EN 67: Creating a company seems daunting

On random days like today, I find myself thinking about the many dysfunctional or unethical companies in the world, and how different—better—things could be. The thought crosses my mind often. In a way, it’s inevitable. Eight hours a day working, for years, could do that to any person. I want to try something different. This cannot be all there is.

So far, most of my jobs have been in startups. Only one company wasn’t an early startup, it had a decent size. To this day—with all its issues—it’s still the best place I’ve worked in, and it was fundamental for my career early on. Looking back to the startups, I can’t avoid but think that I could do it better. It’s the arrogance speaking, as I know for a fact that running a company is not an easy task, and making it succeed is even less so. Still, I would love to give it a try. Not to make money, mind you—although there’s some of that—but to be able to create the environment we deserve and can be proud of, that helps people—customers, workers, communities—and the planet. We might be able to put our grain of sand and show the world that there are better ways to work and organise.

Coupled with the “idealism”, the thrill of adventure, creating something from scratch, helping it evolve and bringing people together towards a bigger purpose is captivating. The risks and sacrifice are high. Many founders speak of years devoted to their child—the company—, of long hours, stress, and the responsibility you have after hiring people. I’ve seen it, a founder who didn’t take care of himself, mentally and physically, bearing the constant stress and preoccupations of making the company survive.

I sense there must be a way to balance the stress and taking care of yourself, after all: “mens sana in corpore sano”. Have you tried to decide or do an important activity after sleeping only four hours or feeling awfully sick? Exactly.

From some founders in the industry, it’s clear to me that raising money from venture capital (VC) can almost be like selling your soul. VC firms expect to get a 100x return to make it worthwhile—most startups fail, but over a diversified portfolio, one or two companies giving such a return cover the losses. To try to make the moonshot happen, you’re forced to work towards massive grow, showing results year-on-year, regardless of how beneficial or detrimental for the company it can be. If the company doesn’t grow enough or show potential, the future investments stop. Is growing at all cost what every company—and the world—needs? I don’t think so, growing for the sake of growing doesn’t achieve anything, I’d even argue that it is worthless. Furthermore, venture capitalists, looking for that 100x return, tend to favour the short term over long-term investments that would be socially beneficial.

VC money is not the only way to go. There’s nothing wrong with having a profitable company that won’t ever scale to Uber and Amazon levels, it’s not a failure. A founder should do well to think long and hard before attempting to raise money.

To offer a different view of Venture Capital, one that doesn’t make the venture capitalists heroes and incredibly intelligent people helping humanity by investing in great endeavours, listen to this episode of Tech Won’t Save Us:

While I’ve been writing about creating healthy environments, I also recognise that efforts, via a company, to do something good in the world, serve people and create a great environment amount to nothing if the organisation is not economically sustainable. If I want to put my grain of sand, show the world that there are better and radical ways of working, the company has to survive. There are many examples of valuable products that didn’t succeed, and plenty of counter examples where companies with bad products, cultures and less than ethical ways of working do well all the time.

Charity Majors has written a few insightful posts about her experience as one of the founders of Honeycomb. Rightly so, she points out that :

As a founder or leader of a venture-backed startup or public company, your #1 job is to make the business succeed. Success comes first. It’s Maslow’s hierarchy of needs all over again; you must ensure your company’s continued existence before you earn the right to tinker.

Success in business is what earns you the right to devote more time, attention, and resources to cultural issues, and to experiment with things that matter to you.

[…]

I believe that leaders who care about building a workplace culture rooted in dignity and respect have a responsibility to care even more about success in business. Let’s show these motherfuckers how it’s done. Nothing succeeds like success.

I certainly would like to show the industry how it’s done. Although, getting into having a company only for the reasons I’ve laid out would not be enough. There has to be a problem, need, or desire that the organisation solves or satisfies, and the founders have to “fall in love” with it. Doing something that you don’t believe in can be a recipe for disaster.

On the idea side, I admit I don’t have any good ones, and haven’t recognised an issue I care about enough that I can help solve in a good way. The emphasis is on “that I can help solve in a good way”. I care about many things that I would like to see changed in the world, but is tech the right way to solve them, do I have the ability and domain knowledge to create the solutions? The former question is more important than the latter, and a question that every potential founder should ask themselves. Let’s face it, the most relevant issues in the world won’t be solved with an app.

An example of an issue that’s best not solved mainly with tech is public transport. Nowadays, various vehicles for rent like scooters or e-bikes appear everywhere and companies fight to monopolise the market (a VC wet dream). I see the situation as a government failure, first and foremost. A city or country that invests strongly in public transport and walkable areas to reduce the reliance on the car doesn’t have a giant market for e-bikes or scooters. A look at The Netherlands is enough to see that there’s no hyper profitable market for these companies.

Coming back to the idea generation, it seems daunting to me. I look back at some of the founders I’ve worked with, and they weren’t geniuses, just normal people. For some, it was their first company, didn’t know much about anything product or software related and were on a journey with tons of trial and error, defaulting to what they already knew “worked”. After all, there were bigger problems—survival the main one. The idea for their companies wasn’t particularly ground-breaking, but it attempted to solve a problem or need. If they can, you and I could do too, but still, for some reason, there’s a degree of mysticism in my mind about the whole thing.

There are occasions where you don’t know what’s possible because of the environment or your upbringing. You’ve never seen it, lived it, or had the resources to do so. “Birds of a feather flock together” or something to that effect. It’s the same thing with the mysticism about having ideas and creating companies. I know it’s possible, but it still feels like there’s a gap.

If anything, most ideas are not to “save the world” but to solve a particular problem. Even if it seems silly, as long as there are enough people that care about it and a good market, it might be possible to come up with a valuable solution.

I saw today on LinkedIn a founder’s comment saying that sometimes working late and skipping lunch is needed, and it doesn’t turn the environment into a toxic one. That might be so, but my initial reaction was to consider a different scenario: what would a company that encourages only working the normal hours and not skipping lunch would look like? We could take it a step further, what would a company where learning, sharing and collaboration is truly embraced look like, where redundancies aren’t the first option, and so on and on? As Charles Lambdin writes in the first interesting link of today: “real transformation is an exercise in box-breaking”.

Do I believe I would do better than most companies and founders in my first try? Most likely, no, at least not for a long while. There’s a lot to learn in essential areas, like sales and marketing, and challenges I’ve never had to worry about as an employee. That’s why founders that built a company before can have an edge. I know that, if the opportunity appears, I’d try hard to avoid the mistakes that I’ve seen as a worker, and to apply what I know about products, software and systems to attempt to create something good. If anything, the experience would be invaluable.

  • Design Thinking as Decision Framing (Charles Lambdin). Insightful post. I was nodding along while reading about degrees of freedom and leaders sapping the system of its options, and the self-sabotaging traps. A few quotes: “real transformation is an exercise in box-breaking”, “when the owner has unwittingly fixed the frame, they have also unsuspectingly frozen the context”.

  • Designing for forgiveness: How to create error-tolerant interfaces (Tetiana Sydorenko). There’s something beyond the “something went wrong” approach, we can embrace the idea that people are fallible—and that we tend to explore to learn—, and design systems with empathy.

  • Prepare to Be Unprepared: Investing in Capacity to Adapt to Surprises in Software-Reliant Businesses (John Allspaw). Fantastic article about resiliency in organisations. While there are a few takeaways, it’s clear how important creating the conditions for learning, understanding and sharing is in improving resiliency. I think about people and teams that never talk to each other and rarely share their expertise.

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