David Friedberg: okay everybody it's a big show today we're doing episode 10 the final show of the startup checklist you can see the entire startup checklist at this week in startups.com checklist but first i'm going to cover the news brian armstrong and tether skipped the crypto hearings this week they got called out by a senator and adele has a new residency at caesar's palace in vegas and people and bots are buying up her tickets and reselling them for thirty thousand dollars i got a really interesting idea of how to use crypto to solve this problem stick with us it's gonna be a great episode

SPEAKER_02: this week in startups is brought to you by linkedin marketing to redeem a 100 linkedin ad credit and launch your first campaign go to linkedin.com checklist odoo is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack as you build and scale your business your first app is free forever and right now odoo is offering one thousand dollars off your first implementation pack at odoo.com twist that's o-d-o-o dot com slash twist and vanta compliance and security shouldn't be a deal breaker for startups to win new business vanta makes it easy for companies to get a sock to report fast twist listeners can get one thousand

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SPEAKER_05: armstrong and tether are called out by a senator for skipping the crypto hearings on wednesday here's a little background the house the house financial services committee hosted a number of crypto executives circle ceo jerry miller who's been on the program ftx ceo sam uh bank and freed on the was there coinbase's cfo was there but not the ceo paxo ceo charles was there and some other lesser known crypto executives of course when people talk about crypto a lot of okay boomer moments a lot of stuff trending on tick tock and twitter but you do see uh from i didn't get to watch the whole thing but from the clips i did see we're starting to see i think a more mature group of executives um who are playing by the rules and an increasingly intelligent discourse with the government so you know we're going into the second decade of this crypto journey and it feels like the second decade of the internet which is to say people are starting to understand what's going on here uh there are obviously a ton of issues around stable coins according to bloomberg's write-up stable coin uh regulation was the most discussed topic especially due to tether's absence and of course their horrific track record of disclosures and fines and general shenanigans we've talked about tether and the tether investigation hashtag tether investigation on twitter on a number of episodes

SPEAKER_08: 1232 1243 1250 and 1300 brian armstrong not making it that's a little weird for me uh you know he did

SPEAKER_11: call out the sec he is the biggest player in the space he should have been there i'm not sure why he

SPEAKER_05: didn't show up it could have been a personal reason uh but the cfo is pretty good to have there as well but that could have been a strategic machine a mistake because if you call out people for not meeting with you and then they have a meeting and you don't show up not a great look i'll be honest uh but who knows maybe had a an excused absence you know you know somebody's kids you know in a play or something uh tether missing well that's to be expected i mean i think if they land on the ground here who knows the doj could have warrants out for them that we don't know about there could be all kinds of shenanigans if you've been getting fines at the rate they're getting them and there are these questions you never know what's going on in the background i hate to be a conspiracy theorist but here's brad sherman a democratic representative from california pulling them out in this 52 second

SPEAKER_18: clip i'll see on the side the fact is that the advocates of crypto represent the powers in our society the powers in our society on wall street and in washington have spent millions and are trying to make billions or trillions in the crypto world these include goldman sachs jp morgan visa blackrock citadel musk and zuckerberg not to mention the ceos that are before us here today the regulators need to listen to this hearing very carefully with all the money and power on one side we will not be able to pass meaningful legislation and if you wonder about where the power is zuckerberg had to come here himself and sit there brian armstrong sent his number two and tether doesn't bother to show up at all zuckerberg did not have a day in the park he did not enjoy it but he had to come armstrong didn't

SPEAKER_11: and tether ain't here at all okay so tether is in the crosshairs you can't operate an at scale stable coin worth tens of billions of dollars and not show up when you're respectfully uh asked to come and have a discussion about the impact of these stable coins on society and uh you know he's dead right in that interesting that he's making uh some comparison here to the power of crypto to that of wall street and uh tech writ large like the major tech companies i'm not sure if that's exactly correct but certainly there are a lot of concerns i think of a contagion and also let's be totally honest crypto is competing with the banks and the banking system and it's also competing especially stable coins with the us dollar and the us dollar is uh you know a locus of power for politicians we are at their uh mercy when it comes to what they decide to spend how they spend it printing more money and monetary policy generally i mean obviously we elect them and we can take them out of office but you know usdt usdc other cryptocurrencies if people decide they want to opt out of having a bank of america or morgan stanley wells fargo you know pick the bank and they decide you know what i want to just keep my money at coinbase and i'm going to take my paycheck and i'm going to direct deposit it into you know uh you know a bank but then i'm going to quickly uh wire it over to my crypto holdings and buy crypto with it or socks at robin hood or crypto and stocks at robin hood or just crypto over at uh coinbase i mean this has a serious impact i think on the future of our government's control over money some people say that's a good thing some people say it's a bad thing it's a little bit of both there's there's upside to having control over the monetary system and there's obviously downside it depends on how things are executed on december 14th the senate committee on banking housing urban affairs will hold their own hearing on the risk of stablecoin so they are clearly uh front front and center in people's minds this is a quote from the bloomberg article the president's working group on financial markets recently proposed for stablecoin issuers to effectively become banks with insured deposits that makes complete and total sense to me they basically are printing a new currency they're printing poker chips and uh there is a

