Blockchain Can Wrest the Internet From Corporations’ Grasp

By Chris Dixon

AS THE INTERNET has evolved over its 35-year lifespan, control over its most important services has gradually shifted from open source protocols maintained by non-profit communities to proprietary services operated by large tech companies. As a result, billions of people got access to amazing, free technologies. But that shift also created serious problems.

Millions of users have had their private data misused or stolen. Creators and businesses that rely on internet platforms are subject to sudden rule changes that take away their audiences and profits. But there is a growing movement—emerging from the blockchain and cryptocurrency world—to build new internet services that combine the power of modern, centralized services with the community-led ethos of the original internet. We should embrace it.

From the 1980s through the early 2000s, the dominant internet services were built on open protocols that the internet community controlled. For example, the Domain Name System, the internet’s “phone book,” is controlled by a distributed network of people and organizations, using rules that are created and administered in the open. This means that anyone who adheres to community standards can own a domain name and establish an internet presence. It also means that the power of companies operating web and email hosting is kept in check—if they misbehave, customers can port their domain names to competing providers.

From the mid 2000s to the present, trust in open protocols was replaced by trust in corporate management teams. As companies like Google, Twitter, and Facebook built software and services that surpassed the capabilities of open protocols, users migrated to these more sophisticated platforms. But their code was proprietary, and their governing principles could change on a whim.

How do social networks decide which users to verify or ban? How do search engines decide how to rank websites? One minute social networks court media organizations and small businesses, the next minute they de-prioritize their content or change the revenue split. The power of these platforms has created widespread societal tensions, as seen in debates over fake news, state-sponsored bots, privacy laws, and algorithmic biases.

That’s why the pendulum is swinging back to an internet governed by open, community-controlled services. This has only recently become possible, thanks to technologies arising from the blockchain and cryptocurrencies.

There has been a lot of talk in the past few years about blockchains, which are heavily hyped but poorly understood. Blockchains are networks of physical computers that work together in concert to form a single virtual computer. The benefit is that, unlike a traditional computer, a blockchain computer can offer strong trust guarantees, rooted in the mathematical and game-theoretic properties of the system. A user or developer can trust that a piece of code running on a blockchain computer will continue to behave as designed, even if individual participants in the network change their motivations or try to subvert the system. This means that the control of a blockchain computer can be placed in the hands of a community.

Users who depend on proprietary platforms, on the other hand, have to worry about data getting stolen or misused, privacy policies changing, intrusive advertising, and more. Proprietary platforms may suddenly change the rules for developers and businesses, the way Facebook famously did to Zynga and Google did to Yelp.

The idea that corporate-owned services could be replaced by community-owned services may sound far-fetched, but there is a strong historical precedent in the transformation of software over the past twenty years. In the 1990s, computing was dominated by proprietary, closed-source software, most notably Windows. Today, billions of Android phones run on the open source operating system Linux. Much of the software running on an Apple device is open source, as is almost all modern cloud data centers including Amazon’s. The recent acquisitions of Github by Microsoftand Red Hat by IBM underscore how dominant open source has become.

As open source has grown in importance, technology companies have shifted their business models from selling software to delivering cloud-based services. Google, Facebook, Amazon, and Netflix are all services companies. Even Microsoft is now primarily a services company. This has allowed these companies to outpace the growth of open source software and maintain control of critical internet infrastructure.

A core insight in the design of blockchains is that the open source model can be extended beyond software to cloud-based services by adding financial incentives to the mix. Cryptocurrencies—coins and tokens built into specific blockchains—provide a way to incentivize individuals and groups to participate in, maintain, and build services.

The idea that an internet service could have an associated coin or token may be a novel concept, but the blockchain and cryptocurrencies can do for cloud-based services what open source did for software. It took twenty years for open source software to supplant proprietary software, and it could take just as long for open services to supplant proprietary services. But the benefits of such a shift will be immense. Instead of placing our trust in corporations, we can place our trust in community-owned and -operated software, transforming the internet’s governing principle from “don’t be evil” back to “can’t be evil.”

WIRED Opinion publishes pieces written by outside contributors and represents a wide range of viewpoints. Read more opinions here. Submit an op-ed at

The 30 Best Pieces of Advice for Entrepreneurs in 2018

This time of year marks a familiar tradition here at the Review, one that’s spent compiling a list. It’s not just any list, (in our eyes at least, but hopefully our readers agree). Rather, it’s an attempt to tie a bow on the past year by assembling a time-capsule-like toolkit, full of the best tactical wisdom that seasoned company builders had to offer in the last year. To that end, we parse through every article we published in between the bookends of January and December, on the hunt for the pieces of advice that stood out and swam upstream against the currents of conventional thinking in tech.

While considering how to frame this year’s constellation of insights, we kept returning to the fact that this is the sixth installment of our annual list. (To quickly retread through the Review archive, revist volumes one, two, three, four and five.) And as we sit on the brink of writing our 400th article, we can’t help but pause to reflect on where we started and what we set out to achieve.

Although much has changed in the tech world since we first took up the pen in 2013, we’re grateful to still be serving as a tool that helps incredible entrepreneurs excavate insight from their experiences and pass it along to the current operators and future founders who will certainly stand on the shoulders of their wisdom. From classics to new additions, these stories have covered topics ranging from practicing radical candor and giving away legos to finding an engine for product/market fit and writing a manual for employee/manager relationships.

But now to return to the task at hand. As always, we hope you find relevance and resonance in the following roundup of the 30 best pieces of advice from our articles last year. We’re already looking forward to what 2019’s list will hold.

1. Ask these questions to move past conversational cowardice and build a meaningful network.

If you enjoyed Chris Fralic’s How to Become Insanely Well-Connected, this one’s a worthy sequel. And it comes from Mike Steib, who’s built his fast-track career on the power of his network. His approach hinges on turning the strangers who populate our lives into valuable and cherished connections, moving up through four nested concentric networks:

The goal is to welcome more people into your meaningful network. For example, to land the leap between familiar and intimate, break out of the habit of conversational cowardice. This refers to our tendency to keep discussions safe and limited to the surface, out of a fear of looking ignorant. To move into conversations of substance, use Steib’s set of universal questions for encouraging others to open up more about their work:

  • Tell me about the business model — who pays whom and who is delivering value to whom?

  • What advantage do you offer over your competitors that get customers to choose you?

  • What drew you to work in this particular industry?

  • How big a piece of the overall business is your division?

  • Are there new technologies affecting your business?

  • It sounds like you’ve been successful? What makes someone unsuccessful in the role?

  • What’s your favorite part of your job and why?

2. Distill product principles by writing your product’s memoir.

Early in her career as a product manager, Trello’s Nikita Dyer Milleradopted a practice to kick off each new role: she hits the ground running with a series of internal interviews to document product principles, figuring out the future of the product by piecing together its history. She typically spends two weeks interviewing subjects on all rungs of the ladder, including the founders, CEO, and members of the product development triad (engineering, product and design), as well as other groups such as sales and support. Conversations center around these key questions:

  • What’s your least favorite part of the product — why and how do you think we got there?

  • What part of the product are you most proud of?

  • What feature/aspect of the product do you think customers are most excited about? Why do you think that is?

Afterwards, Miller thumbs through her notes to look for recurring themes as well as outliers, compiling an initial list of 10-12 proposed product principles that the entire product team eventually whittles down to five.

Product principles, like product features, will require trade-offs. You don’t want a product — or a product team — that isn’t forged by tough choices.

3. Pen a user guide — for yourself.

As a first-time founder and CEO of health technology startup PatientPing, Jay Desai had seen too many teams stall out because of subtle misunderstandings on how to best work with each other. So he wrote a user guide — similar to the kind that’d accompany a rice cooker or bassinet — but this one deconstructed how he operated optimally, when he might malfunction, and how others could use him to their greatest success. The goal was to help set blindingly clear expectations on how to collaborate without the extra second guessing that inevitably accompanies relationship building. To give insight into the defaults, directives and warnings across the dozen categories of his user guide, Desai shared it in full with the Review. For a deeper dive into his approach, read through the marginalia that accompanies each section: his reflections on why these topics matter and considerations to bear in mind should you author your own user guide.

4. Measure — and optimize — product/market fit with this framework.

One of the few universal truths in Silicon Valley is that every early-stage startup has its eyes set on achieving product/market fit. But when it comes to figuring out how to get there, most founders are grappling in the dark.

Read This Next

Enter Rahul Vohra, CEO and co-founder of Superhuman. After spending more than two years struggling to get his startup off the ground, Vohra was stuck at a crossroads and searching for a compass. Encountering only post hoc, unactionable descriptions, he set out to build his own methodology for finding product/market fit — and generously agreed to share his experiences with us on the Review. After the article racked up many thousands of views and was enthusiastically shared on social by founders and investors alike, it’s clear that Vohra’s approach struck a chord (perhaps even finding product/market fit itself). What follows is a condensed glimpse inside his framework — be sure to read his article in full to soak in the meticulous thinking that fuels this engine at every stage.

To assess Superhuman’s product/market fit Vohra surveyed users, asking the following questions:

  • 1. How would you feel if you could no longer use Superhuman? A) Very disappointed B) Somewhat disappointed C) Not disappointed

  • 2. What type of people do you think would most benefit from Superhuman?

  • 3. What is the main benefit you receive from Superhuman?

  • 4. How can we improve Superhuman for you?

The goal? Make sure at least 40% of users would be disappointed without the product in their lives. But in its first survey, Superhuman’s results were considerably below this threshold.

In order to move the needle on this product/market fit “score,” Vohra used the other three survey questions to: segment the data to find supporters, build a profile of Superhuman’s high-expectation customer, identify the main product benefit, highlight high-impact areas for improvement and build a product roadmap that was divided between doubling down on what users already loved and the addressing what was holding others back. By making the product/market fit score the most highly visible metric and continuing to survey new users and tweak the product, Superhuman was able to nearly double the percent of ‘very disappointed’ users to 58% in just three quarters.

5. Cut through the small talk with these exercises for more vulnerable conversation.

Founders don’t just want advice — they want something that works, because they don’t have time for it not to. But in tech, there’s an endless parade of conferences and cocktail parties, filled with small talk and surface level recommendations. To host an event that generates action and leaves an impression, Anita Hossain (the former Head of Knowledge at First Round) recommends making vulnerability the centerpiece.

When we’re all saying that things are awesome, we’re not getting to the core of what’s difficult or finding the help we need. It just creates more distance. The best events events shrink that gap.

