[F5] The Startup Founder's Toolkit
Build a product, Establish a culture, Hire a team, Sell a product, Serve your customers
Welcome to another Free Friday! Today’s post is the first of a new series I’m doing with Altos Ventures’ Director of Research Nick Chow. In this series, we’ll share five pieces of content, whether they be books, booklets, novels, movies, tv shows, reference guides, or anything else, grouped for a specific reason.
We’re still experimenting with the format of Friday 5s, but for this one we’ve split it up into three parts. If you have any suggestions or feedback, please feel free to share it with us on Twitter, Substack (respond to this email or comment below), or LinkedIn.
Theme: Why we grouped these books together.
Books: An overview and takeaways from each book.
Lore: Who wrote the books, who read them, and how they’ve impacted the business world.
Theme
When we first started talking about books and book canons, our conversations flowed to the skillsets and building blocks for business building. Since we both meet with entrepreneurs and executives on a regular basis, we wanted to focus on areas that we’ve seen them overlook.
These books won’t automatically make you good at these skills, but they are helpful frameworks to get you up to speed with industry standards and best practices — to understand some of the best of what’s out there and jump-start your learning there. Even if you aren’t a founder, we would recommend this list to any business leader, executive, or investor of any company from a two-person startup to a publicly traded Fortune 500 company.
We’ve both stumbled through many of the problems in these books (and continue to still wrangle with these problems!), and we’re hoping that this will help founders think through the motions they need to build:
Build a product that solves real pain: The Mom Test, by Rob Fitzpatrick
Establish a culture: Beyond Entrepreneurship, by Jim Collins and William Lazier
Recruit a world-class team: Who, by Geoff Smart and Randy Street
Sell your product: The Qualified Sales Leader, by John McMahon
Serve your customers: Total Customer Service, by William Davidow and Bro Uttal
Books
#1: The Mom Test, by Rob Fitzpatrick
We’ve seen far too many startup founders who had poured their souls (and all their capital) into building a product, only to realize, too late, that no one really cared. The worst part? They often thought they had done their due diligence — they’d chatted with prospective customers, heard some polite compliments, and forged ahead. But politeness is a hidden minefield for an entrepreneur.
Essentially, The Mom Test is a masterclass in how to talk to customers without being lulled by meaningless praise. Fitzpatrick reminds us that your friends — or even random strangers — might tell you your idea is “interesting” or “cool” just to be nice. Derek Sivers once famously said “money is a neutral indicator of value,” and we can expand that concept to include social capital and time. If no one’s willing to pay, show up, or invest in your vision, that’s your real signal. Fitzpatrick also walks us through the subtle cues and “veiled responses” that hide behind well-intentioned compliments, teaching us to decode whether customers genuinely need our product or if they’re just being polite.
As a founder, your runway — both in funding and in energy — isn’t infinite. You need to find that genuine pain point you can solve, and solve it fast, so you can reach “default alive” (the enviable state where your revenue covers your expenses and you’re no longer living on borrowed capital). It’s not just about hearing “Yes, that’s a great idea!” but hearing “Yes — take my money, time, or reputation because I need this.” The Mom Test teaches you how to ask the kinds of questions that get to that truth quickly, saving you from building a product that gets a thousand polite smiles — and zero actual customers.
Select quotes from the book that stood out to us. See here for more comprehensive notes on The Mom Test.
“I once overheard a founder interviewing someone at a cafe table next to me. The founder mentioned a problem and the guy responded, “Yeah, that’s pretty much the worst part of my day.” The founder jotted something down in his notebook, and then moved on to the next question. What!? It’s the worst part of his day and you’re not going to figure out why? That’s insane. You’ve got to dig.” (39)
When people tell you something’s wrong or doesn’t work for them, they are almost always right. When they tell you exactly what they think is wrong and how to fix it, they are almost always wrong. — Neil Gaiman
"If you get an unexpected answer to a question and it doesn’t affect what you’re doing, it wasn’t a terribly important question. Every time you talk to someone, you should be asking a question which has the potential to completely destroy your currently imagined business." (44)
#2: Beyond Entrepreneurship, by Jim Collins and William Lazier
When Amazon’s stock price crashed after the dot-com bubble, Jeff Bezos invited Jim Collins to give a talk at the company. What emerged was a newfound focus on Amazon’s economic flywheel, and the rest is history.
As with all of his books, Jim Collins reminds us that entrepreneurship isn’t just about breakneck speed and revenue charts, but about building a company that endures. Beyond Entrepreneurship is written in the classical Jim Collins style of a blend of historical anecdotes, leadership examples, and data, and Collins hones in on the bedrock principles of lasting success: a clear vision, genuine accountability, and a culture that nurtures creativity while holding people to high standards.
