As an early stage investor I look at A LOT of pitch decks. In the seven years since we started Homebrew there has been some evolution in this area – Docsend, videos, the occasional memo – but the lingua franca among founders and investors is still largely 10-25 slides with several expected sections. And while some of us have very strong personal reactions to certain portions (seed decks should never include an exit slide), we’re generally aware these are lowest common denominator methods of ordering and conveying thoughts in a consistent format. But there’s one common slide that I’m *always* going to offer the same question about – whether you’re building a spaceship or a shoe. If you show me a competitive 2×2, I’m going to ask you what the competitors on the slide would say about it if they were critiquing the matrix categories and their placement.
You see, I’ve never been presented one of these slides where the startup pitching isn’t in the “upper right” (canonical best) square. Sometimes alone by themselves, incumbents and adjacent startups spread elsewhere. Often with another logo or two, but with the startup in an advantaged differentiated position. Very occasionally with a simulated time lapse – ie “Pitching Startup 2020” located one place and “Pitching Startup 202X” located elsewhere, to depict how, over time, the company will move from an unassuming position to one of dominance.
So I’ll review the slide, grok what they’re basically trying to convey and ask “what would your competitors say about this slide?” It’s not meant to be a gotcha! If it was, I just kinda blew it by publishing this post. Rather it hopefully leads to an interesting conversation about how the entrepreneur sees the market. Or how articulate (and intellectually honest) they are about why they selected the two matrix attributes versus any other comparative set. When the discussion falls flat it’s often because the slide isn’t based in reality, the matrices are swerves made to enhance the startup’s position but with very little actual connection to customer needs or strategic advantage. Or it reveals a lack of understanding of the competition.
This is one of those pitch deck slides that’s similar to an iceberg — 90% of the the mass is below the surface. And if we’re going to work together for many years, it’s worth including a thoughtful understanding of your market. Otherwise you’re better off leaving it out – or just taking money from someone who will focus only on the iceberg’s tip.
April 26th, 2013 was the day we closed Homebrew’s initial fund and we consider it our ‘birthday.’ The firm’s why and how were previous blog post topics and I won’t rehash them here, but first I want to share my 2013 Homebrew ‘premortem‘ with you.
When Satya and I started Homebrew together it was with full intention to be our ‘last career,’ what we’d be doing for the next 20 years or so. And if this *wasn’t* the case, my POV was it would be explained by one of these three reasons:
I didn’t like venture
Satya and I didn’t get along
Satya and I weren’t good at our jobs
So where are we now, with approximately 2,500 days of evidence?
Well, turns out I don’t generically like venture *but* I do love Homebrew. That is, it’s difficult for me to imagine being part of someone else’s fund. Even with the firms I respect tremendously, I have little desire to be the third, seventh or 14th partner around their table. I like our size, our strategy and the shared, equal responsibility Satya and I have to deliver against our promises to founders, LPs and one another.
And my relationship with Satya? It’s great – the whole is greater than the sum of its parts. Partnerships are dynamic and neither of us take the harmony for granted, but I’d be very surprised if there was ever an issue between us that could cause Homebrew to dissolve prematurely.
Number Three, are we any good? There’s a tendency to pronounce victory prematurely in our industry. Here’s how I define GOOD in venture: multiple consecutive funds where you’ve beaten your benchmarks while employing a repeatable strategy. By that measure it’s too early for me to answer but we’ve gotten off to a nice start. I’m confident that founders and coinvestors trust us. The founder feedback surveys we run every other year via a 3rd party give us positive indications that we’re living up to expectations (and of course, always a few things we could do better). Entrepreneurs are our customers and they keep us in business.
We’re investing out of our third fund now (which should take us to 2022) and have a solid group of institutional LPs backing us. Our first fund has already returned over its original principal to investors and we’re fortunate to have quite a bit of value still on paper (which we never assume means anything until it’s liquid). So by my own criteria, I’m not yet ready to say we’re “good” — won’t know that until mid-decade – but I can say we’re “not bad.”