Hossain plucks out one exercise that gets people to open up early on: Have everyone write anonymously on index cards one thing that worries them about their work or that causes them anxiety — something they feel like they can’t share with many people. Shuffle them thoroughly and place a card at each seat at the table. Ideally, everyone receives someone else’s card and sees that everyone else has fears and vulnerabilities just like them. Hossain has previously seen powerful responses, such as “I feel like I’m everyone else’s cheerleader, but no one is mine.” and “Every time I pitch poorly, I feel like I’m letting my entire team down.”

Anita Hossain

6. Turn offer calls into celebrations.

In under six years, Gusto has grown from three guys in a house in Palo Alto to over 600 employees across two offices. According to co-founder and CEO Josh Reeves, hiring traditions helped power that scale. Take the company’s approach to offer calls as an example. Back when there were only five people, the entire team interviewed everyone. “We were all working out of one room, so when we did the offer call we didn’t have any conference rooms to duck into,” Reeves explains. “So we all joined in on the offer call to cheer and celebrate because we were really excited to find someone that was connected to our values — and we still do this today.”

To try this tactic out yourself, get three to four people from the hiring panel to join in on the offer call. When the candidate calls in, explain that other folks are in the room because you are all thrilled to extend an offer. (That’s the cue for the cheering and clapping.) Let everyone in the room go around and share how the candidate impressed them during the interviews. The specifics make a big difference in signaling you’ve found strong alignment. Then walk through the actual offer details more privately with the candidate.

You should be stand-up-and-cheer excited about every single person you hire — so much so that you do just that.

7. Dive down to look at diversity on the team level.

Reporting is increasingly becoming a central component of diversity & inclusion efforts in tech. But according to Atlassian’s Aubrey Blanche, you need to change how you approach D&I data by looking at the diversity of teams, not just the company as a whole. “What matters is that each team is diverse, that underrepresented groups aren’t stuck in stereotypical silos. The team level is where you’re really going to feel the impact of experiencing the different perspectives you need to make better decisions and arrive at better outcomes in your day-to-day work,” she says.

Using team level insights can also make it easier to affect change in more meaningful ways. For example, at the corporate level, Atlassian saw that 14.6% of technical employees were women in 2017. But when Blanche looked at the team cut of the data, she learned that two-thirds of the smaller teams developing software had only one woman. This broad distribution probably led to feelings of isolation, so Blanche set to work to create ways for women to connect across teams, such as an informal coffee date program and more structured peer mentorship rings.

Most company-wide aggregate stats don’t actually measure diversity — they measure representation. It doesn’t matter if 30% of your company is women if they’re all in HR, and the men are in engineering.

8. Depend on this investor email template for an extra dose of discipline.

Front’s Mathilde Collin knows firsthand that while it’s easy to get caught up in the day-to-day churn of running a startup, applying a disciplined mentality to everything you do is a deceptively simple and impactful way to level up as a founder. An example of Collin’s famous discipline in action comes from one of the carefully constructed emails she has sent with an almost frightening regularity since Front’s earliest days: her monthly update to investors. Below you’ll find a real-world example from Collin’s sent folder:

Since Collin has started angel investing, her faith in the power of demonstrating focus to investors has only increased. “After a founder sends me two or three update emails, I can immediately get a sense for whether or not that company will succeed,” she says.

Regular communication is unbelievably powerful. If you can’t send your investors focused and consistent updates, you’ll probably be one of those startups that doesn’t make it.

9. Grab a shovel to dig for nonobvious startup ideas.

In his roles as an operator and angel investor, Elad Gil has watched, led or advised numerous companies as they’ve scaled dramatically on the heels of a nonobvious idea. Drawing on his experience, Gil buckets archetypes that those with the founder’s itch to scratch should go after. There’s the classic case of the market that looks crowded at first, but upon second glance is actually revealed to be empty due to a lack of a great product or lots of players with little differentiation. Then there’s the seemingly niche, which Gil breaks down into four flavors: too small, too boring, too high-end and too personally unfamiliar. Finally there’s new technology, the pockets of innovation that are hidden in growth rates or extrapolated technology curves, rather than current numbers.

But Gil’s biggest piece of advice is to just grab a shovel and dig. “When you think you may have stumbled onto something, push past the skepticism and envision a world where that seemingly nutty idea can take off. Because if you don’t, others certainly will — and they’ll go build it without you,” he says.

Elad Gil

10. Make a growth pact with your senior leaders on their first day — about their last day.

Reboot founder and professional coach Khalid Halim has guided the leadership at Coinbase, Lyft and Checkr through some of the steepest parts of their growth curve. Through these experiences, he’s extrapolated a law of startup physics: humans grow linearly, companies grow exponentially. Which means that if the company grows as it should, it will outgrow many of its leaders. This reality presents two options: fire or hire above the exec. Both of these are painful on many fronts, which is why Halim urges founders to make a promise with senior leaders on their very first day, centered around what their last day could look like. Laying out the options shows you have a plan from the start by setting expectations, building trust and providing career definition. Here’s a loose script from Halim to guide you:

  • “If you look at the latest employment data, it’s likely that you’re going to leave or we’re going to part ways somewhere in the next three years. So with the time we have, my pledge to you is that we will be committed to your growth. My pledge to the company and its investors is to its continued growth. I can only keep both promises if the two stay connected. If we start to grow exponentially, we’ll hit a point where you may be out of your league. We may need to carve out a different role for you. Or hire above you if you can handle that. Or part ways. Regardless, I commit to having another honest conversation with you about what’s next when the time comes.”

Khalid Halim

11. Rely on this calculator to scale sales sustainably.

Many founders feel the pressure to spin up sales quickly to hit growth targets, but seasoned sales leader Karen Rhorer knows firsthand that this unsustainable strategy can lead to painful layoffs down the road. “A growth-at-all-costs mindset is a recipe for out of control burn and topsy-turvy unit economics,” she cautions. From basic to advanced CAC and CLV to payback ratios, there are a slew of calculations to understand before scaling sales hiring in order to avoid a painful future of upside-down metrics that burn through cash. To help make all this number crunching easier, Rhorer created a simple metrics calculator. (We recommend spending time with all of the wisdom and details of her approach and then turning to her template.) Plug in your own numbers to calculate CAC and CLV, as well as to confirm that the ratio and payback period are both on track.

12. Look at your org chart in 3D.

Engineering leader Varun Srinivasan had a front-row seat as Coinbase scaled to meet an explosion in demand for cryptocurrencies over the past few years. Along the way, he spearheaded org design changes that helped the engineering team gear up for hypergrowth. One learning was clear: If you design your organization by just looking at org charts alone, you’re going to get it wrong. To anchor this assertion, Srinivasan pointed to an unexpected parallel from the world of cartography. While maps are more convenient, these 2D representations offer incomplete perspectives of the globe’s 3D reality — just as the function and hierarchy of org charts misses the nuances of how teams actually work together. In order to create a different lens to view the org in 3D, Srinivasan relied on work maps that captured every big strategic objective and the set of teams or individuals that need to work together to make it happen. This enabled him to spot people who were overloaded, identify cross-dependencies or flag teams that weren’t sitting close enough for effective collaboration.

13. Make your employee experience stand out with “internships” and a “TEDX” conference.

“One thing I’ve always found surprising and unfortunate is that as companies get bigger and have more money, they actually become worse places to work. That’s terrifying.” That’s how Dave Gilboa, co-founder of Warby Parker kicked off his talk at First Round’s most recent New York Founder Summit, and it’s a glimpse into why he and his co-founder have maintained their conviction that creating an extraordinary employee life cycle is just as important as developing a killer product.

To build in defense mechanisms and create systemic ways for employees to try new things and grow their skill sets, Warby Parker holds an annual internal conference. At “WarbyCon” people get to teach a crowd of their colleagues through TED-style presentations about anything they want to talk about. There have been impassioned discourses on the history of pop music and how to make the perfect gin and tonic, as well as segments related to people’s day jobs. Warby Parker also offers a “Special Projects” program, similar to internships but for employees. Departments can propose an impactful project that they need support on (or overseen entirely) for several months and post an internal application, to which other employees can apply.

14. Pass down credit — but avoid undermining creativity and “celebrating” failure.

When researching how teams can continue to bring creative ideas to the table, Wharton professor and bestselling author Adam Grant found a surprising source of inspiration in the writers’ room of “The Daily Show.”The most transferable lessons for startups? Build psychological safety. Grant was struck by the environment created by host Trevor Noah, one in which writers weren’t afraid to toss out a joke that might tank. While psychological safety takes time and vulnerability, Grant noticed that Noah also did something more incremental and subtle: quick interjections to give credit where it was due. In fast-moving creative groups, it’s easy to lose track of who said what, while all the praise and blame goes to the leader, so be sure to pass down the credit through quick, verbal kudos. To further bolster psychological safety, Grant recommends taking a wider lens view on how creativity is undermined, thinking of accountability as a 2×2 chart that plots outcome against the thoroughness of the process. The tendency to reward lucky successes and punish failed outcomes that had a good process is a reason why Grant isn’t a fan of Silicon Valley mantras on taking risks or failing fast. “You don’t want to celebrate failure, you want to normalize it,” he says.

15. Ruin surprises on purpose and gut check your messaging.

If founders are serious about nabbing funding, winning talent and building momentum, they need to focus less on refining the company vision and more on tapping into the neuroscience behind persuasion, says Reddit’s Tyler Odean. Here’s a taste of what he means: Against the backdrop of a tech world that’s all about game-changing innovations and dramatic reveals, it might be unexpected to learn you should take as much surprise out of your messaging as you can to set others at ease. “If you actually want someone to buy into what you’re saying or offering — and you don’t have the massive credibility of let’s say Apple — one of the best things you can do in a presentation where you’re sharing something new is say, ‘In the course of this talk, I plan to show you X’ before actually showing them anything,’” Odean says.

As a bonus teaser, here’s his punch list of questions to ask before shipping any messaging:

  • Where would my pitch trip up a child?

  • What’s the one thing I want my audience to remember? Is it also the most prominent thing in my argument, message or pitch?

  • What words can I cut from my pitch?

  • Is my preferred outcome the default?

  • Is there anything I can do to boost people’s familiarity with my ideas beforehand?

Tyler Odean

16. Gauge if you’re powered by steam or wind.

ClassPass has certainly found its footing and is off to the races. But it took years of pivots, rebrands and good old-fashioned conviction to make it through. And one of the biggest lessons founder Payal Kadakia has earned along the way is the importance of applying a laser focus to the problem you want to solve. Ignore what she calls false signals of success — capital raised, press, social media followers — in favor of a more meaningful signal: customer behavior. “If you focus on all those other things, you’re not fueling your company. You’re just gliding on tailwinds supplied by other sources. You’re reliant on energy that you’re not creating,” Kadakia says. “That may last for a while, but not forever. It’s hard to scale that way. Instead, return to why you started your company — those actions generate steam when you rev that engine.”

