I recently had a major issue with a product I’d purchased. The timing couldn’t have been worse, so I was frustrated. I tried to solve the problem myself, but I failed. I wanted to avoid calling the company’s customer service, but in the end it was the only option left.

The agent had a great attitude and was knowledgeable. He listened with the intent of understanding my situation, and he made sure we agreed about what problem we were solving. He set clear expectations: he told me he’d do everything he could but that there was a fifty percent chance, at best, that he could resolve the issue. He tried various tactics to resolve the problem. We got close, but it turned out to be impossible.

I found out this company stands behind its products and will do everything in its power to make my experience positive, and that goes a long way with me. Its rep turned a negative situation into an opportunity to reinforce its brand by giving amazingly good service. They’ll be at the top of my list the next time I need to purchase something.

Early-stage founders can learn from this. People don’t remember problems; they remember how you resolve them (or try to). This is true of customers, employees, investors—everyone who’s watching. Every company has issues, but not every company deals with them in a way that leaves a positive impression.

Founders, when you hit a snag, consider it an opportunity to set yourself apart from the competition and turn people into advocates.

Building a company is hard. There’s so much you don’t know that you have to try to figure out. I recently connected with a founder who’s building his second venture capital–backed startup. He raised over $100 million from investors for his first company and scaled quickly. During our conversation, it was clear that he’d learned a ton and planned to apply that knowledge to this new company.

A lot of people are interested in entrepreneurship but wait on the sidelines until they think they’re on to something that could be massive. Nothing’s wrong with this approach, and it works well for some people. I do think there’s another approach, though, that can increase your long-term chances of being a successful founder. Start working on building a company around a problem you’re passionate about. If the market ends up being smaller than you hoped for or customers won’t pay for your solution, that’s okay. Regardless of the outcome, you’ll gain valuable knowledge that will help you in your next entrepreneurial endeavor. That knowledge will help you avoid mistakes and save you tons of time the next go-around.

Being a founder is about learning as much as anything else. If you want to be a founder, put yourself in position to start learning as soon as you can. The more you learn and the earlier you learn, the more you increase your odds of succeeding . . . if not this time, next time.  

I connected with a founder living in the Southeast in a city that’s not a major metropolitan area. He raised capital from investors a few years ago but had an experience that wasn’t pleasant. He received a term sheet from a venture capital firm in a big coastal city. The investors expected his team to move to a large tech hub, but he politely declined. His team was remote (this was pre-COVID), and he didn’t think moving was necessary to success. The investors disagreed and pulled the term sheet.

Great teams can be found in all cities, not just the big tech hubs. The reasons people have for living where they do vary. Work is important, but it’s not the only factor. The decision often revolves around what suits their personal lives (e.g., being near friends and family). The last year and a half has been very difficult, but there’s a silver lining: less pressure for people to relocate for work. More great people are now able to live where they want and work remotely for a great company.

Is this a temporary or permanent change? Time will tell. My gut tells me people’s mindsets have shifted. I predict that employers and investors will continue to embrace team members living wherever suits their personal circumstances. This won’t apply to all roles, but I think it will be an option for a much large number of people that it was a few years ago.

I recently got an update email from a founder I haven’t spoken with in months. He sends them out every month to a distribution list. They’re pretty good, and this one put his company back at the top of my mind.

Update emails are a simple yet powerful tool that can benefit early-stage founders. They help with accountability and focus and they remind outsiders that the company exists. The exercise of creating the email is good for founders because it forces them to reflect on the most important things that have happened and how the company’s KPIs or other metrics look.

These emails don’t have to be long or dense. The more concise the better, in fact. I’ve seen founders create a template and change only key pieces of information each time. Most importantly, these emails should be consistent and truthful. Pick a time interval (I’d suggest monthly at a minimum) and stick to it. Sporadic updates with constantly changing formats and KPIs give the impression that the company or founder is unfocused.

Updates shouldn’t be all about everything that’s going well. Running a startup is hard, and things are constantly going wrong. Share those things, too. When you’re open about where you need help, it’s easier for people to help you. And people will tend to trust you if they feel they’re getting the complete story. If you say your startup never struggles, people won’t believe you.

