05/6/24

CEO Shoptalk: The Escape Hatch, The Startup Pre-Nup

When a founder is giving birth to their new baby, he or she is filled to overflowing with the giddy excitement of creating life. Sure, they may create Corporate Bylaws, Articles of Incorporation, a Shareholder Agreement, or even an Operating Agreement — really good companies have Employment Agreements which subsume job descriptions with each of the co-founders — but there is one necessary element they typically fail to contempate.

OK, I’ll bite, what is it, Big Red Car?

Ahhh, dear reader, it is the escape hatch by which I mean the issue of who is in control and how is it done if the founders should have a spat or decide they need to part company. I think of it as the startup pre-nup.

This should be attacked right up front when there is nothing but goodwill about because if you don’t and such an eventuality befalls you, there will be no goodwill nor reason upon which to resolve the dispute. I have seen some brutally ugly disputes. Continue reading

01/30/22

Startup, Founder Super Power — IGNORANCE

In the world of startups, founders:

“Know what they know” — which is often a substantial body of knowledge.

Some, “know what they don’t know” — for which they find co-founders to buttress or they learn.

All startup founders “don’t know what they don’t know” — which gives rise to the super power called “ignorance.”

One of the great truths of founders is they will not be talked off what the world judges to be a stupid idea because they are not knowledgeable enough to know it is a bad idea. Continue reading

10/12/21

CEO Shoptalk — Not Cleared In Hot

When you are calling in CAS (close air support — might be Snakes, Warthogs, fast movers, Puff the Magic Dragon — I know, dating myself) you will tell the flyboys they are “cleared hot” meaning they can bring their special brand of firepower and turn it loose on the target and that the friendlies are out of the line of fire. You are also assuring them that if you had guns firing that the gun-target line is clear.

When you are a CEO, you can never, ever clear yourself in hot when disciplining employees. Continue reading

09/14/19

CEO Shoptalk — Fragility

In the early days of a startup, when you are running on pure adrenalin, co-founders are in constant contact. Every new development is shared completely, you are likely to be in close physical proximity, and the novelty of it all creates a glue that binds the co-founders together thereby provoking a level of communication that ensures the founding team is fully informed.

At the beginning you are giddy with communication.

This chaotic time builds trust and generates confidence. It is a heady and energetic time. It is the camaraderie that soldiers create on the battlefield. Co-founders are at war against the market, so that comparison is not a great leap.

But, then the company raises money or gets traction or screams, “We have product-market fit, y’all!” and the closeness that was there at the crib side of the new baby begins to change.

Roles are more distinct, there are spheres of responsibility, employees are hired, parts of jobs are delegated, board members begin to deploy their wisdom, and the pace begins to quicken.

The ability for the co-founders to attain full communication and full knowledge of what is going on is tested by the actual progress.

It is at this junction in time — almost verifiable by a watch — that the strength of a co-founding team is tested.

And, the test is this — Is the organization robust (as it relates to co-founder communication) or is it fragile?

The answer, dear reader, 104% of the time is that the relationship is hopelessly fragile. It is the normal state of affairs because it requires specific work, organization, and that most precious of all commodities in the universe — time, to beat the fragility out of your fledgling company.

Continue reading

08/5/19

Practice Like You Play

One of the best bits of advice I ever received was to practice the same way I intended to play — good advice when pertaining to sports, the military, and business.

Startups are often given a pass for not following sound practices.

“Hell, they’re just startups.”

Continue reading

04/29/18

CEO Shoptalk – Energy

Energy, today we focus on energy.

Big Red Car here after an afternoon of menial labor. I like menial labor, I do.

So, today we talk about how a startup, a small business, or a medium size business deals with energy.

First, there are energy sources and energy sinks. An energy sink is an absorber of energy. We will come back to this issue of energy sinks. Now, we focus on creating, maintaining, and multiplying energy.

Here is an example of a dragon projecting energy, hence, the name “dragon energy.” Haha, Kanye and Donald, both DRAGON ENERGY.

Fire breathing dragons are sources of energy. Usually, they have eaten burritos with jalapenos.

Every enterprise is, essentially, an energy equation. Let’s apply that to business, shall we?

Continue reading

04/23/18

Revenue, the Essential Nature of Revenue

Revenue. Big Red Car here to talk about revenue. Y’all love revenue as much as the Big Red Car loves revenue?

I think you do.

If you whip out your accounting text, you will read first about operating and non-operating revenue. Scratch a little harder, you will learn about sales, rent, dividends, and interest.

If you are really on your game, you may stumble on “contra” revenue. Contra revenue is discounts and returns.

For what we are doing — startups — the revenue picture is slightly different. Let’s bring it into focus, shall we?

Continue reading

09/10/15

Managing the C Suite

Big Red Car here. Rained like Hell last night in the ATX. It is that time of year — we get the rains in May and September and this is September. Bring it!

So today, we talk about the C Suite and how it operates or should operate.

First, let’s make sure we’re all talking about the same thing — C Suite occupants: Chief Executive Officer, Chief Operating Officer, Chief Technical Officer, Chief Marketing Officer and so on.

You don’t have to have all these folks but you might. They are the leadership of the company. Continue reading