What should all first-time founders know before they start a company? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.

Answer by William Hockey, Co-founder & CTO of Plaid, on Quora:

What should all first-time founders know before they start a company? There are definitely too many to list for this post, and there are countless articles by founders more successful than myself. But here are a couple things I've learned that I see rarely talked about.

  • I think sometimes founders learn too much on the job. The current climate idealizes hard charging founders who learn on the job. However, Both Zach and I never worked for a startup before we founded Plaid, which means not only did we have to learn how to build a company, we also had to learn how to work and succeed at a startup in Silicon Valley. Basic things like recruiting, management, quarterly planning, all hands, etc. we all had to learn while doing them. If we had worked at a successful startup as employees before we started, and seen what great looked like, we could have shaved at least a year or two off in the beginning.
  • Never compromise on recruiting and do it yourself. Keep a maniacally high bar for talent and never ever compromise.
    • If your first twenty employees are incredible it's going to make it ten times easier to hire the next hundred. At Plaid during every debrief, after reading and discussing everyone's feedback, every interviewer rates the candidate from 1-4. Where 3 is hire and 4 is a must hire. If a candidate gets all 3s we always reject. There are definitely good candidates that we miss, but one bad employee when you're under twenty is too large of a risk to take chances.
    • Early on, you should probably spend 75% of your time recruiting. This doesn't mean interviewing recruiters or talking to external recruiters. This means sending cold emails and ruthlessly mining your network. Some founders would bristle at the concept of being a sourcer, but Zach and I hired a majority of our early employees from cold emails (and we still spend a good amount of time on top of funnel sourcing) [1].
  • Don't over engineer early on. This may be a bit more controversial, but too many founders try to get the technology perfect on day one. You don't need 100% test coverage and the capacity to scale to thousands of users before you have product-market fit. You're going to have to rebuild the system numerous times as you narrow down on your perfect market. Build just enough to find the market, once you find the perfect product then you can build it to scale.

[1] Newer startups like Topfunnel make it way easier than it used to be.

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Published on: Jan 22, 2018