Tag: Startups

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Finance Startups

Day 96 and Founders Who Don’t Want to Be CEO

My Twitter has been going viral with reply guy friendly topics like taxing high earners and public vaccine demand so I needed to get some niche startup content in today to clear my palette of the reply guys. So I’m going to think about founders, professional management teams and venture’s role in supporting founders. You know, a topic that won’t have strong feelings.

A non zero number of my founder. friends would probably pay to be extracted from certain stages of startup growth, especially later stage scaling, but somehow being founder friendly has come to mean keeping these founders in charge all the way through. Many excellent zero to one founders have to actively change their entire style, skill set and value proposition once they get a company past about employee 25. Obviously there are many inflection points in startup growth and many founders relish the opportunity for constant skill growth. But plenty of early stage founders hate stuff like Human Resources and operations. Shit a good chunk hate sales and marketing too.

Early stage work is a speciality. It’s a professional niche and hard to train folks for as it’s part personality and part dysfunction. I think we should value early stage founding for its disproportionate impact on value creation instead of forcing these early stage specialists to train to become generalists, great managers or scaling operators. Of course it’s more likely they will fail once you take them away from the stage where they are genius.

Recently a friend of mine who works in venture said of another investor “oh that VC is old school” and clarified it meant they like to bring in executive teams for their B rounds companies. Which honestly sounds like a dream to me. There has to be a middle ground between firing visionary but scattered founders once they’ve raised and trying to coach a mediocre manager into great growth CEO.

I think we should normalize founders being churned in on new ideas rapidly and churned out on scaling quickly. Let them get back to founding. Let them create more faster. Great scaling venture funds can provide more value by bringing in a scaling leadership team and easing the founder out to areas where they can focus on vision and direction. I say let the professionals run your team.

Obviously some founders dream of going from idea all the way to IPO but I don’t know if it’s the dominant path they desire. It could just be one of many. I have very little interest personally in shit like operations, process and scaling. I literally married a COO rather get good at it (insert joke about literally anything to avoid therapy). However it shakes out the “founder friendly” venture firm will remain. What it means to be founder friendly may need to be rethought.

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Chronicle Internet Culture

Day 85 and Collective Progress

I am extremely online. I think it’s the best place to spend time if you want to thrive. Hands down nothing has ever beaten internet communities at improving the quality of my life on every metric. I know it sounds a little utopian but every skill I’ve acquired, job I’ve had and crucial piece of knowledge can be tracked back to the web.

I could have had a slower path in life with regular credentials and prestige building jobs with the right signals but none of those old rules have hung around long enough that I’m confident I would have made it as far in life. I needed the extra edge from living extremely online. I think we all do.

Life moves too quickly in modernity for us not to come together to survive it. Progress is going to be collaborative. Individual efforts and silos with us all competing for place and resources. Competition maybe served its purpose in a world of resource scarcity but as wealth is less dependent on rent seeking and property ownership and more on innovation and technical progress, then collaborative work has better incentives.

This may sound a little stupid but every time I ask Twitter for a ridiculous piece of advice like “ does anyone lift while high” I get incredible pieces of insight. It sounds like a dumb question and like click bait but I’m probing for similar cases of physiological response, chronic pain and a desire to biohack to better health. And yes it turns out if you have inflammation lifting weights while stoned is a great way to encourage a behavior that promotes lower inflammation with an inflammation lowering drug. It’s a virtuous cycle. And I would never have known without shitposting health nuts on Twitter. I’m not going to get that nuanced a piece of information with specific context out of a doctor or any credentialed body that works to reduce risk. I’d love to see a double blonde study proving the benefits of toking and squatting. Some knowledge is meant to be epistemic. The internet is our culture now. So share your weird finds with your tribe. It gives us all a better shot at better lives.

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Chronicle Internet Culture Media Startups

Day 84 and The Thursday Styles Problem

The Thursdays Styles problem is about zeitgeist, wealth, perception and power. The New York Times publishes its “styles” section on Thursdays and Sundays. Generally speaking if you work in media, public relations or culture, you are aware of the general trends that will emerge on Thursday ahead of time. For the sake of argument let’s say I know directionally on Tuesday in private what will be featured on Thursday in public.

If you know “what everyone knows everyone else knows” ahead of time, there is a lot of money to be made as Tuesday person. For more on the second derivative issues in zeitgeist I highly recommend Epsilon Theory. If you can sense the zeitgeist ahead of time & move to take advantage of it you can be a Tuesday person.

