On the value of Judgement

We’re told not to judge, lest we be judged.

But we are judged, by our customers choosing between us and a competitor, by our employees choosing whether to entwine their careers with our fate, by our peers, allies, and passive-aggressive antagonists on social media.

Rather than avoid judgement as a sin, we should invest in it as a skill.

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Scaling by “delegation” isn’t good enough

Young founders may fancy themselves wizards of coding, design, and salesmanship, because they’re individually excellent; I did! But it should be obvious that those skills don’t mean they can build a team of 75 engineers that balance quality with speed, or build an international sales team guided by principles other than overwhelming exuberance, or develop a consistent brand with a voice and adherents, or manage cash flows once the P&L becomes abbreviated “in millions,” or navigate HR and insurance and office leases and those various “industry-standard boilerplate” contracts that nevertheless all differ in ways that aren’t rounding off in your favor.

The usual solution to this is “delegation,” but that doesn’t scale, nor does it lead to greatness. Here’s how to think about it properly.

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Fermi estimation for startup business models

Early in a company’s life, you don’t know anything. Often your best estimate of any metric or market behavior or business model assumption is accurate only within a power of ten, for example “expected conversion rate between 0.5% and 5%” or “cost to acquire a customer between $50 and $500″ or “average monthly revenue per customer between $20 and $200.”

Fortunately, being accurate only within a power-of-ten can be surprisingly useful. The method is called “Fermi Estimation.” It’s useful because it’s easy to get to a rough answer to an otherwise-unknowable question, but also ensures you don’t erroneously ascribe too much precision to that answer.

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New Year’s Questions (neé Resolutions)

Do New Year’s resolutions work? Studies say “no.”

Maybe asking good questions of yourself is a better way to lift your eyes to the horizon of possibilities for 2015. What good questions have you not taken the time to ask?

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The wrongness of relativism

Instagram had 13 employees when they sold for a billion dollars. Was there any working startup founder who didn’t feel depressed when that happened? Yes, depressed. All those years of toil and sacrifice, the pain of scaling a complex organization and a complex product, scratching and clawing for revenue growth month after month, and you’ll never have that sort of exit, and a 26-year-old founder did it in only 2 years, with 13 buddies, with $0 in revenue, never having had to worry about gross margins or hiring at scale or making sales calls or running out of money.

“It’s not fair,” we all said to ourselves.

That was before WhatsApp sold for 19 billion dollars, with 55 employees.

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For marketing early startups: Deep, not wide

Spreading your precious money and even more precious time over many channels doesn’t get a company off the ground. Typically, successful companies find one channel that really works, and then plumb it to its maximum inventory before layering on additional channels.

How to pick the one channel? Especially since “spray and pray” isn’t a good way to find the answer?

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The Lindy Effect on startup potential

When you’re exploring something new, where the terminus is unknown, you never know how far along the path you are. On average, however, you’re halfway there. This is due to the very definition of “average” — you’ll spend half your time before the half-way point, and half after.

The general rule is called the Lindy Effect: For certain non-perishable things (like technology, companies, and ideas), the expected lifespan increases according to the length of its current age.

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The hidden benefits of Uniform Culture

Requiring uniforms in schools has been a subject of debate in America for decades; today 20% of public schools require uniforms. Many Americans find this repugnant because it mutes personal expression, further reinforcing the notion that people are standardized factory workers instead of creative individuals, as well as an implication that your unique style is unimportant or de-valued. As Banksy says, “The creative adult is the child who survived,” and uniforms are yet another way in which the creative child is killed.

Surveys of students in those schools, however, reveal that more than half are happy to have the uniforms, naming a variety of benefits, and say it doesn’t prevent them from personal expression.

There are indeed benefits that Americans ought to prize. For example, it removes class-culture. With a uniform, you cannot tell from visual inspection how much money you have, what family you came from, or where you were born. You have to judge the person, not their appearance.

Applied to a corporate context, those same benefits accrue, and more: You can’t immediately tell their title, their status, how smart they are, how wise they are, or their seniority.

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Pricing determines your business

It’s often said that you shouldn’t talk about price during customer development interviews. The usual justification is that your goal is to uncover the details of your potential customers’ lives and pain-points, whereas a mention of price turns attention away from that topic, diverting the discussion to budgets and comparative value.

But I disagree. Price is as important as any other feature to determine product/market “fit.”

How many times have you heard someone agree that “it would be great if someone did X,” but when show them someone did do X, but it costs $39.99, they don’t buy? Or seen a review of an iPhone app hung up on pricing trivialities: “It would be pretty good at $0.99, but it’s not worth $1.99.” How many times have you seen someone struggle with an inferior product because they cannot afford the better one? Or struggle with an inferior, expensive product that was purchased based on the salesmanship — the idea that “expensive must mean it’s better” — instead of craftsmanship?

Price is inextricably linked to brand, product, and purchasing decisions — by whom, why, how, and when. Price is not an exercise in maximizing some micro-economic supply/demand curve, slapped post-facto onto the product. Rather, it fundamentally determines the nature of the product and the structure of the business that produces it.

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Stubborn Visionaries & Pigheaded Fools

How to make decisions faster, with less guilt. And less credit.

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You’re a company when…

My hope is that you’ll point up to that sign five years from now and explain to the children in your back seat that it’s there because of you, not just because “I was there,” but because you actually helped create it, one customer at a time, whether you thrilled them with customer service so deeply that they convinced a friend to sign up too, or helped them find us through the fog of “web hosting” propaganda, or helped them decide whether we’re the right partner for their business, or got them excited and saved them hours of drudgery through platform features, or helped all of us run the company smarter through finance and metrics, or made our office a lovely place to come to, or ensured that everyone we hire shares our values, or if you’re the silent hero who put out fires at 3:15am while everyone else slumbered in bliss.

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In its emptiness, there is the function of a startup

Thirty spokes join in one hub
In its emptiness, there is the function of a vehicle

Mix clay to create a container
In its emptiness, there is the function of a container

Cut open doors and windows to create a room
In its emptiness, there is the function of a room

Therefore, that which exists is used to create benefit
That which is empty is used to create functionality

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The only way to guarantee startup success

“Backstage, after their amazing performance, I chatted with [lead singer] Dave Gahan as he cried from pure happiness. He told me that the tears were because he didn’t know if the group could ever pull off anything this great again and for him it was the most emotional concert of his career.”

But what does it mean for you or me, that reaching the pinnacle of success is not only strikingly fleeting, but also sad? That tears of joy transmute immediately to tears of sadness, because reaching the peak means by definition your next steps must be downhill?

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