20stangible

John Brennan

LESSONS FROM MYReal, actionable advice from an entrepreneur’s experience

Lessons from My 20s

INTRODUCTION

Lessons from My 20s

ABOUT MEMany people do something crazy when they enter a new decade of life. Some travel in search of meaning, others make big career moves or seek out adrenaline. I chose to write an eBook.

I've learned a lot about engineering, business strategy and spirituality in the last decade. I've started several businesses, picked up advice from mentors, and spent time soul searching. Last fall I sold my company BuzzTable to Sysco Foods (SYY), and the experience gave me time to revisit my life's goals.

I certainly didn’t get to this point unscathed, and I can almost count the startup failures on two hands. I contribute a large part of these failures to lack of knowledge and experience. I can’t promise to teach you experience in this deck, but hopefully my journey can help you avoid a few common pitfalls.

Get in touch with me: john@buzztable.com @worldlyjohn

Lessons from My 20s

Although this started as a personal exercise, my hope is that other, early stage entrepreneurs will also find value in this. I wanted to take a holistic view to this exercise which is why the “Life” section remains intact because without a work-life balance you will most likely burn out.

Some lessons you may have already learned yourself, others may not apply to you at this current moment -- that’s okay.

My hope is that the time you spend reading (or skimming) this micro-book will have paid you back a few times over in the knowledge you will have gained.

WHO IS THIS FOR?

Lessons from My 20s

OVERVIEW

Lessons from My 20s

OVERVIEW

Slides are organized into 2 parts:

BUSINESS and LIFE

Lessons from My 20s

Part 2: Life

HAPPINESSMINDFULNESSHEALTHRELATIONSHIPSINVESTINGGOALS

TOPICS

Part 1: Business

TEAM & CULTURESTRATEGY & EXECUTION REVENUE MODELSPRODUCT DEVELOPMENTSALES & MARKETINGACQUISITIONVENTURE CAPITALSTARTUP CHECKLIST

Lessons from My 20s

OVERVIEW

It’s about 150 slides.

BUT, if you are short on time there’s a cheat sheet...

Lessons from My 20s

CHEAT SHEET

TEAM & CULTURE1. The one thing no competitor can copy or replicate2. If you don’t define your culture it will define you3. Communicate your north star often4. Celebrate the small things5. Solve tough personal issues early6. Maintain a balance7. Foster respect through mutual understanding8. Decisions made by data9. Hire people with different perspectives10. Hire generalists early on, specialists after product fit

STRATEGY & EXECUTION 1. Lack of focus kills a startup2. Develop milestones early on3. Success emulates success4. Remove the unknowns5. Be hypothesis driven6. Be honest with the challenges you face

STRATEGY & EXECUTION (cont.) 7. Build processes8. Never outsource your core value9. Every problem is a funnel10. Customer and market segmentation

REVENUE MODELS

PRODUCT DEVELOPMENT1. Ship before you want to2. Say no a lot3. Do 2 things at 100% everything else at 80%4. Make 1st-time users happy as fast as possible5. Less is more6. It’s not always what, but when7. Track everything8. Empower ownership9. Don’t write product specs10. Build lead capture into the product early on

PART 1: Business Lessons

Lessons from My 20s

CHEAT SHEET

SALES & MARKETING1. Setting goals2. When it’s not about the numbers3. Road to a repeatable sales process4. Building a repeatable sales process5. Know thy funnel6. Unit economics are your friend7. Don’t automate too early8. Skip resellers9. Think different10. Customer satisfaction drives everything

ACQUISITION1. Love the struggle2. Companies are bought not sold3. Conversations begin in many ways4. Keep working5. Get the letter of intent

ACQUISITION (cont.) 6. Lawyer up for the due diligence7. Negotiate the LOI8. Valuations9. Dating goes both ways10. Be prepared for change

VENTURE CAPITAL 1. How big is your market?2. Show traction3. Build relationships4. Be serious about the financial model5. Know thy unit economics6. Finding investors7. Investor feedback can be contradictory8. You will never hear “no”, just “not now”9. Understand the terms

STARTUP CHECKLIST

PART 1: Business Lessons

Lessons from My 20s

CHEAT SHEET

HAPPINESS1. Harmony between heart and mind2. Quality of your thoughts3. Live in the moment4. Buy experiences not things5. Create your purpose

MINDFULNESS1. Enlightenment is not a destination2. Compassion through understanding3. You can’t see the truth, only a perspective4. Live with gratitude5. Embrace uncertainty6. You are here and here is perfect7. A step back often becomes a step forward8. Perfect timing does not exist9. Breathing exercises10. Deepening your practice

HEALTH1. Eat your super foods

HEALTH (cont.)2. Practice preventive health3. Get your heart rate up4. Detox annually5. Yoga is more than “stretching”

RELATIONSHIPS

INVESTING1. Personal goals should dictate your strategy2. If you remember one thing, it’s asset allocation3. Use index funds to the finish line4. Dollar-cost averaging5. Interest rates6. Stocks7. Bonds8. Real Estate9. Commodities10. Peer-to-peer lending

PART 2: Life Lessons

Lessons from My 20s

BUSINESS

part 1

what i’ve learned in...

