Founder's FAQ: The Predictable Journey of the Ups and Downs of a Startup

By Ilker Koksal

Founder's FAQ covers the answers to all the possible questions of a founder in a startup journey—whether revealing lifesaving principles for the startup's survival path, building A+ teams, creating an evolving machine, setting up a neat culture, or interpreting the true path for the fundraising.

 

All the chapters of the book are packed with real-life examples; from founders who scaled their startups and exited, investors of Airbnb, Coinbase, Deliveroo, Gusto, HubSpot, Instacart, Kayak, Lyft, Opendoor, Robinhood, Slack, Snapchat, Snowflake, Square, Stripe, Twilio, Udemy, to sales, marketing, and product leaders of high-growth startups.

 

This enables you to merge practical knowledge with reality. It can undoubtedly be read cover-to-cover but invites you to open up to any page and digest a quick lesson.

• Language: English
• Publisher: ILKER KOKSAL
• Release date: Feb 2, 2024
• ISBN: 9781736642801

Ilker Koksal

Ilker Koksal is a serial entrepreneur who has founded two startups, one of which is acquired. In 2018, he was named among Forbes 30 Under 30 for being an innovator in the world of enterprise technology. He is on a mission to enlighten founders to innovate for the sake of the world. In the light of this mission, he works as an investor and advisor in startups. He studied Geopolitics and Global Business at Yale School of Management, has a BS degree in Computer Science at Bilkent University, and an MBA at Koc University.

Book preview

PREFACE

August 17, 2015. I was on a plane to San Francisco with a one-way ticket in my hands. I did not know what was ahead of me. The only thing I knew was that I dreamt of being a startup founder in Silicon Valley. While I was majoring in Computer Science at university, I was also a startup founder, and our startup exited after only a couple of years. Now, I was flying towards a brand-new adventure.

On my new journey, I was an immigrant founder. My partner and I built a startup that went through many ups and downs. There were days I had to use my home as an office due to lack of money. I met with over 100 VCs for fundraising and entered into partnerships with tech giants. As a result of my varied experience, I was chosen to be on the list of Forbes 30 Under 30 Enterprise Technology in 2018. This was an excellent milestone on my journey that started with a one-way ticket. A lot of time passed, but one thing remained the same. I was always asking questions to shed some light on my blurry path as a founder. It was crucial to find answers to these questions and to find them fast. For startups that have limited time and money, the answers to these questions are essential for the startup to take action and move forward.

Over time, other founders started to ask me questions to learn from my experience. These questions started coming more and more frequently, and were always focused on certain subjects. These questions are only natural. Startups have big problems to solve and ambitious goals to attain. If they don’t pose these questions, founders will experience the answers firsthand, and this is usually a costly process. It was clear to me that founders needed a guide. That is how I started writing Founder’s FAQ.

This book is an authentic guide that you can keep by your bedside to find questions and answers about situations you will probably experience during the life cycle of your startup. In addition to the answers you’ll find in this book, you will also benefit from the various opinions and perspectives it contains; from founders who scaled their startups and exited, partners of venture capital firms such as First Round Capital, General Catalyst, Redpoint Ventures, Pear VC, Betaworks Ventures, and Susa Ventures, to sales, marketing, and product leaders of high-growth startups.

Founder’s FAQ was written for startup founders. However, the book is arranged so as to answer the questions of anyone and everyone who is or aspires to be in the world of startups. If you are not a founder yet and it’s a dream of yours, Founder’s FAQ is the right book for you. There are many mistakes you could make when you build a startup, and you probably will make most of them. Founder’s FAQ will tell you everything you need to know to help you reduce these mistakes to the minimum. By the time you finish this book, you will have learned the answers to many problems that thousands of founders spend a lot of time and effort to solve—or fail to. Hence, you will save time and resources and gain many valuable insights to help you in your startup journey.

Founder’s FAQ covers all the ups and downs of the founder’s journey in seven chapters.