Alas it’s not as lucrative as you may imagine to be a Tuesday person. A Thursday person who lives exactly on the zeitgeist can take advantage of “in the moment” culture moves. Good entrepreneurs do this well. Most consumer companies hit “right on time.”

This is why venture capitalists will ask “why now” as they may have invested in a Tuesday Person who hit the zeitgeist too early and couldn’t capitalize on it. It really pisses off the founder who knows “but I was first.”

As a Tuesday person, I hate when this happens. I loathe seeing people I perceive as less capable or intelligent than me hit a zeitgeist moment exactly on Thursday. The trouble is they are right. They won. They got the timing right. I didn’t.

And yes being a Thursday mover is good. But it’s crucial to understand who can win this game. The only way to win the Thursday Styles problem is to be in finance, media or culture work that can place a call option on the Thursday future on Tuesday. You have to be able to hold an opinion on the future zeitgeist long enough for Thursday to get published.

If you cannot hold your zeitgeist long enough for Tuesday to become Thursday when “everyone knows everyone knows” being right early serves no benefit. You need diamond hands. And yes, you will be wrong 9 times out of 10.

So you need to ask yourself if the New York Times cuts a piece and it takes another week to run can you hold out? If the markets don’t make a Tuesday idea hit, can you wait till it becomes common knowledge on that metaphorical Thursday? It’s a question for all long holds to ask themselves.

It requires patience to be a Tuesday person. And it takes resources. Knowing you will look wrong for a bit. Knowing that you will lose money when Tuesday knowledge takes longer to become Thursday Style’s common knowledge. If you can hold it’s the ultimate form of future leverage. That’s alpha.

And better yet, it’s “possible” to influence. Publicists make their clients on Tuesday shine on Thursday. And capture the upside. Folks who are extremely online spot how market makers make zeitgeist hit. Cathie Wood at ARK Innovations has been playing the media in exactly this way. The largest experiment in making Tuesday thinkers hit before Thursday is Margit Wennmachers at a16z.

Centralizing zeitgeist and monetizing it with future calls with narratives they tell on platforms they own stakes in has massive potential. The smart money is turning their Tuesday zeitgeist into Thursday Styles and taking it to the bank.

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Chronicle Startups

Day 75 and Expertise

I’ve been slowly ramping up advising, investing and consulting work into startups. Initially I was quite hesitant to do any type of consulting as I was fearful that I would not be able to produce enough work in a quick enough time. I thought advising and investing was a safer and higher leverage activity than consulting. I might have been wrong.

My expectations for work are high not because I’m a perfectionist but because I’m addicted to the feeling of reaching beyond my limits. As a workaholic I struggle to let go of work that is “good enough” as work functions as my dopamine hit. I can always do more, produce more, refine more…more more more. This means I often will find myself in situations where the expectations of the person I am working for do not align with my own. I regularly over produce. I’ve got a classic, and telling, story from my first year in prep school that says it all.

I attended Waldorf Schools as a child. One of the core pedagogical tenants is to teach to the child not to the classroom. This manifests in unique ways, including making your own textbooks. Teachers will put a lesson on the blackboard and students are expected to fill this into their own “main lesson” books which function as your textbook for reference later. A child is welcome to add as much depth to their book as they desire. Main lesson books are often elaborate illustrated affairs with extensive reference materials all completely done by hand. This is great for pushing beyond personal limits and the stagnating effect of teaching to the mean. It also happens to suck if you have a tendency to overwork yourself.

I didn’t realize this was an unusual method for years. So when our town didn’t have room for me in the single Waldorf high school, my mother enrolled me in the town’s private prep school for 8th grade. My history course was American History. On the first day the teacher passed out a map of the United States and told the class our homework was to “full it in” for tomorrow.

I went home and spent 3 hours illustrating geography relief maps, sketching in local points of interest, labeling each state and capital in cursive with my best penmanship. I started crying around 10pm as I had other homework for other classes and I wailed to my mother that clearly I wasn’t academically prepared for prep school. I imagined my other classmates with better illustrated maps with more creative ways of showing base relief mapping.

I got to class the next day and my teacher looked completely baffled by what I turned in. I panicked. What had I done wrong? I started laying out all the detail work complete with my methodology for measuring altitude. The teacher seeing me spiral out said “Julie, when I said fill it in I meant label all 50 states with their name.” I was dumbfounded.

