There’s this distinct memory I have from when I was 11. It was the second to last day of sixth grade – somewhere in the middle in the sweltering ’08 June heat. Despite efforts to hold them back, it was the first time in a long, long time that I cried in public. On a day when everyone was obsessed with signing yearbooks and bragging about summer vacation plans, my core teacher, Mr. S called one of my classmates and I up to his desk.
As soon as I realized his usual smiling demeanor was nowhere to be found, I knew something was very wrong. It turned out that my classmate had submitted the exact same final project as I did – one that I had painstakingly created over two months to be what I believed to be the most ingenious final project my sixth grade teacher would have ever seen. I don’t remember who that classmate was. Hell, I don’t even remember if they were boy or girl.
Between salty tears and choked hiccups, “She… she cop-… copied me,” I stuttered to Mr. S.
All I remembered was that the next few minutes flew by in a watery blur trapped above the floodgates beneath my eyes. I failed to hear a single word he said. I just stood standing facing the beige walls behind Mr. S’s desk. He pulled my classmate to the side to a conversation I was not privy to.
As time went on, my eyes drifted further up, hoping gravity would be kind to my waterworks today, until I was staring right where the west wall and ceiling met. And right on that horizon, I saw the words he hung against that beige wall since the beginning of the school year. A meme. Borderline, a dad joke.
Opportunity is now here.
But the ‘w’ and ‘h’ were so close together, when I first walked into Mr. S’s classroom, I thought it read: Opportunity is nowhere. When I asked, he once told me, “You know there’s a fine line between opportunity and lack thereof.” In a chuckle befitting of a dad, he continued, “The only difference is that you have to give yourself some space.”
And for the briefest moment, I remembering smiling just a little then.
After chatting with my classmate for a few minutes, they solemnly walked back to their seat and sat down. He beckoned me over, and waited a few seconds so that my sniffles wouldn’t drown out his soft, but firm voice.
“David, you should be proud [she] copied you. That means you have something worth copying.”
To this day, that line stays in my head rent-free.
Interest is a two-way street.
Eight years later, after crafting the perfect cold outreach email to someone I really respected, I received the most meaningful rejection email to date from her. Just four words. “Be interesting and interested.”
In fairness, it took me a few weeks before those words clicked, which I wrote about here. I was definitely interested in her background, but I hadn’t given her any reason to be interested in me. I wasn’t interesting. Or at least, I hadn’t painted myself to be an interesting person.
Interest comes in many forms. The ability to be useful. Being a host of exciting or inspiring stories. Strategic value. Bragging rights. Simply put, you need to have something that people want. They either want something from you, or they want to be like you. In Mr. S’s words, “something worth copying.”
Of course, maybe there’s a world where you don’t want people to know. For instance, Max Levchin once shared in Founders at Work. “If you patent [software], you make it public. Even if you don’t know someone’s infringing, they will still be getting the benefit. Instead, we just chose to keep it a trade secret and not show it to anyone.”
Or you might make your VCs sign NDAs. Which most of us aren’t a fan of.
In closing
If there’s anything you take away from this essay, it’s that:
I used to be crybaby, and
Have something worth people’s time and interest.
It doesn’t matter if you’re copied. Hell, it’s good that you’re being copied, or that there are similar ideas in the market.
At the end of the day, it’s not about the idea; it’s about execution. No one can beat you at being you. Do things that excite you. Do things that, if you were someone else, you would want to hang out with you.
Don’t ever have someone you meet with feel like they’ve wasted their time. Rather, make them feel like they got time back from meeting with you. That’s when you feel the magnetic pull of the people around you. And that’s when the people you want to meet and learn from will want to learn from you.
I’m once again reminded of two quotes. One of my recent favorites.
“Magic is just spending more time on a trick than anyone would ever expect to be worth it.” – Penn & Teller
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!
Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.
The Warriors went through one hell of a season. Even as someone who doesn’t live and breathe basketball, watching Stephen Curry this past season, especially during the finals with the Celtics was a thrill out of this world. He is undeniably one of the greats! Yet it’s fascinating to think that the world didn’t always see him as such. From being a 3-star recruit to the 256th-ranked player in 2006 to 7th pick in 2009, Curry’s gone a long way.
Stephen Curry really went from a 3-star recruit and the 256th-ranked player in the 2006 class to a 4x NBA Champion and the best 3-pt shooter in history. Absolutely incredible. pic.twitter.com/LLb8J3O33K
Though he recently won an Academy Award for Best Original Score for his music on Dune, Hans Zimmer‘s early music career was not easy. He had been thrown out of eight schools and only had two weeks of piano lessons. Yet today he is undeniably one of the greatest composers of our time.
When Stan Lee first pitched Spider-Man, his publisher thought it was “the worst idea I have ever heard.” The publisher himself told one of the greatest storytellers: “First of all, people hate spiders, so you can’t call a book Spider-Man. Secondly he can’t be a teenager—teenagers can only be sidekicks. And third, he can’t have personal problems if he’s supposed to be a superhero—don’t you know who a superhero is?'” The rest… is history.
In the making of Star Wars, George Lucas was rejected time and time again – from Disney to United Artists to Universal. And the one bet that 20th Century Fox took on him was for only a budget of $8M, that eventually became a $10M budget, when at the time, the best blockbuster films all had budgets of $20-30M. Yet, today Star Wars stands as one of the greatest cultural assets of the 20th and 21st century.
In the world of startups, the world’s most valuable companies are worth more than four times and raised half as much as the world’s most funded companies. Funding, in many ways, is a proxy for investor optimism in the early days that this company will be the next big thing. But investors, like any other person, can be wrong. In fact, startup investors are often wrong more often than they’re right. But it also goes to say the world’s best companies are non-obvious, in the non-consensus. In other words, underestimated.
As the above graphic shows, even if one picks right, we still grossly underestimate the potential of outliers. After all, humans are terrible at tracking nonlinearities:
The Post-it note was an result of a failed experiment to create stronger adhesives. But Dr. Spencer Silver, its inventor, kept at it, which led to his nickname as “Mr. Persistent” because he wouldn’t give up. Today, Post-it notes are sold in more than 100 countries, and over 50 billion are produced every year.
Google, one of the most recognizable names today, struggled to raise capital and find customers in the early days. Who needed another search engine? For 1.5 years, every search company approached by Larry and Sergey to consider Google’s tech turned them down. The pair funded Google on their credit cards and couldn’t even afford to hire a designer so regressed to minimalism.
Tope Awotona, founder of Calendly, started three failed businesses and emptied his 401k to fund Calendly. Yet despite his hustle and persistence, most VCs he talked to turned him down. Despite starting in 2013, it wasn’t till 2021 that Calendly had their A-round. Calendly took much longer to get the attention of external funding than many of its counterparts. The company is now one of the most popular scheduling tools and worth $3B.
But even when people got it right, they still underestimated the upside.
Even when Kleiner eventually backed Google, legendary investor John Doerr couldn’t believe it when Larry Page believed that Google could get revenues of $10B.
When Bessemer invested in Shopify, Bessemer thought that the best possible outcome for Shopify was a 3% chance of the company exiting at $400M. As of the time of this essay, it’s worth over 100 times more with a market cap of $43B.
If you invested in Amazon on the first day in 1998 at $5, most people would have sold at $85 in 1999 – a 17x in less than two years. But if they held to today, they would have made a multiple north of 600x. That said, selling itself is more of an art than a science.
… And the list goes on.
As Warren Buffett says, “the rearview mirror is always clearer than the windshield.” Our fallacy with estimation is painfully obvious in hindsight, but dubitably unclear in foresight.
Early on in my venture career, an investor once told me a profound statement. One that I still remember to this day. The best ideas – and often the leaders of tomorrow – often seem crazy at first. And because they’re crazy, they’re nonobvious. They’re in the non-consensus.