The first chapter, Start, asks you questions about why you want to build a startup, how suitable your values are for growing that startup, why you are the right person to establish it, and where it should be located.

Once you start the business, you have to survive before you can scale it. The chapter Survive shows you how your core assets affect your startup’s dynamics, how to prepare for risks, and how to get stronger on your path as you advance.

As you continue on your path and your startup becomes stronger, you will need to expand your team. The chapter The team covers how to build and scale an A+ team and how to get the most out of your startup board.

Once you start scaling your team, you get to establish the culture that starts to grow from the very first day in your startup. The next chapter, Culture, is about communication, relationships, and disagreements. It explains what issues you can expect and how you can solve them.

A startup that does not evolve will not scale, and in the end, it is bound to fail. The chapter on Evolution offers information on how to adapt the startup to its desired goals and solve problems that arise along the way. It also explains how to build iterations that could strengthen each other over time.

As the startup evolves, the founder will be looking for capital in order to grow the startup on a large scale. The chapter on Fundraising covers how to plan the fundraising process. It encompasses all the things that are actually important for your pitch, and it also offers the financial tools suitable for the kind of round you are planning to raise.

Another situation that a founder will experience in the life cycle of a startup is the exit. The chapter Exit discusses those things the founder needs to be careful of and gives details on probable exit scenarios.

There are hundreds of problems a founder could encounter during the steps outlined above. These problems give rise to questions; questions that are generally the same for all founders. They constantly experience similar problems, and most of the time, they inevitably live through the experience in order to get to the right answers. Founder’s FAQ is a comprehensive guide that covers most of the areas in which a founder could face problems. In this book, you will find answers to the questions in your mind so that you do not have to experience them all firsthand. I personally experienced everything covered in Founder’s FAQ as I was making my dreams come true. I hope this book will be your light while you are running towards your own dreams.

FOUNDER’S

FAQ

CHAPTER 1: START

Startups are pretty hard.

So why would you want to embark on a journey this challenging? Your answer to this question will radically transform your whole entrepreneurial adventure. The underlying reasons and answers to this question will directly affect whether you end up in the cluster of failed startups that constitutes around 95% of all startups, the intermediate level of startups that form 4% of the whole, or the top 1% of startups that become very successful.

This is why your reasons for building your startup need to be logical and reasonable. Reasonable not just to others, but first to yourself. You will be building a team within your startup. You’ll need to give your team members a good reason to join its cause. You will also have customers. You will need to give them a good reason to choose you. You will have investors. You will need to give them a good reason to invest in your startup. And in order to offer a good reason for all these groups to support you, you need to know the answer to this crucial question very well: Why are you building your startup?

When you question your purpose for starting a business, start by asking yourself whether you are the right person for the job. Millions of people around the world have ideas, and many of them have exactly the same idea as you have. Moreover, some of these people have already started what you want to begin and have made some progress. So are you really the right person to build that startup? Let’s be honest. How well do you realistically know the business you want to start?

You will have a journey of unknowns ahead of you when you start. In order to shed some light on these unknowns, you need to be sure that the founder (you!) and the business is a good fit. The founder has to be aware of their tangible strengths, like coding skills or engineering, and abstract strengths, like passion or motivation. Once you evaluate your measurable and clearly provable assets such as your experience, your special talents, your network etc., you should be able to identify whether you are the right person to start this business. At the end of the day, if you decide that there are people who could do a better job than you could ever do with this particular business, just let them do it.

Once you discover that you are the right person to build your startup and you have solid reasons to do so, you have to ask yourself where you would start your business. Especially with the increased use of the Internet since the 2000s, startups that bring the offline world online have started to emerge. And after 2008, mobile startups have taken their place in this arena and have scaled rapidly. As of 2015, AI has helped to optimize this scaled world of startups even further. The single common feature of both these periods of growth was the reality of the Bay Area. With its authentic economic and cultural values, Silicon Valley created a hub for these enterprises and became the place where all entrepreneurs wanted to found their businesses. So does this mean that all entrepreneurs should start their businesses in the Bay Area? Not necessarily.

