The 1,000 Day Survival Guide For Startups – Courtesy Sanjay Mehta, Angel Investor

The 1,000 Day Survival Guide For Startups – Courtesy Sanjay Mehta, Angel Investor

Success is the sum of small efforts, repeated day in and day out.- Robert Collier

Almost every day a new startup is born, almost every day some entrepreneur somewhere gets the idea to disrupt something. But how many of these ideas survive beyond the first year or the second year or the third year?

As per the  Startup Genome Report Extra on Premature Scaling – a project co-authored by Berkeley & Stanford faculty members with Steve Blank – a Silicon Valley serial-entrepreneur and academician, and 10 startup accelerators, which analysed 3,200 high growth web/mobile startups, within three years, 92% of startups failed.

Let that sink in-92%. So technically speaking, only 8% of startups are effectively able to survive in the first 1,000 days since their inception.

sanjayThis brings the realisation that how the first 1000 days – the formative days of the startup are so crucial. How fragile are things in that period when entrepreneurs are nurturing their ideas. Sanjay Mehta, the serial angel investor who has invested in 60+ portfolio companies states, “The highest mortality that we have seen for a startup is in this period wherein it becomes difficult for them to grow beyond the first year, the second year, and finally the third year. If they are able to survive for 1000 days, they are built to last.”

But how do you build that sustainable startup in the first 1,000 days? In a talk with Inc42, Sanjay spilled the beans on what startups should focus on and what they should not focus on to survive beyond that crucial period and end up in the list of those 8%  startups who are built to last.

From Dreaming To Flying Off The Ground

A startup’s journey from the first year to the third year is a heady mix of dreams and delivery. Ideally the first year is all about dreams, the second is all about getting on the ground, and third is all about flying off the ground.

Sanjay explains that in the first year, it’s all about vision, excitement, and enthusiasm. The entrepreneur goes out and hires his first team, ideas get pitched to investors; hence, it’s all about discovery and exploration across all facets. The entrepreneur tries to the idea to his friends and family.

“The first circle that you have is what you engage with in your first year while you are building your company,” he says.

In the second year, comes the next step in getting across the customers, servicing, building the product, and getting beyond the first circle of connection. This involves going and reaching out to the right set of customers and investors, getting the first round of funding, getting to know the risks and challenges, and most important – the competition.


He explains, “By the second year, you clearly know what you are up against. You will come across your competition and devise ways to tackle it.”

The second year is also when one starts looking at numbers, how well the company is doing, what are the opportunities that can be explored. In case the founder is considering pivoting, by the second year the founder is clear enough to make that pivot as well. Consequently, the founder is open to trying out alternative stuff in case things didn’t work out in the first year. Hence, the second year becomes a crucial year for startups to get their act right. It’s literally shape up or ship out!

In the third year, typically a startup is expected to have achieved its product market fit in terms of pricing, market sizing, out of the n-number of options available. It is also expected to have a strong founding team and now the challenge is to build upon the next level of growth. Typically this is also the year when startups look to raise their next round of funding – Series A or B.

Adds Sanjay, “The whole idea in the third year is about scale – how do you go into the market beyond your network of connections. How do you move into unknown markets and expand geographies?”

So, ideally, if you have made through the first year of dreaming to the second year which is all about getting on the ground, in the third year it is about flying off the ground.

But what are the most important things you should focus on in these 1,000 days? Sanjay enlists the following things you should literally swear by to survive! The idea is if you can survive the first 1,000 days, then you are built to last.

What To Do In The First 1,000 Days



  • Be frugal: Save as much money as possible. While you need money to expand business, but be frugal. Spend minimally on fancy offices, designer logos. Being frugal with resources is important. There’s a huge amount of maturity required to digest money. If you don’t respect money, hardly anything can help you. Don’t waste valuable resources by aping large companies. Customers are not going to flock to you because of fancy offices!
  • Focus:In the first three years, your company should get your free time as well. So, in case you are working another job, you have to quit it as riding in two boats doesn’t make sense. Focus exclusively on your business.



  • Meet entrepreneurs:Get yourself aligned with other entrepreneurs who are sailing the same boat. So build friendships with entrepreneurs who have just started up or who have been there, done that!
  • Execute: The first 1,000 days are all about execution and less about strategy. The idea is to get your hands dirty. Get a team which can execute, execute, and execute and not to come up with a grand plan or strategy. It doesn’t work in a startup world where you pivot and change strategy so frequently. He adds that one should not focus on activity but on results. As these 1,000 days are very crucial, it’s important to create the right metrics to track outcome. So one has to bring commitment to the result in every aspect of one’s business.
  • Find your mojo: The first three years is also the time to set the tone for organisational culture – how do you want your organisation to be seen.  What are your obsessions that you would like to bring in the culture of the organisation? For instance, a few entrepreneurs are extremely obsessed about the brand while others tinker with product quality or design. So you need to find your mojo in the first 1,000 days.
  • 80/20 rule: In the first 1000 days, the 80/20 rule applies. 80% of your initiatives will fail and 20% will work. You need to figure the 100 as well as the 20 worked in your favour. It is about discovering your own strength and weaknesses.




