Your Most Important Decision As A Founder

Imagine for a second…

You’re early in your founder journey. You’ve been exploring various ideas for a few months, and you’ve found a likely co-founder with a complimentary skillset who you get along with.

One of your experiments generated a bit of attention after launching and people you talk to about it (maybe even investors) seem excited. They’re asking you what your plans are for it.

But the truth is… you have no idea! It’s not like it went viral or anything, you tell yourself. Maybe you should go get a job at Google after all... Your co-founder isn’t sure either.

So how do you know whether to go “all-in” on the idea? What evidence do you need to decide this is the thing you want to build, potentially becoming a central focus of your life for years?

This is the most important decision you’ll make as a founder. Here’s how to make the call 👇

The Most Important Thing

Deciding what to build is both a personal and practical decision. I’ve broken down both into separate sections below.

One Thing First

You might be thinking… is this really the most important decision you’ll make as a founder? More important than your cofounder?

It is.

The wrong co-founder can make your life hell, but there’s a solution to that: one of you leaves the company. And having a co-founder leave is tough, but it happens and many startups get through it.

At my last startup, one of my co-founders left due to health concerns and then I later left as well.

On the other hand, committing yourself to building something that people don’t want to use or buy has a 0% chance of ending how you’d hoped. Yes, you learn things — but you lose time.

Personal Factors

Before we even get to the strategic factors, let’s set a baseline — what needs to be true for you, as a founder, to go all-in?

Timing

Where’s your risk tolerance at right now?

Even if your goal isn’t to be one of the <1% of startups that IPO, there’s about a 90% chance your startup will end up being worth $0 eventually.

So, before anything else, do an honest evaluation of what your goals are for the next ~5 years. If your startup fails, do those goals become harder or impossible to reach? If so, are you ok with that or will you be resentful?

Market Size

Yes, this is first and foremost a personal factor.

Not everyone has the same goal for their startup. Maybe you want to create a Silicon Valley Small Business (one of my favorite new concepts to emerge in the last year).

If you’re IPO-or-bust, though, be sure that the market can provide venture scale returns for investors. VCs invest in companies that have a high likelihood of failing, but the potential to return their entire fund (and then some).

They’re looking for moonshots, not safe bets, and if raising venture is your goal you need to be able to show that x people you can reach will pay $y for your product, leading to $z annual revenue.

Additionally, early on you’re really picking a market more than a specific idea anyway. When we founded my last startup, we thought it was going to be a reality show instead of a venture-backed company. TLDR, things change and pivots happen.

Co-founder(s)

Are you ready to get (professionally) married?

I mentioned complimentary skillsets, but it’s also important to have complimentary ambitions. Successful startups have a clear line between what each co-founder is responsible for, and everyone agrees that’s what puts the company on the path to success.

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