Why you shouldn’t (always) hire that Stanford Engineer

So you’ve raised some money, and now it’s time to make your first hire or two.  This is where a lot of entrepreneurs make their biggest mistakes.  Your first couple of hires solidify your company culture, which sets the tone of the rest of your company.  Most entrepreneurs tend to look at candidates purely based on skill.  But looking at a person based on just one axis is a huge fallacy.

People aren’t drones — their skills are affected by all kinds of things: happiness, friendships, and camaraderie at work; independence and autonomy; the job itself; growth potential; etc.  The people with the best skills for the job can be your worst performers if the environment isn’t a good fit for them.

When I started LaunchBit, I made the mistake in the beginning of dismissing things like setting your company’s mission statement and values, from which company culture and hiring culture develops.  It was only a few years later, after my co-founder Jennifer coaxed me into taking a meeting with a potential startup coach, that I started looking at culture.  It was probably one of the best meetings I’ve had in my life, but it was much too late for our company to be only starting to look at that.

Setting your company culture consciously from day 1 is probably the most important thing you can do for your business and hiring.  What do you value?  What sort of employees reflect those values?  If teamwork is one of your values, it doesn’t make sense to hire someone who is very strong technically but isn’t a team player.

This isn’t a post about setting your mission statement or your team values,  but before you make your first hires, you should come up with a rough outline of that mission statement and those values.  Then, take a first crack at writing down what your employee persona should look like.  We all do this with our customers all the time — we write down what a typical customer looks like, but we don’t do this for our own companies.  Aren’t your employees just as important as your customers?  At some companies, employees are considered even more important!

Here’s a quick persona of what I’m looking for in all of my team members at 500 Startups:

  • Open minded
  • Brings diverse backgrounds, perspectives, and ideas to the team
  • Good sense of humor; doesn’t take himself/herself too seriously
  • Efficient; able to build processes to scale activities
  • Competent skills
  • Decent organizational skills
  • Eager and quick to experiment and try new ideas to solve problems
  • Able to prioritize
  • Not afraid to articulate ideas

Basically a team that looks like this:

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image credit: Peppermint Soda

Once you have a list, it’s important to think about the ramifications of bringing onboard a new employee to your team and impact on that team as well as your ability to hire going forward.  My friend and former colleague Andrea Barrica wrote a great piece on diversity debt – namely, if you have too many of the same kind of person at your company, it will hinder your ability to hire other types of people going forward.  In this post, she focuses more on race, gender, and sexual orientation, but this also applies loosely to other areas as well.  For example,  if you have too many extroverts, they may drown out any new introvert hires from being heard.  It’s important to keep this in mind.

Beyond this, it’s also important to visualize how your employees will work.  Will they be remote?  Do you expect them to stay really late?  Will they work all the time?  Do you expect them to socialize with each other?  Do you expect them to be like family?  Or just colleagues you see in the office?  Will you offer awesome compensation?  Or do you see your group as a learning environment?

All of this is an exercise that’s worthwhile for every hiring manager to do — not just startup founders — because this really sets the tone for how your group or company will congeal and work together.  This is something that took a long time for me to figure out and that I wish I’d paid attention to several years ago.

We’ll be talking more about this at 500′s Unity and Inclusion Summit in LA in a couple of weeks.

Dear elizy: How much should I pay myself at my startup?

Dear elizy: What’s reasonable for a founder salary?  For example: I’ve got 13 years of professional experience, an MBA and I have run several of my own businesses.

– Salary Concerns in LA

Dear Salary Concerns: Hmm…lots of thoughts here…

1) Your MBA doesn’t matter here

Sorry.  Your MBA is good for negotiating a salary at large companies or even possibly for jobs at other people’s startups but not with yourself and the company you own.  When you own such a large equity stake in your own company, you should be looking at the tradeoff between short term gains (your salary) and long term gains (the worth of your company and what it could be with the extra investment of cash that you are not taking as salary).

I understand that you may have paid a pretty penny for your MBA  (I certainly did), but hopefully you were able to recoup the cost of it prior to starting this company.

2) There are lots of other considerations

I’ll break these down here:

Location

Although I think you’re in LA, I’ll speak to this more generally.  The cost of living will influence your salary a lot.  The cost to get a startup up and running in the Bay Area will probably be about 2-5x higher than, say, in Las Vegas.  And if you are in Chiang Mai, starting up will probably be 5-10x better economics.  So a “reasonable salary” will depend a lot on location.

