Founder Fridays No. 135
Open AI’s Legal Structure -- Psychology in Marketing -- The Mona Lisa Problem
Happy Friday.
Open AI’s Legal Structure
Money transforms idealism — even OpenAI's initial nonprofit structure now gives way to a for-profit conversion worth potentially $40–-$97 billion. What began as Elon Musk and Sam Altman's attempts to ensure that artificial intelligence would benefit humanity shifted dramatically when scaling laws demanded more capital than altruism could provide. This governance transformation creates fascinating tensions between mission and money, with lawsuits, regulatory scrutiny, and challenging questions about how tech organizations can honor idealistic origins while pursuing massive market opportunities. As a lawyer who started my career focusing on using legal structures to blend profit and purpose, I’m fascinated by the evolution of this story. Astral Codex Ten (10 minutes)
Psychology in Marketing
Most founders obsess over marketing channels when the real secret is mastering psychological techniques that influence decisions. The right advertising approach can transform ordinary messaging into unforgettable campaigns that drive action. By strategically deploying methods like social proof, scarcity, personalization and emotional triggers, you'll create connections that transform casual browsers into loyal customers. Remember that successful advertising isn't just about what you say, but crucially about how you frame your message to resonate with your audience's deepest motivations. Wordstream (7 minutes)
The Mona Lisa Problem
Most founders obsess over product quality when the real secret lies in cultural context and timing. The Mona Lisa didn't achieve legendary status through superior technique or aesthetic innovation, but rather through a publicity phenomenon that perfectly aligned with society's readiness for an artistic icon. By understanding that success often comes from unpredictable combinations of events, timing and cultural moments, you'll stop trying to replicate formulas that work in fundamentally different contexts. The most strategic entrepreneurs recognize that creating something truly groundbreaking requires sensing where cultural waves are forming, not copying what worked when the tide was different. Seth Godin (4 minutes)
Founder FAQ: How Much Should I Pay my First Startup Employees?
Two powerful rules of thumb can guide your early employee equity decisions without resorting to guesswork. The 10/10 Rule states your first 10 employees collectively deserve roughly 10% of your company's equity, with the earliest five receiving 0.25%-3% each and the next five getting 0.10%-1% each. Rule two establishes the inverse relationship between cash and equity — employees accepting below-market salaries should receive substantially more equity as compensation for their financial risk, while those demanding premium pay packages signal less long-term alignment and warrant reduced equity grants. Remember that while formulaic approaches provide helpful guardrails, your ultimate equity decisions require case-by-case analysis based on each hire's potential impact and your company's unique circumstances. Westaway (7 minutes)
Startup Funding Guides
I’ve put together a series of guides to equip founders to excel at fundraising. These guides break down the deal term-by-term and give you negotiation tips so that you can speak to investors with confidence.
Convertible Note: Guide / Video
Built By Founders for Founders
I co-founded my first startup with friends in 2007. As a founder, I struggled to find an affordable law firm that was designed for early-stage startups. So, I created one myself. Westaway is a law firm built by founders, for founders. If you're ready to ditch the outdated billable hour model and try a new approach to legal services that saves you time and money, let's talk. I'd love to jump on a 15-minute call to show you how we can make legal work smooth, fast and cost-effective for your startup. Schedule a call with me now.
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