17. Watch out for these pricing mistakes.

As First Round’s Sales Expert in Residence, Tyler Gaffney gained a unique perspective on how early-stage B2B pricing and go-to-market strategy takes shape after working with 30+ Seed or Series A-stage startups over the last two years. And while he’s a firm believer that pricing is more art than science, everyone has to start somewhere and footholds are key. That’s why he recommends experimenting — and avoiding these unforced errors that he sees startups commit over and over again:

  • Mistake #1: Prices are conjured without customers. All the answers are in your customers’ heads, which is why Gaffney recommends taking 3-5 daily customer meetings.

  • Mistake #2: Prices are set in stone, not in motion. When it comes to setting a product’s introductory price, many founders fall into the trap of picking what should be a pricing starting point, but sticking to it as if it’s a permanent solution.

  • Mistake #3: The price is too low. “Very rarely do I encounter early-stage founders who’ve priced their product too high,” says Gaffney. “This instinct is especially problematic when paired with the rampant belief that it’s very hard to raise prices. If you’ve already started from a low price and are hesitant to raise it over time, you’re capping your growth.”

  • Mistake #4: The pricing structure is overengineered. Many customers are used to buying in a certain way, such as a monthly fee or per transaction. Gaffney cautions against trying anything too far afield, such as charging per API call or charging per-location instead of per-employee, as it can be a high barrier for to understand and adapt.

Speaking to customers about pricing can be stressful. But I promise you that not talking to them and attempting to interpret their silence is more excruciating.

18. Use these time management markers to find your footing as an early startup employee.

Stacy La joined Clover Health as the fourth employee, back when the company hadn’t raised any money and she was the only designer. What seemed like a fun leap got daunting very quickly. But from solving for bad hires to building knowledge of a new industry, La came out the other side with a wealth of hard-won tips. And one of her biggest pieces of advice is to ruthlessly prioritize by following these time management milestones in your first year as an early employee:

  • Months 1-6: Avoid the context-switching that comes from wearing multiple hats by mapping out two-week sprints centered around a theme (such as selecting a design agency). This will help you balance breadth and depth to achieve maximum flexibility and focus.

  • Months 6-9: Standardize how you triage, using the “eyes-on, hands-on, horizon” framework La picked up from her mentor, Airbnb’s Head of Design Alex Schleifer. “Eyes on” is work that you don’t need to do, but need to be informed about. “Hands on” are actions that you need to work on independently, while “‘Horizon’ is a category of themes and developments that are a month to six months out.

  • Months 9-12: Migrate your focus from building your part of the product to your corner of the organization. Document all of your institutional knowledge and share it with the rest of the team to jumpstart this transition to org design.

The demands of a startup are dizzying. To anchor yourself, you must schedule time to write things down.

Stacy La

19. Keep bean counters at bay with this response.

“Decades ago, I considered leaving medicine and went to business school. Almost immediately, I realized that the best thing that I could do to contribute to the business world was to continue to practice psychiatry,” says Dr. Jody Foster, a clinical professor at the University of Pennsylvania. This realization led her to develop a taxonomy of the eight different personality types that others find difficult at work. Let’s spotlight one: the Bean Counter.

This type controls quality, and is focused, persistent and involved, but can easily teeter over the edge into a somewhat obsessive bottleneck that blocks progress. Holding on to every detail is a key behavior marker, as is a tendency to micromanage, get stuck in the weeds and make decisions slowly. “If you’re the boss of a Bean Counter, normalize mistakes and direct towards detail-oriented activities with deadlines and directions,” says Foster. “If you working for or with a Bean Counter, don’t challenge the controlling nature. Don’t promise more than you can deliver. When you make a mistake, own it. Don’t rationalize or be defensive. Try out phrases along the lines of ‘I’m so impressed with your dedication. I feel the same way about my work, so you can rely on me.’”

20. Ace your interviews by blocking, bridging and avoiding the negative.

Eventbrite‘s Terra Carmichael has decades of experience in comms. Her biggest piece of advice for leaders entering the arena of publicity is to remember that the goal of an interview isn’t to answer questions — it’s to deliver your messages.

To stay on track, block and bridge by acknowledging and briefly answering the question that’s been asked and shifting back to the message you actually want to deliver. Practice by outlining your top three messages and running drills where you take any question and bring it back to your messaging, using these starter statements to help:

  • “That’s an interesting observation…but the heart of the matter is really…”

  • “You raise a good point about a key issue in our industry today…How we like think about XYZ is…”

And while reporters may try to get you to go down a dark path that makes for a good headline, never repeat back the negative. Instead, start fresh with your perspective, using these statements to redirect the conversation:

  • “Another way of thinking about this is…”

  • “I think what you’re really asking is…”

  • “That speaks to a bigger point about…”

21. Follow these commandments to make mentorship work.

Mentorship can be an incredible career accelerator, but it requires diligence and preparation. That’s why we were delighted to kick off our First Round Fast Track mentorship program at the end of 2018, the culmination of two years of experiments, five cohorts and hundreds of participants — all overseen by Whitnie Low Narcisse, First Round’s VP of Talent & Community Resources.

Here’s a sampling from her 10 commandments for making mentorship work: Mentees need to make sure that the relationship doesn’t start to feel like a one-sided transaction by investing time in understanding their mentor’s career path, goals and lifestyle. Show up prepared with questions and send over discussion points in advance, treating meetings like a 1:1 with the boss. To avoid boiling the ocean in every meeting, pick 2-3 questions that can be tackled in the space of an hour. As for mentors, Narcisse notes that while mentees may ask about X, they really want Y — a new way to think about their work. That’s why it’s critical to look across agendas and meeting notes to spot patterns and batch themes.

Whitnie Narcisse

22. Spot flagging motivation and turn things around with this pyramid.

At Pinterest and LinkedIn, product leader Jack Chou learned firsthand how vital it is to keep people motivated as a company scales. Now Head of Product at Affirm, he leans on a pyramid he developed as a tool. For Chou, chemistry between people is a precursor to a feeling of ownership, which is a prerequisite for effective measurement and metrics. And to sustain motivation that brings employee longevity, teams must ladder up to an unwavering mission and purpose.

To keep all four levels of the pyramid strong, stay on the lookout for lagging output and slow moving teams. Be sure to pick up on warning phrases dropped into conversations, or even worse, an individual that stops asking questions altogether. The easiest way to diagnose flagging motivation is to create more opportunities for people to talk to you, incorporating simple changes to your team’s routine to open the door to candor. “I think it’s Andy Grove who said that one-on-ones should be 45 minutes instead of 30 minutes because all the interesting stuff happens at 25 or 30 minutes,” says Chou. “The way to find out what a person doesn’t want to tell you is usually by sitting in a room long enough, just talking.”

23. Ask these questions to bolster your credibility and reliability as a new employee.

As the terrain at startups changes rapidly, people move onto new roles and challenges, bringing in an influx of new people. If you’re one of those new people, however, there’s no time to be doubted. Anne Raimondi has headed up product, marketing and operations at big names throughout tech, and there’s one tool that’s helped her with every new role: the trust equation.

To improve your credibility as a new employee, Raimondi recommends asking open ended questions of the people around you to understand what matters to them, how they want to work with you, what they expect from you, and what they want to make happen. This can turn people’s doubt about your abilities into excitement about what you’ll do that’s new. To boost reliability, figure out where to jump in and make impact in a way that’s useful. Raimondi suggests asking someone “What’s that one thing you want to do but that’s last on your list?” and then taking it off their plate and getting it done quickly.

24. Don’t be afraid to put a click in between a customer and a sale.

Food52 co-founders Amanda Hesser and Merrill Stubbs’ hypothesis was that if you lead with high-quality content — offer value to your readers — then the sales will follow. And they weren’t wrong. As a small proofpoint, consider the well crafted German egg coddler email campaign that led to $20,000 in monthly sales. After receiving feedback that some customers didn’t understand the product, the team built a suite of content including a video and a gif of how the coddler works, plus recipes and ideas for how to use it. And while many brands would balk at putting more than one click between the customer and a sale, the team decided to use every piece of content to create a rich educational experience. “Instead of linking from the email to the product page where you can buy the egg coddler, we linked to the editorial post. People had to first open our email, read our email, click through to the egg coddler article and then click through to the egg coddler product page in order to buy it,” says Hesser. “Rather than deterring interested readers, that process engaged them more deeply.”

Amanda Hesser and Merrill Stubbs

25. Interview in threes.

Over the past seven years, Lever’s Marco Rogers has interviewed at least 400 engineers, developing his own unique recruiting methodology along the way. For example, he’s noticed that one-on-one interviews create a rinse-and-repeat cycle that can feel intense for the candidate and rigid for the interviewer. Here’s why he recommends a three-person interview instead:

  • It helps reduce bias. “Say you send in two interviewers: one’s a man and one’s a woman. You’d be surprised how often the candidate will only talk to the man, even if the woman asks the question,” says Rogers.

  • It splits the acts of engaging from observing. “When you’re one interviewer, who’s doing both the engaging, observing and timing, it’s a challenging to be present and do the job right,” says Rogers.

  • It simultaneously trains your more green interviewers and elevates the perspective of less experienced employees.There’s no substitute for interview experience, so including more folks in the process is great practice. And while it’s tempting to only tap your senior people to interview candidates, Rogers notes that less experienced people get a different signal — namely, if they think they can learn from and be led by a candidate.

26. Sketch out early levels and ranges in your diary to hold yourself accountable on comp.

Most founders strive to infuse transparency into the DNA of their startups. But when the more specific topic of compensation transparency comes up, some start to shift uncomfortably in their seats. In bethanye McKinney Blount’s experience, that’s because from black box to Buffer, there’s a wide range of points to consider along the comp transparency spectrum — and a healthy fear that any effort to to put down more cards on the table will be bungled. To start out small, Blount recommends capturing levels and ranges from the beginning, even if they are for the founder’s eyes only as insight for your eventual comp strategy. “It’s also a way to communicate with your future self and stay honest. It’s like a diary entry or a trail of breadcrumbs that capture your thinking at the time,” she says. “For example, if you hired someone thinking he was very senior, but you fast forward six months and he’s still not delivering, then the fact that you wrote that down means ‘future you’ has to be honest about that.”