Some of you know I have the Homebrew logo tattooed on my right shoulder. I did this to capture the creation of something meaningful. Thank you to Satya, our team, the companies we’ve backed, the coinvestors who work with us and our partner LPs for being the meaning behind the ink.
(Part 2 of this post will be responding to my AMA tweet and I’ll try to get it out within next few days. thanks for patience)
How do you value a human life? Planet Money takes us through the economists’ lens with a history lesson on how this questions has been answered in public policy debates over the past several decades (which is different than say, damages for wrongful death lawsuits). Bunch of new information for me including:
“There’s a rule that any federal safety regulation that’s going to cost more than a hundred million dollars a year has to pass a cost-benefit test. So, for example, seatbelts that beep at you – how much would it cost to install beeping seatbelts, and how many lives, in dollars, would be saved by it?”
“We do not adjust the value of statistical life for age. That means we don’t have a senior discount. That also means we don’t have a baby boost or child boost. It’s the same number, whether you’re 2, or 42, or 82. And I think a lot of people can see the problems with that.”
Matt has run WordPress/Automattic as a distributed team since the very beginning, even eliminating a beautiful SF office to ensure there wouldn’t be an implicit status bias towards “remoting” from SF. So I consider him one of the most thoughtful leaders when it comes to these questions, having accrued his “10,000 hours” of time on the issue (plus generally being a smart fellow).
This post is a short summary of a concept he covers on Sam Harris’ podcast, modeled after the five levels of self-driving autonomy (although it kind of also reminded me of Buddhist practices). Level Zero is a job which cannot be done today unless you are physically present and Level Five is… well, click through and read.
Twilio’s CEO Jeff Lawson should be included in any discussion of “who are the most impressive startup CEOs of the last decade.” Helped invent the commercial cloud API as part of the developer stack, took his company public (currently $15b market cap) and leads boldly and outspoken with values/culture. So I’m going to pay more attention to his lessons learned over the last few weeks than your Twitter bon mot. This interview is part of ExtraCrunch [paywall]. I’ll tease you with the ending paragraphs:
“I miss seeing people,” he says. “I think a lot of folks’ lifestyles are going to actually adopt more virtual work. I wouldn’t be surprised if we all come back and people are more likely to take a day or two a week and decide to work from home. We’ll know how it all works; it won’t be mysterious or scary, or like someone’s not showing up. It’ll just be… natural.”
“I wouldn’t be surprised,” he continues, “if there are some employees who say… ‘you know what? I actually really liked that. I don’t want to go back to the office.’ And you know what? I bet that’ll be okay.”
“I think there will be some folks who just can’t wait to return to the office — and that’s fine too!”
The only hesitation over including this beautifully written profile is the flinch I sometimes have when a protagonist isn’t in the position to give consent (Lee, the third founder of Cloudflare who is suffering from dementia). But it’s clearly done with love and caring, and the participation of his friends and family. I’ve met Lee’s cofounders Matthew and Michelle and I read this story twice – first as a Cloudflare history and then as an individual’s personal journey. Both were valuable and impactful.
I’ve mostly resisted the online tech conversations around “COVID will change [X] forever,” although I do especially love the ones which are basically tells for the individual’s true id (“i think post-COVID, polyamory is going to be really popular”). BUT I have dived deeply into the parenting conversations around “what is this doing to our kids?”
Obviously – as with all things with child-rearing – there’s no consensus. No one’s situation is exactly the same – a high school senior who just had their prom and graduation canceled is going to be different than a kindergartener who likely won’t remember any aspect, at least of this spring. Of course a family where someone has been laid off, or even worse, are dealing with the grief of losing a family member or close friend, may never be able to forget April 2020.
Personally I’m trying to treat this as an opportunity for my elementary school child. An opportunity to talk about our family coming together to keep one another, and our community, healthy. An opportunity to reinforce values of citizenship and leadership. An opportunity to nag about hygiene habits, creativity and self-instruction.
