Paul as a founder

1 July 2024 · startup

Dear Paul,

I'm writing this at the start of another startup because I'm scared of going into the unknown again. I'm the only breadwinner for a family with 2 young kids and a newborn. We have plenty of runway, so this isn't about running out of money next month. It's about the years I could spend earning a salary instead, and the child-raising expenses I know are coming even if I don't know what they will be. Somewhere in the middle of a bad week, I will probably forget why I took that risk. So I'm writing it down now. Future me: this is for you.

The scars

Every startup I've done has cost me something. At Spokepoint, a decade before Motiva, I came home dead tired every day. I kept postponing the conversations I should have been having with my partner at the time. In the end, neither the company nor the relationship worked. That one wasn't all work's fault. I was younger and immature, and didn't know how to deal with a relationship where both of us had stopped talking. But work didn't help. At Motiva I carried the pager alone for 18 months, and I only realized what it was doing to me when my wife accused me of being irritable. She was right. Of all these companies, only Motiva ever reached positive cash flow. None became sustainable enough to last. A sensible person would have stopped by now.

So why am I doing it again? Autonomy is one reason. We live in rural Japan, in an area and community we absolutely love, and starting a company gives me more say over how I work. Being able to do that from here is a nice benefit, but it isn't the reason I'm doing this.

The real reason is that every startup seems to have taken me one step closer to business sustainability. Spokepoint earned revenue. InGrower secured government funding. Motiva earned well over 10 times Spokepoint's revenue and reached positive cash flow. Do I finally know how to build a sustainable business? No. I just feel like I'm slowly getting the hang of it. It has been an expensive way to learn.

Moamba

I got the impact part wrong for a while too. InGrower was a nonprofit funded by the Danish and Austrian Ministries of Foreign Affairs. My co-founder Anders did basically all the work to secure that funding. I was building for smallholder chicken farmers in Africa. I went to live with them for 2 months on a farm in Moamba, a small village 2 hours from Maputo. We ate and lived together, and rode into town on a tractor in the evenings. I took that to mean we were friends. At one point I had to make a trip to Johannesburg, so I asked one of my buddies to exchange some money for me. I handed him about 80. Less than 40 came back. He looked nervous handing it over, and my first thought was that he'd been robbed. He hadn't. I didn't confront him. Shortly after, I decided it was time for me to go. I had thought we were friends. The missing $40 told me they saw me as a rich outsider. I wasn't building with them. I was building for my own vanity.

What I'm doing differently this time

Feeling like I'm getting the hang of startups is a dangerous way to start another one. So this time I'm validating before building. I started a Trello board called "NABC horse race" with these stages: Idea, Model NABC, Buddy Iteration, Prospect Feedback, Paid Proof of Concept, and Rejected.

I actually started this new venture last year. By now, I had put 48 business experiments on the board and moved 35 of them between stages. Twenty-five reached Rejected. Four reached Paid Proof of Concept. I'm trying to learn that rejecting a mediocre path is better than getting stuck with it for years. Obvious in hindsight. I still needed a Trello board to make myself see these failures as wins.

What I'm actually building

Motiva taught me what sustainability was for. I was there almost 8 years, and it went the furthest of anything I've built: positive cash flow, real demand, and a few marketing ops teams from Fortune 500 companies running on it. But that's not the part that matters. The Motiva team worked around my 6-month honeymoon, when I traveled from Jerusalem to Lisbon. Motiva paid me a steady paycheck that let me start a family comfortably while living halfway around the world, years before COVID made remote work normal. I could see the impact at my own dinner table.

So what do I want from this one? A simple, sustainable company that supports my family and the families of a small team of people I like working with. I want this company to do for a few more families what Motiva did for mine. The startup is just the vehicle.

Future me: when there's no end in sight, ask whether the company still supports the people, or whether the people are now supporting the company. The company is replaceable. The people aren't.

Appendix: the peg

Here is the peg I want to come back to when the choices get hard. I want to build a company that can last 20 years without taking over the lives of the people who work here. It should support our families and give us room to get better at our work.

  1. People over short-term profit. The company needs to make money, but not by wearing out the people who make it.
  2. Steady growth over rapid expansion. Grow at a pace our customers, cash flow, and team can support.
  3. Customer conversations over assumptions. Talk to customers before building. Keep talking after they pay.
  4. Different people and viewpoints over sameness. I don't want a leadership team where everyone looks and thinks the same.
  5. A life outside work over constant hustle. Nobody should have to give the company their whole life.
  6. Cash flow over fundraising. I want the business to pay for itself instead of depending on investors.
  7. Open decisions over secrecy. Tell people what we're doing and why.

(h/t Agile Manifesto.)