An entrepreneurial friend told me about some early challenges at his company. The team wasn’t being efficient or consistent about completing work. This created at least two problems. First, the longer it took to complete the work, the less satisfied the customers were (and the less likely they were to refer other people to the company). Second, the longer each job took, the more it cost because employees were paid by the hour. After months of talking to his team, he found the solution.

He changed the compensation structure. He began compensating his team for completed jobs. The fewer jobs they completed, the less money they made. The more jobs they completed, the more they made. My friend noticed an immediate impact. His team’s productivity went through the roof. Over time, his team made more money and his business saw increased revenue and profit. Customer satisfaction increased too.

Keeping a team aligned is difficult. Everyone moving in different directions or moving at different speeds is stressful for the founders and could even sink the business. If everyone is moving in sync and in the same direction, the employees can have more autonomy and the business can reach new heights.

An entrepreneur buddy recently was a guest on a podcast, and he shared the recording with me. He told the host about his journey and his learnings to date as an entrepreneur. One of the things he mentioned was that he’d had tunnel vision early on, which was a mistake. He kept his head down and executed as best he could. He didn’t grow up in an entrepreneurial family and didn’t know many entrepreneurs. He used his street smarts and hustle to figure it out . . . the hard way.

Looking back, he now realizes that his journey was more difficult than it needed to be because people who came before him did the exact same thing: built their businesses, heads down. They weren’t sharing what they were learning as they went along. My friend wants to change this approach, which perpetuates a cycle of people making the same mistakes and learning the hard way.

His journey as an entrepreneur is far from over, but he now makes a point of publicly sharing it and what he’s learned. He doesn’t have it all figured out, and he says so. But his hope is that someone listening will avoid some pitfalls and execute faster than he was able to. Or someone on the fence about entrepreneurship will be motivated to give it a try.

Kudos to him for being intentional about sharing his learnings in real time. All too often, successful founders wait until the end of their career to share their knowledge. It’s great that they do that, of course, but I think that doing it along the way gives the people who hear them information that’s more current and therefore more relevant—so it’s more helpful.

I hope more founders start sharing what they learn as they go!

I spoke with a buddy today who asked me for my thoughts on raising capital for his business versus bootstrapping. I shared the lessons I learned from bootstrapping my own start-up and from investing as a venture capitalist:

• Market size – It’s important to understand the size of the market you’re going after. If it’s a small market, raising capital is less likely to make sense. If it’s a large one, then raising capital can make sense, depending on other factors.
• Destination – Once you understand how big the market is, you can determine how much of it you want to capture. CCAW’s market was $40 billion. I figured we could realistically capture 1% of it and build a $400 million company. Sadly, I didn’t think about this early enough in my entrepreneurial journey.
• Speed of execution – Once you know how big a company you want to build, you can think about the time frame for achieving your goal. The faster you want to execute, the more resources you’ll need. If you believe you’re facing a closing window of opportunity, you may want to execute as fast possible.
• Team – Given the speed with which you want to execute, who do you need on your team? Unsurprisingly, the faster you want to execute, the more people you’ll need.
• Runway – Consistent execution is important. You’ll want to make sure you have enough financial runway (i.e., cash) to consistently execute on your plan at the speed you envision. If you’re executing at a slow to moderate pace, bootstrapping may suffice. It’s more challenging (though not impossible) to provide ample runway for rapid execution if you’re bootstrapping.
• Accountability – The bootstrapping approach usually means the founder isn’t accountable to anyone. If you raise capital from others, it comes with an enhanced level of accountability. In my experience, most people need accountability—but no one wants it.

How to capitalize a new or existing business is situational. This is one of many decisions a founder has to make. There’s no right or wrong answer in the abstract—only the right answer for your situation.

Today marks the end of my eighty-eighth week of working from home (mostly). Here are my takeaways from week eighty-eight:

• Christmas push – This week kicked off the push to Christmas. Lots to get done before then! The next few weeks will be busy.    
• Prioritization – I spent time thinking about my 2022 priorities. So far, they’re the same as in previous years, but they’re in a different order. I’ll spend more time thinking about this.
• New project – I started working on a new project. I’ve never done this before, and it’s been an interesting learning experience so far. I anticipate more bumpy learning but am hoping I can wrap it up before Christmas.  

Week eighty-eight was steady. Looking forward to getting a lot done before December 25.

I met with a technical founder who spent seven years at a big tech company that’s a household name. I was surprised to learn that he spent a lot of his time rebuilding decade-old systems. The company worked on those systems only when it had to. On the outside, this company is cutting-edge, but internally, not so much . . . but the public would never know. The founder said the company didn’t grow to be worth hundreds of billions of dollars by fixing things that worked perfectly fine.

