Founder Fridays No. 42
Helping founders scale smarter.
This time last week I was in Napa with an amazing group of people for the Operators Guild Summit.
The speaker lineup was great. We learned about branding from Megan Loyst of GenZ VC. We learned about being a lifelong learner from Mark Hawkins, former President and CFO of Salesforce. And we got to see some pretty powerful early demos of how companies like OpenAI, Gusto, Vareto and Puzzle are applying generative AI to enhance operations.
The content was great, but the people were better. The Operators Guild (OG), as the name would imply, is a peer network operators (think COO, CFO, Head of Ops) of some of the fastest-growing and most innovative companies in the world. Everybody I met was super sharp and generous. If you were there, but we didn’t meet shoot me an email, I’d love to connect.
If you are an operator you should check them out. If you want to get my perspective on OG, shoot me a note.
Also, this week I’m adding two new sections as an experiment:
Featured Newsletter - From time to time, I may give a shout out to a newsletter I think you might like.
Tweet of the Week - I want to experiment with throwing in a tweet I think it thought provoking or just funny.
Did a savvy founder share this with you?
Startup CEO Salaries
Kruze Consulting, an accounting company for startups, analyzed data from more than 400 of the firm's startup clients to see how their finances have changed amid economic headwinds. The average annual salary for CEOs based in the U.S., many of whom are early-stage founders, has dropped from $150K in 2022 to $142K as of this year — a four-year low. Some executives are even cutting their paychecks to zero. That's because CEOs of startups are extending the runway to protect themselves from a dip in venture-capital funding this year. In the first quarter of 2023, global venture funding reached $58.6 billion — a 13% drop from the same quarter last year. Business Insider (4 minutes)
A Life of Invention
James Dyson, of the famed vacuum, is a classic inventor. Here are some key lessons from his life: (1) If you ask people what they want, they’ll say faster horses. When you’re looking to create a breakthrough product, start with interesting technologies and an intuition of what consumers want, rather than asking them first. If you have the right intuition (which Dyson did), and if you’re lucky, you’ll make it. (2) Raise prices. If the quality is there, you can demand a premium. (3) Stasis is death. There is a lesson here. In the same way sharks have to keep moving to stay alive, innovative engineering-led manufacturers need continuous innovation to stay competitive. Striving for new and better products is often what defines such companies. (4) Big companies are slaves to their history; you can counter-position against them and win. (5) Niche to win. You build differentiation by going deep in a narrow niche. By niching down, you are harnessing path dependence. You are forcing competitors to traverse the same path you did. Except that you're already far, far ahead. Sunday Reads (6 minutes)
How to Make Virtual Meetings Shorter
If you’re the meeting organizer, ask two simple questions: (1) How short can we make this meeting? Do away with one-hour or 45-minute meetings unless they’re mission-critical or involve many teams presenting updates. Ask yourself: Can we get everything done in 30 minutes? How about 15? Don’t overcommit on time you set aside in the calendar. I’ve personally moved to 15 minutes for most meetings, and I’m surprised at how much you can get done. My anecdotal evidence is that people come more prepared, communicate more clearly and concisely, and are more action-oriented. As a result, you can often get as much done as you do in a 30-minute meeting. (2) What’s the fewest number of people that need to be in this meeting? You can always fill in those who aren’t in attendance with a short update, if needed. Meetings with too many participants are also likely to last longer. Lastly, the person who organized the meeting should lead the discussion and be mindful of keeping it on track and on time. If that’s you and it’s not your strong suit, assign someone else to lead the meeting. Don’t have a meeting with no one in charge; that’s a great way to wander and go too long. WIRED (5 minutes)
Female Founder World, an amazing community for Gen Z and millennial women building consumer businesses, created a guide to all the grants available to female founders in 2023. Download the guide here, then check out one of their IRL or URL events (Female Founder World’s kinda famous for them!).
Founder FAQ: What Is the Difference Between a Safe and a Convertible Note?
The two instruments often achieve the same objectives, but they differ on the following two key points. (1) Timing: Convertible notes have a firm maturity date, typically two to three years. If the conversion doesn’t occur by that date, then the agreement either needs to be renegotiated and extended or paid off (more on that below). Conversely, there is no maturity date on a SAFE, so there’s no time pressure to convert. Thus, the SAFE creates a more flexible time window for startups. (20 Repayment: There are different implications for the startup, depending on the instrument. If a convertible note does not convert into equity before the maturity date, then the company owes the investor the total amount invested plus accrued interest. However, with a SAFE, if it does not convert, the company owes the investor nothing. Westaway (3 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.
Move Fast. Don’t Break Things.
Hi! I’m Kyle. This newsletter is my passion project. When I’m not writing, I run a law firm that helps startups move fast without breaking things. Most founders want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a flat, monthly fee so you can control your costs and focus on scaling your business. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm. Click here to schedule a 1-on-1 call with me.