If we had to pick the most important part, it’s always Jim Collins’ emphasis on people — in particular, it’s the right ones in key seats. He drives home the point that if fewer than 90 percent of those “key seats” (the ones that can make or break the entire enterprise) are filled with folks who are both capable and aligned with your vision, then that becomes your single biggest priority. After all, no matter how groundbreaking your product or strategy is, it’s the people who determine whether your company will stand the test of time.
A passage from the book that stood out to us:
"And yet, ironically, for most companies, it’s rarely the metric first discussed—if it’s discussed at all. However, to build a truly great and lasting company, it must rise to the top. And what’s that metric? The percentage of key seats on the bus filled with the right people for those seats. Stop and think: What percentage of your key seats do you have filled with the right people? If your answer is less than 90 percent, you’ve just identified your number one priority.
To build a truly great company, you’ll need to strive for having 90 percent of your key seats filled with the right people. Why not 100 percent of your key seats filled with the right people? At any given moment, there’s a very high likelihood that at least some key seats will be temporarily unfilled. It could also be that you’ve only recently moved someone into a key seat, and you don’t yet know how well that person will perform in that seat. And in some cases, the demands of a key seat have grown faster than the capabilities of the person in that seat.
What makes for a key seat? Any seat meeting any one of the following three conditions qualifies as key: The person in that seat has the power to make significant people decisions. Failure in the seat could expose the entire enterprise to significant risk or potential catastrophe. Success in the seat would have a significantly outsized impact on the company’s success." (28)
#3: Who, by Geoff Smart and Randy Street
One individual can derail your entire business. Who aims to prevent that from happening by offering a detailed, no-nonsense framework for hiring top talent. Rather than defaulting to “voodoo” practices like gut feelings or “they seemed cool over coffee” vibes, the authors walk us through building a robust scorecard, running deep-dive interviews, and actually closing the hire in a way that sets them up for long-term success. By focusing on tangible track records and cultural alignment, Who becomes a tactical guide to make sure you have the right person for the right role.
We would note that Who is great for hiring for very defined roles where you know exactly what objectives you need them to accomplish (and therefore can draft a scorecard); however, this is probably a bit less relevant in a startup where it's not a priori apparent what roles you need people to do. However, the Who interviewing approach where you really dive deep into their history and prior experiences is still useful for startups, even if you don't have an incredibly well-scoped role.
Select quotes from the book that stood out to us:
"Think of an A Player as the right superstar, a talented person who can do the job you need done, while fitting in with the culture of your company. We define an A Player this way: a candidate who has at least a 90 percent chance of achieving a set of outcomes that only the top 10 percent of possible candidates could achieve." (12)
“Sample questions include: What do you mean? What did that look like? What happened? What is a good example of that? What was your role? What did you do? What did your boss say? What were the results? What else? How did you do that? How did that go? How did you feel? How much money did you save? How did you deal with that?
Sure, it can seem like you are probing a lot, but this is a key step in an important who decision that can affect your entire company. You should be pushing candidates to be as clear and precise as possible by asking "what" and "how" questions.
When you have no idea what else to ask, just say, "Tell me more." They will keep talking. We promise." (77)
#4: The Qualified Sales Leader, by John McMahon
When Mike Speiser (Sutter Hill Ventures Partner; incubated Snowflake and Pure Storage) got an early read of this book, he thought it was so good that he tried to purchase the book rights and limit its distribution to Sutter Hill’s portfolio companies. That’s how good this book is.
The Qualified Sales Leader is a straightforward blueprint for building a top-tier enterprise sales process: from precisely qualifying which stage a deal is in, to training your sales reps and knowing which questions to ask (and which evasive answers should set off alarms).
The book also digs into how to set up accurate forecasts and quarterly business reviews (QBRs) — this matters far more than most founders realize. Often, early-stage B2B founders either haven’t done enterprise sales at all or they only understand it at a superficial level. But at a certain point, you can’t avoid it any longer. Your product-led growth (PLG) company must shift toward product-led sales (PLS). If you don’t build a proper sales engine, your lifeblood (aka revenue) stalls out.
The Qualified Sales Leader highlights those all-too-common sales missteps and teaches you how to avoid them, ensuring that by the time that big Fortune 500 account knocks on your door, you’ll be more than ready to invite them in.
A passage from the book that stood out to us. See here for more comprehensive notes on The Qualified Sales Leader.
"“Some salespeople will find pain, but fewer salespeople quantify pain, and only a small minority will ever implicate pain,” I continued.
