Pmarca archive pdf download

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Mar 23, Ostap Andrusiv rated it it was amazing. The most fascinating thing about this book is that it consists of blog posts from , but still feels valid in Still you can find valid advice on defining a problem, hiring people, leading companies, and being personally productive.

It's like "start a startup" cookbook. I enjoyed each of the chapters. Mar 22, Olga Shatokha rated it it was amazing. Really great explanations how startups work and great advice.

Pity it was never issued as a separate book and is very little known about. Not just for startup founders or CEOs but anyone who's interested about simple explanation of startup rules. Oct 15, Alexander Boykov rated it it was amazing. May 22, Aamna rated it it was amazing Shelves: favorites.

Very very insightful. Some good nuggets in there what VC-s are looking for , but a bunch of his advice should be well ignored in how to get hired, how to get funded for example. Still, a good read for someone thinking about launching a startup at some point. Not all about startups though - he throws in some random stuff about science fiction writes, luck and gives some pretty brutal tips on how to salvage a large failing company as the new CEO.

Also - quite peculiar that the only posts where the publishing date Some good nuggets in there what VC-s are looking for , but a bunch of his advice should be well ignored in how to get hired, how to get funded for example. Even more peculiar is the fact that those dates are wrong - the right date is October , not So yeah, pretty much right before the bubble burst. My first conspiracy theory then. Feb 12, Diana Pinchuk rated it it was amazing Shelves: marketing-and-business.

One of the best readings about startups and business. Perfectly matches with Lean Startup and The hard thing about hard things. Jul 11, Miroslav Tsibinog rated it it was amazing Shelves: gems. The very first book that I would like to re-read right away. Dec 25, Pavel Annenkov rated it it was amazing.

Aug 16, Jorg Doku rated it it was amazing. This is absolutely amazing. The Xrst question to ask is, what is the corr correct ect, or appropriate, amount of funding for a startup? In other words, insurance. These answers all sound obvious, but in my experience, a sur- prising number of startups go out to raise funding and do not have an underlying theory of how much money they are raising and for precisely what purpose they are raising it. Obviously, many startups Xnd that they cannot raise enough money at one time to accomplish these objectives — but I believe this is still the correct underlying theory for how much money a startup should raise and around which you should ori- ent your thinking.

You can argue you should raise a smaller amount of money at a time, because if you are making progress — either BPMF or APMF — you can raise the rest of the money you need later, at a higher valuation, and give away less of the company. This is the reason some entrepreneurs who can raise a lot of money choose to hold back. Part 6: How much funding is too little? Not raising enough money risks the survival of your company, for the following reasons: First, you may have — and probably will have — unanticipated setbacks within your business.

Maybe a new product release slips, or you have unexpected quality issues, or one of your major customers goes bankrupt, or a challenging new competitor emerges, or you get sued by a big company for patent infringement, or you lose a key engineer. Second, the funding window may not be open when you need more money.

Those of us who were in startups that lived through know exactly what this can be like. Third, something completely unanticipated, and bad, might happen. Another major terrorist attack is the one that I frankly worry about the most. A superbug. All-out war in the Middle East. Giant Yaming meteorites. Such worst-case sce- narios will not only close the funding window, they might keep it closed for a long time. So how much money should I raise?

In general, as much as you can. Without giving away control of your company, and without being insane. Entrepreneurs who try to play it too aggressive and hold back on raising money when they can because they think they can raise it later occasionally do very well, but are gambling their whole company on that strategy in addition to all the normal startup risks. Suppose you raise a lot of money and you do really well.

Is it really worth that risk? There is one additional consequence to raising a lot of money that you should bear in mind, although it is more important for some companies than others.

In the scenario where your company ultimately gets acquired: the more money you raise from outside investors, the higher the acquisition price has to be for the founders and employees to make money on top of the initial payout to the investors. In other words, raising a lot of money can make it much harder to eWectively sell your company for less than a very high price, which you may not be able to get when the time comes.

Taking these factors into account, though, in a normal scenario, raising more money rather than less usually makes sense, since you are buying yourself insurance against both internal and external potential bad events — and that is more impor- tant than worrying too much about dilution or liquidation pref- erence.

