Getting Good at Startups

Given that I spend most of my time nowadays working with first-time founders and students interested in venture, I figured I’d write a post covering my common advice on getting really good. If anything, this serves as an exploration of trade-offs I’ve dealt with at one point or another.

Although I learned the most exciting and nuanced tips and tricks from talking to great people, there’s still a ton that you can do on your own. I’m constantly amazed at how young some top startup nerds are. There’s so much content out there that you can get learn surprisingly fast if you separate the signal from the noise. Apologies in advance if this turns into a sales pitch on joining a startup and focusing on getting really good at one thing.

Principles

As is true in everything, there are many different ways to be really good. In general, I think we bias towards covering our weaknesses and being well-rounded. Especially if you have a strong deliberate practice/growth mindset. But if you want to be really good, it often helps to be the absolute best at one or two things, and merely acceptable at the rest. You could spend most of your time building a great network. Or becoming a top-tier salesperson. Or learning the detailed history of Silicon Valley and the empirical results of what works when building startups. It doesn’t really matter what you choose. But it’s incredibly hard to do everything when so young.

One useful strategy here is to prioritize the skills with a strong snowball or halo effect. If you get very knowledgeable about one specific vertical, you can be known as “the X guy/girl” for your X of choice. Then you have an excuse to talk to people and build cool things. Or if you focus on building a network of smart, like-minded people, it’ll get much easier as time goes on. Having an already strong network makes future networking easier and frees up time for other pursuits.

I think there’s not much choice to be had in your comparative advantage. You should do what you do enjoy the most. I can’t stand “networking” so I focus on what I do best: reading, learning, and expressing interesting viewpoints to friends. Building a reputation around knowing a little about everything has made the other relevant startup/venture skills easier to get.

Read the right materials

I’m a big fan of Semil Shah’s post about context as a tool for having good ideas and operating effectively. Most knowledge is subtle and not specifically written down.

The best way to get context is to follow current and historical thought. I’d read through all the classics: Paul Graham, YC, a16z, First Search, Founders at Work, Hacker News, tech Twitter, AVC, Above the Crowd, Chris Dixon, Brad Feld, Elad Gil, 20 Minute VC, and many other that I’m forgetting.

The raw volume of freely available content is humbling. I used to be bummed that I got rejected from MIT, but there’s a silver lining that I’m extremely grateful for: I have a huge amount of time to focus on stuff beyond coursework. Of course CS@Illinois is no walk in the park but I have a lot more flexibility to sit down and consume whatever info I want. Being careful about 1) minimizing “gen ed” time sinks that could be replaced with short books and 2) cutting out extracurriculars I’m not in love with has made a huge difference in productivity and happiness.

With a small number of brillant exceptions (Jason Lemkin on Quora, Vitalik Buterin on Medium, to name a couple), everything on Hackernoon, Quora, CNET, Business Insider, etc. isn’t worth the time. I find that Techcrunch, WSJ, Recode, etc. are fine for keeping track of big picture stuff, but you don’t learn much from them. Newsletters like LAUNCH ticker, Term Sheet, and StrictlyVC are better.

I’m a staunch supporter of learning things completely outside of your field. Not just “tech, but in a different vertical.” Really out there. Think political science, biology, military history, ethics, law, and comedy. More on the importance of this here.

Starting something

This is definitely the best way to learn every skill you need in entrepreneurship and venture. I’ve always known that I have more of an investor personality, but literally all of my mentors told me not to go straight into venture. I was nearly stubborn enough to ignore them but luckily I found the ideal startup internship and jumped on that opportunity.

Let me say: I’m amazed at how much I learned in just three months. It really is the fastest way to learn. I’d try to go as late-stage as possible as long as you can do a little bit of everything. The startup I was at had 7 people. I’m very fortunate to have done everyone’s job at some point.

To take a step beyond my own personal experience, there are a few specific characteristics to unpack from the generic term “startup.”

The speed of execution helps keep things challenging and interesting. There’s more room to experiment, the feedback loops are tighter, and you’re forced to overcome perfectionism and ship quickly.

The extra responsibility of a startup role adds a very qualitative sense of purpose or necessity. At a big tech company, you don’t need to worry about most of the little details, but those tiny parts of the business add up quickly. The utter lack of a safety net or acceptable “not my problem” scenario is a forcing function. You’ll have to think hard about asking the right questions and prioritizing.

Finally, there’s an enormous value to working on small teams that don’t build narratives. Outside of a company, all you know are the stories. It really is mind-blowing how revisionist or over-simplified most info is. Part of this is to build prestige among outsiders. It sounds better if the challenges you overcame were scary and hairy. It’s also because some things like interpersonal conflict and doubt of the company mission can’t be shared externally. That’d violate norms or expose confidential info. By being on the inside of the machine, you know all the juicy details of what’s happening. That was much more valuable than I had anticipated.

If you want to start something of your own, working at a startup is a no-brainer. Hop between startups each summer (and each semester part-time!) If you want to go into venture, I do think the empathy and tactics you learn are worth the time doing something other than your eventual goal. The street-cred doesn’t hurt either.

Investing

One of my major learnings over the past couple years at Contrary has been the value of getting as much real practice as possible. If you’re asking yourself “is this founder in the top 10%, 1%, or 0.01% in terms of clarity of vision?” you need to have enough data points to draw a normal distribution in your head and decide how much of an outlier the founder is.

This also applies to metrics. Is a 5% week over week growth rate good or bad? Is there a big difference in benchmarks between verticals? What CAC is reasonable for this sort of product? The answers to these questions depend on experience and are hard to observe from the outside of the decision-making room.

Talking to a very large number of founders also helps you understand the edge-cases that pattern matching and percentile-ranking don’t cover. What if a founder is a management consultant who taught themselves to code, and is building a social app which has historically been a questionable category? How do you begin to reason from first principles if you don’t have much info to go off of? You develop a valuable intuition for different situations by talking to as many people as possible.

Another thing to optimize for is the “legitness” of the investing you’re doing. Other founders/investors have suggested building a Fantasy Portfolio where you choose startups you know about and pretend that you invested. This is fairly popular in the public markets. It works better there because you have access to much of the same information as other investors, and you always have the option of investing in public markets. A Fantasy Portfolio helps prove that you can find companies, but convincing them to take your money is a different ballgame.

Through a handful clubs or nationwide student organizations, you can give out grants or invest small sums of ~20k. While these are a good way to build a network and meet founders, you can’t learn as much on the decision-making or value-add side. Working on a returns-driven team with larger check sizes (ideally over 6 figures) forces rigor. Just as exams force you to study and thoroughly learn the material in a way that lectures and homework can’t.

Of course I’m biased, but I think Contrary is the best way to do that while still in school. It’s much better than working remotely for a venture fund doing diligence work, in my opinion. Joining a VC in the summer would be best, but I don’t think it outweighs the opportunity cost of joining a startup when school’s out.