“If salespeople never quantify pain, they can’t justify their price point. If salespeople never implicate pain, they never create urgency. They never give the customer a powerful reason to buy now. A reason for them to change their priorities. That’s why so many forecasted deals die a slow death.”
“Time kills all deals without urgency. If you haven’t established urgency, then, as time moves on, the customer believes they can continue to operate without your solution.”" (123)
#5: Total Customer Service, by William Davidow and Bro Uttal
If you are continually throwing your budget at user acquisition while existing customers quietly slip out the front door, you are pouring water into a leaky bucket. Total Customer Service tackles one part of this problem head-on, by laying out a practical, six-stage plan to transform customer support from an afterthought to a genuine competitive edge. Most of us don’t think of support as something to “strategize,” and this book shows exactly how to turn that idea into a real, systematic advantage.
Much of the author’s advice isn’t just about better service etiquette or more training sessions; it’s about weaving customer service directly into product and service design from day one. The book also gets into real tradeoffs: how much to invest in support versus sales versus everything else. But the core message stays consistent: if your customers keep slipping away, you’ll never build a truly great business, no matter how much marketing dollars you pour into the product.
A particular quote from the book that stood out to us:
"The service winners know that customer service is both a potent competitive advantage and a peculiarly defensible one. Because customers perceive service in relative terms, a competitor who wants to beat a company that offers relatively superior service can’t simply play catch-up. He has to leapfrog, to outdistance the competition. However, since providing great service tends to be expensive, leapfrogging can break the bank.
Leapfrogging is difficult because good service tends to be self-reinforcing. In a phenomenon some researchers call the “virtuous circle,” customers that are well served tend to cooperate more in service processes, making it easier and less expensive to satisfy them and to increase their levels of satisfaction. Thanks to the virtuous circle, companies that provide better service have lower service costs and higher service productivity.
They also achieve significant economies of scale and scope. Providing good service usually means investing in infrastructures—branch offices, training centers, repair vehicles, spare parts, and, especially, computer systems that collect data about customers to improve responses to customer needs. Once those infrastructures are in place, the unit costs of customer service keep falling with increased volume, up to the point where infrastructure capacity has to be expanded.
A competitor who comes late to the customer service game is almost certain to have higher unit costs for a long time." (41)
Lore
#1: The Mom Test
The Mom Test was written by Rob Fitzpatrick, a serial entrepreneur and builder of “little businesses.” He was a founder in Y Combinator’s 5th batch (Summer 2007) alongside Dropbox, but wasn’t able to find product-market fit. However, he was able to develop a process for effective sales and customer development as an introverted techie, which evolved into “the Mom Test.” After shutting down his startup, he started a string of little businesses, including miscellaneous tech projects, a card game, and a small education agency. Today, he’s best known for being the author of The Mom Test.
Today, The Mom Test has sold over 250K copies and is taught at universities around the world including Harvard, MIT, and Oxford, as well as a number of global accelerators. Former Y Combinator Partner Eric Migicovsky loved the book so much he gave an entire talk around it, titled “How to Talk to Users,” which was chosen to be a part of YC’s Startup School program (even if you listen to this lecture, we highly recommend reading the book itself). Eric further contributed a testimonial for the book, noting that Y Combinator had been recommending the book to all of its founders.
#2: Beyond Entrepreneurship
Beyond Entrepreneurship was Jim Collins’ first book, published in 1992, just four years after joining Stanford University’s Graduate School of Business. Prior to joining the GSB’s faculty, Jim had managed his wife’s triathlon career, worked as a product manager at Hewlett-Packard, and graduated from the GSB. Before the GSB, he worked as a consultant at McKinsey, where he was based in the San Francisco office where Tom Peters and Robert Waterman ran the research project that later became the best-seller In Search of Excellence, which changed the field of management books and opened the way for further research and publication around excellence in business.
After publishing Beyond Entrepreneurship, Jim continued publishing books, including two of the most influential business books of all time: Built to Last (Jeff Bezos’ favorite business book) and Good to Great (another Bezos favorite—when the dotcom bubble—and Amazon’s stock price—crashed, Jeff invited Jim to Amazon to speak about the book; this led to to Amazon “turning the flywheel” and making it it’s own).
While lesser known than Built to Last and Good to Great, Beyond Entrepreneurship is hugely influential and has remained a business classic, with two champions in legendary entrepreneurs David Duffield and Reed Hastings.
David has shared that when he first read Beyond Entrepreneurship in 1992 (also the year PeopleSoft IPO’d), he was instantly enamored, and couldn’t put it down — the book held the keys to why his previous three companies had stagnated: they didn’t have values. He called his top management to a two-day offsite retreat, gave each of them a copy of the book, and had them define what the company believed in. PeopleSoft was ultimately acquired by Oracle in a hostile takeover for $10.3B, but David started Workday with the same focus on company values and culture ($70B market cap today).
