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No resolutions for 2019

Instead of resolutions, how about we choose which habits we're going to build...or break.

I’ve never been one to make New Year’s resolutions. I always sensed that they are goals with no real strategy of achieving them.

Really I think the New Year’s resolution should be goals that are actionable and they should be S.M.A.R.T. (specific, measurable, achievable, relevant, time-sensitive). But really are they actually that? Usually not.

Resolutions should really be the habits you intend to build, or break, in the new year. You can plan to take the first 4-6 weeks to create the habit or to establish the tactics for the goal you want to achieve…and then spend the last 11 months of the year reinforcing that habit.

The resolution I’ve had for the last four years it to get one percent better every day. Now this isn’t something that I can quantify, but the real reason I have that resolution is to reinforce a habit. This habit is to spend as much of my time learning as possible.

This learning could come from the two hours per day I spend reading, the times where I write out my thoughts (like for this newsletter) and need to conduct follow-on research, or listening to podcasts. There are many different ways to learn and with an obsessive level of focus you can imagine how much I change on an annual basis.

After speaking with my wife about her inspirations for resolutions in 2019. I realized that she also didn’t want to slap some gimmicky title on her re-focusing efforts.

It’s always about the habits, never about the end result. If we stick to the habits, the end result is inevitable.

Commitment to the process is the only currency you need to invest into your new year resolutions. Most wont, but you can take this time to truly dive into what will make 2019 the most successful it can happen.

So there it is. Next steps? Deciding what you want to achieve in 2019...then figuring out what habits you need to implement to knock it out of the park.

Know what makes your (seed) investors tick

Getting investment funding means accepting "Till do us part" for your startup

“You have an implicit Series A round stapled to every seed term sheet.” - Bryce Roberts, indieVC

This was something that Bryce said during his Atlanta stop of the indieVC road tour.

The quote stuck with me. I spent 5 or 6 months researching and studying the venture capital landscape last year in order to begin pitching partnerships (only one took me up on the offer).  In that time I realized that at the seed/pre-seed stage your investment prowess is solidified...err validated...when the company raised a Series A.

Never did it occur to me that it’s deeper than that.

When Bryce states the quote above, the lightbulb flickered on. I took the night to sleep on it. The idea that the economics flat-out don’t work for seed investors if their portfolio companies don’t raise any extra rounds is incredible.

For startup founders, it pays to realize that taking on investors with “smart” money is paramount. This also means that you need to look at their portfolio and examine who they’ve raised from in their second and third rounds. When you are doing diligence on potential investors, be sure to go upstream and ask later-round VCs what it is like to work alongside the seed investor prospect.

These things are important. Knowing the incentives of your investors can make or break a company. Not in the day to day, tactical sense, but when you consider your expectations as founders. Once you take on an investor, they are basically with you on this ride until you buy them out (i.e. Wistia and Buffer) or you have an exit.

Speaking of exits…knowing your potential investor’s priorities when it comes to exit value will save you a lot of pain later on. A rule of thumb is that an investor invests with the idea that a startup can return their entire fund at exit.

A $50M fund is looking for a $50M exit with each investment they make. With a sub-10% success rate, your investors are incentivized to encourage a hold-out on an exit that could return them less than they expected.

Having institutional investors aren’t bad, KnowCap IO is about to begin actively looking for funding, but you need to know what makes them tick and if that aligns with the organization you want to build.

Sparking creativity in your team

Coming up with the Creative Day program and how it impacted my management style

When I started my first management role I had read so much about leadership and management that I thought success would be easy. I couldn’t have been more wrong.

After putting about 10-15 extra hours per week into learning and creating structures for my team, I realized that you cannot build enough things to compensate for a lack of leadership. You can’t force someone to have a strong work ethic. You can’t force someone to match your management and leadership style. You can’t force someone to double-check their work. And you can’t force someone to be more productive.

You have to figure out how to motivate your team and hope they speak up when they are uncomfortable or need a change. Amongst a host of management failures on my end, I did have two bright spots. Creative Days and the 90-day plan (I believe they now use the 90-day plan idea with every single incoming employee).

The Creative Day program came about after I was using a holiday break to read all I could about motivating a team to be productive. I was struggling. Some of my team members took the whole month of December off but acted like they didn’t. Projects were consistently slipping through the cracks and then subsequently turned in late.

It was a catastrophe and I needed to come up with something that would give them more ownership of fixing their own problems and then coming to the rest of the team for feedback (rather than it just coming from me). How was I failing so bad at something I spent so many hours thinking through and analyzing? That’s when I began down the rabbit hole of initiating creativity.

Typically when you think “innovation” you imagine someone inventing a rocket ship or some kind of technology. For me, it’s when someone thinks of a new/novel way of doing something.  It was a Hail Mary, but I believed if I could get some of my team members to approach their work creatively, they would be able to incorporate issues that they weren’t bringing to me.  

In my research, your best ideas come when you are extremely relaxed (see: vacation or shower), you don’t realize it but it can be the most innovative time your mind will have. That’s when it hit me, there has to be a way to get my team out of their heads and getting creative with what they are working on.

I structured our “Creative Days” in a way that made the most sense given their productivity rate. Take one day per month away from the job (we were all remote), and spend at least six hours that day thinking about their position. They also needed to filter their projects through the lens of how they believe they could improve or introduce an idea that would have a huge impact on the business.

The next week, during the team meeting, that team member would take 15-20min to walk through what they came up with. Then we would all chime in on how that idea could be implemented or if it needed to be tabled for later.

Some of the best ideas I ever heard at that organization were during those Creative Day recaps. People who didn’t consider themselves as innovative came up with projects that could change the face of how customers viewed the company...enabling us to go upstream.

If given the time, I’m willing to bet that the “Creative Day” concept would have taken off just like the 90-day plan concept did. It is a structured way of getting people to self-organize and innovative in a way that you just don’t get from day-to-day activities. By giving your team members space to think and create, you give them permission to break the typical boundaries and examine what they would do in a perfect world.

There are no perfect worlds, but you can create an environment that supports their creativity.  

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