can actually be a determent. The naivety of young, restless people is invaluable. It’s far easier to question why things are done the way they are if you’re new to something, and harder to be weighed down.
Choose Your Co-founder Wisely
Of course this is not a secret, and as a second-time founder is certainly something I was aware of prior to founding Groundfloor. That being said, the 18 months that we’ve been operating to-date has only reinforced how important this relationship is. Co-founders need to combine complementary skillsets, personal and emotional connection and a long term alignment on what they want to be doing for the next 10 years of their lives. Layered into this the requirement for them to be someone you enjoy spending time with on a daily basis. This is an incredibly hard mix.
There are so many examples I have in my co-founder relationship. One was just this week, when at 10pm on a Tuesday, after a very long day together, I called my co-founder and asked, “Are we actually building something people want?” We ended up talking for an hour, and in fact, yes we are building something that people want, and I was having a long day. But I needed the conversation, and the reminder, and the other perspective. Being able to spent 10 hours in the weeds together, and then suddenly zoom up to 30,000 feet and question everything, and then bounce back into the nuances of email copy and CRM optimization, this is what makes the co-founder relationship uniquely valuable.
Understand the Sunk-cost Fallacy
Most are familiar with this: the concept that people are reluctant to cancel or change a path if time, effort and money has already been invested in it, even if changing is objectively is the right thing to do. This is easy to understand but very, very hard to do!
One example for us has been the process of evaluating a property as a potential Groundfloor location. This process can be expensive, and labor intensive, and can include completing designs, paying thousands of dollars to professional services and doing extensive research. While scouting for our second location we went all in on one particular location, committing dollars and our team’s time, got as far as final lease negotiations but there were red flags. We made the decision to pull out, rendering the previous months work useless and we went back to the drawing board.
The lesson here to me is that what feels like an immediate waste of time and money (changing course) can – if the decision is correct – be significantly lower than the ultimate financial and time cost incurred going down the wrong path.
Most People Aren’t Doing as Well as is Appears
People and, by extension, companies, decide what they put out in the world. They are selective, and as a result most public information about businesses and founders is a projection of the version of the business or the founder that they want others to know. The net impact of this is that most publicly available information on any given subject skews positive. This means that comparing yourself to others is not comparing like for like. You are comparing the hard facts about yourself, to the best version of something, or someone else.
An example here would be a competitor of ours who, based on their public image, we had assumed were significantly further ahead of us on the metrics we care about: member count, engagement, revenue. As it turns out, thanks to more information becoming public, not only were they not nearly as far ahead as we thought – but by most metrics, considering our relative youth, we were doing better. Of course the best thing here would be to not compare against others, but assuming that is impossible, the lesson I believe is: Don’t believe the hype!
Celebrate the Wins Along the Way
Most founders are hard-wired to be neurotic, and expect more. The result is that the product is never good enough and progress is never fast enough. We are naturally tempted to wait ‘Until things are done, or better, or bigger’ before allowing celebration, and public notice.
A valuable lesson I have learned is that this is the opposite of what you should be doing. By definition when growing a new company, things are never done; goalposts simply shift and the goals get larger. Giving yourself and your team the ability to recognize the progress along the way is not only important for the fulfillment and mental health of everyone, but if these milestones are shared publicly – it is also important for others perception of the company.
An example for us was our revenue targets. We opened our first location in March, hit $20k Monthly Recurring Revenue (MRR) the very next month. $30k MRR the following month. Over the summer we had a discussion about not sharing revenue updates publicly until we hit $50k MRR, before remembering that just a few months ago even 10% of this felt unattainable. We shared progress, and it led to significantly new investment into our company and a renewed realization of just how much we had accomplished so far, without diminishing the amount that was left to do.
