1. Barrels and ammunition

I didn’t overlap with @keithrabois at @Square, but when I joined, his precepts were (and still are) all over the company. One of the most powerful metaphors - not least because of the vivid imagery - was that of barrels and ammunition. 2. I use this metaphor often with founders. We were fortunate that Keith hired a number of barrels at Square. Not surprising that barrels make great entrepreneurs - many of these people have started category-defining companies.

1. One of the maxims about a startup is “everyone wears all hats”. This is not true about founder roles. With very few exceptions, it’s extremely important to clearly delineate founder roles between a BUiLDER and a SELLER. (Or more colloquially, a hacker and a hustler). 2. The builder role owns building the product, end to end. The seller role owns figuring out how to get distribution for the predict, but also interfacing with external constituents such as investors and partners.

0. Founders/CEOs: what are your thoughts on employee transparency? how transparent should founders be with employees? And on what topics?

DISCLAIMER this question is for startups and private cos only. Public CoS have a much higher level of requirements around confidentiality. 1. Context: A founder confided that a good chunk of their engineers quit because the founder was too transparent about the company’s fundraising struggles last year (co did ultimately raise strong round). He agonized over whether this was preventable, whether he had over shared.

1. Founders and CEOs don’t have a good way to think about competitors. Some ignore them, others obsess over them. Neither is optimal.

IMO, the right way to evaluate competitors is through a customer lens. 2. Specifically, being obsessed with your customers’ problems will help you see early if a competitor is solving their problems better than you are.

The bigget thing that matters wrt competition is if your customers are choosing or switching to a competitor over you.

1. If you work in tech, especially in Silicon Valley, check out @arta_finance - they just launched a new way to manage your finances with advanced tech like AI & ML. It’s designed to address the financial questions & challenges that so many of us in the tech industry have.

https://twitter.com/arta_finance/status/1587813028803661824

2. How do I manage my equity, make it work for me, get liquidity without selling, optimize for taxes, and determine if and when financing is worth it?

1. There will be a spate of acquihires in the next 18-24 months. I've been closely involved in a dozen plus acquihires. After seeing both successes and failures, I believe he 3 principles of a successful acquihire are:
(a) Talent
(b) Domain
(c) Team size 2. Talent: Since acquihires are about talent, there must be 1-2 verifiably (ideally through prior collaboration) exceptional people on an acquihired team, folks who raise the bar for that function or domain at the acquirer. Acquihiring an average team is not worth the trouble.

Early stage B2B Founders: If you have to choose between one very large first customer (say $500k+ ACV) and ten smaller first customers (say $50k ACV each), the right choice (at least for venture funded companies) in most cases is the latter.

Why? Three reasons:
1. Your product becomes better
2. You can forecast better
3. You build better sales muscle and process

1. Founders - in these times, two of the biggest enemies you face to rational decision-making are sunk cost fallacy and ego / hubris. 2. Sunk cost fallacy: The money you burnt? It's gone. The decisions you made in the past? They are made. You can't control what happened. What you can do is look forward. What would you do if you became CEO of your company today? Don't let the past anchor you.

I had to raise a financing round for my startup in mid 2009, a few months after the collapse of Lehman and right in the midst of the global financial crisis. A few lessons: 1. Consider non-traditional sources of capital: Every VC firm had read the Sequoia RIP memo and we didn’t get beyond a first meeting with most. Someone mentioned in passing that we should look at hedge funds. Ultimately, a hedge fund set terms for our round.

tldr Become an ESSENTIAL vendor.

1. Every company executing a hiring freeze or headcount reduction: "we will eliminate non-essential vendor relationships". 2. This phrase should galvanize every B2B company to action. More than ever, it's critical to ensure your service is ESSENTIAL to your customer.

1. Over the last few weeks, I’ve been speaking with leading private / public market investors, to get a sense of how they’re thinking about valuing growth stage or public companies. Three clear themes emerged:primacy of FCF margins, flight to quality, and muted revenue multiples. 2. Theme 1: Primacy of FCF margins: investors are looking for a company that they believe can structurally get to 30% free cash flow margin (adjusted for stock based comp) at terminal state (typically defined as when the company is growing 10% YoY)

1. One of the key learnings from @terra_money is that large money players should be more careful with exposing their on-chain behavior. 2. LFG exposed their large BTC transfer to 4pool, which created the best timing for attackers to attack with just 350M.

1. B2B GTM during downturns: One of the most popular B2B GTM strategies over the past few years was to sell to fast growing startups. 2. This made sense in an up market because sales cycles were shorter and the logos were well known to investors, enabling companies to raise rounds.

1. I have been trying to find the best "first question" to ask a startup when I meet with them. After many iterations, I think I have it. Here it is, and here's why it works. 2. The question is "Tell me your founding story".

Here's why it's a good first question.

0. Startup CEOs: if you want to hire the leader for a particular function, follow this playbook. 1. Identify 2-5 fast growing companies that are bastions of excellence for that function.

CEOs and founders: As your companies transition back to in-person work, I encourage you to consider sticking with video interviews at least for the front end of the process, Four reasons. 1. Better signal: With IRL interviews, it's harder to get through all the questions in the right order. This leads to an unstructured interview and weaker signal. Video interviews allow the interviewer to more gracefully transition to the right question at the right time.

0. Startup proposal: an online platform that enables US angel investors to invest in companies in other parts of the world as easily as they can in a Delaware C-Corp. 1. I just had to pass on investing in a company headquartered in Asia, purely because of the huge number of notarized documents needed. I just didn’t have the time or bandwidth to get them completed in a timely manner.

Entrepreneurs and operators: the best memos and decks are written in the form of a conclusion followed by a series of assertions supporting the conclusion. Each assertion should have a list of evidence that reinforces that assertion.

0. CEOs, CPOs and VPEs: The core product team has traditionally been a triad: Engineer, Designer, PM. Consider changing this to a quartet by adding Analyst. Product analysts can transform product development. Some ways in which they do this: 1. Defining outcomes: Analysts help teams better define the goals they should set, so it’s not just a shot in the dark but based on data. They also make it easy to track progress against outcomes.

There are no bad deals. Every deal - partnership, M&A, investment - has a set of conditions that make it a good deal. Eg: “Give me 80% of revenue” might look like a bad deal for a company, but if the company rephrases it as “I’ll give you 80% of revenue if you upsell every customer to my service”, it could be a great deal.

1. One’s manager is a critical part of the decision to join a company. A lightly discussed but important thing to diligence is how influential your potential manager is and how well they are regarded within the company. 2. How fast have they been promoted? Do they have the ear of the company’s leadership team? Can they get things done? Can they clear hurdles for you?