MP chatted with Chris LaFerla, Founder and CEO of Tatem, a B2B software company redesigning how work gets done, about his entrepreneurial journey. Tatem is designed to help teams love their work. Though Tatem's journey began mere months ago in 2022, the business has already raised a $2.5M Seed Round, garnered an impressive roster of investors such as Caffeinated Capital, Signia Venture Partners, and The House Fund, and is empowering a growing number of teams.
Before Tatem, LaFerla co-founded an online marketplace for interior designers and was an early employee at Faire, working on strategy & finance. He started his career as an investment banker at Barclays, covering internet and software. LaFerla holds a B.S. from UC Berkeley’s Haas School of Business, where he studied as a Regents' and Chancellor's Scholar.
The entrepreneurial journey is one of self-discovery. What have you learned about yourself while building your business?
The entrepreneurial journey really is one of discovering yourself because you’re constantly facing challenges, failures, and mistakes, and every day trying to learn from those, so you don’t make the same ones twice.
I think I’ve learned what gives me energy (building and iterating products) and what drains my energy (sales and outbound efforts).
But, you don’t get to pick and choose what you work on in the early days of your business. Reaching out to new users, hopping on calls with them, and pitching them why they should use Tatem is the most valuable thing I can do at this point for my business.
So, that’s what I need to be doing.
While I’ve learned a lot about what specific portions of building a business I love, I think the bigger takeaway is that I now understand what is required to build a successful business: doing whatever is required, regardless of your excitement or prior experience in that function.
The entrepreneurial journey is often lonely. Have you experienced loneliness as an entrepreneur? If yes, what was that experience like, and how did you overcome it? If not, why do you think this is the case?
Entrepreneurship is a lonely road, and doing it as a solo founder, which I am, is even lonelier.
However, this is an area that we’ve done such an excellent job of solving for at Tatem. By bringing together an incredible team from day one, it doesn’t feel like I’m walking this road alone.
Not only is everyone at Tatem hard-working, intelligent, and supportive, but they also have a high degree of ownership for their work. This makes it feel like we’re all in the same boat, fighting the same battle and working towards the same outcome.
Without my team, I wouldn’t be able to manage the loneliness and pressure of entrepreneurship.
The Psychological Warfare
Entrepreneurs generally sleep less, work more, and let their health slip. This combination, combined with loneliness, often results in insecurity, self-esteem issues, and low self-worth. Have you experienced any of these issues as an entrepreneur?
I don’t think it was 100% conscious until being asked directly, but I struggle with some of these areas.
While I have been able to remain in good physical condition (I haven’t gained weight for example), I have developed some odd medical maladies that the doctors have been unable to identify the cause of…
At this point, I’m pretty certain it’s just stress-related, which is an excellent example of how much pressure entrepreneurs face…
But it’s a different kind of stress. In some ways, I was under more pressure when I worked as an investment banker. The difference is that I didn’t have the same self-pressure that founders and entrepreneurs put on themselves.
You’re generally thinking about your business 24/7, trying to do anything. Everything to get the first spark of “success” for your business, and you tell yourself that failure just isn’t an option.
So you are constantly trying new things and failing until something works… and that is a recipe for poor health, insecurity, and the self-worth tied to your business, which is very dangerous.
Candidly, I don’t know if I have 100% overcome this.
But, I’m conscious of the struggle. I am actively working to stay active by exercising daily, reserving a full day for rest each week, and being present in my relationships with family and friends.
Newer entrepreneurs often equate their personal success with the success and value of their business. If their business fails, they are a failure. If their business succeeds, they are a success. Have you experienced this warped perception of reality?
As a founder whose first startup didn’t succeed, I think this is something I struggle with.
I wasn’t the CEO of the first business, so I don’t 100% chalk that up as my failure, but I certainly made plenty of mistakes.
As a result of having already failed once, there’s even more pressure for me to build Tatem into a successful business. It feels as though Tatem is the only shot I’ll get.
If I don’t find a way to make Tatem work, I’ll likely have to go back and work for someone else, which I do not want to do. So, it feels like I have to make this work.
This likely is enormously draining for me psychologically and adds considerable pressure on my shoulders. Because of this fear, I’m doing everything possible to ensure Tatem succeeds.
I pay myself essentially $0. We don’t have a big team because I want 5+ years' worth of runway if we need to pivot. We don’t have an office because that cost would cut runway, etc.
All of these add to my stress.
So, I struggle with this; frankly, I don’t think I have overcome this… or even attempted to overcome it.
I’ve leaned into it, for better or worse, trying to use it as psychological fuel.
What are your three biggest fears as an entrepreneur, and how do you manage those fears?
1. Fear of Failing
I briefly touched on this earlier, but I think many founders can probably agree that the greatest fear is failure. Failure for a startup has so much more gravity than a personal failure; it means I’ve failed my investors, my team, myself, and our customers.
