Additionally, I've discovered that what founders often need is not just advice about how to raise a seed round or how to pick out the best board members, but also coaching on how to deal with people. They need to know how to manage others and they need to know how to act like leaders themselves. Therefore, many of the letters in this book focus on management and leadership. Because I was an operating executive for Fortune 500 companies (IBM, Quantum, Gateway, Bay Networks, eBay) for much of my career, much of my wisdom is gained from working with big companies. Additionally, in my role as a board director I advise many business leaders who are not founders. Many of these letters address challenges they face and were written with them in mind—but they are also relevant to many others.
I wrote this book as a way to scale beyond my network. We only work with about eighty-plus companies, but there are so many more people who think like a founder and need this advice. Maybe you are an entrepreneur eyeing a move to Silicon Valley, or maybe you are a small business owner with a shop in town, or maybe you were just promoted to be a manager at your company. In any case, there's something in this book for you.
This book is intended to be a guide, and the letters are written to offer guidance when you encounter turbulence. Topics are outlined to offer advice at the defining moment you need it most. Just jump to the letter you need when you miss your quarter, when you receive negative publicity, or when you need inspiration. It's not necessary to read this book from start to finish, although of course you may, and many people do, as they may be curious for another perspective about what they might have already conquered or wish to see what lies ahead. The book follows the trajectory of a company's life cycle. I've been inspired as the companies we work with have grown and organized the book to follow the process: getting started, getting to relevance, getting to scale, and getting to legacy. Of course it must be stated that this process is ridiculously hard.
Right now we are in the midst of a Golden Age of entrepreneurship that is fueled by all segments of the population. College students are signing up for entrepreneurial courses in record numbers. Individuals over the age of sixty-five are creating more companies every year. Record numbers of downsized professionals are starting their own ventures. Of those individuals who have not yet taken a leap into entrepreneurship, research reveals that many of them are actively dreaming about it.
Success, though, is hard to achieve. With each phase of company development, the success stories become fewer and fewer. While a massive number of companies get started, only about 30% of them will go on to raise a Series A round of funding, and from there only 50% them will get to a Series B. That number will continue to halve with every additional step.1 A very small number of companies will go public, and even fewer will leave a legacy.
Writing these letters and compiling them into a book for you has been a labor of love, and I hope these letters help make you better and help your teams achieve their dreams. Unlike the fictional father who inspired this project, these letters are not meant to be the last word we have on these subjects (or any subjects). If you need guidance on topics that are not here, please reach out to us at maynardwebb.com where my network and I will continue to post new letters and answer your questions.
Wishing you luck and cheering you on.
THE EARLY DAYS
WHEN YOU WANT TO START A COMPANY
Dear Founder, Really?
Why do you want to do this? I hope it's not because it's the cool thing to do...it's easy to become an entrepreneur, but it's way harder to become a successful entrepreneur!
These days it seems everyone wants to be an entrepreneur. People become enamored with the idea of pursuing their own passion and being in control of their own destinies. Yet that's a romanticized notion of what really happens.
I hate to be the bearer of bad news, but most entrepreneurs fail. It's not just the statistics that show us this; it's also common sense. It's very hard to turn an idea into reality, and even harder to turn that new reality into something of great significance.
Sure, we know the breakout stories—those A+ ideas that took off from the beginning, like Facebook, Google, or eBay. Yet the fact is that these companies are very rare. Oftentimes, the world is not ready for a new idea and the majority of companies don't get traction. Intrepid entrepreneurs go back to the drawing board and pivot, but that maneuver is not representative of the reality of startups. Most companies fall in a middle space—there's some traction, but the flywheel isn't spinning, and you're not sure if the idea will scale. This uncomfortable middle place is what I call a "tweener" and it's a dangerous place to be.