More on Entrepreneurship/Creators
Aure's Notes
2 years ago
I met a man who in just 18 months scaled his startup to $100 million.
A fascinating business conversation.
This week at Web Summit, I had mentor hour.
Mentor hour connects startups with experienced entrepreneurs.
The YC-selected founder who mentored me had grown his company to $100 million in 18 months.
I had 45 minutes to question him.
I've compiled this.
Context
Founder's name is Zack.
After working in private equity, Zack opted to acquire an MBA.
Surrounded by entrepreneurs at a prominent school, he decided to become one himself.
Unsure how to proceed, he bet on two horses.
On one side, he received an offer from folks who needed help running their startup owing to lack of time. On the other hand, he had an idea for a SaaS to start himself.
He just needed to validate it.
Validating
Since Zack's proposal helped companies, he contacted university entrepreneurs for comments.
He contacted university founders.
Once he knew he'd correctly identified the problem and that people were willing to pay to address it, he started developing.
He earned $100k in a university entrepreneurship competition.
His plan was evident by then.
The other startup's founders saw his potential and granted him $400k to launch his own SaaS.
Hiring
He started looking for a tech co-founder because he lacked IT skills.
He interviewed dozens and picked the finest.
As he didn't want to wait for his program to be ready, he contacted hundreds of potential clients and got 15 letters of intent promising they'd join up when it was available.
YC accepted him by then.
He had enough positive signals to raise.
Raising
He didn't say how many VCs he called, but he indicated 50 were interested.
He jammed meetings into two weeks to generate pressure and encourage them to invest.
Seed raise: $11 million.
Selling
His objective was to contact as many entrepreneurs as possible to promote his product.
He first contacted startups by scraping CrunchBase data.
Once he had more money, he started targeting companies with ZoomInfo.
His VC urged him not to hire salespeople until he closed 50 clients himself.
He closed 100 and hired a CRO through a headhunter.
Scaling
Three persons started the business.
He primarily works in sales.
Coding the product was done by his co-founder.
Another person performing operational duties.
He regretted recruiting the third co-founder, who was ineffective (could have hired an employee instead).
He wanted his company to be big, so he hired two young marketing people from a competing company.
After validating several marketing channels, he chose PR.
$100 Million and under
He developed a sales team and now employs 30 individuals.
He raised a $100 million Series A.
Additionally, he stated
He’s been rejected a lot. Like, a lot.
Two great books to read: Steve Jobs by Isaacson, and Why Startups Fail by Tom Eisenmann.
The best skill to learn for non-tech founders is “telling stories”, which means sales. A founder’s main job is to convince: co-founders, employees, investors, and customers. Learn code, or learn sales.
Conclusion
I often read about these stories but hardly take them seriously.
Zack was amazing.
Three things about him stand out:
His vision. He possessed a certain amount of fire.
His vitality. The man had a lot of enthusiasm and spoke quickly and decisively. He takes no chances and pushes the envelope in all he does.
His Rolex.
He didn't do all this in 18 months.
Not really.
He couldn't launch his company without private equity experience.
These accounts disregard entrepreneurs' original knowledge.
Hormozi will tell you how he founded Gym Launch, but he won't tell you how he had a gym first, how he worked at uni to pay for his gym, or how he went to the gym and learnt about fitness, which gave him the idea to open his own.
Nobody knows nothing. If you scale quickly, it's probable because you gained information early.
Lincoln said, "Give me six hours to chop down a tree, and I'll spend four sharpening the axe."
Sharper axes cut trees faster.
Dani Herrera
3 years ago
What prevents companies from disclosing salary information?
Yes, salary details ought to be mentioned in job postings. Recruiters and candidates both agree, so why doesn't it happen?
The short answer is “Unfortunately, it’s not the Recruiter’s decision”. The longer answer is well… A LOT.
Starting in November 2022, NYC employers must include salary ranges in job postings. It should have started in May, but companies balked.
I'm thrilled about salary transparency. This decision will promote fair, inclusive, and equitable hiring practices, and I'm sure other states will follow suit. Good news!
Candidates, recruiters, and ED&I practitioners have advocated for pay transparency for years. Why the opposition?
Let's quickly review why companies have trouble sharing salary bands.
💰 Pay Parity
Many companies and leaders still oppose pay parity. Yes, even in 2022.
💰 Pay Equity
Many companies believe in pay parity and have reviewed their internal processes and systems to ensure equality.
However, Pay Equity affects who gets roles/promotions/salary raises/bonuses and when. Enter the pay gap!
💰Pay Transparency and its impact on Talent Retention
Sharing salary bands with external candidates (and the world) means current employees will have access to that information, which is one of the main reasons companies don't share salary data.
