Bad Foundations Condemn A Company To Fail
A startup messed up at its foundation cannot be fixed
- Bad decisions made early on are very hard to correct after they are made.
- You need to get the first things right, because you cannot build a great company on a flawed foundation.
- When you start something, the first and most crucial decision you make is whom to start it with.
- Technical abilities skill sets matter, but how well the founders know each other and how well they work together matter just as much.
Most conflicts in a startup erupt between founders and investors on the board
- Board members might want to take a company public as soon as possible, while the founders would prefer to stay private and grow the business.
- The smaller the board, the easier it is for the directors to communicate, to reach consensus, and to exercise effective oversight.
- However, that very effectiveness means that a small board can forcefully oppose management in any conflict.
It’s crucial to choose wisely: every single member of your board matters
- Even one problem director will cause you pain, and may even jeopardize your company’s future.
- A board of three is ideal.
- It should never exceed 5 people.
As a general rule, everyone you involve with your company should be involved full-time
- Anyone who doesn’t own stock options or draw a regular salary from your company is fundamentally misaligned.
- They’ll be biased to claim value in the near term, not help you create more in the future.
- That’s why hiring consultants doesn’t work.
- Part-time employees don’t work.
- Working remotely should be avoided, because misalignment can creep in whenever colleagues aren’t together full-time, in the same place, every day.
LOK: 4. Management
RL: Zero to one
IDEAS: Startups