Founder Fridays No. 78
How Freemium Almost Killed This Company -- Giving Feedback to Gen Z -- The Power of Subtraction
Happy Friday.
Before we get into the briefing, I thought you might want to check out this interview about learning how to be a “supercommunicator” with Pulitzer-prize Winning and Best-selling Author Charles Duhigg.
My experience is that as your level of responsibility grows in any organization, your success mostly depends upon your ability to connect and communicate. I’d always assumed that supercommunicators were just naturally gifted / charismatic speakers. Surprisingly, this is not the case. It’s a skill that we can all learn. In this conversation, we cover:
How to win someone over without challenging their identity
Practical tips for difficult conversations
How to ask great follow up questions
Why data from experts rarely changes people’s minds
and much more
Click on the video below to check it out. While you’re there, don’t forget to like and subscribe to my YouTube channel.
How Freemium Almost Killed This Company
This is the story about how Freemium almost killed the company Equals and how they pulled out of the spiral of death. When Equals launched, they were charging $250 per month and manually onboarded each customer. Then, they saw the success that other companies were having with the freemium model and decided that this must be the key to growth. So, they created a free tier. At first it worked; they saw a jump in signups. But they realized that they had a huge amount of churn from those customers. So, they killed their free plan, requiring a 14-day paid trial instead. This added some friction but improved engagement. I learned that the right amount of friction is good; onboarding is about convincing new users to complete setup. With the free customer, their motivation is seeing the product, so they lose interest in setup once they access it. By introducing some friction with a paid trial, we resumed growth with highly engaged users. The key is finding the optimal level of friction that maximizes retention. Every (10 minutes)
Giving Feedback to Gen Z
How can managers effectively give feedback to Gen Z employees? 1) Challenge your assumptions about feedback by acknowledging that norms change over time. Today's young employees expect managers to care about their well-being and development, not just criticize their work. 2) Adjust your lens to understand that different generations have different views on careers and development. While older generations valued organizational loyalty, Gen Z sees development as managers caring for them as people, not just employees. 3) Strengthen trust by clearly explaining the feedback process so young employees understand it's meant to help them grow. Proactively build trust through transparency rather than assume they know criticism isn't meant to jeopardize their job. 4) Expand the pie by focusing conversations on shared goals and win-win solutions. When employees feel the manager lacks context or is unfair, they doubt feedback is meant to help them develop. Fast Company (5 minutes)
The Power of Subtraction
Perfection is not adding more but subtracting everything unnecessary. In life, we naturally accumulate habits, patterns and phobias that obstruct our true selves. Efforts to fix ourselves often just add more layers, but real improvement requires subtracting our unnecessary desires and expectations. Subtraction goes against self-optimization trends of adding qualities like gratitude or abundance. But just adding more duct tape doesn't fix our minds; it risks losing sight of our natural beauty underneath. True optimization comes from subtracting until we reveal our essential self. New York Times (8 minutes)
Founder FAQ: What is an Action of Incorporator?
This document is significant for a startup. If founders get it wrong, it could be a costly mistake. So, founders should pay close attention to the Action of Incorporator and work with counsel to ensure that it covers all the bases. Before diving into what is an Action of Incorporator, you have to understand what an Incorporator is. The Incorporator is the person who files the certificate of incorporation with the Secretary of State. Generally, this is the lawyer or registered agent who incorporated your company. Their name and signature are at the bottom of the certificate of incorporation. Once they file, from the state’s perspective, they are the only person who has the authority to act on behalf of the corporation. The Action of Incorporator is the document that officially hands that power off to the board of directors of the startup. 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
Extending Your Runway with General Counsel
In this economy, every startup is looking to lower burn rate and extend runway. We helped a Series A generative AI drastically reduce their legal spend by switching to our General Counsel service. When we first met them, they were working with a big law firm and felt they were overpaying for basic legal work. Nearly every month, they got a hefty bill just to cover equity grants, contract reviews and lawyer calls/emails.
When they switched to General Counsel at Westaway, they:
Got more personal service and quicker response times.
Significantly reduced their legal spend.
With faster deal execution and lower spend, they extended the runway and improved cash flow. If you're looking to optimize legal costs and extend runway, click here to schedule a call. Let's discuss whether on-demand General Counsel is right for your startup.
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