500 Startups CEO Christine Tsai offers advice to startup founders

500 Startups CEO Christine
Tsai has observed hundreds of entrepreneurs.
500 Startups

• Christine Tsai has worked with hundreds of
  entrepreneurs since cofounding 500 Startups eight years ago,
  giving her some unique insights into what factors lead to
  success.
• She said successful founders tend to have two traits:
  they listen to feedback and they move quickly.
• To succeed, prospective entrepreneurs also have to
  open-eyed about the difficulty of the task ahead of them, she
  said.

Christine Tsai has a lot of experience working with startups, and
that’s given her some pretty good insights on what makes
entrepreneurs successful.

Tsai is the cofounder of 500 Startups, the famed Silicon Valley
venture firm and startup accelerator. Since last August, she’s
also been its CEO, following
the departure of Dave McClure, her fellow cofounder who left
amid
accusations of sexual harassment — accusations that she’s
declined to discuss in much detail.

Launched in 2010, 500 Startups has helped incubate hundreds of
companies and has invested in more than 2,000 total, including
Twilio, which went public in 2016. Over that time, Tsai has
gotten a close-up look at lots of startup founders and seen what
works and what doesn’t and what it’s like to be an entrepreneur.

Successful founders tend to have two key traits, she said in an
interview this week with Business Insider. They’re coachable, and
they move fast.

Listening is one of the keys to success

Among
the startup teams Tsai, right, has worked with is that from
Bombfell, an online clothing retailer.
500 Startups

Tsai said people have this image of the successful entrepreneur
being someone like former Apple CEO Steve Jobs — the “don’t
listen to anybody, I’m always right type of founder.” But those
types of founders usually aren’t successful, she said.

“I feel like those people who are like that, they succeeded
despite being that way, not because they were that way,” she
said.

That doesn’t mean successful entrepreneurs need to be
ultra-congenial or acquiesce to every suggestion made to them,
Tsai said. But they do need to be open to suggestions.

“They do listen,” she said. “They do take the feedback from
customers, from employees, from investors.”

Moving fast is also crucial

Successful startup founders also move quickly, whether it’s
launching new products or putting new strategies in place — or
learning from mistakes, Tsai said.

500 startups meets frequently with the founders of companies in
its portfolio to check in with them about how they’re companies
are doing and how things like fundraising are going, she noted.
“It’s always a bad sign if they say they’re going to do
something, and then a week later, two weeks later, they still
haven’t done it,” she said.

Successful entrepreneurs have to be careful not to be rash or
reckless, she said. But they also have to avoid stalling and
overthinking things.

“It’s a very fine balance, of course,” Tsai said.

But founders than succeed have a very acute understanding that
they’ve got to move as quickly as possible.

“You have a very limited runway either in terms time [or] cash,”
she said.

It’s important to be clear eyed about the task ahead

Twilio
CEO Jeff Lawson in 2016 at the New York Stock Exchange on the his
companies first day of trading. Twilio is one of the most
prominent companies to have been backed by 500
Startups.
Reuters/Brendan
McDermid

Tsai also offered some advice for prospective entrepreneurs:
Understand what you’re getting into.

TV shows and news reports tend to romanticize the life of startup
founders, particularly the super-successful ones. But founding
and running a startup is usually anything but glamorous, she
said.

Most startups fail. Many entrepreneurs are trading a stable,
high-paying job for an uncertain, lonely, and stressful
existence.

And the payoff — if there is any — usually only comes after years
and years of hard work.

“It’s really sucky … it’s really hard,” she said. “I definitely
do warn [entrepreneurs] about that.”