cyrilgrislain

Bootstrapping is magnificent. I consider the Calendly funding story absolutely fantastic: under $1M in Seed + Debt and next round comes years mater, at 3.5B valuation.

as you say, all customers should have some cash contribution. But if you look at 'net cash', and not 'gross margin' as you seem to describe, then customers economics can take a totally different spin. As you net cash should also include cash costs such: CAC, financing costs (especially in fintech), some costs that are often in OPEX and should be in COGS (eg: Tailored developments), etc. 200% is illustrative for logic. it means 2x your net cash balance. I am sure you got the point :)

Thank you for sharing in this forum and starting this thread!

you may sometimes prefer to, in other occasions need to, but certainly do not always HAVE to declare bankruptcy to do a restructuring :) As you can read, I chose to share a selection of quick-to-implement actions Founders can do. Declaring bankruptcy certainly doesn't fit those criteria.

Yep. and 2 weeks delay in payment is not 'totally screwing' anybody :-)

I am suggesting that if your company is on track to DIE, then your utmost duty is to save YOUR company.

I think we may find the answers by reflecting upon: what were the incentives for the best astro-aero engineers to leave Nasa, Boeing, etc and join SpaceX in its beginning? Join Elon who had 0 track record in Space, came from dot.com SW? he paid quite poorly. Nobody believed in SpaceX. He made clear he had money for only 3 attempts. etc, etc.

Also, when you are part of a company that used to run with 7000 people, and you realize it can run with a fraction of that AND you have been chosen to be part of that fraction, that must (and should) speak highly to many.

True, some Founders just won't succeed at that, for lack of profile or mindset or experience. But ultimately, especially in VC-backed startups, everything starts and stops with the Founders at least until Series B. Handling well hardships is part of the role, and contributes to the making of the most successful Founders. Now, Founders don't have to do this on their own and can get help. Especially for bigger companies. Knowing how to acknowledge your own limitations, reach for help and delegate is a core CEO attribute. I have seen over and over again Founders doing that very successfullY.

People join forces in a Business, rather than working alone for ex, because they believe the collective sum of resources = inputs will produce greater collective sum of outputs. Responsible businesses are those who maximise the outputs. Otherwise, it is a waste of resources that are extracted from collectivity ($, labor, natural resources, infrastructure, etc). Inversely, that is also why the standard business forms are not best suited for artists to thrive.

So, as business is about maximizing output: no matter how much is your productivity, which is a ratio, if you apply it to one more hour of work, then you will produce more output. So there are 2 ways to go here for high-productivity workers: a) you are paid equal for same output, and allowed to work less. b) you work as much as others, then produce more, then are paid more.

There is plenty of science that proves that choosing option a) is a shot in own's foot on the long run. Note: 80% of harvard professors thing their students would rate them in the Upper half best professors. which is of course statistically impossible. Same for how anybody = we, self evaluate ourselves in anything: how good a driver, a parent, ... a worker we are.

How much hours one puts in is a fundamental parameter of how much one produces. Stays true even with diminishing returns, as long as productivity is >0.

There is this say, pardon my french: an idiot who walks will still gets further than a sitting genius.

yep. And VCs will need to deliver even higher returns to stay alive. In fact, the recent exuberance allowed VCs to get rid of the 'hurdle rate' = min return to deliver to LPs before making any carried. This will probably be corrected back, as it should be. If interest rates stay high, then hurdle rates will be very challenging for VCs.

And how damn hard it is for CEOs to have to do layoffs. Especially more in rather small companies, where you do know very well the people you are taking the job away from. Zuck for ex certainly didn't hire himself, know the kids of, etc the thousands he laid off.

And still, your duty as CEO, starting with your duty to your teammates, is to maximize the chances that most people keep their job. The best way to do that is to build a healthy and enduring business & economics. At least as long as people still want to be paid with $$. And this is no bad joke: the pioneers of any industry, like were those joining tech startups in the 70s, were in it for the cause, the dream, the revenge, etc. Today this is not the case anymore: tech is a 'job' for most. Which is absolutely fine. A victory actually: it means tech has become a 'normal' industry.

Unfortunately, the recent cycle was not about 'health'. so as in all excesses, the body needs to rebalance.

Say you generate +$100 in cash. It is typically composed of customers generating +$200, and other destroying -$100. Typically you have an a) small fraction of cash-generating customers bringing in your +$200, and another b) small fraction of cash-losers explaining the -100$. The highest RoI actions are to focus on groups a) and b)

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Say you generate +$100 in cash. It is typically composed of customers generating +$200, and other destroying -$100. Typically you have an a) small fraction of cash-generating customers bringing in your +$200, and another b) small fraction of cash-losers explaining the -100$.

The highest RoI actions are to focus on groups a) and b)

Yep. and worse, it's like designing a car without knowing the car's economics. Like building a product for the product's sake. In SW/HW, a PM that doesn't also build the unit economics is a wrong management choice and a waste of resources.

imo, the #1 role of a PM is to bring the user inside the company. To be the users' advocate and voice. Anybody who is PM without talking to users and doing that role may be a 'Project Manager', but not a 'Product Manager'. Products are meant FOR users.

Agree. And you could argue that Founder(s), owners of the company AND product vision, should keep that role as long as possible. I see too many Founders relinquishing this role too early. One argument being: I need time to raise and recruit. True, but these having taken such massive proportions lately, Product has been delegated 'under' the Founders = 2nd priority by definition. Hence so many companies with millions in bank, over bloated teams, but not even clear PMF, let alone economic models. Economics should remain a core part of Product.

Another explanation is: we have seen a much bigger proportion of Founders with little experience in 'cross-functional work', 'integrative management' and 'user-led holistic thinking' experience. All critical to PMing. Big fund raises allowed to compensate for that, by recruiting PMs.

Again, lots of startups, at the right stage, need PMs. I am just seeing too many startups over staffed in PMs and Founders too far from this.

Everything is a matter of balance and reasonability. Yes, PM role has existed for decades actually, well beyond Tech (also often called Project Management). What happened recently is: the Tech Giants organization have become so ... well, Giants, that they had to over multiply this role, as a way to get cross-functional work done, priorities upheld, etc. Also a matter of choosing to over-specialize engineers (see how hard it is to find full-stacks now), designers, etc. And a matter of how far from the users have pretty much everybody become. I knew PMs in these Giants for literally the 'edit' button. Like everything else, the pendulum has swayed to the opposite extreme / exuberance.

Most startups will need PMs, after reaching a certain size and complexity. What I see is that too many startups, well before reaching that stage, have over multiplied PMs.

Finally, when your company is on a clear path to run out of cash, this discussion and trade-off becomes a matter of survival. Not of org concepts.

Thank you everybody for your time to read my publication and all these rich comments I hope your company's are not in such dire situation to have to apply these tools. But if you are, I am happy to entertain a Q&A in this forum to help navigate at best.