SPEAKER_05: real uh danger there if that money were to go away after the hearing concluded uh sam bankman freed the founder and ceo of crypto trading platform ftx tweeted the following huge thank you to maxine waters patrick mchenry and the whole house financial services committee for having us today to talk about the future of digital assets the meeting was productive and i'm really grateful for the engagement and thought and thoughts from policy makers uh i came in expecting some hostility and grandstanding but instead found the discussion to be by and large productive and helpful i'm excited to keep engaging

SPEAKER_14: with lawmakers and regulators to refine the regulatory landscape so i think what you're seeing here is

SPEAKER_11: is actually quite productive the people who are the bad actors the shady actors most people would put tether into that bucket are now because it's becoming apparent who they are and then the people who are the good actors are having productive dialogues and you know i think we all have the same goal the good actors politicians and other regulatory uh groups everybody just wants to see this be orderly we don't want to see people be hurt and we don't want to see a bubble because when bubbles burst yeah there's this issue of contagions the black swan kind of issue and so we need to get ahead of this this is long overdue and really to have some sort of regulatory environment here that made it more clear uh would be good and it also needs to be fair we have a group of people in the world uh myself included venture capital firms included private equity firms banks hedge funds who are playing by the rules companies going public republic seed invest various platforms seed invest being owned by

SPEAKER_33: circle now all of those platforms are spending tons of money on regulations legal accounting in order

SPEAKER_11: to be compliant and then on this other side people are popping up dows and coins and then like xrp which is super shady and they're doing whatever the hell they please and they don't care about securities law in the majority of cases and let's face it um they're running amok they're breaking the law and our government takes three four or five years in order to process people who break the law that's just the nature of it right we don't want to live in a society where people are being arrested willy-nilly we want to have a thoughtful process of when somebody does get investigated uh taken to trial um we want to have due

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SPEAKER_11: great job linkedin that means when a group of people on mass become bad actors like the ico movement the the the the rush to secure the bag the rush to steal money to bilk you know grandmas and grandpas and you know unsuspecting uh civilians out of their money is great and we know the grifts painting the tape wash trades pumping and dumping pump rooms people buying nfts selling them to themselves and their friends and then lowering the price and giving people a deal on an nft that is worthless all the shenanigans that are going on you know it's going to take years for all those regulatory committees to ask for information and then to find them look at how long tether uh has operated before they got fined and then the really bad actors which i believe tether is one of they will use the fact that they're not been stopped as proof that they are illegal like oh shouldn't we've been stopped by now or you know we just paid a small you know 20 30 40 whatever million dollar fine oh that was just a speeding ticket they make up these excuses but if you look at icos you just type in icos and the sec you're going to find them going after people and those are icos that happened what four five six years ago

SPEAKER_05: uh so the law is slow but it is um pretty harsh as you can um ask the founder of the silk road

SPEAKER_11: who at a very young age built a website that he thought was ebay for people who wanted to trade cannabis and he is going to be in life in jail for life plus i think like 40 or 80 years so he's never

SPEAKER_05: getting out i mean there's a big movement to try to get him out but this is um serious stuff and i think this is great it'd be really great if this led to rethinking accreditation laws because all of

SPEAKER_01: the crypto projects seem to not even know what those are um the number of investors allowed you know

SPEAKER_11: when i do a syndicate uh or somebody does a reg d on an equity crowdfunding there's a dollar limit there's the number of people there's accounting you have to do there's all these protective provisions

SPEAKER_33: and let's face it some people are doing them and other people are not let's all look at those laws and say which ones are still valid and which ones are not i love the fact that people are getting an

SPEAKER_11: education i love the fact that people are betting on the future all of that is great i just don't want to

SPEAKER_42: see anybody you know and nobody does uh face the risk of ruin and i don't want to see anybody be

SPEAKER_11: the victim of fraud and we know there's a ton of fraud there because this is super non-regulated conversely we don't want to see the united states fall behind and so my very simple uh regulatory framework was if a project has a market cap of under 10 million dollars let it register let it exist without too much red tape when it hits 50 million give it a different designation and then over 100 million okay everybody who's participating has to be legit so you know if you want to be the nodes or the routers or you want to be transferring coins all that kind of stuff you're gonna need either a licensing uh you're gonna need to put your social security down you're gonna have to sign paperwork to say you're responsible for making sure that there's not fraud to make sure that it's kyc to make sure there's not money laundering all that stuff that is you know a critical part of running a