How much money is too much? There are downside consequences to raising too much money. I already discussed two of them — possibly incremental dilution which I dismissed as a real concern in most situations , and pos- sibly excessively high liquidation preference which should be monitored but not obsessed over.

The big downside consequence to too much money, though, is cultural corrosion. And of course, none of those things are true. Raising money is never an accomplishment in and of itself — it just raises the stakes for all the hard work you would have had to do anyway: actually building your business.

Creating a golden opportunity for a smaller, scrappier startup to come along and kick your rear. So what should you do if you do raise a lot of money? Easy to say, hard to do, but worth it. Continue to run as lean as you can, bank as much of the money as possible, and save it for a rainy day — or a nuclear winter. Illustrate that point by staying as scrappy as possible on material items — oZce space, furniture, etc. The two areas to splurge, in my opinion, are big-screen monitors and ergonomic oZce chairs.

Other than that, it should be Ikea all the way. The easiest way to lose control of your spending when you raise too much money is to hire too many people. The second easiest way is to pay people too much. Worry more about the Xrst one than the second one; more people multiply spending a lot faster than a few raises.

In particular, pay close attention to deadlines. Oh, they are. Competitors still lurk behind every bush and every tree, metaphorically speak- ing. Keeping moving fast if you want to survive.

There are a lot more startups that raised an excessive amount of money, burned through it, and went under. Remember Geocast? General Magic? Trilogy Systems? By deXnition you will be doing something new, in a world that is a very uncertain place. You are simply probably not going to know whether your initial idea will work as a product and a business, or not. And you will probably have to rapidly evolve your plan — possibly every aspect of it — as you go.

The history of successful startups is quite clear on this topic. Edison went on, of course, to become one of the greatest inventors and innovators of all time. As our story begins, Edison, an unknown inventor running his own startup, is focused on developing better hardware for tele- graph operators. He is particularly focused on equipment for telegraph operators to be able to send voice messages over tele- graph lines.

Cue the book: The day aaer Edison had noted the idea for recording voice mes- sages received by a telegraphy oZce, he came up with a variation. By breakfast the following morning, they had succeeded in getting clear articulation from waxed paper, the Xrst recording medium — in the Xrst midnight recording session. We may guess the reason why: in July, he and his assistants failed to appreciate what they had discovered. The commercial potential of his still-unnamed recording apparatus remained out of sight… [A description of the phonograph in ScientiXc American in early November] set oW a frenzy in America and Europe.

This is a topic that could Xll a whole book, but in this post I will provide speciXc guidelines on how to hire, manage, promote, and Xre executives in a startup based on my personal observations and experiences.

The diWerence between an executive and a manager is that the executive has a higher degree of latitude to organize, make decisions, and execute within her function than a manager.

The manager may ask what the right thing to do is; the executive should know. The general theory of executives, like managers, is, per Andy Grove: the output of an executive is the output of her organization.

Therefore, the primary task of an executive is to maximize the output of her organization. This is a sharp diWerence from many big company executives, who can spend their entire careers running organizations other people built — oaen years or decades earlier. There are no shortage of critical things to be done at a startup, and an executive who cannot personally produce while simultaneously building and running her organization typically will not last long.

Again, this is a sharp diWerence from many big companies, where executives oaen serve more as administrators and bureaucrats. Big companies can oaen tolerate internal rivalries and warfare; startups cannot. Being a startup executive is not an easy job. Startups, particularly well-funded startups, oaen hire executives too early. Hiring an executive too quickly can lead to someone who is really expensive, sitting there in the middle of the room, doing very little.

Second, hire the best person for the next nine months, not the next three years. They need someone to build the soaware development team from four people to 30 people over the next nine months, so they hire an executive from a big company who has been run- ning people.

That is usually death. Hire for what you need now — and for roughly the next nine months. At the very least, you will get what you need now, and the person you hire may well be able to scale and keep going for years to come. Third, whenever possible, promote from within. Great companies develop their own executives. With your existing people, you know, and you minimize your odds of being shocked and appalled.

Someone who has been an up and comer at a midsized company but wants a shot at being a primary executive at a startup can be a great catch.

