The Perks of Being a Founder

The Perks of Being a Founder

 Every now and then we like to focus on the founders’ journey, and we’ve included this graphic for comic relief. The process is not an easy one. In fact, there’s no shortage of lists that go into the top reasons as to why startups fail. May be time to flip the focus: when the authors of this CNBC article interviewed 18 Harvard startup founders, they found that “Here’s the No. 1 trait that made them successful.”

Resilience.

It’s a well-known fact that 20% of startups fail within their first year, no matter how carefully the founder/team plans. ‘Uncontrollables’ always crop up and derail the best laid plans, and this includes acts of God. Example: we know of a founder who launched an app that allowed users to make us of any gym, any time, anywhere in the world. It was an immediate hit – with no freemium version available – so much so, they didn’t even need investment money. Fantastic!

Then Covid hit. Gyms were shut down. The company was out of business overnight.

During that period, drop-in audio network Clubhouse took off like a rocket. Who wasn’t on Clubhouse? Launched in 2022, Clubhouse gained immense popularity during the COVID-19 pandemic as people sought innovative ways to connect with others. “The app’s popularity peaked in 2021 with over 10 million active users. However, in 2022, as people reverted to their normal lives…Clubhouse’s growth began to slow down. Fast forward to April 2023, Clubhouse announced that it was laying off over half of its staff,” DemandsAge reported.

It’s great to fill a pressing need, but is it evergreen? Zoom had been around for years and became part of the vernacular during the lockdowns. The way we do business changed. Many teams are still work remotely. Many meetings still take place remotely, since people have relocated, and geography has become somewhat meaningless. Zoom is still very much part of the business landscape. Evergreen.

Speaking of changing times, ChatGPT/generative AIs have become ubiquitous in a relatively short amount of time, but heads up, founders: we have heard from several investors that founders are clearly using ChatGPT/LLM to generate their investor pitch decks. We do understand that it does make a founder’s life easier, but FYI, investor feedback: Generative AI-generated pitch decks have all started sounding more or less the same. Boilerplate. Meanwhile, investors are looking for what differentiates you from the pack. And it’s a quick ‘pass.’ The reason: you put all that time and effort into building your company or the MVP, then take the ‘easy’ way out when putting together your pitch deck for investors? A group you sorely need? Your deck is their first brush with your company: what you’re building, why this is the right investment at the right time, with the right team, and addressing a huge market. What also crosses their minds is where else did you cut corners?

And investors invest in the team. No LLM is going to give a flavor of how the team thinks – and presents itself. Another concern we’ve heard investors express: say they do invest. Will the updates you send them also be generated by an LLM? Note to self: It’s just not a good look.

Speaking of using AIs to take the easy way out, Y Combinator is being criticized after it backed an AI startup that admits it basically cloned another AI startup.

Starting and building a company is hard every step of the way. We know that the pie chart graphic we’ve included here is every founder’s pipe dream, (apologies that we can’t find the attribution for it), but it’s resilience that will get you through the hard times and the rough patches and believing otherwise is pure pie in the sky. Onward and forward.

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