Your runway

This is tied to how much money you’ve raised and/or how much money you are profitably making.  If you have a long runway – say, 18+ months – then I think it’s OK to pay yourself better.  But if you are going to run out of money in, say, 3 months, you may not even want to pay yourself anything.  If you’ve raised money, you should aim to have at least 12 months of runway, preferably 18-24 months.

Venture backing 

If you’re not venture backed, you have more optionality.  If your company is set up as a partnership, for example, you may pass through all of your earnings as part of your partnership, effectively removing all cash from the entity.  But if you are venture backed, you’ll likely re-invest all profits into the business instead of issuing cash bonuses or higher salaries.

Your equity stake

If you’re a “founder” brought into a startup a bit later and are given, say, 5% of the company (on a vesting schedule), this is very different from being an “original founder” who likely owned 25-50% of the business starting out.

If your equity stake is much more akin to an early employee’s stock plan, then your salary should be what an early employee at a startup earns rather than a founder’s salary.

3) I get it — you really want me to put numbers on this… 

But everything I just wrote was vague.  It doesn’t help anyone figure out what their actual salary should be.  So, here are some rough ranges of founder salaries that are fairly common amongst ventured-backed, seed companies in the San Francisco Bay Area.  Unfortunately, I’m not aware of salaries in other markets, so if you’re outside the Bay Area, you’ll need to ask other founders.

Raised < $500k: In this range, a lot of startup founders pay themselves < $50k per year.  If you have a team of 4 people, aren’t making any money, and have minimal other expenses, then you can see how this raise can last you 1-2 years to get you to your next milestone.  Ramen, baby, ramen.

 

via GIPHY

Raised $500k-$1.5M: In this range, you probably have a slightly bigger team – say, 4-8 people – and some of these later hires are going to be commanding closer to market-rate salaries.  On the flip side, you may be generating some revenues to offset costs.  Again, shooting to have at least 12 months of runway, a typical founder who has raised in this range but is generating limited revenue is probably paying himself/herself $50k-$75k per year.  If you are generating a fair bit of revenue ($1m net runrate), then you might be paid a low 6-figure salary.

Raised $1.5M+: Lastly, if you’ve raised a large seed round, you’re probably a post-seed company indicating that you have significant revenues ($1m net runrate) coming in the door.  You are likely paying yourself $75k-$125k at this point.

4) Burn rate is a signal to investors 

Your overall burn rate is a signal to investors.  It gives them a sense of how seriously you want to invest in the longterm viability of the business as well as how well you manage cash.

If your burn is “too high” per your stage of the business, this could hurt your ability to raise money.  Some investors also ask about how much money you are paying yourself and will use that as an indicator of commitment.  Here are some other people’s thoughts on founder salaries that I think are spot-on.  Post-seed rounds are a bit more akin to series A rounds these days, and so you should adjust your definitions to reflect these responses, which are a couple of years old:

How do seed investors benchmark startups?

Understanding how investors benchmark different kinds of companies is all very confusing.  When I was an entrepreneur, I had no idea how this all worked.  How does a social app such as Snapchat get funded as compared to, say, a developer tools company like New Relic?  Obviously, their milestones and KPIs are very different.

In this post, I’m going to very simplistically dive into some high level categories and talk about how early stage investors consider each.  In my mind, I’ve divided companies into 4 categories. This is not an industry standard — this is just how I personally see things.  However, most early stage investors probably think along similar lines:

  1. Super high-tech companies
  2. High infrastructure companies
  3. Free consumer apps
  4. Everything else — aka companies that can make money immediately

There is a lot to say for each category, but there isn’t enough space to do so here.  (Disclaimer: all of this really only applies to software investors).

Super high-tech companies

I think a lot of software companies would like to think they belong in this category, but the reality is that most software products are pretty easy to build.  Even the vast majority of all those “AI” and “big data” and “machine learning” pitches that I see are not in this category.  Open source libraries (such as TensorFlow) make technology more accessible for less-skilled or self-taught developers such as myself to use.  A lot of previously “super high-tech” ideas are no longer that high-tech.

