I've worked in a People role at seven early-stage firms for over 15 years (I enjoy chasing a dream!). Few of the seven achieved profitability, including unicorn status or acquisition.

Did early-stage startups share anything? Was there a difference between winners and losers? YES.

I support founders and entrepreneurs building financially sustainable enterprises with a compelling cause. This isn't something everyone would do. A company's success demands more than guts. Founders drive startup success.

Six Qualities of Successful Startups

Successful startup founders either innately grasped the correlation between strong team engagement and a well-executed business model, or they knew how to ask and listen to others (executive coaches, other company leaders, the team itself) to learn about it.

Successful startups:

1. Co-founders agreed and got along personally.

Multi-founder startups are common. When co-founders agree on strategic decisions and are buddies, there's less friction and politics at work.

As a co-founder, ask your team if you're aligned. They'll explain.

I've seen C-level leaders harbor personal resentments over disagreements. A co-departure founder's caused volatile leadership and work disruptions that the team struggled to manage during and after.

2. Team stayed.

Successful startups have low turnover. Nobody is leaving. There may be a termination for performance, but other team members will have observed the issues and agreed with the decision.

You don't want organizational turnover of 30%+, with leaders citing performance issues but the team not believing them. This breeds suspicion.

Something is wrong if many employees leave voluntarily or involuntarily. You may hear about lack of empowerment, support, or toxic leadership in exit interviews and from the existing team. Intellectual capital loss and resource instability harm success.

3. Team momentum.

A successful startup's team is excited about its progress. Consistently achieving goals and having trackable performance metrics. Some describe this period of productivity as magical, with great talents joining the team and the right people in the right places. Increasing momentum.

I've also seen short-sighted decisions where only some departments, like sales and engineering, had goals. Lack of a unified goals system created silos and miscommunication. Some employees felt apathetic because they didn't know how they contributed to team goals.

4. Employees advanced in their careers.

Even if you haven't created career pathing or professional development programs, early-stage employees will grow and move into next-level roles. If you hire more experienced talent and leaders, expect them to mentor existing team members. Growing companies need good performers.

New talent shouldn't replace and discard existing talent. This creates animosity and makes existing employees feel unappreciated for their early contributions to the company.

5. The company lived its values.

Culture and identity are built on lived values. A company's values affect hiring, performance management, rewards, and other processes. Identify, practice, and believe in company values. Starting with team values instead of management or consultants helps achieve this. When a company's words and actions match, it builds trust.

When company values are beautifully displayed on a wall but few employees understand them, the opposite is true. If an employee can't name the company values, they're useless.

6. Communication was clear.

When necessary information is shared with the team, they feel included, trusted, and like owners. Transparency means employees have the needed information to do their jobs. Disclosure builds trust. The founders answer employees' questions honestly.

Information accessibility decreases office politics. Without transparency, even basic information is guarded and many decisions are made in secret. I've seen founders who don't share financial, board meeting, or compensation and equity information. The founders' lack of trust in the team wasn't surprising, so it was reciprocated.

The Choices

Finally. All six of the above traits (leadership alignment, minimal turnover, momentum, professional advancement, values, and transparency) were high in the profitable startups I've worked at, including unicorn status or acquisition.

I've seen these as the most common and constant signals of startup success or failure.

These characteristics are the product of founders' choices. These decisions lead to increased team engagement and business execution.

Here's something to consider for startup employees and want-to-bes. 90% of startups fail, despite the allure of building something new and gaining ownership. With the emotional and time investment in startup formation, look for startups with these traits to reduce your risk.

Both you and the startup will thrive in these workplaces.

Massive Layoffs, record low VC investment, debate over crash... why is it happening and what’s the endgame?

This article generalizes a diverse industry. For objectivity, specific tech company challenges like growing competition within named segments won't be considered. Please comment on the posts.

According to Layoffs.fyi, nearly 120.000 people have been fired from startups since March 2020. More than 700 startups have fired 1% to 100% of their workforce. "The tech market is crashing"

Venture capital investment dropped 19% QoQ in the first four months of 2022, a 2018 low. Since January 2022, Nasdaq has dropped 27%. Some believe the tech market is collapsing.

It's bad, but nothing has crashed yet. We're about to get super technical, so buckle up!

I've written a follow-up article about what's next. For a more optimistic view of the crisis' aftermath, see: Tech Diaspora and Silicon Valley crisis

What happened?

Insanity reigned. Last decade, everyone became a unicorn. Seed investments can be made without a product or team. While the "real world" economy suffered from the pandemic for three years, tech companies enjoyed the "new normal."

COVID sped up technology adoption on several fronts, but this "new normal" wasn't so new after many restrictions were lifted. Worse, it lived with disrupted logistics chains, high oil prices, and WW3. The consumer market has felt the industry's boom for almost 3 years. Inflation, unemployment, mental distress...what looked like a fast economic recovery now looks like unfulfilled promises.