SPEAKER_44: functioning society so i feel like i hate to be super positive here but i feel like we're trending in the right direction and that everybody is you tell me but it feels like people are on the same side now uh and i think people are getting a little more i think they're getting a little more realistic that this isn't going away but it needs to have some some rules of the road and that we can as a

SPEAKER_11: society come to them together the tiered regulation of crypto projects my suggestion is brilliant because it allows innovation it doesn't stifle innovation but with great power comes great responsibility so if you know tether was a 10 million dollar product who cares but if it's 10 billion they should be treated a different way if it's 10 billion you need to get a license you need to be here in the united states your ceo needs to sign documents you need to be audited not attestations you know and other nonsense right also look for i predict taxes and uh all kinds of tax related and reporting regulation to come very soon and we know that that's been in some of these recent bills moving on in the news i saw that adele uh who is wonderful and i'd love to see her in concert uh i was just on uh you know when chrome surfaces stories for you i saw this that she was upset that the retail prices for her concerts in las vegas in january are going for between two thousand and wait for it thirty five

SPEAKER_05: thousand dollars a ticket show is called weekends with adele and uh she's going to be playing on fridays and saturdays from january to april that's a run oh my god how much money is she gonna make according to tmz pre-sale tickets sold out in minutes due to bots of course interestingly the tmz

SPEAKER_01: article noted that last week democrats in congress introduced stopping grinch bots act uh and this would stop ticket resellers from using bots to buy tickets instantly before actual fans can get to them and it wouldn't just cover tickets it would also cover other highly deserve you know desirable things like holiday toys and sneaker drops uh that's a lot of regulation from the government probably unnecessary for the government here i just had an idea i wanted to float with you uh we've been

SPEAKER_11: talking about nfts um and you can make them smart contracts so everybody who goes to a concert gets an nft it has their ticket it's got a hologram of whatever maybe it includes you know a live live music you know or the the rights to uh play the live music from your show maybe they take a picture of everybody you get a picture of yourself there you do all kinds of fun stuff but more importantly uh they would be resellable only add up to 10 percent more than you pay for them that's it only 10 percent more and you can only resell it twice maybe in other words if i bought the tickets i could sell them one time and that person could sell them one time so the

SPEAKER_05: most it could go up is a hundred dollar ticket would go to 110 and then we'll go from 110 to 121 and of course adele or the you know get that money or she could say any resells i'd like to give to

SPEAKER_11: this charity so yeah by all means resell it if you can't make it uh but that would be a beautiful way for us to stop this and you know all it i don't even think you would need to be too involved in crypto to do this because to you could give people their ticket in a wallet like apple does or ticket master does or any number of people do with you know a unique hash password whatever it would only be if you want to resell it that you would need to get into crypto or whatever so most people who are not reselling it they would be fine um but when you go show up for the concert you know in these high value tickets uh why not have the ticket uh when it's purchased the person who bought up to four tickets at least one of those people has to show their driver's license right when i go to a conference and i bought a ticket when you go to ted or you know other recode conference whatever and you pick up your ticket your name is on your pass right so this could be a little bit of pain for individuals because you'd have to know who you're going to bring to the concert with you but if you at least know the person who bought them is going and then you know their plus one could maybe not have to show um their names but this would be better for fans and the grateful dead uh did this they would sell their concert tickets themselves you would be on their mailing list you'd send them an envelope they had a bunch of people in a in an office somewhere up in mill valley you know north of the golden gate bridge and they would email you tickets to your shows and they they just took control of their own things and nfts is a great way to do that i'm guessing there are 78 startups that have written white papers and nobody's written a line of code for this yet if anybody in the crypto space has done more than write a white paper with spelling errors in it and you've actually written some

SPEAKER_01: code you can do a product demo i'd love to see it that's the big problem every time i meet somebody i was in our basel everybody's telling me they have the greatest project ever so you show me a demo and they're like oh we haven't we haven't done it yet but we've just raised 10 million at 150 million

SPEAKER_11: posts and i'm like you haven't built anything yet like not one line of code nobody's building anything everybody's talking well i want to see i want to see product demos let's see some product demos folks all right let's get on to the startup checklist if you listen to this week in startups often you've heard

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David Friedberg: of the startup checklist which was just a crazy idea i had at some point when i was riding my rad power bike

SPEAKER_01: to go get some greek food uh and i was like what if there was a little checklist because we always obsessed with these checklists checklist manifesto great book there's a checklist for founders where

