When All Is Said and Done, What Will You Regret?
I listened to an old interview of Jeff Bezos explaining why he decided to leave his stable job to start Amazon. Not just any job—a high-paying job at an investment banking firm on Wall Street. It was a tough decision that he ultimately made using what he described as a regret-minimization framework.
He projected himself into the future to age 80. He wanted to minimize the number of regrets he would have as he looked back on his life. An important part of his thought process was identifying the things he’d regret not trying, even if he failed. Starting Amazon was one of them—even if it meant giving up his stable lifestyle.
I’m a huge fan of starting with the end in mind and working backward. I haven’t used a regret-minimization framework, but I’ve thought about what I want people to remember me for when I’m long gone and used that as a compass when making decisions.
For those fortunate enough to be able to consider only regret, I think it could be a good way to evaluate big decisions.
Weekly Reflection: Week One Hundred Nine
Today marks the end of my one-hundred-ninth week of working from home (mostly). Here are my takeaways from week one hundred nine:
- Focus – This week, I was intentional about carving out time to focus, and it served me well. I was able to move the needle on some important projects and have conversations about my progress with the right people.
- Multiples – I spent time working with some well-capitalized companies this week. They raised at high multiples (in historical terms) in the last year or so. Now they’re trying to figure out how to achieve the growth targets they agreed to when they raised those rounds. They’re facing some difficult decisions. I suspect more companies are in this situation. Should be interesting to see how it plays out.
Week one hundred nine was a week of focus and much activity. Looking forward to repeating that mix next week.
Will a Body Count Be Part of Your Founder Story?
Founders tend to be impatient people. They have ideas, but they realize that it’s the execution of their ideas that matters. Most have high expectations around execution. They manage others with a focus on getting things done quickly. Their impatience can be a superpower, but it can also have unintended consequences.
Focusing exclusively on rapid execution at all costs can be a slippery slope. That type of management gets results, but at a cost. People burn out. The company’s culture can turn toxic. The business churns through people. The body count rises.
If you’re a founder, consider: Do you want a high body count to be part of your legacy? Does your current management style align with the legacy you want to leave behind you?
City for Dreamers vs. City for Hustlers
I had a conversation with an early founder who’s spent time in Atlanta’s and San Francisco’s start-up ecosystems. He’s trying to decide which will be his home base. I’m a huge advocate for Atlanta, so I was curious to hear his perspective on the two cities. He shared a variety of things, and the main thing he said stuck with me: San Francisco embraces dreamers; Atlanta embraces hustlers.
From his time in San Francisco, he learned it’s a city that respects big, outlandish visions. Even if it sounds crazy, people (investors and other founders) will support it. There’s a belief that the outlandish can become reality, have a big impact on society, and generate massive financial returns. Atlanta, he said, is a city that respects action and execution. Getting stuff done and moving things forward matter most. People prefer execution to big visions.
I’ve never heard anyone make this comparison before, and it got me thinking. I haven’t spent enough time out west to judge San Francisco, but I do know Atlanta well. I’m not sure that I agree with him. I think Atlanta embraces big-picture thinking but is also pragmatic. The pragmatism is rooted in the exits local start-ups have had. As those exits have increased in size, so have beliefs around what’s practical (for better or worse). As more founders have larger exits, I think we’ll continue to see bigger dreams embraced by the city.
Founders, Be Willing to Get Your Hands Dirty
An early-stage founder asked me for advice on handling a weird cofounder dynamic. This CEO realized that his team doesn’t respect his cofounder. Finding this odd, I dug in. I learned that the cofounder is used to a more corporate setting with resources and a team beneath him. He sees his lane as being narrow and stays squarely in it. Translation: the cofounder isn’t used to getting his hands dirty and taking on tasks he isn’t experienced in.
Early-stage companies are in constant flux and usually have only a handful of people. What needs to be done changes constantly, and there are never enough resources to get everything done. Often, everyone works on tasks outside their role—leaders included—until the company has the resources and scale to hire sufficient staff.
