When Alexa von Tobel and Lucy Deland started their first companies, they each faced the same huge hurdle: It was the Great Recession, and everyone they knew thought they'd fail. But that didn't happen.
In 2008, Deland left a job at Insight Venture Partners to start the highly successful online correspondence platform Paperless Post. The same year, von Tobel dropped out of Harvard Business School to start LearnVest, which Northwestern Mutual later acquired for $250 million.
Then, in 2019, von Tobel started Inspired Capital with former U.S. secretary of commerce Penny Pritzker as co-founder and Deland as partner. The veteran business owners now aim to lend some of their wisdom and experience to other entrepreneurs.
"It's the only job that as you are getting better at it, it gets harder," von Tobel said of being a founder during a session at the Inc. 5000 Vision Conference Wednesday. "As you're getting better, as the company's doing better, your learning curve is getting steeper, and you're just constantly on a treadmill of getting better and having to see through immense stress and chaos."
Von Tobel and Deland told the audience at the virtual event that passion and resilience during uncertain times is what made them successful, and it's what they now look for in founders they want to invest in. Here are some of the biggest takeaways the two founders have learned about building a company that lasts.
1. Have a Plan B ... and C and D.
The two veteran entrepreneurs know better than just about anyone how important it is to have a backup plan, especially when something like a global pandemic occurs. Von Tobel noted that a big part of being a CEO is tackling complicated problems head-on, so you need to know how to stretch funds or retool a product or service offering.
During the session, she likened keeping a company alive to being an emergency room surgeon who sees a patient after an accident. You have the keep the patient alive and thriving while also figuring out what to treat first, discerning what the most pressing priorities are. "Your job as CEO is often to figure out which is that one thing, and you're kind of alone in making that call," von Tobel said.
2. Set up leadership boundaries.
When your company starts to grow, one of the most difficult transitions founders have to make is from being the doers on the ground to being leaders and executive managers only. And one of the ways to do that, Deland said, is to "force yourself out of the details." As an example, Deland said, when an executive who worked for her would send her a document, she arranged so she was unable to edit it, requesting "read-only" permission. That way when she was giving feedback, she was not able to make any changes herself.
3. Take some time to revisit the basics.
In retrospect, Deland said, the biggest lesson that starting a company during a recession taught her was to embrace discipline and the challenges of surviving to fight another day, because that's the very nature of running a startup. It makes you focus on the big things like finding product-market fit, appreciating your customers, and listening really carefully.
While these are trying times for businesses, Deland said the advice she's been giving her portfolio companies is to take this time to think like a new, struggling startup--even if you have capital--and figure out exactly what your company's value is. "It's an interesting time for learning," she said about the companies in her portfolio, "and for really getting back to the core of what it is that is going to differentiate your company."
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