A picture of Sequoia's Zoe Hewitt.

How To

June 3, 2024

I'm thinking of starting a company. How do I know if it's the right time?

Sequoia's VP of talent Zoe Hewitt shares her tips for those considering launching a startup

Zoe Hewitt

6 min read

“I’ve worked for several founder-led tech companies and am now considering taking a bet on myself to start a company. What advice do you have for an aspiring founder trying to figure out if it’s the right time?”

Based on the hundreds of career planning conversations I have with tech professionals each year it seems more people than ever are considering starting companies, as entrepreneurship moves from the fringes to the mainstream. Europe’s vibrant tech ecosystem is producing a growing number of founders, drawing seasoned operators from startups, scaleups and increasingly straight from research thanks to the AI boom. Although funding for new ventures isn't as abundant as it once was, an uncertain job market and rapid technology advancements create compelling conditions for aspiring founders.

Having spent over a decade working with early-stage founders, I'm convinced that building a tech company is the best career path for very ambitious, talented individuals to maximise their impact. There are many unsolved, legacy problems that could benefit from applications of new technology — from industrial manufacturing to cancer diagnosis — and an evolving set of consumer needs still to be addressed. 


But not everyone should be a founder, so how do you know if it is right for you?

Truthfully, the only way to know if founding a startup is for you is to do it and live through the experience. That said, as you weigh up the decision I encourage you to consider three core components essential to any founder’s story: purpose, people and persistence.

Purpose: why do you want to start a company?

Don’t start a company just for the sake of it. While entrepreneurship is fashionable, more people have what I call 'operator DNA' rather than 'founder DNA'. It's important to examine your aspirations. The traits and motivations that make a great employee often differ from those that make a great founder.

Founders typically have an irrational desire for outsized impact and will run through walls to build something they believe should exist. They break apart the status quo to bring an alternate vision of the future to life. Founders aren't fazed by the extremely low odds of success; their self-conviction is so strong that they believe the odds don’t apply to them. For them, starting a company is often the only viable career option, because they can’t imagine doing anything else. Ask yourself: how much do you want to solve the problem you’ve identified? There’s a big difference between being interested and being obsessed. It should feel like a raging fire inside you, even if you don’t yet have a clear idea.

If this resonates with you, don't delay. While experience in a particular technology, domain, or sector is valuable, incremental time in a job may not improve your odds of success. It can in fact have the opposite effect — you may become more embedded, and the increasing stakes could heighten the perceived risk of starting something. Likewise, the market opportunity won’t stay ripe for long; someone else will build the product or service you're thinking about. Your unique edge can only be an edge if you put yourself in the game.

Of course, not everyone has the luxury of quitting a job to pursue entrepreneurship. If you're truly motivated, find ways to validate and test your idea on the side until it can become your main focus. Be sure to assess the personal risks relative to the opportunity cost; define your long-term goals and explore the career options available to you for the next three-to-five years. Score each based on factors like ambition, impact, personal growth, and financial gain. Consider the benefits lost by not choosing entrepreneurship.

Often, for those with founder DNA, the long-term career cost of not starting a company is too significant to ignore. As my former boss Matt Clifford (cofounder of Entrepreneur First) observed, even very smart, exceptional people tend to underprice their potential.

People: who can help you?

Founding a company can be lonely and extremely difficult to do solo. Even the best founders rely upon a network of smart, helpful people to bring their ideas into the world. As you embark on the discovery process, I’d encourage you to find both your cheerleaders and your critics. 

People who support your ambition and stretch its scale are highly valuable. This might be a mentor or a former boss who knows your talents well and can help you dream bigger. It could be a willing customer or an investor who has seen many founders build similar companies. Equally valuable are candid individuals who challenge your ideas and your thinking. Find people who can help you tear apart your assumptions as you ideate. Also, don't keep your startup idea a secret; good ideas are common and yours is likely not unique. Sharing it brings valuable feedback and connections to refine it. Ultimately, the real competitive advantage lies in the calibre of the team that acts on the opportunity.

You may not have the resources to hire a team for a while, but leverage your network to create a sounding board of mentors and experts who may later become formal advisors. If possible, find a cofounder. Your network might organically offer a shortlist of potential cofounders. It could be a former colleague or someone you’ve built things with in the past. It may be someone unknown to you. Consider programmes designed to help you meet your match.

Cofounder selection should focus on finding someone who complements your skills, counters your blind spots and solves for missing elements — not necessarily a best friend. If you’re technical and focused on product, look for someone with non-technical capabilities such as go-to-market skills; and likewise if your forte lies in things like setting the vision and speaking to customers, find someone who can help you build. Spend time dating each other (metaphorically!) to see how productive or unproductive the working relationship is.


Persistence: are you prepared for the hard stuff?

In the early days of building a company, everything is a setback and you’ll be close to failure constantly. The relentlessness and resilience required often distinguish the founders with the most potential. Be prepared to talk to a huge number of prospective customers as you validate your problem. You’ll need to dig deep into their pain to develop solid insights. Even research-heavy AI companies are started by founders who understand how their product will improve users' lives. Insight gained through perseverance builds a strong foundation for your product direction.

As you test ideas, gather feedback relentlessly. Pursue value signals over vanity signals. Don’t get hung up on the image of running a company as it won’t look much like one in the beginning — and don’t focus on funding until you’ve collected enough proof points on your idea. Remember, VC funding, PR and team size don’t necessarily mean that you have reached product-market fit. Rather, in the early days you should obsessively focus on confirming that customers really want what you’re building. Persist in going back to the drawing board, as you may need to pivot several times. This could take time, working all hours with lean outgoings.

Lastly, if it doesn’t work out the first time, don't be put off from trying again. Many success stories involve repeat founders who had smaller outcomes before building a better company. Investors like serial entrepreneurs because they bring valuable learning from hindsight and have developed character skills that tend to correlate with success. And if you learn that being a founder isn't for you, having tried only makes you more recruitable.

Starting a company is a discovery journey fuelled by purpose, supported by people, and sustained by persistence. If you have the drive to solve a problem, a strong network, and resilience for challenges, take the leap into entrepreneurship. The only way to know is to start.

Zoe will be answering questions from Sifted readers each month. Have something you want to ask? Reach out at askzoe@sifted.eu.

Zoe Hewitt

Zoe Hewitt is VP of talent at Sequoia.