Applying Hindsight: Five Lessons Learned from Building Tech Companies
At a Saturday night birthday party, the conversation turned to the election outcome. After several people shared quotes from leading newspaper articles, someone remarked, "Hindsight brings a lot of clarity." So true.
I decided then and there to apply a bit of hindsight to the lessons I've gathered as an operator, investor, board member, and advisor since I first entered the tech world.
After many drafts, here are five key lessons I’ve learned from building tech startups:
Be Customer-Centric: Building something customers genuinely need and value is paramount. Successful startups focus deeply on understanding customer pain points, iterating based on feedback, and evolving their product in a way that aligns with real user needs. Often, a founder’s early customer relationships drive invaluable insights, shaping both the product and the business model.
Control the Burn Rate With Strong Financial Discipline: Cash is the lifeline of any startup. (Quote from Sloane: “It’s more important than your mother.”) It’s essential to balance investment in growth with disciplined financial management. Controlling the burn rate, runway, and unit economics helps founders make sustainable decisions and reduces reliance on external funding. Early financial discipline is critical to keeping the company alive long enough to reach profitability or the next funding round.
Be Agile and Iterative Versus Perfect: Speed and adaptability are critical. Launching early, even with a minimally viable product (MVP), allows startups to validate assumptions, learn from real-world usage, and refine the product quickly. Agile iteration keeps startups responsive to market needs and competitive pressures while avoiding the pitfalls of over-engineering before product-market fit is achieved.
Hire for Fit and Resilience: The right team makes or breaks a startup. Building a team of motivated, resilient individuals who align with the company’s mission and can handle uncertainty is essential. Skills can be taught, but the mindset, culture fit, and grit necessary for a startup environment are more challenging to instill. The best hires are those willing to wear multiple hats (“hire decathletes” — something I learned at Microsoft) and grow with the company.
Build Defensibility Early: As competition intensifies, startups need unique differentiators to maintain an edge. Whether through proprietary technology, network effects, data advantage, or deep customer relationships, startups should prioritize elements that build defensibility over time. This could include anything from creating a highly specialized AI model to fostering a loyal user community.
Limiting this post to five lessons inevitably leaves out other valuable lessons.
I plan to revisit these five lessons again someday. As Homer said, “Even a fool is wise with hindsight.”
Your feedback is welcome.