A lot of merger and acquisition activity has occurred during this last year. It’s often involved life-changing liquidity events for founders and team members. These events frequently come with conditions. If a fund invests a material amount of capital, they may well create a board of directors and usually want at least one board seat. The board members are the CEO’s bosses. Some boards are great and support founders; others don’t. The ones that don’t support are a challenge to deal with. If the company is acquired by a larger company, the team (including the CEO) usually become employees of the larger company. Finding the right role for each team member is a process, and no one is guaranteed to get the role they want.

I’ve chatted with a few founders in these situations, and they’ve shared that life post-transaction can be difficult. I spent time thinking about why these founders struggled after events that changed their lives for the better. Then it hit me. Founders have key characteristics in common. One has to do with the locus of control—the degree to which people believe that they, as opposed to external forces (beyond their influence), have control over the outcomes of events in their lives.

Founders like to be in the driver’s seat. This desire is what allowed them to become a founder in the first place. When it’s taken away or severely limited, it can feel unnatural for founders and emotionally diminish what should feel like a milestone win.

A strong internal locus of control is something that’s core to founders, and they should think hard about situations that could curtail it. What can they do to maintain it?

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

• Regional capitals – I spent some time looking at different regions of the country and the cities most people think of as their capitals. There doesn’t appear to be a consensus about the southeast—a few cities were mentioned.  
• Reflection – I’ve had a few conversations this week in which people mentioned reflection and how it leads to insights. I think reflection can accelerate learning.
• Learning – A friend shared an interesting observation: reading, thinking, and writing can help make people smarter. He’s got me thinking about this.

Week sixty-eight was a great, productive one. Looking forward to keeping up the momentum next week.  

Customer acquisition was always top of mind at my startup. I’m not marketing-minded and I wasn’t smart enough to hire someone strong in this area, so we struggled. Eventually I figured out a decent strategy. When we acquired customers, we did so in a profitable manner. Over time, I realized that retention (which in our business model meant having customers who bought repeatedly) was key to our growth.

We spent tons of time, energy, and money trying to find new customers. Once we had them, it was easier to convince them to stay (purchase again) than it was to find new customers. If I had to continually replace old customers with new ones, fast growth would be extremely difficult. When I figured this out, we started to focus on the things that mattered most to our customers AND the type of customers most likely to be loyal. This, with other adjustments, allowed us to grow quickly to over $10 million in annual revenue.

Getting customers is important, but founders should also think about how to keep them. If your customers stick around, you’re on to something!

I had a great conversation with an early-stage investor at a large fund recently. We discussed competitive markets and he shared some great views. He looks for traction by the company, such as an increase in the number of customers or users or in revenue. And more importantly, if the market is competitive, he wants to know the “why” behind the traction. What unique insight does this company’s founders have that’s driving the traction? If they can articulate that, he’s happy to consider the investment even though it’s a competitive market. According to him, traction and a unique insight can be a winning combination.

I like this investor’s perspective. The existence of competition isn’t bad: it can indicate a large or growing market, which can be good (you can build a big business). The question is whether your company can do better in the market than others. This investor wants to know whether founders have a unique understanding that positions their solution to create more value than their competitors’ do. I think he’s spot-on.

Founders shouldn’t be deterred by competitive markets, especially if they have founder–market fit. They should ask themselves, “What do I see that others don’t? Will this insight help me win?”

Today I connected with an investor who shared an interesting insight. While reviewing his portfolio, he noticed that his better-performing investments were led by founders with experience in the market. Put another way, founder–market fit matters.

A company creates value for its customers by solving a problem. In many industries, it’s not as simple as creating a solution.Various nuances make solving the problem challenging (otherwise, someone would have solved it already!). And only someone inside the industry understands the nuances, can navigate them, and can create something that solves the problem. Sometimes it takes the right relationship in an industry to get that lucky break. People like to work with people they know and trust. And relationships and trust take time to build.

Founder–market fit is something founders should be mindful of. A deep understanding of the market along with relationships in it accelerate success.

