I’ve been blogging about my startup experience for the last 2 months and I’ve been pretty overwhelmed by the responses and engagement I’ve received thus far. Before I continue with the story, I thought I’d answer a lot of the recurring questions people have been asking about all this. Launching a startup is a mystery to a lot of people (including me) and the original goal of me writing about all this was to share my experiences, so here goes:
What does a startup CEO do all day?
That one is easy… Talk to people. A lot of people. In all seriousness, you run the company, which means you do a bit of everything. It does feel like you go between building to fundraising to building all in rapid succession. On a typical day, if such a thing exists, I meet with the sales team, product team and various engineering teams.
Do you get paid? If so, what’s your salary?
Didn’t your mum tell you it’s impolite to ask that? Ok, seriously, this is a common question. How do you quit your job and launch a startup whilst supporting yourself? I’m not independently wealthy so I couldn’t bootstrap my company myself. When you take on investment from a VC, they are expecting you to be fully invested in your startup. This means that you can and should pay yourself.
Now as to how much you pay yourself, this is a difficult question. Now, I’m not going to tell you my exact salary. When you launch a startup, your investors give you a fixed amount of money which you, in turn, must translate that money into the beginnings of a product. You have a fixed amount of time to do this, which is known as runway. Let’s say you raised $1.2M and your monthly expenses are 100k, you have 12 months of runway.
So as a startup CEO, you have limited funds and you want to use those funds to hire the best engineers you can afford, which comes back to your salary. You can pay yourself a lot, but then you have fewer resources to use to hire good staff. Typically, startup CEOs are not well paid in cash in the beginning, instead taking equity in the company as compensation, but that’s doesn’t have to be the case. Whatever you decide as CEO, you should be prepared to justify it to your investors.
How do startups handle benefits?
Benefits have been one of the most challenging aspects of running a startup and one of the biggest headaches. In my case, we have a lot of medical issues in my family, so we had to have good health insurance. I couldn’t quit my job until benefits are sorted out, and it took us a while to do that.
This is an area that most people, including me, have no idea how it works. When you work for a large company, the large company purchases health insurance, life insurance etc. and because they are large organization, they get preferred pricing on these benefits. As a company with a single digit number of employees, you don’t have that buying power, so purchasing benefits is more complicated. What makes it more complicated is that with respect to health insurance is that each state’s regulations are different so you can’t buy insurance in one state and have it valid in another.
To combat this, there are companies and organizations that basically pool small companies together which make it possible for small companies to get big company benefits. Of course, Maryland being Maryland, prohibits these for companies under 50 employees. Long story short, dealing with benefits is a major headache that will take MUCH more time than you imagine in the beginning stages.
What are some of the hardest things you’ve dealt with?
Honestly, the one of the biggest things I’ve had to really ramp up is my time management. I use Calendly to manage my calendar, and in the first few months, my calendar would be booked from 9-5 nearly every day. I found I was not being very productive and by the end of the day, I was done. I have had to learn to be ruthless with my time management. I also started using some tricks in Calendly to manage my time better. For instance, I set my availability only in the afternoons, and set meeting times to 25 and 50 min respectively. That way I get breaks between meetings. Also, I started really pushing for agendas for meetings. This is an ongoing battle…
Also related to time management is focus. One of the hardest things to do in the early stages is maintain laser-like focus on what you’re doing. It’s very easy to go off on tangents or think some feature is a great idea and start building that. This seems really obvious, but when you’re in the midst of it, it isn’t. As CEO, you MUST serve as absolute referee to keep your team focused on the goal. Which means that you must clearly and regularly restate the goals and make sure that everyone is 100% in alignment.
The other thing that is really hard for me is perspective. This company is the culmination of many years of work and dreaming. In short, it’s my baby. What’s hard for me is remembering that while this is my passion and dream, for our team, this is just their job. Ideally you work to hire passionate people, at the end of the day, it’s still their job, not necessarily their passion. That’s hard for me and I have to remind myself of that. I live and breathe DataDistillr. I’m up coding, blogging or doing something else every night. I can’t expect that from my team.
How has the COVID pandemic affected your startup?
Starting a business during the COVID pandemic is definitely interesting. Clearly, it has transformed our society and the business world. The first thing is that COVID delayed our fundraising by several months. On the one hand, we’ve been able to avoid a lot of expenses that you would have COVID didn’t exist. For example, we didn’t have an office until recently. Thus, we saved a ton of money on office related paraphernalia, such as furniture, phones, computers etc.
We also have been able to hire people all over the country, instead of limiting ourselves to one geographic area. This is great because it really expands the talent pool. After all, not everyone wants to live in Silicon Valley, Seattle, Boston or New York. Nor do people want to re-locate. As a result, our team is all over the country. As anyone who has worked on a remote team knows, there are challenges with a fully remote team. What I find interesting is that I have been working with everyone for some time now and I haven’t met them in person. What’s strange is that when you work with someone in person, you learn about them through casual conversation, which is virtually impossible with a regimented schedule of zoom meetings. So I’m working with people about whom I know next to nothing and whom I’ve never met. I don’t love that part of it. However, as COVID restrictions are loosening, I am very much looking forward to actually meeting our team in person and learning about them as people.
Hiring in multiple locations unfortunately also causes a lot of complications as tax and employment laws have not caught up with the current situation. There are a lot of bureaucratic headaches, but I think it’s worth it.