What’s the best way to decide to pivot or not?

Glenn Kelman (President & CEO @ Redfin)
The Maximum, Beautiful Product | TechCrunch

Because the truth is at least one critic has spoken long before you release your product to the world: the beast at the back of your mind always yelling “FASTER, FASTER,” so loud that the little poet in there hardly has a moment to think. Even worse, sometimes the beast says “What’s the point? Of working on a little detail no one will notice? Of exploring an off-the-wall idea likely to end up in the wastepaper basket?” This isn’t a repudiation of… (read more)

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: One big idea

Most breakthrough organizations aren’t built on a bundle of wonderment, novelty and new ideas.

In fact, they usually involve just one big idea.

The rest is execution, patience, tactics and people. The ability to see what’s happening and to act on it. The rest is doing the stuff we already know how to do, the stuff we’ve seen before, but doing it beautifully.

You probably don’t need yet another new idea. Better to figure out what to do with the… (read more)

Danielle Morrill (Co-Founder & CEO at Mattermark)
Zombie Startups | Danielle Morrill

How do you know if your startup is a zombie? Here are some hints: You don’t want to get out of bed in the morning. You don’t want to go out in public for fear you’ll have to explain what you do. You haven’t hit 10% week-over-week growth on any meaningful metric (revenue, active users, etc) at some point like launch or some other PR event. You’re working on the same idea after 12+ months and still haven’t launched. You’ve launched a consumer servi… (read more)

Eric Ries (Author, The Lean Startup)
The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to … – Eric Ries – Google Books

When an entrepreneur has an unclear hypothesis, it’s almost impossible to experience complete failure, and without failure there is usually no impetus to embark on the radical change a pivot requires. As I mentioned earlier, the failure of the “launch it and see what happens” approach should now be evident: you will always succeed—in seeing what happens.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Second Year – AVC

Not every startup works. There may come a time when you realize the third year is not coming. And then you have to move on. But with the right vision, the right team, and a ton of hard work, many get past the second year. And the good news is that the second year is history when that happens.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: When will you get to Ramsgate?

Nobody, ever once, pops to the top. You walk there. Step by step, each a failure until it’s not. If you’re not yet at Ramsgate, you’ve got some walking to do. And then, when you get to Ramsgate, more walking.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Gradually and then suddenly

Day by day we improve and build an asset, but none of it seems to be paying off. Until one day, quite suddenly, we become the ten-year overnight success. The media writes about suddenly, we notice suddenly, we talk about suddenly. That doesn’t mean that gradually isn’t important. In fact, it’s the only part you can actually do something about.

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Very good results (and an alternative)

Hard work, diligence and focus often lead to very good results. These are the organizations and individuals that consistently show up and work toward their goals.

But exceptional results, hyper-growth and remarkable products and services rarely come from the path that leads to very good results. These are non-linear events, and they don’t come from linear effort or linear skill.

It’s tempting to adopt the grind-it-out mindset, because that’s so… (read more)

Seth Godin (Founder at Yoyodyne Entertainment)
Seth’s Blog: Resilience

Resilience. Given how important it is, it’s surprising we don’t hire for it.

How easily do you bounce back from a disappointment? What is your reaction to change? As an investor, or a board member or an employee, are you seeking stability or impact?

Resilience is a skill, one that’s probably more valuable than most.

What’s the best way to deal with an employee quitting?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Ch-ch-ch-ch-changes – AVC

Every departure is an opportunity to rethink the role and the organization. You can’t find an exact replica of the person who has left. But you can find a person who will bring different things. You can split the role in two. Or you can even choose to eliminate it.
My advice to the leaders of our portfolio companies is to embrace change and the possibilities it brings. And, even more importantly, I advise leaders to be open and transparent about… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Ch-ch-ch-ch-changes – AVC

The thing I caution against is the tendency to get upset at departures and departing employees. I’ve seen leaders take the mob boss approach of “your are dead to me now” with departing employees. The better approach, which I think is a hallmark of great companies, is the idea that departing employees who leave on great terms are roving ambassadors for your organization. After all, you never know when you are going to come across someone again in … (read more)

What’s the best way to create a good team?

Philip Sugar (Founder & President @ SpringActive)
The Management Team – Guest Post From Phil Sugar – AVC

Best Friends: When you are a handful of people trying to make something out of nothing there are no management challenges. Buddies: This is when you have up to twenty people. People say you can only manage eight, but I think if you’ve hired great people that can stretch to twenty. Co-Workers: Now you’ve decided to make the mad dash from 20 to 100 employees. The reason it’s a mad dash is because you will have to put in all the overhead of forma… (read more)

Sam Altman (President at Y Combinator)
Advice for ambitious 19 year olds – Sam Altman

I get asked this question fairly often, and I now have a lot of data on what works, so I thought I’d share my response. No matter what you choose, build stuff and be around smart people. Think about risk the right way.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Management Team – While Building The Business – AVC

Founders should think of the business as yet another product they are building. It is the ultimate product they are building because from the company can come any number of additional products and any number of additional initiatives. The company, if built correctly, will be more important than any single product it can create.

