Yes, that headline and image is meant to be provocative. Startups need to sell. Attention is critical. But not clickbait. So grab your coffee and let’s go (btw that definitely isn’t me!).
First, a quick backstory
My background is ecommerce and Amazon. In 2015 I invested $8k in product and managed to scale my “startup” to a 7 figure exit at the end of year one (all while traveling the world).
If you are scratching your heads, you should be. Building and flipping a business in a year is stupid. But my goal was learn and make some quick cash so I could focus on things that actually mattered.
Somehow it worked. And through the process I built a top 3 Amazon podcast, met hundreds of Amazon sellers and helped 1000s build businesses on Amazon.
But startups NEED 100%
Forget the “give me 110%. soldier” Sure, it sounds cool to say but 100% is it. There is not higher gear — and this stress kills entrepreneurs.
Starting a business is really freaking hard. I spent a year of 80–100 hour weeks, grinding, hustling and trying every trick in the book to make things happen.
Some worked. Many didn’t. It didn’t matter though. I was 100%, I was all in.
That takes its toll.
You can only give 100% for so long, especially when you heart isn’t really in it. And I was doing it just for the money — that isn’t enough. Founders NEED to be obsessed with what they are building.
How else can you handle the stress, rejections and sleepless nights…?
The importance of obsession
People tell you to follow your passion, that isn’t enough. Passion is a good start, but I’m passionate about peanut butter.
A banana with peanut butter is heaven on earth, nothing beats it.
But I sure as hell don’t want to start a peanut butter company. That small snacky passion isn’t a driving force for me. It won’t keep me going day in and day out.
And the market is competitive. There are plenty of peanut butter brands and almost no differentiation or innovation.
Instead, the best founders are obsessed with an idea. They set out to radically change the world and follow their obsessions to its logical conclusion — success, or failure. But as an investor, I’ll bet on intelligence plus obsession any day.
When Zuckerberg first described Facebook or Elon explained Tesla’s mission, it was clear these cats were hooked. They were incredibly smart, driven and drinking the kool-aid.
Whether you are building a venture scale startup or bootstrapping a business, commitment is everything. There will be huge highs and horrible lows — it is a roller coaster.
Between the stress of running out money, the pressure to push product and the problems hiring and managing great talent, starting a startup is arguably the most grueling (and rewarding) work.
Only the obsessed survive, everyone else quits or sells out early…
Managing is hard
The best founders build great teams, using their obsession and charisma to attracts followers. They know they cannot possibly do alone, so they surround themselves with complementary talent.
This is something I have always struggled with. Most of my career has been a one man show with a large outsourced team. I’m a builder, not a manager. When it comes to managing people and optimizing existing success, it gets dull for me.
I have never been “obsessed enough” with the mission to push through. And most founders are not natural leaders. Instead they grow into the role, not out of desire but out of necessity.
When you are obsessed with a goal, you sacrifice yourself for the mission.
The shiny object A.D.D. issue
Yes, I have attention deficit disorder — never diagnosed (but spend enough time with me and it is easy to see). This makes shiny object syndrome challenging.
In the past I got distracted easily. A new PPC strategy, Instagram ads, influencer marketing… buzzwords pulled me and my team off our game. We bit off more than we could chew.
Luckily I realized my mistakes and personal flaws early enough to survive and still thrive. But try to do everything and you end up accomplishing nothing.
Through self-reflection and asking others, we can learn a lot about ourselves.
The three primary reasons I never grew a business beyond the $2M mark were all my fault. The business suffered from my: lack of obsession, distractions/FOMO (fear of missing out) and desire to scale (too quickly).
Each of these creates issues, combined they force a founder to sell. I just couldn’t bring myself to do another day.
Through the years I have come to better understand what I want, and what I’m good at. I believe this is crucial for founders. Better understanding leads to better decisions, both personally and professionally.
For myself, I found people frequently asking for business advice. And I enjoy advising and brainstorming. Sharing knowledge, breaking down business models, talking growth tactics, planning network effects, helping with sales/copy… all without having to execute the plans personally, yes please.
So I stumbled into advising…
Advisors and alignment
During my FBA ALLSTARS days, I consulted dozens of Amazon sellers. And with the podcast, my reputation, processes and the value I could add, I was able to charge a nice premium. And brands kept coming.
