Money = Time

As 2014 comes to a close, I am doing something I love to do: reflect on the past year and plan for the next. I am also doing something I never wanted to do so soon: selling Primeloop.

I am having some exciting conversations with several wonderful companies about providing our customers a new home. These are businesses with the resources to write a new chapter for Primeloop. So, even though I am sad to hand my baby over to someone else, I am still excited to see what happens next.

But, before we get there, I wanted to pause and reflect on how we got to this point, and hopefully extract some lessons for myself. Maybe they can be helpful to my other colleagues who are ‘in the arena’.

Why are you selling Primeloop?

Primeloop ran out of time. Which is just another way of saying we ran out of money. Obviously, I am completely biased, but I truly believe that if we had another year we would turn Primeloop into a thriving business.

In the real world, “Time is Money.”
In the startup world, “Money is Time.”

I had two business goals when I started this company:
1. Create a business, not a startup. The startup is just what we have to be first.
2. Do that with a group of people who I would want to work with for another five, ten, or fifty years.

They say the definition of insanity is doing the same thing over and over, and expecting different results. So, taking that lesson to heart, there are a lot of things I would change the next time around. There are also a few things I would keep.

What I would change:

1. I would raise more money on the story.

In an early stage startup there are two times when it is easier to raise capital: (1) When there is a big vision and a story of how to get there. And, (2) When there is a surprising amount of growth in revenue or customers. It can be extremely difficult to raise capital when you have started to get some revenue or some customers but not enough to surprise anyone. At that point, the numbers speak louder than the vision.

Before Primeloop I worked for, founded, or advised 8 startups. And, through 500Startups and Up Global, I have mentored another 200+. I have watched many startups waste money, seemingly just because it was there. So, rather than raising ‘as much money as possible’ on the story, I decided to raise only what I thought we needed to validate the idea. Next time, I would raise more money on the story.

2. I would take more money when it is on the table.

It’s not even like I didn’t spend enough time making the rounds, I even turned down money that I didn’t think we needed at certain stages of the company. We didn’t need more people at that stage of the company. But, sometimes it takes more than 18 months of burn to get to the next milestone.

3. I would trim even more fat.

Well, at least that is what I wrote down first. As if the reason we don’t have 12 more months to run the business was because I didn’t turn off that “$19 per month a/b testing service we weren’t using because we had our own solution” fast enough. While it is certainly stupid to waste money, maybe it would help to spend different money sooner.

4. I would start to solve sales much earlier.

I was convinced that founders should do sales until there is a specific/repeatable sales process. I still agree with that advice, especially when spoken to founders who hand off sales before they even touch it. But I think I was too far on the other extreme. Next time, I would bring on a full-time experienced sales person much earlier to lead the process of discovering the specific/repeatable sales process.

Category: “Other”

Before I get to the things I would keep. I need to address two things that I am not 100% certain about. These are still unknown to me, and I hope to talk to a lot of other people about these two specifically:

1. Should you only partner with ‘good people’?

My approach with Primeloop was, “yes.” I worked to make sure our investors and early partners reflected our values aligned with the Primeloop culture. Would I do that again? I really hope so. But, Paul Graham kicked off an interesting debate recently with his article, “Mean People Fail.” It is a little too easy to look around at some of the “most successful” companies in the world, and see a bunch of jerks who are willing to do “whatever it takes” to win.

I guess, if being an asshole is what it takes, I don’t have what it takes. That said, it would be foolish to throw the baby out with the bathwater. There must be other lessons to be learned from what makes those great company great.

2. Hire Slowly, Fire Quickly

This was advice that I took to heart. Those times that I had to lay off members of the team for the sake of the business–not based on their performance–were the most difficult days of my career. Especially since we work so hard on the culture. Especially since we made a point to hire slowly and find great people that leveled up the playing field AND who we would all want to work with for years to come. Saying goodbye to those people was always hard. But I tried to do what was best for the company within days of recognizing that we needed to make changes.

I would probably add an additional guideline to this advice: there should not ever be less than 6 months of burn left. And, if it approaches that line, changes should be made at 6 months not “I still think we’ll get there in 3 months.”

The things I would definitely keep

1. I would still consider a distributed team.

Primeloop had a distributed team. We were super productive. We were able to live in places that were 1/2 or even 1/3 of the cost of living in San Francisco. We had fun in slack, and on Zoom, and at our bi-annual team retreats. We had the freedom to get into the flow without constant disruption. We were able to take advantage of multiple timezones to make progress around the clock. And I still believe all of these things were an advantage. I wouldn’t force it, but I would certainly consider building a distributed team again.

2. I would still ban email inside the company.

This one I would absolutely enforce. I already wrote extensively about this. I will just reiterate that the way we used primarily public and asynchronous channels for team communication was a huge advantage.

3. I would still focus on the culture.

I am having the hardest time writing this section. Anything I try to say seems to cheapen the culture we had at Primeloop. I’ll leave specific comments and questions for the comments →

I would never try to recreate the exact same culture with a new team (that is the opposite of great culture). But, I would definitely put as much time and energy into developing the culture at a future company.

Onward and Upward

As I refocus my energies on selling the company, I feel it is important to celebrate the wonderful things while trying to learn how to be an even better entrepreneur the next time around.

Please pick this article apart in the comments, I still have a lot to learn.

If the lessons I learned were helpful to you,
please take a moment to hit the recommend button.