Lost and Founder by Rand Fishkin: Review & Personal Thoughts


I started this blog with the good intention to do book reviews frequently. I’ve since found, however, that my spare time to read is always so limited and I get bored by most books so often that I’ve totally failed here. Ouch.

One book that came out very recently, however,  finally broke this pattern. It was so good that I made time to finish it in less than 3 days.

What is this mystical, magical book I’m referring to? Lost & Founder, written by Rand Fishkin. I was excited about it from the first day I heard it was coming out, and I really wanted it to be amazing.

It was.

How Does It Compare to Other Startup Books?

Long story short: it is amazing. I know that we already covered that, but I wanted to say it again.

From my point of view, it’s the best book about startups out there. Everyone doing or considering launching a startup of any kind should stop whatever they’re doing and read this book right now. It will be the best way to prepare yourself to your new life, and prepare for certain obstacles long before they’re even on your horizon.

This is significant because all the other books I’ve read that discuss startup life had– to put it delicately– sucked. They were either 1) reinforcing the stereotype of Silicon Valley as the perfect place to start a company where everything is perfect, people throw money at you, success happens overnight, and unicorns poop rainbows, or 2) they were excessively negative and falling under the “disgruntled employee revenge” category, which no one should trust or want to hear from.

Disrupted: My Misadventure in the Start-Up Bubble by Dan Lyon is a perfect example of the latter. It was engaging and well-written, but I hated it. It’s a ferocious attack on a great company (Hubspot) with arguments that are laughable at best, and show how little the guy understood of the company he was working for.

Lost & Founder, on the other hand, is the perfect narration of how startup life as a CEO really is. In my experience as CEO of AdEspresso, I can relate to pretty much every chapter of this book and I agree on 99% of Rand’s takes on startups, marketing, funding, and more. They align with my experience.

Originally, I was going to write a chapter-by-chapter Lost and Founder review, because every single chapter deserves to be read. That being said, I didn’t want to spoil too much of the book, so I just want to share a few of my favorite chapters and how they related to my experience as a CEO of a startup.

Chapter 2: Why The startup World Hates on Services (and Why You Shouldn’t)

If you talk with anyone who has had any part in the startup world, they’ll tell you to stay away from services because they’re not scalable. A graphic designer can’t automate what they do, and a freelance writer will always have to write the content they’re creating. Supposedly, Venture Capitalists will run from any startup that heavily relies on services where revenue is concerned.

This isn’t entirely without merit; services are a nightmare to scale. This is very true, and anyone making the transition from a service-based-business to a more traditional SAAS business model will have the urge to kill the service aspects.

While this is true, services offer big advantages at the beginning of your business. Fishkin argues against hating on services in this chapter. I’m inclined to agree for my own reasons, including:

  • It’s safer. Based on census data, 47.6% of service based business survive the first 5 years. Only 25% of startups survive the first 5 years. Frankly, I think this is likely an optimistic set of data.
  • Starting from services is a great way to fund the development of your product-based business. As you may have guessed from my position, this is how we funded AdEspresso.
  • Consulting customers are great to give you directions and feedback on what your product needs to do; you’ll really get to know your target audience and understand what needs and pain points they need filled.

I can personally confirm all of these points. I had a consulting business for more than 12 years before starting AdEspresso. The consulting business was critical to fund the company in the early stages and to understand what product we had to build.

Nowadays inside of AdEspresso, we still have consulting services where a great team of marketers helps SMBs achieve their advertising goals. Every time we have to make a product decision, our product managers will go talk with our consultants to understand what feedback they’re getting from the field to validate our roadmap.

Chapter 3: Great Founders Don’t Do What They Love; They Enable A Vision

This was a fairly short chapter, but it offered a big pearl of wisdom. I think the title is self-explanatory and if your startup will survive long enough you’ll soon realize how true this is.

The experience of being the CEO of a startup is very often far away from what you thought it would be. I love coming up with ideas to solve problems I’m experiencing, I love building a product out of these ideas and I love promoting products.

Most of these things are part of a CEO’s job, but actually completing the tasks will be in someone else’s hands. Instead of executing them directly, which you won’t have time to do, it will just be your job to make sure that they actually happen.

When bootstrapping with your co-founders, you’ll likely find yourself taking care of everything, from setting the vision to coding the product, designing wireframes, writing blog posts, and so on. That’s stressful but also a lot of fun (at least from my point of view).

