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Sometimes Shrinking is the Right Move


  

In the early years of my first startup we totally ran out of money. I remember sitting in my apartment staring at the ceiling thinking "how do we possibly recover from this?"

Then I had a (then) silly idea. What if I just took the whole staff down to just a couple of people and we ran "bare-bones" for a while? I recognized it was a big step back, but I was also thinking "I'd rather be alive and breathing than dead and bloated" (the former being a Pearl Jam reference, the latter being a Stone Temple Pilots reference — RIP 90's).

We made the hard decision of letting basically everyone go. We moved the office back to my apartment. We sold off furniture and office equipment. It sucked.

And then something really interesting happened.

All of a su...



Article

How Relationships Change When You're Successful


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Fresh from graduating at the bottom of my class in high school, I packed my $800 orange Datsun and moved to some weird place I'd never heard of before called "Ohio" to go to college. Back then the Internet didn't exist as we now know it, so when you left the state (unless you called someone on their home line) — you no longer existed.

I went ghost for almost 4 years — no trips home, no holidays — nothing. I lost touch with most of my friends and family. But while they were wondering what prison I was incarcerated at, I was busy building one of the first Internet companies.

The company did well, and when I returned, I was a millionaire. Little did I know that from that point on none of my relationships would ever be the same. Here are the ha...



Article

Where to Find Opportunities in a Recession


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Recessions breed incredible opportunities for startups, if only us Founders knew where to look and how to leverage them.

At its core, a recession distracts everyone all at once, meaning only a select few will have the fortitude and foresight to find advantages. What we need to do during these times is step back and look at the overall picture to understand not just what's happening to us, but what's also happening to everyone else.

This is where the opportunity begins.

Our Competition is Totally Distracted

It's really hard for anyone to stay focused on growth when the walls are closing in around us. That's why most of our competition will be circling the wagons and staying completely fixated on internal struggles and survival. This is a gol...



Article

Bringing on an Investor Means Hiring Your Boss


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The moment we take on an investor, we just hired our own boss. There's really no way around it.

It doesn't matter how much equity we give up or how we structure the deal. The moment we owe someone money, the dynamics change. People don't tell us that when we raise money, but if we've ever raised before, it becomes painfully obvious.

The Golden Rule: She with the Gold, Rules

Anyone who holds the purse strings to our startup essentially runs our startup. If I own 5% of your company but 100% of the capital, I run the company. I may not own the company, but if I control the blood flow of the company, it lives or dies by my choice.

The vast majority of capital raises place all of the flow of capital and the control provisions that come with that...



Article

Treat Departing Employees like Future Employees


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Last week I had a great conversation with a Startups.com employee who was leaving to join another company. During the conversation I repeated the same thing I've told hundreds of departed employees, "This isn't the last time we'll work together, so while I'm sad to see you leave, I'm pumped to team up again later."

Why would we tell someone that's leaving how excited we are to be working together in the future? Because if we've been in this game long enough, we realize how many of those relationships do in fact come around again... and again... and again.

As Founders, especially veteran ones, we begin to learn that every single person we work with is part of a larger "workforce" of future hires that becomes some of our most reliable talent...



Article

Let's Define Success By What We Don't Have To Do Anymore


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What if we defined success by what we DON'T have to do anymore?

What if we didn't have to work with people we don't like? What if we never had to miss dinner with our kids? What if we never had to think twice about taking a vacation?

Does this sound like startup Shangri-la? I thought so, too, until 8 years ago. I decided to build Startups.com based on everything I never wanted to do again.

It fundamentally changed my life.

The List of "No" is Life Changing

It turns out that making a list of things we don't want to ever do is actually much easier than a list of things we are trying to accomplish.

That's because saying "no" is more immediate. We can say, "I'll take more vacations when I'm really rich" (the "someday" paradox), or we can say,...



Article

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


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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

Forget Compensation, let's talk "Quality of Life"


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Would you rather make $200K with a shitty quality of life or $100K with an awesome quality of life?

In the startup world we all seem to understand that $200K is better than $100K, but we do a really lousy job of qualifying that difference based on what actually matters — our quality of life.

When we step back for a second, we may come to find out that "compensation" in strictly monetary terms, is a broken metric. We're all really trying to translate those dollar signs into how it will impact our quality of life.

So why don't we just start with what improves our quality of life and then figure out where money comes in?

What we really want is time.

Years ago at Startups.com, we instituted a work from home policy. At the time we were all sti...



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...



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