If a company has Pay Parity and Pay Equity issues, they probably have a Pay Transparency policy as well.
Sharing salary information with external candidates without ensuring current employees understand their own salary bands and how promotions/raises are decided could impact talent retention strategies.
This information should help clarify recent conversations.
Nik Nicholas
3 years ago
A simple go-to-market formula
“Poor distribution, not poor goods, is the main reason for failure” — Peter Thiel.
Here's an easy way to conceptualize "go-to-market" for your distribution plan.
One equation captures the concept:
Distribution = Ecosystem Participants + Incentives
Draw your customers' ecosystem. Set aside your goods and consider your consumer's environment. Who do they deal with daily?
First, list each participant. You want an exhaustive list, but here are some broad categories.
In-person media services
Websites
Events\Networks
Financial education and banking
Shops
Staff
Advertisers
Twitter influencers
Draw influence arrows. Who's affected? I'm not just talking about Instagram selfie-posters. Who has access to your consumer and could promote your product if motivated?
The thicker the arrow, the stronger the relationship. Include more "influencers" if needed. Customer ecosystems are complex.
3. Incentivize ecosystem players. “Show me the incentive and I will show you the result.“, says Warren Buffet's business partner Charlie Munger.
Strong distribution strategies encourage others to promote your product to your target market by incentivizing the most prominent players. Incentives can be financial or non-financial.
Financial rewards
Usually, there's money. If you pay Facebook, they'll run your ad. Salespeople close deals for commission. Giving customers bonus credits will encourage referrals.
Most businesses underuse non-financial incentives.
Non-cash incentives
Motivate key influencers without spending money to expand quickly and cheaply. What can you give a client-connector for free?
Here are some ideas:
Are there any other features or services available?
Titles or status? Tinder paid college "ambassadors" for parties to promote its dating service.
Can I get early/free access? Facebook gave a select group of developers "exclusive" early access to their AR platform.
Are you a good host? Pharell performed at YPlan's New York launch party.
Distribution? Apple's iPod earphones are white so others can see them.
Have an interesting story? PR rewards journalists by giving them a compelling story to boost page views.
Prioritize distribution.
More time spent on distribution means more room in your product design and business plan. Once you've identified the key players in your customer's ecosystem, talk to them.
Money isn't your only resource. Creative non-monetary incentives may be more effective and scalable. Give people something useful and easy to deliver.
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William Anderson
3 years ago
When My Remote Leadership Skills Took Off
4 Ways To Manage Remote Teams & Employees
The wheels hit the ground as I landed in Rochester.
Our six-person satellite office was now part of my team.
Their manager only reported to me the day before, but I had my ticket booked ahead of time.
I had managed remote employees before but this was different. Engineers dialed into headquarters for every meeting.
So when I learned about the org chart change, I knew a strong first impression would set the tone for everything else.
I was either their boss, or their boss's boss, and I needed them to know I was committed.
Managing a fleet of satellite freelancers or multiple offices requires treating others as more than just a face behind a screen.
You must comprehend each remote team member's perspective and daily interactions.
The good news is that you can start using these techniques right now to better understand and elevate virtual team members.
1. Make Visits To Other Offices
If budgeted, visit and work from offices where teams and employees report to you. Only by living alongside them can one truly comprehend their problems with communication and other aspects of modern life.
2. Have Others Come to You
• Having remote, distributed, or satellite employees and teams visit headquarters every quarter or semi-quarterly allows the main office culture to rub off on them.
When remote team members visit, more people get to meet them, which builds empathy.
If you can't afford to fly everyone, at least bring remote managers or leaders. Hopefully they can resurrect some culture.
3. Weekly Work From Home
No home office policy?
Make one.
WFH is a team-building, problem-solving, and office-viewing opportunity.
For dial-in meetings, I started working from home on occasion.
It also taught me which teams “forget” or “skip” calls.
As a remote team member, you experience all the issues first hand.
This isn't as accurate for understanding teams in other offices, but it can be done at any time.
4. Increase Contact Even If It’s Just To Chat
Don't underestimate office banter.
Sometimes it's about bonding and trust, other times it's about business.
If you get all this information in real-time, please forward it.
Even if nothing critical is happening, call remote team members to check in and chat.
I guarantee that building relationships and rapport will increase both their job satisfaction and yours.
Sam Hickmann
3 years ago
Donor-Advised Fund Tax Benefits (DAF)
Giving through a donor-advised fund can be tax-efficient. Using a donor-advised fund can reduce your tax liability while increasing your charitable impact.
Grow Your Donations Tax-Free.
Your DAF's charitable dollars can be invested before being distributed. Your DAF balance can grow with the market. This increases grantmaking funds. The assets of the DAF belong to the charitable sponsor, so you will not be taxed on any growth.
