You're Probably an Average Founder

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Last week, I wrote a LinkedIn post on a whim. I usually write my content on Sundays and schedule it, but I was short on time last week and had to write one on the fly.

All this to say, while I meant what I wrote, I didn’t think too much of it until after I had posted it.

The more time you spend working on your startup, the easier it is to understand this: the large majority of us (including me) are average founders.

Let me explain.

First, if you dared to start a company, you are remarkable. Compared to the general population, you are well above average.

When I say 'average,' I am referring to the broader startup ecosystem. This newsletter is a wake-up call to any founder who’s mistakenly following the 1% playbook when they’re actually part of the 99%.

And then, when you try to follow those things as part of the 99%, you understand that they don't work for you.

The Tier System

There's an unspoken hierarchy in how the startup world judges founders. This is my unofficial ranking:

1. Group 1: Second+ time founders who had an exit

2. Group 2: Second+ time founders

3. Group 3: Founders with Silicon Valley pedigree (YC participant/alum, Stanford degree, worked at big tech early on)

4. Group 4: Founders who get $1 of revenue

5. Group 5: Everyone else

Any founder who has had a past exit is likely to be able to secure a meeting with a venture capitalist or garner interest from potential employees.

Then there are founders with one of the badges you need for success according to the traditional playbook: you went through YC, graduated from Stanford, or maybe you were an early employee at a company that recently blew up. To put this in perspective:

• YC accepts roughly 1-2% of applicants

• Stanford has about a 4% acceptance rate

• Less than 1% of startups ever successfully raise venture capital (meaning very few of us have an opportunity to work at a high-growth company)

Naturally, the number of people in tiers 1-3 is tiny. Let’s call that 1% of all founders.

That means that 99% of founders fall into tier 4 or 5.

Understanding Where You Fall

Founders are arrogant. They have to be. It takes a lot of self-confidence to look at a report that says 90% of startups fail and say to yourself, “Not me, though; I’m different.”

That arrogance is what propels us through some of the most challenging times building our companies, but it’s also where we slip up. We think that because they had the guts to launch something, they are immediately in that top tier.

Be honest, have you ever done any of the following?

1. Said that there’s no one doing what your company is doing

2. Genuinely tried to raise money without a product or revenue

3. Considered (or actually gone through with) quitting your full-time job to work on your startup full-time before you had traction or funding

4. Jumped into building a product before you even spoke to a potential buyer

These are all the moves of founders who don’t know their tier. More on this below, but very few people in the startup ecosystem get to move like this without some consequence. Just looking at these four examples above:

1. Said that there’s no one doing what your company is doing → there in fact, was someone out there doing what you’re doing

2. Genuinely tried to raise money without a product or revenue → nobody would take a meeting with you, and those who did wouldn’t invest

3. Considered (or actually gone through with) quitting your full-time job to work on your startup full-time before you had traction or funding → you miss the stability of a regular paycheck and realize you could have worked on your company nights/weekends until you had more traction (this one is for me 😅)

4. Jumped into building a product before you even spoke to a potential buyer → you lost time and money building something that nobody asked for

The sooner you can honestly assess where you fall in this hierarchy, the sooner you can start following the right playbook for your situation instead of chasing advice meant for founders with completely different resources and networks than you have.

Moving Appropriately

As part of the 99%, you can't make the mistake of doing what the 1% does.

Here are three pieces of traditional startup advice that work very differently depending on which tier you're in:

"Move Fast and Break Things"

What it means for the 1%: You have the cash and cache to bounce back from mistakes.

If you've ever watched the limited series' Super Pumped' about Uber, they caused millions of dollars in damages to a Las Vegas hotel, and yet were allowed to continue operating. It was years before the founder got ousted. This is something you'd never see someone outside the top three tiers be able to pull off.

What it means for the 99%: Move fast with intention.

Moving fast is always a requirement for early-stage startups. It’s essential to ship features quickly, pivot when something isn't working, and remain nimble. But "breaking things" assumes you can afford to break them.

Moving fast is always a requirement for early-stage startups. It's essential to ship features quickly, pivot when something isn't working, and remain nimble. But "breaking things" assumes you can afford to break them. Moving fast with intention means:

• Validating before you build. Create landing pages or pre-sell your product before writing a single line of code. The 1% can afford to make first and find customers later - you can't.

• Test with real money, not free trials. Get people to pay you $1 instead of giving away your product for free to 1,000 users.

• Limit your scope ruthlessly. The 1% can spray and pray with features, hoping something sticks. You need to be laser-focused on solving one specific problem better than anyone else.

"Hire the Best People"

What it means for the 1%: The "best people" are those with deep product experience who've done the work before at other successful companies. These individuals command high salaries because they know they can secure a position at any well-funded tech company and get paid their market rate.

What it means for the 99%: Redefine "best" for yourself and be flexible with how you hire. If you think you need to hire, do it in this order:

1. Try to automate the work with AI/Zapier

2. Hire a freelancer for a one-time project

3. Hire a freelancer for a set number of hours/week

4. Hire full-time

Being in the 99% means conserving cash, and the best way to do that is to hire responsibly.

"Always Be Raising"

What it means for the 1%: VCs are fighting to get into your rounds. You have multiple term sheets on the table and can raise whenever you want because investors know your pedigree. You spend 25% of your time networking with VCs because it’s assumed that you’re going to raise another round.

What it means for the 99%: Raise when you don't need it and only when you have clear traction that proves demand. You're going to have to work 10x harder to get investor attention, so make sure you have something substantial to show before you even start the process. Focus on building a profitable and scalable business first, then consider whether you even need outside capital.

The Bottom Line

I learned these lessons the hard way by following the 1% playbook when I wasn't in that tier.

When we were only doing $100k in ARR, I hired both an engineer and a product manager because that's what "fast-growing startups" do. We burned through cash we couldn't afford to lose on salaries for roles we weren't ready for.

Even worse, I spent 18 months and over $250,000 trying to move away from our low-code Bubble platform because I felt pressure that no investor would take us seriously with that tech stack. We hired and fired three different engineers, attempted to rebuild the product from scratch (twice), and both times it failed. Eventually, we scaled back to a hybrid setup with Bubble and Supabase, and guess what? The product works great, our customers are happy with it, and I realized I was building for some hypothetical future investor instead of the customers who were paying us.

The 99% playbook isn't worse than the 1% playbook - it's just different. And once you stop pretending you're in the wrong tier, you can start building a business that works for your situation instead of chasing someone else's definition of success.