Seven unexpected lessons I learned on my journey from VC to founder
In the past 100 days, Jessy Wu has learned things about being a founder that she says could have never learned as a VC.
For the last five years, I’ve been an investor in early-stage companies. For the last three months, I’ve been building my own. In this article, I share seven lessons — concepts I intellectually understood as a VC, but didn’t feel deeply in my bones until I became a founder.
It’s been just shy of 100 days since I wrapped up my previous job at AfterWork Ventures and went all-in on building Encour – a strategic communications agency emboldening clients to command their narrative.
I’ve never worked so hard, and I’ve never had so much fun with work. Mark Twain said, “Find a job you enjoy doing, and you’ll never have to work a day in your life”.
I think the opposite is true — find a job you enjoy doing, and you’ll never not work a day in your life.
Of course, Mark Twain didn’t have to hit Inbox Zero.
I’m proud of what we’ve achieved in our first quarter. We launched the business, delivered campaigns for six clients, and accrued over $50,000 in revenue over the quarter. We also managed to stay in the black — Q1 was overall profitable, despite establishment costs such as brand design, legal, and trademarking. We’ve re-invested all our revenue into growth and grown the team to seven people.
In the past 100 days, I’ve learned a few lessons. These are concepts I intellectually grasped as a VC, but didn’t feel deep in my bones until I started building something of my own.
Being a solo founder is blimmin’ lonely
Not because you don’t have anyone to talk to, but because no one cares about your business the way you do, and no one is responsible for the business the way you are.
The highs are higher, but the lows feel existential
Particularly in the first few weeks, there were many highs. I remember when we signed our first customer, delivered our first successful campaign, and received our first referral from a happy client. I felt elated, vindicated, and unstoppable.
But all highs have an inverse — when we churned a customer, when a campaign didn’t go to plan, or when someone took a swipe at us. These lows can be crushing — they can feel personal and existentially threatening. I’ve learned the importance of putting both into perspective and basing my judgement on how things are going on a ‘moving average’ of the last 30 days.
Not all revenue recurs and that’s okay
Monthly revenue (MR) is not the same as monthly recurring revenue (MRR), and MRR times 12 is not the same as annual recurring revenue (ARR). SaaS investors have perpetuated a paradigm that only recurring revenue is worthwhile or meaningful. But this is not the case — if your gross margins are high and your cost to acquire customers is low, you can stack non-recurring revenue to build a large business.
You can generate revenue while you iterate your product
As a bootstrapped founder (with a mortgage), I needed to replace my previous salary, urgently. Although I felt like an impostor, I started charging a five-figure monthly retainer straight away. For initial clients, my product was my labour. I was determined to add value, and I threw the kitchen sink at the first two campaigns I delivered.
Luckily, both campaigns landed strongly and drove great business outcomes for clients. Generating revenue with a high-touch ‘services’ version of your product allows you to cover your costs while you learn about your customers’ problem, the market dynamics, and prove that you can create value.
You can tell very quickly who’s going to be a good customer
Customers who reply to emails quickly and make decisions quickly also sign contracts quickly and pay invoices quickly. These same customers rarely negotiate on price, they trust your expert guidance, are generous with positive feedback, and actively promote you to their friends. Maybe I have unusually good customers, but I’ve found all these traits and behaviours are correlated.
The more distinctive your bat signal is, the more qualified your leads are
I’m a proud comms industry outsider and Encour espouses an opinionated and irreverent perspective: I believe most comms professionals are too risk-averse. I believe declining to comment is almost never the right thing to do, either you’ve done something wrong and you should take accountability, or you’ve done nothing wrong and you should proactively command the narrative.
I love using polarisation to rally your tribe — winning friends by alienating curmudgeons. This spiky stance means I’m not everyone’s cup of tea; I know I’ve already ruffled some feathers! But that’s alright because I don’t have the capacity to work with everyone. My bat signal resonates with clients who are a good fit for me. When they land in my pipeline, they’re already sold.
You don’t need to raise capital to grow a large and meaningful business
Some companies, like deeptech companies or AI foundation models, need a lot of capital upfront – and deliver huge returns if successful. But many companies have a choice – to raise external funding, or to fund growth with revenue. Some investors have perpetuated the notion that bootstrapped businesses are small businesses, but they don’t have to be!
The revenue we’ve contracted for Q2 represents 100% QoQ growth compared to Q1.
As the saying goes: “In theory, there is no difference between theory and practice. But in practice, there is”.
In the past 100 days, I’ve learned things about being a founder that I could have never learned as a VC.
I’m excited for the lessons that I know are ahead — and to keep sharing them with you! Starting today, the Encour team will be writing a weekly column in SmartCompany. We’ll be sharing our insights about communications and marketing, as well as our learnings from building a company.
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