SPEAKER_33: they could just go through this list when they start a company in their first year and make sure they don't miss something important well here we are we've done nine episodes and today's the 10th you

SPEAKER_36: can see every single item in my notes and all the videos at this week in startups.com checklist this week in startups.com checklist and this is something you're going to want to print out and maybe if you got two founders and two people on your management team the five of you can get together and you can run through this do it at an off site take a weekend go to la go to phoenix wherever you austin miami and maybe just for a couple hours a day you go through these items and

SPEAKER_33: just see if any of them are things that are important for your startup i'm going to make this into an ebook

David Friedberg: i think or maybe i'll just publish it as a book i'll talk to my book publisher i'll send her these videos maybe this could be a quick book i could do in addition to the one i'm writing but today we're going to cover the items that you told us we missed or my team in watching this and going through the list said you know this didn't fit into the other categories but they're critically important so again the full checklist this week in startups.com checklist if you are an angel investor send this to your new founders first time founders first year year zero year one and they can

SPEAKER_42: catch up again i don't expect that 100 of 100 of these is going to be new information for you

SPEAKER_33: it's a checklist it's meant to be some of them are meant to be obvious but could be great discussion

David Friedberg: prompts for you and your team and uh you know get out your journal and and start writing and start thinking about these issues okay item number 91 on our startup checklist is understanding lean management and it's uh critically important for you especially in the age of remote work and the

SPEAKER_33: pandemic is to have some kind of reporting system that's not oppressive and micromanaging and that is led by the individuals you want individuals on your team who can manage themselves ideally and you want managers who don't need to be standing over the shoulder of somebody watching them at a desk

David Friedberg: to make sure they're doing their work if that's the case you probably hired the wrong people and maybe you hired the wrong managers i wrote a post in january of 2019 i titled it lean management the power of the eod report and i came up with my own little device and it works really well in slack because slack has become kind of where work coalesces it's kind of like the water cooler or the open floor plan office

SPEAKER_33: and the channels are where people kind of congregate and a little bit of structure goes a long way so i said hey at the start of the day when you're checking in not clock punching but just letting everybody know hey i'm here you can just make an intention you can start the day and say here is what i would like to get done today here's what i'm working on today this serves two very important purposes

David Friedberg: obviously it lets everybody else know what you're working on because you might have a manager or a co-worker who needs help with something maybe what you're doing is much more important and you should

SPEAKER_33: do that or maybe what they need your help on something else and so they can look at it and go oh you know that's not super important can you help me with this mission critical thing we're doing or maybe they can help you or maybe they see something you're working on they say oh i already did that or i was working on that last year before you even came to the company here's like my excel

SPEAKER_11: spreadsheet or my google sheet where i actually built that model maybe that would be helpful for you so it really makes communication extraordinary now the other reason is for you to feel i don't know

SPEAKER_33: a sense of purpose at the start of the day so you're not sitting there going i'm just going to go into slack and read messages i'm going to read the news i'm going to go into my inbox and get lost for two hours and eat lunch and then hope nobody notices that i'm kind of coasting in the afternoon right you want to have some intentionality you want to set some goals for yourself and it's important that you write it not your manager if the manager writes it it's kind of lame you should be able to write it you should be able to direct your work a manager of course can reply your co-workers can reply and then you reply to that with what you got done at the end of the day what's nice about that is we all have all these hours of the day we're working all hours a day we don't have a natural start and end time which was our commutes to the office but since we don't have this this kind of

SPEAKER_36: acts like a commute you just get that nice warm cup of coffee and you write your start of day at the end of the day you follow up with it and then what i'm seeing people are doing now is in my

SPEAKER_33: company is they decided to do it for the entire week so they do a start of week and an end of week s-o-w monday morning eow friday afternoon and then end of day start of day the other days of the week and the and the other time so they do 10 of these a week it could be one bullet point could be

SPEAKER_36: three some people at the end of the week give me five sections with five bullet points under each and it really uh becomes amazing for me as a you know ceo and a founder to read the end of weeks

SPEAKER_33: because i just now know who on my team is crushing it and then they start putting links into it so when my team meets with a company they will link to their notes on the company if they're selling ads to a company they might link to just the company's domain name and i can say oh this company wants to buy ads so that's kind of interesting or if we're hiring somebody the person says i'm interviewing people and they link to their linkedin okay great now i can see that say oh you know i'm connected

David Friedberg: to that person through this person communication people always say is the biggest problem at any company like literally if you go to 100 companies and you ask 10 executives at each now you got a thousand votes and you say what is the biggest problem with this company 900 plus times they're going to say communication why do they say that because communication can always be better well some sort of process where people are self-reporting and setting their own goals and doing it in a

