Joe Fernandez (Klout, Joymode, NewCo) On What Changes After Your First Company
I’m currently obsessing on repeat founders, and what lessons they want to share with the startup community. Just like my earlier request of Sean Byrnes, it made sense to pub Joe Fernandez’s response in full (thanks Joe!). Joe is a good friend and someone I love working alongside (Homebrew invested in Joymode and his current unannounced company).
Yeah, this hits a bunch of different ways.
So on the funding there are a couple of interesting things. When I am pitching a new idea I don’t really want the benefit of the doubt. I want a reality check against something I am considering spending the next 10+ years of my life on. While it’s nice that people are more inclined to lean in, I often feel like I am missing the conversation I want to have. It also puts a lot of doubt in my mind of how valuable of a thought partner that investor might be down the road.
I see this happen the most with new funds. It’s not because I think these investors are any less talented at evaluating ideas but they are highly incentivized to close “hot” deals. They are unlikely to have real results when they go to raise their next fund so they want the story of x, y and z proven, successful, founders choosing to work with them.
Lots of stuff comes to mind around team. The first thing I’ve found happen is that when word gets out you’re working on something new a bunch of people will want to connect about joining. 95% of the time this isn’t the people you actually want or need at this stage. You end up with a lot of people who have no could care less about the mission but know employees at your last company cashed out so they want in. Then there is the people that are hungry to get behind a mission they care about but have a romantic idea of what the earliest days of a startup are like and are totally detached from reality. Then the biggest group (which usually overlaps with the first two) are people who just don’t have relevant skills for this stage of the company.
This ends up being a weird distraction. You have these inbound people that are from your network so it can be socially awkward to just blow them off. Then when you tell them it’s not a fit it can be painful. For example, I had a friend who wanted to get involved in Joymode. I told them no and then when they would see press about us and think we were doing well it would just dig at the wound. They felt like if I was really their friend I would have let them on the bus (no thank you for the pain I saved them in the end of course). Meanwhile, you still have to go out and recruit the actually people you need.
As a first time ceo at Klout I would often look at my board and think “these people were involved in some of the most important companies in our industry, I should probably listen to them”. I easily lost a year or two doing dumb shit my board told me was a good idea. That’s definitely not their fault. It took me too long to realize that world we are building in is dynamic and every company, market and moment in time is different. No one knows anything. It’s all just data points.
I see my team looking at me the same way I used to look at my board and it freaks me out. I tell the team I want them to push back on me, but it’s asking a lot. A debate or any conversation with the ceo is never on even terms but it’s way harder with a 2nd time founder. I just have way more experience than almost anyone I am working with at this point so the depth, pace and scope of the conversation can be overwhelming for someone not used to it. The problem with this is that I can request people to push back and then “win” debates without actually being right. It also just doesn’t make people feel good and motivate them to push back on future bad ideas.
Being a 2nd time founder is basically figuring out how to leverage all your hype without believing it