If you’re an early-stage founder, consider asking people you meet with (at the end of the meeting) if you can add them to your update email list. And send regular updates to everyone on it.

Many founders focus on sales, and rightfully so. If a company can’t get customers, it won’t be around long. So founders spend lots of time trying to get customers to agree to use their product or service. An equally important but less-discussed topic is payment terms. How customers pay can be just as important as what they pay. This is especially true for early-stage companies that don’t have an abundance of cash.

I’ve talked to a number of founders who readily share their sales metrics. As I learn more about the business, I like to get an understanding of how quickly they collect revenue and how payment terms are structured.

These is no one-size-fits-all approach to payment terms, but here are a few thoughts:

• Prepayment in full – If you can get customers to pay in full up front, you’ll have the best source of capital. You’ll be able to avoid paying interest on term loans or giving up equity to investors. If your product or service creates a ton of value for customers (they’re begging for your solution), see if any of them will bite. Make sure you (or your accountant) keep track of how much of your cash is from prepayments.
• Deposits – I think of deposits as partial prepayments. The customer’s putting some skin in the game. Deposits can be structured in various ways. It’s common for companies to require a deposit that’s a specified percentage of the total before doing any work. They’re not as good as full prepayments, but they can help companies avoid borrowing and identify problem customers early.
• As you deliver – This is a good approach to aligning costs with revenue. It can be done in a variety of ways. The founder of a consultancy told me that he includes a payment schedule in agreements. He knows exactly how much he’ll be paid and when. This ensures that he’ll get regular revenue to help pay the teams doing the work and avoid cash crunches. It also motivates clients to keep projects on schedule. If they drag their feet, they risk fully paying for a project that hasn’t been delivered.
• After delivery – It’s common for a company to fully deliver its product or service and then request payment after the fact by sending an invoice to the customer. Large corporations love these types of arrangements and often ask for terms of ninety days or more. This means they’ll pay you three months or longer after you deliver and invoice them. This can put a huge strain on cash. If you’re a product company, you likely have to pay for inventory and pay your people before you deliver. If you’re a service company, you still have to pay people and other costs before you deliver. If you allow customers to pay after delivery, you need to assign someone in the company to monitor how much each customer owes and collect payments on time. Customers are already enjoying what you’ve delivered, so it isn’t uncommon for them to “forget” to pay or pay late if they know no one’s paying attention.

Cash is king, and founders should always know how much of it they have. Raising capital from outside parties is one way to make sure the company has ample cash, but strategically structuring payment terms is another approach that can be very effective.

I recently replaced an Apple product. Having not kept up with their products for the last few years, I did some research. As I read their website and spoke with their customer service, I observed several things. The main one: Apple is edging into financial services.

• Trade-ins – People can dispose of an old device and receive a credit toward the cost of a new one. Reminds me of the car dealership business. I suspect this is handled by a third-party company behind the scenes, but it’s still a smart way to make products more affordable without using discounts or sales. The brand integrity is maintained. I’m pretty sure this reduces the average time between device upgrades.
• Financing – New purchases are eligible for 0% interest for a year if the customer signs up for Apple Card (more on this). This stretches the cost of a sizeable purchase into digestible monthly payments, making the products more accessible to more people. If you can afford the monthly payment, you can get a device now instead of having to wait until you have the cash for the full purchase price, and you don’t have to pay interest for a year. More importantly, this is an ingenious way to introduce consumers to the new Apple Card product.
• Apple Card – This is a credit card product, but done the Apple way. It offers a lot of things consumers value, such as cash back and no fees. The software and user experience appear to be very different than those of traditional credit cards. It integrates tightly with Apple devices and services that consumers already use every day. iPhones conditioned people to think of Apple as a company that helps them communicate. Apple Card will likely kick-start people into thinking of Apple as a company that can help them manage their money. If Apple builds a significant financial services business, this product will have paved the way.
• Apple Pay – This product is focused on making it easier for consumers to pay. It’s a mobile payment and digital wallet service. It’s been around since 2014, so it’s not new. It has gained traction. It positions Apple between consumers who love their devices and merchants who want to sell to those consumers. I noticed that Apple Card offers a 2% cash back on charges made via Apple Pay. Another great way to entice consumers to use multiple products.