But each of these are on a spectrum. Go too far and I risk raising a fearful child, who loses her love of travel, OCDs about the last time she washed her hands and has difficulty attaching to others. And this is coming from a dad who defines “success” as my daughter eventually goes to therapy for something less serious than the reasons her parents do (ie I don’t believe you raise “perfect” children; you raise loved and resilient children).
So I begin each day, or week, and ask myself ‘what lessons do I want our daughter to take away from this week?” Plus ‘what lessons *might* she take away that I don’t want her to learn?” And then we do our best.
Our friendship began as many do – in a bar a few days after I’d been told that Lenny (a) just left airbnb and (b) was smart. Upon receiving the tip I clicked over to his Twitter profile where I saw that indeed he had left airbnb and that he was clearly super duper smart because he already followed me. A DM-slide and poof! cocktails and product management war stories ensued. In the time since he’s written some really wonderful posts and now a newsletter that’s going paid subscription, so seemed like an opportune time to ask him Five Questions...
Hunter Walk: So like, we’ve been friends for a year now. I went back and checked and it looked like I Twitter stalked you when you left Airbnb. Before we jump into Present Day Lenny, can you share how you initially got involved with Airbnb and, leading the witness, had you intended to stay as long as you did?
Lenny Rachitsky: I have this memory I’ll never forget of sitting in an early Airbnb all-hands looking at a big ass Airbnb logo (the old one) projected on the back wall, and thinking to myself “wait, how the hell did I end up at Airbnb??”
I was CEO of a little startup (Localmind) which we started in 2011, and things were going great. Growth was up, we were regularly getting featured in the App Store, and we were just about to kick off our seed round. But when Airbnb can knocking, we quickly realized that our most likely long-term outcome was going to be an acquisition, and that we couldn’t think of a single better company to end up at. So we sold.
When our team came on board, I quickly moved into product (I was an engineer up to that point), and held on for dear life for seven years.
One of my favorite memories from the early days is of Joe talking to an engineer/designer who was working on an update of the homepage literally a few days before a major launch. She was asking for feedback on what she thought was a complete homepage. Instead, Joe offered, “build something the internet has never seen before.”
And the funny thing is that she did (a sweet parallax’y hero image deal). That moment is actually a great microcosm of Airbnb. Never settling for good enough, always looking for ways to push further, and expecting the very best from everyone.
Did I intend to stay there for seven years? Hells no. When I started, I gave it a few years tops. But man, it’s a tough place to leave.
HW:What’s your decision framework for how you choose to spend time these days? I know you’ve done some advising and angel investing. But there have been some fun side projects too with regards to personal interests.
LR: My simple strategy for this year of exploration (which I’m so incredibly fortunate to have) has been to spend as much time as possible on things that give me energy. And as little time as possible on things that don’t. That’s it.
Though my original plan after leaving Airbnb was to start a company again, through this process, I discovered two things:
What I don’t want to do: Specifically, become a full-time VC (no offense Hunter), write a book, or start a product management training course. These are things that folks keep suggesting I do, but I do not enjoy them and am trying hard to avoid sliding into these default paths.
What I do want to do: I’ve discovered the things I enjoy most, at least for now, are writing, angel investing, and advising. So I’ve been trying to build a life where I can do those things.
As a result, these days, I spend about a third of my time advising, a third investing, and third writing.
HW:Ah yes, your writing. I’ve loved the newsletter and am glad to see you’re really committing to it with a paid subscription tier. I’m sure it was already opening doors for you professionally so what was behind starting to charge? Starting to build an income again? Signaling worth for the content? Challenging yourself to up your game?
LR: Folks seem to think I’ve had a well-thought-out plan with this newsletter. Honestly, I’ve been figuring it out as I go along.
I first started writing as a way to get learnings out of my head, before I forgot them. Then, as people started asking me smart questions about things I didn’t have great answers to, it gave me an excuse to go learn more myself (and have better answers). So I embarked on some in-depth research projects (e.g. marketplace growth), looped in smarter people on topics I have little experience on, and collaborated with other great publications to reach new audiences.