So what is in this category?  Essentially, my definition for companies in this category is that the technology is so difficult to build that only a small subset of people in the world can build it. As a result, this is a constantly moving target.  I suppose the way that I actually benchmark this in my head (just to be perfectly candid here) is by asking myself if a product is something that, as a mediocre self-taught developer, I could personally teach myself to build within a year. If the answer is yes, then it’s not really that high tech.  And it turns out a lot of ideas are just not that high tech.  (There are just a lot of things you can learn these days on YouTube and by Googling…)

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Originally posted by genniside

As a result, the most important criteria in this category is the team.  To be more specific, I’m talking about the team’s backgrounds. The team is important in every category, but for super high-tech companies, it is extra important that it is the right team to accomplish the particular idea. Teams that thrive in this category have strong and often niche backgrounds in whatever it is they are doing.  For example, in the self-driving car category, most of the teams that stand out have previously done a PhD in a related topic, participated in the DARPA Grand Challenge for a few years, or have worked for a company (e.g., Google) on a self-driving car or vision-related project.  If you are competing in this category, your team’s resume, or pedigree, is really critical — more so than anything else.  You don’t see a lot of “self-taught” folks in this category.

High infrastructure companies

Traditionally, software investors have loved being in the software industry because the capital costs are low and because you can get something to market quickly.  However, a lot of software investors are now dabbling in fields that don’t necessarily have these characteristics.  Investors are pouring a lot of money into health and fintech companies even though many of these companies have a number of hurdles to overcome.  Getting licenses, FDA approvals, etc. are not trivial, but they are also barriers to entry for would-be competitors.

As a result, for these kinds of businesses, investors often don’t expect that companies can earn revenue right out of the gate because they may not be able to do so legally.  Similar to the super high tech category, investors often look at the backgrounds of the team very closely because understanding clearly what needs to be done is really important.  Has the team worked in the same area prior to starting the company?  Is the company already in the middle of overcoming regulatory hurdles?  Does the team know exactly what they need to do to go into business?  These are some of the most important criteria for investing in seed-stage teams.

Free consumer app companies

In contrast to the last two categories, successful founders of free consumer apps tend to come from any background.  Companies in this category include companies like Twitter, Facebook, Instagram, Pinterest, and Snapchat.  These are all companies that need a TON of users, great retention and engagement, and continued-fast-growth of user adoption in order to make money off of ad revenue later.

If your startup is in this category, you’ll need to craft a story around the following:

  • Hypergrowth
  • How this hyper growth is happening organically.  Do you have virality built into the product? How do new users find your product without your having to pay money?
  • High engagement. Users spend a TON of time on your platform, app, or site. When Facebook first raised their seed round, investors were compelled by just how many hours per day their users were using their platform.
  • High retention rate

In fact, the business model matters very a little. Most investors who invest in free consumer apps don’t particularly care about monetization at the early stages.  But you need to be growing FAST.  Really, really fast.  Investors just want you to keep growing quickly and retain and engage these people.  (Of course, you should also be able to articulate at least a high-level plan around future monetization.)

You’ll want to show that you are making progress on optimizing your free customer acquisition funnel (e.g., growing quickly) and that you are also improving stickiness over time.

The thing about this category is that it’s HARD.  I mean REALLY HARD.  Growing a business is already quite hard, but for free consumer app categories, there are a couple of things to consider:

1. Because you are not monetizing, if you are unable to fundraise, it becomes difficult to keep the boat afloat.

In the beginning, this may not be a problem — you can bootstrap.  However, once you get to, say, a series A or B level and have say 30 people on payroll, if you cannot raise, it’s really difficult to bootstrap a company of that size.

2. The fundraising landscape gets more competitive as you progress.

Generally for all companies, going from the seed to the A to the B rounds is difficult.  The number of series B investors is way smaller than seed investors.  It is even harder for free consumer companies because there are even fewer “free-consumer investors.”  In this category, you are competing with other pure-consumer apps who may be doing something different but are vying for the same consumer attention.  Certainly when it comes to competing for fundraising dollars, you will be benchmarked against other free consumer apps on user base and growth of that engaged user base.

“Everything else” companies

Lastly, there’s everything else.  The vast majority of pitches that I see tend to end up in this category.  These are products that can and should generate revenue right out of the gates in both B2B and consumer ideas.  Obviously, there are a LOT of verticals within this category that are looked at very differently — everything from e-commerce to B2B SaaS to marketplaces.  What specific things investors look for very much depend on the particular vertical and business model, and that is a topic for many more blog posts.  But the one commonality amongst all startups in this category — regardless of vertical — is that most investors would really like startups to start monetizing right out of the gate.

