What I Wish I Knew Before Starting A Company

Years ago I cofounded a company. Here's some hindsight advice I would give to earlier Clay, maybe it will help you:

Work At a Breakout Startup First

I don't think you absolutely need to have worked at a successful startup (or have worked at all) to start a company, but it will increase your odds of success.

If you do, you'll see how a good sausage is made. You'll have organizational practices to draw on, like "Let's set objective goals for this week/month/etc", "Here's how to plan a project", "Here's what an interview should be", "Here's what a 1:1 should be", etc. You can read about this stuff and implement it out without first-hand experience, but I am the type of person who internalizes things much better once I live through them.

You'll also improve your craft with mentorship and structure. Whether you're a designer, engineer, or another role, you'll be pushed outside your comfort zone and beyond your years of experience as the breakout company grows. But, hopefully, you'll have a manager and more experienced peers giving you feedback along the way.

You might pick up on skills or tricks outside your function from other highly effective colleagues. Maybe you'll grab lunch with someone on the data science team, or read a machine learning project spec, or hear about how the marketing budget is allocated. You never know what will come in handy when running your own business.

For all those reasons, I'd recommend working at a breakout company before starting your own.

Start with Customers and Their Problems

For our startup, we first built something interesting (a way to create native mobile apps) and then worked backwards to find customers who had problems this solved (for example, Shopify merchants). But when we found these potential customers, we only had a shallow understanding of their problems, and at best we were coming up with vitamins rather than pain-killers.

Compare this with Opendoor, where the customers were always defined (homeowners), the problem was clear ("Selling a home sucks"), and then figuring out what to build always fell from that.

You can eventually pivot your way to success if you don't start with a precise customer and problem at first, but it will be an uphill battle. Bringing a new product to lift already requires grit, and adding uncertainty in who you're building for will make achieving success even more difficult.

Don't Be In a Hurry

In 2012 I thought it was too late to join a company like Facebook - it was already too big, right? I also thought it especially behooved me to start a company earlier in life. Well, both of these things were wrong.

Sometimes you are in a unique circumstance where it makes sense to jump off the deep end and start a company - maybe a side project unexpectedly blows up, or maybe you get a Fellowship, stuff like that.

But if you're in more typical situations, you should be thoughtful and even methodical about finding the right kind of company to start. Don't feel like you have to start something. Put your energy towards more deeply understanding startups and product spaces that are interesting to you. Read Zero to One, follow everyone on Twitter, subscribe to all the Substacks, listen to all the podcasts.

I didn't start to think more like an investor until many years into my career. You'll probably have a better time weeding through your ideas if you have a grasp on market size, distribution strategy, and unit economics. Ignoring these topics might help some folks, but I suspect you'll have a higher hit rate with them.