Why’d I decide to start charging? For a very simple reason: I want to avoid getting a real job. I’m trying to see if I can make a real living doing this eclectic combination of writing, investing, and advising. It’s a life experiment! Plus, there’s a really neat flywheel between these three things that’s become a huge bonus.
HW:Does this also mean you’ll have a budget to get some custom illustrations from your wife? Along this same timeframe I’ve gotten to know you, she published a best-selling book. What has riding along that experience been like?
LR: If only budget was the reason she doesn’t help me with my newsletter design 😂 She’s definitely got better things to do, plus she tries to avoid the tech world as much as possible.
But, I’m glad we’re clear that Michelle is the real star of our family. She’s as talented as she is modest, and I couldn’t be more proud of her. If readers don’t already follow her on IG, you’re making a big mistake.
Watching her publish her book (excellent reading for the sheltering lifestyle btw) was an illuminating experience. It’s partly what convinced me NOT to write a book. For her, it was a life goal, but the economics are ridiculous, and I’m convinced that for what I’m doing, investing that time in a paid newsletter is a much higher ROI use of time.
HW:I’m sure there are new grads and folks early in their tech careers for whom you’re a role model. What’s the advice you’d give someone now – and has any of that been changed by what’s currently going on with COVID19 and what the world might look like on the other side of this?
LR: This may be the first time anyone has called me a role model, so I have to let that process for a few days.
Some timeless advice I come back to when wondering what to do:
Do great work, create value, and good things will happen.
Spend as much time as possible on things that give you energy.
Work at the intersection of (i) things you enjoy doing, (ii) things you’re good at, and (iii) things that other people want.
Beyond that, for people early in their career, I would suggest optimizing for “variety of experiences.” Do as many different kinds of things as you can. Not only does trying a bunch of things help you find what you enjoy doing most, but also later in life you’ll find that many of the things you learned early on will be essential puzzle pieces in the work you end up doing. I’m pretty sure Steve Jobs said something similar, so it must be true. Explore, tinker, and take risks!
And finally, for the post-COVID19 world, my general take is that it’s going to further accelerate software eating the world (if that’s even possible), and so there’s even more reason to guide your career towards tech. At least the early part of your career. That decision early on for me, to get into software development, was the one thing allowed me to have this freedom to take time to explore and new paths. I’ve been so unbelievably lucky.
Thanks Lenny! I’m a happy paid subscriber to Lenny’s Newsletter and recommend you check it out as well (there’s a free tier too).
Earlier this month I finally reconciled a conflict that challenged me since COVID really crashed our shores in early March. Basically that it’s ok to both feel fortunate that we’re staying-at-home together as a healthy family with more resources than the average American, while at the same time acknowledge and honor the anxiety the situation is causing me.
Wanting to get my daughter back to school where she is able to learn, develop and explore. Wanting to support the founders we backed as people (not just investments) who are confronted now by market forces for sure, but also needing to knit a social and emotional infrastructure to help their teams. Wanting to sit next to my partner Satya at Homebrew HQ, not just Zoom from my dining room. Wanting to not hold my breath when someone walks by me, even if there’s six feet of separation.
For a few weeks any time those needs came into my head I pushed them aside, embarrassed that this was where my mind was going while people lost their jobs, suffered from a horrific virus, or any number of other more substantial dislocations than we’d encountered. So we gave to different charities (support FrontlineFoods) and checked in on friends with difficult situations, because those were good legitimate things to do.
But I wasn’t sleeping well. One night I fought vampires. Then Thursday it was some weird scenario where I left early from a friend’s wedding and couldn’t get back into the venue when I felt ashamed to have ditched. Then there was that one with the tentacle porn… nah, not really that one, just wanted to see if you were still paying attention.
When people would ask “how are you holding up” (or whatever basic inquiry you’d start with before jumping into the meat of the Zoom), my standard response was bravado and apology. “Great, really lucky. I know there are so many people suffering.” And it was true but only a half-reveal. So in one particular conversation I didn’t stop with that explanation but added on, “…still at the same time I don’t want my kid to have a childhood shaped by this experience. And I want to be giving great advice and counsel to our CEOs but in some cases we’re just going to have to figure it out as it evolves. And my puppy peed on the floor and I don’t know if she’s just mad at us or if something is wrong. And…” Well, it didn’t go on forever but you get the sense.