Lessons from My 20s

Part 1: Business

TEAM & CULTURESTRATEGY & EXECUTION REVENUE MODELSPRODUCT DEVELOPMENTSALES & MARKETINGACQUISITIONVENTURE CAPITALSTARTUP CHECKLIST

TOPICS

Lessons from My 20s

part 1: business

TEAM & CULTURE

Lessons from My 20s

1TEAM & CULTURE

TEAMthe one thing no competitor can copy or replicateMany of us read technology articles as part of our morning routine. When we started building our business, every article about a competitor can be a small blow to our morale.I remember reading an article about a competitor that copied several of our features in their latest release. It didn’t bother me because I knew we could push the envelope again. That’s the thing about the team you go to battle with - you can always jump ahead again tomorrow.

Lessons from My 20s

2TEAM & CULTURE

if you don’t define your CULTUREit will define youWhen I was building OpenAction with my former cofounder (and still close friend), we spent a lot of time working on product/sales and very little on the “culture.” We were just getting to know each other when we were starting the company, and by sheer luck had similar interests in the outdoors. Unfortunately, we rarely integrated that into the culture at work, especially as our team grew. Our culture just happened.

At BuzzTable, I wanted to take a different approach and be more deliberate. We started with monthly outings (paintball, rock climbing, etc) and eventually the group threw out suggestions. The culture became larger than myself. Hopefully I can replicate that again.

Lessons from My 20s

TEAM & CULTURE

3communicate your NORTH STAR oftenYour north star is the vision and direction of the company. While you will have a good grasp of this, your team does not sit in every meeting with you and their perspective may differ. Communicate the “why” in addition to the “what” as often as you can.

I think this problem is correlated with company size. When you are 4-8 people in a room, there are so many conversation exchanges in real time that it’s easy to stay on the same page. Once you grow out of a single room, you’ll need more than quarterly updates to communicate the 5 “W’s.” Align your goals to it, repeat yourself often.

Lessons from My 20s

TEAM & CULTURE

CELEBRATE the small thingsMilestone wins, no matter how insignificant they seem, bring the team closer together. When we first started out we didn’t have a snack bar or a water cooler in the office... after a few early milestones that changed. The whole team was a part of the selection process. Most notably for the office minibar. =)4

Lessons from My 20s

5TEAM & CULTURE

solve tough personal issuesEARLYFounder/team issues will compound themselves with every milestone or funding round. Problems never resolve themselves, quite the opposite actually.

Even after we raised a large funding round in a previous company, we still had founder issues around our roles and responsibilities. I imagine this problem is common with overlapping skill sets. I promise the conversation will be harder tomorrow, so address it today.

Lessons from My 20s

TEAM & CULTURE

http://www.fastcompany.com/3002879/designing-one-week-team-sabbatical-will-transform-your-companyhttp://product.skillshare.com/2012/09/whats-a-company-retreat-for/

6maintain aBALANCEAll work and no play is a recipe for burnout. Remember, the company you are building is a marathon, not a sprint.

We had small monthly retreats as a team (rock climbing, paintball, play hooky and see a movie) and larger weekend retreats once a quarter (ski trip, RV road trip from NYC to Chicago, etc).

Lessons from My 20s

TEAM & CULTURE

7FOSTER RESPECTbetween disciplines through mutual understandingEveryones’ job is hard. Most of the time engineers can’t sell and salespeople can’t write code. That’s why you’re a team.

Understanding each other’s pain points leads to mutual respect. We achieved this at BuzzTable because it was built into the culture early. When the product team stayed until midnight every night the week before we had to ship, sales stay there with us to prospect. We held code hackathons AND sales hackathons together. And that made all the difference in the world.

Lessons from My 20s

TEAM & CULTURE

8decisions made byDATAIt’s about the data, not the ego. If there is no data, default to the decision maker. Let everyone in the company know this. You never know who may uncover a bright spot. This also is a great point to make when hiring engineers.

I remember when we were just starting BuzzTable we were marketing to the end user (the restaurant guest). Our conversion rate (getting restaurant owners to sign up) was terrible. We wanted to position ourselves as a consumer app (investors wanted this too), but the data was telling us a different story. I spent a few weeks tweaking the site based on visitor behavior (Google Analytics) and found our conversion rate triple!

Lessons from My 20s

9TEAM & CULTURE

hire people withDIFFERENT PERSPECTIVESWhile I didn’t have the chance to really follow through with this at BuzzTable, I started to realize that our team was fairly homogenous. It makes sense because we hired friends and friends of friends. I worried that as we grew from 10 to 30 we would need to hire out of network and feared that some new members would feel like outsiders. I was also aware that the best products are derived from many perspectives. You might not follow this when you’re still hiring in single digits, but it should always be top of mind.

Lessons from My 20s

10TEAM & CULTURE

Your idea and market may change, so

hire generalists early on,specialists after product fitYou’ll probably need a different type of sales person if you decide your model is best suited to inbound sales (versus outside sales). The same thinking can be applied to engineers. Both of my prior companies had pivots before we knew what we wanted to be.