As Steve Jobs says, “the ones who are crazy enough to think they can change the world, are the ones who do.” The world’s most transformative individuals and businesses take on many more headwinds than those optimizing for local maxima. But history shows us that those that dream big consistently outperform those optimizing for marginal improvement. While there is nothing wrong with the latter, I hope the above anecdotes serve as a reminder rejection is not a sign of failure. Rather, it’s a sign that most people have yet to see what you see.
Your job is to teach them to see what you see. After all, the only difference between a hallucination and a vision is that other people can see a vision.
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!
Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.
I’ve been asked by many founders over the years, “How do I know it’s time to let it go?” And every single person asks me for some length of time. When I tell them I don’t have an “optimal” length of time that would do the question justice, they ask: “When do you usually see other founders you work with let go?” To which, the answer spans as far as the Pacific Ocean. I’ve known folks who work on it for six months before they called it quits. Others for seven years, without external validation. And then some who continue at it past the decade.
Who’s right? Who’s wrong? If I were to be honest, I don’t know. Rather I’ve always believed the independent variable here shouldn’t be time, but rather your emotional state. I’ll elaborate.
The “ideal” emotion to quit with
There’s a timeless apologue about a boiling frog. If you put a frog in boiling water, it’ll jump straight out. But if you put a frog in lukewarm water and slowly increase the heat, it won’t realize it’s dying until it’s too late. It goes to say that the more time you spend in the forest, the harder it is to see the forest itself. As such, this essay is for everyone who is stuck in the forest.
Andy Rachleff of Benchmark and Wealthfront fame has this great line. “I’d love to kill it and I’d hate to kill it. You know that emotion is exactly the emotion you feel when it’s time to shut it down.”
I really love this line because loving to kill something and hating to kill something are on two sides of a spectrum. Oftentimes, if you’d love to kill something, that means you haven’t spent enough time on it. It’s easy to give up on something you care little to nothing about. On the flip side, if you’d hate to kill something, you’ve spent too long on it. Often, an example of sunk cost fallacy. And it’s when these two distinct emotions meet at twilight that you know you’ve put your best effort in. It’s when you feel both of these emotions simultaneously that you can finally let it go.
As I rounding out this blogpost, I thought I’d post on Twitter to tap into the world’s greatest minds alive on Monday. And when my friend Sara shared the below line, I knew she had something better. Something I did not know that I would be remiss not to double click on.
My friend once looked me in the eyes and told me, “You know what your problem is? You’re not a quitter, but you needed to quit a long time ago.” I have a whole methodology about how not to end up back there again. Happy to share.
So I did. And I promise the next few paragraphs from deep within Sara’s mind will change the way you think about quitting.
“You’re not a quitter, but you needed to quit a long time ago.”
“One of the things I learned over the years is that your intuition is probably right. It’s hard to trust though, especially when there is a lot of chaos or noise. Anything unstable from market turbulence to a toxic relationship creates that noise. You need to find quiet time to let your mind relax enough to think clearly.
“Sometimes if you’re anxious, it is hard to be in a spot that’s quiet or still. Don’t feel obligated to be in Zen meditation mode. Personally, I’m not someone who can be still. Instead, I find my quiet time when I walk and think around the water, where I live a block from.
“When I find myself caught between a rock and a hard place, I find myself asking the below questions with neither judgement, shame or guilt:
“If this problem was a house fire, what is my first instinct? If I stay, am I going to get swallowed up in it? Do I want to get a hose to put it out or do I want to add gasoline to it?
“If the answer is gasoline, is it because you’re beyond frustrated? If the reaction is to dump more gasoline, roast marshmallows, and walk away, that means it’s the point of no return. It’s time to quit or bring in someone else to get a fresh perspective. In these situations, the individuals involved tend to want to pick fights out of frustration. They’re combative. They can’t see any way through the problem, and they’re exhausted. It’s time to step away at least temporarily.
“In scenario two, if I’m just sitting there and watching the fire burn while I think about it, I’m stuck in indecision. Create a list of pros and cons, and really think critically about it. If you’re in a team situation, you need to figure out where the rest of your team stands and what the core problem is that needs to be solved in order to be successful. Sometimes it’s a team shift. It’s just one person who wants to call it quits, and the others want to keep going. If you’re in a relationship, you need to be completely honest with yourself and each other about what you both need to do to get things back on track and if you actually want to. The hard part about a slow burn is if you just stay stuck, you have a hard time recognizing when it’s too late.
“Thirdly, there’s the situation where I am motivated to look for the hose. I want to fight the fire. You need to think about what you actually need to do in order to fix the problem. If you’re short on capital, can you extend your runway? Be it sales, outside capital, or cutting your burn. If you’re short on talent, can you bring in world-class talent? Other times, you need to ask yourself does the market really need your product in its current iteration? You need to be really honest and look at it from a third-party perspective. If you don’t know how to fix it, you can always ask others for help. It might not seem like it, but most people are willing to help.
“The takeaway from all of this is that you have to suspend your own judgment and ego. You have to be honest with yourself. The right answer is usually the first answer. Trust your gut with what’s right.
“Sometimes the honesty will hurt. If you’re running a company, at some point, that might mean you might not be the right CEO for your company anymore.”
In closing
The hardest parts about building anything – be it a house, business, relationship, career, family, or passion – are starting it… and ending it. If most people had to pick, they’d say the former is more difficult than the latter. But if you truly love or loved someone or something, the latter is always more difficult. And while the above may not solve all your problems, I hope when the nights are the darkest, that Andy and Sara’s thoughts may light the way.
Thank you Sara for sharing your thoughts with the broader world!
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!
Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.
A founder looking to write more long-form recently asked me, “What does your writing process look like?” As I was sharing my long answer to her short question, I realized, “Holy f**k, my writing process sure has evolved over thepast few years.” In an effort to encase my current thoughts in amber, I find myself transcribing thoughts from gray matter to illegible scribblings. And from a 180-grams-per-meter-squared canvas to a two-dimensional electronic screen once again.
A trip down memory lane
I remember when my friend first asked me, “How are you able to commit to a weekly writing schedule? Aren’t you busy enough?” And I shared a secret with him. Something that one of my mentors shared with me.
Before officially starting my blog, I wrote 10 essays – a Plan B in case I ever went through a dry spell. Knowing I had the comfort of a cheat week and still having content to put out gave me the courage to continue writing every week. Almost three years later, of those 10 initial pieces, I’ve only two of the afore-mentioned. In the world of content creation, there’s a massive graveyard of creators who never make it past 10 pieces of content – be it blogposts, podcast episodes, YouTube videos, and so on. I would know. I started 3 blogs before this one. For each of the three prior to this one, I have an epitaph that made it to five or less posts.
The evolution of process
In my first year, I usually spent time conceiving a blogpost at night when I found myself to be the most creative, and editing the same one in the morning before the rooster cried to the awakening sun, when I found myself free of distraction and in peak efficiency. Yet despite a greatly industrialized process, one consistent theme throughout 2019 and 2020 was regret from publishing an essay too soon. There were multiple cases where I’d stumble on new, yet relevant information often within hours of publishing. In fact, this gnawing yarn of remorse reached such a level of prowess that I was re-editing blogposts by the paragraph on a monthly basis. Sorry to all of my early subscribers. Good news is you have your very own limited edition copies of David-jumped-the gun-again.
And so I started delaying my publishing schedules – to account for this sense of continual regret. In my current phase, I break down writing into three phases:
Time to create
Time to ruminate
Time to edit
Time to create
One of my friends once told me the secret to creativity is to “give your brain time to be bored.” DJ, one of the most creative people I know, having worked to create some of the most iconic animations we know today during his time at Cartoon Network and Lucasfilm, and now a YouTuber with over half a million subscribed, once shared with me, “Creativity is a residue of time wasted.”
When I asked him to unpack that statement, he said, “Good ideas are gifts from the universe – fish that swim in that river. All you have to do is learn how to reach up and fish for them. And just like fishing, if you stick around long enough – if you’re patient enough, you’ll be able to catch a few. But you never know what fish you’ll reel in. Just that you will.”