People rethink everything they eat. Paying a Netflix subscription instead of buying beef is moronic if you can watch it for free on your cousin’s account. No matter how great your real estate app's UI is, buying a house can wait until mortgage rates drop. PLGProduct Led Growth (PLG) isn't the go-to strategy when consumers have more basic expense priorities.

Exponential growth and investment

Until recently, tech companies believed that non-exponential revenue growth was fatal. Exponential growth entails doing more with less. From Salim Ismail words:

An Exponential Organization (ExO) has 10x the impact of its peers.

Many tech companies' theories are far from reality.

Investors have funded (sometimes non-exponential) growth. Scale-driven companies throw people at problems until they're solved. Need an entire closing team because you’ve just bought a TV prime time add? Sure. Want gold-weight engineers to colorize buttons? Why not?

Tech companies don't need cash flow to do it; they can just show revenue growth and get funding. Even though it's hard to get funding, this was the market's momentum until recently.

The graph at the beginning of this section shows how industry heavyweights burned money until 2020, despite being far from their market-share seed stage. Being big and being sturdy are different things, and a lot of the tech startups out there are paper tigers. Without investor money, they have no foundation.

A little bit about interest rates

Inflation-driven high interest rates are said to be causing tough times. Investors would rather leave money in the bank than spend it (I myself said it some days ago). It’s not wrong, but it’s also not that simple.

The USA central bank (FED) is a good proxy of global economics. Dollar treasury bonds are the safest investment in the world. Buying U.S. debt, the only country that can print dollars, guarantees payment.

The graph above shows that FED interest rates are low and 10+ year bond yields are near 2018 levels. Nobody was firing at 2018. What’s with that then?

Full explanation is too technical for this article, so I'll just summarize: Bond yields rise due to lack of demand or market expectations of longer-lasting inflation. Safe assets aren't a "easy money" tactic for investors. If that were true, we'd have seen the current scenario before.

Long-term investors are protecting their capital from inflation.

Not a crash, a landing

I bombarded you with info... Let's review:

• Consumption is down, hurting revenue.

• Tech companies of all ages have been hiring to grow revenue at the expense of profit.

• Investors expect inflation to last longer, reducing future investment gains.

Inflation puts pressure on a wheel that was rolling full speed not long ago. Investment spurs hiring, growth, and more investment. Worried investors and consumers reduce the cycle, and hiring follows.

Long-term investors back startups. When the invested company goes public or is sold, it's ok to burn money. What happens when the payoff gets further away? What if all that money sinks? Investors want immediate returns.

Why isn't the market crashing? Technology is not losing capital. It’s expecting change. The market realizes it threw moderation out the window and is reversing course. Profitability is back on the menu.

People solve problems and make money, but they also cost money. Huge cost for the tech industry. Engineers, Product Managers, and Designers earn up to 100% more than similar roles. Businesses must be careful about who they keep and in what positions to avoid wasting money.

What the future holds

From here on, it's all speculation. I found many great articles while researching this piece. Some are cited, others aren't (like this and this). We're in an adjustment period that may or may not last long.

Big companies aren't laying off many workers. Netflix firing 100 people makes headlines, but it's only 1% of their workforce. The biggest seem to prefer not hiring over firing.

Smaller startups beyond the seeding stage may be hardest hit. Without structure or product maturity, many will die.

I expect layoffs to continue for some time, even at Meta or Amazon. I don't see any industry names falling like they did during the .com crisis, but the market will shrink.

If you are currently employed, think twice before moving out and where to.
If you've been fired, hurry, there are still many opportunities.
If you're considering a tech career, wait.
If you're starting a business, I respect you. Good luck.

After 10 years of working in scale-ups, I've embraced a few concepts for scaling Tech and Product teams.

First, cross-functionalize teams. Product Managers represent the business, Product Designers the consumer, and Engineers build.

I organize teams of 5-10 individuals, following AWS's two pizza teams guidelines, with a Product Trio guiding each.

If more individuals are needed to reach a goal, I group teams under a Product Trio.

With Engineering being the biggest group, Staff/Principal Engineers often support the Trio on cross-team technical decisions.

Product Managers, Engineering Managers, or Engineers in the team may manage projects (depending on the project or aim), but the trio is collectively responsible for the team's output and outcome.

Once the Product Trio model is created, roles, duties, team ceremonies, and cooperation models must be clarified.

Keep reporting lines by discipline. Line managers are accountable for each individual's advancement, thus it's crucial that they know the work in detail.

Cross-team collaboration becomes more important after 3 teams (15-30 people). Teams can easily diverge in how they write code, run ceremonies, and build products.

Establishing groups of people that are cross-team, but grouped by discipline and skills, sharing and agreeing on working practices becomes critical.