That the assignment was so simple never occurred to me. What the fuck was even the point of assigning something that was so rote? To 8th grades no less! What kind of bullshit low grade busy work was this! I was furious. What a waste of time if this was the standard of work.

How little did I know at the time. While I was spending 3 hours on work to the best of my ability straining to extend my understanding, most kids were smart enough to realize their homework should be working to the “mean” of the classroom not to their own standards. I really was not prepared for prep school. Just not in the way I imagined.

This is all a very long winded way of saying that I still tend to do this. Someone may ask my opinion on how to run an advertising campaign and I will launch into extensive detail on demographics versus psychographics and the importance of building out multiple permutations of creative in your funnel to determine the most effective content for the best return on investment. I will give you as textured and nuanced an wander as possible. You won’t just get “Colorado” on the map I will show you the trail over the pass. This is often great for founders of startups who swear the small stuff as much as I do.

If anything I should agree to more consulting work as you will get so much more out of my three hours than someone who can sense the parameters of the work you’ve assigned them. They mat give you exactly the map you asked for even if you need more and didn’t know to ask. I will draw you a geographic relief map so you can navigate the treacherous mountains of paid advertising. Or any area where you happen to be interested in my expertise. I know an astonishing amount about narrative, branding, public relations, user acquisition and revenue growth. And I should stop convincing myself that I cannot produce work that is of value in a consulting framework. What I wonder work product may be more involved than someone else but that’s not my call. Anyone who hires me can decide if it’s worth a consulting fee or not. And if this story has any lesson it’s that I’ll probably give you well over the median or mean expectation for the job. This is also why I don’t charge by the hour. But that’s another story for another time.

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Aesthetics Chronicle Finance Internet Culture Media Startups

Day 62 And Who Can Make Art

My ego dislikes debate, but my heart leaps at tension.

Over the weekend, my friend Phil and I decided to make a functional art installation called Illegal.Auction. The premise is simple: we are selling Fungible Tokens (or NFTs) of Culture. 

Unsettled ideas of generation and representations colliding with abstractions like finance are important issues both culturally and practically.

Art is for itself, so who cares either way. A certain dogmatic insistence that “medium is the message” is pervasive in the critiques. Are movies different than books? I don’t think they have anything to do with the price of milk. It reminds me of the classic Annie Hall scene (speaking of artistic intent and harm) where Marshal McLuhan explodes on a chattering group “you know nothing of my work.” Woody Allen’s character concludes the scene if only real life were like this. Well on Twitter you can recreate this scene everyday!

It is funny because commentary is distinct from creation. And a lot of people have takes on McLuhan that he himself doesn’t agree with. But who cares right? Interpretation of art is ostensibly art.

It’s very interesting to see just how angry people get about the worth and value of culture in particular. As if it’s some monstrosity to comment on the abstract financial value of some creation with worth that cannot be extracted.

If it were so easy to make value judgments about art then we would trade it on the Chicago exchange like pork bellies and orange juice. Not that we don’t already sell art and trade it and frankly it has been a massive tension through the history of human creation how we value that work, but now many have decided to insist that art is non-fungible. Not interchangeable on a one to one basis like an apple. And yet we are acting like everything can be valued and traded so easily with NFTs. By making art tradeable on exchanges, we have made some thing inherently non-fungible, fungible.

This is ultimately where Illegal.Auction came from. These conversations are important and transformative. That we choose to represent the tensions with representations of reproductions of jpgs of art is part of the art installation. That it is a functional sale is in inherent to the tension.

There is a part of me that is really worried that because I am not a practicing artist that is paid for work or represented in a gallery, that I don’t have a right to comment on these issues. I am a technologist and I do work in finance and the overlap of disciplines makes this an inter-disciplinary question in my mind. It seems like some people disagree with my right to create art (and certainly the morality of remuneration).

But if we insist that only artists can make art I don’t have any right to make installations remixing software and representations. But I’m not sure anyone reading this is comfortable with that world. I am not.

I think people want there to be simple yes no questions to these things. Is it legal? Did you steal? Is it a transformative remixing of a cultural artifact? Is it worth $1 million? And the truth is is that there is no easy answer to what political system is best or how much some thing is worth. Trillion dollar industries are based around the fact that we don’t have clear answers. Irate commentary doesn’t help any of us understand the infinite questions of worth and creation. It is good to do and helps further understanding but its crucial to remember indignation and moralizing is a function of ego.

