Ten + one ways to grievously damage your high-growth tech startup, and Silicon Valley in the process:
- Only hire, and only train/motivate/incent your managers to hire — don’t optimize efficiency, don’t do performance management, don’t fire.
- Founders, sell too much of your own personal stock too quickly, alienating your employees and questioning your long-term commitment.
- Let private stock sales by employees get out of hand: create hit-and-run culture and take on burdens of being public before going public.
- Dilute the s*** out of cap table: be sloppy and undisciplined w/stock grants to early employees, plant morale land mine for later employees.
- Maximize absolute valuation of each growth round: make later rounds harder and harder to achieve, until you trigger a disastrous down round.
- Let non-SV investors suck you into terrible structural terms on growth rounds: guarantee massive trauma if anything goes slightly wrong.
- Go public too soon, before you’re a fortress, before you can withstand all the assaults: ending in stock price death spiral and train wreck.
- Pour huge money into overly glorious new headquarters, signaling to employees “we’ve made it, we’re amazing”, then repeat two years later.
- Confuse conference circuit and party scene with actual work. Encourage alcohol and drugs, party culture in company, value ballers over nerds.
- Refuse to take HR seriously: allow terrible internal manager and employee behavior to catalyze into catastrophic ethical and legal crisis.
- And the one that will actually kill you: Assume more cash is always available at higher and higher valuations, forever.
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@pmarca Says 