As I’ve been researching more public-market companies, I’ve noticed that most of the CEOs aren’t the original founders. That makes sense for companies that have been around for many decades. But it’s true even for companies started within the last twenty years.

This got me thinking. It’s difficult to take a company from zero to, say, ten million in annual revenue. Many founders struggle to level up as the company goes through various transitions. Going from zero to hundreds of millions or billions of dollars in annual revenue must be a gargantuan task—one that only the rarest and most talented founders can accomplish.

I’m now wondering, what traits do these founders have in common that help them go from zero to billions? They level themselves up continuously—what’s their secret?

Over the next few months, I’m going to spend time learning about a few founders who are still CEOs of public companies founded in the last twenty years. I’m curious about what I’ll find—and then whether their traits exist in any early-stage founders I encounter.

I had a conversation this past week with an entrepreneur who’s run a successful business for several years. During our conversation, I realized he didn’t know the cash flow of his business—or what that means. After more chatting, I realized that he didn’t understand his balance sheet either. He didn’t know how much he owed others or how much he’s owed. He mainly bases his decisions on his bank account balance and profit and loss statement. This approach to decision-making has hindered the business’s growth over the years.

In college, I was forced to take accounting classes as part of my finance curriculum. I’m not much of a rule follower and hated memorizing countless accounting rules. Many years later, I can’t remember any of those rules to save my life. But the concepts stuck with me. How to read core financial statements and how the statements work together to show you a complete picture of the business are the biggest takeaways from those courses. When I was an entrepreneur, those foundational concepts improved my decision-making. Now that I’m an investor, they’ve helped me spot opportunities and problems early that others have missed. I hated my accounting courses and don’t remember most of what they covered, but they taught me how to understand accounting. 

Accounting is often called the language of business. To thrive in business, entrepreneurs need to speak the language—or at least understand the foundational concepts underpinning accounting. If you’re an entrepreneur or aspiring to be one, consider taking time to learn basic accounting concepts. It may be difficult, but it will likely pay off in the long run.

I recently caught up with a friend who happens to be an investor at a large, Silicon Valley–based venture capital fund. His firm focuses on the seed stage, so they’re used to being the first check into a company before the incorporation papers are completed. He said his firm reviews over a thousand deals every month and he attends countless pitch meetings. 

I was fortunate enough to sit in when a seed-stage founder pitched him. At the end of the pitch, he gave the founder great advice on how to improve his pitch by communicating the company’s potential and his vision unapologetically (i.e., with extreme confidence). He left the founder with a quote that stuck with me:

Good founders help you see up the road. Great founders help you see up the road and give you a peek around the corner. What’s around the corner—IPO, big exit, big impact, etc.?

Seeing what’s ahead on the current path is easy because everyone can see it. No imagination or convincing necessary. But to help people see around the corner, you must paint a picture of what can’t be seen and get people excited about the possibilities. A great founder can do this, and it helps with raising capital, recruiting, and closing deals with customers and partners. My friend’s firm believes that the ability to help others see around the corner is a superpower that great founders have. Building a company is hard, but this superpower increases the chances of outsize success.

If you’re a founder or aspiring founder, ask yourself, “Am I helping people see up the road and around the corner?”

Today I had a chat with an early-stage founder about his origin story. He participated in CREATE‑X’s Startup Launch program at Georgia Tech. He had an idea when he entered the program that he built into a working product with a handful of paying customers with the help of CREATE‑X.

Part of the program involved attending sessions with other founders. At one of those sessions, another founding team asked if anyone could help with ad campaigns and A/B testing, areas this founder was proficient in. He began helping, and after a while he was spending more time on the other team’s solution than on his own. After a few weeks of working well with the team, they asked him to join them as their third founder. He agreed, and now they’ve launched an MVP with paying customers. They’ve all decided to pursue this idea full-time and are looking to raise seed capital.

For entrepreneurs, being around like-minded people who are attempting to accomplish similar things is powerful. Not only do they learn faster because of experience sharing, but being around other founders can lead to serendipitous interactions that result in amazing opportunities. Kudos to this founder and his cofounder for joining CREATE‑X. I’m excited to follow their journey and the company they build!

This week an entrepreneur friend pinged me about an idea. We did a call and he laid out his idea for solving a problem that impacts a large segment of society. He went on to explain how his solution is now possible only because of AI. He was energized by the idea and its possibilities. We talked for a long time, and I left the call with a new perspective.