As your startup grows and you hire more people– who are ideally more qualified than you– your role will shift from doer to enabler. You’ll find yourself setting the company vision and making sure other people are enabled to make it a reality, performing tasks you would have probably never thought about when you started. These include:

  • Fundraising to make sure you can survive long enough to make the vision a reality
  • Spend countless hours interviewing candidates that are a good fit for your company
  • Managing people, from 1:1 to company culture, to reporting structure and so on
  • Working out processes to make everything efficient over and over again
  • Handling crisis (there’s always one)
  • Making sure everyone is motivated and aligned with the company vision
  • Solving countless other problems that will change every time you thought you’re done

So founders who love marketing and working with clients may not be running those campaigns for long; instead, they’ll be managing others who are handling the growing number of accounts.

Chapters 6, 7, and 8: Raising Money

There are three different chapters that talk about raising money for your startup. These are:

  • 6: Don’t Raise Money for the Wrong Reasons or From the Wrong People
  • 7: So You’ve Decided to Ask Complete Strangers for Millions of Dollars
  • 8: Founding a Top 5% Startup May Not Make You Rich

In case you’re outside the startup world at this particular moment, I’ll let you in on a little gem of knowledge: comparing how much you’ve raised for your startup is like Silicon Valley’s equivalent of bragging about the size of your penis. It’s a weird obsession, with too many startups focusing on raising money as their end goal, instead of focusing on actually building a business that creates real value.

These three chapters… read them carefully. There’s a goldmine of information about how to go about your next round of funding, and what to do with the money once you have it. Rand not only explains how the process works, but also all the non-written things you’re signing off to someone else when raising the funds.

You’ll also find a very clear explanation of the VCs’ business model, how they work, what they expect from you, how they’ll interact with you when things are going great and how things will change when your business stop growing.

Another important take away from my point of view: understand what you want.

Want to build something huge? Ok, raise a ton of money and build the next unicorn.

Just want to get rich? With dilution that comes with raising a lot of money, preferred stocks, liquidation preferences and so on, you could probably get richer selling your company early on at a lower price but with a higher percentage of the stocks than going IPO after 10 rounds of funding when you own less than 4% of the company.

Understanding all of this is important because everyone has different goals when it comes to their startups.

Since Rand is an incredibly smart guy, he took all of this a step further when creating his new company, Sparktoro. They raised money with a very interesting and unusual legal structure and they made all the documents open source. (Full disclosure: I’m a small investor in Sparktoro, but this review is not biased in any way.) 

If you’re interested in money when it comes to startups, I’d also recommend reading the story Wistia just published about how and why they refused to sell the company and get rich and instead raised $17M in debt and buyed out their investors. Lots of great nuggets of information in it.

Pros

In case I didn’t manage to get this point across, this book is exceptional. It’s well-written and is rich in useful, actionable information.

There are a few other key points that really make this book something uniquely special:

  • Rand’s transparency in the book is exceptional. He doesn’t hold back on sharing the ugliest parts of his journey, which makes the book more honest and more valuable.
  • There’s so much good first-hand advice on startups and marketing from someone who has done it well once (and is doing it now again).
  • It’s extremely enjoyable to read; I thought it was a page-turner, which isn’t something I say about many books.

Cons

The only downside to this book is that it’s based entirely on Rand’s specific experience. While this may seem obvious, it’s important to note that every startup’s and every CEO’s experiences will be different from everyone around them. Take things with a grain of salt in that regard, as they’re not always black and white, and you could achieve the same results through many different paths.

Key Book Details

My Vote: 9

Author: Rand Fishkin
Price: $14.99 for the Kindle version
Purchase: Amazon Kindle
Pages: 320
Publication Date: April 24, 2018

Lost and Founder Review: Conclusion

That’s it for this review. If it wasn’t clear yet, go ahead and buy it and read it immediately if you have any interest at all in the startup world.

Interested in what’s coming next? It’ll likely be 10x Marketing Formula: Your blueprint for Creating ‘Competition-Free Content’ That Stands Out and Gets Results” by the CEO and Co-Founder of CoSchedule, Garret Moon. These guys are taking inbound marketing to the next level, so I’m sure this book will be extraordinary.

What do you think of our Lost and Founder review? Have you read the book? What were you biggest key takeaways? Share your thoughts in the comments below, and let me know if you have another book you’d like me to review! 

1 thought on “Lost and Founder by Rand Fishkin: Review & Personal Thoughts”

  1. Max, thanks for this review. I didn’t know this book and immediately bought it after reading the post.

    As always when it comes to Rand Fishkin, this book is pure gold. Read it in less than a week and really related to his experience.
    I agree with you, this should be a mandatory book for everyone starting a company!

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