Thread by @jmikolay

Apply the knowledge of @eriktorenberg

I organized and distilled his last 3,000 tweets into a summary of his big ideas, in three threads...

Thread 1⃣: Careers, Finding Startup Ideas, Co-Founders, and Raising a Seed Round

Young people, don’t be afraid to look dumb…
🔷You can follow a safe path that caps your downside, not realizing it also caps your upside
🔷Safe paths are often tournament-style competitions, and perhaps not as safe as you think

Early in your career…
🔷Value substance more than status
🔷Enter markets that are small or don’t exist yet
🔷Build relationships with peers and up-and-comers

Don’t worry about finding your passion early
🔷Your passion may not be invented yet
🔷Premature self-labeling closes off hidden opportunities

Undergo unique experiences and get good at something with no playbook…
🔷Take high upside bets others won’t
🔷Figure out what’s hard to reverse engineer
🔷Pick something that isn’t big now, but will be
🔷Quadruple down on what feels like play to you but looks like work to others

Get so good they can’t ignore you…
🔷Build a unique accumulating advantage
🔷Work on what is durable and compounds over time
🔷Acquire rare and valuable skills that give you a moat
🔷Don’t optimize on building your network until you already have a great reputation

Learn continuously and forever…
🔷Deploy your learning as you learn more
🔷To find the right answers, ask the right questions
🔷The goal is to look smart at the end

To find startup ideas, get exposed to new problems…
🔷Lead an interesting life and be curious
🔷Put yourself in a position to viscerally feel problems
🔷Look at ideas that were tried before but failed
🔷Ask why you might now have a different outcome

Figure out what’s now abundant and scarce…
🔷Leverage enabling technologies
🔷Unlock new supply using a fixed physical asset or new digital asset
🔷Look for the constraints that go away and what 2nd order effects might emerge (when what was previously scarce becomes abundant)

Find where you have an unfair advantage…
🔷Don't pursue double miracle startups (or "bank shots")
🔷Pick something that’s so boring, but hard or big, that other people just won’t do it
🔷Find a little thing you can execute for a few months that could lead to a larger thing

Don’t be afraid to share your idea with others…
🔷Truly good ideas don’t sound like they’re worth stealing
🔷The feedback you receive is worth more than the benefits of keeping the idea private

Find the right cofounder…
🔷Build top of funnel by telling the world what you’re thinking
🔷Treat your search like any other recruiting process
🔷Find someone who can help you solve core risks to the business

Look for someone who agrees with you on first principles…
🔷Look for complementary skills (how you together have an unfair advantage)
🔷Look for value-mission alignment (what success looks like)
🔷Look for company alignment (who makes decisions and tradeoffs to accept/reject)

Once you’ve found a potential cofounder, date before you get married…
🔷Meet their spouse and/or parents if you can
🔷Go on a road trip or other intense experience
🔷Do a hackathon or work together in trying conditions

As early as possible with the founding team, figure out…
🔷Goals
🔷Equity split
🔷Non-negotiables
🔷CEO / tie-breaker
🔷5-20-year vision for your lives
🔷Extenuating life circumstances
🔷Personal runway and salary need
🔷How each cofounder wants to scale with the company

Ask each cofounder…
🔷Who has the vision?
🔷Who should be CEO?
🔷In what ways are you crazy?
🔷What are your failure modes?
🔷What’s most important to you?
🔷If this didn’t work out, why not?
🔷What was it like working with ex co-founders?

Treat each cofounder relationship like a marriage…
🔷See a coach
🔷Communicate effectively
🔷Read relationship books
🔷Respect and trust each other
🔷Don’t hate going to work every day
🔷Work on the relationship consistently
🔷If it's too much work, it might not be a fit

To raise a seed round, answer these questions…
🔷What's your unique insight?
🔷What is the biggest risk?
🔷Is the business defensible?
🔷What have you proven so far?
🔷What are the unit economics?
🔷What's your unfair advantage?
🔷How does this become a $10B business?

Understand the VC model…
🔷Out of ten swings, VCs get seven strikeouts, two base hits, and if lucky, one home run
🔷The base hits and home runs pay for the strikeouts
🔷VCs require a credible potential of a 10x gain
🔷If you don't want to 10x in 4-6 years, don't raise VC!

Before starting the process, consider meeting with 3-5 friendlies…
🔷Give them a “first look” in exchange for feedback
🔷Ask them, "What would you need to see to invest?"

While fundraising, it's always a no until it's a yes…
🔷Time is your enemy and the VC's friend
🔷VCs want to lower risk, so they want to let time pass and get more information
🔷Meantime, nearly all investors say no but you only need one or a few to say yes

Run a tight process to maximize momentum…
🔷Be 100 percent focused on raising
🔷Get referrals from other founders
🔷Get referrals from strong deal sources
🔷Get referrals from existing investors
🔷Do 20-50 meetings in 2-3 weeks, back-to-back

Prepare like mad…
🔷Research firms in depth
🔷Talk with founders in their portfolios
🔷See what else they’ve invested in
🔷Understand their deal size and deal cadence
🔷Maintain the confidence of someone who's going to raise easily alongside the paranoia of someone who won't

During meetings, ask…
🔷Have you invested in this space before?
🔷What's interesting to you about this business? What's unclear?
🔷How exactly does your process work?
🔷Do you believe there will be a multi-billion-dollar company in the space?

Hit the follow button for threads 2⃣ and 3⃣ in this series, and find six more fundraising ideas here!

letter.substack.com/p/the-best-of-…