This reminded me of my time in corporate America. I learned then that some of the most well-known organizations have antiquated systems or processes. Not pretty, but things still worked, and that’s what mattered most. If it wasn’t broken, they weren’t in a rush to replace it.

Early founders should remember that good enough is all you need in the early days. Get something working and pushed out. You needn’t worry about using the latest and greatest technology or building something perfect, because those aren’t always the best use of resources. In many cases, done is better than perfect.

Today I listened to a founder pitch a solution to help small retailers sell more products to consumers. It facilitates taking an in-person interaction with a consumer online. The need for such a solution preexisted the pandemic, but the pandemic intensified it.

This pitch reminded me of the early days of my company. I bootstrapped it, so resources were limited. Because I couldn’t afford to hire a big team, I handled almost every aspect of the business. I was stretched thin. Whenever I found reasonably priced software that saved me time or money or enabled me to do something that I couldn’t do manually, I happily signed up. I recognized and was happy to pay for the value the software created for me and my business.

Change is flying at us. We’re facing more change in the next decade than we’ve ever seen. Small and medium-sized businesses (SMBs) won’t be able to keep pace on their own. They’ll need software to keep their businesses relevant as the world changes. I see a big opportunity to help SMBs of all kinds navigate the winds of rapid change.

During the Thanksgiving holiday, I caught up with friends who work in various industries and asked how 2021 has been for them. Their responses were consistent: it’s been busy for all of them. The companies they work for (or own) are growing, and some are having a hard time keeping up with all the growth.

Today I looked at the calendar and thought about the rest of the year. We have about three-and-a-half workweeks until Christmas. Once Christmas hits, it’s pencils down, as the year is essentially over for many (not all) industries.

I think December 2021 is going to be the last leg of a spectacular year. We’re not going to see a holiday-season slowdown: the next three-and-a-half weeks will be a mad dash for many people who want to close out the year strong. And I’m one of them—looking forward to it!

This past week was a much-needed holiday. After not celebrating Thanksgiving or Christmas in 2020, I’ve been looking forward to this holiday season. I went into Thanksgiving excited and also focused on being more intentional. I was looking forward to spending time with others, and I wanted that time to be high quality—I wanted to be present and engaged. I tend to not be as engaged if I’m in work mode, so I decided to not look at anything work related through Saturday. Overall, I think the mission was accomplished. I enjoyed the holidays, was able to unplug a bit, and was mentally as well as physically present with people I care about.

Today I started to prepare for the coming week and noticed I wasn’t being very productive. It was taking me longer to get things done and I wasn’t as focused as usual. I guess I was having a bit of an off day during my holiday. Today is Sunday, and my brain refuses to leave holiday mode even though I wanted to put it in work mode. Instead of fighting it, I recognized what was happening and leaned into it. It’s been two years since I had Thanksgiving, and it’s clearly something I’ve missed. I decided to put the work away and enjoy the last day of my Thanksgiving holiday!

I enjoy spending free time learning about new things online. When I find something I want to learn more about, I seek out credible people who’ve created useful content on the topic. I’ve been amazed by some of the videos I’ve found since the pandemic began. The content and production quality are impressive. The creators take what they’re doing seriously, which has resulted in large, faithful audiences. A few have been producing videos for less than a year, but you’d never know that from the quality and frequency of their content.

The trend of individuals monetizing content is likely to continue for the foreseeable future. More subject matter experts will monetize their knowledge and create followings. This got me thinking about picks-and-shovels opportunities. Much of this content is created by a single person or very small team. I suspect many are limited in their abilities and would welcome opportunities to do more with less or the same thing in less time. And I suspect the market for tools to support these creators is small but growing quickly.

I believe an opportunity exists for entrepreneurs to build a big business helping creators via software. These creators are small businesses or sole proprietorships, so there’s an opportunity to build a large and sticky customer base. They probably aren’t using any software now, so they don’t expect a perfect product. The market is small, so I doubt it’s on the radar screen of large software companies because it won’t move the needle on their sales now.

As I continue learning online, I’ll be paying close attention to what tools these creators adopt. I think that someone who deeply understands their pain points will strike entrepreneurial gold by solving their problems.

I enjoy the Thanksgiving holiday. It’s a nice time when most people are focused on family, friends, and fellowship. The past eighteen months have been unprecedented in several ways. One example of that, on a personal level, is that last year was the first time I didn’t celebrate Thanksgiving as I always had. That had a big impact on me—it was a stark reminder of how fortunate I’d been in all the years before.

Yesterday felt like a normal Thanksgiving, and I really enjoyed it. After the day was over, I reflected on how fortunate I am and all the things I’m thankful for. Everything isn’t exactly how I want it, but life is good and I’m appreciative of that.

What are you thankful for?