Sometimes you do run into someone who has been VP Engineering at four companies and loves it and wants to do it at a Xah company. More oaen, you will be dealing with someone who is no longer hungry and driven.

This is a very, very big problem to end up with — be very careful. Great executives are high-ego — you want someone driven to run things, driven to make decisions, conXdent in herself and her abilities. The executive skill sets required for a big company vs a startup are very Even great big company executives frequently have no idea what to do once they arrive at a startup.

Believe it. Validate it by reference checking peers, reports, and bosses. Along the way, reference check personality and teamwork, but look Xrst and foremost for a pattern of output. Fiah, by all means, use an executive recruiter, but for sourcing, not evaluation. There are some executive recruiters who are actually really good at evaluation. Others are not. Betting that your recruiter is great at evaluation is not a risk you want to take. Sixth, be ready to pay market compensation, including more cash compensation than you want, but watch for red Gags in the com- pensation discussion.

You want someone focused on upside — on building a com- pany. That means, a focus on their stock option package Xrst and foremost. Watch out for candidates who want egregious amounts of cash, high bonuses, restricted stock, vacation days, perks, or — worst of all — guaranteed severance.

A candiate who is focused on those things, as opposed to the option package, is not ready to do a startup. On a related note, be careful about option accceleration in the event of change of control. But this is not reasonable, in my view, for core functions such as engineering, product management, marketing, or sales. Make your acceleration deci- sions accordingly.

The CEO who used to be a product manager who has a weak product management executive. The CEO who used to be in sales who has a weak sales executive. The CEO who used to be in marketing who has a weak marketing executive. When he bought ABC at Disney, it promptly fell to fourth place. His response? A CEO — or a startup founder — oaen has a hard time letting go of the function that brought him to the party. Eighth, recognize that hiring an executive is a high-risk proposition.

People are people. People are complicated. People have Yaws. Those Yaws are oaen fatal in an executive role. At least then you know what the Yaws are up front. Managing First, manage your executives. You can see the thought process: I just hired this really great, really experienced VP of Engineering who has way more experience running development teams than I ever did — I should just let him go do his thing!

Skimp on this and it is very easy for both your rela- tionship with her and her eWectiveness in the company to skew sideways.

Second, give your executives the latitude to run their organizations. Manage her, understand what she is doing, be very clear on the results you expect, but let her do the job. That is a sureXre signal that the executive is not working out and proba- bly needs to be Xred. More on that below. Third, ruthlessly violate the chain of command in order to gather data. I mean, ask questions, continually, at all levels of the organization. How are things going?

What do you think of the new hires? How oaen are you meeting with your manager? You never want the bulk of your information about a function coming from the executive running that function. In fact, she loves it, because it means the CEO just hears more great things about her.

Promoting This will be controversial, but I am a big fan of promoting talented people as fast as you can — promoting up and comers into exec- utive roles, and promoting executives into bigger and broader responsibilities. Seen it. Done it. You can also promote someone to their level of incompetence — the Peter Principle.

However, life is short, startups move fast, and you have stuE to get done. When you Xnd one, promote her as fast as you can. Great for her, great for the company, and great for you.

This assumes you are properly training and managing her along the way. That is lea as an exercise for the reader. Projects are getting done, team morale is good, new hires are top quality, people are happy. Time to promote some people into new challenges. You rarely go wrong giving someone who is high poten- tial the shot. This assumes you can tell the high potential people apart from everyone else. That too is lea as an exercise for the reader.

Firing First, recognize the paradox of deciding to Fre an executive. It takes time for her to build and manage her organization to generate output.

But, an executive can cause far more damage than a normal employee. Therefore, it is far more important to Fre a bad executive as fast as possible, versus a normal employee. He said, you always Xre a bad executive too late. Second, the minute you have a bad feeling in your gut, start gathering data. Back to the point on ruthlessly violating the chain of command — get to it. Talk to everyone. In the meantime, of course do everything you can to coach and develop and improve the executive. If not, get ready.

If not, you have a problem. Great executives are oaen imperfect but their peers always respect them. If your other executives are skeptical of a new executive aaer the Xrst few months, you have a problem. Does talking to her give you a headache? If the answer to any of these questions is yes, you have a problem.

