Three lessons I learned (and could only learn) in a startup


I love startups!

I was twenty six when I first traded the comfort of a stable paycheck (at a government research lab) for the excitement and potential of getting rich in a software startup.

I had spent two years working on every aspect of web browsers, servers and applications that I could. I'd stayed up for days on end as the Information Superhighway continued to change right under our feet. I loved every minute of it.

And I was ready to leave it all to build a new kind of product – a hosted web application (we still weren't using the term SaaS in 1997 very much).

I couldn't have predicted then that 19 years later, I'd still be building hosted web applications for enterprises. I thought I would never leave the startup world.

And yet, 11 years later I did leave – but that's a whole different story. Nevertheless, I thought I would share with you three lessons I learned during that decade in startups. Not because my time was unique, but because I don't think there is any other way I would have learned them.

Three lessons I learned

Scarcity drives creativity – For several years in my startups, we never had more than a three or four month runway. It can be a consequence of bootstrapping or raising money in tranches (where the funds are tied to specific milestones).

In most companies, there's no consequence if a project ends late. It's a hiccup. But in a startup, it might jeopardize a round of funding, or impact cash flow, which is everything.

So when you have little time left, and little money left, you learn to live and think in a pressure cooker. I'm not sure there's any other way you learn to be creative with that level of pressure. It's not the same thing as a looming deadline.

Lots of people say no a lot – I don't think I ever heard as many people say no (in lots of different ways that often sounded a lot like yes but were more like maybe) as I did for a decade of my life while in startups. It wasn't just from the venture capital community (because honestly, they're much better and saying ‘not yet' than a direct ‘no') – it was from everyone.

Vendors, partners, employees, prospective clients, prospective new hires – I mean everyone. And eventually you get used to the word, and the concept.

More than that. Eventually you learn to embrace no as a powerful motivator for yes. You learn that you also need to say no. You need to stop wasting time in the places where you're likely to hear “no” and move to the places where you get definitive answers – preferably in the affirmative.

But maybe most importantly, someone else's “no” no longer defines what you can and can't do.

It simply defines what they're willing and not willing to do. And once you realize that, you can move on – and worry a lot less when others tell you something can't be done or is impossible.

Decision making is critical – I know I'm not telling you anything you don't already know. But unless you've been in a startup, you've likely not faced the same amount of decisions, at the pace they come, or at the size they are in any other environment. Don't get me wrong, the GM of a multimillion dollar business unit of Proctor and Gamble has tough decisions. But you know what? Many of them are similar to the ones made the year before, and the year before that. Or they're made with teams of people – likely who've faced similar situations.

In a startup, you may be faced with decisions that no one has or will face again. I remember having to decide whether to treat my brother as an employee or as a brother – at once point in one of our startups. Do I stay silent about potentially closing down our company (because we're not telling employees)? Or do I share it with my brother (because we'll close on his birthday and he'll be out of work and is the dad to my nephews)?

But size, speed, and quantity aren't the only decision challenges you face. You also face asymmetrical decision problems where you have limited information and even less power. Like negotiating a term sheet or a large contract with someone like American Express. They do it 200 times a year. You may do it once in your life.

Learning how to make decisions, when to get assistance, how to shape the decision context, how to evaluate decisions without emotion (or with it), and how to make horrible tradeoff decisions are all part of the journey that's available in a startup.

I'm better for my years in startups

I also learned something else. Not part of my three lessons for this post, but still a major lesson in my life. I learned that I enjoyed my time building teams and building products far more than anything else (including becoming rich).

In the end, I had much more success than failure (4 for 5 in terms of exits). But when I sold my first company (one I was an owner of, not just an employee) I did it by the time I was 30. On paper I was rich (but again, that's another story). But when I woke up the next morning, and I tell this to people a lot, there was no parade.

The world didn't stop and applaud. There was no special party. And I had given up tons of time, energy and friendships for that day. And in the end, if it hadn't been for those three lessons and the friendships I created, I would have regretted my time.

My last lesson, which I cherish, and impacts me daily, was simply this – relationships are worth much more than money.

I still love startups. I love the pace. I love the challenge. I even love the scarcity. And I've learned to embrace “no.”

But mostly, I love the people who run hard, build hard, and play hard. And I love people over stuff.