I caught up with an early founder yesterday. We met when he was building his first start-up. That company didn’t make it, I learned yesterday. When companies don’t survive, good founders will reflect on the experience and try to learn from it. I asked him what he learned, and he was quick to share this: “Next time, I’ll prioritize go to market too, not just product.” Translation: he focused on building a great product and struggled to get it in the hands of customers.

This founder learned a valuable lesson. Just because you build it, that doesn’t guarantee that customers will come. He didn’t give enough thought to how he would take that product to market.

Kudos to this founder for taking the time to learn from his first experience, even though it didn’t play out as he planned. His self-awareness will serve him well as he dusts himself off and starts building his second start-up. I can’t wait to see his second act.

A founder building a marketplace asked for my thoughts on the risk of people connecting on the marketplace and taking transactions offline. If transactions are done outside the marketplace, his company doesn’t see revenue from the connection it facilitated.

Marketplace founders can’t stop this from happening. There will always be people who’ll do whatever is necessary to avoid paying the marketplace. You can create features and build processes to stop this behavior, but you won’t eliminate it.

The best way to mitigate it is to create so much value for both parties that they don’t want to transact outside the marketplace. And if they do, they risk losing much more than they gain in fee savings. A good example is helping supply-side participants (i.e., merchants) build their entire business around the connections made on your marketplace and making tools available that allow them to scale in ways they otherwise couldn’t.

Conversely, merchants who have thriving businesses and established tools outside the marketplace will explore the marketplace to acquire new customers and aim to take them offline.

Put differently, the best defense is to focus on maximizing value!

I was having a conversation today. It was a normal catch-up conversation. How’s life, what are you working on, etc. Toward the end he asked me, “What are you afraid of?” The question caught me off guard. I hadn’t been asked that before, and I don’t think I answered it very well in the moment.

Reflecting on it a bit today, I now have a clear idea of my answer. It forced me to ask myself some tough questions—and to answer them. I’m glad this person asked me this question. It gets to the core of self-awareness, and I think it’s a great question for founders (everyone, for that matter) to think about periodically.

So, what are you afraid of?

I shared my thoughts on the importance of customer onboarding in previous posts (see here and here). Those posts were inspired by poor experiences related to products I was interested in purchasing. Today I had the opposite experience.

My friend wanted to meet at a particular coffee shop he’d heard about. I meet people at coffee shops regularly but never buy coffee or tea. They just haven’t been my thing, but I’m happy to support the business by grabbing a juice. I had no plans to do anything different today. Little did I know that was about to change.

As soon as we walked into this shop, we were greeted and given an impressive education on their products and the history of the company. They highlighted how they were different from competitors, gave us personalized recommendations, and allowed us to smell samples. I was impressed and intrigued. I’d never had an experience like that at a coffee shop and decided to try one of the recommended teas. My expectations were still low.

My buddy and I both were blown away when we got our drinks. He’s an entrepreneur too, so we immediately nerded out on breaking down why we thought this coffee shop would do exceptionally well. We concluded that in addition to having high-quality products, they’d done a phenomenal job of onboarding people who are new to coffee or tea. They made it easy to try something you otherwise wouldn’t through education, personalized recommendations, and sampling. All within the first minute or so of walking through the door.

This shop did an amazing job and gained two new customers in the process. I have zero desire to try tea anywhere else, but I’m looking forward to my next cup at this shop! My experience today demonstrates the power of onboarding for a business different from tech—a brick-and-mortar retail store with a physical product. Make it easy for your customers to try a great product and you’ll win!

As most people understand,  building a great company is hard. It requires years of focus and dedication. You often hear founders, even after their companies have scaled, acknowledge that they’re constantly thinking about work when they’re away from work. They can’t help themselves. They’re giving it their all at the office and putting in more mental reps outside it. I was guilty of this when I was building my company. I’d find myself constantly thinking about the business and jotting down ideas—often at the most inopportune times (dinner, for instance).

As I’ve reflected and studied other accomplished people who aren’t founders, I’ve seen a pattern. In any industry or profession, the people who want to be the best have a similar dedication. They eat, sleep, and breathe what they do. It’s often a big factor in their eventual success.

That level of commitment has other ramifications. It means they often forgo other things in life (for better or worse). It affects their lives—and possibly the lives of others around them—in important ways. It’s hard to be 100% dedicated to your goal and have enough left to give to others too. Not impossible, but definitely hard.

People don’t stumble into significance. They dedicate themselves to what they’re doing and sacrifice to achieve it.

I recently became a customer of an interesting business. It seemed amazing, and I wanted to learn more. The product is great. I was surprised it hasn’t seen explosive growth. I decided to dig deeper and spent time observing and talking to the team. The owners are absent most of the time and live somewhere else. Once they got the business open, they began to focus on other projects, relying on general managers to run this business. Two general managers share the load, each running the business for approximately six months at a time. I spoke with one of the managers and asked about this arrangement. She said she has other projects outside this job that take priority and this role was never intended to be a full-time or long-term commitment. I spent time with the junior team members as well. They all live close to the business, and this is their full-time and only job.