Third, Fre crisply. Firing an executive sucks. Nevertheless, the only thing to do is do it, do it professionally, make clear to the organization what will happen next, and get on down the road. Confusing, demoralizing, and just plain weird. Instead, make a clean break, put a new person in charge — even if only on an acting basis — and get moving.

Hate it. There is an occasional exception. Unless you are positive you have such an exception, skip it, and move directly to the conclusion. Anyone who got a job as an executive at a startup is going to have an easy time getting the next job. Aaer all, she can always paint you as a crazy founder, or inept CEO. More oaen than not, when you Xre an executive, you are doing her a favor — you are giving her a chance to Xnd a better Xt in a diWerent company where she will be more valued, more respected, and more successful.

This sounds mushy, but I mean it. And on that cheery note, good luck! Counterpoint: Ben Horowitz on micromanagement [This is a guest post from my business partner Ben Horowitz, reacting to my recent post about hiring, managing, promoting, and Fring exec- utives. I have italicized the parts where he really tears into me for your added humor value. Everyone knows that the hyper-controlling manager with the severe personality disorder who micromanages every crummy decision is no fun to work for. However, it is wrong to condemn the practice of micromanagement on that basis.

Andy explains that employees who are immature in a given task require detailed training and instruction. They need to be micromanaged. On the other hand, if an employee is relatively mature in a task, then it is counterproductive and annoying to manage the details of their work. This is also true when managing executives. Marc might think that he hires an executive because she has the experience and know-how to comprehensively do her job, so any detailed instruction would be unwise and unwarranted.

Marc would be wrong about that. It turns out that even — and maybe especially — executives are also immature in certain tasks. It is almost always the case that a new executive will be imma- ture in their understanding of your market, your technology, and your company — its personnel, processes, and culture. Would it be better for this new head of engineering to make guesses and use her own best — not so good— judg- ment, or for Marc to review the Xrst say 20 decisions until the new exec is fully up to speed?

This level of micromanagement will accelerate her training and improve her long-term eWectiveness. It will make her seem smarter to the rest of the organization which will build credibility and conXdence while she comes up to speed. Micro- managing new executives is generally a good idea for a limited period of time.

It turns out that just about every executive in the world has a few things that are seriously wrong with them. They have areas where they are truly deXcient in judg- ment or skill set. Almost nobody is brilliant at everything.

When hiring and when Hring executives, you must therefore focus on strength rather than lack of weak- ness. Doing so may make the diWerence between an executive succeeding or failing. For example, you might have a brilliant engineering executive who generates excellent team loyalty, has terriXc product judg- ment and makes the trains run on time.

This same executive may be very poor at relating to the other functions in the com- pany. She may generate far more than her share of cross-func- tional conYicts, cut herself oW from critical information, and signiXcantly impede your ability to sell and market eWectively.

Your alternatives are: a Macro-manage and give her an annual or quarterly objective to Xx it, or… b Intensively micromanage her interactions until she learns the fundamental interpersonal skills required to be an eWective executive.

I am arguing that doing a will likely result in weak perfor- mance. The reason is that she very likely has no idea how to be eWective with her peers.

Yet the weakness remains. As a result, executives generally require more hands-on management than lower level employees to improve weak areas. So, micromanagement is like Xne wine. How to hire the best people you've ever worked with There are many aspects to hiring great people, and various peo- ple smarter than me have written extensively on the topic.

Criteria 7rst Lots of people will tell you to hire for intelligence. Especially in this industry. I think intelligence, per se, is highly overrated. Most of the lore in our industry about the role of intelligence in company success comes from two stratospherically success- ful companies — Microsoa, and now Google — that are famous for hiring for intelligence. Are we in the man- hole business?

Google, on the other hand, uses the metric of educational achievement. Have a PhD? Front of the line. Go to the end. Hi, Tim! Hi, Diego! So maybe there are other hiring criteria that are equally, or more, important. Drive I deXne drive as self-motivation — people who will walk right through brick walls, on their own power, without having to be asked, to achieve whatever goal is in front of them.

