On focus, fundraising and managing expectations
from @justinkan
#34
What does Justin Kan know that you don’t? How it feels to be a partner at Y Combinator, how to build a gaming content company called Twitch (which I didn’t know about till I went to the States and saw everyone with gaming laptops and streaming this Twitch thing) that sold to Amazon for almost 1B$ and has close to 3B hours of live streaming recorded. So, yeah, he might have something sensible to say in an interview. Andrew Chen interviewed Justin and below are 3 (of the many) things he had to say. Jeph, watch the first one.
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The paradox of choice: choosing a focus
Justin says:
“Once you see some success … The world opens up. They want you to be a VC, they want you to work on projects with them, you can start any company that you want, which is great… but it’s a paradox of choice, and focus can be a huge problem”
This is the biggest, surprising thing about being a repeat entrepreneur, which is how easy it is to get pulled in a ton of directions. And also that you might not be as patient and let something develop, since your perceived opportunity cost is high. Justin ended up trying many different options — including as a partner of YC — and didn’t feel like he was learning/growing and the feedback cycle is too slow. Justin ended up picking a new startup because it’s the #1 vehicle for personal growth.
Fundraising strategy: go big or stay lean?
Justin says:
“I’ve not convinced that raising a ton of money out of the gate is the right strategy. When you have a ton of money you spend a lot of money.”
Nearly 10 years ago, Ben Horowitz wrote The Case for the Fat Startup — the idea that sometimes you need to raise a boatload of money in order to get your company off the ground. In Atrium’s case, that’s exactly aligned, because the market wants a stable legal provider, and as an execution risk with clear competition, real capital has to go in to prove out the model.
Managing higher expectations
Justin says:
“It’s always a battle with the devil on your shoulder that says you’ll never be good enough. And the way to win that battle is to internalize the idea that whatever happens, you’re gonna be fine. You’re probably going to be the same — not happier or less happy”
When you read the academic research on happiness, one of the intriguing ideas is that people have a “set point” for their level of happiness, and in general it doesn’t change much. If you get that, then it helps level out the ups and downs of something stressful. This is important to startups, of course, but also to many other things in life!
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Article List— What I’m reading (10 articles a day x 7 days x 4 weeks x 12 months = 3360 articles a year). Building the scope of my knowledge.
MTN and Ericsson unveil Mobile Money open API platform in Ghana: So more revenue-making opportunities in the mobile money space. Developers, let’s work.
Carbon entering Kenya with micro health insurance & a digital wallet: And Ngozi and co. are hiring too, so hit them up.
History of the credit card: Just a good Twitter thread to go through.
Despite raising $210 million, Tala halts its mobile lending operations in Tanzania: 🙃🙃🙃This digital lending business is beginning to look more and more like a way to give out predatory loans. 🙃🙃🙃These NPLs are looking a bit off and not in the consumer’s best interest.
WeWork CEO Adam Neumann Steps Down Amid Failed Stock Sale: Benchmark Capital is at it again 😂😂😂. They took out Travis and now, Adam. They’ve really been on the war path to protect their LPs.
WeWork taps co-CEOs to tackle pre-IPO turbulence: Another one. Neumann OUT!
Impossible Burgers aren’t healthy, and thats the whole point: FYI, the goal of taking on a vegetarian or vegan diet, or even just eating less meat, is to support animal welfare and to choose foods whose production contributes less to global warming.
Father in College-Admissions Case Sentenced to Four Months Prison, $95,000 Fine: Listen to Gangster Capitalism for more on this case. Devin is funny, man. If i remember correctly, he paid 250k for his son to be admitted as a water polo star. Had his son’s face photoshopped into someone else’s picture and apparently the designer didn’t even do a good job and it stood out. What in the tomfoolery is this. Talk about waste of money. 😂😂 But 4 months? White privilege is real.
Thomas Cook faced ‘running out of cash by October 4’: Cautionary tale: innovate or die.
Podcast— What I’m listening to (1 podcast episode a day x 7 days x 4 weeks x 12 months = 336 podcast episodes). Broadening my experiences through others’ stories.
Business Casual- The coolest podcast out there today. From the coolest guys at Morning Brew. If you don’t subscribe to them, do it here now. It’s a brand new podcast so you can start listening right now and not get left behind. This episode is about the FAANG companies- should they be broken up or nah?
Book— 1 Chapter a day x 7 days x 4 weeks x 12 months = 336 chapters. Most books have 10-12 chapters, so 1 year = 28 to 33 books. And my book list is nearing 1000 books. Send help 🌚
Oya, pick one, buy and read.
Seeking Wisdom by Peter Bevelin
Poor Charlie's Almanack by Charles Munger
The Personal MBA by Josh Kaufman
The Fifth Discipline by Peter Senge
Twitter screenshot of the day
Almost everything I’ve learned about startups:
Aim to get to cash flow positive early
Don’t overly optimize for private market valuations
Build a great team and culture
Make sure the business model *works*
Focus, focus, focus. Dilution of effort will crush you <—(Jeph, ahem!)
Remember folks: “Until the lion learns to write, every story will glorify the hunter.”