Heidi Roizen has yet another great post this week: “How to Build a Unicorn from Scratch – and Walk Away With Nothing.” Every budding entrepreneur should read it. Her post isn’t just about valuations and terms. It is also about thinking through downside. In frothy times, especially when equity starts to feel more valuable than cash (a condition not yet reached …
Workbook for learning financial modeling and excel techniques
I’ve written about financial modeling for startups on here a few times, and included a few sample models. More recently, I led an after-work class internal at Neo for those interested in improving their skills. For those into lean, doing a thoughtful financial model from scratch is one of the best ways to spot hidden but critical assumptions, risks and …
The challenge of a hedging model
A couple days ago, I wrote about entrepreneurship and some level of partial hedging. Actually solving that challenge is, of course, enormously difficult. So much so, that I think it might only really be doable when companies are just starting out, and the equity is worthless. I can see it working in a startup studio that creates its own companies …
The Stupidity of Entrepreneurs
I was hanging out tonight with a bright young man who said, “A great entrepreneur always bets on themselves.” Context: we were talking about hedging. I asked the question: what if founders could hedge themselves against other startups so that if your company failed, you still had a chance for upside? He disagreed. He felt that a great founder would …
Do Market Sizing Early, Before You Jump Into “Lean”
Powerful new ideas often start with a spark insight: “Carpooling sucks! How can we fix it?” Or “Wow, these new smartphones might allow me to disrupt the entire taxi industry in a way never before possible!” Lean is great, but before you jump ahead with customer development, experiments and MVPs, it is worth taking two preliminary steps: 1. examine the …
Startups: Don’t Wait to Build Exit Relationships
Paul Graham’s latest essay warns of losing time and focus to “corporate development” staffers out there sniffing for companies to buy. I agree with him on the corp dev side. But I wouldn’t want people to think that you should ignore potential buyers until “you want to sell your company right now.” It’s a question of whom you talk to. …
Fighting Our Own Biases
In 2010, I became minorly Internet-known as an early adopter of lean startup. I blogged as I went. I made plenty of mistakes. One was not defending adequately against my own biases. I have a soft spot for entrepreneurs of any kind. That’s one of my big honking biases. Liz Crawford and I were working on problems around product discovery. …
Predicting Failure from Failure?
Shane Snow’s new book Smartcuts is is a master class in weaving anecdotes together to make a point in an interesting way. He’ll take A, add B, weave in C, to get you to D. I’ll write more on the highly enjoyable book later, but the tricky part is if one component in the mental journey gets taken out of …
Startup Marketing Is Dead. Long Live Startup Marketing
Marketing has become a dirty word in some startup circles, with the name of the day now being “growth hacking.” And frustrations over traditional marketing’s failures to adapt to a new hyper-connected, hyper-communicative world are valid. But demand generation is as important as ever. Stewart Butterfield, the co-founder of Flickr and founder of Slack, understands this and has made public …
What Lurks Beneath the Surface
I’ll believe it with my own two eyes Humans have a tendency to focus on what they can see to the exclusive of other things. Many years ago, my wife and I lived in a shoebox in Manhattan. We couldn’t afford to buy a place in the city, but ironically we could afford to rent and buy a small getaway …