I spent Q4 of 2021 thinking about what I want to do differently. Historically I’ve set goals, but I always thought something was missing. You can do everything that’s in your control and still not achieve a goal. I never liked that, and I decided to focus on habits and systems in 2022. I read Atomic Habits and crystallized the habits I want to have that align with my identity.
I began implementing my new habits at the beginning of the new year. It was harder than I expected. I struggled to be consistent with all my new habits, and as I did, I realized that I need to simplify and focus on the one habit that will up the likelihood of my sticking to all my habits. So I did—and it’s been a game changer.
I’m now measuring one action every day. I have data for only a few weeks, but it’s clear. When I do this one thing that I want to be a habit, my days are much more productive and balanced and I get the outcomes I want. When I don’t, I’m far less productive, I’m reactive, and I don’t get the outcomes I want. This habit has such a big impact on my day that I consider it a foundational habit.
Figuring this out has changed my thinking about habits. Maintaining them felt like tons of work, and I wasn’t sure I could do it. Amazingly, it now feels like an easy life that I can maintain. I’m still doing the same things—it’s just how I think about them and what I focus on that changed. Glad I figured this out!
Thinking in Probabilities
I’ve recently been thinking about making an investment. I’ve chatted with people I respect who are credible in the space to get their perspectives. That was helpful and exposed some gaps in my thinking, but it didn’t sway me one way or the other. Today I had some downtime, so I built a quick spreadsheet.
I’ve built tons of spreadsheets for decision-making before, but I included something new in this one. For this investment to be successful, several things would have to happen. I thought through the probability of all of them happening and included it in the spreadsheet. This exercise was helpful because it forced me to carefully consider a variety of things, including what that percentage is and why it’s the right percentage. It helped clarify some things and got me closer to a decision.
Like many other things in life, this investment has a chance of being successful that can be estimated. Thinking about that probability was helpful.
Every Founder Needs a Supporting Cast
As founders build, they will regularly encounter unfamiliar situations. They won’t know how to deal with many of them, and that’s OK: it’s difficult to navigate circumstances you’ve never been exposed to. Founders can acquire the experience they need through trial and error or by leaning on others who already have it. I’m a fan of the latter approach—I found it invaluable during my founder days. Talking with people with experience in what I was trying to do helped me make better decisions.
As my company grew, I had to make more decisions that were complicated and had long-lasting implications. Think contracts and other legalities. The stakes were high. Some of these decisions, once made, couldn’t be undone. To navigate them, I hired professionals whom I thought of as my supporting cast. I was looking for them to fill my knowledge gap so I could make the best decision possible in a high-stakes situation. I wasn’t looking for someone to tell me what to do, but rather for someone who could help me understand the ramifications of all my options. I cycled through a few people and firms, which contributed to some bad decisions in the early days. Over time, I learned to look for service providers who had specific experience helping clients make the types of decisions I was faced with. I found that people who had lived it with other clients were able to easily explain the pros and cons of all the paths I was considering.
It took time, but I ended up building a great supporting cast of service providers. Their knowledge was invaluable; it helped me make the right decisions in critical areas.
If you’re a founder with some high-stakes calls in your future, consider building a supporting cast of service providers who’ve helped others navigate your exact situation. No need to learn the hard way or work with people who are learning on your dime.
Weekly Reflection: Week Ninety-Five
Today marks the end of my ninety-fifth week of working from home (mostly). Here are my takeaways from week ninety-five:
- Atlanta – I had great conversations with various people about new initiatives happening in Atlanta around start-ups and entrepreneurship. The city is on an upward trajectory. I’m excited to be part of it and can’t wait to see where Atlanta is in ten years. I foresee Atlanta as being the internationally recognized capital of the Southeast and known for inclusive entrepreneurship.
- Beginner’s mindset – Another investor I respect shared this term with me a few months ago. It’s hard to disregard what you know and have experienced when looking at opportunities, but since then I’ve been more aware of this mindset and more intentional about looking at things from a fresh perspective. Talking with credible people this week about things I’m researching was a good way to induce a beginner’s mindset.
- Energizing chats – I had a few great chats this week. Some personal, some business, some a mix of both. They were helpful and energizing. It’s always enjoyable to connect with good people.
Week ninety-five was a high-activity week. I got a lot done—but still have a lot to do next week.
Keep in Mind Fit Matters Too
Founders looking for capital will likely talk to a lot of investors and hear no repeatedly before they hear yes. It’s a frustrating process. Today I was talking with a founder friend about finding the right investor. We discussed the importance of fit.
Founders have an objective they’re trying to achieve. They need capital, start-up knowledge, and relationships to execute and turn their vision into reality. The investors that can help them achieve this objective are the best fit. Founders are (or should be) evaluating investors for fit, but what they often don’t realize is that this is happening on the other side of the table too.
Investors, like founders, have objectives. They’re looking for opportunities that are the best fit with their objectives. Investors’ objectives vary. They probably include potential financial return, but they may also include other variables. For instance, an investor may want to fund a start-up with a specific approach to solving a problem. Or invest in certain types of solutions (e.g., software) and not others. Or give back to the community as well as make money (do good while doing well). Whatever their objectives are will play into their decision-making process. This means you could be a great founder with a great idea, but the opportunity might not be a fit with a given investor’s objectives.