Team backgrounds matter in the “everything else” category but not nearly as much as in the first two categories because anyone can start a business in this category. Instead, execution and traction are often a measure of the team rather than their resumes.

I’ve outlined these categories because it can be rather confusing as an entrepreneur to know what you need to achieve in order to get funding.  On one hand, you may see friends in fintech getting funded when they have zero traction, and on the other hand, if you’re in e-commerce, you may need to hit $1M GMV runrate to capture that same investor’s attention.  It just doesn’t seem to make sense.  Hopefully this post illuminates why investors think along these lines.

Build a product that fits your runway

What product you should build as an entrepreneur should, in large part, be based on your runway.  For example, very few entrepreneurs could have built Tesla because most entrepreneurs are neither super rich nor able to raise tons and tons of money right out of the gate.  This seems pretty obvious.

Everyday, I see entrepreneurs trying to build products that are way out of the scope of their runway.  For example, if you are trying to build a new type of email marketing tool, you will need to have a completely different approach from what MailChimp does because you will not be able to afford to build out all the features of a full-fledged traditional email marketing system.  It would take years to go head-to-head with their features.  Similarly, if you are looking to build out a CMS, you should not even consider trying to incorporate all the features that Weebly or WordPress have because they have developed features that took years to build.

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Originally posted by aviationgifs

Now, does this mean that should not build a product in an existing space at all?  No.  But, it means that you need to really think carefully about how to build a simple and quick-to-build product that will compete in an existing space through strong differentiation.  SendGrid (500 Portfolio company) is a great example of that. They didn’t build out (at first) all the typical features of an email marketing solution.  They were an API that sent mail.  That’s it.  No interface, no WYSIWYG features.  And that was enough.  They took one aspect of a traditional email marketing solution and blew it up.  Hubspot, too, in the beginning, was just focused on helping people write content.  Back then, they didn’t have emailing features or a CRM or anything.  This all took years to build.  The initial version of the product was based on the hypothesis that they could build a simple tool that would ride on the new wave of content marketing.  It’s only now that they compete in the traditional marketing automation space.

Don’t use most of your runway on product development

One of the biggest mistakes I see entrepreneurs make is that they spend too much time on product development.  Part of the reason is that the scope of products are often far too complex for the first iteration.  It is much better to take just one feature and blow that out of the water.  Make it super simple and easy to use, and do this within just a fraction of your runway.  If you’re a first-time entrepreneur without much easy access to capital, you should be shooting to get this done in < 2 months.  If you can’t get it done in this time, your scope is probably too big.

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Image credit: Quora

There are lots of big problems that small features can solve.  This is often easiest to find in products (of existing dinosaur players) who have built up bloated software.  Craigslist is a good example.

Take one of these large bloated products or companies, and write down a full list of every single feature or thing that the product achieves.  From this list, there are often several features that could be standalone products in themselves.

Find balance between painting your vision and explaining your current product

For all these reasons, I hate it when VCs say, “Is this a feature?”  Yes!  In order for you to have survivability in the beginning, your product really should feel like just a feature.   But it doesn’t have to stay that way.

When you pitch your company, it will be very important to walk a fine line between conveying your vision and how things are today.  Explaining the ins and outs of your current product is going to be un-inspiring, but talking too much about the future will make it seem like you’ve done nothing, or worse yet, an investor will think you’re lying if he/she finds out what your product actually looks like.

When you talk about your vision, you should be explicit in mentioning that this is how you see the future and where you see your company going.  Make sure to tie your pitch back to where you currently are and the steps you need to tackle to fulfill your vision.

How valuations are really determined at the seed stage?

Valuation is a nebulous topic amongst early stage startups, so I thought I’d really spell it out in detail.

In short: Valuations for seed stage companies are fairly arbitrary and driven solely by supply and demand.  Supply – amount of your round and Demand – investor demand.

Your startup’s valuation is not based on a proforma of your revenue.  And therefore, it’s also not quite analogous to the market cap of a publicly traded company.  This is really key to understand because so many founders wonder, “Why was that company over there who has 0 revenue able to raise their round at a $10m cap convertible note?  And another company that is on a $1m runrate barely able to raise at a $6m cap convertible note?”

