Startups are hard. Nobody knows this better than the team at CTO.ai
Recently our founder Kyle Campbell asked all of us on the CTO.ai team to listen to Reid Hoffman’s Masters of Scale podcast episode, “The Ten Commandments of Startup Success”, where Reid and Tim Ferriss explore the core tenets of what it takes to build and scale a successful startup. Since sharing this content with our team we've noticed these ideologies have been permeating around the office in a very positive way. We're so excited about the alignment this has been creating within our team that we wanted to share our key takeaways.
Here’s a summary of what we learned from this fantastic episode:
Commandment 1: Expect Rejection
Expect No’s, but look for other signs that you’re onto something. This could be from potential investors or customers or even within your own teams brainstorming sessions. The important thing is to pay attention to the quality of the rejections. If you’re seeing highly polarized opinions you’re probably onto something.
Commandment 2: Hire like your life depends on it
Hiring the right people can make or break your startup.
You want to hire quickly, but not hastily. Two great qualities to look for in candidates are persistence and curiosity. The combination of these qualities is a very good predictor that a candidate will be able to help solve the hard challenges that lay ahead.
Another great piece of advice is that you should never hire someone to work for you, unless you would work for them in an alternate universe. This doesn’t mean you should give them your job, but rather the most important thing you can do is get the best people you can around you.
Commandment 3: In order to scale, you have to do things that don’t scale
This one really resonated with our team. There is no point in optimizing or creating process around things that don’t yet exist.
You want to perfect your prototype, then pour fuel on the fire. Don’t stop until you know exactly what your prospective customers want. If you spend a ton of hands on time with early customers you’ll learn a tremendous amount about what they value. Your product roadmap often exists in the minds of the people you’re developing the product for — use this information to help refine your roadmap.
Commandment 4: Raise more money than you think you need
It goes without saying that you’re always going to run into a minefield of unexpected problems, but it’s also important to be prepared for unexpected opportunities that arise. This could be as simple as hiring a strong candidate that you didn’t budget headcount for, but would be foolish to pass up hiring. You might also need capital to make an acquisition to acquire technology it might otherwise take you months (or years) to build on your own.
Lastly, market conditions can always shift and this extra capital can help carry you through economic downturn.
Commandment 5: Release your products early enough where you think it still might embarrass you
If you’re not a bit embarrassed you’ve probably released too late. Most tech entrepreneurs share the mantra move fast and break things. It’s important to release features fast so your users can help you improve them, but do so in a responsible way. As you scale, you want to continue to embrace this move fast mentality, but avoid breaking things on a massive scale. This is a delicate and important balance.
Commandment 6: Learn how to make decisions; it’s better to make a decision than to not make a decision
It’s important to make quick decisions and you might make some mistakes along the way. It’s okay. An error rate of 10–20% in the outcome is totally acceptable; especially if it means you’re able to move fast. This mentality will take you a lot farther than contemplating every single decision with the aim of perfection.
Commandment 7: Be prepared to both make and break plans
In a fast growing startup, you have to be ready to pivot.
Be willing to try new things and be willing to kill bad ideas, but remember you need to keep the team together throughout all the twists and turns.
Commandment 8: Don’t tell your employees how to innovate
Embrace contained chaos to innovate and keep ideas flowing in a startup.
When you’re surrounded by bright minds, you don’t have to push too hard for interesting ideas. The challenge can often lay with management not being comfortable with this type of chaos. You have to understand the notion that you don’t have all the best ideas yourself and the fact that you can’t always schedule innovation on a predictable timeline.
Google famously instituted a rule that any employee could devote 20% of their work week to any project or idea they’d like. This enabled management to set timetables and budgets for experimentation while still making progress on core initiatives. This also allowed for reasonable employees to defy unreasonable managers. This institutionalized defiance, as Reid Hoffman puts it, can help balance the power and keep high performing employees engaged.
Commandment 9: To create a winning company culture, make sure every employee owns it
Hard work isn’t enough. Startups need people to be culturally aligned. They need people who will change with the times.
At CTO.ai we’ve come up with a set of core values that keep all of us aligned and moving in the same direction. This is so important that we also make it a priority to evaluate all of our potential hires against these core values.
Commandment 10: Have grit, and stick with your hero’s journey
There are critical junctures that determine whether a startup succeeds or fails. Grit is the stick-to-it-ness that kicks in when you actually understand the risks, know you might fail, but move ahead anyway.