People with drive push and push and push and push and push until they succeed. We shall go on to the end, we shall Xght in France, we shall Xght on the seas and oceans, we shall Xght with growing conXdence and growing strength in the air, we shall defend our Island, whatever the cost may be, we shall Xght on the beaches, we shall Xght on the landing grounds, we shall Xght in the Xelds and in the streets, we shall Xght in the hills; we shall never surrender.

Of the people who have it, with some of them it comes from guilt, oaen created by family pressure. With others, it comes from being incredibly Type A. Whatever… go with it. Drive is independent of educational experience, grade point averages, and socioeconomic background. That may or may not be the same thing as being driven to succeed in the real world. Drive is even independent of prior career success. For the background part, I like to see what someone has done.

Not been involved in, or been part of, or watched happen, or was hanging around when it happened. The business you started and ran in high school. The nonproXt you started and ran in college.

Motivating people who are fundamentally unmotivated is not easy. But motivating people who are self-motivated is wind at your back. I like speciXcally looking for someone for which this job is their big chance to really succeed. Finally, beware in particular people who have been at highly successful companies.

First, let them go somewhere else and fail. And remember, an awful lot of people who have been at hugely successful companies were just along for the ride. Anyone who loves what they do is inherently intensely curious about their Xeld, their profession, their craa. They read about it, study it, talk to other people about it… immerse themselves in it, continuously. And work like hell to stay current in it.

Not because they have to. But because they love to. And you should be hiring people who love what they do. As an example, programmers. Sit a programmer candidate for an Internet company down and ask them about the ten most interesting things happening in Internet soaware.

Remember — because of the Internet, staying current in any Xeld no longer costs any money. In my experience, drive and curiosity seem to coincide pretty frequently. Ethics Ethics are hard to test for.

And avoid, avoid, avoid. Unethical people are unethical by nature, and the odds of a metaphorical jailhouse conversion are quite low. Priests, rabbis, and ministers should give people a second chance on ethics — not hiring managers at startups. Guess what.

How to run the hiring process First, have a written hiring process. Whatever your hiring process is — write it down, and make sure everyone has a copy of it, on paper. Second, do basic skills tests. For example, test programmers on basic algorithms — linked lists, binary searches.

It does matter if they are unable to go up to the whiteboard and work their way through something that was covered in their Xrst algorithms course. The same principle applies to other Xelds. For a sales rep — have them sell you on your product all the way to a closed deal.

How to hire the best people you've ever worked with 77 For a marketing person — have them whiteboard out a launch for your new product. Third, plan out and write down interview questions ahead of time. So just make sure you have questions planned out and assigned to each interviewer ahead of time. The best part is that you can then iteratively reXne the questions with your team as you interview candidates for the position.

Fourth, pay attention to the little things during the interview process. You see little hints of things in the interview process that blow up to disasters of unimaginable proportions once the person is onboard. Person never laughs? Probably hard to get along with. Person constantly interrupts? Egomaniac, run for the hills. Bullshit- ter. Person gives nonlinear answers to simple questions? Complete disorganized and undisciplined on the job. Person drones on and on?

Get ready for hell. Fiah, pay attention to the little things during the reference calls. You are doing reference calls, right? You get the picture. Sixth, Hx your mistakes fast… but not too fast. Most startups in my experience are undisciplined at Xxing hir- ing mistakes — i. Finally, although this goes without saying: value the hell out of the great people you do have on your team.

Given all of the above, they are incredibly special people. Step 1: Go dark and execute. Your predecessor in the CEO job inevitably spent way too much time explaining to reporters, investors, analysts, and anyone else who would listen why your company was actually doing just Xne and how brighter times were just around the corner as your competitive position deteriorated and your Xnancial results fell apart, and nobody believed it anyway. Step 2: But Frst, throw your predecessor completely under the bus.

He completely fouled the Xnancials and sabotaged the business and as a result, earnings for the next several quarters are going to come in way below expectations. Step 3: Identify the things that are working surprisingly well in your business, and double down on those.

Any big company, no matter how moribund and poorly run, has a number of products and projects that are going better than expected — and usually come as a complete surprise. Promote their general managers, elevate their business units in the organization, give them more funding, and get out of the way. Step 4: Identify the things that are consuming a lot of money and time and yet going nowhere, and kill those.