Then my conversation companion paused and shared his own version of what had been troubling him. And it was just as messy, and dumb, and serious, and trivial. And he was happy to be able to shed the “I got my shit together. Wartime CEO.” suit for a second and just be human. And I started having versions of this conversation with more people. And I was no longer battling vampires or missing weddings in my sleep.
Kia Kokalitcheva is a San Francisco-based technology and business reporter at Axios. She covers tech, Silicon Valley, and venture capital. We’ve known each other for a while – she was previously at Fortune – and besides appreciating her work, Kia has always struck me as a no BS person who will tell you where she stands. Whether I agree with her or not on an issue, I like the forthrightness. And I’m happy she agreed to Five Questions with me.
Hunter Walk: If “the medium is the message,” how does Axios’ newsletter-first strategy shape the reporting you do and the format it takes?
Kia Kokalitcheva: Our newsletters have evolved over the years but today, we’re constantly thinking about what makes a story good enough to “lead” one of our newsletters. Why should this be the main story a subscriber spends their time on when they open the email? For me, that means either a story with original reporting (a scoop, an interview, an original dive into a subject) that readers can’t get anywhere else. If that’s not possible, then original analysis or arguments about information already out there!
At the same time, we know subscribers often use our newsletters as the way to get their daily dose of news in one shot, so that also means catching them up on smaller news they may have missed, links to longer stories if they want to go deeper, other information they may want, charts, etc.
HW: I’ve never quite understood the relationship between editor and reporter. At some publications it seems like editors have to approve story topics, whereas at others, it’s more of a post-submission content review/improvement function but not an approval per se. How have editors played a role in your career across three companies?
KK: So the thing to know is that there are different types of newsroom cultures, and different types of editors. Some are more driven by editors while in others, reporters take the lead, and some are a mix, varying across the different products they put out (website, newspaper, magazine, etc.).
Because I’ve always worked in (mainly) online newsrooms, I’ve always had a lot of flexibility and room to use my judgement and write the stories I think are needed, important, or interesting for readers. But editors have also always been a great source of knowledge and wisdom about improving things like sentences, story structure, angles, subject matter expertise, and guidance in getting the necessary reporting done. At Fortune, for example, the range was wide—from self-guided decisions to write a short online story about Uber’s latest big news, to pitching the print magazine’s editors and then going through very heavy-handed (but amazing) editing to get to the final process, and everything in between.
At Axios, I regularly go ahead and write stories that I know are important for our audience, and get an editor to work their magic on the draft before publishing it. At the same time, I also regularly chat with certain editors like Dan (Primack), who is also my boss, about story ideas I’m thinking about before I start working on them.
HW: It’s only natural that a technology reporter also develops friendships within the tech community. How do you navigate these relationships when you might be reporting on someone you know (or their company)?
KK: Journalism is built on a foundation of trust and truth. While I have friends who are also sources, those friends know I wear two hats — the professional and the personal — and know that I separate those two. I am pretty good at setting and managing boundaries. Friends know what to say and not to say, and they also know that if we’re hanging out in our off time, I’m not going to burn them if they accidentally blab.
HW:What’s your take on reporters unionizing at media companies and news startups? And do you think we’ll start to see similar at technology companies (I guess Kickstarter may be the first)?
KK: To be honest, I don’t personally have an opinion on unionizing, so I’ll leave it to others to decide whether it’s a good move for themselves. But I’m not surprised to see a number of newsrooms make that choice — newsrooms have been precarious workplaces thanks to the turbulence of the industry.
HW:Over the past few years there has been more open discussion of the ways the tech industry has mistreated women within its culture. Do similar issues occur within journalism and do you personally feel like as a female reporter it’s getting “easier” to do your job outside of this bias?