Good relationships are mutually beneficial. Founders should be mindful of this when evaluating investors (or any partner for that matter). Clearly articulate what your objectives are—but understand the objectives of the other party too. The goal is to find fit: alignment of the objectives of both parties, even if they differ. When there’s a fit, the relationship will be mutually beneficial.
Exit Interviews, Done Right, Are Golden
In the early days of a company, the team is small. One person leaving the company can be a big blow to the team. To an early founder not anticipating the departure, it’s frustrating. Usually, team members opt to leave when things aren’t going well, so the departure combined with challenges in the business can feel like a double whammy and cause founders to question themselves as leaders.
Departures happen at start-ups. The first leaver likely won’t be the last. You want to do all you can to build a great environment and have everyone aligned on the mission, but however hard you try, people will leave. It’s a setback—but also an opportunity to get candid feedback on the business, how leaders are perceived, and the mood of the rest of the team.
I’m a big fan of doing exit interviews when team members choose to depart. Along with thanking them for their service and letting them know they’re always welcome to come back (if they were a good team member), it’s important to ask them for candid feedback. When someone is departing, they’ll usually give more direct feedback because they don’t have anything to lose.
Listening to feedback from someone leaving a hole in your team is hard to do. But it’s super important to look past how you feel about the situation and the extra workload caused by the departure. Listen to understand the why behind the person’s decision to depart, what’s going well, and what can be improved. You may not agree with everything they say, but this opportunity to learn and improve in various areas doesn’t come often. It often leads to valuable golden nuggets.
If you’re an early founder and a team member exits, don’t dwell on the fact that they quit. Instead, focus on what you can learn from the situation to minimize the chances of it happening again and to make your business better.
Exploring What’s Going on with Labor
I spent time talking with a founder friend and with family this weekend about the current labor market for front-line workers. I already knew about businesses having to reduce their hours of operation or capacity due to labor issues. I’ve read about the Great Resignation. But I was still surprised when I listened to firsthand accounts from the customer’s perspective this weekend. It’s anecdotal evidence, but it still got me thinking. I was talking to unrelated parties in different states, yet they were having similar experiences.
I really want to understand this phenomenon better. I’ll be spending some time over the next few weeks learning more from people on the front lines of this issue. My gut tells me that something bigger is happening here that we haven’t fully grasped.
Creating the Ideal Company in a Laggard Industry
I’ve shared my views on the entrepreneurial opportunity to take laggard industries from physical to digital. I’ve been thinking more about what the ideal company will look like in the future in laggard industries and what the result of that will be. A few thoughts:
- Automation - Manual and inefficient processes are common in old-school industries. The result can be inconsistent and slow execution of critical tasks, which leads to a poor customer experience. Automation will be a big part of the ideal company in these industries. Efficiency, timeliness, and visibility of execution will not only improve the customer experience but also reduce costs.
- Centralized data - Manual processes and a lack of systems mean that data is often unavailable to team members and leadership. Decisions are made with subjective or anecdotal evidence. Digitization will allow ideal companies to store data centrally and use it to improve decision-making.
These are just two of many ways digitization can improve laggard (and other) industries. Overall, I believe digitization will allow companies to create more value for customers and reduce costs.
My parents raised me with a certain set of values and morals, which I stuck to. As an early founder, I always assumed others operated similarly. But as my entrepreneurial journey progressed, I learned that wasn’t always the case.
A few of our customers took advantage of us. We sold automotive parts to consumers and had customer-friendly policies around returns and other service situations. They were great for most of our customers, but they also attracted fraudsters. We got hit with a rash of fraudulent transactions in the early days. Caught off guard, we didn’t know what to do to fight them. In the end, they cost us a significant amount of money I didn’t have. We learned we had to be more aware of what was going on with our orders. We implemented systems and processes to identify suspicious orders. I also had our team take an aggressive stance vis-à-vis orders that we deemed fraudulent after they were shipped. Fraudulent transactions dropped sharply, to the point we rarely saw them. Fraudsters knew we’d fight back and weren’t an easy target.
And a supplier walked all over us. This company was orders of magnitude larger than my company and our main supplier at the time. Knowing this, they used their scale to push us around. They’d change our payment terms on the fly, which affected our cash flow. They’d change our pricing on a whim, which made us less competitive and reduced our revenue. They’d limit our ability to sell certain products, too. All these moves were made to optimize the relationship for the supplier at my company’s expense. Once I realized this company was looking out for itself—and only itself—I changed our strategy. I instructed our team to take an aggressive stance with them. We pushed back strongly on one-sided changes and even cut them off as a supplier. That company began to reverse their decisions and operate with more of a partnership mentality. They learned we weren’t a customer they could push around.
From these situations and others, I learned how important it is for a founder to be situationally aware. You can’t count on everyone to be honest and fair all the time. Your business, your people, and your money are on the line. You have to pay attention. You must understand when you’re in a situation where bad actors could prey on you or parties you’re involved with could do harm if given the opportunity. And you have to figure out how to protect yourself.