Given the current state of the markets, our team at LTSE sat down with Seedscout Founder Mat Sherman to unpack how early-stage founders can successfully thrive in the current downturn.
In our conversation, Mat highlights four distinct leverage points to focus on. Let’s dive in.
“A great mission plus great execution equals solid growth and retention at scale. With the right ingredients in place, startups will thrive, even in a down market.”
1. Distill Your Company Mission
Having a crystal-clear mission statement strengthens your brand since it helps employees remember why they chose your company in the first place.
That clarity can help employee retention even as they’re faced with other job offers. It can also motivate team members to grind, even when the founder isn’t around to set an example.
Missions are deeply personal to each founder. In his words, if a mission is true to the founder, only the founder can really speak truth on it. He points out that successful founders need to ensure that their mission comes from within, and isn’t inspired by another company or another founder. Anything that a founder borrows from somewhere else can weaken their mission.
2. Build a Human-Centered Team
Leaders must present themselves as human beings — not just cogs in the industry machine.
This can look like being vulnerable about shortcomings and, again, welcoming, accepting, and implementing feedback on a regular basis.
At the same time, the founder must show up each day to execute their role well and inspire faith.
Without basic trust, your team may believe their current leadership isn't fulfilling their side of the bargain and turn toward a new company with a more reliable exec team.
Mat admits that he's better at founding businesses than running them, so he's discovered the unavoidable pressure points that come with keeping a company afloat.
3. Stay on Top of Your Bookkeeping
Early-stage founders are usually absorbed in realizing their vision and sharing it with the world.
They're not obsessed with the numbers. In Mat’s case, he admits his accounting software setup was a mess for a while.
On one occasion, an investor was interested in the company and asked to see the numbers. Mat sent along the info, despite the chaos, because he saw no other option.
The state he sent them in likely impacted the investor’s eventual decision. That experience was a wake-up call: He knew he’d have to keep his books diligently organized and updated.
Within the tooling space, Mat recommends Bench and Pilot, both of which work closely with early-stage companies. He adds, though, that at a certain stage of growth, these bookkeeping and finance functions should be taken in-house. However, at the earlier stages, founders can get moving faster by leveraging streamlined tools to keep their books up to date.
Mat also stresses that it's not embarrassing if you don't know how to manage the numbers yourself right off the bat. Plenty of resources exist to help you learn or outsource the problem.
In all, good bookkeeping is critical because, if a founder can’t sell to an investor, they most likely can’t sell to a customer or an employee either.
4. Play to Your Natural Strengths
Founders should play to the strengths of their personalities.
The industry stereotype has long been that founders are outgoing, energetic, and charismatic, but Mat affirms that quiet or reserved people can and have also succeeded.
Competence is ultimately more meaningful than a zesty personality.