There is a ton of hidden treasure in failed startups — you just have to know how to look for it, and ultimately, how to capture it.
After my first (not last) venture-funded startup tanked, everyone pretty much ran for the hills. Investors bailed, the team got other jobs, and customers found better solutions. But I kept thinking "We just spent a ton of money to build all of this, can't I capture this value back?"
Then it occurred to me — the same thing is happening for countless other failed startups. All of the assets that they spent millions to build just get buried. Everyone tries to make a last-ditch effort to sell them off, but in most cases, it never works and they just evaporate.
But what if we were the ones looking to dig up that bur...
TL;DR: "Oh Sh*t!! My competitor just raised a bunch of funding to do exactly what we're doing. We're done for, right? How can we possibly compete with someone who now has the resources to do all of the things we wished we could do?"
Yes, a competitor just raised some funding. No, it probably doesn't matter.
"Wait, what? How could my competitor raising money be anything but my own personal Armageddon?"
Well, it turns out that when the pixie dust settles after those big announcements, our competitors often have a whole new bag of problems to deal with that we don't. We need to look past the upside of that new capital to understand how most funded startups actually sink themselves with an anchor of funding.
The very first t...
Sometimes our greatest liability is our own experience.
We often look up to executives who have incredible experience in their fields, rightfully so, as these "Gods of Wisdom." We assume their years of hard-earned experience allow them to make forecasts and decisions that the rest of us would just be guessing at.
But what if that same experience worked against them? What if their pattern recognition actually created a dangerous bias that prevented them from innovating on past success?
Founders are pattern-breaking machines by definition. Our whole DNA is based on upending the patterns of the past and creating new products to replace them. So what if the least experienced Founders were the greatest assets of innovation?
Here's a crazy idea — what about a startup that just makes money?
I know, I know — crazy talk! But it turns out that while 1% of the startup world is busy chasing venture capital and trying to create outsized returns, 99% of the rest of businesses are just trying to build a business that consistently turns a profit.
"How dare you question the wisdom of VC!" — echoes the startup world.
But seriously, it turns out even grizzled veterans of the startup world, especially those who have raised venture capital before, are getting really excited about building companies that guarantee a profit versus potentially generating an exit.
It's a confluence of factors, really. When the Nuclear Winter of Funding hit in 2022 and beyond, an aw...
When I was in high school, there was a saying that "No one ever asks the pretty girl to Prom," which implied that everyone assumes they aren't good enough to make the ask, so no one asks.
Now, no one asked me to Prom in High School, so I've clearly assumed it's because I was so damn pretty, but that's another topic for another day. What I have learned when it comes to recruiting rockstar Advisors is that most people never get their top draft picks because they simply never ask.
Here's a fun fact — most of the Advisors you have in mind unless they are Elon Musk or Sarah Blakely, are probably going to say "yes." Seriously. It's way easier to get Advisors on our Boards, and as Founders, we're typically the only ones stopping ourselves!
Is it better to risk it all for a big outcome or count on a steady paycheck to create wealth?
Having watched tens of thousands of Founders live through the answer to this question, I can tell you it comes down to 3 related factors — our age, our earning potential, and our exit options.
When we answer this question, we often subconsciously fill in some of those values in our minds. So perhaps we say, "The paycheck is better!" because we're thinking about a 45-year-old professional making $300,000 per year.
But when we say, "The big outcome is what matters!" we might be only considering that risk for a 28-year-old without a mortgage or kids. Either way, the conditions drive the argument, so let's talk about those.
How do we maintain focus and order when everything else is going to hell?
There are two skills we need as Founders trying to lead chaotic startups — the ability to solve problems and the ability to focus our attention. As it turns out, the ability to focus our attention tends to be the most important.
You see, chaos is pretty much standard fare at any startup. Yet, if we're not able to organize that chaos, no matter how capable we are, it will consume us. When everything is in chaos, we need to be the steady hand that guides us through the storm, even in cases where we're the only person in that storm!
Over time we start to realize that we can't "end chaos," but we can learn to control it in a way that allows us to systematically assess and...
There's no perfect to know if you've found a great Co-Founder, but there are some really obvious ways to tell you're about to recruit a bad one!
Yet picking Co-Founders isn't something many of us will do more than once in our lifetime, so how could we possibly know what to look for? There's no absolute checklist, but there are 3 categories where most Founders don't press hard enough — Selection, Shared Cost, and Commitment.
Technically there's a fourth, which is "personality type," but that's so incredibly hard to determine in the early stages (see: all of dating and marriage) that it's almost not worth mentioning compared to the Big Three. If all of these start to sound way too familiar, it may be worth thinking about an exit strategy.
The most ambitious companies grow their products, not their teams.
Back in 2002, I was invited by (now) Managing Partner Roelof Botha to come pitch the partnership of famed venture firm Sequoia Capital. While I was sitting in their lobby I noticed two things that I'll never forget.
First, like most venture firms, they had a giant list of "tombstones" on their wall, which are the plaques they create after a company goes IPO. The list was already impressive back then which included companies like Yahoo!, Electronic Arts (EA), and Cisco among many others. It was the "who's who" of venture investments globally at the time.
The second was that there were maybe 20-30 people in the entire office — and this was back when everyone was in the office....
I have two modes — working all the time and feeling guilty about not working all the time. There's no third mode.
I'd love to say this is a new phenomenon or that I've got some monopoly on this curse, but having spoken to countless Founders just like me, it appears I'm certainly not alone.
Now, part of that might just be self-selection. Perhaps the people who tend to work tirelessly often want to do it for themselves, or at the very least, have more motivation than the people they left back in their cubicle farm. I can't think of anyone who works harder than a Founder without anyone telling them to do it!
Everyone's origin story comes from somewhere else, so I can't pretend to triangulate the genesis of this afflicti...