The Human Element of Startup Businesses

One of my favorite startup books is The Lean Startup by Eric Ries. But I have a bias – it’s bent toward processes, checklists, and following a clear path no matter how unpredictable. Steve Blank, I admire him too, and I mean a lot. I love his scientific approach to startups in The Startup Owner’s Manual.

The Book Every Startup Founder Should Read

There’s a new book every startup-founder needs to read. It’s not a step-by-step prescriptive approach to building a startup. Instead, I found a strong human element in this book similar to what I found in The Hard Thing About Hard Things, another book startup-founders should read.

Instead, my focus is on the book by Brett Fox entitled, Learn How to Take a Punch.

Don’t know who Brett Fox is? Forty million readers have read or scanned his answers on Quora. He’s been featured in HuffPost, Forbes, Apple News, Mashable, Inc. Business Insider, and Observer. I thought his book was so good, I just had to interview him.

What Do I Mean by Human?

What’s it like to be a startup CEO? Ponder the following line for a minute or two:

I wake up from my nightmare. We couldn’t close funding. My wife is sound asleep next to me. I am shivering, even though it is 72 degrees. I hate the shivering.

Fox, Brett. Learn How To Take A Punch: Building Your Startup Isn’t A Marathon, It’s A Prizefight (p. 9). Kindle Edition.

By the way, it was 3:00 a.m. when he woke up.

That’s what I mean by Brett being transparent about being a startup founder. It’s scary. Especially when funding will occur in June – two years later that is.

Key Themes in Learn How to Take a Punch

While Brett’s book is not the mini MBA for startup founders, I’m calling it the prerequisite before starting a business. Or, even seasoned entrepreneurs who have started and sold multiple ventures will gain valuable nuggets from this startup book of wisdom.

Below are just a few of the notes and highlights in my copy:

1. Deal with entrepreneurial fear head-on – make sure you can unload on a person other than a family member when dealing with these intense emotions.
2. You need the grit to get through tough times – it’s stamina for the marathon.
3. Raising money is not as easy as you think. Just wait till your try finding and securing that first $1,000,000. Plan for one year as the timeframe for raising cash.
4. I thought hiring a CTO was hard, but Brett reminds us that hiring a VP of Sales is difficult. However, wait till the business is scaling before making that hire.
5. The most important role for any CEO is recruiting and hiring great team members (Brett’s recommendations on page 31 seem so simple, but why is it so hard to do?).
6. Phil Knight and fanatical team players.
7. No, no, no … you don’t need a COO for the startup, you are.
8. Don’t underpay – be in the median range.
9. The divorce rate is around 50%, so how do you improve the odds of co-founders sticking it out?
10. Cultural fit – fanaticism, integrity, smarts, cultural fit.
11. Sandy Koufax – great mention (I’m not telling).
12. Be careful about seeking VC funding. If you do, you lose options.
13. Knowing when to scale or pull back is one of the most difficult things you need to do as a CEO. Knowing when to scale is never clear.
14. MVPs have to be 10x to 100x than what’s better than what’s currently available in the market.
15. Know when to work with an investment banker or broker.

Product-Market Fit Revisited

If you devour great writing about startups, then you’ve read one of the best articles ever written about product-market fit by Tren Griffin entitled, 12 Things about Product-Market Fit.

Get the product-market fit right, and you have success, right?

Not so fast according to Brett. You need a great team as he reminds us of Rachleff’s Law:

• Great Team + Terrible Market = Market Wins
• Terrible Team + Great Market = Market Still Wins, but
• Great Team + Great Market = Something Special Happens

Brett presents his own spin on Rachleff’s Law by stating the key to startup success is going after a great market, having a great team, and having great investors.

The Art of the Start, Part II

I loved Guy Kawasaki’s, The Art of the Start. In that book, he mentions the the 10-20-30 Rule for PowerPoint. Just 10 slides, 20 minutes, and 30-point font.

Brett has a presentation thought process too which requires the answers to three important questions:

1. What does my product or business do?
2. How much better are you than the competition?
3. What’s the size of the market that’s being attacked?

On Selling the Company

I enjoyed Brett’s advice on selling the startup. He states, “You’re not building a company if your intent is to sell it.

He says real companies have a long-term strategy. Real companies have a vision. But your vision is to just be bought – great reminder.

Key Terms

I’m not giving away the punch line, but be prepared for some possibly new terms that will be meaningful in your startup journey:

• Zone of Insolvency
• 409A Valuation
• Leading Indicators of Product-Market Fit (brilliant concept)
• Appropriately Frugal
• Short Supply Lines
• Investor-Company Mismatch

The Final Verdict

Easily, this book is 5 out of 5 stars. Read it first, then feel free to shoot Brett a question or two on his website.