8 Things I Wish I Had Known Before Founding My Startup

As a first-time founder, I learned a lot about building a startup from launching my own company. These are the most important insights I gained from my experience.

Written by Rachel Lo
Published on Jan. 26, 2022
8 Things I Wish I Had Known Before Founding My Startup
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It’s a new year, and with the Great Resignation in full force, more people than ever are considering quitting their nine-to-fives in favor of finally following that nagging feeling that they could make a great startup founder.

I started my first, now-defunct startup Struck in late 2019. Like a lot of people, the perfect storm of time off, a good idea, and frustration with my previous employment led me to entrepreneurship — something I had never considered prior. I dove in headfirst, unaware of what laid ahead: not just a multiyear pandemic, but also a brutal two years of product building, networking (remotely, of course), and learning on the fly. Though I had had previous experience at early stage startups prior to venturing out on my own, nothing could have prepared me for my own founder’s journey. 

Still, there are things I could have done better and realities I wish I had understood or had more foresight to ask about before taking the leap. People often feel that good advice about running a business can only come from those running ultra-successful companies, but the reality is that founders can learn a lot — and sometimes more — from each others’ failures as well.

With that in mind, here are a few nuggets of wisdom I wish someone had shared with me before I started.

8 Things I Wish I Had Known Before Founding My Startup

  1. The product you build is a choice, and so is fundraising.
  2. Some products and industries are hotter to VCs than others.
  3. You may lose some friends along the way.
  4. But you will make a ton of new friends, too.
  5. You will never be your own boss.
  6. You have to put yourself out there.
  7. Working for a few years before becoming a founder was a godsend.
  8. You will be able to get a job afterward.

More From Rachel LoVCs Need to Stop Using This Phrase

 

1. The Product You Build Is a Choice, and So Is Fundraising

Getting swept up in a good idea without considering the long-term ramifications of a particular business model can be easy. 

In my case, I knew the market existed for the product I was building, and I knew that I was getting strong signals from social and traditional media, as well as our users. We even charted ahead of companies like Hinge in the App Store for a brief moment. So, I felt confident that the business side would work itself out. Sure, I had ideas about how I would monetize my astrology-based dating app — and they were good, lucrative ideas! — but I fundamentally missed a massive, important fact: All successful dating apps must raise money if they want even the tiniest chance at success. 

Dating apps rely on critical mass to propel their network effects, and it’s a fact that all of the top dating apps today started out with a large influx of cash. Dating apps, as a matter of fact, cannot be bootstrapped. A mix of scale and the fact that user churn is actually a feature and not a bug of this type of product means that feeding a constant customer acquisition funnel requires a large amount of marketing capital.

My example is very specific to my niche, but this principle applies to other industries as well (see: biotech). Do your research and really understand how you’re going to get from an idea to product-market fit in a tangible way. If you’re not excited about fundraising, which I wasn’t, don’t push that thought aside if you won’t be able to circumvent it due to the nature of your product. Research competitors in the space, map out fundraising paths for successful companies that have come before you, and analyze your company’s viability without upfront investment.

Always remember that you’re operating within multiple markets. You’re not just pitching your company to the consumers who will be using or buying your product, but also to the venture capitalists who will need to fund it.

 

2. Some Products and Industries are Hotter to VCs Than Others

Related to my first tip, consider how difficult (or easy) it will be to raise money for a certain product. The way I see it, there are two main types of founders in the world: the product idea person and the “born entrepreneur.” The latter makes savvy decisions about what product to build based on where the venture capital market is and what’s raising huge multiples. The former, like myself, may find themselves in a bind if their product doesn’t fit neatly into a category venture capitalists are excited about. 

It doesn’t take a genius to realize that astrology, which is a topic with a majority female, majority non-white audience, might be a tough sell to the notoriously male, notoriously white venture capital world. But I foolishly underestimated what a tough sell mixing a dating app with an astrology product would be. I combined two niche products in an overall fickle space — consumer social apps — and packaged it up neatly for rejection after rejection. Be mindful that if your product is niche, a lot of VC firms have a very tight quota on the number of companies they’re willing to invest in within that niche, which can be detrimental to your fundraising.