The “Spotify Guild” model has been where I’ve taken a lot of my inspiration from.

Last, establish a taxonomy for communication channels.

In Slack, I create one channel per team and one per guild (and one for me to have discussions with the team leads).

These are just some of the basic principles I follow to organize teams.

A book I particularly like about team types and how they interact with each other is https://teamtopologies.com/.

The Kardashev scale grades civilizations from Type 1 to Type 3 based on energy harvesting.

How do technologically proficient civilizations emerge across timescales measuring in the tens of thousands or even millions of years? This is a question that worries me as a researcher in the search for “technosignatures” from other civilizations on other worlds. Since it is already established that longer-lived civilizations are the ones we are most likely to detect, knowing something about their prospective evolutionary trajectories could be translated into improved search tactics. But even more than knowing what to seek for, what I really want to know is what happens to a society after so long time. What are they capable of? What do they become?

This was the question Russian SETI pioneer Nikolai Kardashev asked himself back in 1964. His answer was the now-famous “Kardashev Scale.” Kardashev was the first, although not the last, scientist to try and define the processes (or stages) of the evolution of civilizations. Today, I want to launch a series on this question. It is crucial to technosignature studies (of which our NASA team is hard at work), and it is also important for comprehending what might lay ahead for mankind if we manage to get through the bottlenecks we have now.

The Kardashev scale

Kardashev’s question can be expressed another way. What milestones in a civilization’s advancement up the ladder of technical complexity will be universal? The main notion here is that all (or at least most) civilizations will pass through some kind of definable stages as they progress, and some of these steps might be mirrored in how we could identify them. But, while Kardashev’s major focus was identifying signals from exo-civilizations, his scale gave us a clear way to think about their evolution.

The classification scheme Kardashev employed was not based on social systems of ethics because they are something that we can probably never predict about alien cultures. Instead, it was built on energy, which is something near and dear to the heart of everybody trained in physics. Energy use might offer the basis for universal stages of civilisation progression because you cannot do the work of establishing a civilization without consuming energy. So, Kardashev looked at what energy sources were accessible to civilizations as they evolved technologically and used those to build his scale.

From Kardashev’s perspective, there are three primary levels or “types” of advancement in terms of harvesting energy through which a civilization should progress.

Type 1: Civilizations that can capture all the energy resources of their native planet constitute the first stage. This would imply capturing all the light energy that falls on a world from its host star. This makes it reasonable, given solar energy will be the largest source available on most planets where life could form. For example, Earth absorbs hundreds of atomic bombs’ worth of energy from the Sun every second. That is a rather formidable energy source, and a Type 1 race would have all this power at their disposal for civilization construction.

Type 2: These civilizations can extract the whole energy resources of their home star. Nobel Prize-winning scientist Freeman Dyson famously anticipated Kardashev’s thinking on this when he imagined an advanced civilization erecting a large sphere around its star. This “Dyson Sphere” would be a machine the size of the complete solar system for gathering stellar photons and their energy.

Type 3: These super-civilizations could use all the energy produced by all the stars in their home galaxy. A normal galaxy has a few hundred billion stars, so that is a whole lot of energy. One way this may be done is if the civilization covered every star in their galaxy with Dyson spheres, but there could also be more inventive approaches.

Implications of the Kardashev scale

Climbing from Type 1 upward, we travel from the imaginable to the god-like. For example, it is not hard to envisage utilizing lots of big satellites in space to gather solar energy and then beaming that energy down to Earth via microwaves. That would get us to a Type 1 civilization. But creating a Dyson sphere would require chewing up whole planets. How long until we obtain that level of power? How would we have to change to get there? And once we get to Type 3 civilizations, we are virtually thinking about gods with the potential to engineer the entire cosmos.

For me, this is part of the point of the Kardashev scale. Its application for thinking about identifying technosignatures is crucial, but even more strong is its capacity to help us shape our imaginations. The mind might become blank staring across hundreds or thousands of millennia, and so we need tools and guides to focus our attention. That may be the only way to see what life might become — what we might become — once it arises to start out beyond the boundaries of space and time and potential.

This is a summary. Read the full article here.

Fixing problems isn't enough.

Numerous articles and how-to guides on value propositions focus on fixing consumer concerns.

Contrary to popular opinion, addressing customer pain rarely suffices. Win your market category too.

Core Value Statement

Value proposition usually means a product's main value.

Its how your product solves client problems. The product's core.

Answering these questions creates a relevant core value proposition:

• What tasks is your customer trying to complete? (Jobs for clients)

• How much discomfort do they feel while they perform this? (pains)

• What would they like to see improved or changed? (gains)

After that, you create products and services that alleviate those pains and give value to clients.

Value Proposition by Category

Your product belongs to a market category and must follow its regulations, regardless of its value proposition.

