Advice at Scale 2
Scott Painter, the Founder & CEO of Fair on fundraising and building a business.
- Currently heading Fair, a Car-as-a-Service leasing company that raised a Series B round of $385 million led by Softbank last year.
- Founded TrueCar in 2005 to eliminate negotiation from the car-buying process (IPO in 2014).
- Introduced upfront pricing to auto retail through founding CarsDirect in 1998 that generated tens of millions of dollars in sales during the first months after its official launch.
1. So Scott, what are some of the key learnings you’ve had during your journey? Is there something you would have done differently?
My biggest career takeaway is that you have to be an amazing judge of character. You should never partner with, take money from, or hire people that you don’t trust – even if they’re the best at what they do.
And while I’ve certainly learned that lesson the hard way a time or two, the thing I most wish I would have done earlier in my career is to have learned the technical fundamentals of business-building – specifically how all of the legal agreements work with investors and what their rights are.
I would’ve taken more time early in my career to gain a comprehensive understanding of finance and accounting: how to read a balance sheet, an income statement, a statement of cash flow, a pro forma. Nobody prepares entrepreneurs well enough to be able to be fluent in those conversations. And those are things that, had I learned them earlier, would have made me far more prepared and capable at the beginning of my career.
2. What concrete advice would you give to a fresh startup founder?
Make sure you know how to raise money as a core competency. Don’t make it something you address when you need to; that simply will not work. Capital-building needs to sit right at the top of your business priorities and stay there at all times.
Also, it’s critical to know when to walk away from a bad idea. You should be aggressively honest with yourself about what you’re trying to accomplish and remain objective and thoughtfully introspective about your progress and results throughout.
3. Is there a book or a piece of content that has really shaped the way you think? How?
1. The Richest Man In Babylon by George S. Clason is a book every father should give to his kids because it lays out the entire secret to building wealth in a series of parables. It was written at the height of the economic boom in the 1920s and remains just as pertinent today. Turns out, the richest man in Babylon was not the king. He was the blacksmith who owned his home, paid himself first, didn’t go into debt, and lived within his means. It really does offer all the pillars of financial wisdom within a great little story.
2. I also love The Innovator’s Dilemma by Clayton M. Christensen. Every young company requires experts, and experts tend not to innovate; they tend to give expert advice about what you can’t do. But in order to change a thing, you have to be willing to break it. It’s the scariest, most daunting premise in business, but it’s a really important thing for a founder to internalize.