Archive for October 2014
- Convertible debt should count in total shares outstanding b/c it almost *always* converts.
- Properly-written double triggers give meaningful downstream protection.
- Divide by 5-10 what the VC swears he won’t sell the company for less than.
- Have written proof of preference structure, and you’ll be taken care of upon exit.
The number of page views will continue to grow exponentially, but ad budgets might grow at 10 percent per year at best. When you marry those two things, CPMs can only go down. Advertising is no longer going to be a high-value product. For publishers, that means you have to figure out how to drive your long-term relationships to get your audience to buy higher-margin projects from you.
I left my job at Cisco expecting that it might take six months to start a company. Two and a half years and more than a half-dozen serious start-up explorations later, I started BloomReach. There were plenty of reasons for the long run up. Markets that turned south. Teams that did not gel. Ideas that sucked. Prototypes that I hated. I tried to keep the bar high, believing that if I was going to pour my life into something, it had to work.
If you are starting a company your first team, target market segment, or product idea may not stick.
You’ll need to pivot your product, target market segment, or team (OK, maybe all 3 at once).
So clearly financial runway (personal and company) is important.
What you may not realize is that runway, even if it’s just a tiny landing strip, generates a ton of option value.
it’s hard to overstate how valuable it is to keep your personal burn rate low. it probably 10x’s interesting opportunities available to you.
— Sam Altman (@sama) August 15, 2014
The best part? Doesn’t matter if you have 12 months or 12 weeks or 12 days of runway left to take advantage of it.
Today could be the day.
Another great reason to stick with the struggle…
If you’re a small business that doesn’t have the resources for content creators, editors, and whatever else is needed to run those operations, I say do what I did in 2006 when I had the wine show: Take hours away from staffing, strategizing, selling, and all the other things you’re doing, and put one, two, three hours into becoming a media company. I really do believe that this practice has, and will continue to have, an enormous upside to the future of business.