As an early founder, I was responsible for everything. I was the linchpin holding everything together, and I was into all the details. As my company grew, I realized that I was spending too much time working in the business and not enough working on the business. I added to the team, but I still found myself thinking about the weeds more than I should. I wanted to be thinking big-picture, but my brain was used to thinking details. With the help of some founder friends and good strategic frameworks, I eventually lifted my head to focus on the forest—not the trees.

Building a company is a journey full of twists and turns. It’s not uncommon for teams to get caught up in the day-to-day turmoil and lose sight of the destination. When this happens, it’s like going in circles: you’re going nowhere fast. Thinking big-picture is a must for founders. It helps ensure that they don’t lose sight of what they set out to achieve. Getting down in the weeds is often necessary early on, but founders should be thinking high-level from the beginning. It’s easier said than done, which is why I’m a big fan of defining and reviewing high-level objectives every quarter to make sure everyone understands the big picture and then defining what needs to happen in the upcoming quarter.

If you’re a founder or thinking about becoming one, raise your head. Take time to think about the big picture often.

Today Virgin Galactic launched a rocket with six passengers, including seventy-year-old Richard Branson. The trip was successful in reaching space, and the crew returned safely.

Space travel isn’t new, but making it available for purchase to ordinary people is. Virgin Galactic is going after this market, and it’s not the only one. Blue Origin, SpaceX, and others are looking to do something similar. In fact, Blue Origin’s founder, Jeff Bezos, will be part of the crew on the company’s first human flight later this month.

I’m not passionate about space and haven’t followed it closely, but space tourism is intriguing to me. I’m very curious about the possibilities. I’ll be learning more and closely watching this evolve.

Today I read an article that detailed how individuals borrow against their assets. The piece goes into detail about how and why to use this strategy, but one section jumped out at me. It gave examples of founders and senior executives who’ve borrowed against their company stock to access cash while maintaining their ownership stakes. A few months ago, I shared my thoughts on founders derisking without selling the company. This article highlights another path for founders to consider.

Building a company often takes many years, during which founders take low salaries. It’s understandable that founders may need some liquidity as they transition through life stages while building their companies. Selling the entire company isn’t the only path available to them. The examples in the article include founders and CEOs at FedEx, Tesla, and Shift4Payments, all of which are publicly traded companies. Many founders won’t have the same options available to them as those folks do, but the examples are still food for thought.

Founders shouldn’t let concerns about liquidity limit their visions or how big they dream. If they want to swing for the fences, they should! They can rest assured that there will be opportunities to access capital along the way.

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Today marks the end of my sixty-seventh week of working from home (mostly). Here are my takeaways from week sixty-seven:

• Short week – Monday was a holiday, so this was a four-day week. Short weeks are nice. The extra day makes a difference. I’d imagine a lot of people took the entire week off.
• Systems – I want to implement systems that help me work on things that are important to me in a healthy and sustainable way. Looking forward to doing that in the second half of the year.
• Events – In-person events are coming back. I’m starting to see more scheduled for this fall. Many are hybrid—they offer a virtual option. I’m curious to see if attendance will be back to pre-pandemic levels.      

Week sixty-seven was a short one. Next week, the pace will be back to normal.

I met with a founder who wants to help consumers make more educated purchasing decisions. She wants to empower consumers to drive impact through their spending. I’ve always been intrigued by solutions that help smaller players harness their collective power because I believe that individuals and small businesses can have a massive impact when their disparate actions are aggregated and focused.

Buying clubs and other organizations whose intent is to focus consumer buying power have been around for a long time, but they haven’t truly harnessed consumers’ power. Technology is now making it possible to do so on a whole other level, and it’s having a big impact. Robinhood, for example, empowered retail traders to sway the stock market—that could be the new norm.

A huge opportunity exists for founders to create solutions that help consumers harness the power of their wallets. They were nice-to-haves before, but I think they’ve become must-haves. Consumers have seen how powerful they can be when they align with others who are liked-minded, and they’re searching for solutions that help them do it more.