It’s more dramatic when voiced, but I know it’s something I internalize (and try not to) regularly. And while unhelpful in certain ways, fear has also been a driver of our success. So I don’t think that fear is wholly bad. To help manage this fear, however, I make sure to take time to unplug each week and do something completely non-work-related: go to the beach, sit at the pool, read a book, and spend time with friends or family.
2. Building the Wrong Product
To elaborate, as an early-stage startup, we’ve done everything we can to ensure the success of our product: market research, user testing, feedback sessions, building something that solves a verified problem, etc.
But at the end of the day, knowing whether or not we’ve built the “right” product and whether or not that product will succeed takes time.
I believe chugging along, getting candid user feedback, and continuing to grow our user base have helped assuage these fears.
3. Not Being Financially Independent for the Next 12 Months or Longer
While I believe I’m doing the right thing for the business by taking a salary just above $0, it’s also a constant stressor I live with.
Some might argue that I should just pay myself a salary, but the lack of personal funds is another driver towards success.
In my mind, Tatem has to succeed; lacking personal funds reminds me that the investors are waiting for a return, as well as my teammates, most of which have taken a salary not indicative of their talent, in the hopes that they’ll get a future return.
To help manage this fear, I keep reminding myself that when 🤞 Tatem succeeds, everyone, myself included, will be financially rewarded.
What are three mistakes you made early on as an entrepreneur, what did you learn from them, and how can others avoid these mistakes?
1. At a Former Startup, We Paid for Marketing Too Early On
It was detrimental to us because we quickly drained a significant amount of funds on paid ads to prove product-market fit and gain early users.
Not only did the test not work (ads take a while to perfect, and even still, it’s become more of a money game in today’s market), but we also burned valuable runway that could’ve been reallocated for something else.
In my current startup, we’re focused on acquiring users organically. Not only is it significantly more cost-efficient, but it allows us to gain true insight into the reasons why users are or are not using our product. My advice to founders at early-stage startups is to do everything you can to gain your first batch of users organically: tap into your network, start a referral program (which still costs less than ads), attend virtual and in-person networking events to meet new, potential users, and have a great PRODUCT that perpetuates organic growth, etc.
2. Not Being Frugal Enough as an Entrepreneur.
In past startups, I have not been as careful as I should have to review team expenses personally, evaluate unnecessary software costs, and use only the bare minimum in terms of paid subscriptions, tools, etc.
This is important because every financing round should be treated as the last round. If our startup or any other, for that matter, can’t prove out the business with the current runway, we’ll die.
Now, I do what I wish I’d done in my past startup, and I encourage other entrepreneurs to have the same mindset in ruthlessly eliminating unnecessary costs.
It’s something that needs to be reviewed regularly. Practical ways to do this are: ensuring that no tool or software is used that isn’t needed, personally approving teammates' expenses, capping the team’s salary by paying yourself, as the founder, at or near $0, and never signing up for annual subscriptions, which teams often find they don’t need after it’s too late.
3. Not Focusing Enough on Personal Health and Wellness
I think there’s this idea that we, as founders, need to work overtime and lead by example in terms of hard work and sacrifice.
But I’ve also come to find that this mentality can be self-sabotaging as our mental and physical health suffers due to a lack of balance and self-care. Even founders need to practice good self-care and understand that startup life isn’t a sprint it’s a marathon.
If I’m operating on empty, I have nothing to give to my team or our product, as being worn out depletes us of creative, mental, and physical energy.
My advice to founders (and myself): remember that investing in yourself is investing in your business and that you’ll set yourself up for better success by doing both.
Some practical ways to practice this include: taking one day off a week to unplug, doing one thing every day that refreshes you (30 minutes of exercise, reading a chapter or two of a fiction book, watching a tv show, spending time with friends or family, etc.), getting enough sleep, and eating well.
What are three things you see that are often overlooked by entrepreneurs you encounter, and how can other entrepreneurs be aware of these things from the beginning?
1. Not Eliminating Unnecessary Startup Costs
I can’t stress this enough! We’ve been able to extend our runway by two years (at least!) just by taking careful thought to review (and eliminate) costs regularly. From the beginning, I encourage founders to personally review costs each month and set a plan in place to ensure everyone on the team is on the same page. While I don’t believe in micro-management, in this one area, it is vital to responsibly manage funds as a founder and pass that mentality on to the team.
2. By Having a Great Runway, Founders Are Better Able To Make Good Hiring Decisions
I see many entrepreneurs hire en masse to move fast and gain traction before their current funding round runs out and then need to conduct layoffs because they hired too many too quickly.
Instead, by careful financial planning in the early days, entrepreneurs can extend their runway, and make slow, thoughtful hires without needing to conduct layoffs. Increasing your headcount is a vanity metric and by no means reflects your team's success.
Better to keep your team small, move fast, and stay lean than to lose the trust of your employees (current and future) and investors by laying off good employees.
To ward against this, remember to ask yourself which role(s) you need to hire for, and then involve your entire leadership team in the process to help ensure good hires.
3. Overlooking the Importance of Building a Great Startup Culture
Building a great culture is often lost with stress on speed, gaining traction, generating returns, and getting early users. It’s a fatal flaw because culture is directly linked to work output, retention, and a happy, creative team.
