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Some of you may be too young to remember, but the physical Yellow Pages was one of the main ways you could find local businesses. Those meaty books were a mainstay and saw frequent usage in many many households around the world. But since the late 90s and early part of the 2000s, for good measure, the books have been disappearing. Google had a big part to play in that.

Google is the de facto search engine of choice. But there was space for better discovery of local services. So Angie’s List, HomeAdvisor, Yelp and others were born.

Going beyond discovery

To start, as an example, let’s take a look at all of Yelp’s local services categories in San Francisco:

Under each of these categories, you’ll find hundreds if not thousands of local busin...

Welcome to Phase Three of a four-part Splitting Equity Series. If you missed it, start your journey here: Introduction - Early Startup Equity — Getting it Right before continuing on if you haven’t already, and go in order from there.

Phase One - Startup Equity - Avoiding Early Mistakes

Phase Two - How Startup Equity Works

Phase Three - Part 1 - How to Split Equity

• Part 2 - Splitting Equity Today

• Part 3 - Splitting Equity in the Future ( ←YOU ARE HERE 😀)

• Part 4 - Calculating Startup Equity Splits + FAQ

Phase Four - Equity Management

Let's continue!

Founder equity splits rarely turn out to be what we hoped they would be after Year 1. The co-founders at startup companies start off with the best intentions, but as the business venture turns into lon...

In 2008, the world got a new music streaming service named Spotify. It was developed in Stockholm, Sweden, and provided digital rights management-protected content from record labels and media companies. It may have started out as a local thing, but the freemium service quickly expanded. Today, Spotify has more than 140 million monthly active users and over 50 million paying subscribers.

I had the pleasure of meeting up with Andreas Ehn, who was Spotify’s first employee and CTO. Andreas was responsible for the product and platform architecture as well as hiring a world-class engineering team, of which many have gone on to become successful entrepreneurs on their own.

After Spotify, Andreas founded Wrapp — a mobile online-to-offline customer...

The first article in this 3-part series (How to Design a Killer Sales Compensation Model) introduced the concept of behavioural theory and how it affects sales compensation design. This second article discusses how compensation packages suit different stages of company and product evolution.

The main challenge with designing a sales compensation program is the primary sales role constantly evolves as the company grows and the market matures. The following diagram, courtesy of The Alexander Group, explains the four phases of growth and how this impacts the business.

Phase 1: The Start-Up Phase

In the Startup phase, brand awareness is low, and companies strive for a foothold in the market. The salesperson must have an entrepreneurial drive ...

There is absolutely a point where the cost of building our startup is simply too high.

The problem is all of our startup lore tells us otherwise. When I talk about building my new startup I talk about not taking a vacation for 7 years, not seeing my family for 3 years, and eating nothing but Ramen Noodles for a decade.

OK, the last part isn't true, it was Chocolate Pop-Tarts dipped in Nestle Quick (I was living big all along!)

We've built a culture around respecting the sacrifice, which is only somewhat helpful. What's dangerous is when we wind up taking it too far. How far is too far? That's the $0 question.

The Hard Truth of Being a Founder

One of the most difficult things about being a startup Founder is that you have to be willing to sac...

Welcome to Phase Four of a four-part Splitting Equity Series. If you missed it, start your journey here: Introduction - Early Startup Equity — Getting it Right before continuing on if you haven’t already, and go in order from there.

Phase One - Startup Equity - Avoiding Early Mistakes

Phase Two - How Startup Equity Works

Phase Three - How to Split Equity

Phase Four - Part 1 - Equity Management ( ←YOU ARE HERE 😀)

• Part 2 - Recovering Startup Equity

Let's continue!

Splitting startup equity is only half the challenge for early-stage startups — managing startup equity is a whole different issue! How much equity we split and the founders' ownership percentage is generally determined by what we expect each founder to contribute.

But the problem is once ...

Founder success is almost never what we picture it to be.

When we think of wildly successful Founders our minds easily jump to billionaires like Branson, Blakely, and Musk, balancing a life of magazine cover story photoshoots with keynote presentations and TV interviews. Our most "successful" Founders often have this air of glamour around their success.

But as it happens, Founder "success" feels way less glamorous. In fact, the most exciting success milestones are often so mundane when they occur that we don't even realize they happened. But this success is a culmination not of a single event, but a series of tiny events that we later look back and realize was when our success was truly defined.

We Always Make Payroll

For most of our journ...

We opened our doors in 2010 with less than 100k in revenue. Despite bringing in money the first year, I technically lost money due to start-up and capital expenses. I even had to get a loan from the IRS to cover taxes that year that took me four years to pay off.

It was my first exposure to the “Oh wow, THIS is how businesses fail”. I had to grow quickly and with a sense of urgency to keep enough cash coming in to pay for the baseline business expenses. I was hustling while crossing my fingers that my hard work would pay off. It did. I grew so fast that I had to hire people quickly that cared as much as I did….and I did. The second year we grew by 630%. We followed that first year burst with an average of 73% growth every year for the next ...

Most startups launch with $0 in funding, but no one ever really explains how the hell they do it. We keep saying, "They bootstrapped it," as if that explains anything other than "They didn't take on investors." What the heck does that even mean? What it is intended to mean is that we find creative ways to compensate people and buy things that don't involve using cash in the bank.

We can't possibly cover every use case of how startups find resources for $0, but let's take a look at the most popular categories that people run around looking for money for and see how we make it work.

Paying for People

Figuring out how to compensate people is where we're often stuck first. Most of us are familiar with paying folks with equity, but that's not th...

Why does it Matter?

The financials slide in our pitch deck takes our own financial projections and consolidates them into our most key metrics that potential investors care about.

Most pitch deck financial projections wind up being incredibly hard for potential investors to understand, so we're going to provide you with a killer financial projections slide template that's easy to use and will impress investors.

Key Metrics Potential Investors Want

We always build our financial projections slides in our pitch deck backward from what questions investors have.

That way, the financials slide is only covering exactly what a potential investor wants to see — and no more!

"What are the pro forma financial projections?"

Our "pro formas" are really just a ...