On our In Depth podcast this week, we talked to a first-time founder we think has one of the more underrated stories in Silicon Valley. Read the Review article in full or listen to the new episode for a deep-dive into leadership lessons learned the hard way.

The First-Time Founder's Guide to Learning Everything the Hard Way

Like any startup founder and CEO, Steve El-Hage has experienced incredibly high highs, and equally dramatic lows in building Drop — sometimes in just the span of a week or two. El-Hage dropped out of Stanford to become a first-time founder at 22. In just the third week after launching a "janky website," the company doubled its weekly revenue to $50K. Investors took notice, and despite the founding team's lack of Silicon Valley connections, Drop (then called Massdrop) quickly closed its first fundraise.

But shortly thereafter, those promising early wins toppled off the cliff. “We did zero in revenue for eight consecutive weeks and we couldn’t figure out why. We basically had to go to this group of investors and say like, ‘We promise we didn’t trick you guys,” says El-Hage.

Fast forward eight years, and you’ll find that Drop has since achieved a special alchemy of data-driven design and community validation to build products that people actually want. (Read our Review story from a few years back for more on their unique development process.) “Now we’re able to make and launch over 200 high-quality products at a time. 98% of our products launch successfully and pre-sell their initial production run,” says El-Hage. “The company is about 100 people and we've scaled to about $100 million a year in revenue. Everything's organic, we're profitable and have been generating positive EBITDA for a little bit now.”

Anecdotes like this prove El-Hage may just have one of the most under-appreciated founder stories to learn from in Silicon Valley. From rescuing flailing revenue, to executive hires that miss the mark and facing team-wide burnout, as El-Hage puts it, he's had to "learn everything the hard way."

In this exclusive interview, El-Hage picks his head back up and candidly reflects on the eight-year-long journey so far, sharing plenty of wisdom for current and future founders looking to build companies that can go the distance.

You can read the story in full today on The Review, but if you'd rather pop in some headphones and listen to El-Hage's frank reflections on company-building, check out the latest episode of In Depth. Either way, we've included a quick preview of the tidbits El-Hage shared in our interview below.

Thanks, as always, for reading, listening and sharing.

-The Review editors

Here's a sneak preview at some of the lessons that stick with El-Hage:

Lesson #1: Listen to users to resuscitate revenue that's flat-lined. "A lot of people that design products are in the mindset of, 'I will magically imagine some perfect product and I will pass it down as a gift to my users.' But that’s very rare. It’s usually the other way around — existing users talk about what they wish brands would do, but that feedback isn’t incorporated into the product design."

Lesson #2: You're going to screw up key hires — it's all about how you course correct. “One of my biggest mistakes as a first-time founder was executive hiring. It took us awhile to realize that the most important thing was that we needed to hire people who had already done exactly what we needed them to do — not a similar thing on a different scale."

Lesson #3: When it comes to advisors, bring more on and dedicate more time with them. “A lot of people don’t structure their advisors correctly. Most of the time you have coffee with them once, you tell them what you’re up to, they tell you what they did, and then you maybe talk to them once or twice again – that’s it. I would meet with my advisors for maybe 20 hours a week on average for a year — maybe even more in some cases. Our target was three advisors per major function."

Lesson #4: Proactively manage burnout for yourself and your team. "One of the biggest risks to company performance is founder burnout. It’s the CEO’s job to present and communicate in a certain way our commitment and focus and excitement. If that’s not lined up, there’s going to be a lot of ripples, and it can be dangerous."

Lesson #5: Spot long-term problems, make unpopular calls, and stick to your guns. "If we’re going to go under, it wasn’t going to be because I didn’t do what I thought we needed to. Or I didn’t do what I thought was right because it was too hard or other people might not have liked it."

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