And he’s right. The more time you spend moving or doing, the less bandwidth your brain has to explore new possibilities. The nuance here is not to block some amount of time every day to ideate. In fact, if you’ll allow me to be brutally honest, while it is giving yourself time to be bored, it’s too structured. And by definition, creativity, like DJ mentioned, is unstructured thinking. Subsequently, blocked time often creates unnecessary stress and anxiety to create. Especially when your mind is drawing blanks and you’re on a clock.
Instead, allocate time immediately after your brain has been given 10 or more minutes to be bored. For example, after you take a shower. Or go on a 30-minute run. Or a 20-minute power nap. Simply, even going on a 20+ minute walk helps your brain re-center and refresh. And always, always write down your ideas. No matter how awesome or lame you think it is. The more you practice the art of ideating, the more consistently better your ideas will be. Not saying that I’m the most creative person out there, but I still have “trash” ideas every so often, but at a far less frequency than when I started.
Time to ruminate
If you’ve ever bought a new car – for the sake of this essay, a black Toyota Camry – as soon as you buy it, you start noticing more black Toyota Camry’s on the street. In fact, you’ll start being able to identify the 2022 versions versus the 2021 or the 2016 ones. A combination of recency bias and confirmation bias. The same holds if you go to a new restaurant, you’ll start noticing that it pops up more in conversations with friends or as you’re scrolling through Instagram.
On the same side of the token, once you seed an idea in your brain (or better, on paper), you start realizing, there is more content and discourse in the world about said idea than you once thought. In the time I spend between creating and editing, I stumble upon or (re)discover articles, podcasts, conversations, experts in my network, just to name a few, when I give my brain time to ruminate.
I like to visualize the scene from Ratatouille when Remy is savoring the individual and collective flavors of the strawberry and cheese, unlike his brother Emile who gorges food down without a second thought. Whereas Emile loses the magic of culinary world, Remy sees what no rat has been able to enjoy prior. Simply put, be Remy! Savor your thoughts.
Time to edit
For me, editing has become the easiest, yet hardest part of writing. All I have to do is string together words and thoughts. I have all the biggest pieces on paper already, but formatting, grammar, punctuation, you name it, feels just like busy work, especially where there are so many more productive things I could be doing.
So, time to edit is akin to time to be inspired. As such, there are two takeaways I’ve learned about myself over the past three years:
I edit in the early morning or late at night. No one will ping me (usually). There is no urgency to respond. Simply, no distractions.
I have a Google doc (which I might share one day, but as of now, it’s a hot mess) that includes all the pieces of content that has, in the past, inspired me to feel a distinct emotion. I use this library of emotions when the content I am creating (blogpost, email, pitch deck feedback, replying to a friend who’s in a rut) requires empathy. For example…
If I want to feel sad, Thai life insurance commercials are my go-to 5-minute sadness augmenters. Here’s one of my favorites.
For pure inspiration and drive, Remember the Name or any of Eminem’s songs.
In closing
While I don’t timebox myself in this 3-step process, on average, writing a blogpost takes me about two to three weeks. In case your curious, any blogpost where I lead with a sentence that includes “recently” instead of a set time probably took a few weeks to come to fruition.
In effect, writing never feels like a chore. Rather, it’s inspired. Inspiring. Uplifting. And de-stressing.
#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.
Stay up to date with the weekly cup of cognitive adventures inside venture capital and startups, as well as cataloging the history of tomorrow through the bookmarks of yesterday!
Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.
For the better half of my life, I’ve searched and am still searching to be a better purveyor of questions. And in my journey to do so, in searching for the perfect question for each situation, I’ve made mistakes. I wanna say more so than the average person in the realm of asking questions, but of course I might be suffering from availability bias.
The lagging indicator of which is the number of times I’ve been asked: Could you repeat that question? Or I didn’t quite catch that. Or frankly, just a puzzled look from the person I am looking for answers from.
In those moments, and it never gets old, I had never felt so emasculated. Moments that will continue to play a theme in my life. But it is in those moments when refinement happens. When I sharpen the steel of each curiosity. A forcing function for improvement.
In this world there are so many “lazy” ways to ask a question. Some may get the answer you want. Most of the time, you will be leaving secrets untold on the table.
Albeit a short blogpost, but once again, I was reminded recently that the only way to improve is by making new mistakes. And even after all the mistakes I’ve made and will continue to make over the years, I don’t think it ever gets easier. But I am able to jump back from a depressive state faster.
The DGQ series is a series dedicated to my process of question discovery and execution. When curiosity is the why, DGQ is the how. It’s an inside scoop of what goes on in my noggin’. My hope is that it offers some illumination to you, my readers, so you can tackle the world and build relationships with my best tools at your disposal. It also happens to stand for damn good questions, or dumb and garbled questions. I’ll let you decide which it falls under.
Subscribe to more of my shenaniganery. Warning: Not all of it will be worth the subscription. But hey, it’s free. But even if you don’t, you can always come back at your own pace.
Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal, investment, business, or tax advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.
“Two of our biggest clients pulled the rug on us. They just cut their budgets, and can’t pay us anymore.”
“My co-founder had to leave. His wife just lost her job, and he needs to find a stable job to support the family.”
“I don’t think we’ll make it, David. How do we break it to our team?”
It was June 2020. The above were three of a dozen or so calls I had with founders so far who couldn’t make it through the pandemic. But most of the founders who called me weren’t looking for any solutions. In fact, half of them had already decided on their ultimatum before calling me. I could hear the pain in their voices over the phone. Yes, we called on the phone. Neither them nor I had the luxury of beautifying or blurring our backgrounds on Zoom or to try to look presentable. The only thing we had between us was the raw reality of the world.
Those conversations inspired me to compile a list of hard-won insights and advice from some of the best at their craft. A Rolodex of tactical and contrarian insights that a founder can pull from any time, so that you are well-equipped for times in the startup journey in which you’ll need them. I don’t know when you will, or even if you will, but I know someone will. Even if that someone is just myself.
Below are bits and pieces of insights that I’ve selectively collected over several months that might prove useful for founders. As time went on, I found myself to be more and more selective with the advice I add on to this list, as a function of my own growth as well as the industry’s growth.
I also often find myself wasting many a calorie in starting from a simple idea and extrapolating into something more nuanced. And while many ideas deserve the nuance I give them, if not more, some of the most important lessons in life are simple in nature. The 99 soundbites below cover everything, in no particular order other than categorical resonance, including:
Some might be more contrarian than others. You might not use every single piece of advice now or for your current business or ever. After all, they’re 100% unsolicited. At the end of the day, all advice is autobiographical. Nevertheless, I imagine they’ll be useful tools in your toolkit to help you grow over the course of your career, as they have with mine.
Oh, why 99 tips, and not 100? Things that end in 9 feel like a bargain, whereas things that end in 0 feel like a luxury. We can thank left-digit bias for that. Dammit, if you count this tip, that’s 100!
To preface, none of this is legal investment advice. This content is for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. Please consult your own adviser before making any investments.
On fundraising…
1/ Some useful benchmarks and goals for stages of funding:
<$1M: pre-seed
Find what PMF looks like and how to measure it
$1-5M: seed
$2-4M – you found PMF already and you’re gearing up to scale
$5M – you’re ready for the A
$5-20: Series A *timestamped mid-2021, your mileage may vary in different fundraising climates
2/ If you’re a hotly growing startup, time to term sheet is on the magnitude of a couple of weeks. If not, you’re looking at months*. Prepare your fundraising schedule accordingly. *timestamped mid-2021, your mileage may vary in different fundraising climates
3/ On startup accelerators… If you’re a first-time founder, go for the knowledge and peer and tactical mentorship. If you’re a second- or third-time founder, go for the network and distribution.
4/ Legal fees are often borne by founders in the first priced round. And are usually $2-5K at the seed stage. $10-20K at the A. Investor council fee is $25-50K. So by the A, may come out to a $75-100K cost for founders.
