ArticleBeware the Absentee Landlord of Equity

Beware the Absentee Landlord of Equity

What's the worst equity holder we could possibly have in our cap table? The one who isn't even here any longer.

We all know this, and yet for generations, we've built cap tables loaded with "absentee landlords" who provide no ongoing value but reap all the benefit of those that continue to drive the ship. Until recently the notion of "dead equity" has been just accepted and rarely challenged, leaving those that still work for the company to carry those that don't.

I'd like to poke a giant, trident-sized hole in this argument once and for all. And for my fellow Founders who are dealing with this issue at present, or soon will be, I want to provide you with some ammunition toward what will invariably be a tough and painful conversation.

In Ca...

ArticleStartup Culture is a Reflection of its Founders

Startup Culture is a Reflection of its Founders

Our startup's culture can all be mapped back to one person — us.

We are the cultural North Star of our startup, and everything we do, and how we act, puts our ship on a course for good things, and if we allow it, really bad ones. Our challenge is that we often don't recognize how even our simplest actions broadcast across the entire organization and poison the actions of everyone else. Our worst behaviors, even those that we think are positive, become the virus that infects everyone.

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ArticleWhy Co-Founders Often Don't Last

Why Co-Founders Often Don't Last

It's a little-known secret — many Co-Founders typically quit in the first year.

We don't hear these stories because, by the time a startup becomes successful, they are long since written out of the annals of the company's history. If we're a first-time Founder, we don't realize that there's a massive delta between the commitments we make when we start a company and those that we have to maintain as the grind continues.

The problem becomes real when we realize we just gave our "forever committed partner" 50% of the company for what amounted to 5% of the long-term effort required to make it successful. If we had known Co-Founders don't last, we'd have prepared accordingly.

So why don't Co-Founders stick around?

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ArticleThe Case for Growing Slowly

The Case for Growing Slowly

Growing slowly is the fastest way to build a sustainable startup.

From the outset that sounds like a contradiction, right? How could "growing slowly" and scaling possibly be congruent? They are if we take the time to understand that scaling is only possible once we've identified the assumptions in our business that are actually true.

As it happens, most Founders don't realize that "growing slowly" isn't about the long-term growth curve of a startup, it's about the near-term growth curve, the part where we are still trying to figure out exactly how this thing works.

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ArticleDon't Rush into Your Second Act

Don't Rush into Your Second Act

Have you ever noticed how musicians who have a breakout album almost always follow up with a shitty second album?

Founders are the same way. Typically our first startup success, which took our entire lives to evolve, is quickly followed up by a terrible second startup idea. It's not because we're "less of a Founder" than we were the first time, any more than that band knows less about music than they did on our first album. It's because rushing a creative process is the fastest way to ensure the outcome totally sucks.

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ArticleIt's Not What We Own, It's Whether It's Liquid

It's Not What We Own, It's Whether It's Liquid

Owning 100% of an asset is the same as owning 0% if it's never liquid.

Too often we get hung up on what percentage of a company we own, only to overlook the fact that our equity actually doesn't matter at all unless it's liquidated at some point.

In this case, we're specifically talking about ownership that requires a sale to have value, not two gals in a room splitting annual profits 50/50 (that percentage does matter in that case!).

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ArticleThat Founder Sold For Too Little!

That Founder Sold For Too Little!

"Did you hear about the Founder who sold their startup and 'only' made a million dollars?!"

Ah, the popular refrain of startup haters everywhere when they gleefully recount the supposedly "shitty" outcomes of hard-working Founders. They get almost giddy with speculation. Nothing excites the people who don't start companies more than trying to belittle the outcomes of those that do.

Well, startup haters, this one is for you. This is a not-so-subtle reminder that not only do your opinions not matter — at all — but how wrong your position is, to begin with.

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ArticleWhen Can I Feel Good About Taking a Break?

When Can I Feel Good About Taking a Break?

Founders need to be as militant about recharging as they are about working.

Yet, nothing in front of us suggests slowing down or taking a break to do it — at all. We have a mountain of work, no one to help us, and we're burning through what's left of our cash and credit. The last thing any of that suggests is "Let's plan a sweet vacation!"

What we're missing in this mess is the fact that it's not about whether or not we want to take a break — it's that we have to. If we're going to run the marathon that is the startup journey, we can't just go full sprint 24x7 and pretend it'll all work out. Instead, we have to become highly regimented in our plan to recharge all the time, and treat that recharge as seriously as we treat our startup.

In Cas...

ArticleForget "Big Ideas" — Start with your North Star

Forget "Big Ideas" — Start with your North Star

The most impossible task for a Startup Founder is to "invent a big idea."

It's not because we lack creativity, it's because we wind up focusing our energy on the wrong thing. Big ideas, by themselves, are nearly impossible to corral in our minds because they are inherently either "not big enough" or "too big to tackle."

We tend to go about this all backward. We assume that once an idea is incredible enough, it will guide all of our actions thereafter. But that is like putting a map down on a table and saying "We want to go west!" without making this is the most reasonable path.

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ArticleAdding Staff Isn't a Sign Of Success, Revenue Is

Adding Staff Isn't a Sign Of Success, Revenue Is

Celebrating adding staff is like celebrating the cost of a wedding — it's the liability, not the achievement.

It seems like everyone loves to champion the importance of "scaling our staff," whether it's the media or our local government talking about job creation (when is the last time a startup was successful because it met a job creation metric?) Of course, we proudly announce we're hiring because it implies that our business is doing well, right?

While that may be true, the reality is adding staff still falls under the cost bucket of our income statement, and while those important hires may help us grow revenue, the important distinction is that they are not, in fact, revenue.

They are actually a massive cost, and in most startups, by fa...

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