Startup gurus tell aspiring founders to take massive risks, relish failures and shoot for glory. This narrative deceives people into thinking that entrepreneur CEOs need be “fearless” in the classic sense of the word. It’s one-sided advice that leads entrepreneurs to take unnecessary risks.
There are different ways to approach risk. One way is to invest everything you have into a new venture. When Captain Hernán Cortés landed in Veracruz, Mexico in 1519, he ordered his crew to burn the ships. There was no turning back.
Silicon Valley loves stories of digital conquistadors who put everything on the line. Investors only like that story in retrospect. Rarely do venture capitalists brag about their portfolio companies that burned $10 million and ended up stranded in hostile territory.
Another way to approach risk is with calculation. When I started JotForm in 2006, I kept my day job at a New York media company and worked on JotForm during the evenings and weekends.
At the media company, I was paid to immerse myself in new technologies and sharpen my programming skills. Our editors needed custom web forms for polls, questionnaires, contests, and surveys. This dull, tedious work became a big part of my job. I asked myself if I could automate the form-building process.
That question was the genesis of JotForm. Working in a large organization exposed me to a large cross-section of customers, who I came to recognize, shared common pain points.
A day job is an underrated incubator. I continued to learn about product development, sales, and customer support. I applied these lessons from a profitable business to my fledgling company. I developed JotForm at a slow pace, and if I stumbled, I didn’t face financial ruin. I could sail my ships home.
Only when JotForm was as lucrative as my 9-to-5 salary did I kick the day job. When I dove into building my product full-time, I had fewer reasons to be fearful.
To be a “fearless” leader, by my definition, is to operate in such a way that you aren’t plagued by fear. Instead, you confirm that you’re offering a product that you and others want. You hone the skills and experience to build it yourself. Hopefully, you do something that few others realize is worth doing.
After I quit my day job, I made a “fearless” decision that proved to be the most important: to remain bootstrapped. I didn’t spend any money or push especially hard. Nonetheless, about 15,000 users signed up within a year.
Had I taken venture capital, JotForm’s story would have been radically different. I would have had to answer to a board of directors who wanted “exponential” growth and a fast exit. By bootstrapping, I retained control of my company.
If you want to be a fearless leader, as I define it, remain independent. Don’t “figure things out” on a venture capitalist’s dime. That rarely ends well. Toward that end, I offer a few practical tips:
Do not hire anyone unless you have their first-year salary in the bank. That has been my practice since hiring JotForm’s first employee 12 years ago. 130 plus employees later, we uphold that rule. Consequently, we don’t have to work employees to death to get a quick ROI. We can invest in developing teammates who thrive rather than burn out.
Crown cash flow queen. Make sure your bank account is growing. The millions that VCs inject into a startup are a mirage of success. When you bootstrap a company, you need to earn more than you spend and operate on the money you actually have. Only governments and VC-backed startups can routinely spend more than they earn.
Do one thing really well. At JotForm, we only do forms. Focus is the best competitive edge we have against goliath tech companies that have made a business model of diversified mediocrity. When Adobe entered the form builder space, they didn’t stay long because the revenues, according to their executives, were too small to justify the effort. Convince bigger companies that competing with you isn’t worth it.
If you can afford your employees, your bank account is growing and you’re the best in the market at one thing, what is there to fear?
Anyone who starts a company should experience fear — of failure, competitors, regulations, and all the contingencies we cannot predict. Burning your ships is not a victory over fear. It is a failure of imagination — in this case, imagining other ways to launch a great company. Try out “fearless” entrepreneurship instead.
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