Thread by @justinkan

I've been a mentor to countless founders over the years

Here are the common traps 🪤 founders fall into that guarantee failure:

Waiting way too long to start their company.

I see this too often - people waiting for the 'perfect' opportunity and psyching themselves out and getting scared.

The secret:

There is never a perfect opportunity. You should start yesterday.

Being blinded by 'consistency' over truth.

Its important to recognize when your initial ideas aren't working;

Developing the wisdom to know when to pivot and adapt is such a vital skill.

Don't be a slave to the sunk-cost-fallacy.

Don't start a services company. It's fucking terrible.

These types of businesses rely solely on talent stick around.

Margins will get compressed to zero as the market gets more competitive and price of talent follows.

(cont.)

Building a product retains value much more sustainably,

also gives you way more leverage, higher margins, and can be reproduced consistently.

Services are the opposite. I learnt this the hard way with my failed company Exec.

Lack of focus aka shiny object syndrome.

When you find something that works, optimize for it relentlessly.

Don't get distracted by starting new things and diluting your efforts.

Don't half-ass multiple things; whole-ass one thing.

Rushing into co-founder relationships

Finding a co-founder is like a spouse - you need to find someone that aligns with your core values.

Don't take this process lightly and just choose the 1st person who will validate your ideas and join you.

(cont.)

Deeply consider what competency that you currently don't have, but need.

Be super picky and ruthlessly recruit the most talented people you can find.

Aligned values + talent is critically important.

Skipping background reference checks

Contacting references when making hires is so crucial.

Gather information about what kind of people to surround the potential hire with, and what their weaknesses are.

Making the wrong hires tends to lead to wasting time and resources trying to force them into filling a role, shutting out exponentially better fits.

In a startup you have limited resources (time + $). Use them wisely.

Raising a shit ton of $$$ just because you can.

While every company is raising $100 million around you, don't feel insecure.

Money often exacerbates problems in your company, instead of solving them.

(cont.)

This was one of the main problems with Atrium:

We raised $75 million thinking that it would help us solve product market fit, and perfect our service.

Result: churned customers and shut down shortly after.

I have never seen this work out in the startup realm, ever.

Building for yourself and not talking to customers

We spent 5 years at justin.tv building what WE thought a cool live video site would look like.

We never understood what our users wanted until @eshear suggested that we focus on gaming

By talking to gamers, we discovered that creators wanted a platform that supported them directly, and helped them grow their audience.

That's how @Twitch was ultimately born. By talking to our users.

Hiring too quickly

Before achieving PMF, it is super important to have your team as lean as possible.

The more ppl you have, the harder it will be to pivot and stay cohesive on your mission.

Tying ego and identity to the success of your company

This one is super important. As founders, it is easy to get caught up in success as a metric of your own self-worth.

(cont.)

If things are going badly in your company, you may start to think that you are doing something wrong, or you're not a good person, or founder.

I struggled a lot with this during the failure of Exec. and Atrium

This is extremely unhealthy, untrue, and unsustainable. Ironically, these thoughts will be the biggest barriers to your success.

This also means being vulnerable about the problems you are facing, and not being afraid to ask for help.

I made a full video about this topic with my good friend @jamesbeshara where we go into way more detail into each of these topics: