Summary
Elad discusses some key topics that entrepreneurs face from initial stages of a company to exit. He gets great insights from some of the best known entrepreneurs which is helpful to better understand how to navigate complex situations that naturally arise through this process
Key Takeaways
Most startups, once they hit product market fit, shift more towards distribution focus rather than product focus. Distribution has proven to beat out product time and again
Coming out with a second hit product is often harder than the first but you need to keep iterating or else you’ll get left behind
Pricing power is a key aspect of a moat. If you can’t raise prices, you’re in trouble. This is enormous leverage as it drops right to the bottom line and can fund new efforts, hiring, research, and more. Higher prices = faster growth
Role of the CEO
The CEO sets the vision of the company and communicates that to all stakeholders while hiring, growing, and fostering the culture.
They are chief psychologist and need to be responsible for capital allocation.
You must manage yourself, your reports, and your Board.
You must learn to delegate more, audit your calendar, say “no” more often and make time for things you enjoy.
Learn from an experienced executive, trial by fire, have dinner often with CEOs at other companies, get an executive coach.
You must be able to get perspective and keep the big picture in view – this means focusing on the right things.
Hold regular 1-on-1s, weekly staff meetings
Should write a “How to Work with Me” document which will help others quickly understand how you like to work
Great example of how Johnson of Stripe wrote her document
Can’t have too many things be mandatory so must choose carefully
As a leader, you have to state the obvious and you have to do it often. Make sure people are on the same page. Create documents which outline your overall vision and strategy and shorter term documents for how you’ll get there. You must codify a set of behaviors and principles and adhere to them. You need planning procedures earlier than you think and they must start at the top and flow all the way down
There are five main jobs for the CEO
Chief product officer
Primary face of the company
Steward for senior executives
Chief strategist
Cultural leader
You do not want to preserve culture. You want to steer and guide it overtime
Role of the Board
Choosing your Board, particularly your independent director, is of utmost important.
The book has some great examples of how you should approach, what you want at varying stages, etc.
The Board’s role is advisory and they should come in asking, “how can I help?” and pose questions rather than demand action.
It should be a collaborative open relationship rather than a hierarchical one.
One of your mantra’s has to be “do no harm”
Board meetings exist to help the company and ensure proper corporate governance for all stakeholders.
Board meetings should start with
Board matters which should be a quick, high-level overview of key metrics which impact the strategy and the high-level vision
Follow-up items from last Board’s meeting
End with strategic initiatives which should take up most of the time.
Send out the slides before the meeting so everyone has a chance to review them and think about everything
Keep your Board to five or six people if possible as it starts getting political and unwieldy much beyond that.
You have to set expectations early that there won’t be fancy PowerPoint decks just a sheet of paper with the key metrics and strategic points you want to talk about
As a CEO and founder you have to manage the board
Hiring and Training
When hiring people, you should ask the same questions for people interviewing for the same roles so that you can calibrate. The faster you can interview and offer a job the higher your candidate conversion will be
At the beginning, you should hire through your network and this will take a lot of time and effort. As you grow, you can use outside recruiters or bring someone in house to manage it all
When someone is brought on board, send out a welcome email, have a care package waiting for them (such as a hoodie, a onesie for their baby, their laptop etc.)
Assign them a mentor or a buddy for the first couple months and make sure they feel true ownership over whatever they were hired to do
How to hire Executives, COO
Your job as the CEO is not to know everything but to make sure all problems are solved. Hire people that complement you and can do certain things better than you ever could. These high level issues are perfect for a COO.
Great executives are thinking about and preparing for issues that will come up in 6-12 months. They’re not fighting today’s fires but figuring out how to solve others before they even start
You must hire someone with the right experience. If your company is too large or small for a certain hire, the executive will be bored or over their heads
There is no perfect Org structure and if you’re growing very quickly, you will literally have a different company and 6 to 12 months. So, you should optimize for the current needs rather than trying to optimize for where you think the company might be in a couple years.
Reorgs, while difficult, will happen both at the company level and at the functional level but they must be handled delicately, thoughtfully, and quickly
Rapidly growing companies should look to have a position that “fills the gaps.” Someone who reports directly to the founder or CEO and can help cover bases and fix problems until a bigger team and an executive is hired and built out. Fast growing companies are chaotic on the inside and that’s why a position like this is so powerful. Finding a good person, having them understand the problems, building out their team, and scaling takes time so you really need to be looking out for at least a year and hiring someone to fix the problems you think you’ll run up against.
Early on make sure you have the proper scaffolding for your organization so that it doesn’t break when you scale. it doesn’t need to be large or require tons of people but it should be thoughtfully built out
You can compromise on skill or experience when hiring quickly but never compromise on culture – no jerks. Say your culture and values so often that you get sick of it. Reward people on performance and culture to align incentives
Other
Product managers are the CEOs of a certain product lines and are responsible for addressing customer needs, desires, wants, and creating products to match that
When fundraising, don’t over-optimize for a valuation. Raise money at a fair price and that way you can grow into it organically. In addition, later fundraising could be easier because metrics are more realistic and manageable to meet
Right of First Refusal for secondary share offerings and/or a mandate in your charter discussing this could be helpful if you grow and employees want to diversify and cash out
What I got out of it
A supremely helpful and insightful book for anyone thinking of starting a company, in the midst of starting one, or far along the path. Will come back to and reference often