27. Boost transparency by mapping out how decisions are made for all to see.

While leading engineering at Instagram, James Everingham spotted a problem: the inevitable dip in transparent decision-making and communication as teams scale. To pull back the curtain on how decisions are made, his engineering team adopted the RACI framework as a decision-making process. To bring this model to life on a practical level, Everingham turned to another acronym: RAM, or a responsibility assignment matrix that helps ensure only one individual makes the call.

You can have more decisions than decision-makers, but if you have more decision-makers than decisions, that’s when you run into problems.

“This exercise reminded me of the classic Eisenhower quote, ‘Plans are useless, but planning is indispensable,’” Everingham says. “On its own, a RAM is fairly useless, but the process of building it and clarifying owners is essential to aligning your company.” See a sample RAM similar to the one the Instagram engineering team used below:

28. Get to the root of the problem to clean up your team’s emotional issues.

From bone deep competition and imposter syndrome to a lack of feedback, there are many dynamics lurking beneath the surface of every team — the key is to catch the cracks before they become chasms. As an executive coach, Laura Gates has repaired interpersonal dynamics for orgs such as NASA, Shell Oil and the military. So she knows firsthand that the price of not addressing conflict is simply too high. That’s why Gates recommends laying it all out on the table in a frank, guided discussion at a team retreat or offsite. Beforehand, send an anonymous survey about interpersonal issues, asking about what is and isn’t working well about how the team relates to each other.

Have a facilitator read all the responses out loud (anonymized and generalized), or start with one in particular, offering up a possible explanation for the issue to generate group discussion. Next, as a team, make a list of key conflicts, writing them down for all to see so they can be dealt with individually. With each one, use these questions to figure out the source of the conflict:

  • When did you first notice this problem? What happened that led you to feel negatively?

  • What conclusion did your draw from that example? What other evidence have you seen that supports this conclusion?

Gates emphasizes that it’s the facilitator’s responsibility to make sure conversation isn’t cut off prematurely. “Sit with the silence. If people jump in too soon to soothe someone and make them feel better or try and change the subject to avoid the discomfort, they end up fixing a superficial problem, but not the underlying issue,” she says.

The stress to be outstanding at all times literally triggers fight or flight. It’s like we’re all trapped in survival mode over something as innocuous as an email exchange.

29. Land a sustainable growth loop by asking these questions.

The most celebrated companies are lauded for swift, exponential user growth — a reality that most startups fail to replicate. But the good news is that it’s not the only path. And according to scaling and growth advisor Casey Winters, it’s not even the best one. While at Pinterest and Grubhub, he instead successfully relied on content loops, which involve publishing and sharing media that is then shared by others in a way that triggers additional signups, activations and user engagement.

For the startup looking to scale sustainably, Winters recommends layering in different approaches and exploring other models. (Check out the chart below for his take on all the growth loops out there, and why they do and don’t work). Find the right loop for your startup by evaluating each growth strategy against its ability to help retain users and monetize in the long-run. For Winters, sustainable growth lies in the intersection of three questions:

  • Can we build or retain users who are consistently finding value in our product?

  • Can we monetize those users in a way that will support the business?

  • Do answers to the previous questions lend themselves to a sustainable acquisition strategy?

30. Make sure the first mile of your product’s experience isn’t an afterthought.

Customers make sweeping judgments in their first experience interacting with a product. Scott Belsky calls this the “first mile” — and deems it the most critical yet underserved part of a product. “It’s almost an afterthought. When we spend so much time focusing on making what’s behind a locked door so brilliant, we sometimes forget to give the user the key,” he says.

The first 30 seconds in particular are a sprint that determines if people will keep running the whole distance. Customers need to feel successful quickly, so it’s important that they know three things: why they’re there, what they can accomplish and what to do next. They don’t need to actually know how to use your entire product at the beginning — the task is to create a hook that pulls them in and pushes past their lazy, vain and selfish tendencies. “Don’t think you’re above needing a hook. Nobody is,” says Belsky. And as your product reaches beyond early adopters, keep in mind that the first mile will need to be even simpler to account for vastly different groups of “newest users,” not just the power users you were originally hoping to attract.

The first mile of your customer’s

Photography by Bonnie Rae Mills and Michael George. Top illustration by Alejandro Garcia Ibanez, featuring (from left) Rahul Vohra, Mathilde Collin, Marco Rogers and Stacy La.

4 Assumptions That Are Hurting Your Business

By: Zech Newman

Assumptions hurt businesses. Remaining blind to the causes won’t make you immune to the damaging effects.

As an entrepreneur, you devote time and energy to your business, pouring money into new products and services. If you’re like most visionaries, you’re stubborn. You don’t like to be told what to do, and you might not be interested in hearing you don’t know what you don’t know.

This mindset risks creating a pattern of willful ignorance. What if challenging some of your own assumptions could reveal answers that transform your business for the better? Have you considered hiring a consultant, seeking honest input from employees or surveying your customers?

Here’s a quick list of biases to double-check as you look for ways to shatter your assumptions and work smarter in 2019.

Assumption 1: You’re a known name in your market.

Among my businesses is a pizza restaurant that’s operated for a decade in a town of about 5,000 people. A few years ago, while shopping a block away, I introduced myself to the store’s owner and mentioned my own business. “I’ve never heard of that place,” my fellow entrepreneur said. “Where is it?” I walked with her to the front of her store and pointed to my restaurant.

I assumed everyone in town noticed my shop more than they actually did. It was a good reminder to keep pushing to break through the noise, even a smaller competition pool. Your sales could be suffering from obscurity without your even realizing it.

Assumption 2: You’re the best.

I have yet to meet an entrepreneur who doesn’t believe his or her product or service is the best. I’m no different. I “know” my business is superior. You probably would say the same about your company, too. There’s only one, glaring problem: If you think you’re already doing everything you can, there’s no room to improve.

Odds are, you aren’t viewing yourself in an accurate light — and you’re unlikely to correct that vision on your own. It’s like trying to be objective about your own children. Bring in a qualified, credible someone from the outside and approach your conversations with a learner mindset. Do your best not to think or speak from a defensive position. Rather, seek to get a broader perspective so you can make smart decisions even when the truth is hard to hear.

Assumption 3: Everyone in your organization feels your level of ownership.

No doubt your vision for your business is highly personal. Maybe you also believe your employees need to care about your company as much as you do. That combination can have negative effects, leading you to churn through employees until you find people who match your own level of accountability.

Your team members might care a lot about your shared work, but they’re never going to make the same kind of sacrifices you will to pursue your vision. Don’t saddle your crew with those expectations. Instead, marry your vision with their personal vision. What does this company mean to them? Do they see opportunities for development and advancement? Is the work fulfilling for them? Align your common goals, and you’ll build a team of employees who will run through a brick wall for you and your company.

Assumption 4: You serve everyone.

When you try to serve everyone, you actually end up serving no one. You will become indispensable to customers and acquire raving fans if you get very specific about whom you exist to help. Along the way, your company will pull in customers who live beyond your target’s perimeter. Think of them as a bonus, but never lose track of your base. When you narrow down your focus, your advertising becomes more specific, your products become more helpful, and your business will become more profitable.

The Founder’s Guide to Discipline: Lessons from Front’s Mathilde Collin

By Mathilde Collin

Front has a story that any budding startup would envy.

Highlights from the past four years include scaling to 100 employees, acquiring more than 4,000 customers, raising almost $80 million in funding and closing the books on its first acquisition.

But as co-founder and CEO Mathilde Collin tells it, the workplace communication tool’s meteoric rise can’t be traced back to an incredible founding vision from their early Y Combinator days. In fact, Collin was unsure where the product was heading at the time and had serious doubts about whether the company would take off.

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According to Collin, the startup’s success instead took root thanks to a single trait: discipline.

This is an answer we’ve heard before — after all, most leaders wax over the stories of their careers with a thick coat of grit and determination. And whether it takes the form of an inspirational quote splashed across a striking stock photo or an encouraging blog post about the startup grind, discipline is always cast as a recurring character when entrepreneurs talk about success.

But while the discussion around this quality is heavy on colorful mandates, it’s also often lacking in detail and depth. Very few go beyond platitudes about working hard to move into more nitty-gritty tactics for bringing an intense discipline to every facet of the company building process. Collin, however, is a rare exception.

Her quiet focus and obsession with efficiency has been the propellor beneath the surface, helping to power Front’s impressive trajectory. From her pristine email templates and clockwork communication habits to her insanely fast fundraise process and carefully crafted calendar, discipline is the current that runs through all aspects of this founder’s life.

In this exclusive interview, Collin dives deeper to put tactical teeth on an entrepreneurial trope, sharing why a founder’s discipline matters more than vision. She describes her approach to communication, time management, fundraising and team building, unveiling impactful practices and sharing the actual emails she relies on to stay on track.


Many early-stage teams pour hundreds of hours into ensuring that the product roadmap and company mission are as crisp as possible. Painting a picture of potential is a way to put a stake in the ground — and it’s often a helpful tactic for papering over initial shortcomings. But that’s not how Front went out into the world.

“At first, Front wasn’t that impressive or even that good. I remember at Y Combinator someone told me that we were the best company in the batch and I was convinced he misspoke, that he had confused us with another startup,” says Collin. “Four years ago, I didn’t have a clue of how big we’d be today or a plan for getting there — it’s been much more of an evolution.”

As a founder, I’d choose discipline over some grand vision any day of the week.

“I’m sure many will disagree with me on this. But the driving force behind Front’s success is that we’ve been incredibly disciplined at every point along our journey. And this isn’t to say that we were lacking in ambition,” says Collin. “It’s to point out that the pressure founders put on themselves to have a far-reaching plan isn’t always helpful or realistic — and it’s certainly not a predictor of future success. The vision I pitched in our Series B fundraise was totally different from what we presented back at Demo Day. What mattered more was that we were determined to turn this kernel of an idea into a real company through sheer will,” she says.

“You can have a very ambitious, tight plan of exactly where you want go, but chances are that you’ll drop some balls or focus on the wrong things,” says Collin. “Working on your company’s vision is necessary, but it’s something many early teams spend too much time on; there’s a sort of navel-gazing element to the exercise. The bottom line is more simple: are you disciplined enough to make it happen or not?

To unpack this fundamental question, Collin dissects this essential attribute further: “At a high-level, discipline is focusing on just a handful of things, which is incredibly challenging because you’ve got so much to do and you’re pulled in so many directions — everything seems important. But discipline comes down to focusing on the right thing, which means you need to be crystal clear on what success looks like and how to measure it,” she says.

Collin breaks down the most important elements of a founder’s discipline by offering a set of questions to run through for a focused assessment:

  • Making progress: What metrics are you using in order to see if the company is succeeding? How are you orienting your entire team around them? How frequently — and consistently — are you communicating updates?