Two years after David first read the book, in 1994, someone gave a copy to Reed Hastings. Three years later, Reed started Netflix, which famously shared a 200 page culture deck with employees and candidates alike (this will be covered in our next Friday 5). Twenty years later, in 2014, when prompted for general advice for young CEOs, Reed recommended memorizing the first 86 pages of the book, calling them “absolutely incredible” and “very practical advice,” sharing that he had re-read the book every single year since he first read it. Today, Netflix is a $400bn company.
#3: Who
Who was written by Geoff Smart, the Founder and Chairman of the advisory firm ghSMART. Geoff studied under the legendary Peter Drucker, and co-wrote the book Topgrading with his father, Bradford Smart, who had helped set up GE’s hiring practices in the 1980s and 1990s and had a consulting firm that practiced and taught the topgrading methods. Who built off Topgrading, and outlines a clear process for making hiring more scientific.
Alpine Software’s Graham Weaver listed Who as one of the five best business books he had ever read, hired a consulting firm to train his firm in the Topgrading framework (which he called one of the best investments they’ve ever made), and said the book and process transformed the way they hire. They also offer Topgrading sessions to all Alpine portfolio companies twice a year.
John Phelan, who previously spent time with Sam Zell, Richard Rainwater, and Eddie Lampert, and architected Michael Dell’s family office MSD Capital, recommended Who when asked about how he found talent. He shared that they actually used ghSmart for senior hires because the way they interview and find people is incredible, and that the book is really good for developing interview questions and really forcing you to define the job, decide who you want in that job, and figure out what are the questions you’ll ask to identify that. Just as Stan Druckenmiller famously tells investors to invest for tomorrow, John Phelan tells operators to hire for tomorrow.
Other fans of the book (and/or firm) include: Wayne Huizenga (Waste Management, Blockbuster, Autonation), John Malone (Liberty Media), Steve Schwarzman (Blackstone), William Johnson (Heinz), Robert Gillette (Honeywell Aerospace), Ken Griffin (Citadel), Alec Gores (Gores Group), Mark Gallogy and Jeff Aronson (Centerbridge), Roger Marino (EMC).
#4: The Qualified Sales Leader
John McMahon wrote The Qualified Sales Leader after serving as the Chief Revenue Officer of five publicly traded enterprise software companies: 1) BladeLogic, 2) BMC, 3) Ariba, 4) Parametric Technology Corporation (PTC), and 5) GeoTel. As COO and Head of Worldwide Sales at BladeLogic, he helped transform the company from a startup to an $872mn acquisition by BMC. At GeoTel, he grew sales to $52mn before the company was acquired by Cisco for $2bn. At PTC, he grew sales from $1mn to $1.1bn in nine years.
Before John published the book, Mike Speiser (Sutter Hill Ventures Partner; incubated Snowflake and Pure Storage), who calls John “The Godfather of technology sales, and credits him with single-handedly changing the way enterprise technology companies sell, got an early read of the book. He thought it was so good that he tried to purchase the rights to the book and limit the distribution to Sutter Hill Ventures’ portfolio companies.
#5: Total Customer Service
Total Customer Service was written by Bill Davidow of Intel in 1989. Bill spent over a decade at Intel, joining in 1973 (five years after it was founded), and left in 1985 as the Head of Marketing. Andy Grove called him “the best marketing person in the company” and personally asked him to stay a few years when he first tried to leave in 1982. After leaving Intel, Bill went on to found Mohr Davidow Ventures.
In December 1992, the month after PeopleSoft IPOed, Founder David Duffield wrote a company memo crediting the company’s success with a focus on customer service, highlighting the company’s original goal of “excellence in customer service,” recommending Davidow’s book as it underscores many of the reasons for their success, and distributed a copy to every single employee. Ultimately, Peoplesoft was acquired by Oracle in a hostile takeover ($10.3bn), but David took this customer mindset to Workday (market cap: $70bn) and then Ridgeline.
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Wrap-up
If you’ve got any thoughts, questions, or feedback, please drop either of us a line — we’d love to chat! You can find us on Twitter at @kevg1412 and @nicholasachow, Kevin’s email at kevin@12mv2.com, or Nick’s LinkedIn here.
If you're a fan of business or technology in general, please check out some of our other projects!
Speedwell Research — Comprehensive research on great public companies including Constellation Software, Floor & Decor, Meta (Facebook) and interesting new frameworks like the Consumer’s Hierarchy of Preferences.
Point in Time — Musings on code, capital, and craft.