I realized what’s missing. The owners and managers of the business aren’t fully committed. Leadership all have other things they’re working on that are more important to them than this business. The rest of the team sees the lack of commitment and has adjusted accordingly. None of them spoke of this as a place they see themselves long-term. They view it as a job and are passing through until their next opportunity.

There’s no one on the team fully committed to seeing this business reach its full potential, so it hasn’t. It’s just chugging along as a mediocre business. I suspect another entrepreneur will come along and see its potential. They’ll buy it and commit to taking it to the next level.

I’ve used the same home cleaning service for over a decade. They’ve been reliable, and their quality’s been consistent. I’ve been a happy customer. A few months back, the owner told me that the team servicing my home would be transitioning out of the company. They decided to go back to school and become software engineers. I was excited for them and wished them well. The company assigned another team to my home and things went on as normal.

This week, the owner of the company reached out to let me know that he’s been dealing with a worsening labor shortage. It’s gotten to a point where he won’t be able to keep my upcoming cleaning date. He’s hoping to add more team members and be able to service my home in a few weeks, but he has concerns, given the labor market. He’s historically paid his team the highest rates in the industry and has increased their pay recently, but even that isn’t enough to retain people in this market.

I’ve been trying to learn about the problem from the perspectives of various people on the front lines over the last few months (see here and here). Now I’ll have my own firsthand experience as a customer.

From everything I’ve seen and learned so far, I think this problem will get a lot worse. What matters to people has changed drastically. Pay is important, but it’s not the main motivator for a lot of people. Until employers understand what matters to people and incorporate it into hiring and retaining people, they’ll have labor struggles.

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Following up on the heels of what I wrote yesterday, I want to share an alternative path for people who want to be an entrepreneur but haven’t found a problem they’re passionate about solving. A lot of people think entrepreneurship is binary: you’re either a founder or you’re wasting time working for someone else. I disagree. I believe this thinking contributes to people forcing entrepreneurship.

Working for an early-stage company with ten or fewer people can be a great path. It’s incredibly risky to work for a company that could fail—but it’s less risky than founding one! You’ll learn what start-up life is like on a day-to-day basis. You’ll also gain invaluable knowledge about what does and doesn’t work when you’re trying to take something from zero to one. That knowledge and the relationships you build during that journey will position you for success when you do find the thing you want to go all-in on. I think of it as a try-it-before-you-buy-it approach and a terrific stepping-stone for aspiring founders.

If you want to be a founder but haven’t found your thing yet, this and other alternative paths are available. Don’t feel you have to force it by pursuing something you’re not passionate about. That could really be a waste of time.

I love hearing the origin stories of successful founders. Most people think they’re usually overnight success stories. The truth is that people hear about those founders after journeys that are commonly at least ten years long.

Today I began reading about the background of a founder who reportedly personally realized over $1 billion from his start-up. As I would have expected, he formed his start-up over a decade ago. And it wasn’t his first start-up.

This founder watched all his friends and siblings begin to have professional success while he struggled to find his footing. He felt like he was being left behind. To keep up, he decided to start a company in a space he knew nothing about. He thought it would be cool if a certain product existed. He did no customer discovery before he created the product, nor did he really understand the problem. As one would expect, the product was a disaster and never got off the ground.

He still wanted to keep up with his friends and family, so he started another company—again in a space he knew nothing about. This company had some success and got to seven figures in revenue, but it ultimately folded.

He was making a common early-founder mistake: instead of trying to solve a problem, he was creating a solution and forcing it on customers. He wasn’t passionate about what he was doing; he was trying to keep up with those in his social circle. In other words, he was forcing entrepreneurship and pursuing it for the wrong reasons. That was why his first two endeavors didn’t scale.

He learned from those experiences and changed his approach. He found a problem he wanted to solve, spent time understanding his customers, and started a decade-plus journey to solve the problem. The result was outsize success.

I applaud anyone who wants to pursue entrepreneurship and be a founder. It can be a life-changing experience. Before you go on the journey, consider asking yourself: Am I focused on being a founder or on solving a problem?

I watched a fireside chat by a successful founder yesterday. He shared his thoughts on the importance of one’s network and the impact his has had on his career. Advice he got from mentors twenty years ago continues to be the foundation for his growing enterprise. He believes strongly that you’re an average of the five people you surround yourself with. He also believes your net worth is a result of your network.

The people in your network can have a big impact on your trajectory, for better or worse. I was a nontechnical founder who knew zero about software. Being friends with other founders who were building software was the impetus for me to pursue building software for my start-up. The software was the backbone of our ability to scale the company to over $10 million in annual revenue. And I could give you countless other examples of how my network led to big wins throughout my journey.

Founders should be mindful of the outsize impact their network can have. A strong network can’t replace execution. You still must do the work. But a network of credible people can be a great complement that accelerates your success.