What I wish I'd learned at Harvard Business School

Reflecting on 2 years of being a B2B software company founder

My alumni class at HBS looks very similar to other alumni classes: Consulting, Investing, Big Tech.

I took a less-travelled route - raising VC money and starting a B2B SaaS company. Two years post-graduation, I’m quite happy to be operating a small technology company.

But MBAs beware: Early-stage B2B SaaS is really, really hard. Here are some of the things I wish HBS had taught me:

This isn’t a glamorous job.

Pre-MBA, I worked at McKinsey. First class flights, steakhouses, and Fortune 500 boardrooms.

You expect to give up the salary. Giving up the respect hurts.

A few humbling experiences:

• Getting asked to leave a McDonald’s by the manager for trying to get product feedback

• Cold-calling janitorial businesses and getting told, “your product is stupid and I’ll never buy it.” (Verbatim.)

• Getting physically sick from stress (unlike any stress I felt at McKinsey) when funding in / payroll out weren’t lining up

• Giving up LinkedIn because if you see ONE more classmate “humbly” announcing their promotion…

Not sold yet? Here’s a picture taken just this week. Two years after paying over $100k for a degree, here I am taking a Zoom call from my bathroom floor, because I share a studio apartment. Glamorous.

Pre-“product-market fit” is hell on earth.

Some people love the ideation phase. The early, uncertain days.

After living in that world for longer than I’d care to admit… after experiencing the “pre” & “post” product-market-fit worlds… pre-product-market fit is hell. Especially for B2B software.

Consumer products / services are relatively easy to smoke test with Facebook ads and landing pages. In most cases, people already buy these things. You’re convincing them to buy a cooler, better version. B2B SaaS is something new, different, unproven, intangible.

You don’t learn much in the pre-product-market-fit phase. It’s been described as a drunken stagger. It feels like repeatedly banging your head into a wall.

It takes a lot of time and effort just to have conversations with potential customers. Then they don’t understand what you do, because you don’t know how to describe your product. And you don’t know if the problem is your product or your description of your product. Or if this person you’re talking to is representative. Or if the people who say, “wow that would be helpful” are lying. Or, even if they truly like it, if they’d be able to actually buy it. Or…

The worst part is that there’s no guarantee that you escape. Businesses often die in the pre-PMF stage. When you haven’t figured out how to get customers. When you haven’t built a product anyone really cares about.

You can live in this pre-PMF hellscape for months or even years. You can scrape along with a few customers but no real path to scale. And you can learn very little of value in the process.

But…

Nothing feels better than finding product-market fit.

Creating something out of nothing that people value, are willing to pay for, refer to their colleagues. Something repeatable, scalable. Seeing the pieces start to come together, hiring people who get it and make it better.

Of course, your journey to product-market fit will never end. But early customer validation, the path from $100k to $1M ARR when things just start clicking. It feels like running after a long day stuck indoors.

Figure out GTM yourself.

You weren’t taught early-stage software sales. Finding an effective channel. Finding an effective message. Closing deals. You can’t outsource this stuff, so might as well learn it.

Here’s how I’ve become an effective (not good, but effective) salesperson / marketer:

• Read Obviously Awesome, Demand-Side Sales 101, Lean B2B, Lean Customer Development.

• Got a sales advisor who forced me to do 50 cold calls per day until I figured out which description of our pain point got people to stop hanging up on me. Then, iterated on the discovery call and demo until we got a few customers. THEN helped us bring in people much more talented than me.

• Continued to force myself to do sales & marketing when I don’t like them and have people on our team who can do them better than me. How else will we learn what customers need firsthand?

It’s not fun, but it’s a worthwhile skillset: Figure out how to create real demand for early-stage products, how to position products, and how to sell.

Learn the manual-to-scale loop.

Then comes the challenge of actually building the damn software.

Start by wasting thousands of dollars on contract engineering firms who prey on first-time founders. Then starting over and finding good engineers and learning how to work with them, figuring out requirements and designs, getting it built in a reasonable amount of time in a way that doesn’t need months of refactoring when you inevitably make a bad assumption…

I wish someone had given me “Hypergrowth” by David Cancel and the Drift team years ago. I wish “Shape Up” by Basecamp had been written in 2016.

I wish someone had told me to not spend time worrying about interfaces and detailed design (initially). That practicing Scrum by the book is counterproductive if you don’t know what to build. (Even when you know what to build, I find Scrum to be counterproductive.) That building cool, sophisticated things is not the same thing as building what customers care about.

That all that matters in the early stages is finding what your customers truly value, and early-stage product development needs to do that at warp speed.

I’ve worked alongside my engineers to manually deliver the value that customers were asking for. Then we hacked together existing tools. Then we built a junk version we used internally. Then we built a better version that we’re letting customers use. Of course it’s wasn’t scalable (initially), but it was the only way we could learn what was scalable.

Many engineers don’t enjoy doing this… again, it’s not glamorous. The ones who do are the ones who understand your customers’ pain. When engineers understand what your customers are trying to accomplish, their output is always faster & better.

Stop planning.

At the earliest stages, you have no clue. You won’t know what customers will really value until they prove it to you, and even then you’ll learn new things every day that cause you to question, iterate, and revise.

It’s cathartic to finally admit that you don’t know. “What’s your revenue projection for the next 5 years?”

False certainty is worse than honest cluelessness. One is remedied by open-minded exploration, the other by running face-first into reality.

If you talk to enough customers and try enough things, what’s truly valuable will emerge. We’ve found a promising, exciting direction. It didn’t come from theory or plans; it emerged from listening to our customers and trying to creatively solve their biggest problems.

I know another company out of Harvard who - after a few years of building a product and struggling to sell it - built a side project in a few days that is growing like crazy.

You don’t know. Stop planning. Start listening, and let the answer emerge.

And if you MUST plan (because HBS taught you to plan), plan to build an organization that is by nature adaptive, responsive, and creative to what you learn from your customers.

There are alternatives to VC-backed entrepreneurship.

Our lead investor and board members are amazing. We’ve lucked out but have heard horror stories about the venture route. It certainly has a high failure rate, is really stressful, and requires a potential billion-dollar exit.

There are alternatives. You can bootstrap a small, niche software company. You can start with paid info products. You can start with a media company and eventually build software. You can acquire a small software business.

The venture route can be exciting, but it isn’t the only option for entrepreneurs.

You have the moral obligation to be an entrepreneur.

(If you’ve read this far, you deserve my most controversial opinion…)

“Hey you. You rich, privileged, smart person attending the world’s top business school. You publicly, loudly espouse (costless) ideas about social justice and making the world a better place. You wax eloquent about ‘our responsibility’ as future business leaders. You claim to empathize with the disadvantaged and care about reforming capitalism.

Then you go work for Big Tech.

Here’s an idea: Try to build something that actually makes the world better. That pushes an industry forward. That crushes some stupid legacy software company. That solves a massive problem for other people who are building a better world. Create real jobs for real people.

You - who have all the privilege in the world - have a moral obligation to be an entrepreneur. To build. To risk total humiliating failure, when the worst that can happen to you is your company goes to hell and THEN you get a cushy job.

All routes post-MBA are NOT created equal. Go start something.”

- What I wish our entrepreneurship professors told us.