Early-stage founders should lead by example and be ready to get their hands dirty. Otherwise, they risk losing the respect of their team. It’s hard for your people to wrap their heads around running through a wall for you if you won’t run through one yourself.
Reflections After a Successful Raise: The Evolving Pitch Deck
I met with a founder about his successful fundraise. I was curious about what he learned from the process. Some of his learnings are to be expected; for example, realizing that to hit his goal, he needed to pitch more investors than he planned for. But he also shared something else: he didn’t crystalize his pitch (or finalize his pitch deck) until the end of his fundraise process.
This founder talked to many people who poked holes in his business from many angles. He was asked questions he’d never thought about. Most of those pitches ended in a no, but he reflected, talked with his cofounders, and made changes when necessary. While painful, the fundraising process gave him more clarity about, and confidence in, what they’re attempting to do.
A founder spends lots of time preparing a fundraising pitch deck. They often feel they’ve created a masterpiece. Many are surprised when they learn it’s just the beginning. Their masterpiece may look very different by the end of a successful fundraising.
Lower Your Personal Burn Rate to Enhance Your Optionality
One big hurdle for some aspiring founders is their lifestyle—the amount of money required to maintain it is so high that entrepreneurship isn’t a viable option. There’s an argument that every dollar that goes into the founder’s pocket reduces the resources available to scale the company. You often see founders take small salaries with large equity positions in the early years. The thought is that if the business is successful, the equity will be orders of magnitude larger than the forgone salary.
You may not have thought about it this way, but personal burn rate and optionality are correlated (for most people). The higher your personal burn rate, the lower your optionality. A high personal burn rate prevents many people from entertaining opportunities with a big upside but lower initial salary.
Anyone serious about founding a company or joining an early-stage company should keep their personal burn rate as low as possible. This doesn’t mean you shouldn’t enjoy life. Nothing’s wrong with doing one-off things that bring you joy, such as taking a trip. It does mean to be strategic about the recurring monthly payments and other monthly outflows you get accustomed to.
I like to think of a low burn rate not as limiting, but rather as not allowing past decisions to restrict your options. The lower the personal burn, the more interesting opportunities you can consider.
Do I Have a Good Reason for Doing It?
When I was younger, I made a series of decisions rooted in groupthink. Everyone else was doing it—whatever “it” was at the time—so I figured I should too. Some of those decisions proved to be painful. Upon reflection, I realized I was following the crowd instead of thinking for myself.
These days I’m very aware of this. If I find myself thinking about doing what everyone else is doing, I’ll pause and ask myself why I want to do it. If I can’t identify a reason that’s specific to my situation, I go the other way. This is difficult and sometimes isolating, but it’s served me well over the years.
I feel we’re in a period of escalating groupthink in a variety of areas. The people who think for themselves will be uncomfortable in the short to medium term but will ultimately be proven correct.
Weekly Reflection: Week One Hundred Eight
Today marks the end of my one-hundred-eighth week of working from home (mostly). Here are my takeaways from week one hundred eight:
- Energy – I thought it would take me a bit to get back in the groove after vacation. I surprised myself by jumping back in full throttle with no problems.
- Unplanned interactions – This week ended up being filled with unplanned interactions and connections with people. Although it was unexpected, it ended up being a great thing. Lots of good stuff came from those interactions.
Week one hundred eight was a high-activity week. I drew a lot of energy from talking with folks. Looking forward to more focus time next week.
It’s Only a Failure If You Didn’t Learn Anything
I caught up with an early founder yesterday. We met when he was building his first start-up. That company didn’t make it, I learned yesterday. When companies don’t survive, good founders will reflect on the experience and try to learn from it. I asked him what he learned, and he was quick to share this: “Next time, I’ll prioritize go to market too, not just product.” Translation: he focused on building a great product and struggled to get it in the hands of customers.
This founder learned a valuable lesson. Just because you build it, that doesn’t guarantee that customers will come. He didn’t give enough thought to how he would take that product to market.
Kudos to this founder for taking the time to learn from his first experience, even though it didn’t play out as he planned. His self-awareness will serve him well as he dusts himself off and starts building his second start-up. I can’t wait to see his second act.