I can’t predict the impact that AI technology will have. But I can see that AI is having an impact on how entrepreneurs think. It has entrepreneurs more excited than I’ve seen in a long time. They’re overflowing with ideas around potential solutions. They’re thinking bigger about the impact of their solutions. And they’re starting to view challenging problems as solvable.

AI is affecting how entrepreneurs think, and that’s bound to have an outsize impact on society.

I caught up with an early-stage founder considering his company’s next steps. The runway is shrinking. He’s pursuing several paths, including raising more capital or selling the company. The market isn’t as big as he initially thought, and the business doesn’t have the potential to become a nine- or ten-figure company. He’s accepted that fact and doesn’t want to pursue an option that requires a nine- or ten-figure exit for success.

The probabilities are low that this founder’s current company will get him the type of exit he hoped for when he started the company. He feels he has a lot left in the tank and wants to use that energy on something high return.

This founder is an entrepreneur at heart. He has the drive and intelligence to build something amazing. Unfortunately, the market for his first business is smaller than he and his investors envisioned. He also happened to raise capital in the 2020–2022 window when valuations were inflated. These and other dynamics have taught him painful but valuable lessons that he’ll carry forward.

This founder is part of a group of founders who, I think, will experience pain with their pandemic-era companies but go on to have wildly successful second acts. They may not realize it, but the things they’re learning and the relationships they’re building now will be immensely valuable and contribute significantly to their future success.

I had an interesting conversation with an early-stage founder who’s launching an AI company in San Francisco. He walked me through a demo of his MVP. Then he shared a prediction.

He believes ChatGPT will cause an explosion in vertical software solutions. Building is easy using ChatGPT, a fact that has aspiring founders flooding to build solutions using the service. The low barriers to entry and ease of building will likely prevent founders from scaling a solution that appeals broadly (i.e., horizontal software). There will be too much competition. Instead, founders will go niche. They’ll find small markets they can dominate. They’ll build solutions for painful problems that affect a smaller base of people but have been overlooked historically because of the small market size.

He also believes these companies will be able to scale faster because of ChatGPT. This, combined with the niche nature of the market, will make founders aim to sell earlier than we’ve seen historically and at less than unicorn (i.e., $1 billion) valuations (assuming they haven’t raised too much capital). 

This founder’s perspective is interesting and something I want to think about more.

An early-stage founder asked me for feedback on his fundraising deck, and I went over it with him. Then he asked me to also look at his data room and provide feedback.

The data room was well organized and included more detailed information than I’d expect for an early-stage company. I asked the founder about that, and he said it’s the expectation these days—without this level of detail, his chances of getting funded would be significantly lower.

My takeaway is that investors are focusing more on substance, and founders are starting to get the message. Investors are taking longer to evaluate investment opportunities and diving deeper into whatever data exists to help them make an investment decision. They want to understand the problem, the market potential, and whether the solution is adding (or could add) real value to customers. Founders looking to raise should be aware of this and prepare accordingly.

This week, I connected with an early-stage founder who’s fundraising. A few funds that are deep in the process want to do customer diligence calls—they want to talk to the handful of early-adopter customers that are larger companies. The customers don’t understand venture capital or start-ups. The thought of talking with “investors” looking to invest in a provider of a service they deem critical makes them queasy. They’re not sure if this is a sign that the company is in trouble financially and they should rethink the relationship.

If a company has a product with paying customers and it wants to raise venture capital, the investment firms are going to want to talk to the customers. They could construe not being allowed to do so negatively. “If your product is so great, why can’t we hear that directly from your customers?” goes the thinking.

 One way around this is to pitch your most important customers on your big vision. They know the product you’re offering and how it solves their current pain point, but they may not know more than that. Once you share your big vision with them, they’ll likely be more excited to be part of that journey and help turn the vision into reality. They’re also more likely to understand that going on that journey will require growth capital. When they’re asked to do reference calls with venture capital investors, the investors can be described as “partners to help provide the capital that will allow us to execute on our vision” (which is true for VC), not a financial lifeline.

A friend talked to me about an early-stage start-up because I’m familiar with the space. He asked my opinion. The space has lots of downsides, the main one being the small size of the market. And it’s complex, which makes completing transactions difficult, labor intensive, and expensive. He said he wished the founder had chatted with me before starting the company. I agreed. I learned a lot about the space the hard way and would have happily shared what I know.

Something for founders to consider doing before building a new solution is seeking out founders who’ve already built in the space they’re entering. Lessons can be learned from the successes and failures of other founders that can save lots of time, energy, and money. Oftentimes those founders are excited to share what they learned with someone who’s equally passionate about the space. It’s an activity with a high upside and relativity low downside that anyone can do.

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