In a post-COVID workplace, this can undoubtedly be more of a challenge.
Our team holds weekly in-person days to avoid this, ending with a meal or activity. We’ve gone to the movies, played pool, gotten Boba, gone to Dave and Buster’s, and a myriad of other things.
We also do “Question of the day” over zoom 2-3 times weekly, asking silly, non-work questions to help build community.
As a result, we have a strong, tight-knit team. I encourage all teams, no matter how small, to do things from day one that make work fun and make the team feel valued.
What are three seemingly insurmountable obstacles you’ve faced as an entrepreneur, and how have you overcome them?
1. Raising Capital Without a Fully-Functioning Product
This is hard, and I know I’m not alone in this. I had to convince investors we were investment-worthy before having long-standing traction to prove it.
We worked really hard to gain early beta users without a product by performing the software tasks manually. While it was much more labor-intensive than if we’d had a fully-functioning product, it gave us a chance to get early users, gain early feedback, and build out an even better v1 than we would’ve without going through this process.
This gave us the traction we needed to raise our first round.
Also, raising a small friends-and-family round to get off the ground is a great way to get started in the early days.
2. Hiring My First Employee When Tatem Was Just a Vision
I had no product to show potential recruits, no metrics to prove our success, and no professional capital. Because of this, I had months of conversations with our first hire, talking about the ins and outs of my vision, going over all the “what ifs,” and making sure he felt comfortable (and excited!) to come on board.
It’s essential to make a great first hire; it just takes time (and many conversations) to do so!
3. Learning How To Lead Well
I can’t say I’ve arrived, and I know there’s still much more to learn. Still, I’ve learned much about balancing expectation with praise, taking time to truly listen to my team and let them know I value their input and providing ownership in balance with careful management.
I think the best way to improve is simply by practice.
I’ve failed numerous times, but I grew and learned how not to lead each time.
I also believe that surrounding myself with stronger, more senior leaders than myself, as mentors, advisors, and investors has helped me grow.
What are some ways you have managed to boost your productivity without causing burnout?
1. Balancing Intense Days With Lighter Team-Building Days
For instance, our team works hard Monday through Thursday, but on Fridays, our last meeting ends at 3:30 pm, and then we jump into a team-building activity.
This gives everyone something to look forward to and is a great way to incentivize productivity early in the week.
At Tatem, we operate with 2-4 week sprints, and I try to balance out the difficulty of those sprints. So if we have a hard sprint coming up, I’ll let the team know so that they’re prepared for an intense couple of weeks, and then I’ll follow that up with a lighter one.
2. Generous PTO Schedule
While this might not be common for all startups, we have a generous PTO schedule.
For instance, our team takes off all US Bank Holidays in addition to getting 1.5-2 weeks off each December. Additionally, we still offer unlimited PTO, but since I know that most founders struggle to get their team to use it, I enforce time off every December for all employees.
This is motivating because we all know that, while we might be in a busy season at work, we’ll get regular breaks to unplug and refresh.
How can newer entrepreneurs develop a healthy work-life balance even when it seems like an impossible task?
Be incredibly organized regarding your day off.
I think it’s unrealistic to get a whole weekend off when building a business in the early days, but I think it’s possible to take a full protected day off each week.
I refer to this as “sabbath” because I do my best not to think about work. I think that’s the most challenging part of work-life balance as an entrepreneur.
Even when you’re not working, you’re thinking about work, that problem you haven’t solved yet, how you’re going to get your first (or next) customer, whether you’re going to need to hire a replacement if one of your teammates leaves…
So, I advise taking a single day and treating that as an actual day off.
What three key pieces of advice would have made your entrepreneurial journey easier, and why?
1. Remembering That It Takes Time To Build a Successful Business
I think it’s easy to fall into the “build it and they will come” mentality when, in most cases, that outcome couldn’t be further from reality.
Realizing that great things take time and learning to appreciate even the slightest bit of success and traction is vital to our product’s and team's overall success.
2. Taking Time for Yourself
I know it seems “selfish” when so much is at stake, and admittedly, I’m still learning how to do this (well) as a founder.
But doing so is vital for my overall well-being, which affects the team. It’s easy to put off things like relationships and dating, fitness, vacations, or even just taking time to refresh, but doing so allows me to lead by example and remind my team that there’s more to life than the success of our startup and that relationships, family, and health won’t flourish if we don’t do something to invest in them.
3. Find People Outside Your Inner Circle That You Can Really Talk to You About Your Business
Mentors are essential, and I understand that bringing my close friends, family, or even teammates, into my stressful decisions can sometimes be a burden on them, but finding a mentor outside of my immediate circle that I can share things with and gain advice from, has been an enormous help.
By finding someone completely disconnected from my business or personal life, I can relax in conversation and honestly share with someone who knows, understands, and can offer sound advice.
Questions based in part on topics and comments provided by:
- Alicia Nagel, Founder at Alicia Nagel Creative
- Rob Volpe, Chief Executive Officer at Ignite 360