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Originally posted by finofilipino

Because valuation is based on supply and demand, these are the levers that affect your valuation:

  • Market / economic conditions
    • Geography
  • Competitive landscape of your vertical
  • Compelling components of your business (revenue / team / growth / performance)
  • How you run your fundraising process

Market conditions

Unfortunately, market conditions are completely out of your control.  2008-2009 was a terrible time to raise money.  Many startup investors sat on the sidelines.  So, there were significantly fewer active investors at that time, which meant that valuations were really depressed.  I know an investor who got into Instagram’s early seed round at this time at $2m valuation, and this was considered to be a high valuation for that time period.  By the time 2011 rolled around, uncapped notes were quite common.

The reality is that external market conditions actually affect your valuation a lot more than what you’re actually doing in your business.  Because no one actually knows the right number to value your business, seed startups are very commonly valued around the same amount regardless of what is actually happening at a given company.

Additionally, geography matters a lot as well.  Startups who raise in the Silicon Valley can typically raise money at higher valuations than in many other places, simply because there are more investors here.  On the flip side, if there are only 5 seed investors in your town, they can pretty much command whatever terms they want.  This is changing a bit because startups are starting to raise money outside of their hometowns, and there have been huge increases in the number of investors in many places (NYC is a great example) in the past 2 years or so.

Investor demand here is unfortunately not in your control.

Competitive landscape

I know so many startups in competitive spaces who are frustrated because they have high revenues but have a lot of trouble raising money.  When they do raise, their valuations are not as high as they would’ve hoped or expected per their revenue.

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Originally posted by mashable

In crowded verticals, a lot of investors will simply sit on the sidelines and avoid making investments, which limits the number of investors who are writing checks in these spaces.

The takeaway here is NOT that you should stop working on your business in a competitive field  (Remember a little company called Google was like the 7th or 8th search engine and they did just ok. 😉 )  If you are in a competitive space, you should just be cognizant of this.  It will be REALLY important for you to put a LOT of work into your differentiation story  (This is a longer post in itself.)

Compelling components of your business

Revenue can certainly increase your valuation because when you have more revenue, typically more investors will be interested in investing, which increases the investor demand for your round.  That being said, you shouldn’t think, “Oh if I do an extra $1k in revenue next month, my valuation will go up to Y.”  This just doesn’t happen.

Now, what could happen is 1) if you all of a sudden do a LOT LOT LOT more revenue, then you could get a bunch of investors excited simply because you are now in their “range” of traction that they typically invest in;  or 2) if you formed relationships with investors early and have shown good traction progress over time, that additional $1k in progress could compel them to invest, but let’s be clear that it’s not the $1k result itself that is compelling.

Remember, most investors (especially VCs) are looking to invest in billion dollar club companies, so your additional say $1k per month that you do next month, while meaningful and important to your business and something you certainly should be proud of, is very far from proving that you’re in this billion dollar club.

In a similar vein, besides revenue, there are plenty of other components that you control that affect your valuation.  Team is certainly a big one.  What do investors mean by “awesome team”?  Typically the teams that get big valuations for their companies with limited-to-no traction are the ones that have had a previous successful exit before or were execs at well-known fast growth tech companies.  Shy of that, even if you went to or worked at a brand name company like Caltech, Facebook, or Google as a mid-level manager or employee, your team isn’t going to be enough to get investors excited.  (Think about it – there are probably about 1m people who work or went to school at some brand name place worldwide at some point.  You’re not unique).  Therefore, you need other compelling things about your business to increase investor demand, which in turn increases your valuation.

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Originally posted by robertsdowneystark

Some verticals will be difficult to get revenue traction in.  Hardware, healthtech, fintech, and govtech are good examples.  Highly regulated industries or capital intensive businesses have different benchmarks that investors are typically looking for.  In regulated businesses, for example, making progress on navigating regulations and approvals will be important to get investors excited.  Even if you can’t start generating revenue today, increase investor demand by making progress on things that you can work on.

Lastly, having a “great” idea is worth a lot – many investors will get excited just by “great” ideas.  Personally, I’m in the camp that most ideas that are great don’t sound great from the get-go and vice-versa.  In my mind, the execution is what makes something a great idea.  That being said, putting yourself in the shoes of an investor, who gets pitched TONS and TONS of ideas everyday, they all start to blend together.  So when a truly unique idea does come along that seemingly makes sense and is creative or clever, it’s really easy to get excited.  When I was on the other side of the fence as an entrepreneur, I had no idea whether an idea was unique relative to all the other startups pitching out there.  Since most pitches are not unique, you should just assume your idea is not unique.  If an investor tells you your idea is clever, then you know you happen to have a unique idea relative to the rest of the pool, and this can potentially help you command a higher valuation.