I would be remiss to not acknowledge the many biases that haunt the VC world. These biases, though unfair, are the reality. If you’re part of a marginalized group, fundraising will be much harder for you than some of your peers and competitors. You’ll need to have double or triple the gumption to succeed. Venture capital firms all say that they’re working on making it a more level playing field, but we are a long, long way off from that having a tangible impact on your company.

 

3. You May Lose Some Friends Along the Way

Business is tough, and there’s no way around it: You will be stressed out. Some relationships in your life will be able to withstand the stress test of your starting a business, and others will crumble. You’ll need support and patience from those around you, and I eventually learned that it was better to let go of the relationships that had run their course rather than trying to salvage them in the midst of all the other chaos.

 

4. But You Will Make a Ton of New Friends, Too

You will learn and grow more than you can understand over the course of this process. As such, your interests will probably shift a bit. Luckily, because running a business (and especially a startup) forces you to network more than you’ve ever networked in your life, you’ll end up meeting a ton of great people. As someone who started their company as they were nearing 30, I truly had no expectations of making new friends. Two years on, though, I have met some very close friends who are or were also founders and could really relate to my experiences.

 

5. You Will Never Be Your Own Boss

Leaving the corporate world behind and never reporting to another manager or being beholden to ideas you don’t care about ever again is a nice idea. Unfortunately, this isn’t the case for most founders. If you fundraise, you’ll be beholden to your investors. If you get big enough, you’ll be beholden to your board. And even if neither of those things happens, you’ll be beholden to your customers. 

None of these are necessarily bad things; this is just something to keep in mind if “being your own boss” is your main motivator.

 

6. You Have to Put Yourself Out There

This tidbit is specifically directed at those who aren’t self-promotional by nature (or nurture). You must put yourself out there. Once in a blue moon, a product will take off solely due to a stroke of luck and some great word of mouth, but these are the exceptions to the rule. You are your first and most enthusiastic supporter, so if you’re not able to make a great case for yourself and your product, who will?

It took me a few months to realize that I had to be the one making Tiktok videos. I had to be the one joining podcasts. I had to be the face of my brand. If things had gone on longer, yes, I could have hired someone to do these things for me, but in the very early days somebody has to get the ball rolling, and that somebody is you.

 

7. Working for a Few Years Before Becoming a Founder Was a Godsend

Not everyone starts on the same footing when it comes to running a business, and there are certain financial realities you may have to face. Dropping out of college and starting a business with no money is glorified by the media. For example, look no further than Mark Zuckerberg. 

But I can tell you from my personal experience that working for a few years, learning the basics of how different organizations operate, and, most importantly, having some savings in the bank before taking this risk were hugely valuable. If you know beyond the shadow of a doubt that you want to be a founder at age 20, great! But if you’re more on the fence about your timing, it’s important to acknowledge that there are a lot of benefits (and little downside) to being a founder with some outside experience and financial security.

 

8. You Will Be Able to Get a Job Afterwards

Nobody plans for their startup to fail, but that’s the outcome in the vast majority of cases. It can be scary “leaving” the workforce for one month, let alone several years. I was plagued by a constant, low-grade fear that I wouldn’t be seen as credible and competent should things go south with Struck. Even worse, I read reports that some companies actively avoid people who were founders because they might be too independent or a flight risk. 

Luckily, doing the best I could at building my own company spoke for itself when it was finally time to start job hunting. In fact, before I even started that process, multiple startups extended immediate personal offers to bring me on board as chief of staff or other roles because of my unique skill set and demonstrated successes despite the overarching failure of my business. If you make an honest effort with your company, your work will speak for itself, and you’ll be fine afterwards.

More in Founders + EntrepreneurshipThe Surprising Reason Why Startup Founders Need to Share Their Knowledge

 

Look Before You Leap

Making the leap and starting my own business was one of the scariest, most exhilarating, exhausting, and ultimately rewarding experiences I’ve had. A lot of my advice might sound like it’s attempting to dissuade you from following in my footsteps, but my intent is actually to set you up for success. Ultimately, you won’t know whether this path is the right one for you until you try it for yourself.

If, after reading all of this, you still choose to move forward on your path to becoming a founder, I’ll be here rooting for you from the sidelines.

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