Ben Doherty, co-founder of Favor and Sunroom, advises early-stage founders to hold off on delegation until they hit product-market fit. Delegate only non-core tasks like admin and regulatory work. Before that milestone, obsess over the core product and aim for the 40% retention threshold that signals real demand.
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When you're working with an early team or hiring an early team, how do you delegate who does what? And that's a tough question because I think every team is different. You really need to have a deep understanding of what is sort of the, what are the specialties of the guys or gals on your team? For us, it was something like, it became very obvious what I was gonna be good at compared to what my co-founder Zach was good at. But I'll tell you, for anything that was really important, we always worked on it together. And I think one piece of advice I'd give on that is don't feel like you need to delegate so much early on. One of the advantages of being an early-stage nimble startup compared to a big company is you can all focus on just one thing at a time. And so if you're trying to delegate too much, or what I've heard called, once our company became big, we'd say all the time, oh, let's divide and conquer and do those things. You actually don't wanna do that when you're a team that's under 10. I mean, even for me being a second-time entrepreneur this time, and I have a very, very, very talented team, if it's something that I know is really important, I'm obsessing over that too. And so I think as far as the whole early-stage delegation, I'd almost say delegate less because you never know when you're going to be digging into something that you're going to be like, Wow, I just discovered this huge thing. And that's always what I've found. When I try to delegate things too early on, sometimes I might miss out on some big breakthrough that I would've found if I had just done it myself. Now that being said, you really need to trust your co-founders to be able to dig into things so that you can save time because there's only so much time in the day. But if you have anyone starting to work for you, And please, the last thing to do, don't get a team of 10 interns and think that you're gonna delegate things to them and you're actually gonna take your next step forward. For the most part, you need to get to a point where you're almost delegating nothing all the way until you find product market fit. Who knows what product market fit is? Does everyone know what that is? No one? Okay, I should definitely define that. So product market fit is usually the key moment when you actually move out of seed stage into being able to start scaling because it basically means that you've built a product that whatever customer you focus on actually wants. So this is talked about in Eric Ries' Lean Startup. Who's read Lean Startup? Okay, like half the group. If you guys want to, I mean, if you guys are seeking to start a company, you should read, I mean, that's a really good book to start with. It's just, that's a good place to start. And it helps you not waste time. That's a really good book. But basically what they talk about in that book is that product market fit is sort of this key moment where The way that you would define it is when 40% of your customers feel like they can't live without your product. If you can't get to the point of when 40% of the people who are using you, let's say you just failed, you went bankrupt or whatever and you didn't exist, if they're not upset about that, if they can just switch over to something else and their lives don't change, you haven't found product market fit yet. So up until that sort of key moment when you've reached product market fit, you should be delegating very little. And unless it's something that has nothing to do with finding product market fit. Let's say it's like, I don't know, some sort of administrative work or maybe you work in a regulated market or something like that. None of those things, by learning how to file some paperwork with the state, that's not going to help you find product market fit. So maybe stuff like that you might be able to delegate, things that don't matter in my mind. But the only things that matter at seed stage is you getting closer to having your product fit whatever your target market is, whoever your customer is. If you don't have a point where those 2 things match, that should be what you're obsessing over day and night. And as far as on the fundraising side of things go, you should essentially just be trying to use the least amount of money possible. Give the least away, give the least amount of your company away up until you get to product-market fit. Because if you give too much of your company away while you're trying to do that, by the time you find product-market fit, which allows you to actually start scaling and growing the company, you might not be able to get really good investors in because you've already given away too much of your company and now they're not going to be interested.