KK: I think a lot of what’s come out really is what women have to face in the workplace in general because it’s a societal problem. So yes, women in journalism—as in workplaces everywhere—face stereotypes, bias, discrimination, sexual harassment, and so on.
We’re long past the days when women weren’t allowed to have a byline and could only get “researcher” jobs at news outlets, but I’m also not sure it’s noticeably changed in the 6 years I’ve been doing this. But I do see a lot of encouraging signs! For example, Axios’ original team of tech reporters was majority-female, had a woman as the tech editor, and a woman leading its main newsletter (the team has since expanded and evolved so this has changed a bit, but we still have strong female representation). I also recently noticed that most VC reporters I know or bump into at industry events are women, so like it or not, this industry has to answer questions from one (or many) of us even if we’re still underestimated sometimes 😉
Thanks Kia – everyone go follow her on Twitter and read her at Axios
Lots of mutual bad faith. Reporters I respect indulging themselves in screenshotting and quote dunking tech folks, performative for their tribe. Executives, investors and other prominent SV personalities believing they’re Martin Luther tacking 95 tweets to the doors of establishment media shouting down supposed hypocrisy and calling out errors. I’m a tech industry bro who also is a journalism fanboy, and the above just makes me sad. So let’s do this and get both sides mad at me….
My friends in the tech industry, here are things you do/say about the media that I believe you should rethink:
Not all critics are “haters” and please stop adopting the language of our President to deride reporting. Fake news, online hit job, MSM, a takedown — these glib characterizations (even if you believe them to be true) bring so much nonsense and baggage along with them. Read the negative coverage and decide what’s legit, what’s a misunderstanding and what you want to reject/ignore. Then just move on.
You are not as much of an underdog as you think you are. Over the course of my career in technology, we’ve moved as an industry from scrappy underdog to dominant incumbent. Industrial capitalism has given way to technology capitalism. The largest public companies are tech-related. Many of our skills are in deep demand from labor markets. I know – especially at a young startup – it can feel tenuous and risky, but compared to almost any other industry, in every other geography, we are structurally empowered right now. And we – as an industry – have continued to build some wonderful stuff, but we’ve also had examples of fumbling the football with regards to appropriately understanding and prioritizing the secondary impacts of the work we do. And of looking at the culture of our own workplaces and building spaces that can be healthy and inclusive. So just as you think the media is “punching down” when they critique us, they generally see it as “punching up” and hold power accountable. Sometimes they fuck this up – don’t worry, I’m going to yell at them in a bit too – but you’re not some precious hothouse flower which needs protection, so spare me the “man in the arena” quotes.
You want to content market yourself but then think follow-up questions from the press are not worthy of response? The media isn’t looking at your github pull requests and asking glib questions. They’re reading your blog posts, your tweets, your podcast transcripts. If every individual, VC firm, startup is using these platforms to build their brand and puff their chests out, please spare me the indignation when reporters want to ask you for comment. It doesn’t mean you have to respond – no one owes anyone this – but realize that when you put yourself out there for purposes of self-promotion (and it’s all self-promotion – me included!) that you are inviting a magnifying glass.
Pay for media. You care about reporting? Make sure you are paying for it. Even if it’s not perfect. You think there’s truly a market for “unbiased evidence-based reporting?” Write a $100,000 check to a reporter and let them try to do it. Put some skin in the game if you want to critique journalism.
Ok, my reporter friends. Here are specific things that some of you – or your industry colleagues – do that I believe undermine your credibility in specific instances.
“Red Team” yourself into a biased corner. A reporter I know told me that their job is only to Red Team vs tech. I felt sad for them. It’s not that a reporter’s job is to write “both sides” of the story, or to balance their negative coverage with positive stories, but I do fear that over time this type of newsroom (and culture) narrows its perspective. And also applies the same level of Red Teaming outrage equally to very different circumstances. For example, highlighting a young individual who made a stupid tweet or blog post vs truly speaking truth to power.