Lessons from My 20s

part 1: business

STRATEGY & EXECUTION

Lessons from My 20s

STRATEGY & EXECUTION

1LACK OF FOCUSkills a startupYou want to start solving a problem that’s narrow and deep. Think Facebook’s debut at Harvard. Attract users that really want it. Listen, learn and iterate. You can build less to satisfy the problem and spend less to acquire new users.

If you take away only one lesson from this deck, this is it. Often the decision to pare down and focus, is hard. While building BuzzTable we couldn’t decide if we would have more success leading with b2b or b2c. We were getting pulled in both directions from different investors. Once we finally chose b2b, we built a lead-converting website, and started to see the growth. Our decision was evident. If I had to do it over again, I’d spend more time creating small experiments to test both models early. Every model will have its challenges. For us, generating leads was easy and the work was in conversion.

Lessons from My 20s

STRATEGY & EXECUTION

2developMILESTONESearly onDefine OKRs (Objectives and Key Results) quarterly and review monthly. Early on, focus more on learning (engagement) than revenue or sales targets. As patterns emerge, you can adapt.

Coming up with OKRs early will help you focus, but it’s really hard to plan for the next three to six months when you are just starting out and have only a few months of runway. At my previous startup we went month to month with funding for the first nine months. Even after we closed on our seed round, we still weren’t thinking in terms of milestones (aside from product), and that made it hard to achieve the targets I had in mind. Once we set up formal checkins, each quarter and month, we got more done.

Lessons from My 20s

STRATEGY & EXECUTION

success EMULATES successAnother company has probably faced a similar challenge before, so instead of reinventing the wheel, leverage the work of great minds. Add your value on top.

For example, when building BuzzTable, I thought of the website as a SaaS-based, lead gen tool. First thing I did was learn what made Salesforce, ZenDesk, and Zuora great.3

Lessons from My 20s

STRATEGY & EXECUTION

remove theUNKNOWNSEvery business makes assumptions until they know the answer. The key is to know what unknowns will have the largest impact. Define, prioritize and begin to test your assumptions today.4

Lessons from My 20s

STRATEGY & EXECUTION

5beHYPOTHESISdrivenCreate a culture of experimentation. Emphasize learning and iterating.Don’t point fingers at failed solution or place blame at missed numbers early on -- as long as you are learning.

Lessons from My 20s

6STRATEGY & EXECUTION

be HONEST with YOURSELF about the challenges you faceOne must not confuse persistence with obliviousness. No one cares about new feature X if you still have zero customers. Stop building new features and understand what pain points your target customer actually has.

This requires a bit of self reflection, so pause for 5 minutes and think about whether your business is where you hoped it would be six months ago. If not, why do you think that is? Once you are honest with yourself, then you can begin to formulate a plan to win.

Lessons from My 20s

STRATEGY & EXECUTION

7buildPROCESSESPerformance ReviewsNew Employee TrainingTech Stack SetupPurchase OrdersOffice Supplies/Snacks/LunchPayroll

Customer OnboardingProduct FeedbackDowntime/Update NotificationInternal/External CommunicationsVacation RequestsLegal Contracts

Lessons from My 20s

STRATEGY & EXECUTION

8never outsource yourCORE VALUEIf you are a technology company this means building an internal engineering team over an outsourced dev shop.

When building out sales channels, avoid resellers who push you farther away from the customers you are trying to reach. It will be harder to get the valuable feedback you need to iterate.

Lessons from My 20s

9STRATEGY & EXECUTION

every problemIS A FUNNELWhether you are trying to raise capital or find your first few paying customers, you can think about it as a funnel. Start with your target goal and work backwards. Assume a conservative success rate and figure out the number of prospects you will need.

Then GO!

50 prospects

30 meetings

10 customers

Lessons from My 20s

10STRATEGY & EXECUTION

customer and marketSEGMENTATIONMark Suster refers to this as “Deer Hunters.” A common and often fatal flaw early in your company’s life is picking the wrong customer segment, or worse yet, not knowing what segment your target customer is.

The animal analogy corresponds to the typical contract size. Elephants are massive customers like PepsiCo or Microsoft. The contract may be worth $1m, but could take years to land if you are even so lucky.