Ask yourself some pertinent questions when deciding where you want to start your enterprise. Where do the dynamics of your business require you to be? Should you be working completely on a remote basis? You need to know these things well before you start.

1.1 Why do you want to do this?

Even though this seems like a perfectly easy question, a lot of founders struggle to answer it. Seriously, why do you want to do this? What is your main motivation in doing this? Is it to make a lot of money? Do you want to escape from the corporate world? Is it because it is cool or seems cool from the outside? Is it because you do not want to work for somebody under their management and control? Or is it because you’ve said I have a lot of money, I can do this? Which is it? Believe me, your answer to this question is crucial.

The answer to this question is the departure point for everything, and it is also the very last thing you will have in your hands when you reach your destination. Throughout all the ups and downs of your business, the only thing you will have to hold onto is this: Why do I want to do this? The reason needs to communicate so many things to you that it will make you see this bumpy, difficult, tiring road filled with tears, adrenaline, and ups and downs as worth it. This reason needs to speak to you. Not just to investors or others, but to you. Because you will be alone on this road, and if you do not have an excellent reason to be there, why would you take it anyway?

Many entrepreneurs and soon-to-be entrepreneurs reach out to me to tell me about their ideas and ask me what they can start doing. I always ask them this simple question: Okay, you will make a great profit, you will accomplish this and that, but in the end, why are you doing this business? Are you trying to carry on your father’s legacy? Is this your childhood dream? Do you have solid experience in this business? Which is it?

If you have an answer to this question that satisfies your guts 100%, hang onto it tight because you will always need to remember it. You will remember this answer during times when you make a lot of money and times when business is slow. You will always remember it and will say to yourself, I am glad I am doing this work. And if these words do not pop into your mind when you think about your business, you do not need to read the rest of this book. First, you need to find your own ‘Why’. First, you need to establish your roots and anchor them deep into the ground. The rest will follow.

There are a couple of ways you can come to understand why you are starting your business and why you are the right person to do it. The first and foremost of these is that you know your own personal values. Every individual has different things in life that are important to them. The degree of importance individuals place on things eventually form their values and determines how they make their decisions. If you know your values for sure, the reason why you are willing to start your business will reveal itself more clearly to you. If you are not aware of your values, it is highly crucial to find out what they are. Then ask yourself whether the startup you want to found serves these values, and in turn, whether those values directly serve the problem that you want to solve with your startup.

The values factor

Having a crystal clear understanding of their values and being aware of their limits allow people to live a fulfilled life in career, relationships, and many other areas. And this is true for everyone, not just for founders. Values are slightly more significant for founders because they need to reflect these values 100% in the startups they launch. Otherwise, founders cannot live a fulfilled life, and when they do not live a fulfilled life, there will be consequences for the startup. The entity they have established could rapidly join the cluster composed of the 95% of failed startups.

How can you determine what your values are and know that you are the right person for the startup that you want to launch?

Human behavioral specialist John F. Demartini highlights the importance of people’s values in his books and workshops. Finding those values starts with asking questions of yourself. The actions that you describe as I choose to do and I love to do are the actions that reflect your values. Even if you utter sentences that start with I have to and I need to, those actions are just the embodiment of values that do not resonate with you. Here is an example: If you say, I love to spend time with my children, one of your core values is revealed to be spending time with your family members. Choosing to found a startup that will require you to travel a lot will not be wise once you know you value your time with your family. Another example would be to notice that when you say, I choose to write code, remaining in this field and being productive in this area are your values. Given this fact, being the CEO of a startup that works in B2B sales would not particularly serve your values, and in that case, your values would not serve the startup you founded.

