Category Archives: Business Building

Garbage in, Garbage Out – Yes Indeed

Renee DiRasta had a good post talking about conflicting data about seed activity. I don’t think some of her assertions about the data sources being similar for data providers are that accurate which I talked about on Twitter (see below). I also commented on her post that the whole seed deals are falling narrative is laughable.  Here’s the comment I left on her post.


Anand here from CB Insights. Great thoughtful post. Thank you.

Five reasons that came to immediately came to mind on why the whole seed is declining narrative doesn’t pass the most basic of smell tests. If I spend an hour thinking about this more, there are probably others.

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… and Unintended Consequences

Perception is a funny thing.  I have a habit of writing emails in a fairly stream of consciousness style. Not all that dissimilar from this blog.  And as a result, punctuation and grammar are not top priority.

One of the things I do to connect thoughts is use ellipses – you know — these things …

So I’ll write stuff like “how did things go with the migration…as expected?…curious to see how clients like the new people search…”

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The Blurb

We trying to share interesting articles in our newsletter in addition to our own data-driven content in a section we call the blurb. It’s one of several experiments we’re going to try to increase our reach.  We call the section with these articles The Blurb. Here is The Blurb from today’s CB Insights newsletter. It’s fun to “force” myself to read interesting new content regularly. Yup – I have a great job 🙂
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This is a title I’ve never really been comfortable with. To me, a CEO was Jack Welch of GE or Ken Chenault of my alma mater American Express. They ran huge organizations, had big offices and were as the initials imply – executive officers. They did executive’y things.

And so I always found it funny when someone who was just 1 person or one person plus a buddy who introduced themselves as CEO of their startup. They were in the truest sense I suppose, but it just seemed like false advertising or perhaps grade inflation to me. But I’m skeptical by nature or just maybe a dick or a bit of both.

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Saying no to money

Today, I told 4 clients that we couldn’t meet their price or contract terms. I hate saying no to money. I really really do.

But as I’ve understood the value we provide and how much we help our clients, I’ve had to become more comfortable saying no.

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The God Metric

Evan Williams of Twitter is not someone I’d read much about before. But he’s been writing a lot more recently, and he’s well worth a read. His recent essay entitled “A Mile Wide, An Inch Deep” is well worth a read.

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Hatin’ on MBAs

A recent article in Fortune talked about Wharton, Harvard and other elite b-school ramping up their entrepreneurship programs. I have nothing against MBAs and am a Wharton guy myself (undergrad so I can still talk shit), but this IMO is one of those signs of things getting overheated in startup land.

Startups are becoming another career path or vocation as I talked about yesterday – raise funding, take a decent salary, get a call option on some upside and ultimately all for pretty low risk. These environments bring out the opportunistic. The real estate bubble saw a similar phenomena where everyone jumped in cuz it was easy money.  From the article on Fortune:

“Entrepreneurship is entering the mainstream in the economy and therefore it’s starting to enter the mainstream in the business schools,” Zoller says. “You’re starting to see people increasingly seeking out high-growth venturing as a pathway for their professional success.”

There is no pathway in entrepreneurship as far as I can tell. Or a very jagged zig zaggy one.

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No Risk, All Reward – The Startup Career Path

The post on Hacker News had some interesting comments.  Here’s one that caught my eye as pasted below (bold emphasis is mine):

The model is a fairly quick development cycle, fast early adopter sales, quick conversion to cash flow positive. Well, that’s a lot of things that have to go right all in a row with only $100k to start…. It may be enough to start some kinds of businesses, but many will require significantly more in startu pcapital to brave even an accelerated road to break-even.

As to the model, the question is does it fully factor in the risk level? The idea is lower the goalpost and manage the cash burn more carefully, to ultimately obtain a faster break-even and then ride growth through reinvesting profits, to some point in the future when you can actually start making distributions. The premise, possibly flawed, is that by not shooting for the stars you should be less likely the fail. They don’t need to win as big each time, because they will win more often?

Businesses need capital to grow. It’s that simple. $100k is a bare minimum startup fund for a sole founder for less than 6 months. It’s not a serious amount of money. You can’t expect that $100k to buy enough revenue to sustain full-time employees and also be paying out a meaningful dividend.

If the idea is to really, truly, avoid VCs and institutional investors…. I think you need to be able to seed about $2m. For example, structured as a Line of Credit, drawn over 48 months, but with warrants to convert into common stock at some ratio. The conversion ratio in the warrants adjusts to provide anti-dilution as needed.

That would provide a real amount of money for a 2-3 person team to potentially solve a real problem. And that would give the investors a meaningful percentage of the company and choice between a cash payoff or taking shares. That would be a really appealing alternative to VC funding which some strong founding teams might take notice.

Here’s my diplomatic’ish answer on HN:

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I’ve been sitting down with the team to do year end reviews. They are focused on what they did well, what could have gone better, what I did well, could have done better and what the company overall is doing well and could be better at.

They’ve been fantastic.
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Best Places to Work – Just Ignore the Data

Tony Schwartz offers an interesting perspective on the Best Places to Work rankings in this article in the NY Times.  He writes:

But these lists don’t really measure something even more important: the quality of their employees’ lives. Over the last decade, I’ve spent countless hours interacting with employees at all levels in many of the companies that appear on the Glassdoor best-companies list, as well as on the Fortune annual 100 Best Companies to Work For list.

Basically, his argument revolves around ignoring data others have collected and on using his selected anecdotes.  It is all a bit new-agey.  There are always going to a spectrum of opinions at a company the size of Google or any top employer so finding these anecdotes is probably easy.  Making everyone happy is an impossibility.  If it was possible, we’d have some sort of bizarre work utopia/cult.

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