  • Managing time: Does your calendar actually reflect the priorities from above every single week? Is there an activity you aren’t spending enough time on? Do you have the discipline to disconnect and step away?

  • Fundraising: How are you managing your investors? Are you sending frequent updates on your progress, tightening your pitch and proactively building relationships?

  • Team building: What are you doing to consistently create a great work environment? How are you making sure that every hire meets your standards?

Each of these four buckets can be optimized and infused with extra rigor. But in Collin’s experience, few show up to do this additional mental labor. “Many founders get caught up in the day-to-day churn of running a startup,” she says. “Applying a disciplined mentality to everything you do, whether it’s an email you send to your team, a presentation for investors or a company offsite, is deceptively simple — but it’s so impactful.”

If you’re not disciplined with managing your time and religiously tracking your company’s progress, it’s going to be very tough to succeed.


As fledgling startups struggle to find their footing, tackling high visibility metrics becomes the main focus. But in Collin’s experience, simply pursuing progress isn’t enough — an extra dose of discipline around communication provides the accountability that makes those goals more likely to materialize.

For Collin, that discipline lies in the three carefully constructed emails she has sent with an almost frightening regularity since Front’s earliest days: a weekly update to the entire company, a note to her direct reports and a monthly update to her investors. Read on for a closer look at how she crafts them and why they’ve been critical to Front’s results.

TO: All users
SUBJECT: Revenue update

As with most startups, Front’s early days were marked by an obsession with revenue. “We had no excuse if those numbers weren’t trending upwards. So I started sending a daily email to the team to bring that metric front and center. It explained how much revenue we added yesterday, what we did well and what didn’t go so well,” says Collin.

“I soon changed it to a weekly email as that was a better cadence, but ever since I’ve sent this email every single week to our entire company. It always has the same structure and is sent around the same time. And I haven’t missed a single one in the past four years,” she says.

“In the first few years, I wrote this completely on my own and it probably took me about an hour,” says Collin. “This may seem like a lot of time for an early-stage founder to spend on an internal note every single week, but it was vital. Amid all the growing pains, people knew exactly what success meant and evaluated everything they did through the lens of ‘How can we make that number go up?’”

  • SENT FOLDER: Below you’ll find an early example of the weekly emails Collin sends to the Front team.

  • SENT FOLDER: Here’s a more recent, real-world (and lightly scrubbed) example of how Collin’s weekly email template has evolved over time as Front has scaled.

For Collin, there’s power — and pressure — from this kind of transparency. “Sharing the good, the bad and the ugly provides accountability and a forcing function. If you see numbers that are less than great, you’ll be tempted to make an excuse, point to another bright spot, or hold off on sharing until things improve,” she says. “Or you might shift gears and work on another project as a distraction. But you can’t afford to do that.”

Concentrate on a single metric. If it’s not improving, resist the easy comfort of letting up and focusing on something else. Stay the course.

TO: Direct reports
SUBJECT: Goals for the week

As another exercise in accountability, a different email flies out of Collin’s inbox at 10am sharp every Monday morning: a note to her direct reports.

“I quickly run through all of my goals for the week. It’s not about telling your reports every single thing you’re going to do. Rather it’s a chance to share what’s top-of-mind for you, which of course should be top-of-mind for them. More generally, it’s helpful to know how managers spend their time — often it’s a more of a black box instead. That’s also why I’ve made my calendar public and shared a deck that explains what I do all day as CEO of Front,” she says. This email habit also sets an example. “If I start to slip or if my weeks don’t ladder up to those big goals we’re focusing on, that sends the wrong message,” says Collin.

  • SENT FOLDER: Below is an example of Collin’s direct report email in action.

TO: Investors
SUBJECT: Monthly update

Another one of Collin’s favorite tricks for bringing discipline to her communication is the update email she sends to Front’s investors. “I sent the same note every month for years, and only changed to quarterly after our Series B,” she says.

  • SENT FOLDER: Below you’ll find an example of what Collin’s note to investors looks like in practice.

Collin’s faith in the power of demonstrating your focus to investors has only increased now that she’s on the other side of the table.

“Since I’ve started angel investing, I feel even more strongly about this practice. After a founder sends me two or three update emails, I can immediately get a sense for whether or not that company will succeed,” she says. “Some send an email and then you don’t hear from them again for four months. Others use different formats or metrics every time. Or they say that revenue is the top priority in one meeting and then say they’re focusing on engagement and redesigning the app in the next. That’s not an update, that’s an excuse. If revenue isn’t where it needs to be, admit that you have an issue to your investors, your team, and above all yourself so you can start getting back on track,” she says.

Regular communication is unbelievably powerful. If you can’t send your investors focused and consistent updates, you’ll probably be one of those startups that doesn’t make it.


Asking Collin about how she manages her time prompts a frank confession: “I am really crazy when it comes to my calendar. I’m hypervigilant about making sure that I spend time on the right things,” she says.

This assertion is backed up by a quick glance at her schedule — every slot is filled and every minute is accounted for. “If I don’t always know what I’m doing, then I get sucked into checking my emails or answering questions instead of focusing on what I said was most important at the beginning of the week,” says Collin. But that doesn’t mean her calendar is brimming with meetings. In the debate between a maker’s and manager’s schedule, Collin straddles the line down the middle.

“When I add things to my calendar, they aren’t always meetings. I create a lot of appointments with myself to work on specific projects. This could mean blocking off larger chunks such as a ‘time for culture’ session dedicated to thinking about everyone in the company and assessing whether anyone seems unhappy,” she says. “But I also book several 15-minute tasks, such as writing that email to my direct reports or reading over a recent insights survey.”

To give further insight into how she spends her time, Collin shares five tips for bringing discipline to a crowded calendar:

1) Block and tackle: create a window for email and opt out of notifications.

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“I have two 30-minute dedicated slots in my calendar every day to go through my inbox and I try my hardest to not look at it outside of those times,” says Collin. To help stay on track, she’s quit notifications altogether, save for her calendar reminders.

“I’ve disabled them for email, chat and other tools on both my phone and my desktop. My calendar’s on so I don’t miss events, but opting out of everything else has magnified my efficiency and significantly reduced stress,” she says. “I found it so helpful that I challenged the entire Front team to quit their notifications for a week as well. And now during the weekends, I even log out of all of my apps so that temptation isn’t there.”

2) Step back and clear your head.

Out of all of Collin’s calendar optimization experiments, “stepping back time” has been the most valuable addition. “It’s half a day each week where I allow myself only a notebook — no computer — to really concentrate on a key issue,” she says. “I tinkered with this quite a bit, splitting it up into an hour a few times a week for example, but I found that made it harder to focus.”

Collin also makes time for reflection by reserving a 10-minute morning slot for meditation. “I meditate every day at home and we hold a weekly meditation for the Front team. It’s honestly changed my life. There’s no immediate benefit — it’s completely dependent on your discipline because it’s a muscle that you’re training. But when my co-founder got sick, it really changed my perspective,” she says. “Building a company is unbelievably stressful, but there are more important things and this daily habit reminds me of that.”

3) Set a date with yourself on Friday to organize the next week.

“I need to know exactly what I want to achieve, and that requires additional prep, which is often the first thing to go for many when things get hectic,” Collin says. Here’s a look at her process:

“I have a 15-minute ‘Review My Calendar’ slot every Friday afternoon. I revisit our quarterly goals and a few top-of-mind topics. I then look at my calendar for the upcoming week to make sure it matches up,” Collin says. “For example, hiring is a huge push for me right now so I need to spend about a third of my time interviewing executives. When I look at my calendar and it’s packed with product meetings or I only have one interview scheduled, then I know that I’m not doing enough to make progress, so I’ll add a sourcing session in.”

Collin finds this exercise serves as another fail-safe to make sure she’s allocating enough time to the right things. “This also dovetails with the weekly email I send to my direct reports. If I tell them that my goal for the week is to decide what the new sales organization will look like, then I better have a few personal working sessions and key meetings dedicated to that,” she says.

4) Analyze your time to match intention with reality.

Among her Twitter followers, Collin is known for occasionally sharing a graph of how she spends her time.

Below is a more recent example of the exact analysis she pours over every week:

“At the end of every single week I have my EA send me an analysis of my calendar,” says Collin. “It’s split by the type of activity, such as interviewing, selling, managing and so on. This is how I flagged that I need to step up my hiring efforts. I also look at it on a team level to see if I’m spending too much time with any one group and neglecting another.”

5) Take the time to write it down.

In addition to sharing a breakdown of how she spends her days, Collin also generously shares a window into her journey as a founder by writing articles with very tactical details to provide insights for founders. And it comes as no surprise that the writing time required to produce these pieces is meticulously scheduled.

Collin has two 30-minute blocks for writing on her calendar every week and aims to publish an article on her Medium page about every two months. “I will be honest that I keep these writing slots only about 75% of the time,” she says. “The discipline is more around achieving the result of publishing every other month, so I force myself to find a topic if necessary.”

Front CEO and co-founder Mathilde Collin


While her email habits and time management tactics are impressive, Collin is perhaps best known in the tech world for her fundraising chops.

She netted three term sheets for her Series A round in a mere 10 days and timeboxed her Series B fundraising process to just one week, walking away with 10 term sheets. More impressive still is her generous commitment to sharing her best practices with others. Collin put both her Series A and Series B decks online for the world to see, highlighting strong slides as well as feedback she received.

To extend that spirit of sharing, Collin pulls back the curtain on how she built the muscle required to pull off these fundraising feats:

1) Develop relationships before you need them, but don’t be afraid to hold back.

While these fast fundraising cycles may seem to be the stuff of startup kismet, Collin is quick to point out that she was only able to raise so quickly because she put in the legwork upfront. In her eyes, these rounds weren’t the sum of five to ten days of pitching, but rather the culmination of four years of careful chess moves.

That’s because after nabbing Front’s initial seed round, Collin maintained a fundraising mindset. “I started proactively building relationships with partners at firms that I liked, meeting with each of them every three to six months. Once we were raising, I could lean on those relationships to get a partner meeting right away,” she says. “But what’s more is I knew that whoever invested in our Series A would land a board seat, so getting to know partners early on meant I’d be in a better position to decide who to work with.”

Early-stage founders looking to replicate this tactic should note that it’s about quality, not quantity. “I was focused on about five partners. Going really deep with just one investor puts all your eggs in one basket, but cultivating 20 relationships would be distracting,” says Collin.