You can also consider this a warmup exercise for Step 5. Step 5: Lay oE a third of the workforce. So do it all at once. A company that requires a turnaround has, in all likelihood, hired too many people for the size of the business opportunity it actually has.

This impairs proXtability, driving away investors and submerg- ing the stock price at precisely the time the company needs a healthy acquisition currency; this demotivates your great people by sur- rounding them by too many mediocre people and too much bureaucracy; and this slows everything in your company to a crawl because there are simply too many people running around who have to talk about everything before anything gets done. Grit your teeth, oWer the most generous severance and assis- tance packages you possibly can, and get it done.

Your ability to continue to employ the other two-thirds of your people is at stake. Step 6: Reduce layers, then promote up and comers and put them clearly in charge.

A company that requires a turnaround has, in all likelihood, too many layers of management. Nuke as many of them as you can. Then develop a list of your top 20 or 30 up and comers — strong, sharp, aggressive, ambitious director- or VP-level man- agers who want to succeed and want your company to succeed. And promote them, and put them in sole charge of clearly iden- tiXed teams and missions.

As CEO, you should only have at most one executive between you and these 20 or 30 up and comers once you are done pro- moting them and putting them in charge of their teams and missions. Step 7: Figure out the single most important thing your company has to win at, and put your single best person in charge of winning at it. Step 8: Look at the market, Fgure out new areas in which your company is not currently playing or winning, but are clearly going to grow a lot — and acquire the best company in each of those areas.

Step 9: In six months, relaunch the company with a single, crisp, coherent message and strategy. Then go dark again and go right back to work.

But these are the 9 most important. Part 2: Retaining great people This post is about retaining great people, particularly at big com- panies in industries like technology, where stock options matter and where people can relatively easily move from one company to another.

Actually, I lied. Let me explain: Companies that are winning — even really big, old ones — never have a retention problem. Companies that have a retention problem usually have a win- ning problem. The typical case is a company that used to be a hot growth com- pany, but the growth has Yattened out, causing the stock to tank and everyone to be in a bad mood. In other words, a company in transition — from winning at one point, to not winning now.

Part 2: Retaining great people 87 The only way a company in that situation can retain great peo- ple is to start winning again.

Great people want to work at a winner. Oh well. So the right question is, how can we start winning again? I am particularly talking about the former hot startup that is now a large slow-growth company. Doing that will make your situation far worse, by causing the remaining great people you do have to abandon ship even faster. Who wants to work for a company that has given up on having energy and drive and ambition?

And then you will end up with a staW that only knows how to be a big company — that only knows how to maintain something that someone else has already built — which is death in any industry where things change all the time.

Second, focus. In a technology company, focus on retaining the great architects and managers. In other kinds of companies, focus on retaining the equivalent people — the people who are the magnets for retaining other great people and hiring more great people. If you bear down and focus on retaining the magnets, retaining everyone else — for example, in a soaware company, the junior programmers, the product managers, the user interface design- ers, the salespeople, the sales engineers, the marketing staW, and so on — will be much easier.

Third, clean house. Any company with a retention problem prob- ably also has an overstaZng problem and a mediocrity problem and needs to Xx both of those at the same time.

VIPs are a particular problem at the former hot startup that has plateaued. They suck the life out of their environment and have to go. Again, a classic problem for the former hot startup. Look particularly hard at the people who joined in the two years following the IPO — some of them are undoubtedly very hard working, but others are summertime soldiers and have to go.

Taking out the people who fall into these categories will make your remaining great people feel better immediately, and will save you a lot of money and stock options that you can reallo- cate to better purposes — such as new compensation packages for your remaining great people. Fourth, promote your best people — especially into the jobs vacated by the more senior of the people you just Xred — and give them very interesting challenges.

FiMh, simplify and clarify your organizational structure to make sure that your best people have direct responsibility for their pro- jects. This is a great opportunity to clean that up — and in particular, to move to an organizational model where each of your stars has clear, direct, and comprehensive responsibility for a critical mission.

Nuke all dual reporting structures. And nuke as many shared services functions as you possibly can.