Founding a company is, to sum it up, difficult. This is common knowledge, in the sense that people state it when asked, but I’m not sure if people tend to really understand what it means to say this is hard to do.
At the very least, while I had some foggy ideas, I certainly didn’t fully understand the complexity of building a company when I started. I knew it would be “hard”, but if you’d asked me to predict what about building a company would be such a challenge, I wouldn’t have been able to be very precise. My answer likely would have been something like “well, I’m sure I’ll have to figure out some stuff about sales,” or “product-market fit will probably be tough to achieve,” but the truth is that I would have been thinking in the back of my mind that I was different. This matters not because predictions are valuable for their own sake, but because an accurate prediction about the difficulties I’d encounter would have allowed me to find the right team and the right ways to focus on personal growth to counterbalance those concerns.
Having now spent roughly a year and a half working full time at Modulate, I have a much clearer picture about some of these challenges. In general, they’ve been fun, and valuable learning experiences to boot – but the mental handwave I’d previously trusted in assessing “oh, I know people say sales is hard, but our tech is different, I’m sure it’ll be trivial for us” is now something I can offer a fairly concrete rebuttal to. As much as I’m enjoying being a founder, it’s absolutely hard work to be successful.
Obviously the best way to teach past-Mike is exactly what happened – experience. But if we want to try to find a shortcut, or a way to teach people before they have to jump in for themselves, I think the best option is through developing a clearer vocabulary. We don’t really have a consistent set of terms to describe different kinds of difficulty, so all the various challenges a startup founder faces get rolled into one. This obfuscates genuine difficulties and allows someone who isn’t thinking clearly to misunderstand warnings, or believe they are prepared only to discover they were imagining the wrong kind of challenge.
So this post is my attempt to clarify the kinds of difficulties founders fact – not by laying out every specific challenge a founder will find themself confronted with, but to at least offer a way of classifying the different types, in the hopes that this understanding will enable future founders to plan a bit more concretely for the challenges they’ll encounter.
Ideation: A Spectrum From Obvious To Inspired
The first and most obvious kind of challenge founders will need to overcome is ideation – for instance, coming up with a good idea to form a startup around! These sorts of objectives are hard to put time frames or even specifications towards, as they tend to simply emerge as a consequence of experience, focus, and lateral thinking. When we laud tech leaders for being “innovative”, I think we’re often referring to their strength at coming up with great ideas – but since this can get munged together with other skills, I prefer to use the more distinct vocabulary of obvious (for ideas which come straightforwardly) to inspired (for ideas few people could have come up with) to describe the level of idea necessary. These can vary a lot, though – determining a business plan might be obvious for some startups which have similarities to existing businesses, but many other startups working on new markets will need something truly inspired.
Inquiries: A Spectrum From Apparent To Uncertain
Inquiries are the second type of challenge. These are situations in which you know the shape of the destination but not the trajectory or specifics. To frame things for Modulate, it was ideation for us to arrive upon the concept of voice skins in the first place, but we still then required an inquiry as to how (and whether) voice skins could be implemented. Of course, not all inquiries are this technical – hiring is also of the “inquiry” type, in that you have a clear sense of the goal (a candidate with specific skills) but don’t necessarily know exactly how to get there. In some cases, such as when you already know someone who is a perfect fit, the answer to the inquiry might be apparent – but on the other end of the spectrum are the uncertain inquiries, like when a nontechnical founder needs to find a technical cofounder, and doesn’t yet know what to interview for. You’ll usually be able to estimate a rough level of difficulty for inquiries even at high levels of uncertainty, but will have trouble predicting exactly how long it will take to solve the problem.
Tasks: A Spectrum From Menial to Elaborate
The third category of challenge are tasks. These are well-understood things you need to execute on – for instance, thousands of startups have incorporated before. Once you’ve identified a trustworthy lawyer, there likely aren’t any real inquiries left to conduct about how to incorporate – but there’s still work to be done! Filing paperwork is an example of a (relatively) menial task, but not all tasks are straightforward! The opposite end of the spectrum includes elaborate tasks such as onboarding a new employee – you may have a fully planned process, but there are likely a number of steps you’ll still need to execute. The good news is that tasks are the most predictable type of challenge – you can generally estimate with good precision how long a task will take and how many resources it will require, even if the task itself is on the elaborate side.
Gambles: A Spectrum From Safe to Risky
All of the above types of challenges contain elements of uncertainty, but the uncertainty generally comes from your own mind. Take “how to build voice skins” as an example inquiry- even if someone else in the world knows how to solve this problem, it’s still an “inquiry” to you – because the uncertainty that matters if your own understanding of the solution.
Gambles are different. The nature of a gamble is that, even if you have the best understanding of the situation that anyone could have had in your position, there’s still a lot of uncertainty left over. When you choose to leave your job to start working on your (unfunded especially, but funded too) startup, that’s a gamble. When you decide which investors to accept, that’s also a gamble – not to say you can’t learn about the people you’re planning to work with, but to emphasize that ultimately you have to make a decision far before you’ve resolved all the uncertainty. Of course, as with all types of challenges, there are also more straightforward-to-understand gambles, such as “do I spend this money now and reduce my runway, or do I hold on to it just in case?” Generally speaking, I’ve found that the best way to characterize gambles is on the spectrum of safe (your downside is capped or highly unlikely to be large) to risky (high-risk high-reward), though there are definitely other elements that can add complexity to these kinds of decisions!
Having laid out these types of challenges, I feel it becomes easier to assess what difficulties you might face as a founder. Perhaps you’re great at ideation – a true lateral thinker with a wide range of unique ideas – but have trouble taking gambles or focusing long enough to execute on tasks. Or perhaps you’re a diligent optimizer who, given a well-formed question, can push your way through to a solid answer, but who struggles to ideate without a well-defined goal. Personally, I find ideation the most difficult kind of task, but I’m most stressed by gambles, because they are fundamentally outside of my control. Understanding this led me to find workarounds to help ensure I don’t get too worn out fighting against problems which aren’t my strong suit. For instance, our early investors understand that I can err against risky gambles at first, so I’ve actively encouraged them to push me loudly if they see me leaning too much to that side, and I try to keep them informed about gambles I’m considering even when I’m leaning against taking them. This way I can capitalize on their experience and higher level of comfort with these kinds of risks in order to compensate for my default bias.
As things stand today, leading Modulate to success is still certainly a difficult proposition – but because I’ve been able to surround myself with great people who can help handle the challenges I’m weaker at, I’ve been able to transform that from a stressful “how could I possibly solve this?” difficulty, to a relatively painless (and definitely exciting!) “we have the necessary tools, now we just have to build” path to success. Hopefully this way of breaking down challenges will prove useful to you as well as you think about building out a team or the safeguards you need to set for yourself to ensure you won’t burn yourself out as a founder – as always, feedback about your own experience thinking through these kinds of concerns is more than welcome!
An Entrepreneur's Journey 