Sam Altman (President at Y Combinator)
Startup Playbook

When you are in recruiting mode (i. e. , from when you get product-market fit to T-infinity), you should spend about 25% of your time on it. At least one founder, usually the CEO, needs to get great at recruiting.

David Jackson (Founder, Seeking Alpha)
Should you hire consultants? | A Founder’s Notebook

Should you hire consultants? My view: Almost never, for two reasons: “the company you build is the team you build”. So your goal is not to “execute a set of tasks”, but to “build an outstanding team. Your biggest challenges often require you to “figure things out”. External consultants rarely figure the hard things out for you, and if they do, much of the knowledge is theirs, not your company’s.

What’s the best way to compensate your sales employee?

David Sacks (CEO at Zenefits)
New Sales Models – David Sacks, Founder and CEO of Yammer – YouTube

Just keep the balance of their base and variable pay set. So if they want an increase in their base, they also need an increase in their quota that they need to hit. Do they really want that added stress?

Andy Swan (Three time financial tech entreprenuer)
Commission plans — how to get them right | A Founder’s Notebook

Embrace the idea of salespeople making more than you do.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Commission plans — how to get them right | A Founder’s Notebook

The key is to sit down with finance, product and marketing with the budget in hand and ask the questions; what do we need to sell by the end of the year? Once the incentives have been nailed and properly aligned, make the plan dead, stupid, simple. A plan is simple stupid if a sales person knows exactly what they will be paid on a deal without looking it up. In addition, all plans must have accelerators. Accelerators are when more commission is p… (read more)

Geoffrey James (a contributing editor for Inc.com, is an author of the award-winning blog Sales Source)
5 Ways to reduce cost of sales

Many companies still use gross revenue to measure sales performance. Focusing solely on revenue, however, can easily put a company in a position where you’re losing money on each sale and trying to make up the difference by selling in volume. Since profit, not revenue, is the point of selling in the first place, it only makes sense to measure sales accordingly. A big advantage of this approach is that it reduces the temptation to discount (a hidd… (read more)

David Sacks (CEO at Zenefits)
New Sales Models – David Sacks, Founder and CEO of Yammer – YouTube

10% until they hit their quota and then 15% once they’ve met it

David Sacks (CEO at Zenefits)
New Sales Models – David Sacks, Founder and CEO of Yammer – YouTube

50% base and 50% variable, assuming they hit their quota. Set their comission to 10% until their quota is met and then 15% once they’ve met it. Therefore their quota should be 10x their base salary (assuming the 10% comission rate).

What’s the best way to compensate your legal team?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

Some of you might know this, some of you might not. It’s pretty standard stuff, but the majority of firms will, in the valley, work on, contingency upfront so think about DLA Piper, Wilson Sonsini, Fenwick, you can go to them. If they believe your idea has merit, you don’t have to pay them upfront. You can defer fees, usually $25 to $50,000 until your seed or Series A. You shouldn’t be paying your attorney upfront. You should be spending all your… (read more)

Aaron Patzer (Founder & CEO of Fountain, Mint)
Aaron Patzer lays bare Mint’s numbers – YouTube

We went to Wilson Sonsini and deferred our legal costs and gave them .5%

What’s the best way to compensate employees?

Philip Sugar (Founder & President @ SpringActive)
The Management Team – Guest Post From Phil Sugar – AVC

I am in charge of recruiting. I will have somebody managing the process as we grow; departments do the interviewing, but bottom line, if my people are better than your people I win. I go on as many sales calls and customer visits as I can. I’ve been told that once I hire a Head of Sales, I should stay out of the process. I totally disagree. The top producer makes more than the manager. If the only way people think they can make the most money… (read more)

Mitchell Harper (Co-Founder & Board Member @ Bigcommerce)
28 things I’d do differently next time around — Medium

Tie a good amount of everyone’s bonus to a customer success metric

Michael Mauboussin (Managing Director and Head of Global Financial Strategies at Credit Suisse)
Untangling Skill and Luck

Ideally, a compensation program pays an individual for his or her skillful contribution toward achieving a desirable objective. Compensation programs need to be modified so as to strip out as much randomness as possible.

Henry Ward (Founder & CEO at eShares)
eShares 101 — Medium

1. Compensation (salary + equity) is determined by the market for your skill set, and your skill level. That means there is no automatic annual raise of 2-4%. 2. Increase compensation by increasing marketability. 3. You will be marked-to-market at your 9-month anniversary and every 12 months thereafter. 4. We target being in the 75th percentile for your compensation.

Leo Polovets (General Partner @ Susa Ventures)
Analyzing AngelList Job Postings, Part 2: Salary and Equity Benchmarks · Coding VC

[from 2014] Assuming that a startup has two founders, here are some ballpark numbers for engineering job offers:

Salary:
For employee #1:
20th percentile salary range is $70k – $100k
50th percentile salary range is $80k – $120k
80th percentile salary range is $82k – $135k

For employees #2 through #13, salaries rise for higher paying jobs:
20th percentile salary range is $75k – $100k
50th percentile salary range is $85k – $125k
80th percentile s… (read more)

Unknown (who knows!?)
Explore Salary & Equity Data

https://angel.co/salaries has useful information to identify market rates

Aaron Patzer (Founder & CEO of Fountain, Mint)
Aaron Patzer lays bare Mint’s numbers – YouTube

My first engineer at Mint I paid $3,000/mo. That’s what I paid my second engineer as well. [They] got 2% and 1.5% equity. I hired my VP of Engineering who was [previously] making 180k for 90k but I gave him 4% equity.