5/ If you’re raising from VCs with large funds (i.e. $100M+), don’t have an exit slide. It may seem counterintuitive, but by having one, you’ve capped your exit value. Most early stage investors want to see 50-100x returns, to return the fund. And if their expected upside isn’t big enough, it won’t warrant the amount of risk they’re going to take to make back the fund. With angels or VCs with sub-$20M funds, it doesn’t matter as much.
6/ “Stop taking fundraising advice from VCs*. Would you take dating advice from a super model? In both cases, they’re working with an embarrassment of riches and are poor predictors of their own future behaviors. Advice from VCs is based on what they think they want versus what they want.” – Taylor Margot, founder of Keys *Footnote: Unless they’ve been through the fundraising process – either for their fund or previous startup.
7/ These days, it’s incredibly popular for founders to set up data rooms for their investors. What are data rooms? A central hub of a startup’s critical materials for investors when they do due diligence. Keep it on a Google Drive, Dropbox, Docsend, or Notion. Usually for startups that have some traction and early numbers, but what goes in a pre-seed one, pre-revenue, or even pre-product?
Pitch deck + appendix slides
Current round investment docs
Use of funds
Current and proforma cap table
Pilot usage data, if any
References + links to everyone’s LinkedIn:
Key members of management
1-2 customers, if any
1-2 investors, if any
Financials: annual + YTD P&L + projections
Slightly controversial on projections. Some investors want to see how founders think about the long term, plus runway after capital injection. Some investors don’t care since it’s all guesswork. Rule of thumb at pre-seed is don’t go any further than 2-3 years.
List of all FAQ investor questions throughout the fundraising process
Press, if any
Legal stuff: Patents, trademarks, IP assignments, articles of incorporation
8/ If you’re a pre-seed, pre-revenue, or even pre-product, you don’t need all of the above points in tip #7. Just stick to pitch deck/appendix, investment docs, use of funds, and current/proforma cap table.
9/ Investors invest in lines not dots. Start “fundraising”, aka building relationships, early with investors even before you need to fundraise. Meet 1-2 investors every week. Touch base with who would be the “best dollars on your cap table” every quarter. With their permission, get them on your monthly investor update. So that you can raise capital without having to send that pitch deck.
10/ Don’t take more money than you actually need when fundraising. While it’s sexy to take the $6M round on $30M valuation pre-product and will guarantee you a fresh spot on TechCrunch and Forbes, your future self will thank you for not taking those terms to maintain control and governance and preserve your mental sanity. Too many cooks in the kitchen too early on can be distracting. And taking on higher valuations comes with increased expectations.
11/ If you’re getting inbound financing, aka investor is reaching out to you, decide between two paths: (a) ignore, or (b) engage. If you choose the first path (a), when you ignore one, get comfortable ignoring them all – with very few exceptions i.e. your dream investors, which should be a very short list. Capital is a commodity. Your biggest strength is your focus on actually building your business. For undifferentiated VCs, understand speed is their competitive advantage. Fundraising at that point, for you the founder, is a distraction. If you choose (b) engage, set up the process. As you get inbound, go outbound. Build a market of options to choose from. Inspired by Phin Barnes.
12/ If you haven’t chatted with an investor in a while (>3 months), remind them why they (should) love you. Here’s a framework I like: “Hi, it’s been a minute. The last time we chatted about Y. And you suggested Z. Here’s what I’ve done about Z since the last time we chatted.“
13/ If you have a business everyone agrees on, you don’t have a venture-backable business. Alphas are low in perfect competition and businesses that are common sense. You’re going to generate a low 2-5x return on their capital, depending on how obvious your idea is.
Strive for disagreement. Be contrarian. Don’t be afraid to disagree in your pitch. Trying to be a people pleaser won’t get you far. If your investor disagrees with your insight, either you didn’t explain it well or you just don’t need them on your cap table. If the former, go through the 7 year old test. Are you able to explain your idea to a 7-year old? If that 3rd grader does understand, and you have sound logic to get to the insight, and your investor still disagrees, you need to find someone who agrees with strategic direction forward.
It’s not worth your time trying to convince a now-and-future naysayer on a future they don’t believe in. Myself included. There will be some ideas that just don’t make sense to me. While part of it might be ’cause of poor explanation/communication, the other part is I’m just not your guy. And that’s okay.
14/ If a VC asks your earlier investors to give up their pro-rata, and forces you to pick between your earlier investors and that VC, it’s a telltale sign of an unhealthy relationship. If they’re willing to screw your earlier investors over, they’ll have no problem screwing you over if things go south. To analogize, it’s the same as if the person you’re dating asks you to pick between your parents who raised you and them. If they have to force a choice out of you, you’re heading into a toxic relationship where they think they should be the center of the universe.
15/ You can really turn some heads if your pitch deck doesn’t have the same copy/paste answers as every other founder out there. Seems obvious, but this notion becomes especially tested on two particular slides: the go-to-market (GTM) and the competitorslides.
16/ If you want to be memorable, teach your investor something they didn’t know before. To be memorable means you’re likely to get that second meeting.
17/ Focus on answering just one question in your pitch meeting with an investor. That question is dependent on the plausibility of your idea. If your idea is plausible, meaning most people would agree that this should exist in the market, answer “why this.” If your idea is possible, meaning your idea makes sense but there’s not a clear reason for why the market would want it, answer “why now.” If your idea is preposterous, answer “why you.” Why you is not about your X years of experience. It’s about what unique, contrarian insight you developed that is backed by sound logic. That even if the insight is crazy at first glance, it makes sense if you dive deeper. Inspired by Mike Maples Jr.
18/ Beware of investor veto rights in term sheets. Especially around future financing. The verbage won’t say “veto rights,” but rather “no creation of a new series of stock without our approval” or “no amendments to the certificate of incorporation without our approval.”
19/ 99% of syndicate LPs like to be passive capital, since they’re investing 50 other syndicates at the same time. Don’t expect much help or value add from them. But if they’re also a downstream capital allocator, you can leverage that relationship when you go to them for bigger checks in future rounds.
20/ Don’t count on soft commitments. “We will invest in you if X happens.” Soft commitments are easy to make, and don’t require much conviction. X usually hinges on a lead investor or $Y already invested in the startup. Investors who give soft commits are not looking for signal in your business but signal via action from other investors. Effectively, meaning they don’t believe in you, but they will believe in smart people who believe in you.
21/ Just because they’re an A-lister doesn’t mean they’ll bring their A-game. Really get to know your investor beforehand.
22/ If you’re an outsider of the VC world, first step is to accept you are one and that you will have to work much harder to be recognized. “You will be work for investors. The data doesn’t support investing in you. The game is not fair at all. It will be a struggle.” Inspired by Mat Sherman.
23/ Mixing your advisors and investors in the same slide is a red flag for potential investors, unless your advisors also invested. Why? It gives off the impression that you’re hiding things. If the basis of an investment is a 10-year marriage, doubt is the number one killer of potential investor interest.
24/ Too many advisors is also a red flag. “Official” and “unofficial“. Too many distractions. Advisors almost always invest. If they don’t, that’s signaling to say you need their help, but they don’t believe in you enough to invest.
25/ There are also some investors don’t care about your advisors at all, at least on the pitch deck. The pitch deck should be your opportunity to showcase the team who is bleeding and sweating for you. Most advisors just don’t go that far for you. The addendum would be that technical advisors are worth having on there, if you have a deeply technical product.
26/ “Find an investor’s Calendly URL by trying their Twitter handle, and just book a meeting. With so many investor meetings, it’s easy to forget you never scheduled it. Just happened to me and it was both frightening and hilarious.” – Lenny Rachitsky
27/ If you want money, ask for advice. If you want advice, ask for money.
28/ Don’t waste your energy trying to convince investors who strongly disagree to jump onboard. Your time is better spent finding investors who can already see the viability of your vision.
