Things I Tell Myself Part 3 | Zander Adell

Back to this. So you've, let's say you've sort of stomached the numbers game, and you've actually found some people who are interested in giving you money. And you seem to have found a little bit of product-market fit, maybe some hint that what you're doing isn't absolutely ridiculous, and your parents aren't going to be embarrassed. Now it's time to deploy it. All of that fire in this metaphor is money. It is so expensive to move the needle. And that is why talking in millions of dollars is totally normal after a while. When people were first like, you probably need to raise $1 million, I was like, $1 million? Oh my god. Even saying that seemed crazy. But it takes $1 million to do almost anything, considering the marketing costs, the engineering costs, and hiring anyone. You can burn through $1 million really, really fast, and that's doing it right. You can also burn through $1 million and completely do it wrong, but there is no version of deploying venture capital that is clean and efficient. It always looks like this. Once you're in orbit, if a public company is like, oh, let's do something slightly different, they're already in orbit. They're already profitable. If they did nothing, they would still be a perpetual motion machine because there's enough money coming in to keep the machine running. So they don't actually have to hit their burners at all. So if they want to change orbit a little bit, it's just a little like, you know, the little puff of smoke out the side of the space shuttle. But in order to get there, it has to be this. And this is extraordinarily messy and painful and crazy. You know, when we're like, yeah, let's spend $150,000 a month. Like, the first year we were alive, we spent $30,000 in 9 months. And that's, you know, that I'm okay. I like that. I can, you know, you can kind of cruise and you're like, yeah, we got cash for days. And now it's just our foot is on the gas because we were told to. Because I went to a bunch of VCs and angels and told them this crazy plan, and they were like, yeah, that's a great idea. Here's a ton of cash. I was like, oh fuck, I have to actually go execute that plan now. And that plan is going to be— this is going to be dangerous and scary, and I've never spent money like this in my life. And it feels very, very weird. But it's okay. It's supposed to feel like that, especially for a first-time founder. The other thing to sort of remember about that process is that it's really inefficient in other ways as well. Yes, you're setting cash on fire, and yes, that's inefficient. But don't ever let the argument, well, if we build that, we're just going to have to throw it away later, be a valid argument. Everything you build is going to get thrown away, probably within 6 months. Everything you're building right now is probably crap, and 6 months from now, if you don't think what you're building right now is crap, 6 months from now you will agree with me. You'll be like, oh yeah, that was crap. And that's true at every company, every day, all the time. Like, we're so excited about the new stuff that's coming out, and like half the stuff that we're sitting— half of our tech stack we're sitting on right now, we're like, yeah, it's kind of crap. And that's good. That's right. You have to— you can't just be like— what you really don't want to hear is, no, let's build the thing that is meant for us at scale 2 years from now. That's totally wrong. Don't build that. It will take 4 times as long, and you'll— it will almost be a self-fulfilling prophecy keeping you from getting to that 2-year state because you didn't just knock something out, see if it worked. It probably won't work anyway. Half the experiments you do, the market isn't going to be interested. You think it's going to be the big thing that changes the company. It isn't. It maybe moved the needle a little bit, and maybe you learned one new thing. You're like, oh, wait. Okay, I'm glad we did that experiment because we learned this thing. Now that's the real thing we need to go do. And that just keeps on going on forever. So, you know, every piece of code you are writing right now will get pushed off. And that's how rockets are supposed to work. You can't get a rocket off the ground without a bunch of, like, literally future garbage sitting around it to get it there. And then once you're in orbit, then you're a more efficient machine. But until you get there, you're just— those are, you know, hundreds of millions of dollars worth of stuff. They're just like, whatever, let it burn up in the atmosphere and go into the ocean. It's the only way to get into orbit. And that was the plan from the beginning, and it should be your plan too. So this is kind of the— this is the one that goes through my head the most. And I'm mostly done. Do I even have time? Oh, good. I'm doing okay. So evil can evil. Fundraising is— or deploying venture capital is evil can evil. If you hit the gas, or if you don't hit the gas hard enough, and you don't start deploying the capital that you have raised, and you're like, sweet, we got $500,000, let's just sit on it and survive for like 10 years, you're gonna hit a bus. You won't make it to the other side. People will move faster than you. People will work harder than you. And people will take much bigger risks than you're taking. You're the risky part of the portfolio. Like, when a financial manager goes to his ultra-high net worth client and says, here's how we're gonna structure your portfolio. We're going to have 5% in extremely safe stuff, and then we're gonna have 20% in very safe stuff. Then we're gonna have like 30% in kind of risky stuff. No, no, no, no, no, no, no. And then right at the top, we're going to take 1% of your capital, and we're just going to set it on fire and risk it on the riskiest thing out there, because why not? You're an ultra-high net worth individual, and betting on startups is fun. It's like horse racing, kind of. And it's just 1%, and you're not going to fucking notice anyway. This is the hilariously, just pretend you threw it away money. And maybe if one of them pops, It'll actually