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How to tell Investors “Sorry it didn’t work out.”


  

Breaking up with investors at the end of a failed startup journey is basically every Founder's worst nightmare. It's that awful conversation we did everything in our power to avoid. We rehearsed it over and over while starting at the ceiling at 3 AM. And yet, here we are.

How we break up with investors is as important as how we built the relationship to begin with. That's because in the startup world, building long standing relationships among key players, including investors, is all about treating those folks with respect at every step of the journey — even the shitty ending part.

We need to own the outcome

This is no time to point fingers. It was our job to create a successful startup; it didn't work out — we have to own that. This is th...



Article

How a Founder should Communicate in Crisis


  

Founders are rarely prepared for how to handle a legit crisis, like when the whole world turns upside down overnight.

I lived through 9/11 with 700 employees, raised multiple funding rounds in the middle of the 2007 Financial Crisis, and just for "funsies" oversaw the overnight shutdown of a startup with 450 people.

So yeah, I have some experience here.

What I've learned is when crisis hits, a solid approach to communication is one of the single most effective tools we can employ.

Cut the Bullshit

In times of crisis, no one wants to hear the sugar-coated version of where things stand.

"Hey Team, I know half of you have turned into flesh-eating Zombies, but the good news is there's way more La Croix for those of you who have survived!"

No...



Article

Let's All Work On The Last Startup We'll Ever Do


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8 years ago I decided that whatever startup I was going to launch would be the last startup I ever did.

I made this decision after launching 8 startups and realizing that creating a company as a "means to an end" was a shitty way for me to live.

I found myself in this constant cycle of being wildly preoccupied by "the next thing." Raising money for my startup was a means to a quicker exit. Killing myself meant I could finish this chapter faster, more successfully.

I had endless justifications for compromising my life because I could always "make it up later."

But what if there was no "later"?

This time around I decided to change it up.

I asked myself, "What if I picked what I wanted to do for the rest of my life NOW?" So instead of maki...



Article

Why We Plan Our Entire Business In 5-Day Sprints


  

There's an incredible amount of magic in having very little time to get things done.

That's why at Startups.com, with over 200+ people, we manage our entire workload based on what we plan on getting done by Friday. That's it. No long term planning sessions, no confusing Gantt charts or Trello boards. Just 5 days to get stuff done.

And damn it's effective.

Less Time = Less Room for Excuses

The problem with creating longer planning cycles is that every additional day, week, or month decreases the visibility and accountability for a single day of work. Our focus needs to be reducing the amount of time we can cheat on our time.

Imagine we wanted to lose 10 pounds this year. At lunch, we can order a cheeseburger, because hey, we have all year t...



Article

Forget Inventing New Ideas, Try Improving What's Out There


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While the novelty of creating the next Facebook sounds amazing, the truth is we don't need to necessarily invent a product to bring a new innovation to market.

If we look closely, we'll see that some of the fastest-growing companies out there — Uber, Casper, Dollar Shave Club and dare I say it, WeWork — are all based on ancient business models with a new twist.

Start With This: "What's Wrong With Current Products?"

Look, Uber didn't invent taxis — they just simply asked, "What's broken about the taxi business?" (Well, the limo business initially but who's tracking?) Any of us would be hard-pressed to find an existing product or service that couldn't use a ton of improvement.

What customers care most about is the improvement. Maybe that's ...



Article

Is It OK To Admit I Have Flaws?


  

We're all freaked out about sharing our flaws.

We're worried that employees, investors, customers and just about anyone else will think less of us. Maybe they won't invest, maybe they won't buy our products, or maybe they won't come to work for us.

Sharing our flaws is terrifying. But it's also one of the most liberating things we can do not just as Founders, but as the weirdo humans we all are.

You're the Founder/CEO of Startups — do you have flaws?

Geez, where do I begin?

I've been building startups for nearly 3 decades and I have tons of flaws. I've got massive ADHD (I can't even proofread this sentence without losing focus), terminal pain, crippling anxiety — and I can't dance to save my life.

For a long time I would have never even...



Article

What Should We Teach Kids About Startups?


  

Imagine what would happen if we spent as much time trying to teach kids to become entrepreneurs as we did trying to get them to prepare for the SATs?

Let's remember that a disproportionate amount of our academic focus is around a series of standardized tests designed in an era where homogenizing the workforce was our number one goal (side note: it worked).

Now our goal is the polar opposite: differentiating our workforce. The only way our kids will succeed is if they can stand apart from others and chart their own course.

That's the essence of entrepreneurship, and it's something we can absolutely teach.

Why should we start with kids as entrepreneurs?

Kids are natural entrepreneurs.

They possess the most powerful skill any of us can have...



Article

How Do I "Buy Out" An Equity Holder Fairly?


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Getting equity back from an existing stakeholder isn't easy — but it is possible.

It's a situation that very few Founders have ever been through before, so no one really knows how to go about it. Let's talk a bit about how the situation develops and what we can do to get some of that precious equity back into our coffers.

Remember, Equity is a Promise of Payment

More than anything, equity isn't just a stock issuance. It's a promise that at some future point that stock will be worth cash money — maybe.

When we think about pulling the equity back, we have to think in terms of how to redeem that promise of payment in some capacity. It's not just a matter of "taking it away" per se, it's a matter of trading the terms of the initial agreement ...



Article

How Much Should I Budget For An MVP?


  

App development is not a straightforward process, despite how much "process" developers add to the equation. There are basically 3 things that are never working in our favor:

First, the idea is in our head, not in the developers head, so the translation is a huge, time consuming challenge.

Second, we're building an app that has never existed before, so we don't actually know how people are going to use it or what features are required.

And last, we're assuming that our developer is capable of completing a working app. All of these are giant issues that should give us pause (and keep our cash in the bank for a minute!).

Focus on Milestones

We have to think about building an app in stages — not the whole enchilada all at once. To do that, w...



Article

Will Investors Fund a "Small" Business?


  

Funding doesn't make a lot of sense to first time Founders. In our minds, we think, "Hey, investors want to make money, so if my startup can make money, who cares how big it gets?"

Unfortunately, that thinking overlooks one big fact: that for every one investor check out there, there are hundreds of startups competing for it.

In order to understand how investors look at one deal versus another, we first have to understand how investors look at deals in the first place.

The thinking goes that all investments are high risk, so if you're going to risk your money, you may as well make the bets that are big enough to wipe out all of your bad bets.

So Who Does Fund Small Deals?

Actually, lots of people, just not most "traditional" investors.

M...



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