For brevity sake, see Mark’s blog below. The second link is a new take on the model, introducing “flies” and “mice”-size customers.

http://www.bothsidesofthetable.com/2009/09/16/most-startups-should-be-deer-hunters/

http://christophjanz.blogspot.com/2014/10/five-ways-to-build-100-million-business.html

Lessons from My 20s

part 1: business

REVENUE MODELS

Lessons from My 20s

REVENUE MODELS

when starting a business, it’s often helpful to see examples of web and mobile

REVENUE MODELS

Lessons from My 20s

REVENUE MODELS

TRANSACTIONSmerchant acquiring (paypal, stripe)

processor (paymentech)payment gateway (firstdata)

ACH (dwolla)card issuance (simple)messaging (whatsup)

ADVERTISINGdisplay/search (Google)

audio/video ads (Pandora/Hulu)promoted content (twitter)

lead generation (zocdoc)featured listings (yelp)

retargeting (criteo)

DATAuser data (bluekai)

business data (duedil)user intel (yougov)

search data (chango)consumer intent (yieldbot)benchmarking (comscore)

LICENSINGpay per seat (salesforce)

per deviceper app instance (photoshop)

brand licensing

SUBSCRIPTIONSoftware as a Service (salesforce)

Service as a Service (Shopify)Content as a Service (Spotify)Platform as a Service (AWS)

Sampling (Birchbox)Paywall (NYTimes)

COMMERCEretail (zappos)

marketplace (etsy)crowdsourced market (threadless)excess capacity mrks (uber, airbnb)vertically integrated (warby parker)

digital goods (iTunes)

PEER TO PEERbuying (etsy)

services (taskrabbit)mobile wifi

lending (lending club)gambling (betfair)auctions (ebay)

here are 7:

For more, see: http://bit.ly/bizmodelex

Lessons from My 20s

part 1: business

PRODUCT DEVELOPMENT

Lessons from My 20s

1PRODUCT DEVELOPMENT

SHIPbefore you want to

-Reid Hoffman

I learned this the hard way a few times. I was building a social network in college. It took almost a year to get the product to a point where I was ready to show others my work. Unfortunately, it was too late. People may not have cared in the first two months while I was building it, but that could’ve saved me 9 months!

Releasing your creation makes you vulnerable. No one gets that more than me. However, I have also learned that you are doing a disservice to your creative work by not putting it out there. Everything evolves -- even this presentation you’re reading. Embrace it.

Lessons from My 20s

2PRODUCT DEVELOPMENT

say NO a lotYour product is measured by what you don’t put in it just as much as what is. Say “Yes” once for every 50 “No”s. This often means saying no to custom work from early customers, unless you want to become a dev shop.

While building OpenAction, a mapping platform for non-profit organizations, one of our investors offered us additional money to add a few features to the product so another company of his could use it. Turning down any additional revenue early on is a hard decision, but I knew it was the right one. He commended us later it.

Do not blindly say “No.” Understand if it’s something that many users will experience. Build for those cases. Another example is the company, 37Signals, makers of BaseCamp. Instead of writing down feature requests, I’ve heard they discuss them verbally each week, those heard often get developed.

Lessons from My 20s

3PRODUCT DEVELOPMENT

Do 2 things at 100% everything else at 80% Think about the two most important use cases (signup, form entry, invite others) and be maniacal about crafting them to 100%. Everything else should be built “good enough.”

You need to move fast and a lot of stuff will either change or won’t be important in 6 months.

Lessons from My 20s

4PRODUCT DEVELOPMENT

make 1st-time users happyAS FAST AS POSSIBLEDave McClure calls this “activation.” You want to lead your new users to an “aha!” moment as fast as possible. Don’t tell them why they should use your product, show them.

Spend a lot of time here.

Lessons from My 20s

5PRODUCT DEVELOPMENT

less isMOREUse simple, common tools and architecture. Build shallow. Your MVP probably doesn’t require memcached at launch. When building your MVP, use the tech you know so you know what to do when things go wrong (because they will).

The less code you write, the easier it will be to maintain and grow.

Lessons from My 20s

6PRODUCT DEVELOPMENT

it’s not always “what”BUT “WHEN”It’s easy to say “No” to bad ideas.

It’s much harder to say “No” to good ideas that you just shouldn’t do right now.

Lessons from My 20s

7PRODUCT DEVELOPMENT

track EVERYTHINGBut spend time deciding what the right things to report are. Don’t fall into the trap of paralysis by analysis. Plan before you track.

Collect quantitative and qualitative information. Quant usually tells you how something you built is working while qualitative data is where you’ll find new opportunities to improve and WOW your customer.

Lessons from My 20s

8PRODUCT DEVELOPMENT

empowerOWNERSHIPSpend time thinking about how to be autonomous as you grow. Don’t become a bottleneck. Empower others to own parts of the product. This strategy will increase employee happiness and let you move faster.

I actually learned this lesson before I ever embarked on my startup journey. I was working at Microsoft and pleasantly surprised at how much responsibility was expected of me even during my first week as part of the team. It motivated and inspired me. I’ve taken that lesson and tried to infuse it with ever company I’ve started since.

Lessons from My 20s

9PRODUCT DEVELOPMENT

don’t write productSPECSLet code comments and unit tests serve as your documentation early on. When you are developing your MVP lots of “features” turn out to be irrelevant. Spend most of your timing trying to build something of value instead of writing about it.

After we hired our first engineer, I made sure that any question he had was recorded. This became our first “onboarding” material for future engineers we hired.

Lessons from My 20s

10PRODUCT DEVELOPMENT

build lead captureinto the productearly onI touch on this in the slide on “focus” when I recalled how we built a simple lead-gen capture system. It provided the proof points to show that a inbound sales and marketing model would serve our business well.

