How to avoid failure as a second-time founder

We all know conceptually that starting a company is hard. Conversations with Christian Lanng illustrate the reality very vividly.

How to avoid failure as a second-time founder

Of all the conversations I’ve had with founders recently, there’s one that sticks in my mind. It was with Beyond Work’s Christian Lanng, whose $2.5 million pre-seed round Moonfire recently led.

We’re excited about Christian’s vision for a platform that uses AI to transform the way people interact with workplace software. What made our conversation unique was that this isn’t his first startup. Christian also co-founded Tradeshift, the world's largest business commerce platform with more than 1 million customers that has been valued at a multi-billion valuation.

Throughout most of my VC career, I’ve focused on first-time founders – spotting talented individuals, being the first to invest, and nurturing them as leaders. The best ones have bags of passion, a critical mind, and feel there’s no other path for them than to be a founder. Christian has all of that, but because of his experience our conversation was much more intimate. We talked about what we’d learnt from our time in startups, the mistakes we’d made in the past, and how we’d do things differently next time.

It hasn’t all been easy for Christian. As he explains in a very frank discussion with Harry Stebbings on the 20VC podcast, he recently stepped down as Tradeshift CEO after suffering from burnout.

“It's a bit like the frog getting boiled slowly,” says Christian. “You don't see it when you're in it. It took sort of some pretty big reality checks, both on my health and my work that made me realise I wasn’t in a healthy place.”

“I almost died of anaemia. I felt really tired just before the annual sales kickoff so I went to the doctor. When I stepped down from the stage, there was a text message from my doctor telling me to go to the nearest ER immediately. The next thing I knew, I had a bag of blood on my arm.”

I’d encourage every founder to listen to the full interview. We all know conceptually that starting a company is hard, but Christian illustrates the reality very vividly.

Being a second-time founder like Christian comes with many advantages.

First, you have access to prospective employees, customers, and investors. Your network will be full of people who know you, trust your abilities, and believe you can succeed. First-time founders often have less of a track record, which makes it harder to persuade people to back them.

Second, you have experience of scaling a company. As well as understanding the challenges ahead and how to overcome them, you know the mental resilience required.

“There's a chance to make a lot of new mistakes we haven't tried to make before,” says Christian, “but at least I can make them faster and I can learn faster.”

Third, you know how to create a winning culture – not just what you do, but how you do it. Culture eats strategy for breakfast. In many ways, it’s the biggest driver of success.

However, being a second-time founder also comes with risks. While you can often command higher valuations, the statistics show you’re just as likely to fail as a first-time founder. A common mistake is sticking rigidly to the blueprint that worked the first time.

Instead, the secret to success as a second-time founder is to combine your network, experience, and know-how with the best traits of a first-time founder. Embrace the constant process of experimentation – creating something, putting it into the world, and refining it or pivoting based on feedback. Try new approaches where you think you already have the answer. Question everything you take for granted.

“You’ve just got to iterate faster and you’ve got to kill stuff faster,” says Christian. “The very best operators, like [Rippling co-founder] Parker Conrad, are so insane at the iteration speed, and that's why they win.”

It’s clear Christian hasn’t lost the mindset of a first-time founder. As he starts the entrepreneurial journey again with Beyond Work, I’m excited to watch him marry that approach with his learnings from Tradeshift to build something unstoppable.