Overgrant anonymity, especially to direct quotes. I’ve written “you can always find an anonymous former employee to trash the founder.” There’s a school of thought in some journalism circles that anonymity is a precious privilege to be given out only when the information being secured is so important to public good, and the person doing the speaking is putting themselves in such a compromising position, that it’s worth robbing the reader of their ability to judge the information in context of who is saying it. This is the school I subscribe to. Every day I read articles which give full anonymity to almost anyone while also do direct quoting of what they said. “We wouldn’t get the good quote otherwise” some reputable reporters tell me. Well you know what, then maybe don’t get the good quote. If you want to grant anonymity, don’t use direct quotes. And if you must, at least provide context. “…said ex-employee” is meaningless – was this a VP there for eight years with intimate knowledge of the situation? Or a low level individual contributor there for two months and now talking out of their ass? Reporters want to say “well, you need to trust us on this sourcing” but I’m sorry, that’s a lot to give over for 95% of issues. If you can’t get people on the record, maybe it’s not a story. If you can only get a handful of low level people to comment anonymously about a 50,000 person company, maybe it’s not yet a story. Do more work.
Blame the media business model or editor for your content or the headline. “We’d love to do more [longform; sourcing; data gathering; fact-based headlines] but [my editor, the social team, the business model] doesn’t allow us to.” I’ve heard enough variations of this from enough good reporters. And I feel for them. But please, some accountability. I’m sorry if these pressures are putting constraints on how you want to do your job, but you need to own it. And try to change it. Just as you might ask tech workers to not be part of companies or systems which compromise their values, I ask you to consider the same.
So what to do? The tech industry needs to understand that a challenging press is important component of society. And some in the tech press have developed a number of habits/assumptions which I believe weaken their own impact. And I generally wish more reporters could experience the other side of the table – Jessica Lessin’s observations as she went from newsroom to startup have always struck me as the type of self-reflection that I wish we could make more common. Maybe I can figure out how to let a journalist embed in Homebrew for a week….
We opened our own public library this week. On our lawn. It’s modest in size but made us part of a worldwide network called Little Free Libraries. Books have played a huge role in my life – always an enthusiastic reader and my first jobs were at a hometown public library and then a local indie bookstore. So when my daughter noticed these curious boxes on people’s lawns all over SF filled with books, we leapt to support her curiosity.
Turns out Little Free Library is nearly 11 years old and started with one guy in Wisconsin! Now there’s a global network of people who buy or build their own, for installation at their home or business. You fill it with books and encourage people to take or leave their own. Some folks are very creative with their designs (Instagram).
Decentralized communities supported by technology – I spent much of my product management years helping to strengthen platforms that encouraged these types of relationships. In an era of political tribalism and ‘glass half empty’ views of the Internet (yes there are some very real problems but…) I find great optimism and hope in observing and participating in these efforts. And now I finally have somewhere to put those copies of Sapiens and Ray Dalio’s book that I never actually read.
2019 didn’t herald any major innovations in how early startup employees receive equity. Which is a shame since, on the margins, the most talented hires deserve more of it. On the positive front, I did encounter more founders making early exercise available to their teams and much less resistance overall to the idea of a 10-15% pool (perhaps because valuations continued to increase so founders themselves were taking less dilution in financings). A subset of startups we worked with also made changes to their equity plans which allowed for longer exercise windows in the case of an exiting employee in good standing (usually who have stayed a minimum of two years at the company).
Perhaps I’m just not looking in the right place for changes – it’s more likely the non-venture backed companies that will explore dividends, profit-sharing and other mechanisms for rewarding teams in building an enduring business. For startups like Carta, this looks more like structured secondary programs.
It’s the second time founders – especially solo founders – who often think most deliberately about these issues. They saw how previous outcomes did – or didn’t – reward teams proportionately. They have people in mind they want to pull into their new venture and know often these folks will be leaving money on the table from current gigs. They are often more aware of what their role requires as CEO (and sometimes their own strengths vs weaknesses). And as they’ve articulated to me, rather than have a single cofounder, they’ll take 20% of the company’s equity and provide real incentive to the founding team and early executives.