Personally I don’t think that wealth has any moral value. I don’t want to have to be wealthy in order to be valuable. Or if a piece of art I make does make money do you have a right to tell me it is objectionable because this isn’t how you make money? I guess you do. Whether you can stop me from doing it is a central questions for the ages and also literally why it is important to create pieces like Illegal.Auction in the first place.

This commentary I think is worth having. Not whether speculative infinite land grabs with financial instruments make you worth more to billionaires. They probably do. That’s fine! I think people are mostly offended by the idea that non-artists can make art. Especially if a transaction takes place. If we had stamped illegal on the jpgs and blocked out NOT ART on them would it have made it better? Conceptually I’m not sure that that’s true and probably reflects the viewer’s own sense of value and worth more than a legal, political or moral reality. Also I personally think it cheapens the point just to make concessions to dogmatic insistence on ownership in a space that isn’t settled because frankly it cannot be.

Much of the narrative and coverage around NFTs is that they delineate ownership, value and origination more cleanly. I’d argue that they are actually having the opposite effect. NFT’s are ripping away edifice and abstractions that we use to assign value and worth. And that makes people uncomfortable.

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Startups

Day 55 and Promoting Your Loved Ones

I love doing little projects and hacks for my friends and family. I always have a pet project or two on the burner for my nearest and dearest. My favorites are typically leveraging my talent for getting attention. Promoting the work and talent of your loved ones feel great. And it benefits everyone.

My husband Alex Miller has decided to more formally put himself on the job market. Both of us make a living through the wonders and vagaries of start up life. This includes angel investing, advising (which pays in equity), freelancing for the companies we advise (that usually means cash and equity) or if we are very lucky full time work making the rocket ship fly.

It’s hard to capture how someone’s life path qualifies them for a startup job. Typically you are taking on workloads that aren’t fully defined. You bring about whole departments and revenue streams. So Alex and I decided to put together a cross between a resume, a cover letter, a reference check and a compensation package into one website to give founders and startup executives a better sense of what he can help on.

Part of what makes startup life so challenging is that you often have problems more than defined roles. It’s just messy all around. So someone like Alex can say he’d like say operational lead roles or is best with series A to B startup COO roles that doesn’t really capture the full range of problems he can effectively tackle or the types of companies where he would be happy. Nor does it really help founders get a sense of what kind of value he can bring.

So we thought fuck it lets put together a site that can hold as much context as possible and make it easy to share. We put it together in a couple of hours so technically my long form writing for the day was writing up stories on how Alex got into startup work,

The best bit that I’m quite pleased with is a little growth hack to make it easier for venture capitalist or friends of startups that want to help source talent to just hit the email button and send off a referral without having to write a word. So go head and take a look. You might help a friend make some money.

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Chronicle Startups

Day 53 & The Process

Startup land can feel exclusionary and clique driven. Looking in from the outside it can seem as if all the power and money is concentrated into a few groups that only fund and hire their friends. Less charitably it looks like a circle jerk.

While this isn’t an incorrect perception, I believe why we think it is exclusionary is very different from the reality of why it is exclusionary.

Startups are tight knit because successful companies have high psychological safety. We all tend to work together again and again and back each other’s plays because we have built up a high trust environment in order to survive. Even if we don’t exactly see the vision someone else has we trust that they will find a way to make it into a reality.

We don’t trust that this is true for everyone. Ideas are like assholes in that everyone has got one. It’s the ability to turn a formless expanse of ideas and hopes into a company that makes a product it’s customers like. It’s extremely hard to make something new. Harder than you can ever imagine if you haven’t tried it. So people who make a living out of making something from nothing have developed a set of heuristics that let us determine if someone outside our circle is capable of making “a thing” to prove their ideas can become reality.

We tend to overweight people that build tangible things. Even though many of the most crucial skills in business are the less quantifiable ones. We tend to overweight people that have demonstrated any kind of success in zero-to-one work even if what they want to build isn’t remotely related to what was done in the past. This is how despite most of my experience being in advertising tech and e-commerce I was backed to make cosmetics. People had faith that I could flip the bit from off to on.