  • Believe: You need to have your self-belief in what you are doing, otherwise you won’t be successful. It’s like building your own destiny – so unless you believe it; you will never be able to achieve it. Being in business is like running a marathon, not a sprint. In the first 1,000 days, you start with small steps, then get to running slowly, and then comes the marathon.



  • Get your fit right: One absolutely needs to get the product market fit right in the first 1,000 days. Find those customers who are ready to pay for your product, find the market you should go out in, and the price at which you should. And once you have your set of customers, you need to ask him what made him buy the product?  Many times entrepreneurs go out and ask why didn’t you buy my product – that’s not important. Not everyone in the world will buy your product but find out the person who has bought your product. And then find out people with similar problems that you can serve. That’s a much smarter way of scaling up.
  • Pay attention to positioning: It’s very important for entrepreneurs to define their key value proposition in the first 1,000 days rather than just making some statements. Do not think that if you have built a great product, it will sell by itself. It never happens. You need to create both offline and online branding to get customer traction. But remember while you are building products, your positioning should be all about your business. Investors fund a business not a product.
  • Acknowledge competition: Entrepreneurs who do not acknowledge the competition in the first 1,000 days are fooling themselves. One has to be paranoid about acknowledging your competition.

Sanjay quips, “I would say only morons are not afraid of anything. As an entrepreneur you should be paranoid.”

  • Vaildate: When the product feedback mechanism goes into place, and the customer gives feedback, you need to deliver it. Feedback gives an opportunity of learn and correct at the same time. So proactively act on getting customer validation.

How Not To Screw In The First 1000 Days

While you can follow the above checklist to follow what absolutely needs to be done, one also needs to remember the ways in which one can screw up in this crucial time.


  • You’re No Superman: Sanjay explains that many entrepreneurs consider themselves to be Superman, but he has a word of caution. “Don’t take your capacity as infinite. You should think and plan as humans and not superheroes.”  And even if you get funded, the power of money is limited. So don’t overestimate the power of money.


  • Waiting for a perfect product: Many times entrepreneurs wait too long for product perfection, hoping to bring out the best product in the world. Instead, one should release the product early, with minimal features, support with quick feature updates and get users to validate the first few releases.

The longer you wait for the product to launch, it’s a revenue loss as well as a waste of resources deployed.


  • Hiring resumes:Don’t hire people with resumes or experiences. In startups, history doesn’t repeat itself. So just having experience is not something that will work. What you need is a person who can play multiple roles and thinks about execution. Skills are important but they are overrated. Focus on hiring different personalities with complementary skills. Also, one should take care to create enough of stock options pool so that that incoming team can be incentivised. However, remember not to make unrealistic promises.
  • Taking investors for granted: Assuming that you get your first round of funding in the 1000 days, don’t start taking your investors for granted. Sanjay explains, “Every startup goes through good, bad, and ugly phases and the investors who have backed you will help you. So don’t take relationships for granted. Adhere to your shareholder’s agreement and send regular updates to investors.” In fact, a smart entrepreneur will use the investor as their unpaid consultant! However, do not build companies to satisfy investor greed. Understand that not all investor money is equal. You need to find an investor who has nurtured multiple deals in his portfolio, has connections and will work with you in building a company.


  • Selling to strategic investors: Many times companies get offers from strategic investors in the very first years. But if you are already willing to sell yourselves in the first 1,000 days, then why did you start in the first place? If an entrepreneur is not determined to last, then entrepreneurship will just be another job which he will be getting into very soon. However, in case things don’t work after 1000 days, you can think about exits.



  • Mind the media: Sanjay advises not to get carried away by media. While it is great to be in the limelight, do understand not all publicity is good publicity. He adds, “When you’re too talked about, any bad publicity can reach customers before you even get the chance to build a defence. Don’t pick fights in the press.”  Unless there’s a strategic reason, entrepreneurs should remain silent. After all even remaining silent is a strategy!


  • Plan to build business, not to spend: Once funded, entrepreneurs think spending is equal to building more business. They spend huge amount of time and resources in building the brand, on advertising than building the business. While growth capital is given to build a business, it’s not a shortcut to building a successful business. Additionally, one should stay away from astronomical valuations and quick cash burns. Financial planning is very important in the 1,000 days. Also it’s important to remember to build a company on losses, and focus on profits. While entrepreneurship is about learning and mistakes, it is smarter to learn from the mistakes of others.

Sanjay also adds not to innovate on finance and legal fronts – in other words, buck the system. Many times, entrepreneurs decide to not pay taxes on early days or compromise on financial/ legal matters, and compromise their reputation. But, in doing so, you lose respect and faith from investors and customers alike.

In a nutshell, listen to your gut feeling but validate with data. Build your startup to last the first 1,000 days and you have a winner that will survive. Sanjay aptly concludes that by all means live your dream, but don’t live in the world of your own dreams! Wake up and make them come true.

If you want ask Sanjay any questions tweet him at @mehtasanjay with #TheJunction2017.

 [This article is part of The Junction Series. Sanjay Mehta will be speaking at “The Junction” in Jaipur in January 2017. Get a deep dive on angel investing, investment thesis, exit strategies with him. Learn more about The Junction here!]

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.

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