29/ Higher valuations mean greater expectations. You might want to raise for a longer runway, and I’ve seen pitches as great as 36 months of runway, but most investors are still evaluating you on a 12-month runway upon financing round. Can you reach your next milestones (i.e. 10x your KPIs) in a year from now? Higher valuations mean your investor thinks you are more likely and can more quickly capture your TAM at scale than your peers.
30/ As founder, you only need to be good at 3 things: raise money, make money, and hire people to make money. Every investor, when going back to the fundamentals, will evaluate you on these 3 things.
31/ A good distribution of your company’s early angel investors include:
32/ “All investor questions are bad. They are a tell tale sign of objections politely withheld until you are done talking.” Defuse critical questions by incorporating their respective answers into the pitch. For instance, if the question that’ll come up is “How do you think about your competition?”, include a slide that says “We know this is a competitive space, and here’s why we’re doing what we’re doing.” Inspired by Siqi Chen.
33/ “‘Strategics’ (aka non-VCs) may care less about ROI, and more about staying close for competitive intel and downstream optionality.” – Brian Rumao
On managing team/culture…
34/ Align your vacation with when the core team takes their vacation. (i.e. if you’re a product-led team, take your vacations when your engineers and product teams go on vacation)
35/ Please pay yourself as a founder. Some useful founder salary benchmarks:
Seed stage – lowest paid employee
Series A or when you find product-market fit (PMF) – lowest paid engineer
When you hit scale – mid-level engineer
When you’ve reached market dominance – market rate pay for CEOs
If growth slows or stops or hard times hit – cut back to previous compensation, until you grow again
36/ Measure twice, cut once. If you’re going to lay people off, do it once. Lay more people than you think you need to, so you don’t have to do it again. Keep expectations real and don’t leave unnecessary anxiety on the table for those that still work for you.
One of my favorite examples is that, at the start of the pandemic, Alinea, one of the most recognizable names in the culinary business, furloughed every full-time employee, giving them $1000 and paid for 49% of their benefits and health care, eliminated the salaries of owners completely, and reduced the business team and management’s salary by 35%. Not only that, they emailed all their furloughed employees to level expectations and to understand the why. In normal situations, the law states that furloughed employees shouldn’t have access to their work emails, but Nick said “I will break the law on that because this is the pandemic.” For more context, highly recommend checking out Nick’s Medium post and his Eaterinterview, time-stamped at the start of the pandemic.
37/ Take mental health breaks. I’ve met more venture-backed founders who regretted not taking mental health breaks than those who regretted taking them.
38/ Build honesty into your culture, not transparency. And do not conflate the two. Take, for example, you are going through M&A talks with one of the FAAMGs. If you optimize for transparency, this gets a lot of hype among your team members. But let’s say the deal falls through. Your team will be devastated and potentially lose confidence in the business, which can have second-order consequences, like them finding new opportunities or trying to sell their shares on the secondary market. I’ve quoted mmhmm‘s Phil Libinbefore, when he said, “I think the most important job of a CEO is to isolate the rest of the company from fluctuations of the hype cycle because the hype cycle will destroy a company.” Very similarly, full transparency sounds great in theory but will often distract your team from focusing on their priorities.
39/ When in doubt, default to Bezos’ two-pizza rule. Every project/team should be fed by at most two pizzas. In the words of David Sacks, even “the absolute biggest strategic priority could [only] get 10 engineers for 10 weeks.” Don’t overcomplicate and over-bureaucratize things.
40/ Perfect is the enemy of good. Have a “ship-it” mentality. Give yourself an 10-20% margin of error. Equally so, give your team members that same margin so that they’re not scared of making mistakes. It’s less important that mistakes happen, and they will, but more important how you deal with it.
41/ James Currier has a great list of ways to compensate your team and/or community.
Value of using the product (e.g. utility, status, cheaper prices, fun, etc)
Cash (e.g. USD, EUR)
Equity shares (traditional)
Discounted fees
Premier placement and traffic/attention
Status symbols
Early access
Some voting and/or decision making, ability to edit/change
Premier software features
Membership to a valuable clique of other nodes
Real world perks like dinner/tickets to the ball game
Belief in the mission (right-brain, intrinsic)
Commitment to a set of human relationships (right-brain, intrinsic)
Tokens (fungible)
Non-Fungible Tokens
42/ Have Happy Hour Mondays, not on Thursdays and Fridays. Give your team members something to look forward to on Mondays.
43/ “Outliers create bad mental models for founders.” – Founder Collective
44/ Once you break past product-market fit and hit scale, you have to start thinking about your second act. It’s about resource allocation. The most common playbook for resource allocation is to spend 70% of your resources on your core business, 20% on business expansion, and 10% on venture bets.
45/ The top three loads that a founder needs to double down or back on when hitting scale. “You have to stop being an individual contributor (IC). Stop being a VP. And you gotta hire great [VPs]. The sign of a great VP… is that you look forward to your 1:1 each week. And that plus some informal conversations are enough. Otherwise you’re micromanaging.” – Jason Lemkin.
46/ If you could write a function to mathematically approximate the probability of success of any given person on your team, what would be the coefficients? What are the parameters of that function? Inspired by Dharmesh Shah.
47/ The team you build is the company you build. And not, the plan you build is the company you build. – Vinod Khosla.
48/ “The output of an organization is equal to the vector sum of its individuals. A vector sum has both a magnitude and a direction. You can hire individuals with great magnitude, but unless they were all pointed in the same direction, you’re not going to get the best output of the organization.” – Pat Grady summarizing a lesson he learned from Elon Musk.
49/ “The founder’s job is to make the receptionist rich.” – Doug Leone
50/ “The amount of progress that we make is directly proportional to the number of hard conversations that we’re willing to have.” – Mark Zuckerberg quoting Sheryl Sandberg.
52/ Hire for expertise, not experience. The best candidates talk about what they can do, rather than what they did.
53/ A great early-stage VP Sales focuses on how fast they can close qualified leads, not pipeline. Also, great at hiring SDRs. It’s a headcount business.
54/ A great early-stage VP Marketing focuses on demand gen and not product or corporate marketing.
55/ Kevin Scott, now CTO of Microsoft, would ask in candidate interviews: “What do you want your next job to be after this company?” Most of your team members realistically won’t stick with the same company forever. This is even more true as you scale to 20, then 50, then 100 team members and so on. But the best way to empower them to do good work is to be champions of their career. Help them level up. Help them achieve their dreams, and in turn, they will help you achieve yours.
56/ When you’re looking to hire people who scale, most founders understand that a candidate’s experience is only a proxy for success in the role. Instead, ask: “How many times have you had to change yourself in order to be successful?” Someone who is used to growing and changing according to their aspirations and the JD are more likely to be successful at a startup than their counterparts. Inspired by Pedro Franceschi, founder of Brex.
57/ The best leading indicator of a top performing manager is their ability to attract talent – both externally and internally. “The ability to attract talent, not just externally, but also internally where you’ve created a reputation where product leaders are excited to work not just with you, but under you.” Inspired by Hareem Mannan.
58/ When you’re hiring your first salespeople, hire in pairs. “If you hire just one salesperson and they can’t sell your product, you’re in trouble. Why? You don’t know if the problem is the person or the product. Hire two, and you have a point of comparison.” Inspired by Ryan Breslow.
59/ The longer you have no team members from underestimated and underrepresented backgrounds and demographics, the harder it is to recruit your first.
On governance…
60/ You don’t really need a board until you raise the A. On average, 3 members – 2 common shareholders, 1 preferred. The latter is someone who can represent the investors’ interests. When you get to 5 board seats (around the B or C), on average, 3 common, 1 preferred, and 1 independent.
61/ As you set up your corporate board of directors, set up your personal board of directors as well. People who care about you, just you and your personal growth and mental state. Folks that will be on your speed dial. You’ll thank yourself later.
62/ You can’t fire your investor, but investors can fire you, the founders. That’s why it’s just as important, if not more important, for founders to diligence their investors as investors do to founders. Why for founders? To see if there’s founder-investor fit. The best way is to talk to the VC’s or angel’s portfolio founders – both current and past. Most importantly, to talk to the founders in their past portfolio whose businesses didn’t work out. Many investors will be on your side, until they’re not. Find out early who has a track record for being in for the long haul.
