The 1 Underrated Skill It Takes to Reach 500 Million Users
Most startups don’t start out like a rocket ship. Take Slack for example. Media coverage about Slack is pretty funny. It often sounds as though Stewart and Cal showed up one day and had a multi-billion dollar business the next. It almost makes you forget that the team behind Slack has been refining their product skills for 23+ years. (I actually read Cal’s book when I was a teenager — outdated now, but still a classic.)
Another good example is DigitalOcean. Yes, they are a successful startup, however, the real story is how their team continued to learn more and more about the website hosting industry. That experience allowed them to succeed in a market where they compete with industry leaders like Google, Amazon, and Microsoft. (Here’s a great podcast interviewing Moisey and Ben, founders of DigitalOcean.)
Which brings me to the point of this article. One of the most underrated skills in a startup is grit. Grit is one of the most important traits for founders. It’s essential for every phase of building a company — from raising funding to scaling your startup.
It takes grit to get through fundraising.
As a founder, you need to deal with constant rejection. Some of the founders in our Techstars cohort were discouraged by the rejections. They struggled to close their round. There was nothing wrong with their business — they were just worn down by the process.
My company Stream started in 2015 by participating in Techstars NYC. That was four years ago (at the time of writing this) and we had a handful of customers. Raising our first round of funding was difficult. VCs explained to us how larger companies wouldn’t want to use our tech. At the time, the feedback was unsettling. VCs are in a position of power, so you generally attach more value to their opinion. It’s important to take this feedback with a grain of salt. Today, our platform powers activity feeds and chat for over 500 million end-users.
A great blog post about this is written by Brian Chesky the founder of Airbnb, titled 7 rejections. It shows how even for the most successful startups, there were always many investors that found reasons why it wouldn’t work.
I’m not complaining about investors. It’s just really hard to evaluate early-stage startups. Our fractional CFO here at Stream famously decided not to join Netflix as their CFO. In hindsight, this seems like an obvious mistake, but at the time, they were a tiny company.
It takes grit to get through scaling.
It doesn’t get easier as you grow your business. You have more resources but the targets you need to hit go up. I think it’s important for founders to realize that there are always things that can and will go wrong.
At my first startup, we ran out of cash many times. I even went without a salary for a year and signed personal guarantees to the bank to make it succeed. Fortunately, my second startup, Stream, has been a much smoother ride. There is always a bit of struggle though. At Stream, we scaled our team too quickly after our last funding round and some of the hires simply didn’t work out. It took a while for us to find the right path forward. Following a clear methodology can help make things less stressful. One book that really helped me is Traction which Bart Lorang recommended to me.
Recently, I was listening to a podcast with Gil Elbaz on my way to work. Gil is the founder of Adsense which was later acquired by Google. Adsense is, of course, a huge success story and the foundation on which the modern internet is built. Gil mentioned how they went through a large dip and had to scale down the team. It’s important to realize that this can happen to even the most successful companies and can be really stressful for everyone involved.
Experience and good methodology only get you so far, it takes a ton of grit to scale a startup.
It takes grit to take care of yourself.
If you’re feeling healthy and positive it’s easier to deal with the rough times. Alex Iskold wrote a great post about this and shares his story about how he learned to deal with the stress of running a startup. It’s titled Founder self care tips. Brad Feld also talks about this in detail on this podcast episode “Building a Startup without Compromising Your Personal Well-Being”.
What works is very different for every individual founder. For me, it means prioritizing spending time with my daughter and finding time to workout. As long as I take good care of myself I enjoy working long days and even weekends.
Building a startup is a marathon and one of the most important things is to not be discouraged and to keep refining your craft. Remember this when your startup hits a low or the next investor says no.
I hope this helps some of my fellow founders out there. Keep up the hard work and join the discussion on Twitter.
