Original posted on Medium.

We interviewed 25 founders to learn about their founding insight, motivations, and top challenges they faced in starting a new venture. Here is the link to the slide deck.

Who is this for?

We’re capturing founding stories from a wide range of start-ups and sharing our learnings with you.

This report is for aspiring founders in their current 9–5 jobs that need that extra kick of motivation to start their next venture. We’re creating a space to read those stories, get inspired, and hopefully help you create your own.

Format

30 min qualitative interviews x 25 Founders.

Topics covered:

• Founding Insight

• Motivations to start their own venture

• How they got their 1st set of customers

• Hardest part of the early days (pre-revenue)

• What they did to overcome obstacles

• Biggest pain points today

• Advice to an aspiring Entrepreneur in their day job

Founders Interviewed

25 founders interviewed primarily based in major cities
(i.e. SF, Toronto, NY, Boston, Seattle, etc.) in NA, 75% from the US, rest mostly from CAN

All tech-related ventures

• 60% B2B SaaS or deep tech (i.e. AI)

• 30% B2B services shops (i.e. dev, design)

• 10% B2C mass services enables through tech (i.e. legal, funeral, etc)

Average employee count: ~80e
Average revenue: ~$15MM ARR

1st time founders: 50%
2x founders: 40%
3x and beyond founders: 10%

Founding Insight

Graph: Founding Insight Source

Anecdotes:

• [Fell into it]
  Was looking at public RFPs. One RFP was talking about a new technology and they thought it was the future. Applied with no real domain knowledge. Got contract: what was 1 services engagement turned into several which turned into a product.

• [Purposeful discovery]
  Ran a lean discovery process — interviewing potential customers in various industries. Open discovery in cool industries they were interested in such as real estate and others.

• [Deep domain knowledge + saw problem 1st hand]
  Spending $30–40k per month on energy costs at previous company. 8% of revenue was going to energy; energy use growing, saw the trend. Data centres produce so much greenhouse gas. Saw the problem 1st hand and had the domain knowledge to go solve it.

Motivation

Graph: Founder Motivations

Anecdotes:

• [Aspirations] [Frustrated] [Timing]
  Since high school always had dreams of starting his own thing. They were 26, and knew the timing was good for them. Were extremely fed up with the company they were working for.

• [Altruism]
  Loved gymnastics. Loved helping ppl. Loved technology. Was a judge for gymnastics and as a judge saw it was all pen and paper → wanted to help others w this problem.

• [Altruism] [Parental influence]
  Created a community in the Bay area for geeks that code and political activists → purpose of reinventing money for a soulful, equitable world. Want to work on some problems that changed the world as strongly encouraged by his mother.

Getting 1st Customers

Graph: Getting 1st Customers

Anecdotes:

• [Outbound] [Inbound]
  Still doing cold outreach as well as lots of events in the beginning. 1st paid customer from an event in EUR. Developed a lot of content afterwards to get traffic. Had testimonials from early customers on the problem and PoC they had built (no real product yet) → built a story around that but did not have commercial commitment from them.

• [Network] [Inbound]
  Had a strong reputation for doing good work in the past. Leveraged network, and got a warm intro to his first contract. No salespeople, all inbound and referrals from blog posts and conferences that they speak at.

• [Structured pilot model]
  Getting people involved in beta, pilots and converting them was crucial to start.

Hardest Part, Early Days

1. Cash and resource management: 20%

2. Focus, knowing what to do next, which market to go after: 20%

3. Getting 1st customers bc didn’t have credibility: 16%

4. Operational tasks (i.e. office, bookkeeping): 12%

Anecdotes:

• [Focus] [Credibility]
  Trickiest part: finding who would resonate with the product. Had tons of convos and uncovered new segment through discovery process. Struggled with credibility in the beginning.

• [Cash management] [Focus]
  Managing budget and spending it correctly is always complicated. Main issue is focus: when you start you have no idea what to do bc you don’t have experience.

Hardest Part, Today

1. Scaling the business (hiring, growth): 40%

2. People mgmt (BoD, middle mgmt, reporting structure, culture, role change): 20%

3. Differentiation from competition: 8%

Anecdotes:

• [People mgmt]
  General people management is hard. Keeping up w new technologies. Growing from 10 to 100 employees is so different. Where to hire next, where to place mgrs, give people growth opps.

• [Differentiation]
  Hardest part today is differentiation in the software. They buy hardware from other companies and GPS system has reached physical limit now after many years. Customers requesting so many features that they cannot handle.

Advice for Aspiring Entrepreneurs

Graph: Hierarchy of Advice for Aspiring Entrepreneurs

Anecdotes:

• [Risk tolerance] [Manage your risk] [Just do it]
  Be true to yourself: some ppl should stay corporate. If you can’t do the ups + downs there’s no way to coach you. Be smart about financials, manage your risks — gives you right to be overconfident during first few months. You’ll never be ready, just do it.

Other Themes

1. On managing risk (when they quit their FT jobs)

• Trigger to quit jobs ($100k salary) and become FT ($50k salary) was when growth was accelerating and they acquired a good batch of customers / they saw the numbers. Had mortgages, kids, etc but managed the risk.

• Knew he needed a back of napkin plan. Quit FT job when saw interest picked up and got willingness to pay — 12–13 customers. Saw this as fun and genuinely exciting.

2. Skillset changes from founder in early days to senior leader when the company grows

• He’s no longer an entrepreneur. He a senior leader. Now he only has heads reporting to him (instead of indiv contributors). His day to day is totally different. Mandate is empowering leaders to be aligned.

• Working on diversity of leadership. Showing up is a big part of the battle (clients and his team are thrilled when he joins meetings) — showing that he cares. Writes a lot of content, hosts webinars. As co grows, saw that his name was valued more.

3. Entrepreneurship actually not having huge downside and is not that much risk

• “Might as well jump” bc no real downside. Worst case, you learn some lessons and bounce back. Tons of opportunity out there.

• If you’re fortunate enough to have the chance to do it, the risk isn’t that bad. The idea of massive risk is overstated.

Author’s Takeaways

1. Start now, you’ll learn as you go — no one knows what they are doing

2. Expect failures — lot of these founders have multiple failures before they succeeded

3. Have a values system: should be about helping others, shouldn’t be about money or fame

4. You can be technical or business, it doesn’t matter → just build the right team to be around where you get along, have complementary skills, and share common goals