63/ Echoing the previous point, all your enemies should be outside your four walls, and ideally very few resources, if at all, should be spent fighting battles inside your walls.
64/ Standard advisor equity is 0.25-1%. They typically have a 3-month cliff on vesting. Founder Institute has an amazing founder/advisor template that would be useful for bringing on early advisors. You can also calculate advisor equity as a function of:
(their hourly rate*) x (expected hours/wk of commitment) / (40 hours) x (length of advisorship**) / (last company valuation) *based on what you believe their salary would be **typically 1-2 years
65/ Have your asks for your monthly investor updates at the top of each email. Make it easy for them to help you. Investors get hundreds every month – from inside and outside their portfolio. I get ~40-50 every month, and I’m not even a big wig. Make it easy for investors to help you.
66/ Monthly/quarterly investor updates should include, and probably in the below order:
Your ask
Brief summary of what you do
Key metrics, cash flow, revenue
Key hires
New product features/offerings (if applicable)
67/ In his book The Messy Middle, Scott Belsky quotes Hunter Walk of Homebrew saying, “Never follow your investor’s advice and you might fail. Always follow your investor’s advice and you’ll definitely fail.”
68/ While you’re probably not going to bring on an independent board member until at or after your A-round, since they’re typically hard to find, once you do, offer them equity equivalent to a director or VP level, vested over two to three years (rather than four). Independent board members are a great source for diversity, and having shorter schedules, possibly with accelerated vesting schedules on “single trigger”, will keep the board fresh. Inspired by Seth Levine.
69/ “A company’s success makes a VC’s reputation; a VC’s success does not make a company’s reputation. In other words to take a concrete example, Google is a great company. Google is not a great company because Sequoia invested in them. Sequoia is a great venture firm because they invested in Google.” – Ashmeet Sidana. This seems like obvious advice, but you have no idea how many founders I’ve met started off incredible, then relied on their VC’s brand to carry them the rest of the way. Don’t rely solely on your investors for your own success.
70/ “Invest in relationships. Hollywood idolizes board meetings as the place where crucial decisions are made. The truth is the best ideas, collaboration, and feedback happen outside the boardroom in informal 1:1 meetings.” – Reid Hoffman
71/ When your company gets to the pre-IPO stage or late growth stages, if you, as the founding CEO, are fully vested and have less than 10% ownership in your own company, it’s completely fine to re-up and ask your board for another 5% over 5 years. No cliffs, vesting starts from the first month. Inspired by Jason Calacanis.
72/ A great independent board member usually takes about 6-9 months of recruiting and coffee chats. You should start recruiting for one as early as right after A-round closes. In terms of compensation, a great board member should get the same amount of equity as a director of engineering at your current stage of the company, with immediate monthly vesting and no cliff. Inspired by Delian Asparouhov.
73/ If your cap table doesn’t have shareholders with equity that is differentiated (i.e. everyone owns the same size of a slice of the pie), then their value to the company won’t be differentiated. No one will feel responsible for doing more for the business. And everyone does as much as the lowest common denominator. It becomes a “I only have to do as much as [lowest performer] is doing. Or else it won’t be fair.”
74/ “If you ‘protect’ your investor updates with logins or pins, you will also protect them from actually being read.” – Paul Graham
On building communities…
75/ Every great community has value and values. Value, what are members getting out of being a part of the community. Values, a strict code of conduct – explicit and/or implicit, that every member follows to uphold the quality of the community.
76/ Build for good actors, rather than hedge against the bad actors. I love Wikipedia’s Jimmy Wales‘ steak knives analogy. Imagine you’re designing a restaurant that serves steak. Subsequently, you’re going to be giving everyone steak knives. There’s always the possibility that people with knives will stab each other, but you won’t lock everyone in cages to hedge against that possibility at your restaurant. It’s actually rather rare for something like that to happen, and we have various institutions to deal with that problem. It’s not perfect, but most people would agree that they wouldn’t want to live in a cage. As Jimmy shares, “I just think, too often, if you design for the worst people, then you’re failing design for good people.”
77/ If you’re a consumer product, Twitter memes may be the new key to a great GTM (go-to-market) strategy. (e.g. Party Round, gm). As a bonus, a great way to get the attention of VCs. There’s a pretty strong correlation between Twitter memes and getting venture funding. Community, check. Brand, check. Retention and engagement, check.
On pricing…
78/ For B2B SaaS, do annual auto-price increases. Aim for 10% every year. Why?
Customers will try to negotiate for earlier renewal, longer contract periods.
When you waive the price increases, customers feel like they’re winning.
You can upsell them more easily to more features.
79/ If you’re a SaaS product, you shouldn’t charge per seat. Focus on charging based on your outcome-based value metric (# customers, # views per video), rather than your process-based value metric (e.g. per user, per time spent). If you charge per seat, aka a process-based value metric, everything works out if your customer is growing. But incentives are misaligned when your customer isn’t. After all, more users using your product makes you more sticky, so give unlimited seats and upsell based on product upgrades.
80/ Charge consumers and SMBs monthly. And enterprises annually. The former will hesitate on larger bills and on their own long-term commitment. The latter doesn’t want to go back to procurement every month to get an invoice approved. Equally so, the latter likes to negotiate for longer contracts in exchange for discounts. Inspired by Jason Lemkin.
On product/strategy…
81/ Having a launch event, like Twitchcon, Dreamforce, Twilio’s Signal, or even Descript’s seasonal launch events, aligns both your customers and team on the same calendar. Inspired by David Sacks’ Cadence. For customers, this generates hype and expectation for the product. For your team, this also sets:
Product discipline, through priorities, where company leaders have to think months in advance for, and
Expectations and motivates team members to help showcase a new product.
82/ Startups often die by indigestion, not starvation. Exercise extreme focus in your early days, rather than offering different product lines and features.
83/ “Epic startups have magic.” Users intuitively understand what your product does and are begging you to give it to them. If you don’t have magic yet, focus on defining – quantitatively and qualitatively – what your product’s magic is. Ideally, 80% of people who experience the magic take the next step (i.e. signup, free trial, download, etc.). Inspired by John Danner.
84/ To find product-market fit (PMF), ask your customers: “How would you feel if you could no longer use our product?” Users would have three choices: “Very disappointed”, “Somewhat disappointed”, and “Not disappointed”. If 40% or more of the users say “very disappointed”, then you’ve got your PMF. Inspired by Rahul Vohra.
85/ For any venture-backed startup founder, complacency is cancer. As Ben Horowitz would put it, you’re fighting in wartime. You don’t have the luxury to act as if you’re in peacetime. As Reid Hoffman once said, “an entrepreneur is someone who will jump off a cliff and assemble an airplane on the way down.”
86/ Good founders are great product builders. Great founders are great company builders.
87/ To reach true scale as an enterprise, very few companies do so with only one product. Start thinking about your second product early, but will most likely not be executed on until $10-20M ARR. Inspired by Harry Stebbings.
88/ Build an MVT, not MVP. “An MVP is a basic early version of a product that looks and feels like a simplified version of the eventual vision. An MVT, on the other hand, does not attempt to look like the eventual product. It’s rather a specific test of an assumption that must be true for the business to succeed.” – Gagan Biyani
89/ Focus on habit formation. “Habit formation requires recurring organic exposure on other networks. Said another way: after people install your app, they need to see your content elsewhere to remind them that your app exists.” And “If you can’t use your app from the toilet or while distracted—like driving—your users will have few opportunities to form a habit.” Inspired by Nikita Bier.
90/ “Great products take off by targeting a specific life inflection point, when the urgency to solve a problem is most acute.” – Nikita Bier. Inflection points include going to college, getting one’s first job, buying their first car or home, getting married, and so on.
