Some wise words for startup founders everywhere.
The co-founder of Tesla, Marc Tarpenning, was kind enough to give a guest talk to my Stanford Continuing Studies students last month. He told the story about how he and his co-founder Martin Eberhard founded the company in 2003, spent five years developing the company, the technology, and the original Tesla Roadster — and then in 2008 the Elon Musk era began.
It’s a great startup story, and my students were rapt. But to me the really valuable nuggets were in the summary advice Marc gave my students at the very end — I think it’s valuable stuff for startup founders everywhere:
- Have a Clear North Star. Marc said that Tesla’s North Star was to reduce fossil fuel consumption by “Creating electric cars that delight customers”. By staying focused on this, he and his co-founder managed to avoid all the other distracting opportunities (people were pitching them on all sorts of wild things like electric jet skis). I know how easy it is, as a startup founder, to become distracted by all the other ideas and opportunities that come along. I’ve certainly been guilty of it.
- Founders Need to Choose Which Hats to Ditch. We all know that founders need to wear a lot of hats, but Marc said “It’s really important to get rid of hats as the company grows”. This one really hit home for me, because I think I eventually became a barrier to scale with every company I founded, because I wasn’t doing a very good job of delegating hats to others. I’m terrible at delegating, and for a startup founder that is a self-limiting trait that can be fatal to an organization.
- Entrepreneurs Need to be Good at Firing People. Marc apologized for saying so, but a key part of building a great company is cutting employees who “don’t work and play well with others”. It’s somewhat counterintuitive that part of building a great team is being able to fire people, but I certainly know from my own career that every time I’ve fired someone, I’ve wished that I just done it sooner.
- No Vanity Awards. Marc talked about how tempting it is to fly to NYC to accept some “best new startup idea” award, but as a startup founder you need to focus on delivering. As Marc said, “The only award that is worth collecting is Best Selling Product”. Stay focused on metrics that matter.
- Storytelling Matters. I preach this to my students all the time, so I loved hearing Marc say “The ability to tell the story in a crisp and compelling way is essential” for entrepreneurs everywhere. It’s true for fundraising, but it’s also true for recruiting, managing, selling, and nearly every other part of a founder’s job. It has always been thus.
Marc is now a Venture Partner with Spero Ventures, an investment firm focused on “founders who are building the things that make life worth living”. His closing words to my students were “We want a future of abundance. We have billions of people we have to bring up to our standard of living. Our future has to be sustainable and renewable. And we know how to do it”.
This was adapted from my weekly missive for entrepreneurs, investors, and innovators.
