ArticlePlan for Bad Times, Budget in Good Times

Plan for Bad Times, Budget in Good Times

When times are good at our startups, we think it will never change; when times are bad, we think it will never change.

Yet the only constant with startups is change.

The challenge for many Founders is that this is likely the first time we've had good or bad times, so we have yet to see a full cycle. That makes it difficult to know whether this is a short-term blip or a long-term trend. As such, we tend to grossly overcompensate by spending too much in good times and running for the hills in bad times.

How Startups Actually Grow

We all have this fantasy that our startups constantly grow "up and to the right!" on our beautiful charts. The reality is way different. The best way to think about our startup journey is a constant cycle of "feast o...

ArticleWhen a $40m Exit is More Than a $200m Exit

When a $40m Exit is More Than a $200m Exit

What if I told you that selling a company for $40 million could net you more money than if you sold it for $200 million?

On its face, it sounds ludicrous, I know! But what's missing in that formula isn't the exit price, but how much of that exit we get to put in our pocket as we raise more rounds of capital.

More importantly, our opportunities to sell for $40m are dramatically more abundant than selling for $200m (or more!). That means every time we raise capital, while it sounds like we're improving our chances of an outcome, we're also reducing our options to find an exit at all.

Real Founder Dilution Numbers

CapShare released a study of 5,000 startup cap tables to determine how much equity Founders have at each stage of a funding round. ...

ArticleDon't Fear the Reaper: AI Edition

Don't Fear the Reaper: AI Edition

Yes, AI is actually going to change everything, and No, we're not all totally screwed.

Why? Because every time we embrace change as Founders, we create exponentially more value than has ever existed before. And every time things change, everyone freaks out and thinks the "old ways" were the only way things should have been done.

I'm an avid carpenter — I build tons of stuff with power tools. Every time I'm zipping through a piece of lumber with my portable saw I think, "Some poor bastard used to have to do this by hand. I bet the moment he saw an electric saw, he figured he'd be out of a job!"

What we're missing with that line of thinking isn't whether we'll be displaced — it's whether we should have been doing that work by hand, to begin w...

ArticleDon't Let Investors Become Your Customer

Don't Let Investors Become Your Customer

What happens when our main customer becomes our investor?

This is fundamentally the rabbit hole that nearly every startup goes down when fundraising. At some point, we start to realize that we're no longer building a startup for the needs of our customers; we're building it for the perceived needs of our next investors.

At any given time, our startup needs vastly more cash than we have, so we're always looking for the shortest path toward filling that gap. The very nature of investor capital is that it comes dramatically before customer capital (revenue), so in most cases, our early "customer," as it relates to cash, is an investor.

So what happens? Our investors become who we're building the company for.

We Optimize for Their Needs First


ArticleWe Can't Stay Out Of The Game For Too Long

We Can't Stay Out Of The Game For Too Long

Startup Founders are like top athletes — if we don't keep working that startup muscle daily, we get out of shape fast!

Normally while we're building our startups, that's not a problem — we get all the "exercise" we need in the form of unrelenting stress and anxiety (hey, it's burning calories, right?)

But seriously, being active in our startup keeps us relevant, connected, and engaged in our business worlds. The moment we disconnect, whether it be from a sale, a wind-down, or even just a career change, we start letting that muscle atrophy, and it's very hard to get it back in shape.

We Lose Our Relevance

When we're in the middle of building our startups, one of the things that we can take for granted is how relevant we are at the moment. We...

ArticleWhat if Our Dreams Are an Illusion?

What if Our Dreams Are an Illusion?

What if all the sacrifice we're making for this startup isn't worth it?

There's a bit of a compact we make with ourselves that it's OK to sacrifice our time, money, and life experiences for a big payoff later. The most important part of that assumption is that we're absolutely certain that the things we'll get with that payoff are worth the sacrifice.

But how do we know for sure? What if we go through all of this sacrifice, get everything we ever thought we wanted, and wind up no more satisfied than we are today? What if our dreams are an illusion?

The Cost of Being Wrong

The cost of us being wrong is significant because, as Founders, we sacrifice a lot for our goals. By comparison, if we work a regular day job, we get paid for our time. We...

ArticleWhat if this isn't a "Big Business"?

What if this isn't a "Big Business"?

It doesn't matter if we have a "big opportunity" if it never really accomplishes our personal goals.

Yet it's hard to avoid starting a company without thinking in terms of the market potential or the ultimate outcome. If we run around saying that our new startup could one day be a "$1 million business," we're going to get very few high fives. Yet, if we say we're going to be a "$1 billion business," we'll have people lining up to talk to us. Why is that?

The difference in that balance becomes who benefits from that outcome. At $1 million, it's almost entirely the Founders. At $1 billion, it's investors, staff, and everyone else that's joined in the party. What we need to consider is who we're really building this business for and, as such, ...

ArticleFounders, Not All Problems Are Apocalyptic

Founders, Not All Problems Are Apocalyptic

There are very few problems at a startup worth actually stressing about — but that doesn't keep us from burning ourselves out about them.

Startups are nothing but problems. Everything about this epic shit show that we've created is a problem. We're building a company that has never existed, in a market we invented, with a team that got here 5 minutes ago. What about that would breed anything but problems?

Even if we can agree that the fire hose of problems will never be turned off, we can at least understand how to treat those problems differently, separating the ones that may end us from the ones that are "just another day at the office." If we can't, we will crush ourselves with stress and anxiety.

Problems vs. Apocalypse

First off, we re...

ArticleStop Listening to Investors

Stop Listening to Investors

Startup investors are incredibly useful experts — on investing in startups.

The problem for us Founders is when we start taking their expertise on building startups as gospel, and worse, start pivoting based on their feedback versus our own decisions.

This stems from the fact that as Founders, we don't really have a lot of data points or experience when it comes to the qualifications of investors. We tend to think that since they invest in startups, they must be experts in how startups operate.

Investors are not Fortune Tellers

One of my favorite indulgences is listening to an investor who has been thinking about my business for 60 seconds tell me what the future of my business will be. I will always politely listen (you never know what you...

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