91/ You’re going to pivot. So instead of being married to the solution or product, marry yourself to the problem. As Mike Maples Jr. once said about Floodgates portfolio, “90% of our exit profits have come from pivots.”
92/ Retention falls when expectation don’t meet reality. So, either fix the marketing/positioning of the product or change the product. The former is easier to change than the latter.
93/ To better visualize growth of the business, build a state machine – a graph that captures every living person on Earth and how they interact with your product. The entire world’s population should fall into one of five states: people who never used your product, first time users, inactive users, low value users, and high value users. And every process in your business is governed by the flow from one state to another.
For example, when first time users become inactive users, those are bounce rates, and your goal is to reduce churn before you focus on sales and marketing (when people who never used your product become first time users). When low value users become high value users, those are upgrades, which improve your net retention. Phil Libin took an hour to break down the state machine, which is probably one of the best videos for founders building for product-market fit and how to plan for growth that I’ve ever seen. It’s silly of me to think I can boil it down to a few words.
94/ When a customer cancels their subscription, it’s either your fault or no one’s fault. If they cancel, it is either because of the economy now or you oversold and underdelivered. So, make the cancellation (or downgrading) process easy and as positive as the onboarding. If so, maybe they’ll come back. Maybe they’ll refer a friend. Inspired by Jason Lemkin.
On market insight and competitive analysis…
95/ To find your market, ask potential customers: “How would you feel if you could no longer use [major player]’s product?” Again, with the same three choices: “Very disappointed”, “Somewhat disappointed”, and “Not disappointed”. If 40% or more of your potential customers say “not disappointed”, you might have a space worth doubling down on.
96/ Have a contrarian point of view. Traits of a top-tier contrarian view:
People can disagree with it, like the thesis of a persuasive essay. It’s debatable.
Something you truly believe and can advocate for. Before future investors, customers, and team members do, you have to have personal conviction in it. And you have to believe people will be better off because of it.
It’s unique to you. Something you’ve earned through going through the idea maze. A culmination of your experiences, skills, personality, instincts, intuition, and scar tissue.
Not controversial for the sake of it. Don’t just try to stir the pot for the sake of doing so.
It teaches your audience something – a new perspective. Akin to an “A-ha!” moment for them.
Backed by evidence. Not necessarily a universal truth, but your POV should be defensible.
It’s iterative. Be willing to change your mind when the facts change.
97/ Falling in love with the problem is more powerful than falling in love with the solution.
98/ If you’re in enterprise or SaaS, you can check in on a competitor’s growth plan by searching LinkedIn to see how many sales reps they have + are hiring, multiply by $500K, and that’s how much in bookings they plan to add this year. Multiply by $250K if the target market is SMB. Inspired by Jason Lemkin.
99/ Failures by your perceived competitors may adversely impact your company. Inspired by Opendoor’s 10-K (page 15).
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Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal or investment advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.
“Good writing is always about things that are important to you, things that are scary to you, things that eat you up. But the writing is a way of not allowing those things to destroy you.” — John Edgar Wideman
I go through these sinusoidal episodes where I write about my journey as a person. A world where things just aren’t perfect. And I, like everyone else who graces this planet, am struggling to find where I fit in the world. And when I’m swimming in the depths of self-discovery, I find that for an audience of entrepreneurs and investors, I really haven’t written much about my discoveries and re-discoveries in the wonderful land of innovation. The other half of it is for my fear of knowledge atrophy.
And so, I spend back to back to back weeks writing about the inner workings and the robust mental models of some of the world’s top intellectual athletes. Then in hindsight, once again, I realize that my blog begins to read just like any other business blog – any other startup, VC, tech blog – out there. And I fear that I’ve lost my voice. So, I re-embark on a literary path of introspection and growth.
The great Charlie Kaufman once said about his time on Adam Resnick’s show, Get a Life, “Adam Resnick’s scripts were the best on the show. And we all tried to write in Adam’s voice. That was the job. And I was frustrated with my results. But it occurred to me that there was no solution to this problem as long as my job was to imitate someone else’s voice. I can maybe get close but I was never going to get better at it than Adam.
“The obvious solution was not to throw my hands up but try to find myself in a situation where I was doing me, not someone else. Do you. It isn’t easy, but it’s essential. It’s not easy because there’s a lot in the way. In many cases, a major obstacle is your deeply seated belief that ‘you’ is not interesting. And since convincing yourself that you are interesting is probably not going to happen, take it off the table. Agree.
“Perhaps I’m not interesting, but I am the only thing I have to offer. And I want to offer something. And by offering myself in a true way, I am doing a great service to the world. Because it is rare and it will help. As I move through time, things change. I change. The world changes. The way the world sees me changes.”
As a product of what I can only describe as a game of tug-of-war between my right and left brain, I start many essays and unfortunately, lose interest half-way through writing them. As such, I’ve amassed a far-reaching graveyard of zombie posts. Eclectic, disparate monologues. Neither fully alive nor fully dead. Some may see a phoenixlike revival. Others may forever rest as vestigial drafts until Indiana Jones excavates them.
But nevertheless, the act of writing to think – to express – hones my mind like a whetstone to a kitchen knife. The more I do so, the sharper I get. Yet too much so, without application, renders the act of sharpening useless.
A few days back, I stumbled across a fascinating tweet on atrophy and hypertrophy.
There are many things in life that atrophy over time – knowledge, skills, presence. Yet there are a handful of things that hypertrophy – brain, demand for proof, and space, just to name a few. For me, writing exists in both categories. Like most skills, it is perishable. Yet the more I see, hear, and learn, the more I demand to myself that I need to put pen on paper. A personal intellectual renaissance.
#unfiltered is a series where I share my raw thoughts and unfiltered commentary about anything and everything. It’s not designed to go down smoothly like the best cup of cappuccino you’ve ever had (although here‘s where I found mine), more like the lonely coffee bean still struggling to find its identity (which also may one day find its way into a more thesis-driven blogpost). Who knows? The possibilities are endless.
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Any views expressed on this blog are mine and mine alone. They are not a representation of values held by On Deck, DECODE, or any other entity I am or have been associated with. They are for informational and entertainment purposes only. None of this is legal or investment advice. Please do your own diligence before investing in startups and consult your own adviser before making any investments.
What is play to you but work to everyone else? Or said differently, what do you love doing that many others would hate or get bored of quickly?
This isn’t an original self-query. I want to say I heard it years ago on one of Tim Ferriss’ episodes, but the exact one escapes me. Yet, recently, my friends and colleagues remind me of this more and more. In the ultimate shortage of labor, more than ever before, people are rethinking what career means to them and what a meaningful career means. I’ve had friends become full-time live streamers, NFT creators, inventors, fiction novelists, artisans… you name it, and I bet you someone that I know – hell someone you know – has dabbled or jumped head-first into it. It truly is the era of the Great Resignation.
Now this question isn’t a call to arms to leave whatever you’re doing. Rather a direction of clarity that may help you live a more enriching life. Something to pursue in your down time. Until you can find a way to get paid to do so – unless you happen to have 20-30 years of runway from previous riches. The same is true if you’re an aspiring founder. Work on your project part-time, until you are ready to take it full-time either with investment capital or revenue.
For me, the answer to the above question is:
Writing (to think)
Meeting, and more specifically, learning from passionately curious and curiously passionate people (what can I say, I’m a glutton for inspiration)
Becoming a world-class questioner (you’ve probably guessed this one from the DGQ series)
Collecting quotes and phrasings that resonate (a few of which are repeat offenders on my blog)
Helping people realize their dreams (something that was much easier when I only had 20 friends, but much harder when I’m adding zeros to the right)
Many of the above have become synonymous with my job description over the years. Did I predict I would fall into venture capital? No. Frankly, it was a result of serendipity and staying open-minded to suggestions from people I really respect.
While this may come off as virtue signaling, to me, I’m willing to, did lose, and continue to lose sleep over each and every one of the above activities. And if I know anything about myself, my goalposts are likely to change over time. Not drastically, but fine-tuned over time.