Lessons from My 20s

part 1: business

SALES & MARKETING

Lessons from My 20s

SALES & MARKETING

1settingGOALSUnlike mature companies where sales goals are often revenue targets, early stage startups may have little or no revenue so goal creating gets blurry. Goals should still align with company strategy, but may require creativity.

At BuzzTable, we wanted to focus on accounts that had “willingness” to pay, but didn’t want to focus limited resources on the payment collection process. I found a simple usage pattern, dubbed it “premium eligible,” and used that as our guiding metric. Once we had the resources, we resumed revenue collection, and had a much better growth trajectory because of steps taken early on.

Lessons from My 20s

SALES & MARKETING

2when it’s not about theNUMBERSOne of the mistakes I made early on in my previous company was to pressure our sales team to provide target numbers each month. While this is common practice after achieving product-market fit, it's much harder to do before a baseline can be established with past months data.

The results of this decision led to a drop in moral when numbers weren't hit and a lack of learning because we were so focused on the numbers. If I do it again, I would focus the first few months on sharing lessons learned, and only on numbers once patterns emerged.

Lessons from My 20s

SALES & MARKETING

3road to a repeatableSALES PROCESSNo company starts with a scalable sales process. Your first few customers can help you identify bright spots. That is, the specific customer profile that sees your solution as a painkiller (as opposed to a vitamin). Learn everything you can about this customer’s behaviors -- how they buy, when, where. Once you are here, create a process and start automating.

Don’t hire additional sales people until you have a documented process! You will hemorrhage money if you grow prematurely.

Lessons from My 20s

4SALES & MARKETING

building a repeatableSALES PROCESSDon’t confuse your early customer success with a scalable sales process. You will know you are here because you will want to hire more people to keep up with demand. Don’t. Try to automate the onboarding process as much as possible. Leverage marketing automation tools like Marketo or Hubspot to do a lot of the heavy lifting.

At BuzzTable, we started to get overwhelmed with the amount of leads coming in. We could have hired one or two more people to alleviate this bottleneck, but what happens when you hit a ceiling again? Instead, we solved this pain through market automation and more than tripled the number of leads each person could handle.

Lessons from My 20s

SALES & MARKETING

5know thyFUNNEL

(top of the funnel)

(bottom of the funnel)

(middle of the funnel)

In the strategy section, I mention the broad funnel as a way to frame most goals. This is especially important for S&M. Marketing, at the top of the funnel, is about opening the door. Sales closing it.

The infographic on the right is a good visualization. You can take a deep dive into any of these areas for tried and true strategies via Google.

Lessons from My 20s

SALES & MARKETING

6unit economicsARE YOUR FRIENDIf searching for product-market fit you can glance over this. As you find PMF it’s important to understand your cost to acquire (CTA) and lifetime value (LTV). You won’t be able to raise cash, and more importantly, won’t have a viable business without them. I’ve probably read David Skok’s blog three times over and you should too.

LTV CTAMonths to recover CTA

For SaaSstartups: <12 months > 3x

David Skok’s blog: http://www.forentrepreneurs.com/

Lessons from My 20s

SALES & MARKETING

7don’t automateTOO EARLYAlways start with a “high touch” customer model, meaning you personally speak to each customer. As you gain intimate insights about your customer, you can start to move into a “low touch” model. This means leveraging tools from Hubspot to capture leads, create drip campaigns, etc. to Zendesk to do the heavy lifting with customer service.

I caution against a “zero touch” model. While it may free up cash in the short term, product quality will erode in the long run.

Lessons from My 20s

SALES & MARKETING

8skipRESELLERSEspecially early on. Resellers will push you too far from your customer and feedback is the fuel of early product development.

Lessons from My 20s

SALES & MARKETING

9thinkDIFFERENTWhen it comes to marketing, nothing is harder than nailing the company messaging (positioning). You need to exude empathy with your target customer, but you also need to craft a unique experience to tell customers how they should think of you.

In my opinion, Lyft has continued to do this well. They started with the pink mustache to create awareness (e.g. why are cars in San Francisco driving around with this?) and now position themselves as your neighborhood driver against Uber’s “private driver” mantra.

Lessons from My 20s

SALES & MARKETING

10customer satisfactionDRIVES EVERYTHINGDelight customers and you will be rewarded. Whether you drive incremental revenue through upselling/cross-selling or through referrals, none of this will happen if you haven’t “WOWed” your customer.

Make it a top priority.

Lessons from My 20s

part 1: business

ACQUISITION

Lessons from My 20s

1love the

STRUGGLEWhile you're in the struggle, the period early in the startup when you feel the world is against you, you will think the best moment will be when you get acquired.

After you get acquired, you will remember the best moments as building the business and struggling together.

Live in the moment!

ACQUISITION

Definition of “the struggle”: http://www.bhorowitz.com/the_struggle

Lessons from My 20s

2ACQUISITION

companies are bought

NOT SOLDYou can improve your odds by getting the attention of the right people, usually within the Corporate Development team.

