Burning the Boats

This is something that has been circulating in my brain for the last few weeks. I’m not talking about torching a yacht or two. I am actually talking about a venture capital cardinal rule.  Basically, go all in or walk away.

The story goes that when Cortes set out to conquer Central America, he made sure that his troops were committed to the effort by burning the boats once they hit the shore. That meant no surrender – either you conquer or die.

To me, this has become an obvious necessity for a successful startup.  In my current role as CEO for a very young startup, I am seeing this everyday as I struggle with a high-level sales executive that has never given our venture 100%.  Leaving a big corporate job in December, he said all the right things and seemed excited to help grow our business.  Yet it was quickly evident that any work after 5pm was not happening, forget about the weekends, and on a good day work my start by 9.30am.

As a virtual company, you have to put a lot of faith in your people that they will do their jobs.  Blind faith is easy when you have results, but when the results are not there – doubts start to arise. Combine this with a less-than-hoped-for work ethic, and you start to realize that your all-star employee has never really worked for you at all. Instead, they are treading water and waiting to see if your company is going to “take-off”. Sort of like standing in the shadows until you are sure your side is going to win the fight.

I don’t have an answer to this, at least not yet. I am fighting it right now, how do you burn the boats without ruining the morale of your troops?  Working on that.

Dock Dogs at the Teva Games

If you are in Colorado in early June, you have to make it up to Vail for the Teva Mountain Games.  My wife and I have made it up there for the past 3 years, and now we block out that weekend (this year it is June 3-6) so that we don’t schedule something over it.

There is a little something for everyone there, from climbing to biking to fly-fishing. There is a “gear town” where you can check out all sorts of swag, clinic & classes, and food (BBQ from Moe’s is the best!!!).  One of our favorites is the 8-ball kayak competition on Sunday, where races head down the river and dodge the gladiator kayakers (dressed all in black) who are there just to make their life difficult.

But the best event has to be the Dock Dogs competition.  My wife likes the extreme vertical, but I prefer the Big Air Wave. These dogs jump over 20 feet – it is awesome to watch. If you are looking at getting a dog, it is a great place to scope out breeds, as not only are there a lot of dogs in the competition, but 70% of the spectators have their dogs with them as well. The Vail Valley Foundation has a good link up to the Dock Dogs event here.

See you in Vail!

The Abbreviation for “Million” is not “M”

Wanted to clear up a small pet peeve of mine… the abbreviation for “million” is not “M”.  Obama didn’t have a “$100M” spending cut, and their was no “$100M” Ponzi case.

The “m” that is used to shorten million actually comes from the Roman Numeral for Thousand. So million really translates to “thousand thousand,” or “mm”.  If you don’t want to believe me, check it out on the wiki page:

For large numbers (4000 and above), a bar can be placed above a base numeral, or parentheses placed around it, to indicate multiplication by 1000, although the Romans themselves often just wrote out the “M”s:^[4]

Vesting and Startups

Most people hear the term “vesting” and they think of their retirement plan. Back in the day (pre-2000) more companies spent a little money on their employees by providing some sort of “matching” in their retirement accounts. Vesting was the term used to describe the time it would take before that cash was yours. Typical arrangements were 5 year vesting periods, that were pro-rated on your anniversary date (so on your 1 year anniversary you owned 20% of the company match, 2nd year anniversary was 40%, etc.).

In the startup world, vesting more often refers to the time it takes for you to earn your piece of the pie. Startups typically don’t have a lot of cash, so they use their only currency – equity – to help entice the best and brightest to join the team. But don’t think that you get all the return at little risk – your pay will most likely be lower, and you have to dig in for a period of time before that equity actually becomes yours.

The form of your equity grant, and how you manage it, can make a big difference in the tax consequences you have in the long run – hopefully I can get to that shortly.

What is that password again…

It has been a while since I last posted something on this small parcel of web real estate. I spent all of 2009 working as President / COO for a growing consumer products company. In one year, we accomplished a lot given the internal distractions that we dealt with (not to mention the macro environment that everyone faced).

In January I decided to take the role of CEO in another local startup. Ground floor. No revenue = no salary.

The past few months have been spent getting that startup going. A couple other big changes are set to happen in 2010 (all in due time), so I thought it might be a good idea to log in once again and get in the habit of publishing my personal journal to the world. If anything, it will give me a good way to look back and see how I handled each one of the upcoming changes. Who knows – it might even affect how I make decisions. We’ll see.