The DGQ series is a series dedicated to my process of question discovery and execution. When curiosity is the why, DGQ is the how. It’s an inside scoop of what goes on in my noggin’. My hope is that it offers some illumination to you, my readers, so you can tackle the world and build relationships with my best tools at your disposal. It also happens to stand for damn good questions, or dumb and garbled questions. I’ll let you decide which it falls under.
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I spent the majority of my 25th year of being alive in 2021. A year of Yes’s. A year of unexpected surprises created by increasing the surface area in which luck can stick. And by transitive property, I intentionally opened myself up for exploration. Some might call them distractions. For me, they were the scenic route. A route that may or may not change the final destination. But I will only know the robust or flawed nature of my initial destination if I take Highway 101.
And quite expectedly, I said “Yes” to projects that would push me past my “limits.” In foresight, scary. Might I say, fearfully challenging, plagued with self-doubt. Yet, just one question kept pushing me forward while I sought the comfort of being a blanket burrito.
What if this were easy?
Synonymously, if I were the world’s leading expert on this topic, how would I approach this? Not only tactically, but also emotionally. Or oftentimes, lack thereof.
In hindsight, I usually realize I had handicapped myself with training wheels all these years. I am nevertheless proud to say I would have surprised the me on the cusp of 25 years young more than twice given this past year.
This year will continue to be a year of Yes. And, I will undoubtedly continue to surprise myself. Shock will continue to be my currency of growth. Not from others, but by myself.
I have spent a lot of time thinking whether annual goals are the best forms of motivation for a myopic human like myself. I have given into short-term gratification more often than I can count. This past year, the near-term “Yes” is closely correlated with fried chicken and hojicha. Sorry, they are my Kryptonite. It’s unfortunate that my mom dipped me into the Styx holding both rather than just one of my heels.
If I hadn’t gone through my birthday resolutions of my 25th year I wouldn’t be here today. And it wouldn’t have led to the v26.0 software update as it stands.
My latest software update
As such, by 27, I will have spent at least twice a week getting into the flow state – inspired and courtesy of my colleague Edgar Brown. What is the flow state? As one of my good buddies describes it, “the flow state is a state you enter when you feel the most alive and creative. You’re 100% immersed in the activity you’re doing. It’s a completely egoless state. You don’t care – and frankly, forget – about what other people say. Yet after going through the flow state, your ego strengthens and becomes part of your identity.”
Of a similar vein, creativity is also very much a luxury I would like to indulge in more, shackled only by my minor, but noticeable discomfort with idle time. An unfortunate byproduct of my occupational hazard, otherwise known as “hustle porn” as Alexis Ohanian of Reddit fame so elegantly describes it. In year 26, I will have found profound solace in cold silence, where one would find comfort in the absence of speech, as opposed to hot silence – silence that is awkward. And in these weekly cold silent flow states, I hope to better identify my own signal amidst the noise.
In closing
Before this essay sounds any more like a wannabe doctorate dissertation, I hope that in writing this for the public eye, I can better hold myself accountable for my goals.
I hope there will be no consecutive offenders to my resolution list. Since it’ll mean that after a year, I still haven’t broken into the habit I want to build for myself. And it’s that delta between promise and reality that’ll have me going back to the drawing board again. And if you ever see that there are, this blog will keep me honest for failing on my promise to myself. While I imagine there will be repeat offenders by product of growth-inspired oscillations, I am at the end of the day a constant work-in-progress.
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I’m a big fan of self-deprecating humor, but this isn’t one of those moments. Rather it’s a learning moment. While the above question is a lagging indicator for personal growth, it nevertheless deserves to be measured. After all, as the great Peter Drucker would say, you cannot manage what you cannot measure.
The timeframe of evaluation
Why a month? Why not a week? Or not a year?
In the business world, there’s a concept called the rule of 72. Effectively, 72 divided by the growth rate is the time it takes to double. For instance, if you’re growing 30% month-over-month, 72 divided by 30 is 2.4. So, if you’re growing revenue at 30% every month, you’re going to double your revenue in roughly two and a half months.
It is equally as analogous for personal growth.
time it takes to shock yourself = 72 / rate of learning
Let’s say you’re a first-time founder, and you only knew 10 things about how to start a business. But every day, you learn one more thing – via podcasts, articles, blogs, classes, you name it. Give or take a 10% growth rate. You will double your knowledge in about a week. Hopefully enough to shock the you from a week prior. Or take another example, many self-help books ask you to commit to getting 1% better every day. Assuming you consistently do that, you would have doubled your experience in about 2.5 months.
That goes to say, the faster you want to grow, the shorter the timeframe should be for you to look back and reflect on your “stupidity.” For me, it is in my nature to be hungry for knowledge, and I really love learning about things I thought I knew and what I didn’t know. For now, as learning is a top priority for me, a month sounds like a reasonable timeframe to shock myself. I also use the term “stupidity” lightly and with notes of self-deprecating love.
The shock factor
But how do you measure personal growth? Something rather intangible. It isn’t a number like revenue or user acquisition. Some people might have a set of resolutions or goals that is tangible and quantitative – say read two books a month or exercise an hour four days a week. Great goals, but they are often based on the assumption that movement is progress. The two aren’t mutually exclusive, but neither are they synonymous. The former – movement – lacks retrospection.
There were, are, and will be days, weeks, and months, we may just be busy. Our schedule is packed. We’re a duck paddling furiously underwater. And we’re gasping for air. And while our body and mind are exhausted, our body and mind have not expanded. I know I’m not alone when I think to myself, “Wow, I did a lot, but I still feel like I’m not moving anywhere.”
Our brains are unfortunately also poor predictors of the future. We use past progress as indicators of future progress. But while history often rhymes, it does not repeat. Our predictions end up being guesstimates at best.
So I look into the past. I measure my own personal growth emotionally – by shock, very similar to how Tim Urban measures progress of the human race (which I included at the end of a previous essay). I don’t know what the future will hold and neither will I make many predictions of what the future will hold for me. If I knew, I’d have made a fortune on the stock market already, in startups, or on crypto already. What I can commit to is my relentless pursuit of taking risks, making mistakes, and trying things that scare the bejesus out of me. Since only by making new mistakes will I grow as a person. What I am equipped with now can be mapped out by the scar tissue I’ve accumulated.
Coming full circle, what’ll make me realize and appreciate my mistakes and failures more is knowing that as a greenhorn I was laughably stupid.
But if, in retrospect, David from a month ago sounds like quite the sensible person, my growth will have gone from exponential to linear. Or worse, flatlined.
For founders
And now that I’m thinking aloud – or rather, writing aloud (which may deserve its indictment into the #unfiltered series), this might be a great line of questions to ask founders as well.
As a founder, what was the last dumb thing you did? When was that?
And before that, what was the second most recent dumb thing you did?
And the third most recent?
There’s the commonly repeated saying in the venture world. Investors invest in lines, not dots. Two’s a line. Three’s a curve. I want to see how fast you’ve been growing and learning.
Why such a question?
If we’re in it for the long run, I wanna assess how candid and self-aware you are. Pitch meetings often depict a portrait of perfection. But founders, like all humans, aren’t perfect. For that matter, neither are investors.
Venture capital is impatient capital. We demand aggressive timelines, and honestly, quite toxic to most people in the world. Given that, if you’re going to learn how to hustle after investors invest, you’re going to have a tough time convincing investors. But if the hustle is already in your DNA, that bias to action lends much better to the venture model.
The DGQ series is a series dedicated to my process of question discovery and execution. When curiosity is the why, DGQ is the how. It’s an inside scoop of what goes on in my noggin’. My hope is that it offers some illumination to you, my readers, so you can tackle the world and build relationships with my best tools at your disposal. It also happens to stand for damn good questions, or dumb and garbled questions. I’ll let you decide which it falls under.
Subscribe to more of my shenaniganery. Warning: Not all of it will be worth the subscription. But hey, it’s free. But even if you don’t, you can always come back at your own pace.