Avoid a Windfall Tax Year.
DAFs can help reduce tax burdens after a windfall like an inheritance, business sale, or strong market returns. Contributions to your DAF are immediately tax deductible, lowering your taxable income. With DAFs, you can effectively pre-fund years of giving with assets from a single high-income event.
Make a contribution to reduce or eliminate capital gains.
One of the most common ways to fund a DAF is by gifting publicly traded securities. Securities held for more than a year can be donated at fair market value and are not subject to capital gains tax. If a donor liquidates assets and then donates the proceeds to their DAF, capital gains tax reduces the amount available for philanthropy. Gifts of appreciated securities, mutual funds, real estate, and other assets are immediately tax deductible up to 30% of Adjusted gross income (AGI), with a five-year carry-forward for gifts that exceed AGI limits.
Using Appreciated Stock as a Gift
Donating appreciated stock directly to a DAF rather than liquidating it and donating the proceeds reduces philanthropists' tax liability by eliminating capital gains tax and lowering marginal income tax.
In the example below, a donor has $100,000 in long-term appreciated stock with a cost basis of $10,000:
Using a DAF would allow this donor to give more to charity while paying less taxes. This strategy often allows donors to give more than 20% more to their favorite causes.
For illustration purposes, this hypothetical example assumes a 35% income tax rate. All realized gains are subject to the federal long-term capital gains tax of 20% and the 3.8% Medicare surtax. No other state taxes are considered.
The information provided here is general and educational in nature. It is not intended to be, nor should it be construed as, legal or tax advice. NPT does not provide legal or tax advice. Furthermore, the content provided here is related to taxation at the federal level only. NPT strongly encourages you to consult with your tax advisor or attorney before making charitable contributions.
Enrique Dans
3 years ago
You may not know about The Merge, yet it could change society
Ethereum is the second-largest cryptocurrency. The Merge, a mid-September event that will convert Ethereum's consensus process from proof-of-work to proof-of-stake if all goes according to plan, will be a game changer.
Why is Ethereum ditching proof-of-work? Because it can. We're talking about a fully functioning, open-source ecosystem with a capacity for evolution that other cryptocurrencies lack, a change that would allow it to scale up its performance from 15 transactions per second to 100,000 as its blockchain is used for more and more things. It would reduce its energy consumption by 99.95%. Vitalik Buterin, the system's founder, would play a less active role due to decentralization, and miners, who validated transactions through proof of work, would be far less important.
Why has this conversion taken so long and been so cautious? Because it involves modifying a core process while it's running to boost its performance. It requires running the new mechanism in test chains on an ever-increasing scale, assessing participant reactions, and checking for issues or restrictions. The last big test was in early June and was successful. All that's left is to converge the mechanism with the Ethereum blockchain to conclude the switch.
What's stopping Bitcoin, the leader in market capitalization and the cryptocurrency that began blockchain's appeal, from doing the same? Satoshi Nakamoto, whoever he or she is, departed from public life long ago, therefore there's no community leadership. Changing it takes a level of consensus that is impossible to achieve without strong leadership, which is why Bitcoin's evolution has been sluggish and conservative, with few modifications.
Secondly, The Merge will balance the consensus mechanism (proof-of-work or proof-of-stake) and the system decentralization or centralization. Proof-of-work prevents double-spending, thus validators must buy hardware. The system works, but it requires a lot of electricity and, as it scales up, tends to re-centralize as validators acquire more hardware and the entire network activity gets focused in a few nodes. Larger operations save more money, which increases profitability and market share. This evolution runs opposed to the concept of decentralization, and some anticipate that any system that uses proof of work as a consensus mechanism will evolve towards centralization, with fewer large firms able to invest in efficient network nodes.
Yet radical bitcoin enthusiasts share an opposite argument. In proof-of-stake, transaction validators put their funds at stake to attest that transactions are valid. The algorithm chooses who validates each transaction, giving more possibilities to nodes that put more coins at stake, which could open the door to centralization and government control.
In both cases, we're talking about long-term changes, but Bitcoin's proof-of-work has been evolving longer and seems to confirm those fears, while proof-of-stake is only employed in coins with a minuscule volume compared to Ethereum and has no predictive value.
As of mid-September, we will have two significant cryptocurrencies, each with a different consensus mechanisms and equally different characteristics: one is intrinsically conservative and used only for economic transactions, while the other has been evolving in open source mode, and can be used for other types of assets, smart contracts, or decentralized finance systems. Some even see it as the foundation of Web3.
Many things could change before September 15, but The Merge is likely to be a turning point. We'll have to follow this closely.