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Founder Fridays No. 43
Helping founders scale smarter.
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Building an Asynchronous Culture
Almost every startup has a global team, which makes synchronizing meetings tough. What if you just ditched them altogether and went asynchronous? At a fast-paced startup, it’s important that decisions don’t get delayed and projects don’t grind to a halt just because someone’s stepped away from their desk. You’ve got to create a culture that prioritizes autonomy — and give folks the context they need to make sharp decisions without gathering a group of colleagues on a Zoom call. If you’re ready to take the leap, here is a blueprint for a radically different workplace that’s fully asynchronous. (1) No micromanagement. Anytime you’re telling someone what to do, you’re not actually solving the bug. You’re doing a really bad patch. (2) Document everything and make it easy to find. (3) Treat hiring like a segmentation exercise. Think of your company and culture as a product your employees experience. The people you need are the people who are interested in the product you're offering. This gives us very specific segmentation. You want candidates to opt out if it’s not for them. First Round Review (23 minutes)
Pricing Strategies for PMs
Here are some important product pricing strategies every product manager should understand. (1) Cost-Plus Pricing is a method of setting prices where the selling price is determined by adding a specific amount or percentage to your total cost. It’s commonly used with physical products. However, many professional service firms such as McKinsey, Deloitte and Cooley use the same approach of charging their customers based on the hourly rates of their consultants (commonly known as “time and material”). The low marginal costs for digital products makes Cost-Plus Pricing less relevant. (2) Competitive Pricing is pretty self-explanatory. See what your competitors are pricing at and price based on that. (3) Penetration Pricing is a strategy used to attract customers when entering a market with a new product. The company initially sets a low price to attract customers away from competitors and to gain market share quickly. Once the product is established in the market and customer loyalty is built, the price typically gradually increases. (4) Dynamic Pricing, also known as Surge Pricing or Demand Pricing, is a strategy where businesses set flexible prices for products or services based on current market demands. (5) Price Discrimination is charging customers different prices for the same product or service, often based on the maximum they're willing to pay. (6) Economy Pricing is setting a low price for products with minimal marketing or promotional expenses to keep the price as low as possible. (7) Premium Pricing is the opposite of Economy Pricing. It's used when a company deliberately sets the price of its product higher than the competition to cultivate a perception of superior quality. (8) Loss-Leader selling a product at a price is used when it’s no longer profitable. However, this tactic can help attract new customers or sell additional products and services. (9) Value-Based Pricing is a strategy where prices are based on the perceived value or benefit of a product. It shifts the focus from the cost of production or market to the actual benefits your product provides. The Product Compass with Paweł (7 minutes)
Investor Updates in Hard Times
Sending world-class investor updates is one of the highest-value rituals startup leaders can learn. This matters because the right investors can be absolute heavyweights in your corner, but only if you are diligent about a) building trust by communicating well during good times and b) communicating even better during the down times. Here are some common mistakes to avoid. Mistake #1: Not showing up. You’d be surprised by how many founders get too busy to update their investors, and then turn up asking for money when their backs are against a wall. There is no advantage to not sharing information with your investors. None. Mistake #2: Sitting on bad news. And what if there is bad news? Sitting on it is the worst possible tactic. It’s highly possible that your investors will eventually learn, either by deduction or from someone else in their network, that something is amiss. Make sure they hear it from you first. Mistake #3: Not having an investor-update template. Having a template brings you incredible speed. The cognitive load of formatting your updates is done. You don’t need to reinvent the wheel for each update. Mistake #4: Not including enough data. Updates that lack tangible numbers feel incomplete at best and like you’re hiding something at worst. If you can say it with a graph or number, do so. Mistake #6: Not reading your own previous updates. Many founders think of these updates as one-off reports. Actually, they’re more like chapters in a story. Investors will go back through your updates to get a full picture of your progress. Mistake #7: Waiting for the board meeting. In the early stages of your company, board meetings typically happen every 6 to 12 weeks — and you need to send updates more frequently than that. NFX (16 minutes)
Founder FAQ: What Is the Difference Between Series Seed and NVCA Startup Funding Docs?
Over the years, two standard sets of documents have emerged as starting points for a Series Seed equity financing: the National Venture Capital Association’s (NVCA) docs and the Series Seed Docs. Both sets are well-drafted and battle-tested, but they differ from each other.
NVCA. The core NVCA document set runs 132 pages and includes at least the following:
Amended Certificate of Incorporation
Stock Purchase Agreement
Investor’s Rights Agreement
Right of First Refusal / Co-sale Agreement
It may also include ancillary agreements such as a Management Rights Letter, Opinion of Counsel, Indemnification and other agreements.
Series Seed. The core Series Seed Docs run 49 pages and include the following:
Amended Certificate of Incorporation
Stock Purchase Agreement
Choosing between Series Seed and NVCA funding documents can be a difficult decision for startups. Each type of document has its own advantages and disadvantages that should be carefully considered with legal counsel. If you’re looking for counsel, feel free to reach out to me. Learn more in this article. Westaway (6 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.