6 terrible pieces of advice we’ve received as entrepreneurs
Why learning how to think for yourself can save you from bad advice
Hiiii everyone! It’s been way too long since I’ve written. I’m stoked to be back and re-connecting with all of you. I’ve poured all of my energy over the last few months into building Personal Learning alongside our beta community. It’s been immensely energizing to meet others who are also on a quest to learn better. We’ve been getting together for weekly Zoom jams on:
Learning how to learn
Mental models that help with learning effectively
What do our personal learning systems look like? How can we design them to help us learn efficiently?
How might we build better learning habits? A learning lifestyle?
Translating learnings into opportunities and personal leverage
If you value self-directed learning and are also on a quest to learn better to unlock more opportunities, you’ll LOVE these community jams. Let me know you want to join and I’ll share the calendar invite.
I’m kicking off my return with a 30 day writing challenge! I’ll be sharing my long-form writings here, and short-form on twitter. Raaid (my husband) is doing the challenge with me, so we figured it would be fun to write this first piece together.
We’ve been noticing a pretty big shift in how people are thinking about their careers. We’re seeing lots of people take the entrepreneurial leap!
Lots of freelancing careers taking off. Lots of consultancies popping up. Lots of people diving into small business opportunities. It’s awesome.
You might be exploring new opportunities right now, too. And you might be coming across a ton of conflicting information as you learn more about your options.
Raaid and I have been building businesses for 10+ years now, and we’ve come across A LOT of bad information along the way, including lots of advice. You’ll likely come across a lot of that advice as well, so this is our attempt to save you some pain.
Bad advice #1: Just go raise money
When people give this advice, they’re usually referring to venture financing. They’re telling you to go find institutional and angel investors, who believe in the problem you’re solving and your ability to build something of value, and ask them for capital support. They would do this in exchange for ownership in the company.
Here’s when this advice ends up being awful:
It’s super easy to advise someone who needs $$$ for a compelling idea, maybe even a product with traction, to go raise money. But raising venture financing isn’t the only source of capital for businesses. It often isn’t the ideal source for most businesses. And it certainly isn’t the “least expensive” one.
Aside from the time and energy required to fundraise, you’ll likely surrender a meaningful amount of ownership in the business. These trade-offs can certainly be worthwhile, however it’s important to learn about your options.
Understanding what you need the capital for, and estimating how much, will determine what options may be available to you fairly quickly.
I especially dislike when people include the “just” in “just go raise money.” This likely means they severely undermine the realities of doing so.
Raising from VCs and angels comes with expectations and a commitment that many founders don’t internalize. When everyone seems to be raising around you, it can feel tempting to follow the crowd without understanding the choice you’re making.
To help you understand the reality of being venture-backed, identify venture-backed founders in your industry across different stages, and ask them about their experience. Consider questions like:
Why did you decide to raise?
How did you choose who to raise from?
How have you nurtured relationships with your investors post-raise?
What expectations are set between you and your investors?
I bootstrapped my first company and went the venture route for my second. The experiences are incredibly different. Maybe I’ll write a separate post on this. Let me know if you’d like me to.
Bad advice #2: Don’t ever raise money
We’ve also been recipients of this terrible advice. Ultimately, blanket statements like “you should raise money” or “don’t ever raise money” come with a world of hidden context.
When someone tells you not to raise money, take it as an opportunity to understand their experience.
Maybe they had a bad experience with certain investors. You can learn a lot about investors by talking to their portfolio companies. Don’t believe everything you hear, and always get multiple perspectives.
Maybe they got a crappy end of the stick. This can happen during fundraising negotiations, especially because most founders know very little about how VCs are incentivized and what goes into their decision making. I can ask Raaid to share some insights here as a VC — let me know if that feels valuable for you.
Or maybe they blindly took someone’s “just go raise money” advice and had to deal with not-so-fun consequences
The best thing you can do is learn about your options, understand the opportunity costs, and cycle through mental models to help you think for yourself.
Bad advice #3: Monetize quickly
It’s important to understand the impacts of this advice on a business, especially one that’s early.
Early founders pursue an idea because they have an insight. This insight is usually not fully developed or validated, but it’s deep enough to give you a shot at identifying a reasonable solution within a problem space. When you’re trying to address a problem, the goal is to learn as much as you can, as quickly as you can, to identify viable solutions.
“But does it make money?” Money is always a topic of concern for founders, but forcing monetization early can take your attention away from letting your insights adequately develop. For example, you might force yourself to think of easier, faster-to-implement solutions that don’t allow you to learn what you need in order to evolve your insights. Distracting yourself from the rigorous problem solving required at the early stages of product development can lead you to build in an ineffective direction.
Bad advice #4: Don’t worry about monetizing, just focus on user growth
We’ve also been advised to do the opposite. And the results can be just as bad. Learning how to make sense of the “wisdom” that leads to certain advice is very important.
Often times we’ve seen founders who are told to just “grow” invest the money they have into growth initiatives. This can ultimately lead to forced growth, and be very expensive.
Even when growth is inexpensive and ideally organic, there’s still a hefty risk for founders who haven’t made the time to learn and understand monetization options. Every business needs to be able to make money and have unit economics that make sense. If you’re using growth as a way to represent demand and future profits, it can be easy to neglect verifying people’s willingness to pay in exchange for the value they’re receiving.
Bad advice #5: Don’t waste money on expensive recruiting companies to help you hire in the early days
When people share this piece of advice, I’ve found that they’re often valuing $$$ in the bank to be greater than hours invested. But when moving fast is crucial and time is of essence (like always), you’ll need as much help as you can get to connect with critical early hires.
It’s helpful to do an opportunity cost analysis to understand why it may or may not be valuable for you to work with recruiting companies. Explore and think through your options before taking advice that may dismiss a perfectly good one.
I’ve personally found value in establishing relationships with a few headhunters who have strong networks for the roles I hire for often. And since headhunters typically only charge you if you hire a candidate from their recommendations, there’s no critical monetary investment until you’ve found the ideal candidate, at which point I’ve found the “saved time costs” to be worth the not-so-ideal placement fee.
Bad advice #6: Don’t waste your time hiring, use a headhunter
And then there’s the other side. It’s awful to depend on headhunters to hire for early roles. Your critical first hires will choose to join your team because they believe in you.
I’ve advised several startups on People Operations and almost always I find that founders are trusting headhunters to represent their vision, team, product, and brand without any guidelines. This is guaranteed to make your hiring inefficient and ineffective. Building relationships with headhunters and seeing them as partners in your hiring efforts is great. But not taking hiring seriously will have serious adverse effects. Your team is your greatest leverage.
When we sat down to create this list, Raaid and I genuinely thought we’d come up with a handful of distinct pieces of advice. But with every piece of bad advice that came up, we immediately remembered a memory of also receiving the opposite piece that ended up being just as bad.
It comes down to thinking for ourselves. Advice is often framed as the sole answer, when it’s really just a data point among many others in our learning process.
Always identify multiple perspectives, question them, and develop your own opinions. I use my personal learning management system to hold me accountable for this. When you’re juggling multiple responsibilities as a founder, it’ll feel tempting to make quick decisions based on the advice you get. Do yourself a favor, and bake learning/thinking time into your calendar.
Hope this was helpful. Would love to know what y’all are learning about these days. Email me back — I’d love to hear from you!
Shireen (& Raaid)
p.s. The rest of our writings will probably be more short-form and on twitter, so follow along if you want more content on learning better!