SPEAKER_33: public fashion it builds everybody's it builds everybody's performance and it lowers anxiety everybody knows what we're working on and then you can have more rich discussions because it's not hey what are you working on i know what you're working on everybody drinks coffee they're right there

David Friedberg: as they read everybody else's and then if you're an ambitious person in a company you're a young person coming into a company you see what everybody else is doing hey okay i see this person is really important is working on diligence oh i see this other person is doing meetings maybe i need to be able to you know at this venture firm i'm working i get on the diligence train right or maybe i need to be able to do some of those first meetings or sourcing of companies and it just levels the playing field of what work is being done in the company and so you don't have to do my system and i can tell

SPEAKER_33: you when i used to do this system i had one or two people who are really respected say i won't do it

SPEAKER_01: and i didn't respect them all that much afterwards it eventually became clear the people who didn't want to do this uh it was only two people really out of like 16 they just weren't doing as much work

SPEAKER_11: as their contemporaries and so it's much more fair i think for everybody to just say here's my contribution

SPEAKER_33: to the company and leave it at that right and sink or swim and i i like a meritocracy so i think it's very important you can do whatever system you want some people like to use 155 a company we've invested in other people use okrs they've got other reporting systems what's important is that you have some lean management system and the word lean is in there for a reason you shouldn't be overbearing tps reports

SPEAKER_01: from the movie office space we all know those are oppressive so remember you don't want to be

SPEAKER_11: oppressive you want it to be led by the individual and you you you want to be uh congratulatory so i just love to pop in there and just tell people great job or tell me more about this it just works great oh yeah and one one point don't leave the hardest stuff for the end of the day when you're deciding on what you're going to work on today you know there's some easy things uh you can put the hard things first right so if you if you got to make a strategy document or a model for the next two

SPEAKER_33: years it gives you a little prioritization right um i was going to ask people to put how much time they spent on things i stopped doing that i did it for a little while at inside because i wanted to

SPEAKER_11: know how long they were spending on newsletters once i realized a good newsletter takes some people two and a half hours other people four that it was going to be between two and a half and four which meant a person who was full time could write one in the morning one in the afternoon and have a little bit of time left over so i just did that early on so they could share with each other when they

SPEAKER_01: started a newsletter when they finished and then actually the cms tells us that anyway so we don't need it content management system but it lets you also prioritize right sock 2 compliance is critically

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SPEAKER_11: slash twist go get it okay item number 92 you gotta hire people that are smarter than you and young founders sometimes get intimidated by people who are better than them

SPEAKER_01: what you want to do and what i did was i hired carol martesco as an example who was a legendary independent publisher when i was doing my zines elliott cook who was an incredible operations and strategy thinker who's with me to this day i hired people who were smart at brian alvey you know clearly smarter than me uh and worked for me and then was my business partner on weblogs inc peter rojas was uh and ryan block who were partners on weblogs inc sean gold all better than me at what they did whether it was you know their ability to write about tech and blog they were better than me they were better bloggers than me and better at sales and partnership so hire people who are better than you

SPEAKER_33: this is critically important you want people who can do things you can't and there is this concept at amazon of the bar raiser you can do a google search for that they try to make every single person they hire somebody who raises the bar in some way so molly

SPEAKER_11: wood coming here and helping on this weekend startups listen i mean she's um got a lot more

SPEAKER_33: experience candidly than the producers i currently have on the show because she's been doing it for a magnitude longer so she is a bar raiser she's going to teach me stuff and she's going to teach our

SPEAKER_36: producers here this week and start us up and we're up for that right yeah everybody likes to learn and and we want the show to get better so hire people smarter than you hire people who have more experience than you and then let them teach you and let them make you better you if you're building a team and there's somebody who's a three-point specialist and your team is not good at three pointers and you get clay thompson on your team all of a sudden that may make everybody a better

SPEAKER_01: three-point shooter because he's gonna we're gonna see clay thompson shoot 300 three pointers after you know uh practice is over and we can all get in on that and he can give us tips okay number 93 on our checklist understand how to spend your capital efficiently you want to be frugal you don't want

David Friedberg: to be cheap and you know people waste money i see people do it all the time don't waste money if you have short tasks to do you're gonna you know use freelancers you don't spend twenty thousand dollars on a logo when you raise you know a million dollars that's a lot of money but if you had raised ten

SPEAKER_01: million dollars you can and you can always spend five hundred dollars on a logo now five thousand dollars down the road and when your company's profitable you know have a design consultant and into a fifty thousand dollar rebranding and reimagining there's always time to spend more money later office space is a waste of time you know you don't need class a office space you should have a dump if you have any office space at all uh now everybody's working from home and

