Founder Fridays No. 136
Why OpenAI Really Fired Sam Altman -- Values Into Action -- Start Small, Win Big
Happy Friday.
Why OpenAI Really Fired Sam Altman
Ever wonder what happened behind the scenes when Sam Altman was fired from OpenAI? Behind every corporate drama lies a clash of personalities, principles and power dynamics. OpenAI's nonprofit board dramatically fired CEO Sam Altman in November 2023 after collecting evidence of alleged deception, including misrepresentations about safety approvals and lack of transparency about his personal ownership of the OpenAI Startup Fund. The board's concerns were fueled by whistleblower complaints from senior executives, including CTO Mira Murati and co-founder Ilya Sutskever, who documented a pattern of alleged lies and toxic management — yet ironically, these same executives would later sign a letter demanding Altman's reinstatement. Wall Street Journal (10 minutes)
Values Into Action
Your values are meaningless until they directly influence decision-making. True belonging in organizations comes from creating a shared belief system that people can opt into, allowing them to find fulfillment and become a "useful engine" in their work. Instead of relying on one-size-fits-all goals for diverse teams, establish three strategic themes that everyone can connect to, creating an organization whose whole exceeds the sum of its parts. Operationalizing your company's "taste" — those subjective but crucial elements like aesthetics or design philosophy — requires making meta-tradeoffs based on values before specific decisions arise, enabling consistent choices even as you scale. First Round Review (11 minutes)
Start Small, Win Big
Conventional startup wisdom says "go big or go home," but the most successful founders master the art of starting ridiculously small. The lean methodology isn't just about cutting costs — it's about validating ideas quickly and reinvesting every dollar of revenue directly back into growth while maintaining complete control. By deliberately choosing business models with low startup requirements like service-based, subscription or digital products, you create something sustainable that can scale without dilution from external investors pulling you in different directions. Whether you're selling knowledge, services or physical products, the path to bootstrapped success follows the same pattern: minimize overhead, test assumptions quickly and grow only after validation. The Founder Corner (10 minutes)
Founder FAQ: What Should a Startup Founder’s Salary Be?
Investor Peter Thiel notes that one of the most important factors he looks at before deciding to invest in a startup is how much the CEO is paying himself. He says, “The lower the CEO salary, the more likely it is to succeed. The CEO’s salary sets a cap for everyone else. If it is set at a high level, you end up burning a whole lot more money. It aligns his interest with the equity holders. [Beyond that], it goes to whether the mission of the company is to build something new or just collect paychecks. In practice, we have found that if you only ask one question, ask that.” So, does that mean that startup founders should be living off instant noodles until they exit their company? No. But it probably does mean that a high salary, say above $150,000 at seed stage, will raise some questions from investors. More practically, it will accelerate the burn rate. Westaway (5 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
Control Legal Spend
Startups suffer from unpredictable legal bills under the billable hour system. Fees fluctuate month to month without warning. Law firms drag out billable hours, but startups foot the bill. Even basic work can lead to surprisingly high legal bills. This unpredictability cripples financial planning. Budgets rarely match actual spend. With utter uncertainty around legal spend, startups cannot forecast or manage burn rates effectively. The antiquated billable hour system fails them. Our General Counsel flat, monthly fee service gives startups cost certainty. Legal spend becomes predictable with bundled services and no surprise overage bills. By switching from hourly to our flat-fee model, startups finally get confident budgeting, accurate forecasting and predictable legal spend. If you’re sick of getting surprise legal bills and are interested in controlling your legal spend, let’s talk.
Post of the Week
