The mistakes we make the second time

Late-stage startups are reflections, writ large, of their founding teams. All the strengths and weaknesses, quirks and peccadilloes of the original team become durable advantages and systemic issues at scale. Founders who are community-builders by nature grow to have scalable, defensible community management functions. Founders who have no idea what marketing is can’t hire good marketing leaders, and their companies never develop strong marketing functions.

In the early days of Periscope, on Friday afternoons, we would all pour the whiskey and toast new customers and new features. Some things about this were good: Rituals are important, obviously. Woe was the salesperson who did not have at least one new deal to share on Fridays. Even at 20 people, getting support and engineering and sales to spend time together was important. When it got big enough that it needed a calendar invite, the engineer who made it called it “Whiskey Wednesday.”

Experienced founders see right away the problems here: Alcohol-based rituals at work lead to bad behavior. If founders are leading the toast, employees don’t *really* feel like it’s okay to decline. Lots of groups, like, say, parents with families, would assume they were not welcome at a company where important discussions take place over whiskeys after hours on Friday.

When I realized my error, I tried to make changes. Some were successful, like holding it during work hours and making it about real learnings with an agenda and materials. Some were less successful: The old-timers poured drinks, which meant most everyone partook. 

And I tried to change the name. I was not successful. “Whiskey Wednesday” had become something of lore, an in joke, part of the culture. We got to be hundreds of employees and still, when I would propose renaming Whiskey Wednesday, the exec team would push back that “HR-ing” a prized ritual would cause a sense of loss on the team. I finally changed it, by founder fiat, when we were acquired, and started an unkillable rumor that the acquirer had made us change our beloved ritual.

When we start again, we vow to build our new companies free of these silly mistakes. By this time, we’ve been carrying a chip on our shoulders for years. We can’t wait to prove how well we can do it now that we know what we’re doing. 

And then we learn about all the new mistakes we can make:

Raising too much money. Last time, you were always out of money. “Six months from zero cash” was a familiar trauma you wore to bed like ratty pajamas. This time around, investors want to offer you a nice big Series A out of the gate. Wouldn’t that be nice? A big team, a decade-long runway, no going back to investors hat in hand trying to project confidence while worrying about making payroll. But you know how this ends. You can’t pivot a big team, you’ll spend time in team meetings and processes instead of with your customers, and fear of running out of cash is the most effective motivator in the history of startups. Plus, you owe it to yourself to constrain the timeline. Make it work, or don’t. Don’t be piddling along with no product-market fit seven years from now.

Building for scale you don’t have. This is so clearly survivorship bias, and yet we all do it. We remember too well the constant downtime, the mounting technical debt, the months-long migrations. We vow never again to have to dig out of a hole like that. This time, you think, shouldn’t you just start with the microservices and distributed databases you’ll need at scale? No you should not. Technical debt is a side effect of moving fast. Moving fast is required to find product-market fit. Over-engineering your product when you have no customers will prevent you from moving fast, and you will never find the promised land. Technical debt is a hole in the side of an airplane that made it.

Listening to the nice words. People are all too happy to tell first-timers it’ll never work. Last time, the only investor intros you could get were favor meetings arranged by your old boss. Those investors couldn’t wait to leave the meeting, and were happy to casually explain why your startup won’t work. (It’s because a portfolio company tried something vaguely similar 14 years ago and failed.) And if you think that’s hard, wait until you have to hire an employee. Or tell your mom why you left your stable job. The second time, new hires think working for experienced founders is a worthy career bet. Investors look good by sourcing the second-time founder deal. Even mom figures, hey, you made it work last time. 

You know who’s unmoved by how lucky you got last time? Customers. You either solve their problem or you don’t. Or you do, but they just don’t care enough to get out of bed. Or you do, but hang on, you wanted money for this? It’s surprisingly easy to sustain yourself on cheap validation from non-customers. But the customers are the only ones who aren’t bullshitting you.

Losing the joy in it. Around 2011 and 2012, a lot of my friends quit jobs to start companies. A year later, as is natural, most had failed and slunk back to their managers at Google and Facebook like kids moving back home after college. We felt very lucky to outlast them, to raise a modest seed round, find a little office, and hire a few friends onto our team. We were doing it! It’s just a little cash-strapped startup, but it’s ours! We took pride in the banners we hung, the games we played to split the lunch bill, the processes we started with too much self-important discussion of how they would scale when we were huge. 

The second time, a seed stage company does not feel like an accomplishment. It feels like a chore we have to get through on the way to greatness. This leads to an attitude of just slogging through the early days. A lot of colorless days and weeks. As my co-founder put it, “a whole lot of ‘fine.’” But this is just no way to live. It’s also no way to succeed during the foundational days that will determine whether you strike gold and scale to the moon or, well, you don’t. 

You can’t go back to college. Having fun “playing company” rings false now, as it should. What rings true is the pride of craftsmanship in the product and the business itself. When you build a product that runs a billion inferences per day without downtime? Pride. When customers tell you what a joy it was to work with your team during the sales process? Pride. 

When the founding team finds their joy in the work in the early days, then the team does too, and then the whole company reflects that joy. A company where the product evinces pride of authorship. A company that takes pride in how quickly and how well it serves its customers. A team that finds joy, together, in excellence.

So, no. No Whiskey Wednesdays this time.