David Friedberg: when somebody says hey i was getting paid this amount at facebook or google you say well that's fantastic if you want to get paid that go work at facebook or google this is a startup you're getting

SPEAKER_11: compensated with equity we're all here to build something and to be the underdogs and you don't even entertain that conversation that you would ever be able to keep up so you want to allocate your capital intelligently for marketing you know if the marketing doesn't work you're not just going to hire some agency and blow through your money and hope for the best you're going to run small tests

SPEAKER_01: type tests iterate uh and make sure that that marketing spend works and not just spend blindly i've seen people hire an agency spend 300 000 on creative blow through you know 700 000 on ads for three months and then they they get a hundred customers and it costs them you know ten thousand dollars a customer and the customers are only paying a thousand dollars and it's like okay well that was dumb maybe we should have done something as simple as just emailing people or you know going to a conference and networking you have to have to be frugal and you have to be gorilla gorilla marketing and be smart about how you deploy capital early professional services you can always negotiate if

SPEAKER_11: you have an attorney an accountant etc you can say hey we're young now can you cap these fees can you

SPEAKER_01: work with me here you know you don't need to travel to conferences and waste time on that if you're going to spend ten thousand dollars going to art basel you know business class and hiring hotels just to

David Friedberg: see if you can drum up a deal well could you have hired if you're going to do one of those business development meetings every month for 120k could you hire a salesperson who does it over zoom and emails 10 people a day and does three phone calls a day you probably would have got a lot farther but maybe you want to go to art basel and party well you're going to have to ask yourself what is the most efficient use and you are steward of the capital you're raising from other investors so be wise about that don't be spending money it's really bad optics when you waste money

SPEAKER_11: when you see a young startup blow five or ten percent of their money on their office space and it's the office space is really nice and you're like what are you people doing like spend your money wisely because you never know when the market could turn all right item number 94

David Friedberg: attention to detail i want you to know the value of little big things there is a website called littlebigthings.com and uh it just shows how in user interface being clever and having little things that people notice little refinements you see when you own a tesla or an apple product uh you see it when you fly virgin america or atlantic uh you see it when you go to an amman hotel or a w hotel

SPEAKER_01: little things mean a lot uh airbnb ceo brian chesky understood a lot of the little details that made

SPEAKER_11: things great as an example somebody told him on twitter like can you get the the upload and the download speed of these locations because i go and i've had this happen i want to do video

SPEAKER_01: conferencing at an airbnb i got to do the podcast and they for some reason you know have elected to get the 12 a month internet plan which can't do video where they capped it i was at one place that capped

SPEAKER_36: it we watched two movies and then all of a sudden they're like oh yeah you guys ran over the cap i'm like it's we're paying 300 a night the difference between like the capped internet of twenty dollars and eighty dollars is sixty dollars uncapped it and they uncapped it while we're there you know brian chesney made a tool that the hosts can actually with an app record and then publish to their airbnb pages what the actual speed of their internet is so you could search for places where you can work and actually do video conferencing or record a podcast that's a that's a big little thing or a

SPEAKER_01: little big thing you want to obsess over little big things and i we just showed you the video if you're watching on youtube and uh i told ryan i loved him on twitter for doing this seriously like

David Friedberg: little big things are so important and think that through you know sometimes uh i was amazed the first time i ever stayed in a nice hotel i was staying at shutters i was probably 23 or 24 years old i went for a run on the promenade in santa monica i came back and i kid you not the valet or the you know person who was uh the bellhop walks up to me with a bottle of water and a um a towel like a hand towel

SPEAKER_11: and i looked at him i said that's not mine and he said no no i'm giving it to you for free it's

SPEAKER_33: part of the service here at the hotel you're sweating and i thought you might like some cold water i was like really it's incredible the first time i flew in business class with my friend doug rushcloth they brought warm nuts i had never had warm nuts in my life i put my hand in the thing i was like whoa these nuts are hot and doug rushcloth was like yeah it's warm nuts they do it on every flight i started eating the warm nuts i was like why don't we heat our nuts up at home yeah these warm nuts are incredible i literally went home and i got a ramekin and i started heating my nuts in my toaster oven i'm gonna do that today little big things they mean a lot okay 95. you need to be able to do back of the envelope math you hear me do this on the podcast all the time it's a little party trick i do when i'm meeting with founders hey how many employees you got oh seven

David Friedberg: great oh do you have an office oh yeah we work great all right yeah uh what's your sales oh okay you got fifty thousand dollars in sales a month okay oh you're in new york great all right seven times uh maybe nine thousand dollars eight thousand dollars seven thousand dollars all in per employee all right seven times seven forty nine thousand a month you have 50 okay and you're spending 10 on your office space maybe 10 on legal spending 70 you're making 50 okay you sorry i just

