Fundraising Makes You Fat

Things aren't working: your numbers are pretty far from the "hockey stick" trajectory you need to get to Series A. Your investors are frustrated, and so are you. Why doesn't the world love what you produced? How could the world not be as genuinely excited and passionate about your solution to their problem(s)?

Your investors are sending you the occasional "hey, what's up? What's going on? Any updates" emails, and you're not sure how to answer. You're incredibly conscious of the fact that every day represents money spent, with no revenues coming in the door. You realize that they want a plan, they want to know how you're going to fix what isn't working, and you don't have one. 

Internally, conversations are getting tougher and more heated between the founders. Your employees can feel the tension rising, and it's making for a more toxic work environment for everyone involved. The stress makes conversations mired with a certain degree of contempt - everyone thinks their opinion is right, when in reality nobody has answers. Days turn into a week, and you feel like you have all these engineers, and designers, and marketers, and that unless they're coding/designing/marketing, you're wasting money. The pressure to build and launch something grows even more. 

The pressure keeps building, and ultimately the desire to "move forward" takes over, and you start building things again. (For better or worse). 

I've been there. It's not an incredibly happy place. It kinda sucks actually. But I learned a few things, and hopefully they can help you navigate through it all:

Don't Over-plan. 

Planning is natural: it's our way of mitigating risk and calming our anxiety about the future. The future is easier to step into voluntarily if we know exactly how things are going to go, and what we're going to do. It also helps keep investors off your back, because it shows that you've thought through X number of contingencies, and know what you're doing. (Even though you have no idea what your'e doing, and that's ok). 

The problem with planning is that the future never goes as you'd expect it to, which means that all that "planning" you did was pretty much wasted. (I learned this the hard way). Instead of planning, come up with a process and goals you want to achieve. Do you need 1M users to raise Series A? Do you need to hit 5% conversion to paid? Focus on that goal, and focus all your energy on achieving it. Don't plan what you're going to do month by month, just focus week to week on ways you're going to hit that number. 

Don't Over-build. 

The second thing I see time and again is startups making larger,  more audacious, and technically more challenging changes over time. We don't ever want to feel like we're throwing money down the drain, so that drives us to building incredibly time consuming, technically complex things. We can't be wasting money, because look…our latest version of our service took 4 months to build, with some of the best Python developers in the country!  It has machine learning, natural language processing, and that's only 1/10th of the new amazingness we're putting into this new version! It's bona fide badass! It has to be, we're really smart, and we spent so much time on it! 

The problem is that time and effort aren't direct corollaries to your startup taking off. In fact, the opposite is often true. Instead of spending 4 months working on the new version of your service, you could have spent two weeks making sure you were building the right thing, and breaking your build don into smaller segments. Don't build a 2.0 of your service, build a 1.1.1 of it, then a 1.1.2, etc, while keeping all your energies focused on your key goal and metric. 

Ship often, Cut back on discussions. 

The pressure to build is a good one. You don't want to get lost "theorizing" about how to fix things, and debating internally on what are good ideas, versus great ideas. The truth of the matter is, nobody in the room really knows the answer, you just have to test things as quickly as possible, and get feedback from real users. That initial gut feeling you had to keep the ship moving, and getting your team back into action is a good one at it's core: building things means putting product in front of users, which means you learn.(It also helps cut down on the endless hours of no-data-dead-end-rabbit-hole conversations internally on what is "best"). 

Conclusion:

A lot of the pressures to overplan and overbuild come from having raised money. You are now paying a team of people (mostly engineers hopefully) to work towards a goal. They were hired with a very specific skill, and when you don't have a set (ambitious) plan, it feels like you're not using your resources properly. That, and the fact that your investors are clamoring to hear what your "plan" is, and how you're going to fix things, makes the pressure to overbuild and overplan the safest option. IT's the perfect way to subconciously absolve yourself of responsibility: "I used the money and resources I was given to their fullest extent. We built incredibly complex things, which justifies the money we spent". In reality, the only thing that justifies the money you're spending is finding product to market fit, and the "plan" should be a "process". 

I realize this is pretty much everything Eric Ries outlines in his book, Lean Startup, but I had to learn it all the hard way, through 39 months of failure. Hopefully this helps make the process, and learnings real for you, so you can avoid the mistakes I made for so long.