The first twelve months of a company’s life can make or break an early stage startup. This is why we take as many opportunities as possible to work alongside our portfolio companies, including engaging with our portfolio via in-person community events. Over the years, we’ve hosted panels, dinners, and fireside chats. This year, we sought to further engage with our founders by hosting our first-ever founder retreat in Los Angeles. Over the course of two days, our founders deepened connections with each other, shared strategy and advice with other founders and business leaders, and engaged with key members of the Restive network during a series of panels and Q&As.
Over the course of the retreat, a few themes emerged that we wanted to share more broadly:
Being a founder, especially now, demands resilience.
Now more than ever, the current funding environment requires founders to greet each new challenge with persistence and perseverance. Many founders shared the struggles and tremendous sacrifices that they had made in previous eras, and which so often accompanies the life of an early stage company. Everlance CEO Alex Marlantes shared how his company stumbled on product/market fit only after many long years and a series of pivots.
After raising modest funding for his first company, Power Finance founder Randy Fernando said that he decided to forgo a salary for nearly two and half years. “I slept in a friend’s walk-in closet because I couldn’t afford a place in San Francisco,” he said. In the end, though, Randy learned a valuable lesson in capital management that he brought to his next startup. Even after raising a successful round of funding for his second company, his team was “extremely thoughtful with how we managed our finances because I remembered how hard it was to raise my first time around.”
Sell, sell, and sell some more.
We hosted a session on teams and culture, where the mantra of “selling” applied not only to products but also to employees. As a fourth time founder, Danny Shader, now CEO of PayNearMe, shared what he believes is a founder’s primary goal: motivate people to find and solve a real problem. Throughout a company’s life, a founder must successfully motivate people around their company’s culture, brand, and product, including customers, investors, and potential employees. “Your initial product idea is seldom what you end up selling,” he says. “It's a prop used in a conversation to find out what your customers really want.”
Want more customers? Practice empathy.
Alex Marlantes of Everlance decided to do customer research by becoming the sort of customer that Everlance sought to sell its product–a gig worker. For months, he moonlighted as a Lyft driver, an experience that provided invaluable insight into what features best supported Everlance’s primary customers. “At Everlance, culturally, that’s what’s celebrated–people spending a lot of time with our customers and users,” he said. The insights from this work allowed him to get actionable feedback and put the company on a path to success.
For all the talk about founders’ bringing a strong vision, they also need to have control over the details. Whether it relates to knowing new customer acquisition numbers or where the books are, being on top of these can dramatically speed up operations and improve focus. For Power Finance’s former CEO Randy Fernando, being on top of these details enabled his company to realize a $275 million acquisition in record time. Critical to Randy’s journey was Power’s operational & financial maturity relative to the age of the company. When the company engaged in acquisition talks, much of the complexities of due diligence were able to be more effectively managed as a result of the team’s overall preparedness.
Things may not be as bad as you think.
Despite the dire headlines, Jose Penabad, CIO of HCG Funds shared a heartening perspective: despite the market turmoil, consumers are in good shape, compared to other times in history. “Consumers are actually getting wages to stick and we’ve turned the corner on inflation,” he says. Additionally, the job market is still booming–which means that there’s still plenty of opportunities to grow and compete at scale.
A special thanks to our speakers and portfolio companies for sharing their experiences to make this retreat a special time for everyone. We’re excited to share more of what we learned from these sessions in the coming weeks so stay tuned to restive.com/content.