SPEAKER_01: say your burns 20 and they're like our burns 18 how did you know and then i just tell them the party

SPEAKER_36: trick i talk about in my book angel you need to be able to do back of the envelope math and you need to be able to do quickly because when you're doing things like talking about pricing you're talking about expenses this comes from building your model in excel or google sheets over and over and over again

SPEAKER_11: and just having your calculator up and i would model everything okay if we have 15 newsletters

David Friedberg: at inside and we can get three classified ads a week or 150 each is kind of what i went through for inside i was like okay if we can have five my original idea was to just have like five classified ads at the end for a job or an event it's like five ads at the bottom 150 each 750 a week and then in my mind i'd say okay 750 times 100 is 75 divide that in half 37 50 something like that so maybe 35k 37k okay 37k per week okay got 750 okay if i do four episodes a week if i pay somebody 100 bucks 150 bucks a newsletter that's three hours to write it that winds up being 30 bucks an hour yeah you find freelance writers for 30 40 bucks an hour to do that and i was just like okay this business could work it's possible it could work and sure enough uh we're profitable this year with a couple million dollars in revenue and it happened exactly as i thought it would with my back of the envelope math and i'm doing more back of the envelope math i just did it with events i was like well i think we could do each newsletter could do one weekly event and then maybe a quarterly event or two big events a year the weekly events if we got a sponsor to give us a thousand dollars a week that'd be 50 000 a year for those 50 events we could probably sell it you know 15 or 20 events at a time and get 50 to 200 people at each weekly event and then i modeled the events business i was just able to do it in my head after 30 years of being a an executive you really want to be able to do that don't be intimidated you just learn how to use excel and you put numbers in there you put it up on your screen and then you have a little discussion with your team hey how many ads do you think you could sell what's the minimum number of ads we sell what would be a price people would pay for those ads that would be a no-brainer how many people would we need to have come to the event how many people would we have to invite to get to 100 people in the event okay we think that five percent of people are going to come great we need to have 2 000 active readers on the newsletter okay we have 8 000 people we're going to easily be able to get to 100 okay great maybe we'll set the target at 200 and we'll double the price of the sponsorship you get the idea back of the envelope math being able to think quickly with numbers

SPEAKER_11: understanding how much revenue you're going to make in a year and how much you spend on you know the cost to do something will make you be able to just build a model in your head if anybody's a great chess player backgammon player you can look at the board and you know where you are right or you can look at your cards and know where you are okay i have the eighth best hand here there are seven better hands in poker i'm up against two other players there was a raise it was a re-raise everybody's got strong hands you know i got a pair of queens and there's an ace and a king on the board ain't no chance that those other two other players don't have an ace or a king here my queens are probably dead i need to get out of here you know like you can really start to understand kind of intuitively where you're at yeah it doesn't mean you're not going to try for a bluff but you get an idea of where you're at so do that back of the envelope math and get good at it okay

David Friedberg: number 96 just got to read the mount rushmore of management books there's a debate over which ones i like checklist manifesto i like working backwards i really love the no rules uh netflix culture book some people really like good to great um read the business management books some people would say lean startup there's many different ones out there i gave you four or five right now make sure you read them make sure read them with your team and when you find a great book where the operating philosophy is something you want to have by the book by the audio book and have a discussion with your team about the principles there ask them if they finish the book yet if they didn't finish the book ask them to finish the book it really is great for everybody in the company to have read some of these seminal books so that they can share uh that system and apply it to your company it's almost like shorthand so we say checklist manifesto we say working backwards in our company we know we talk

SPEAKER_11: about writing culture and making checklists so that we avoid making mistakes uh you get the idea item

David Friedberg: number 97 i think going through your entire products workflow every week or month is a really good idea people forget to go through their sign up forms and they don't refine their products you really want to look at things with fresh eyes create a new account look at that drip campaign and go through your workflow desk trainer was on episode 543 back in 2015 and on that episode he said all founders should go through their entire product workflow at least one time per week that's pretty intense this means you sign up as a new user you go through the onboarding process and you just understand what it looks like because sometimes you forget and then what are you going to focus on how do i make this faster less clicks less friction less time less annoyance and make it clear okay item number 98 you want to avoid shiny object syndrome this is something i've given you a thousand metaphors about but if you've

SPEAKER_33: got a business and it's working and web 3 comes out and somebody says you know what this uber thing is amazing but what if it was a dow airbnb is amazing but what if it was decentralized you know what

