7/52: Don't have nightmares
#CapitalAtRisk
The 2010s was the decade of the Entrepreneur.
The 2020s will be the decade of the Investor.
““As a startup CEO, I slept like a baby. I woke up every 2 hours and cried.”
Ben Horowitz
Sunday night chit-chat
My last newsletter, here, was entitled, “Early start; Early finish”.
And while that’s generally true — if the meeting, call or day starts well it’ll likely end well — I’m afraid that sometimes working with founders does take a late night. If you’re a startup CEO or one of their investors you can’t always (and might never) take a night off1.
Never bored?
When talking to other venture capital investors they often ask my view on taking a board seat. I tell them that these days I don’t sit on boards2.
While I do want board packs and as much information as the CEO will agree to share, I’ve found that the most critical, existential and important conversations and decisions seem to happen over WhatsApp on evenings and weekends. The problems, fall-outs and crises don’t wait patiently for the next board meeting3.
Quick question…
Last night the CEO of a portfolio company WhatsApp’d me at 8:15pm with a problem. Naturally I’m not going to go into specifics of the company or the problem but I did want to share some of my go-to advice as it may prove useful to the startup CEOs amongst you.
My crisis playbook
If there’s a crisis that comes up on a Sunday evening then please consider the following:
Tell someone — a problem shared is a problem halved, as I’m sure everyone’s parents used to say4. I bet that the very act of writing a WhatsApp to me put the CEO at ease5. So tell someone — articulate the problem in short, written form and hit send (which is why WhatsApp is better than a long, drawn out email).
The separation of tasks — remember Alfred Adler. Separate what is your task and what is someone else’s task. For example if someone else is trying to ‘prove’ something in dispute then I’d say it’s their task to go find that proof6. Equally if you are asking someone to do something then it’s your task to make sure there is no ambiguity. The separation of tasks greatly simplifies who does what and when, and avoids the ‘We’ problem described here7.
Sleep on it — don’t be rushed. In fact, the more someone else is trying to rush you then the more important it is for you to pause, take stock, and think very deeply about the incentives and implications of any action you might take. Going for a walk first thing the next morning (without your phone but with a notebook and pen) will do wonders for this.
So have a think…
Who are your top-three WhatsApp contacts when (not if) there’s a crisis?
Is it clear who should do what and when?
And always, sleep well.
In other news
🥷 Founders Focus is going well. I hosted the fourth session today and it’s proving incredibly useful for members, not least me! You can become a member anytime here and then I’ll add you to the session.
➹ On Wednesday I’ll be up in Newcastle giving a talk on — coincidentally — startup boards. I occasionally do speaking gigs and mentoring so if you’re keen to explore that with me just hit reply.
More from me?
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Q&A
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Important: None of these posts are investment advice. If you are thinking about investing you should seek the advice of a suitably qualified independent advisor.
#CapitalAtRisk
For the investors among you this is really about what kind of investor you want to be. For me I say to my portfolio CEOs, “If I’m awake I’m available”. But it’s also OK to be completely passive — so-called ‘dumb money’ is underrated — put in the cash and let them do the work. A ‘meddling’ investor is the worst of all, so don’t be one of those please.
I used to — from 2016—21 I was an observer on many and Non-Executive Director on one other.
I do ask for the board information though — I want to see the formal stuff and I want to see that the CEO takes it seriously.
Part of my childhood was in the 1980s and, with the even-present thread of the four minute warning of nuclear annihilation, my father certainly said this more that once.
As in, as soon as they hit ‘send’ and before I’d replied.
Adler also said that, “all problems are interpersonal relationship problems”, which is also helpful to remember on stressful Sunday evenings.