Apple is a strong company whose hardware and software have heavily influenced our society since the release of the iPhone fourteen years ago. I suspect financial services (in addition to other unannounced businesses) will further solidify its role in consumers’ everyday lives. If it’s successful, I can see a day in the future when people will think of Apple as a place to go for help with managing their money.

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

• Short week – Having Monday off was a nice break, and it made the workweek shorter. I like shorter workweeks, especially in the summer. I suspect a lot of people will be aiming for as many four-day weeks as possible this summer.    
• Summer – June usually kicks off the summer travel and vacation season. I think this year will be especially active, and I’m curious about how business activity will be affected.  
• Finish line – This week was a reminder to keep pushing, especially when I’m in the last leg of something. It’s important to persevere all the way to the finish line.    

Week sixty-two was a short week. It was good and productive even though it feels like more people have a summer-vacation mindset.

I lived the bootstrap life with my company and learned a lot. It has pros and cons that founders should consider when deciding whether it’s the route they want to go. One of the things I regularly encounter is the full-time team taking no salary.

Building a company is hard. It takes a lot of time and effort. Naturally, you want your team to be focused. This usually means you want them to be working full time on your startup. This sounds great in theory, but it often doesn’t work in the real world. If the team is working full time with no salary (i.e., for equity or deferred cash compensation), they still must fund their lifestyle. They need cash. Some people are fortunate enough to have cash reserves, but most don’t want to burn through their savings. What usually happens is that your team starts doing things on the side for cash as they go longer without pay. As people start doing side things, they lose some focus. As they lose focus, things slow down a bit. As things slow down, people get frustrated. You see where this is going.

Bootstrapping is a good path in certain situations. I did it (albeit painfully) and built my company to over $10 million in revenue. I also personally went without pay and couldn’t afford to hire the people I needed for long periods of time. Founders should avoid asking people to work full time without a salary if that’s going to last for a while. It’s usually not sustainable, and talented people with options (including cash) may be less inclined to accept these types of offers.

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I’ve talked with many founders who’ve been ecstatic upon receiving term sheets, and rightfully so. It’s super hard to fundraise. It takes tons of time and founders endure lots of rejection. An offer in hand is a joyous event. But founders should be aware that the deal isn’t done.

All kinds of things can happen after a term sheet is issued. Some of them prevent founders from receiving the funds outlined in the term sheet. I know founders who have had term sheets rescinded because of world events outside their control.

After issuing a term sheet, investors need to complete other steps before they send funds. The exact process varies by investor and sometimes by deal. It’s important for founders to always have a clear understanding of what steps are left in the investor’s process and what the approximate timeline to completion looks like. If they don’t, they should ask. They should also understand that deals can be fluid—things can be added to the process or removed from it. There’s nothing wrong with founders making status inquiries throughout the process. In fact, I’d recommend it. Most investors will readily share this info.

Founders must understand that Murphy’s law is a real thing. (Remember? Anything that can go wrong, will go wrong.) It can manifest at any time. If the unexpected happens, don’t panic. Be proactive about resolving any issues with all parties involved and make sure everyone is aligned on the remaining steps and timeline to close.

Receiving a term sheet is exciting, but it’s important for founders to stay focused and understand that the deal isn’t done until the money is in the bank.

Successful founders embody a variety of traits. The exact combination differs because every person has unique strengths and weaknesses, but certain traits are more common in successful founders than in the general population, I think. Street smarts is an important one.

When I think about street smarts, I think of navigating bad situations with lots of uncertainty. Often without relevant experience. The term doesn’t mean the founder comes from the streets or was raised in a rough environment. All founders will encounter situations that feel impossible. (It’s only a matter of time.) Navigating them is a key to survival and ultimate success. Founders with street smarts understand when they or their team members are under attack and know how to put up a defense. They also can detect when people are lying or trying to take advantage of them.

A company may not survive if its founder doesn’t have street smarts. If you’re a founder or want to be one, ask yourself: how well do I handle bad situations?