You will indeed encounter things that do not align with your values but are still obligatory for the startup process. As a founder, you will always have to be a generalist, since you will find yourself in a position where you need to do all sorts of jobs in your startup, especially in the beginning. However, if you are not doing all these jobs because they serve your values, your contribution to the startup in these areas will deteriorate over time. You will automatically experience founder burnout, and this is the last thing you wish to happen to your business.

As a founder, you need to keep this in mind: You will only overcome the challenges you face if you can stay true to yourself. Once you fail to do so, there is a greater risk you will feel disempowered and give in to the expectations and responsibilities of other people (your teammates, customers, investors, etc.) However, once you know your values and found a startup that aligns with them, you will become empowered and have the chance to empower people around you.

Matteo Berlucchi Answers: How important is knowing your values to serve better to the startup process?

I think it’s really important for a founder of a startup to have a very clear idea and understanding of your moral compass and your values. It’s not something easy to know because people don’t think about their values. There is nothing that wakes you up in the morning to ask you what your values are? The only time when your values come out is when they’re tested. When you’re in a situation that tests your values, then you understand what your values are. And I think it’s important for founders to ask the difficult questions: what is your moral compass, what are your key values? And this is a fundamental passage if you want to be successful in building a company because you will inevitably come up with situations where you will not really know what to do or what the right direction is. And if you have very clear values, it will become much easier to choose a certain direction with the knowledge and the confidence needed because it adheres to your values’ default. Your MD was very important for me because I definitely wanted to do something that has a social impact. I wanted to do something to help people, transform people’s lives and make them better. And that’s ingrained in the company values and in all its processes, such as hiring people that believe and share your values. 

► More about Matteo Berlucchi - www.bit.ly/FoundersFAQ-Matteo

Founder values <> Problem solution fit

At their core, startups encompass sustainable problem-solving processes. They offer solutions that can ease the pain of individuals or companies. And the person who establishes this solution is the founder. It is you, from Day 1.

Yes, you solve a problem, but you cannot do it in one day; it requires a process. And since it requires a process, you will have to spend a lot of time on the problem and its solution. That’s where your personal values need to align with the problem you tackle and the solution you offer. This is necessary because you will be dealing with the solution of this problem and its modalities day and night. From the very first moment you get out of your bed to the minute you go back to it, this will be on your mind. Can you imagine working on a problem every day that does not have any relation whatsoever to your values? Yes, that would be hard. You would just try to solve the problem without putting in any extra effort. However, if the problem and solution processes serve your values, you would start enjoying a fulfilling, empowered, and inspired life. And this, in turn, would contribute to and boost your solution processes. This cycle could transform into an energetic feedback loop in which the components nourish each other. The previous scenario is composed of non-reciprocal actions that feel like obligations enforced by one party. The results would be nothing but a structure that does not go much further.

It is paramount that your values and the problem you solve with your startup serve each other. There has to be a mutual cultivation mechanism here, not a unilateral process. Therefore, you need to define the problem you plan to solve in a crystal clear manner. How will the world change once you solve that problem? What will change? What kind of lives will you touch with your solution? The answers to these questions should be straightforward. Once you have these played out in your head, ask yourself this: Why am I the one to solve this problem? Am I solving this problem because of a challenge, or am I choosing it with the values that lie within the actions I love and choose to do? If you are solving the problem because of a challenge, stop right there and think for a moment. The actions we do because of challenges and difficulties are not sustainable, and eventually, you will not be able to solve that problem.

Tomasz Tunguz Answers: How do you assess the founder <> problem’s solution fit? What do you check while evaluating the founder?

Ideally, you’re looking for somebody who has experienced the problem they are looking to solve. Since they have lived the problem, they understand the customer needs very well. This intuition should help them build a product and position the company. There is a small collection of people who can imagine what customers need before customers realize they want it. Those people are much rarer, but if you find one of those, you just bet on them and watch the magic happen.

Execution speed is one of the