Before founding Asymmetric, I co-founded and ran Catalant Technologies for eight years, and now serve as Chairman of the Board. Today, the company has successfully raised through Series F and generates in excess of $100M of gross revenue annually. While we were lucky enough to grow the company successfully during what was more or less an uninterrupted bull market from 2013 until the onset of the pandemic, like any small, ambitious and fast-growing company, we were forced at times to contend with uncertainty and setbacks. Along the way, I took notes at crucial moments in an effort to codify my founding experience in a guide (and reading list) which I could use down the road both as an investor and as a resource to other founders. Over the coming quarters, I’ll be turning these lessons into a series of public Substack posts. Given Asymmetric’s increased focus on the earliest stages, today we begin with some thoughts on the formative seed and launch phases.
First and foremost, only pursue an idea about which you are truly passionate. The glamor and excitement will fade far sooner than success arrives. As a corollary, not everyone should start a company and be a founder. The idea matters enormously. If you are launching a business because you “want to be a founder”... you’re at greater risk of chasing a bad idea. While we’re likely to see fewer marginal concepts get funded in the coming years given the shifting macro backdrop, charismatic people nearly always find their way to capital. If you want to found, make sure you get additional feedback beyond money from friends and family. Asking customers for money is on a lifetime unbeaten streak as a good arms length trial for an idea. As Mark Cuban once told me, no business ever failed because its customers needed the product too badly or wanted to pay too much money for it.
Keep all of your early decisions flexible. Avoid durable entanglements before you’re particularly educated. All equity vests; use earnouts wherever you can. If what you’re doing is truly exceptional it will change quite a few times. Along the same lines, many of your assumptions about what and who you need to achieve your vision will be wrong. Keep rigorous track of the hypotheses that underlie your actions, so when your hypothesis changes, you can make quick corresponding shifts in strategy. Peter Drucker’s masterful classic contains the best playbook I have found for creating a personal OS.
Take the opinions of industry experts with a grain of salt. If they have become an industry expert, they have had a hand in constructing and maintaining the existing world order you are trying to disrupt. In the early days, however, stay as close as you possibly can to the product, and more importantly, to the customer. For at least a year - and maybe more - you need to be talking to the customer directly. Sales, marketing, and customer service people will insert spin on and add their personal orientation to the facts. If you are disintermediated from the customer, you will be slow to adjust. Joe Gebbia and the Airbnb founding team are about as good at this as anyone.
Most investors are not worth your time. It can feel like an achievement to secure a meeting or interest with a brand name investor. In reality most of these people are busy and self-interested. Only you are responsible for growing your company. They are responsible for meeting as many founders as they can. Even in this market, they’re the customer at the buffett and you’re the dish. Do what you can to flip that dynamic. Once we had received Sandler training on topics like equal business stature and objection handling as part of the sales team we became infinitely better fundraisers too. Equal business stature is one of the freest lunches you can add to your professional arsenal.
No investor is ever going to be as helpful to you as you assume they are going to be. However, if you select properly, the right investors can do an overwhelming amount of good in key areas like hiring, strategy, and raising capital. But, they are not going to help you grow day to day. Be realistic and strategic about what you are solving for in a capital partner.
Remember, your idea/concept/company has no inherent right to exist. If you are going to separate businesses or consumers from their scarce money (sustainably, and do it again), what you offer has to be far more than modestly better than their existing best alternative, because people are inherently inertial. It doesn’t need to be 10x better … but 10% doesn’t change people’s behavior.
I am deeply skeptical of early stage companies whose early growth plan is via conventional paid channels. It is a sad reality that some other person is also bidding on the same keywords to sell the same thing to the same person. They may have more money than you. They may also not be very good at math. Luckily most of the people backing founders like this have been chastened by the recent correction. But some money still flows on. Fred Reichheld (the inventor of NPS) has done fantastic work on a metric called earned growth. It was Robert Stephens, founder of Geek Squad, who once said, “Advertising is the tax you pay for being unremarkable.”
As a founder, time is your most precious commodity, and it’s constantly working against you. Runway, competition, investor interest, reaction of incumbents all win as your pace slows. However, there can be an excessive mania among early stage founders that prioritizes speed and the appearance of action over a truly thoughtful, deliberate approach. I always found we were happier with outcomes when we gave critical decisions a lot of thought, and reversible/non-critical decisions were made quickly. Jeff Bezos has done some of the best thinking I have come across on this topic.
The most thoughtful thing we heard from one of our investors at Greylock was in our early days. Rather than revenue growth, or even user growth, he asked us every month, “What new thing did you learn about your customers?”. We didn’t prioritize this question enough until later in the company’s life. I regret this. The best VCs in the market are almost comically rigorous about scrutinizing product-market fit. Many ideas can grow quickly; a smaller few can drive meaningful organic growth at attractive cost of acquisition, once they’ve reached decent revenue scale and early adopters have been exhausted. Continually delivering attractive growth at favorable unit economics is not trivial.
Just as important as time at the early stages is emotional bandwidth. You only have a finite amount of “full send” energy for meetings and calls every day. Every time you use it on the wrong meeting or an unimportant discussion, you make yourself worse at the right meeting. Relatedly, be violently discriminating in how you schedule your day. Do the most important things at your emotional sweet spot - probably better in the morning, but more importantly learn when you are at your best and book the most important calls then. Never yield to an investor who claims they only have one 30 minute slot to see you, if that slot is bad for you. It simply isn’t true.
Finally, most new developments are simply not as important as they seem in the moment. Good or bad. If you aren’t having fun, take a serious look into why. Most founders don’t take enough risk, and don’t have enough fun. If you have a good idea, work hard at it, and find some degree of product-market fit, your company’s outcome will probably be pretty good. If you want a friend for the journey, come say hello.