These ongoing conversations with investors should move beyond shop talk. “Once you’re in a fundraising process, it all happens in a flash. So for me, these meetings weren’t simply a report on how Front was doing, but rather a chance to get to know the partner. I asked them what they liked and didn’t like about investing or what they did outside of work,” she says.

If you’re focused on building relationships with investors well before you need them, the fundraising flywheel will spin much faster.

Collin cautions that founders need to be thoughtful when approaching these conversations. “Investors are always hunting for signals about your company, but remember that you get to control where the conversation goes and what they’re able to pick up on,” she says. “Anytime I was asked about our revenue or number of customers, I always shared something a bit lower than our actual figures. I wanted to have some flexibility in case things didn’t go as expected, but it also enabled me to save the good nuggets for when we were actually raising.”

2) Raise or don’t raise — don’t let it drag.

As with most things, when it comes to fundraising, timing is everything. But deciding when to pull the trigger requires navigating that tricky space between art and science.

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In Collin’s eyes, founders falter when they let their fundraising efforts drag on. “I’ve always been impatient with the entire process. You have to be all in when you decide to raise; ‘kind of raising’ is a waste of your time,” she says. “For the entire 10 days I spent on our Series A, I wasn’t working on anything else at Front. We had less than 20 employees, so my stepping away to manage the fundraise had huge consequences for our productivity. I wanted to get back to work, so I put everything I had into it — and learned when to stop ‘shopping.’”

Collin also leaned on open lines of communications with investors to speed along her Series B round. “One of the partners I was talking to casually mentioned that he’d invest in our next round. I took him seriously — and I used that one term sheet as leverage to compress the timeline for everyone else. The discipline it took to sink time into that relationship and then full-on commit to raising is what put me in a position to set the terms and move quickly,” she says.

Putting speed aside, most founders grapple with the broader problem of figuring out when to raise. Collin identifies the three factors she considers: feeling good about the business, reaching a marker set in the previous round and requiring additional resources to attain a new ambitious goal.

“Feeling good about the business is very subjective. It’s not as though you hit a certain metric and then it’s all roses. I’d always heard that reaching $1 million in annualized revenue was a benchmark for Series A, but when we hit that, I still wasn’t feeling great so I didn’t raise,” says Collin. “If you’re not feeling confident because one of your customers just churned, a deal fell through or an employee is causing problems, that’s going to seep into the entire process. As a founder, the smallest thing can take so much headspace. You have to be in the right state of mind to raise.”

To illustrate what “feeling good” looks like, Collin shares two examples:

  • Going after a new ambitious goal. “Just before we did our Series A, we had three great quarters in a row. Around that same time, I was speaking to a branding agency, but it was pretty expensive. That set off a lightbulb in my head that I could invest more in the long-term if I had more money,” she says.

  • Getting energized about the future. “Our Series B was totally different. We still had lots of runway. But I had dinner with a few employees and they told me that our mission statement wasn’t that inspiring,” says Collin. “So, as we worked on a new one and talked through what the future of Front could look like, I got more and more energized by how big the opportunity was — and I decided to raise our next round.”

Your metrics won’t suddenly snap into place ahead of your next round — and even if they do, that might not be enough. Your state of mind is incredibly important, so look for the moments that make you excited and capitalize on them.

3) Remember that it will be stressful no matter what — and prepare for the sting.

Even though Front had a legendary Series B round, Collin is quick to point out that it was far from painless.

“I’m always getting comments from people about how they are so envious of our quick rounds and how easy it must have been. But every would-be founder needs to know that it’s always going to be stressful. Even though we had one of the smoothest fundraises imaginable, it was still incredibly tough,” she says.

Collin attributes this stress to the sting of rejection — something that never gets easier. “When people tell you they don’t want to invest in your company, that’s one of the hardest things that you can hear as a founder,” she says. “When a customer doesn’t want to buy your product or a great leader turns down an offer, there are always other things you can point to, such as price or salary. But when an investor passes, they’re telling you ‘I don’t think that your company could be bigger than it is,’ and that always hurts.”

4) Bring discipline to your deck by focusing on the story.

As for the pitch decks that earned all of those terms sheets (and racked up millions of views on the internet afterwards), Collin shares how they came together — and why discipline was essential.

“There’s a temptation to stuff every metric you can find in the deck. But you have to be really disciplined in the narrative you present to investors in order to boost your odds. Think of the pitch as a story waiting to be told, not a set of slides to be strung together. I’m not here to report what Front did in the past four years, I’m here to paint a picture,” she says.

To start painting, Collin always begins by typing an actual story out in a document. “I don’t even think about slides,” she says. “The story mostly follows the same formula: here’s why we started this company, here’s why it’s working and here’s why it could be a hundred times bigger.Only then do I start looking at data and thinking about what metrics to include, so long as they fit one of those buckets. Metrics are important for answering investors’ questions, but they aren’t the pitch. They need to be supported by a narrative.”

Think of the story you want to tell in your pitch and write it out — without opening Keynote. Then choose the data that helps you fill in the brushstrokes of that bigger story arc.

5) Do diligence on your investors.

For founders looking to follow in her fundraising footsteps, Collin offers a final tip. “VCs dig into you and your company before investing, but remember that diligence is a two-way street. You can always get rid of employees, but your investors stick. That’s why when we were considering Sequoia’s Bryan Schreier for our Series B, I talked to the founder of almost every company he was on the board of,” she says.

“In those conversations, I was looking for two things: I wanted the person joining our board to be caring and challenging, which is a tough combination to find. You don’t want cheerleaders, but you don’t need tons of extra pressure either.” To go deep on potential investors’ backgrounds, Collin used these tailored questions:

  • Share some examples of when they’ve been caring.

  • What types of things did they typically challenge you on? Was it helpful?

  • Tell me about a time when they disappointed you. Did you feel like you could have an open discussion and give feedback?

  • Looking back on the early days of your working relationship, how would you manage or interact with them differently, knowing what you know now?


Collin brings the same regularity and intention to her internal team building efforts — and has the results to prove it. Front has a 5-star Glassdoor rating, an internal NPS of 87, while only a few people have voluntarily left the company in the past four years.

“This high employee engagement is a result of the transparency we’ve cultivated and the commitment we have to making people feel like they have an impact,” says Collin. Outside of the weekly email connecting everyone to the main metric they’re working towards, Front has smaller initiatives to highlight impact, such as using ‘Fronteer of the Week’ and ‘Stumble of the Week’ as opportunities to share wins and learnings (and award trophies crafted out of legos).

The Lego trophies awarded to a member of the Front team each week.

The startup also embraces fun (and regularly scheduled) events, such as board game nights every month or the musicals that the entire Front team puts on once a year. The most recent productions included stagings of ‘Les Mis’ (with Collin of course taking on the role of Cosette) and a Disney medley.

“It’s a programmatic way to give people a chance to be very vulnerable. Whether they’re dancing, singing, narrating or playing an instrument, it brings the team together,” Collin says. “Overall, we’re very disciplined, with the same programs at the same weekly, monthly or annual cadence. Bring regularity to your team touchpoints to make sure they aren’t a one-off initiative from HR or a tradition that dies out — create something employees can count on,” she says.

However, Collin doesn’t place too much weight on Front’s approach to cultural events. “Many startups focus so much of their team building efforts on events or offsites and start to lose sight of the core of their culture: hiring people that align with your values,” she says.

Collin has applied her signature discipline to expanding Front’s team — so much so that after six months of searching, she’s still on the hunt for a head of finance. “We’re over 100 people, we’ve raised $80 million and I have zero experience in it, but I still haven’t found the person who has the right skill set and matches our values — so if you know someone I should talk to, send them my way,” she says. “But in all seriousness, you have to be very disciplined and show the restraint not to hire, even when you urgently need to fill a role,”

To further cement this principle in her mind, Collin revisits advice she got from Stripe’s Patrick Collison: “He told me that before hiring someone, consider whether you’d like to have 10 times as many people like them in your company. Because they will hire people in their mold, that’s the bar everyone needs to clear.”

Events aren’t culture. They’re something you do to build it, but they aren’t an end themselves. Be disciplined in who you hire and how you live out your values — that’s the culture.


When it comes to getting a startup off the ground, time is the most precious resource and momentum is the objective. That’s why a founder’s discipline and willingness to dig in can be more determinative than the ability to project a sweeping vision for the company.

To bring more discipline to your daily life, apply these takeaways from Collin’s personal habits:

  • Reach goals by communicating more consistently: Concentrate on moving a single metric by regularly communicating with your team, direct reports and investors. To provide an additional layer of accountability, templatize your most important messages and never miss an update.

  • Manage your time to find focus: Develop the calendar hygiene to match work to stated priorities by reviewing your schedule for the upcoming week every Friday and analyzing how you actually spent your time. Create the space to step back and reflect by blocking off dedicated windows for checking email, writing and meditating.

  • Fundraise faster: Condense your fundraising timeline by proactively building relationships with and doing careful diligence on investors. Assess if it’s the “right” time to raise by considering your state of mind and looking ahead to milestones you want to hit. Make sure your pitch is a story, not a set of data points.

  • Build better teams: Boost retention and engagement by bringing regularity to cultural programs. But remember that events aren’t the culture, people are. Don’t hire someone if you don’t want to have 10 times as many people like them on the team.

Road to Regionals: Hult Prize at FIU 2018 – 2019

Hult Prize is the biggest social entrepreneurship competition around the world. For the last 10 years, the Hult Prize Foundation has funded about 9 different companies, deployed more than $50M in seed capital and mobilized more than one million young people to rethink the future of business.

The Hult Prize process begins with the On Campus competitions where teams are selected to represent their universities in any of the world regional competitions. The winning team of the regionals will then win a spot in the summer incubator program at the Castle in Ashridge, UK. The top six teams of the incubator will be selected to compete for the grand prize of $1M to fund their startups.

Hult Prize has been a part of FIU for the last five years. For the last three years FIU has been hosting the On Campus competition with the support of StartUP FIU, a  university-wide initiative to foster innovation and entrepreneurship to pursue opportunities in the Fourth Industrial Revolution. For Hult Prize at FIU 2018-2019, 19 teams registered to compete with 67 students from different majors from STEM to Business and Social Sciences.  

“I had the opportunity to participate in last year’s Hult Prize at FIU On Campus competition and was able to represent FIU at the Boston Regionals 2018. For me it was a very enriching experience that helped me to grow as a student and future professional. I wanted more students to have the same opportunity of growing and thinking about the future through the Hult Prize. This is the reason why I took the challenge of becoming Campus Director for Hult Prize @FIU for 2018-2019” says Luisana Zambrano, Campus Director for Hult Prize at FIU for 2018-2019.