Jeffrey Minch (Entrepreneur – ‎Littlefield Advisors)
The Management Team – Guest Post From JLM – AVC

A good comp plan includes: Salary; Benefits; Short term incentives (measurable performance based bonus); Long term incentives (equity); and something special (work from Colorado two weeks per year).

David Jackson (Founder, Seeking Alpha)
Promote fast | A Founder’s Notebook

Promote fast. A simple litmus test for promoting someone is: Are there additional, meaningful responsibilities you want to give this person? If so, promote them. If not, don’t. And “promote fast” then means: Don’t be scared to throw extra responsibilities at capable people.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
Titles and Promotions – Ben’s Blog

There are two schools of thought regarding this. Marc Andreessen argues that people ask for many things from a company: salary, bonus, stock options, span of control, and titles. Of those, title is by far the cheapest, so it makes sense to give the highest titles possible… If it makes people feel better, let them feel better. At Facebook, by contrast, Mark Zuckerberg… avoids accidentally giving new employees higher titles and positions than bette… (read more)

What’s the best way to build a good company?

Brad Feld (Managing Director at Foundry Group)
The Long Lost Myth of Capital Efficiency – Feld Thoughts

When a company can become cash flow positive on a small amount of capital (say $5m – $10m) and grow over 100% year-over-year without raising another nickel of equity, well that’s a silent killer.

David Jackson (Founder, Seeking Alpha)
Why capital efficiency is critical for SaaS and subscription businesses | A Founder’s Notebook

Capital efficiency gives you time, which is critical for businesses that scale steadily but without viral growth, such as SaaS and subscription businesses.

Sam Altman (President at Y Combinator)
Super successful companies – Sam Altman

They can explain the vision for the company in a few clear words. They generate revenue very early on in their lives. They keep expenses low. They are tough and calm. They make something a small number of users really love. They move fast.

Ben Horowitz (Co-Founder & Partner @ Andreessen Horowitz)
Why Startups Should Train Their People – Ben’s Blog

As success drives the need to hire new engineers at a rapid rate, companies neglect to train the new engineers properly. As the engineers are assigned tasks, they figure out how to complete them as best they can. Often this means replicating existing facilities in the architecture, which lead to inconsistencies in the user experience, performance problems, and a general mess

Sam Altman (President at Y Combinator)
The Post-YC Slump – Sam Altman

The main problem is that companies stop doing what they were doing during YC instead of relentlessly focusing on building a great product and growing, they focus on everything else. In general, startups get distracted by fake work. Two particularly bad cases are raising money and getting personal press. But the list of fake work is long.

Mark Zuckerberg (Founder & Chairman & CEO at Facebook)
How To Get Ahead: Entrepreneurial Lessons From Mark Zuckerberg

The most important thing for you as an entrepreneur trying to build something is, you need to build a really good team. And that’s what I spend all my time on… I spend probably 25 percent of my time recruiting, finding good people, both outside the company and inside the company, to put them in more impactful roles.

Sam Altman (President at Y Combinator)
The three steps to building a great company, and why most startups fail on the first step | A Founder’s Notebook

Task #1: Build a product that users love. Task #2: Figure out how you are going to grow. Task #3: Make sure you are going to stay a winner if you win. [Are the three tasks sequential? In other words, should you figure out growth only after you’ve finished building a product that users love? I think there’s overlap, but broadly speaking — yes, they’re sequential. ]

Dharmesh Shah (Co-founder and CTO of HubSpot)
Happy Birthday HubSpot! 9 Lessons From Our First 9 Years

As a startup, you need to seek that love. We don’t just want people to buy from us. We want people to love us. We want them to love what we love and respect what we do, even if they don’t buy from us. Even if they are unlikely to ever buy from us. Because what we believe is that the more people that love us, and want us to succeed, the more likely we are to do so.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Long Roadmaps – AVC

And I replied that building a great company is a combination of patience and impatience in equal doses applied unevenly. Impatient short term, patient long term.

Paul Graham (Co-Founder & Partner at Y Combinator)
Beating the Averages

If you do everything the way the average startup does it, you should expect average performance. The problem here is, average performance means that you’ll go out of business. The survival rate for startups is way less than fifty percent. So if you’re running a startup, you had better be doing something odd. If not, you’re in trouble.

Tomasz Tunguz (Partner at Redpoint Ventures)
Why the Bubble Question Doesn’t Matter

1. Think long term 2. Manage your cash effectively 3. Only hire the right people 4. Mitigate churn 5. Raise capital opportunistically to amass a war-chest large enough to achieve your vision