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As someone who has seen both sides of the world that you describe, I think I can verbalize a topic that was not explicitly discussed in the video: if you feel f

As someone who has seen both sides of the world that you describe, I think I can verbalize a topic that was not explicitly discussed in the video: if you feel forced to raise capital for a company that you personally don't believe in, then perhaps you shouldn't do it assuming you're early enough that you're not putting the livelihood of many other people at risk. Raising that capital will tie up years of your professional career in an underpaid and overworked role that has very little chance of returning your and other people's investment. I didn't use to think this way until a few years ago when I experienced true product market fit. Prior to that, I always found myself slugging it out and just accepting that paying with blood, sweat and tears for even the tiniest amounts of success is the only way there is. But there truly are opportunities out there to solve other people's problems that are so important to those people that your experience in building that startup will be vastly different. Suddenly the metrics look good without having to put a spin on them, investors are competing to get into your rounds, you start getting inbound resumes from highly qualified candidates, and you're able to pay generous salaries so that you surround yourself with amazing professionals who are better than you in their specific domains and can work autonomously with a minimal amount of interaction. Next thing you know - you're no longer working on weekends, you can take vacations, go on maternity/paternity leave like other normal people, etc. In other words, life starts feeling normal again. I struggle with sharing this because I don't want to demotivate anyone. A part of me believes that the slugging out portion of my life was the necessary ingredient that taught me many important lessons and that prepared me for the the moment when the stars finally aligned (but it certainly came with a mental and physical cost that took years to iron out again). There's also this idea that a startup might struggle for many years and then suddenly take off like crazy (I believe life360 is one of the many well-known examples). All I would say is don't overdo it - do the grind for as many years as you think is acceptable, and then at some point start getting a bit more picky about the risks you take. If you've got 10 years of grind behind you and your current startup is unlikely to succeed, shut it down, take a job, and try again in two years (or if you're lucky enough that you can afford going straight into your next startup, then by all means do that as well). Whatever you do, make sure that your next startup benefits from the lessons learnt in the previous one, which almost always means make sure that you have the product market fit (PMF). That's the hard part - how do you know if you have the PMF without quitting your job and raising capital? Product Hunt, Kickstarter, Shown HN and similar feedback mechanisms can be helpful here.

zomglings 5y ago
Thank you for sharing these golden experiences here. If you'll bear with me, I will try to articulate my perspective on the slugging out parts and risk-taking. Would love to hear your thoughts on this. There are two types of markets - open markets and winner-takes-all markets. You can tell the difference between these markets by the number of sustainable players in each market and by the distribution of available revenues across these players. Revenue distribution in open markets follows a power law distribution with a fat tail. Revenue distribution in winner-takes-all markets resembles an exponential distribution with a virtually non-existent tail. The market you are trying to go after should define your approach to slugging it out and to the way that you take risks. If you are participating in a winner-takes-all market, you should be pushing your balls to the wall and taking any risks necessary to give yourself the best shot at being one of the winners. If, on the other hand, you are participating in an open market, there is a pronounced asymmetry between upside and downside from each risk that you take. This asymmetry means that you should be maximizing the number of risks that you take, but you should limit amount that you bet so that a risk not panning out is not catastrophic. The longer you survive, the better chance you have of hitting it big. Most founders I know act as if they are participating in winner-takes-all markets. However, if you are running a startup, chances are that you are participating in an open market with a fat tailed distribution of long-term valuations for players in that market. The reason that it is easy to fall into the illusion that you are in a winner-takes-all market is because VC funding is a winner takes all game. It is easy to conflate the act of raising money with the act of growing a business. Personally, once I understood that my market was open, I was able to comfortably take my foot off the pedal a bit and this had a positive impact on my whole team and on our business. But back to your point about slugging it out, I think you slugging it out was you taking those small bets in an open market. It was a necessary step to your current success. Because the alternative is sticking with your day job, and that just makes you far too slow to jump on opportunities.
- aerosmile 5y ago
  That's a very thoughtful take and I am glad to see other people putting a lot of thoughts into this. The only thing I would question is are there really any evergreen open markets. Sure, they might be open today, but will they stay open 5-10 years from now? I mean, just look at home care - could have anyone envisioned back in 2014 that this is going to turn into a VC battlefield? Between Honor and Papa, it will be hard for any independent agency to stay competitive for many more years.

zomglings 5y ago

Thank you for sharing these golden experiences here. If you'll bear with me, I will try to articulate my perspective on the slugging out parts and risk-taking. Would love to hear your thoughts on this. There are two types of markets - open markets and winner-takes-all markets. You can tell the difference between these markets by the number of sustainable players in each market and by the distribution of available revenues across these players. Revenue distribution in open markets follows a power law distribution with a fat tail. Revenue distribution in winner-takes-all markets resembles an exponential distribution with a virtually non-existent tail. The market you are trying to go after should define your approach to slugging it out and to the way that you take risks. If you are participating in a winner-takes-all market, you should be pushing your balls to the wall and taking any risks necessary to give yourself the best shot at being one of the winners. If, on the other hand, you are participating in an open market, there is a pronounced asymmetry between upside and downside from each risk that you take. This asymmetry means that you should be maximizing the number of risks that you take, but you should limit amount that you bet so that a risk not panning out is not catastrophic. The longer you survive, the better chance you have of hitting it big. Most founders I know act as if they are participating in winner-takes-all markets. However, if you are running a startup, chances are that you are participating in an open market with a fat tailed distribution of long-term valuations for players in that market. The reason that it is easy to fall into the illusion that you are in a winner-takes-all market is because VC funding is a winner takes all game. It is easy to conflate the act of raising money with the act of growing a business. Personally, once I understood that my market was open, I was able to comfortably take my foot off the pedal a bit and this had a positive impact on my whole team and on our business. But back to your point about slugging it out, I think you slugging it out was you taking those small bets in an open market. It was a necessary step to your current success. Because the alternative is sticking with your day job, and that just makes you far too slow to jump on opportunities.

aerosmile 5y ago
That's a very thoughtful take and I am glad to see other people putting a lot of thoughts into this. The only thing I would question is are there really any evergreen open markets. Sure, they might be open today, but will they stay open 5-10 years from now? I mean, just look at home care - could have anyone envisioned back in 2014 that this is going to turn into a VC battlefield? Between Honor and Papa, it will be hard for any independent agency to stay competitive for many more years.