During the Fall 2018 semester the Hult Prize at FIU team held design thinking sessions, problem identification process, solution ideations based on the global challenge, storytelling and pitching practice workshops, as well as mentor hours and one-on-one sessions for the teams to prepare for the On Campus competition held on December 7, 2018 at StartUP FIU. The Hult Prize at FIU team also focused on spreading the word about social entrepreneurship by collaborating with StartUP FIU in hosting two information panels with local social entrepreneurs and social impact enthusiasts:  Launching a Business for Social Good, with the FIU Social Media Association and Global Entrepreneurship Week event, Doing Well by Doing Good: A Discussion About Social Entrepreneurship.

“I’ve been involved in the Hult Competition for five years. When it started it was a project in the FIU Honors College. Today through StartUP FIU it is university wide and we have made so much progress under Luisana Zambrano’s leadership.” Director of StartUP FIU, Bob Hacker.

Vikaas, the winning team of the Hult Prize at FIU On Campus Competition, led by three undergraduate students Yashaswi Tapadia, Economics major, Arquimides Perez-Leyva, Computer Science major and Paula Perez a Mechanical Engineering major, will represent FIU at one of the Regional Finals next Spring 2019. StartUP FIU will work hand in hand with the team to support their preparation for Regionals next semester in hopes of bringing home a win.

Vikaas revolutionizes the agriculture industry in India through its scientific practices, while also empowering the rural communities it serves by providing a stable income to otherwise financially insecure farmers.

A Blinding Flash Of The Obvious

Industrial Revolution Meets The Classroom


Among the many factors that contribute to a Worlds Ahead experience at Florida International University, StartUP FIU has fostered a creative, entrepreneurial environment for students, faculty, and alumni. With engagement at the forefront of its philosophy, StartUP FIU allows people to put their innovative side to work. Whether it be through a class or attending a workshop, StartUP FIU provides you with the opportunity to be engaged, empowered and enriched by learning about how to solve some of the world’s most tough challenges through technology.

As a student enrolled in the Digital Media in the 21st-century class, I have learned about how companies can influence and track consumer behavior via Google’s online tools. This class is taught by Google clients and poses as a year-long interview since there is an opportunity to get an internship with Google at the end of the course. We will have a chance to showcase our skills by developing a marketing plan for a small local business in Miami.

Through an evaluation of the company’s business goals, marketing goals, media goals, and campaign goals, we will determine which tools are most appropriate to reach consumers to establish a loyal customer base. Classes such as this force you to look at the world through a digital lens and allows you to forge change in your community. Thanks to StartUP FIU—every dream is made possible.


About Kelli Perkins

My name is Kelli Perkins and I am a junior studying Public Relations at FIU. I am originally from Orlando, Florida but moved to Miami in August 2018 to continue my college career. I have a strong passion for writing because I believe it is an outlet to share your perspective of the world around you. Everyone has a different lens that is worth looking through.

My Summer Building a Startup and Working For an Accelerator


This Summer, I had the opportunity to intern in Boulder, CO. I worked for UpRamp, a later stage Accelerator, and participated in Startup Summer, a program focused on starting a startup in ten weeks. The following is an overview of my experience along with my learnings in a practical form.

But first, I must say that I wouldn’t have been able to do this without the help of the people at StartUP FIU. I worked there for nearly 8 months and learned virtually everything I know about Entrepreneurship. Having said that, let’s now begin!


UpRamp is an accelerator under Cablelabs, a research and development non-profit for the Cable industry. Every year, they help 3–6 later-stage startups get deals with huge companies like Comcast, CableONE, and others.

Last team meeting

My job consisted on building their operating system, automating several processes, and doing anything needed for the team to succeed. Unfortunately, I left just before the program started, but I did get a chance to attendSummerConference and meet the cohort! These are some of the things I learned:

Always do world-class work: If you do, you will become reliable, and you will be assigned more meaningful work. If you have too much work, use your best judgement to determine what to prioritize, and if you cannot make that decision, ask the person that can. Just make sure to not settle for anything but excellence.

Being yourself is the right strategy: Understand who you are and only take actions that align with that identity. It is the only way for you to find the place where you belong. Prestige, ego, fear, and others will seduce you into deviating from this path. Don’t do it.

Also, make sure you express your real self to the world; that way, you will attract the right people and opportunities.

Startup Summer

Startup Summer is a 10-week program where 50 students from around the country form teams, build a startup, and participate in a pitch competition. In order to participate, one must also get a full-time internship in Colorado, but they help you with that. I highly recommend it to anyone interested in Entrepreneurship.

On week 1, we bonded and attended several events, including a TEDx talk that I really enjoyed. On week 2, we had already pitched our ideas, formed teams, and started to work on the startup. I joined a team of 4 people to create an experiential company that designed educational field trips. It was the only slightly social project, so I decided to jump on it.

We followed the Design Thinking methodology to build our startup, so we began by empathizing with our customer. Ultimately, we realized there was no problem to be solved, so we pivoted. We started to work on, a review platform where individuals with disabilities can find the right service provider to meet their needs, whether that’s an educational institution or a theme park.

After several weeks of work, we pitched at the final competition. All the pitches were on point, but we managed to win 1st place and were awarded $3000!

Minutes after winning the pitch competition 

It was phenomenal to win, but honestly, it wasn’t nearly as valuable as the network we built and the lessons we learned during those 10 weeks. These are some of those things:

Giving is the right strategy: You will be happier and more successful in business. Try it for a month. Whenever you meet someone, seek to understand how you can add value to that person and then do it. You can add value by listening, by giving your time, by making an introduction, by recommending an article, etc. If you want to read more about this idea, read The Go-giver; it’s a wonderful book.

Get as many experiences as possible: I saved some money and decided to drive to San Francisco and Los Angeles once the internship was over. I met many smart people, visited several universities, and tried plenty of new things. This trip ended up changing my plans for next Summer, which in itself provided me with a positive return on investment.

Let’s sum up!

This was a wonderful experience, and I would recommend it to anyone interested in Entrepreneurship. Also, in case you were wondering about the future of Likability: two of my team members will continue to build it from Denver, hopefully launching in early 2019!

I moved back to Miami and will be competing on this year’s Hult Prize, so you will probably find me in StartUP FIU working on that for the rest of the semester. Feel free to reach out if I can be of any help!

About Stefano: 

Stefano is an FIU student passionate about Traditional and Social Entrepreneurship. Within the last two years, he has worked for two accelerators, including StartUP FIU, and participated in a startup programcalled Startup Summer. He is currently participating in the Hult Prize, where he is working with a team to create 10 million jobs in the next 10 years. He is always looking for new people to meet and intriguing articles to read, so feel free to reach out!

The 3 Data Streams That Every Founder Needs


Gathering real-world feedback from customers is a core concept of Customer Development as well as the Lean Startup.

But what information to collect?

Yesterday I got an email from an ex-student lamenting that only 2% of their selected early testers responded to their on-line survey. The survey said in part:

The survey has 57 questions, the last three of which are open ended, and should take about 20 minutes to complete. Please note that you must complete the entire survey once you begin. You cannot stop along the way and have your responses to that point saved.

If it wasn’t so sad, it would be funny.

I called the founder and noted that there are SAT tests that are shorter than the survey. When I asked him if he actually had personally left the building and talked to these potential customers, or even had gotten them on the phone, he sounded confused, “We’re a web startup, all our customers are on the web. Why can’t I just get them to give me the answers I need this way?”

Customer Development suggests that founders have continual and timely customer, channel, and market information. Founders need three data streams or “views of information” to truly understand what is going on in their business:

  • First-hand knowledge
  • A “bird’s-eye” view
  • The view from the eyes of customers and competitors

1. First-hand knowledge

First-hand knowledge is “getting outside the building” and talking to potential or actual customers. Customer Development proposes that the best way to get customer data is through personal observation and experience — getting out from behind your desk and getting up close and personal with customers, competitors, and the market.

Founders of tech companies often confuse web metrics like A/B testing and online surveys as the entirety of first-hand knowledge—it is not.

In fact, this mistake can be a “going out of business” strategy.

Metrics tell you that something is happening, but not why. A/B testing can tell you that one something is better than another…but not why. Getting survey responses back from customers will give you part of the answer, but you can’t watch their pupils dilate or hear the intonation of their voice. And without that, it’s just not something I’d build a business on.

Of course you need to collect metrics. It’s just that without having founders “get outside the building” you are missing a key point of Customer Development — the numeric data you collect may be blinding you to the fact that you’re more than likely working to optimize the wrong business model. Customer needs are non-deterministic.

2. Bird’s-eye view

The second picture founders need is a synthesized “bird’s-eye view” of the customer, market, and competitive environment. You assemble this view by gathering information from a variety of sources:

  • web sites
  • social media (Facebook, Twitter, blogs, et al)
  • sales data
  • win/loss information
  • market research data
  • competitive analyses
  • a/b tests
  • customer survey data
  • …and so on

From this big-picture view, founders try to make sense of the shape of the market and the overall patterns in the unfolding competitive and customer situation. At the same time, they can gauge how well industry data and the actual sales match the company’s revenue and market-share expectations.

Just remember that most market research firms are excellent at predicting the past. If they could predict the future, they’d be entrepreneurs.

My test for how well you understand this “order of battle” is to hand the founder a marker, have them go up to the whiteboard and diagram the players in the market and where they fit. (Try it.)

3. See through the eyes of customers and competitors

The third view is of the action as seen through the eyes of customers and competitors. Put yourself in your customers’ and competitors’ shoes in order to deduce possible competitors’ moves and anticipate customer needs.

  • In an existing market this is where you ask yourself, “If I were my own competitor and had its resources, what would my next move be?”
  • In looking through the eyes of a customer, the question might be, “Why should I buy from this company versus the incumbent.”
  • In a new or resegmented market, the questions might be “Why would more than a few early adopters use this app, web site or buy this product? How would I get my 90-year-old grandmother to understand and buy this product?”

Think of this technique as playing chess. You need to be looking at all the likely moves from both sides of the chessboard. What would we do if we were our competitors? How would we react? What would we be planning? After a while this type of role playing will become an integral part of everyone’s thinking and planning.

Putting it all together

First-hand knowledge is clearly the most detailed and essential data stream, but offers a narrow field of view. Founders who focus only on this information risk losing sight of the big picture.

“Bird’s-eye view” data provides perspective on the market but lacks critical detail. Founders who focus only on this image risk missing the “ground truth.”

Seeing through the eyes of customers and competitors is a theoretical exercise limited by the fact that you can never be sure what your customers and competitors are up to.

The combination of all three data streams helps founders form an accurate picture of what is going on in their business and help them hone in on product/market fit.

