So, you wanna win as a first-time founder?

Think like a beginner!

It’s like being a kid in a candy store. Question everything. ‘Why are these gummy bears so expensive?’ Because you’re the boss now, that’s why!

How to Win as a First-Time Founder

• Why Read:

  • This article provides valuable insights from Dropbox founder Drew Houston on overcoming early challenges, building a successful startup, and maintaining a strong mission and culture.

• Featuring:

  • Drew Houston (@drewhouston), Founder & CEO of Dropbox

• Link: 

  • “How to Win as a First-Time Founder, a Drew Houston Manifesto”

Key Concepts and Tactics:

1. Overcoming Initial Setbacks as a First-Time Founder:

   • "It wasn't a great experience, coming in unannounced," Houston recently told students in an exclusive Dorm Room Fund interview at MIT. "Getting into Y Combinator is like getting into a great school. So imagine having your two minutes with the dean of admissions and them coming away thinking you're an asshole. That plane ride back was the worst. No co-founder. Lower chance of getting into YC. I was panicked."

   • "The good news is, early founders can turn things around. Soon after he thought it was all over, Houston teamed with fellow-MIT alum Arash Ferdowsi and made it into YC. Today, he's led Dropbox to nearly 200 million users — and the company's growing faster than ever before."

2. Choosing a Worthy Problem to Solve:

   • "Prospective entrepreneurs are primed to find problems. While he was still in college, Houston signed up to beta test an online game as it was being built. When he ran out of things to do, he started poking around under the hood, and he discovered a bunch of security vulnerabilities."

   • "Dropbox was born out of a similar moment, when he simply got fed up with the lack of seamless storage solutions for his files."

3. Embracing the Beginner's Mindset:

   • "A lot of really great, innovative things have happened when people just didn't know it wasn't supposed to be possible," Houston says.

   • "Everything can seem so mystifying before you start," he says. "But when you look behind the curtain at how some of these huge companies were built, it wasn't a lot of magic. It's people iteratively trying to make reasonable decisions and surround themselves with the smartest people they can."

4. Challenging Assumptions and Exploiting the "First Mover Disadvantage":

   • "People make basic assumptions based on what they have now. But you have to ask yourself, is this really what people are going to be doing in five years?" he says.

   • "The fact is that there's a problem with being first," Houston says. "When you do that, you create a market, and if you're too early, you essentially leave the door open behind you for someone to do it better."

5. Systematically Building a Knowledge Base:

   • "I was living in Boston, working for a startup during the summer, living in my fraternity house. But every weekend, I would take this folding chair up to the roof with all these books I got on Amazon. I would just sit there and read all of them. I would spend the whole weekend just reading, reading, reading."

   • "You have to adopt a mindset that says, 'Okay, in three months, I'll need to know all this stuff, and then in six months there's going to be a whole other set of things to know — again in a year, in five years.'"

6. Demonstrating Resourcefulness and Urgency:

   • "It was one of those things where it was a couple weeks before the deadline, and I just realized I had no choice. I had to write this application," he says. "I was already at a disadvantage because I was a single founder and YC really wants co-founders. But I said to hell with it, I'll just do it anyway. So I made a video."

   • "It was sort of like them telling me I needed to find someone to marry in two weeks."

7. Maintaining a Strong Mission and Culture:

   • "When you're studying and getting your engineering degree, things like mission or values sound totally unnecessary," he says. "But then it turns out that you have to evolve from building this system of code to building a system of people. It's like updating your operating system. You have to adapt very quickly."

   • "We're not just adding features to software. We're on our way to building the biggest assembly of human memories ever created."

5 Lessons from Scaling PLG and Sales to $100M

Why Read: 

• This article provides actionable insights for startup founders on building an effective growth strategy, from investing in customer support early to treating PLG and sales motions as a continuum.

Featuring:

• Amelia (Lerutte) Ibarra (@miadia), SVP and GM at SaaStr

Link: 

• “5 Lessons Learned When Scaling Product-Led Growth and Sales Motions Beyond $100M with Cloudinary VP of Developer Experience Sanjay Sarathy”

Key Concepts and Tactics:

1. Investing in Customer Support Early:

   • "Cloudinary strongly believes that customer success and support are enablers of PLG growth and aren't just a cost center. If you think about Cloudinary's core audience in the beginning, developers, the fifth employee they hired was the first person in the customer success group."

   • "The developers they hire into CS are engaging as peers with customers and people using the product. Knowing the customer, APIs, and specific language and frameworks drives word of mouth efforts."

2. Creating Credible Technical Content:

   • "Cloudinary didn't have a marketing organization. It wasn't the focus. Developers like reading about how to build things and best practices around building things, so their CFO started writing technical content in two forms: Blogs and Documentation."

   • "A couple of months ago, someone in their Discord channel asked a question, and someone else referred them to a blog post written nine years ago that was relevant in 2024. That's huge!"

3. Treating PLG and Sales Motions as a Continuum:

   • "There wasn't a sales organization then, so they knew they needed SDRs, AEs, sales engineers, the whole works. These motions and teams were kept separate for the first couple of years. Self-service here, Enterprise motion here, and they shall never meet. Over time, they realized that might not be the right thing to do."

   • "The work you do at a PLG level can influence Enterprise customers, and the work you do for Enterprise customers can benefit self-serve PLG customers. The takeaway? Treat your PLG and sales motions as a continuum vs. two completely separate entities."

4. Hiring a CFO Early:

   • "$300k per employee is what a self-funded business needs to break even."

   • "The CFO helps you understand your operations, PLG motions, Enterprise sales motions, and all the personas you're engaging with, like developers and marketing folks. They help you understand what investments to make, how to measure what works and doesn't, and where to double or triple down on something that's working."

5. Understanding Early-Stage vs. Mature GTM Motions:

   • "The solution is to separate how you think about new GTM motions vs. mature ones. They're very different."

   • "As you think about building a multi-product portfolio, you want a group internally focused on moving quickly and iterating quickly in early-stage GTM. Move fast, fail fast. You want to be very comfortable with failing products at this stage, so it isn't a huge loss when it won't get to market and doesn't hit whatever product market fit gates you've put in place."

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