How you run your fundraising process

The last thing that is in your control is how you run your fundraising process.

If you are only meeting with, say, 5 investors, and you run your fundraising process half-heartedly and not as a full-time activity, then of course, you’re not going to be able to command the valuation you want.  Your effective demand side is only 5 investors in this case!  Even if they want to invest, they can pretty much offer you any terms, and you’ll take it because you have no other options.

I’ll write more on this later, but you need to approach a LOT of investors to essentially create a bidding war for your deal.  This is like an auction.  Let’s say you’re raising $500k, and you have 20 investors who want in at $50k per person; then you have twice as much interest than what your round can accommodate, so your valuation will increase until investors start dropping out because the price is too high.

How you run your fundraising process IS very much in your control and almost more so than your actual business!  I know so many great founders that raise money like a part-time job because they want to focus on building their startups, and then later they are upset that their valuations didn’t end up as high as they thought they should be.  This is why.  If you’re going to fundraise, then you really need to make it your full-time job.  No one is going to approach you and say you’re worth a $10m cap convertible note.  You need to bid your price up with investor competition.

Valuations are set by your round’s supply and investor demand; that’s it.  So the way to think about getting a higher valuation is how you can work some of these levers to increase investor demand.

Tracking productivity

Off-topic post today on my own productivity.  Last night, I gave a fireside chat, and a question came up about how I balanced running my startup LaunchBit while having and raising a child.  It wasn’t easy.

More generally speaking, having said child forced me to improve my productivity a TON.  It’s far from optimal, but I track and analyze like crazy so that I can continue to get better.  Here’s how I do it.

My schedule today

Laura Vanderkam, author of I know How She Does It, suggests thinking about your time in week-long blocks of 168 hours rather than 24 hour days.  I love this approach because days are too varied to try to optimize.

This is how I typically spend 168 hours these days (this definitely looked different when I was running LaunchBit):

  • Sleep: 50 hours (varies as an insomniac)
  • Work: 45 hours
  • With my kid: 20 hours
  • Commuting: 15 hours
  • Household chores / personal hygiene: 10 hours
  • Personal branding / side projects: 7 hours
  • Gym / pool: 3 hours
  • Personal email / informal mentorship: 5 hours
  • Socialization / goofing off / wasting time / reading: 13 hours

= 168 hours

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Originally posted by inspirationmobile

A lot of people overestimate how much they actually work.  It just feels like you’re working a lot because you’re checking one-off emails all the time.  When I went to actually map out how much work I was doing, it’s not a lot at all.  I spend 40 hours a week in the office and another 5 either at events, checking email, or preparing for the week.  I may be thinking about work at other times while doing other things, but that doesn’t get counted here.

I strongly believe in short commutes of 20 min or less.  Coincidentally, from work to my home is 15 minutes door-to-door, but my commute ends up being super long because my gym is way out of the way. This is something I’ll rectify in the coming months.  I also included driving time to social activities on the weekend in my commute category.

I go to the gym religiously now even if only for 15 minutes (you can lift or row in 15 minutes).  It helps me with my lifelong insomnia, makes me more productive during the day (and not tired), and makes me need less sleep to be productive.  My biggest regret is is not exercising religiously throughout my 20s.

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Originally posted by motivateyourselfeachandeveryday

I get a lot of requests for meetings asking for advice on various things (startups, list building, ads, fundraising, etc) – I ask a lot of people for that too, so thank you to all of my mentors who have helped me grow professionally.  Unfortunately, there are just not enough hours in a week to take all those meetings.  I still do them because I believe in giving back and showing gratitude for all that I’ve taken from others.  One hack that I’ve adopted from people like Noah Kagan is that if I’m out of mentorship slots for a given time period, I ask people to move the conversations to email (or wait for a couple of months to talk over the phone).  I ask people if there are specific questions that I can answer over email.  It turns out that 90% of the time, no one asks anything specific, so I’m not really sure why people wanted to meet?  Although in-person is nice, I firmly believe that you can start building a relationship with people online.  Some of the people I most respect in this industry are people I first had lots of online conversations with before ever meeting them in person.  You don’t need to do coffee meetings all the time – there just isn’t time for that!

