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Before I get into this week’s big idea, I want to take a hot second to talk about the difference between hard work and overwork.
When I onboard a new client, I explain that by choosing to build a venture-backed startup with ambitions of becoming a business behemoth, they’ve chosen a path no less challenging than becoming an Olympic athlete. And Olympic athletes don't insist on 7-8 hours a night of sleep because they want “work-life balance,” they do it because they know sleep is critical to performance.
Yet for founders, sleeping enough gets framed as a hard work vs. laziness debate instead of the performance requirement that it is. Why? Feedback loops. Neglect your sleep, exercise, and diet as an athlete, and your times start to slip quickly. Do the same as a startup founder, and what happens? You get a bit more irritable and anxious. Both things you blame on the clock is running out on getting product-market fit before someone else does.
Athletes look at sleep, diet, and exercise as part of their work, and founders look at those things as separate, almost like luxuries or indulgences for the weak who can’t handle the grit of chewing gravel with the guys on the All-In podcast.
There’s the famous metaphor that building a startup is like running off a cliff and building a plane on the way down. And if the plane isn’t flying or at least gliding, then who has time for sleep, diet, and exercise? To some extent, these things are indulgences at the earliest stages.
The only thing wrong with applying this kind of thinking here is that sometimes it can take years to get the plane gliding.
Over the years, four things will happen if you neglect your health:
Think I’m exaggerating? I woke up in May unable to stand up straight for two weeks after ignoring acute lower back pain. Or you could ask the CEO I worked with, who spent days in the hospital for an untreated knee injury this year. Or you could speak with another CEO I work with who never had a migraine until this year and finds herself getting them at least monthly now.
Sometimes you and the team need to push and sacrifice things like a good night’s sleep or an exercise routine, especially in the early days, but these things need exceptions, not the norm. They need to be exceptions because when you ignore your health, it’s like you’re operating on a sprained brain. And good luck winning the gold on a sprained brain.
For this week’s big idea, I’m going to expand on a concept similar to building the plane after you jump off the cliff, except we’re bringing it down to Earth.
Jeff Bussgang, author of Mastering the VC Game, General Partner at Flybridge, and Professor at HBS, says startups go through three phases on their journey to maturity: jungle, dirt road, and highway.
Why it Matters: Each phase requires different behavior and making sure you and your team understand that when hiring and setting the tone can be the difference between bikeshedding and getting shit done.
What are the three phases?
One of the biggest mistakes I see CEOs make—myself included—is accidentally operating as if they’re a dirt road company while still deep in the jungle.
This metaphor has several applications, but those few should get you started. One CEO I work with has been straddling Jungle and Dirt Road for a while now, and the company-wide theme for 2023 is “Exit the Jungle.”
I want to leave you with a quote—one that shows the importance of knowing which stage you’re in and communicating that to your team, starting with the interviews to weekly all-hands—from Patrick Collison, CEO of Stripe: “people’s disposition with regard to the company is actually a function of what they feel like they signed up for.”
It’s the end of the year, and hopefully, you’re planning for next year. I frequently cite this post with CEOs when they’re in planning mode. Jason recommends three plans for three corresponding confidence intervals (C): C-90, C-60, and C-10. I see a lot of early CEOs setting only a C-10 plan (confidence = 10%), aka their “stretch plan,” to employees and investors. While this post is meant for SaaS founders, it’s helpful for anyone forecasting and setting expectations for the year.
Another common mistake I see founders make is spending too much time with customers who don’t pay enough. For example, a customer pays you $5,000 / year for your self-serve SaaS. Your margin is 80%, so your profit is $4,000. This customer takes up about 5 hours a month of your customer success manager’s time because they’re needy. You pay your CSM $120K / year, which comes out to about $60 / hour, which annualizes up to about $3.6K, meaning you’re barely breaking even on this customer. Michael’s thread is a good reminder for every CEO to think about profitability more granularly.
I couldn’t stop thinking about how endearing this episode was. Hugh and Tim have professional crushes on each other. It’s not uncommon for me to hear vapid claims about Tim Ferriss being some kind of input that outputs tech bros, and Hugh couldn’t be further from that stereotype. You can’t argue with how successful Jackman is, and I appreciated just how grounded Hugh came off as. My favorite part? The question Hugh and his wife always ask when making a big career decision is: “Is this good or bad for our family?”
A few weeks ago, I watched Jonah Hill’s documentary about his therapist, Phil Stutz, Stutz. I loved it. Go watch it. Afterward, I discovered that Phil wrote a book a decade ago, so I bought that to learn more. I’ve been loving the book, and I think anyone struggling to express themselves, find their confidence, deal with irritation and anger, or learn more about themselves will enjoy the book.
One question I get from CEOs and founders is how to implement performance management. They usually ask, “How do I do performance reviews?” And then we have to back up. I’m a bit proponent of sharing feedback with your direct reports more often than once a year. Faith’s rubric and templates in this google doc are a practical and thorough way to start setting expectations, giving feedback and tracking performance.
That’s all for this week. I’m looking forward to what’s next!