Increase your odds by getting in touch with these people early. Whether a mutually beneficial partnership or just to get on their radar because you think it might be of interest to them. Investors/advisors can help tremendously here, so make sure you are giving them ammo to talk about you (frequent updates).

Lessons from My 20s

3ACQUISITION

conversations beginIN MANY WAYS For some reason most acquisition talks never begin that way. It may start as a partnership discussion or an investment.

Lessons from My 20s

4ACQUISITION

KEEP WORKINGAssume the deal will fall through. Many deals never make it to a term sheet, and some that do fall apart before it’s consummated.

It will be hard enough for the executive team to get back in the mindset of building the business if things go awry. I can guarantee it will be detrimental if the business goes on autopilot during this time. I’ve heard this happen to a few companies I’ve crossed paths with in the last few years. Some founders had to take a hiatus because the emotional drop was so rough. It’s very hard to muster the determination to power through once you’ve told yourself the deal is all but done.

Lessons from My 20s

5ACQUISITION

get theLETTER OF INTENTNever take a company too seriously until you receive a letter of intent, which is basically an outline of terms and purchase price.

Even after you receive an LOI, the acquisition should not be a top priority until you’re at the home stretch. If things fall through, it will be hard enough for you to mentally come back to the daily routine.

Avoid signing a no-shop until you have a signed LOI (at the minimum).

Lessons from My 20s

6ACQUISITION

lawyer up forDUE DILIGENCEThe acquirers’ lawyers do M&A all day. Don’t bring a knife to a gun fight. Get solid counsel to guide you through the process, especially if this if your first time.

Expect to spend $100-200k. Ask for the buyer to split or pay legal fees. Ask for a breakup fee. You may not get either, but it doesn’t hurt to try.

Lessons from My 20s

7ACQUISITION

negotiate THE LOIIt is nearly impossible to change or expand on deal terms after the LOI is signed off, so spend your time negotiating at this stage. Try to create alternative paths so you have some chips in your corner - option to fundraise, competing acquisition offer, etc.

Understand deal killers and terms, especially if you have other investors on your board. Indemnification is the most prominent one and allows the acquirer to take back it’s purchase price (or more!) if you get sued. Read more online.

Make non-compete as narrow as possible. Avoid no-shop if you can.

Lessons from My 20s

8ACQUISITION

VALUATIONS• Multiple of earnings if generating revenue or

premium of valuation (~1.5-2x) from current/last round• Understand the price bands when thinking of a number.

Under $15-20m requires fewer authorizations than $25-40m.• Agree with partners on minimum sell price before you start.• Don’t share cap table until you receive an LOI. Buyer may do a cost-based valuation

with majority in retention package.• Think of retention as bonus, not part of deal. Things change post-acquisition and

goals may shift away from performance targets.

Lessons from My 20s

9ACQUISITION

dating goesBOTH WAYSSimilar to founder dating, make sure you do due diligence on the acquirer. Do they have the right people and capital to follow through on their vision? How do you fit into the organization and what support (HR, finance, etc) will you have? Will you operate independently or get reallocated to other projects?

Note that these questions probably matter much less if this is your first acquisition.

Lessons from My 20s

10ACQUISITION

be prepared forCHANGECompany culture will falter. Product and market position will suffer. It’s impossible to continue to execute at a high level when you may have to deal with relocation, staff changes, and new priorities.

Most of all, be aware that you are selling more than the company, but also your baby, your passion for it, and everything you’ve built.

Lessons from My 20s

part 1: business

VENTURE CAPITAL

Lessons from My 20s

1how big is yourMARKET?It can be frustrating when investors tell you that the market you are going after “isn’t big enough.” They are not saying this to be tough on you, but rather because they know that as you develop a deeper understanding of the problem/customer your solution may change. If the market size is too small there won’t be sufficient room to pivot.

I remember when we were taking OpenAction to Series A investors in NYC. We were told our market was too small, so we played with the numbers to get to $100m top line revenue in year 5. This should have been a signal to us at the time that the model as we had it wasn’t going to work, but we carried on. We pivoted to a new industry 6 months later and sunset the company shortly after that.

VENTURE CAPITAL

Lessons from My 20s

2showTRACTIONI find first time entrepreneurs will cater to heavily to what investors are asking for. Stop building your business in the direction of investors, and start focusing on a pilot with traction. If you don’t have traction quite yet, explain the subtleties of the problem you are going after and why it matters.

Investors don’t bring traction, but traction sure will bring investors.

VENTURE CAPITAL

Lessons from My 20s

3VENTURE CAPITAL

buildRELATIONSHIPSMost first time entrepreneurs see all capital equally, however you want to be as selective as you can. The relationship with your investors is almost as important as your co-founders. If you are lucky, you will be working together for a long time.

Mark Suster describes this best with his post about Investing in Lines, Not Dots.

http://www.bothsidesofthetable.com/2010/11/15/invest-in-lines-not-dots/

Lessons from My 20s

4VENTURE CAPITAL

be serious about theFINANCIAL MODELIt’s easy to think of your financial model as “checking the box” for investors, but it can help you more than you know. Sure, investors want to see $100m top line in 5 years, but they are really interested to see how you are thinking about this business. What are your revenue drivers? Can you achieve this or are you spreading yourself too thin? Do the unit economics make sense?