While this may make it seem hopeless if you are currently not inside the system that’s not what I hope you take away. Startup people love watching newbies make the leap. I cannot overstate the fondness we have for someone gathering up the courage to spring into the unknown. I used to hate the phrase “I’m rooting for you” till I realized everyone actually did want me to succeed. They just rightly realized I needed to learn the hard lessons in my own time. They could give me all the advice in the world (and believe me they did) and sometimes I just needed to make the mistake in order to learn the lesson. The mistakes allowed me to succeed.

Of course, we always hope people will learn from our advice and not require the pain of a fucked up cap table or a growth plan that missed target because we burned our cash position down to three months runway. But most people that are genuinely good at startup work appreciate that only the person actually “doing it” can make the choices that lead to success.

So startup folks will always be excited to give back and encourage those that want to try “doing it” too. If I have a clear ask I find I get an answer from even the most successful and prestigious. Literally CEOs and world famous developers of entire languages will just email you back. It’s honestly miraculous. I have invested in cold emails. Championed them to my nearest and dearest. Because we believe that the process of making something from thing doesn’t exclude anyone. You just have to show someone that you will try to make your vision a reality.

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Chronicle Finance Startups

Day 51 & Unwritten Rules of Startups

I’ve been shifting my working attention towards angel investing. As I talk with more founders, particularly those sent to me by my venture capitalist friends, I’m noticing how much bad advice is circulating in the discourse.

There has been a consistent trend of thought pieces and generalist advice in startup land that gets published by those that find attention helpful to their careers but don’t actually want the risk of sharing the unvarnished truth. Think TechCrunch thesis pieces and founder medium pieces. I’m guilty of engaging in it to a significant degree.

But it’s getting to the point where I feel bad that I’m not doing more to correct some of the bad advice or “true but not in your case” advice. It’s persistent and chronic and doing significant harm to certain communities of founders particularly those that are underrepresented. If you are a founder please DM me on Twitter or email me Julie dot Fredrickson at Gmail for further dish.

Founders regularly get terrible advice on fundraising metrics. Lower your CAC with blending channels (don’t please be honest about cost), you need to show faster growth so increase spend (growth is good but can kill you dead), organic growth is more appealing than marketing spend (it depends organic is hard to replicate and scales unevenly) and my personal favorite stack your MoM growth charts it looks sexier (so does a push-up bra but eventually you get seen naked).

Another area that gets weird is how much bad advice there is in fundraising process. You get told to drive FOMO and excitement but no one tells you just how much investors talk. Founders inadvertently tell white lies that are so transparent it’s the source of constant back channeling. There are so many cliques and power structures you don’t appreciate till you are more entrenched. Startup land lives for it’s petty feuds and rivalries. Be careful trying to play funds off each other as it’s rare for anyone to be fully blacklisted (though it happens) and you don’t know how close to partners may be or if they hate each other’s guts. Some folks look nicey-nice on Twitter but fucking loathe each other in reality. We’ve got cliques for female founders, gay founders, Christian founders, libertarians, fitness freaks, data geeks, retail hounds, SaaS sluts, and yes some of these are just fun to say. Be careful with back channels. You never know who may actually be crucial to your deal or a significant power player. Or who vouching for you can turn an entire deal around. Many of the most respected startup folks don’t maintain social media presence at all. So don’t be rude if you can’t judge how important someone is from their bio. They might tank your deal or get you tracked to a partner who writes a term sheet.

Be carful about optimizing your raise for specific outcomes like valuation or time. I know fundraising sucks but it’s also your job. You will have to do it again and it gets harder each round. You go with a higher valuation and you have to grow into that number. Are you sure you raised enough to hit the metrics? If not you get recapped next round. That only hurts your ownership and the VCs don’t really care. Are you trying to get it done fast so you can move on with your life? Lol guess what now you are stuck with that board member for a decade or till your startup dies. And a bad board can kill you dead. Or make you wish you were. The chances of you slowly sinking because your board has a toxic relationship with you is much bigger than the chance that you will grow so fast you always hit your metrics.

A big part of startup life is accepting that your ego does you more harm than good. This life will humble you. And generally everyone just wants founders to succeed. We want to help you avoid the mistakes we made. But not everything will apply to you. So don’t take every bit of advice or you will constantly be at the mercy of others. Context matters a lot.

But you must learn to listen and adjust your course or you may end up chasing metrics that don’t matter with a board you hate and a valuation that you can’t life grow into.