Compartmentalization

I compartmentalize a TON:

Multitasking:

I generally don’t believe you can do anything meaningful while multitasking.  Maybe some people can, but I can’t.  I never check FB or Twitter except for texts and IMs while at work.

BUT, I will combine things that don’t need loads of thought. For example, the other day, one of my good friends was in town. I wanted to see her, and I also needed to go shopping.  Boom: my friend and I went shopping.

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Originally posted by omghowgirl

30 min meetings:

I set meeting blocks for 30 minutes.  You can always fill up an hour-long block, but I’ve found that if everyone is prepared, you can usually cram everything that would’ve taken an hour into 20-30 minutes.

Manager vs Maker schedule:

Paul Graham has a great article on maker vs manager schedules.  The gist of that article is that it’s very difficult to task-switch.  You can’t take a meeting and then immediately go into building stuff productively to then be interrupted for another meeting later.

For that reason, I cram all my meetings back-to-back.  A typical Monday for me has 10-12 meetings back-to-back all day.  It’s not easy, but it frees up time the rest of the week.

The rest of the week, Tues-Fri, I have 4 hour “no-meeting” blocks so that I can take action on decisions from meetings or other work (either strategic or operational) that need to be cranked out.

When I was running LaunchBit, I did something similar.  Instead of taking meetings with entrepreneurs, those meetings were with potential clients.  It was important for me to do all those meetings back-to-back while also having large blocks of time to tackle meaningful projects.

Tools I use

These are some of my favorite tools to help me keep my productivity high.

Inbox Pause (by 500 Portfolio company Baydin):

I’ve adopted Tony Hsieh’s Yesterbox system, which basically means that I don’t read emails that arrive today.  Inbox Pause holds these emails and delivers them to me tomorrow.  With Inbox Pause, I’m able to get off the hamster wheel of email.  I only have to respond to yesterday’s emails, and I can bulk process them.  I end up archiving about 50% of them in one-fell swoop instead of one at a time.  Then I hammer out quick responses to about 40% of them.  I can usually do this in an hour.  The remaining 10% need a lot more work. They could be blog post edits, something to read, introductions, a doc of some sort to create, something to seriously think about, etc.  This 10% could take 1-2 hours a day.  I will peek once or twice a day at the folder that holds all the emails that came in today to see if anything is urgent.  The majority of emails usually can wait a day, and that’s OK.

In the tech industry, we have this weird notion that every email is urgent and needs a response RIGHT NOW.  When I was at Google, it was common to see lots of email conversations fly back and forth at midnight or 1am. Many of them were not urgent issues.  I think what is really happening is that there is this underlying culture of, “You should email a ton all the time so that everyone sees that you are doing work.”  It’s the modern facetime.  We should measure success by results, not by time.

Calendly:

This helps me schedule meetings automagically.  I used to have lots of back and forth emails about scheduling.  Now, I just use Calendly and let other people schedule a time that works for them and that fits my open slots on my calendar.

Canned Responses in Gmail:

For emails that I tend to send over and over, (e.g. why a company is too early to raise money now) I have created a templated response via Gmail’s Canned Responses feature.  Super useful and a free add-on.

Reducing phone usage & being present

Being present is hard for a lot of entrepreneurs, especially with your phone always buzzing.  I’ve found over the years that checking my phone frequently is actually completely inefficient unless there’s an emergency.  Answering emails in one fell swoop (see above) is a way better use of time than answering emails on a one-off basis on my phone.  Taking action on your phone is probably the least productive thing you can do even though it seems like your phone should make things more productive.

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Originally posted by insta-ghetto

Even if I’m on the go, I like to use my phone to tether to my computer and hammer out work or process email in bulk.

Optimizing productivity

I think it’s too much work to create weekly logs as recommended in the I Know How She Does It book, but I try to keep a sense of how many hours I’m spending in different areas so I know what to change.  For example, I’m already working on changing my commute situation, which should probably cut my commute time in half, freeing up a few hours.

Like everything else, you can’t really get better without measuring first.  So, while there’s a lot that I could improve in my schedule, mapping out my time is a really helpful first step for me.

What do you do stay productive and balance your life?

 

Cover photo by rawpixel on Unsplash