The problem is, consulting feels dirty (trading time for money). Startups can’t afford that. Plus the incentives are all wrong. Consultants get paid, regardless of how startups perform.
As an entrepreneur and a hustler, I’d rather put my money (and/or time) where my mouth is and go to work for my startups.
This combined with increased exposure to founders has led to an interesting opportunity for me: both investing in and advising great startups. With my ecommerce experience and background in growth hacking, network effects, and sales and marketing, I work to tip the scale in the startup’s favor. This allows me to work closely with several early stage companies and create exponentially more impact.
At the same time, if an investor or advisor can make or break a company, that isn’t a sound investment. Founders MUST be able to win on their own. That said, adding an unfair advantage to an obvious winner accelerates progress.
That is my focus: work with and invest in companies I can help accelerate.
Understanding equity and incentives
I recently wrote an entire article on the dynamics of equity incentivization. I firmly believe in incentivizing all early employees and members of a startup with stock options. Ownership of both the business and the vision keeps great employees around longer, hustling like hell to make it a success.
Getting these incentives right means your team can take less salary and outwork an overpaid Google guy 10–1. Coffee, creativity and motivation combine create killer companies…
The value of formal advisors
Most founders worry about equity. Between stock options and future fundraising, dilution is a concern.
But honestly, nothing beats a win-win situation.
As a founder, you are giving 100% to your startup. You need others to do the same. And people ALWAYS work harder when upside is on the line.
Every advisor brings something to the table. The best help in multiple areas, providing expertise and credibility while also doing introductions to investors, leads and potential employees.
For every individual startups consider bringing onboard, founders should ask themselves what is the net gain. From investors to employees, advisors to attorneys, it takes a village to raise a startup. And every individual’s value-add should exceed their (equity) compensation.
NOTE: Most startups use FASTs for advisors. The FAST, or Founder — Advisor Standard Template is a prewritten advisory contract with outlined equity percentages based on current stage and commitment level (typically 0.1–1%). FASTs keep things inexpensive, easy and quick. Learn more about the FAST here and download the free template.
***NOTE: Never hire anyone or bring on an advisor without vesting. Typically vesting structures vary from 2–4 years (shorter for advisors, longer for founders and employees).
I started The Syndicate podcast to educate both investors and startups and lift the venture ecosystem as a whole.
With access to startups, I decided to start sharing deal flow and scaling up our capital base.
Even the best companies often require funding, so via our SPV (special purpose vehicle), our syndicate is able to pool resources and invest in top tech talent — combining up to 99 investors in a single SPV to cut bigger checks for companies.
And investors are always looking for great deals, that is the nature of power law portfolio returns. A single investment or two drives the lionshare of returns.
That is the beauty of the syndicate opt in model, allowing any accredited investors to invest alongside our members (or decide to pass), all without the legal hassle — saving both startups and investors time, money and patience.
And to get the inside scoop on syndicates, angel investing and early stage VC, join our newsletter. I have interviewed top angels and VCs like Gil Penchina, Esther Dyson, Semil Shah and many more. I will send you the best of the best plus invites to our free expert roundtables.
What’s the point of this post
I believe startups and technology are changing the world, certainly faster and more effectively than any organization or government. And this world and opportunity to participate is pretty opaque for most people.
While many of the best investors and startups are based in Silicon Valley and NYC, angels and entrepreneurs anywhere can still get in on the action. That is my goal with The Syndicate and my story.
I am far from inspirational and certainly not done. And the results of my work will take years to observe, but I aim to shed a light on the incredibly profitable world of early stage startups and help both investors and founders around the world fuel the growth of this innovative ecosystem.
If my work as an investor, advisor or podcast/writer puts others in a better position to succeed, I’ll consider this a success.
Are you an investor, entrepreneur or advisor? What’s your experience in the world of startups, how did you get involved and what are you working towards.
For more on The Syndicate’s investment criteria, see the following.
If you are a startup interested in advisory help, specifically related to growth hacking, network effects, ecommerce, sales and marketing or business development, feel free to reach out. You can contact me here.
Before you go…
If you got something actionable or valuable from this post, share the article on Facebook and Twitter so your friends can benefit from it too.
Originally posted on Medium