have a meaningful effect on your portfolio. And that's who you are. You're there. If you're acting conservatively, you're doing it wrong. Your job as that most risky 1% of an ultra-high net worth individual's financial planning, your job is to be hilariously risky. If you're not, You should have been in another part of the chart, and that means you have to work at a different company. The whole reason you guys are here is because risk is part of the portfolio. It's an important part of everyone's portfolio, and it needs to be there. So your literal job is to be riskier than anything else going on, which means that if you have a very conservative way of dealing with money and a very conservative way of making decisions, You're going to have to dig deep to figure out how to bet bigger, how to bet it all, how to risk your company on a strategy, how to risk millions of dollars that you have gotten from people that to you seems like the most amount of money that has ever existed, but to them is just this little sliver that they think is like fun and interesting. Now, Once you're Series A, Series B, then you actually move down on that scale. You're no longer that top bit. Now you're kind of in maybe the top 5%, where it's less risky. What you were doing every single day by surviving, and by building better code, and making a better website, and hiring someone smarter than you to work at your company and save your ass— Which I've done over and over again, thank God. is de-risking your company. The moment you thought of your company, you're like, oh, I'm going to do this. This is a great idea. I'm going to tell my friends so that it forces me to actually do it. That's the most risky moment. You're at 100% risk. The chances your company is going to work is like zero. And every day that you keep thinking about it, and you keep solving problems, and you keep kind of figuring things out, and you keep learning about the market, and learning how your weird multidimensional puzzle piece actually Fits into the tornado, you're actually de-risking the company slowly but surely. But you're still way up there, and you have to deploy capital hard. You have to make decisions and be like, fuck it, and just put on the gas, because if you don't, you're gonna hit a bus. Then there is the other side, which is if you hit the gas too hard, you do have to do it right. If you hit the gas too hard, you will just go way over the ramp. And your company's just dead instantly. And you were like, you know what this office needs is we need a complete architectural makeover on the office because that's going to help morale. That's incorrect. The capital you're deploying, it should be based on the plan you told investors that they invested in. Because if they invested in it, that's some validation. Like, all right, this is how I want you to deploy the capital. But I actually want you to go do it. I went out to the venture capital market last year, and I was like, OK, we built an app. People kind of like it. We've got a little bit of traction. We've even gotten these few retail deals, which are way higher margin. And I'm so glad I paid attention to The Current and kind of started doing experiments in it. And it's been a lot of work. So here's our new plan. We're going to go— What we heard from retailers was, you need to be in more cities, and you need an easier API to integrate. And so that's what they're telling us, and that's what we're going to do. So I'm raising millions of dollars to expand aggressively into more markets, and then start building a completely new API. that integrates much easier with retailers. We're going to hire all these engineers. We're going to do all this stuff. We're going to do all this marketing. Christmas is coming. It's going to be nuts. And they were like, great, let's do this. And I was like, oh no. Now I have to actually go do all that stuff. And the amount to which I had to open up the money hose to make that shit happen in the course of a few months was A nightmare, and it gave me terrible anxiety. This whole thing is just incredibly anxiety-inducing. So I will almost finish the talk with what I believe is my last slide, with an extremely close-up selfie of my fiancée, who regularly tells me, go the fuck to sleep. Yeah. It is so important. It is so hard to go to sleep with all of this going on and this kind of pressure and all of these people that have trusted you with their money and your parents who were like, rolled their eyes when you said you were going to quit your job or quit school or whatever. There's so much pressure on you. It is, it's, it's, it's, you can't stand it. Or I can't. It's too much. And so I didn't sleep for years. And it's not good. And it wasn't good for the company. And it wasn't good for the morale of the people around me. It wasn't good for my biz dev efforts. It wasn't good for my ability to raise money. It's just, if you are tired and exhausted, your ability to maintain positivity in all of this chaos is lower. So figure out how to get to sleep, and don't do it with drugs. Then you're just, you're just as much of a mess the next day as you would have been if you didn't get that much sleep. Find the things that calm you down. For me, it's like reading weird esoteric science fiction. It has nothing to do with startups. Don't try to read, you know, TechCrunch to go to sleep. You'll just end up like, oh God, we're totally doing it wrong. And you'll just never go to sleep. In fact, and God bless TechCrunch, but I would recommend, like, if possible, if you kind of have, if you know what your company needs to do in the next few months, read a little, like, read slightly fewer blogs. Take a little bit of a step back from the industry. You're in it enough. You have bet. Yeah. You have bet your ego, and you have bet relationships, and you have bet how you see yourself on this already. You're really in it. You don't need to be constantly obsessing over what every single other company is doing and every single amount of money that everyone else is raising. It's not good for you, and it will make going to sleep harder. So, go the fuck to sleep. Bonnie said so.