Lessons from my first venture-backed startup

My first venture-backed startup, Commons, was a pandemic project. In early 2020, I had been looking to start a company, and then the pandemic happened. Seemingly overnight, what seemed like the worst time to start an internet business became the best time.

I partnered with a former colleague and his partner, who are both full-stack engineers and had previously founded a software business. We had a thesis that the pandemic would shift how millions of people work, and that subsequently, new software-based solutions to productivity and communication problems would be needed.

We raised a round of venture financing in spring 2020 and got to work. We inhaled all the traditional zero-to–one startup advice. We built a team, designed and developed 2 distinct products, and attracted 1000s of businesses using our product.

The end of our adventure with Commons came in March 2022, when we got acquired by another startup, Pulse, which in turn ended up getting acquired by Mozilla. While my first venture-backed startup ended on a good next with an exit, by venture standards the exit wasn’t a slam dunk.

Regardless, I learned more than I could have imagined in a little over two years. Here are a few things I wish I would have known when we started.

NB: The canonical book to help navigate the early days of company building is The Messy Middle: Finding Your Way Through the Hardest and Most Crucial Part of Any Bold Venture, by Scott Belsky. I referenced it constantly during those early days.

Product

Survival > finding product market fit (PMF). Finding PMF is everything, right? Well, not really. My favorite advice from one of our investors was: “there’s no PMF in the early stage. There’s only survival.” All that matters until you get to PMF is that the company continues. Sometimes survival mode can take years.

It’s more art (intuition) than science. Despite the 1000s of opinions on the methodologies to get to PMF, in the early days it’s more art than science, more improvised hand-to-hand combat, fog of war than scientific method. My favorite answer to ‘how do you know when you have product market fit?’ came from an advisor who attributed it to Parker Conrad: “you just know it, even if the data show it!”.

PS: I wrote a separate essay about how to build intuition.

Products don’t sell themselves. Distribution matters as much if not more than a great product. This is traditionally the case with enterprise software, but I think it’s true for consumer as well. As a product person, this realization is hard to contend with. But it’s true. If your product doesn’t get in people’s hands, it won’t go anywhere.

“First time founders are obsessed with product. Second time founders are obsessed with distribution. — Justin Kan

Similarly, don’t confuse a GTM problem with a product problem. Sometimes users don’t engage because of product flaws. Sometimes it’s because they don’t understand what the product’s value prop, or they’re the wrong user. The latter category are go-to-market problems, not product problems. Often the issue is a bit of both. But it’s critical to understand the difference between the two, and proceeding accordingly.

User research is indispensable, but assume that most users are lying to you. There’s a methodology for interviewing users that helps yield unique insights, which I had to learn.

Know when to pivot vs double down. This is probably the toughest challenge we faced and one which I still think we could have gone either way. We pivoted twice, once minor and once major. Each time, our investors and advisors we’re split 50/50 on the decision, which unfortunately is the case with the most important decisions. Like most challenges in the early days, it’s more art than science to know when you’re in slight iteration land vs major pivot land.

Company building

Problem and market selection is more important than speed of execution. At Commons, we built products very, very quickly, which gave us a big advantage. However, in hindsight I wish we would have spent more time on problem selection and initial design before starting to build. It’s counter-intuitive to spend time not building, but that early investment often pays off.

If you’re in a crowded market, you need an edge. In our case, the most common question we got from investors was “how are you going to differentiate?” Putting aside the fact that this is perhaps the most cliché of investor questions, in hindsight I realized that we didn’t have a great answer. One of my many existential freak-outs came when I realized how many competitors we had, most of which had more funding and hadn’t cracked the nut either. I couldn’t honestly answer what edge we had compared to them. The best kind of edges are proprietary, like a team’s domain expertise or lived experience.

That said, don’t overly worry about competition, because most companies die by suicide not by homicide. Almost any market worth building in will have competitors. Most often, the game is to outlast them. I look back on our list of ~20 competitors from 2020, maybe which went on to raise big rounds of financing. Now almost 3 years later, it’s surprising how few of them are still operating.

Like most things in life, much of success is dependent on luck and timing. And each at-bat increases the odds of success.

In summary

Starting a company is similar to starting a family — it really changes you at a deeply intuitive level, and mostly in ways that are hard to notice. In my experience, being a founder forced me to get really scrappy and move as fast as possible, while also keeping the big, existential questions top of mind. It’s quite a juggling act. But I know it made me a better leader and a product thinker. For that reason alone, I’m insanely grateful for the experience.