Ironically, this is more important for you than anyone else. I mentioned my anecdote about market size with OpenAction, and realized it took that experience to prioritize this exercise. When starting BuzzTable in 2011, you can bet I spent a lot of time playing with the financial model before jumping in with both feet.

Lessons from My 20s

5know thyUNIT ECONOMICSInvestors aren’t asking you to be ball busters. These metrics help them understand how you think about your business, how far along you are, and if you are ready for their capital.

VENTURE CAPITAL

B2Bcustomer acquisition cost (CAC)lifetime value (LTV)lead velocity (lead growth MoM)revenue per lead

B2Crepeat usage/engagementviral coefficient/sharingdownloads

Lessons from My 20s

6findingINVESTORSI’ve spoke about funnels in past slides. Meetings are a function of outreach, so load up the top of that funnel (with quality). • What types of investors are you looking for? 3Fs (friends/family/fools)? Angels? VCs?• Are you b2b or b2c (consumer)? The right type makes all the difference.• Create a list of names. Notable investors you read and would like to work with, early

investors in large incumbents in your space, etc.• Use LinkedIn to find mutual connections and ask for intros.• Don’t ask for coffee. Hook them with your 2-3 sentence pitch. Avoid buzzwords. Why

you? Offer to come to their offices (because they will probably ask anyway).• Remaining list is cold outreach. Pick your top 5 and try to get their attention.

VENTURE CAPITAL

Lessons from My 20s

7investor feedback can beCONTRADICTORYEvery investor has an opinion and it’s often skewed in the direction of their experience. If you are speaking with an investor that previously built an enterprise technology company with 800 sales people, get ready for that person to tell you how you should have an outside sales team to hit the ground running.

Most important, if you know where you’re going, seek appropriate feedback. Otherwise, cast a broad net then decide.

VENTURE CAPITAL

Lessons from My 20s

8VENTURE CAPITAL

you will never hear “NO”JUST “NOT NOW”When you are raising your round, don’t wait for investors to tell you “no.” They will try to avoid those two letters if they can. While you might not meet their investment criteria today, they want to keep the door open with you incase something changes.

Keep on them as your round (and business traction) progress. If they grow less interested, don’t waste time. Move on.

Lessons from My 20s

9VENTURE CAPITAL

understand theTERMSVALUATION, OPTION POOL SIZELIQUIDATION PREFERENCES, FOUNDER VESTINGTYPE OF PREFERRED STOCKVETO/BLOCKING RIGHTSBOARD SEATS

Great deep dive here: http://www.slideshare.net/MarkHaddad/understanding-vc-term-sheets

Lessons from My 20s

part 1: business

STARTUPCHECKLIST

Lessons from My 20s

STARTUP CHECKLIST

SCALE

OPTIMIZE

DISCOVERY

VALIDATE

MARKET RESEARCH

Lessons from My 20s

STARTUP CHECKLIST

MARKET RESEARCH

• Try to convince yourself not to do it• Conduct feasibility analysis, look at market signals• Is there a clear need? (would your problem be a vitamin or a painkiller?)• Initial assessment of acquisition/distribution channels

• What other skills are needed on your team? (becomes hiring plan)• Where’s the competition?

• No competition is rarely a good thing unless you are creating a new category (which is rare). Competition usually proves there is a market here

• Remove the big unknowns• Create a list of questions and find industry experts to help answer them.

(Tip: Some of these people may become future “beta” testers)

TIME IN STAGE: 1-2 monthsEXIT CRITERIA:Learn the key players, how things work, how money moves

Lessons from My 20s

DISCOVERY

STARTUP CHECKLIST

• The only thing that matters is getting to product/market fit• Hold others accountable to learnings not numbers• Develop sales plan (skip marketing until you know more about your customer and

the voice you should have)• Research all possible acquisition channels (ads, referrals) and begin to test them• Begin to form your pitch deck (helps organize thoughts and focus)• Corp formation (83b, IP assignments, trademark)• DONTs:

• Concentrate on investors (you’re too early)• Talk about partnerships (not a mutual value exchange yet)• Document architecture/spec writing (it will change)

TIME IN STAGE: 4-6 monthsEXIT CRITERIA:Minimal viable product and value proposition are created, founding team is formed

Lessons from My 20s

VALIDATE

STARTUP CHECKLIST

• Define your KPIs (1-3 that company can get around, should be inline with model) • Find bright spots (test different channels, pitches, segment customers)• Think about team building early (culture, retreats)

TIME IN STAGE: 3-5 monthsEXIT CRITERIA:Find product/market fit, first paying customer, metric collection, find evangelical customer, identify acquisition channels, key hires

Lessons from My 20s

OPTIMIZE

STARTUP CHECKLIST

• Free your time with marketing automation• Iterate on KPIs (hone on what’s most important)• Watch out for premature scaling

• loading the hopper with issues downstream will exacerbate your problems• Fix the leaky bucket. Your sales funnel will show you where to focus first.

