Entrepreneurs are a source of inspiration to most of us. They don't have to be an Elon Musk or Mark Zuckerberg to deserve our admiration—they don't even have to be successful, if you ask me. Something about people with the guts to chart their own way and working to bring their ideas to life has always fascinated me. This is why I have been drawn to reading books written on or by entrepreneurs as of late.
The book we featured last month, Delivering Happiness by the late entrepreneur Tony Hsieh, was one such look into how entrepreneurs deal with the immense challenges they take on, some of which they themselves seek. The book we feature today, Founder's FAQ: The Predictable Journey of the Ups and Downs of a Startup by İlker Köksal, is a similar attempt at shedding light on what it takes to succeed as a founder in today's startup environment.
The book starts with Köksal nudging his readers into engaging in some kind of soul-searching before founding a business. Throughout that particular section, you feel as if Köksal is right in front of you, staring you right in the eye and questioning whether you have what it takes to succeed as a founder. He reminds you that you won't be going too far without first being honest with yourself about the core assets you bring to the table as a founder. Do not solely rely on your subjective evaluation of yourself but double-check by asking your colleagues to grade your skills and see if both evaluations are consistent, he says. It certainly is a good piece of advice; founding a business on wrong assumptions seems like a surefire way of dooming yourself to failure.
It is not without reason that Köksal is such a passionate champion of soul-searching before rolling up the sleeves for a startup. A startup founder will no doubt run into some setbacks during his journey. Money alone cannot motivate a person to overcome all those setbacks—there has to be a bigger idea he must be chasing. A founder should have convincing answers to questions about why he is building a startup or developing that particular product. Because, when times get tough and money is not there, he will need something to hold on to. The two critical questions are:
- "Is there a market for your product?", and
- "Are you the right person to build it?"
Ambiguous answers short of a resounding "yes" to these two questions should be considered red flags. Once you are sure that you are the right person for the job, determining the total market size, developing a sound business model, and following up with a long-term business plan are the next steps.
Being a computer engineer and a serial entrepreneur, Köksal boasts a proven track record with two startups he founded—one of them bootstrapped and the other one VC-backed. Therefore, his words carry a lot of weight. Not only that, but he also brings in the wisdom of CEOs, entrepreneurs, and institutional investors after the discussion of each topic throughout the book. This gives the readers a chance to see how business leaders think.
The book is full of deep insights and words of wisdom distilled from the experience Köksal and the professionals he interviewed share with us. But the chapter on the fundraising process stands out the most among all the rest. It sheds light on how that magic moment that grabs the headlines when a startup receives a seven- or eight-figure investment comes about.
Köksal offers us a glimpse into what goes on behind the scenes for a startup during its efforts to raise venture capital and covers a wide range of topics related to raising funding. He helps founders form a sound strategy, starting with how to determine the right time to start seeking funding and then moving on to other topics such as how much funding they should seek or what angel investors or venture capital firms look for at the funding stage, etc. Köksal's emphasis on the implications of the equity dilution and the need to keep an eye on how the cap table shapes up is very instructive for inexperienced founders.
I think this is the section where Köksal's interviews with industry professionals really pay off. Institutional investors and venture capital firms have a different mindset than friends and family, who usually support you with pre-seed funding. Therefore, raising venture capital is an entirely different beast. Picking investors' brains on different aspects of a subject as complex as raising money puts things in perspective for the readers. Really neat stuff.
Founder's FAQ is a much-needed reality check for prospective founders. This is a very clear account of the challenges awaiting them during their startup journey. Actually, it is a breath of fresh air among cliché-laden Ted Talks or Medium posts that don't tell the audience much more than "You can do this, just believe in yourself!"
Founder's FAQ brilliantly lays out the conflicting goals a founder will be pursuing: The need to establish a certain culture, on the one hand, but keep things fluid and nimble at the same time, on the other; having to set a vision for the employees to follow, on the one hand, but avoid micromanagement, on the other, or the need to seek funding, while trying to avoid risking excess dilution of founder shares. It serves as a forewarning to the founders, teaching them about the tough decisions they will have to make at every stage and showing them that this will be no walk-in-the-park.
No two startup journeys are the same—your own journey as a founder will come with its unique challenges. Having read Founder's FAQ, though, you will stand a much better chance to overcome them.