Even with information from all three views, founders need to remember there will never be enough information to make a perfect decision.

Building an Information Culture

The most important element of data gathering is what to do with the information once you collect it. Customer information dissemination is a cornerstone of Lean and agile companies. This information, whether good or bad, must not be guarded like some precious commodity. Large company cultures reward executives who hoard knowledge or suppress bad news. In any of my companies, that is a firing offense.

All news, but especially bad news, needs to be shared, dissected, understood, and acted upon.

This means that understanding poor click-through rates, retention numbers, and sales losses are more important than understanding sales wins; understanding why a competitor’s products are better is more important than rationalizing ways in which yours is still superior. Winning startups build a startup culture that rewards not punishes messengers of bad news.

Lessons Learned

  • There are 3 data streams that every founder needs: First-hand knowledge, “bird’s-eye view,” and the view from the eyes of customers and competitors.
  • Startups often fall into the trap of confusing metrics, testing, and surveys with real-life customer interaction.
  • The goal should be to build an information culture to help you get to product/market fit.

Learned something? Hold down the 👏 to say “thanks!” and help others find this article.

How to Build a Startup that Gets Acquired

By Steve Blank

May 16, 2016

There are many reasons to found a startup.
There are many reasons to work at a startup.
But there’s only one reason your company got funded — liquidity.


The Good News
To most founders a startup is not a job, but a calling.

But startups require money upfront for product development and later to scale. Traditional lenders (banks) think that startups are too risky for a traditional bank loan. Luckily in the last quarter of the 20th century a new source of money called risk capital emerged. Risk capital takes equity (stock ownership) in your company instead of debt (loans) in exchange for cash.

Founders can now access the largest pool of risk capital that ever existed –in the form of Private Equity (Angel Investors, family offices, Venture Capitalists (VC’s) and Hedge Funds.)

At its core Venture Capital is nothing more than a small portion of the Private Equity financial asset class. But for the last 40 years, it has provided the financial fuel for a revolution in Life Sciences and Information Technology and has helped to change the world.

The Bad News
While startups are driven by their founder’s passion for creating something new, startup investors have a much different agenda — a return on their investment. And not just any returns, VC’s expect large returns. VC’s raise money from their investors (limited partners like pension funds) and then spread their risk by investing in a number of startups (called a portfolio). In exchange for the limited partners tying up capital for long periods by in investing in VCs (who are investing in risky startups,) the VCs promise the limited partners large returns that are unavailable from most every other form of investment.

Some quick VC math: If a VC invests in ten early stage startups, on average, five will fail, three will return capital, and one or two will be “winners” and make most of the money for the VC fund. A minimum ‘respectable’ return for a VC fund is 20% per year, so a ten-year VC fund needs to return six times (6x) their investment. This means that those two winner investments have to make a 30x return to provide the venture capital fund a 20% compound return — and that’s just to generate a minimum respectable return.

(BTW, Angel investors do not have limited partners, and often invest for reasons other than just for financial gain — e.g., helping pioneers succeed — and so the returns they’re looking for may be lower.)

The Deal With the Devil
What does this mean for startup founders? If you’re a founder, you need to be able to go up to a whiteboard and diagram out how your investors will make money in your startup.

While you might be interested in building a company that changes the world, regardless of how long it takes, your investors are interested in funding a company that changes the world so they can have a liquidity event within the life of their fund ~7–10 years. (A liquidity event means that the equity (the stock) you sold your investor can now be converted into cash.)

This happens in two ways:

1. You either sell your company (Merger/Acquisition)

2. You go public (an IPO.)

Realistically, M&A is the most likely path for a startup to achieve liquidity.

Here’s the thing most founders miss. You’ve been funded to get to a liquidity event. Period. Your VCs know this, and you need to know this too.

Why don’t VCs tell founders this fact? For the first few years, your VCs want you to keep your head down, build the product, find product/market fit and ship to get to some inflection point (revenue, users, etc.).

As the company goes from searching for a business model to growth, only then will they bring in a new “professional” management team to scale the company (along with a business development executive to search for an acquirer) or prepare for an IPO.

The problem is that this “don’t worry your little head” strategy may have made sense when founders were just technologists and the strategy and tactics of liquidity and exits were closely held, but this a pretty dumb approach in the 21st century. As a founder you are more than capable of adding value to the search for the liquidity event, even if that event is an acquisition.

So, let’s talk about how to do that.

6 Steps Toward Acquisition

As a founder, you need to be planning your exit the day you get funded. I’m not suggesting that you build in a short-time “let’s flip the company” way, but rather that you should be thinking about who, how and when you can make an acquisition happen.

Step 1: Figure out how your startup generates value
For example, in your industry do companies build value the old fashion way by generating revenue? (Square, Uber, Palantir, Fitbit, etc.) If so, how is the revenue measured? (Bookings, recurring revenue, lifetime value?) Is your value to an acquirer going to measured as a multiple of your revenues? Or as with consumer deals, is the value is ascribed by the market?

Or do you build value by acquiring users and figuring out how to make money later (WhatsApp, Twitter, etc.) Is your value to an acquirer measured by the number of users? If so, how are the users measured (active users, month-on-month growth, churn)?

Or is your value going to be measured by some known inflection point? First-in-human proof of efficacy? Successful Clinical trials? FDA approvals? CMS Reimbursement?

If you’re using the business model canvas, you’ve already figured this out when you articulated your revenue streams and noted where they are coming from.

Confirm that your view of how you’ll create value is shared by your investors and your board.

Step 2: Figure out who are the likely acquirers
If you are building autonomous driving aftermarket devices for cars, it’s not a surprise that you can make a short list of potential acquirers — auto companies and their tier 1 suppliers.

If you’re building enterprise software, the list may be larger.

If you’re building medical devices the list may be much smaller.

Every startup should have a working idea of who potential acquirers might be.

It’s helpful to also diagram out the acquirers in a Petal Diagram. When you do, start a spreadsheet and list the companies. As you get to know your industry and ecosystem, the list will change.

It’s likely that your investors also have insights and opinions. Check in with them as well.

Step 3: List the names of the business development, technology scouts and other people involved in acquisitions and note their names next to the name of the target company.

All large companies employ people whose job it is to spot and track new technology and innovation and follow its progress. The odds on day-one are that you can’t name anyone. How will you figure this out?

Congratulations, welcome to Customer Discovery.

  • Treat potential acquirers like a customer segment. Talk to them. They’re happy to tell anyone who will listen what they are looking for and what they need to see by way of data or otherwise for something to rise to the level of seriousness on the scale of acquisition possibilities.
  • Understand who the Key Opinion Leaders in your industry are and specifically who acquirers assemble to advise them on technology and innovation in their areas of interest.
  • Get out of the building and talk to other startup CEOs who were acquired in your industry. How did it happen? Who were the players?

It’s common for your investors to have personal contacts with business development and technology scouts from specific companies. Unfortunately, it’s the rare VC who has already built an acquisition roadmap. You’re going to build one for them. It will look something like this:

After awhile, you ought to be able to go to the whiteboard and diagram the acquisition decision process much like a sales process. Draw the canonical model and then draw the actual process (with names and titles) for the top three most likely acquirers

Step 4: Generate the business case for the potential acquirer
Your job is to generate the business case for the potential acquirer, that is, to demonstrate with data produced from testing pivotal hypotheses why they need is what you have to improve their business model. You will offer reasons like:

  • filling a product void
  • extending an existing line
  • opening a new market
  • blocking a competitor’s ability to compete effectively
  • Etc.

Step 5: Show up a lot and get noticed
Figure out what conferences and shows these acquirers attend. Understand what is it they read. Then show up and be visible — as speakers on panels, accidentally running into them, getting introduced, etc. Get your company talked about in the blogs and newsletters they read.

How do you know any of this? Again, this is basic Customer Discovery. Take a few out to lunch. Ask questions — what do they read? — how do they notice new startups? — who tells them the type of companies to look for? etc.

Step 6: Know the inflection points for an acquisition in your market
Timing is everything. Do you wait 7 years until you’ve built enough revenue for a billion-dollar sale? Is the market for Machine Learning startups so hot that you can sell the company for hundreds of millions of dollars without shipping a product?

For example, in Medical Devices the likely outcome is an acquisition way before you ship a product. Med-tech entrepreneurship has evolved to the point where each VC funding round signals that the company has completed a milestone — and each of these milestones represents an opportunity for an acquisition. For example, after a VC Series B-Round, an opportunity for an acquisition occurs when you’ve created a working product and you have started clinical trials and are working on getting a European CE Mark to get approval.

The time to prepare for an acquisition is on day 1

When to sell or go public is a real balancing act with your board. Some investor board members may want liquidity early to make the numbers look good for their fund, especially if it is a smaller fund or if you are at a later point in their fund life. If you’re on the right trajectory, other investors, such as larger funds or where you are early in their fund life, may be are happy to wait years for the 30x or greater return. You need to have a finger on the pulse of your VCs and the market, and to align interests and expectations to the greatest extent possible.

You also need to know whether you have any control over when a liquidity event occurs and who has to agree on it. (Check to see what rights your investors have in their investment documents.) Typically, a VC can force a sale, or even block one. Make sure your interests are aligned with your investors.

As part of the deal you signed with your investors was a term specifying the Liquidation Preference. The liquidation preference determines how the pie is split between you and your investors when there is a liquidity event. You may just be along for the ride.

Above all, don’t panic or demoralize your employees. The first rule of Fight Club is: you do not talk about Fight Club. The second rule of Fight Club is: you DO NOT talk about Fight Club! The same is true about liquidity. It’s detrimental to tell your employees who have bought into the vision, mission and excitement of a startup to know that it’s for sale the day you start it. The party line is “We’re building a company for long-term success.”

Finally, do not obsess over liquidity. As a founder there’s plenty on your plate — finding product/market fit, shipping product, getting customers… liquidity is not your top of the list. Treat this as a background process. But thinking about it strategically will affect how you plan marketing communications, conferences, blogs and your travel.

Remember, your goal is to create extraordinary products and services — and in exchange there’s a pot of gold at the end of the rainbow.

Lessons Learned

— The minute you take money from someone, their business model now becomes yours

— Your investors funded you for a liquidity event

— You need to know what “multiple” an investor will allow you to sell the company for

  • Great entrepreneurs shoot for 20X
  • You need at least a 5x return to generate rewards for investors and employee stock options
  • A 2X return may wipe out the value of the employee stock options and founder shares

— You should plan for liquidity from day one

— Don’t demoralize your employees

— Don’t obsess over liquidity, treat it strategically