- Alignment on what we were doing. A single list of what the priorities are from c-suite.
- Managers as ICs. Less emphasis on coordination, more on building.
- Rituals that show, not tell. Demo code every week. Including VERY rough living code to @jack
- Killing consensus in favor of speed with DRIs.
- Direct escalation. Disagree and commit. Make a decision within 48 hours.
- Unreasonableness on behalf of customers and experience. Intolerance of process that doesn’t add value.
- Hunger. Ambition. And a huge chip on our shoulder.
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Rich kids have one very important advantage in life: they see from early childhood how to find leverage and use money to free up time.
It's a crazy important skill for VC-backed founders and part of why the learning curve can be so steep for non-rich people (like how I grew up).
When I was little my dad taught me how to fix a toilet. "You never want to pay $500 for something you can easily do yourself."
And while the ability to do labor is hugely valuable, the resource I was ALWAYS taught to conserve was money. It was part of our DNA on a single income.
Whereas rich kids are more likely taught how and when exchange money to free up the MOST valuable resource: time.
Giving your kid an ability to know how to make the tradeoff, when to buy more time, and what to do with that time, is easy when money isn't a strict constraint.
People talk about tech debt a lot. I tend to align with the belief that you should take on as much as you're able pre-PMF and work back from it over time.
But I want to talk about growth debt.
Growth debt is what happens when you do things you wouldn't normally do just for growth. Every single successful company has some of it (just like tech debt).
It's not inherently bad, but it's not inherently good either.
First, what it is:
Courting customers who aren't your target is growth debt. You'll get sucked into servicing them, fielding support, feature requests etc. from people who aren't your target customer. Maybe they're too low LTV, maybe they're too high CAC. Both a problem.
Quick story about the worst VC meeting I've ever had. [Note: I've heard MUCH worse, so I do think it's important to call out this was unpleasant and not horrifying, and for that, I'm grateful.]
It's September 1, 2018. Catch hasn't raised any venture, and Andrew and I are green.
The partner we're meeting with tells us he's bringing in another partner to join who has invested in portfolio companies "very similar to Catch" to be an expert and ask thoughtful questions.
No red flag. Always great to get more partner attention. Hooray for Partner #2.
We sit down for the meeting, aiming to raise our seed. We are live and in market. We're gaining traction, but it is undoubtedly early days. Maybe 1,000 users.
Partner #2 starts, "Your dates are wrong. The deck says AUGUST 2018, but it's September now. Not a good sign at all."
There was a lot of talk a few weeks ago about how this hard time would sort out bad startups and destroy those that are more vitamin than painkiller.
I understand that point of view, and I agree with part of it. Contractionary cycles are an important part of strong growth.
1/
I also was stunned by ridiculous valuations and companies whose products seemed cheap copies of each other raising hundreds of millions of dollars after a few short months of existence. Almost all of which were founded by (mostly white) men.
Scooters come to mind.
2/
So now we are supposed to be slashing bubbles and pricing more closely to reality - whatever that is - and companies that were not solving real problems or had no product market fit will take their appropriate disintegration.
Omg if one more SF VC says current status “proves” remote work is the future (full stop) I will lose it. What about the current situation makes you think it is working?
3.28M filed for unemployment last week. Hundreds of billions of dollars evaporated out of the economy. Productivity at historic lows. Anxiety exploding. Now, let’s assume you’re talking only about the software companies you spend all your energies on:
Roadmaps are slowing down. Hiring is slowing if not stopping. Cuts are being made. Kids out of school are making WFH prohibitively hard. Many tech companies will close completely. You’re probably thinking “right but that’s the pandemic.”
A year ago today, we were almost out of money. We had a consulting client who owed us ~$450k, but was trying to negotiate down on the amount, despite work being fully delivered in September. Then, "the holidays" hit.
1/
Everyone at this client company evaporated for at least two weeks. Our burn rate was high-ish because we were building across three different regulated industries (banking, investment, insurance). Our funds kept trickling out. Traction existed but was not entirely compelling.
2/
My co-founder, @ajambrosino, and I had been trying to raise VC funds since May 2018. Not full time, but we bought into the "build relationships" trope, and the "they'll fund you when you don't need money" bit. We completely failed at driving urgency.
3/