David Friedberg: that's a great thought experiment but if you've got a hundred million customers they're delighted and you're growing 30 year over year i would stay focused on that if you want to put somebody on a you know little side project here to model something out that's fine but too many founders see some shiny new object happen some new feature and they don't finish their existing features they don't refine them and they never get to true product market fit so avoid what people in the industry

SPEAKER_33: call founder adhd and if you find oil you keep drilling so many times a founder will say to me

SPEAKER_11: hey we drilled for oil we found oil i'm like great you want to drill deeper and they're like no i think i'm going to go over to that stream with this pan and see if i can pan for gold

SPEAKER_36: i'm like that's a great idea there's 50 people over there panning for gold there might be gold there there's nobody over here on this oil field and we just drill for i don't know three more months one more quarter and see what happens that's what i did with the newsletter business at inside i just kept drilling that's what i did with the

SPEAKER_11: syndicate that's what i did with this vegan startups i wonder if i did two episodes a week if we get better three episodes a week if we get better i wonder if we started meetups if we get better with inside i wonder if we did five newsletters 10 newsletters 15 newsletters would it get better but if we do events i kept drilling kept going deeper pulling the thread and seeing if it gets better that doesn't mean you just keep launching new products right you got to be very

David Friedberg: careful a new product means a whole new set of things you need to maintain products people businesses constituents okay number 99 align your team around monthly updates sending monthly updates to your investors is inspiring and giving each of your team the ability to track their metrics weekly and then roll them up monthly and then know that that information is going to investors man it puts everybody on pointe this is why when we invest in companies we ask them to send us a monthly update i would say on average they send six seven eight a year uh some people said none we have to and we just know those people who said none they're probably doing poorly they're not good leaders they don't inspire their team and so uh you know maybe we made a mistake investing in them or maybe they need to get a better support team around them because they may just be waiting for good news to happen and then they run out of money and the investors are like is is this company even in business i haven't heard from them in 12 months and to be totally honest the companies in our portfolio that have done the best send a monthly update internally because they want everybody on the team on the same page so it's not just for

SPEAKER_33: investors it's also for everybody who works in your company to be able to then take in that celebration and and just pause for a minute every month on the 15th and say listen it's december 15th man sales team

David Friedberg: killed it in november product team killed it hey customer support we're behind our ticket times are taking longer but we got a plan here's the plan just absolutely fantastic and number 100 some people are going to think this is silly but and it's it certainly is a no-brainer but never lie about where

SPEAKER_11: you're at to yourself to your team to investors especially you want to be candid you want to be up

David Friedberg: front you want to face the music if you're drilling for oil and nothing's coming out you're gonna be

SPEAKER_01: honest about that and if 10 gallons of oil are coming out you tell people it's 10. you don't tell them you're on a run rate for 100 just because one gallon happened to come out fast because i don't know you just hit a pocket of oil you never bend the truth you never lie you never exaggerate if people are on a trial and they're not paying you say they're on a free trial you don't say they're a customer call them somebody who is a free user they're trialing the software if somebody's in your pipeline that doesn't mean they have a free trial if you give them a free trial and they never log in

SPEAKER_11: they're not on a free trial you're trying to get them on a free trial it's important because if you're selling securities and you're almost always in a startup uh either preparing to sell securities or in the process of selling securities uh you're committing securities fraud when you lie about your the reality of your business and misrepresentations and losing your credibility it's just not worth it because you can go to jail you can ruin your reputation you can burn yourself with employees with stakeholders investors your customers be honest in all things accept the reality of your startup and the truth shall make you free you know one of the issues uh we had at a company i was at was that people were not renewing and you know we did have sales rising but the same time we had churn problems and i said what's the story with the churn and they're like yeah you know we're growing and i was like but are we growing or are we on a treadmill that is not sustainable and

SPEAKER_01: we just had a candid discussion about it and i said can we just talk to everybody and ask them to answer and give them a prompt and say check all that apply why did you stop using acme's product too expensive not enough value too slow couldn't understand it uh found a better solution other and we just let them check it off and you know it wasn't price it was that they didn't understand

SPEAKER_36: how to use the product and so it was like okay products too complex we got to simplify this thing or they didn't get enough value from it okay they don't know the features so it's a training issue okay let's do training let's train people on how to use this let's invest in a customer success person right the truth shall make you free all right everybody this wraps up the startup checklist 100 items across 10 episodes of this week in startups hardest working team in startup land put this together thank you to charlie nick jackie ashley fresh marine rachel justin everybody worked on it did a great job thank you so much it's a great list share it feel free to remix it you can copy it you can change it just link back to the original this week in startups dot com slash checklist this week in

SPEAKER_55: startups dot com slash checklist and we'll see you next time on this week in startups bye bye