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Craig Walker, Founder and CEO, Dialpad

Starting a business is hard. Sometimes it’s brutally hard. And odds are that all the work you put into your business: the grueling labor, long hours, and low pay...is going to end up for naught. I’ve heard that 90% of startups fail, and it’s likely true. But that also doesn’t mean the other 10% become Google and Facebook. A small minority do, but “not failing” doesn’t always mean “great success." In other words, starting a company is hard and high risk.

I’ve been lucky enough to be in on the ground floor for three great startups. The first was acquired by Yahoo!, the second by Google and my current company, Dialpad, is scaling to over $100m ARR and going after a massive market. After 20 years of founding and growing tech startups, I’ve come up with a list of 10 pieces of advice I’d give myself 20 years ago before starting on this journey.

10 Tips for Building a Great Business

  1. Fix a problem that bothers you. You have to have conviction to power through all the challenges that come with starting a business. First, it’s likely that what you are trying to build is not super obvious or it would have been done before. There are going to be a lot of people second guessing your decision, so stay strong. Second, it’s hard to have a ton of conviction about things in the abstract. I need to feel the pain in order to work to fix it. I couldn’t believe conference calls still required entering a PIN and/or an access code to join the call...so we built UberConference. Feeling the pain firsthand gives you confidence in what you are building and helps to overcome doubts and negativity.
  2. Be hands-on. You can’t outsource leadership and you can’t sit back and wait for others to build your vision. As a founder and CEO, I’m actively involved in the details to understand things better. A great CEO should be able to have intelligent conversations with engineers, product managers, designers, customer support, sales, finance, HR, etc. That can’t be done from the sidelines and getting involved is the only way I’ve found to really have a pulse on the company and business. I remember when getting my MBA, a roommate was going to work for PepsiCo after graduation. He was going to make a great salary, but he was required to spend the first 2 years working in a Taco Bell. Not only that, he was going to start at the bottom of the ladder and work up to manager before moving back to PepsiCo HQ. By the time he was managing the Taco Bell he’d already spent 18 months doing every single job in the restaurant and knew what it took to be successful inside and out. I never forgot that.
  3. Be scrappy. Cash is oxygen to a startup and wasting cash is like wasting oxygen. If you’re not scrappy from the get go, it will reverberate throughout the organization. You’ll see things like new hire requests for every job that needs doing rather than stretching the team to take it on themselves, or you’ll suddenly have layers of middle managers all worried about their career progression and find nobody taking responsibility for the end user. People will start wasting the company’s money: things like expensive dinners, excessive travel, and nice hotels will become the norm. It all starts with being scrappy and that mentality evaporates instantly once you stop. Never lose that edge.
  4. Start with a great team. The single best piece of advice I can give is to put together a team of co-founders and early hires who share your values. When you have that type of deep connection and shared values, you can overcome anything. Starting with a scrappy, hard working, customer-focused team is the key to building a scrappy, hard working, customer-focused company. Avoid the rock stars (unless they share your values) and hire the people you want in your foxhole when things get rough. Because things will inevitably get rough. Having a rock solid relationship and confidence in your team and co founders will get you through a lot of adversity.
  5. Focus on the customer. Happy customers should be the goal of every business. Sweat the details in the product. Use it often and test it yourself. And just like point #2 about being hands on, you personally need to live the end user’s journey and you should always be looking for ways to improve the experience for your customers. I remember the first time I used an iPhone and opened the calculator: I turned the phone sideways, and it switched to a scientific calculator with a lot more functionality. I thought then that if Apple put that much thought into the calculator, they must really have given a lot of thought to the phone calls, camera, messaging, apps, and everything else. And they did.
  6. Find a big market. I’ve heard people say that a VC won’t be interested in any startup going after a market smaller than $1B. To me, that actually sounds small. I love the idea of going after huge markets; it means you can find a niche or create a big opportunity by making plays the big players will overlook. Being able to focus on a certain aspect of a big market not only gives you a chance to be super innovative in that segment, it also protects you from somebody taking over the entire market and putting you out of business.
  7. Stay true to yourself. This sounds a little trite, but every startup and every founding team has natural tendencies and natural strengths. You might be an engineering driven company, or a product driven company, or a design driven company, and you should leverage that natural DNA and use those strengths to your advantage. Nothing is more unnatural than trying to be something you’re not. It just doesn’t feel right to anyone. I’ve seen a lot of B2B SaaS startups trying to become an “Enterprise” company because they (or their investors) believe companies that can serve the Enterprise market are more valuable. But just because it’s an attractive market doesn’t mean you’re going to be good at it and you might be missing your strengths and other opportunities trying to be something you’re not. Find your fit and hammer away at it. See #6 above: if the market is big enough, you can find success in smaller segments that might be a more natural fit.
  8. Realize everything has a cost. This is a tough one for me because everything sounds exciting and doable. When there’s a potential partner or a new product idea, it’s really tempting to get excited about it and go after it. Same goes for customers: when there’s an opportunity to land a big customer, it’s tempting to chase it, even if you know they might not be a great fit. You get convinced that your great team can solve any problem and can make any customer happy. And that might be true, but it does come at a cost. Your roadmap gets disrupted as you try to build solutions that your new massive customer demands. Your other customers get less attention, and you personally are getting on calls and flights to make that customer happy. It might be the right call in the end, but remember, everything has a cost and the most successful startups should focus on minimizing costs.
  9. Have fun. Life is too short not to enjoy what you’re doing. You’re running a startup...how great is that?! Enjoy it. Enjoy the people you work with. Enjoy the challenge and the grind. Celebrate successes. Be excited to get out of bed and attack the day. It wouldn’t be possible to put in the effort needed to build a successful startup if you weren’t having fun doing it. And going back to #4 about starting with a great team: these are your co-founders and earliest employees, so make sure they are positive people and will pump you up. There are going to be plenty of mistakes along the way, so having positive and fun people around you will help you recover from those mistakes quickly.
  10. Create a great culture. Culture gets a lot of attention these days, and rightfully so, but to say “create a great culture” is too prescriptive. Culture comes from doing the right things every day and showing up ready to create great things every day. By being hands-on, scrappy, caring about the customer, having fun, and staying true to yourself, the culture flows organically from that and is a by-product of the great company you are building.

Best of luck on the journey, it will surely be an adventure. And, as Hellen Keller wrote, “Life is either a daring adventure, or it is nothing.”