Creating a new market category is challenging. Fitting into customers' product perceptions is usually better than trying to change them.

New product users simplify market categories. Products are labeled.

Your product will likely be associated with a collection of products people already use.

Example: IT experts will use your communication and management app.

If your target clients think it's an advanced mail software, they'll compare it to others and expect things like:

• comprehensive calendar

• spam detectors

• adequate storage space

• list of contacts

• etc.

If your target users view your product as a task management app, things change. You can survive without a contact list, but not status management.

Find out what your customers compare your product to and if it fits your value offer. If so, adapt your product plan to dominate this market. If not, try different value propositions and messaging to put the product in the right context.

Finished Value Proposition

A comprehensive value proposition is when your solution addresses user problems and wins its market category.

Addressing simply the primary value proposition may produce a valuable and original product, but it may struggle to cross the chasm into the mainstream market. Meeting expectations is easier than changing views.

Without a unique value proposition, you will drown in the red sea of competition.

To conclude:

1. Find out who your target consumer is and what their demands and problems are.

2. To meet these needs, develop and test a primary value proposition.

3. Speak with your most devoted customers. Recognize the alternatives they use to compare you against and the market segment they place you in.

4. Recognize the requirements and expectations of the market category.

5. To meet or surpass category standards, modify your goods.

Great products solve client problems and win their category.

Every week I meet many people interested in VC. Many of them ask me what it's like to be a junior analyst in VC or what I've learned so far.

Looking back, I've learned many things as a junior VC, having gone through an almost-euphoric peak bull market, failed tech IPOs of 2019 including WeWorks' catastrophic fall, and the beginnings of a bearish market.

1. Network, network, network!

VCs spend 80% of their time networking. Junior VCs source deals or manage portfolios. You spend your time bringing startups to your fund or helping existing portfolio companies grow. Knowing stakeholders (corporations, star talent, investors) in your particular areas of investment helps you develop your portfolio.

Networking was one of my strengths. When I first started in the industry, I'd go to startup events and meet 50 people a month. Over time, I realized these relationships were shallow and I was only getting business cards. So I stopped seeing networking as a transaction. VC is a long-term game, so you should work with people you like. Now I know who I click with and can build deeper relationships with them. My network is smaller but more valuable than before.

2. The Most Important Metric Is Founder

People often ask how we pick investments. Why some companies can raise money and others can't is a mystery. The founder is the most important metric for VCs. When a company is young, the product, environment, and team all change, but the founder remains constant. VCs bet on the founder, not the company.

How do we decide which founders are best after 2-3 calls? When looking at a founder's profile, ask why this person can solve this problem. The founders' track record will tell. If the founder is a serial entrepreneur, you know he/she possesses the entrepreneur DNA and will likely succeed again. If it's his/her first startup, focus on industry knowledge to deliver the best solution.

3. A company's fate can be determined by macrotrends.

Macro trends are crucial. A company can have the perfect product, founder, and team, but if it's solving the wrong problem, it won't succeed. I've also seen average companies ride the wave to success. When you're on the right side of a trend, there's so much demand that more companies can get a piece of the pie.

In COVID-19, macro trends made or broke a company. Ed-tech and health-tech companies gained unicorn status and raised funding at inflated valuations due to sudden demand. With the easing of pandemic restrictions and the start of a bear market, many of these companies' valuations are in question.

4. Look for methods to ACTUALLY add value.

You only need to go on VC twitter (read: @vcstartterkit and @vcbrags) for 5 minutes or look at fin-meme accounts on Instagram to see how much VCs claim to add value but how little they actually do. VC is a long-term game, though. Long-term, founders won't work with you if you don't add value.

How can we add value when we're young and have no network? Leaning on my strengths helped me. Instead of viewing my age and limited experience as a disadvantage, I realized that I brought a unique perspective to the table.

As a VC, you invest in companies that will be big in 5-7 years, and millennials and Gen Z will have the most purchasing power. Because you can relate to that market, you can offer insights that most Partners at 40 can't. I added value by helping with hiring because I had direct access to university talent pools and by finding university students for product beta testing.

5. Develop your personal brand.

Generalists or specialists run most funds. This means that funds either invest across industries or have a specific mandate. Most funds are becoming specialists, I've noticed. Top-tier founders don't lack capital, so funds must find other ways to attract them. Why would a founder work with a generalist fund when a specialist can offer better industry connections and partnership opportunities?

Same for fund members. Founders want quality investors. Become a thought leader in your industry to meet founders. Create content and share your thoughts on industry-related social media. When I first started building my brand, I found it helpful to interview industry veterans to create better content than I could on my own. Over time, my content attracted quality founders so I didn't have to look for them.

These are my biggest VC lessons. This list isn't exhaustive, but it's my industry survival guide.