TIME IN STAGE: 6 monthsEXIT CRITERIA:Conversion funnel optimized, repeatable sales process created

Lessons from My 20s

SCALE

STARTUP CHECKLIST

TIME IN STAGE: 6-12 monthsEXIT CRITERIA:Raise Series A financing, implement processes, improve backend scalability, key roles become teams

At this point you probably already have a solid board and mentors that will guide you through the final step of the process. The purpose of raising this round is to pour jet fuel on the amazing unit economics you’ve found within your business.

Great job! You are further along than me. Perhaps you should consider writing about your own lessons.

Lessons from My 20s

Congratulations you completed the business lessons!

Lessons from My 20s

Remember, business is just a s m a l l part of the journey of life.

This isn’t a sprint. You love what you do, so ensure you can do it for a long time. Invest time in yourself. Aim for balance.

Here are my most valuable life lessons to date...

Lessons from My 20s

LIFE

part 2

what i’ve learned in...

Lessons from My 20s

Part 2: Life

HAPPINESSMINDFULNESSHEALTHRELATIONSHIPSINVESTINGGOALS

TOPICS

Lessons from My 20s

part 2: life

HAPPINESS

Lessons from My 20s

1HAPPINESS

HARMONY between heart and mindThe longest journey that a man must take is the 18 inches between his head to his heart.

The mind is logical and will often lead you to what appears to be the “right” choice based on millions of calculations with experience as it’s guide. The heart is unaware of past experiences, and is the core of your Being. Sometimes the most difficult decision is what the heart wants. For me, it has not always been easy to follow my heart. I haven’t always had the courage to listen, but when I have listened, it’s never been wrong.

Lessons from My 20s

2HAPPINESS

QUALITY of your thoughtsThe happiness of your life depends upon the quality of your thoughts - Marcus Aurelius, Meditations

Lessons from My 20s

3HAPPINESS

live in theMOMENTForty-seven percent of the time, the average mind is wandering, and it is not good for well-being. A mind belongs in one place. Happiness comes from focusing on the present moment.

After all, nothing else exists except this moment right now. This takes practice. Once I started paying attention to the present moment, it was much easier to relax and let problems - that felt insurmountable at the time - go.

Lessons from My 20s

4buy experiencesNOT THINGS

HAPPINESS

If you can’t live in the moment, they say the next best thing is anticipation of the moment. Experiential purchases (money spent on doing) tend to provide more enduring happiness than material purchases (money spent on having). As it turns out, waiting for an experience elicits more happiness than waiting for a material good.

The common emotional response before you set off on vacation is excitement whereas waiting for a new phone is usually met with impatience. If the event fails to meet expectations a negative response is common for both experiences and material objects. However, as time passes, the beach vacation that rained every day usually turns positive while the disappointment that the new phone wasn’t an iPhone never does.

Source: Waiting for Merlot, Anticipatory Consumption of Experiential and Material Purchases. By Amit Kumar, Matthew A. Killingsworth, et al.

Lessons from My 20s

5create yourPURPOSEYour purpose is not found, it’s created. You must give yourself time to reflect on what you love doing. After selling my last company (along with the passion and purpose as it seems), I’m now starting to create the space I need to do it again. I’m putting myself in the mindset that anything is possible, soaking up all the new innovations in the world and exploring what problems resonate with me that I might want to tackle next.

The graphic in the next slide may be a helpful way to wrap your head around the next step in creating your purpose.

HAPPINESS

Lessons from My 20s

5create yourPURPOSE

HAPPINESS

Source: Ryan Allis’ Lessons from My 20s

Purpose

Lessons from My 20s

part 2: life

MINDFULNESS

Lessons from My 20s

MINDFULNESS

What is mindfulness?

It’s the mental state of being conscious or aware of the present moment.

Lessons from My 20s

1MINDFULNESS

ENLIGHTENMENT is not a destinationIt’s a realization. And when you wake up, everything changes and nothing changes. My favorite explanation of this is a story from the book “Way of the Peaceful Warrior”.

A young man had spent five arduous years searching for truth. One day, as he walked up into the foothills of a great mountain range, he saw an old man approach from above, walking down the path, carrying a heavy sack on his back. He sensed that this old man had been to the mountain top; he had finally found one of the wise, one who could answer his heart's deepest question. Please sir, he asked. tell me the meaning of enlightenment. The old man smiled, and stopped. Then, fixing his gaze on the youth, he slowly swung the heavy burden off his back, laid the sack down, and stood up straight. Ah, I understand, the young man replied. but what comes after enlightenment? The old man took a deep breath, then swung the heavy sack over his shoulders and continued on his way.

Lessons from My 20s

2MINDFULNESS

you are here, and here isPERFECTI think I learned this lesson the hard way a few years ago when I tried to project my life experiences on others. As I was going through my own personal development, the love I experienced for everything around me grew abundant. Almost immediately, I started sharing my thoughts and feelings with others in the hopes that they would feel all the positive energy that I felt. Unfortunately, it had the opposite effect of my intention and created more distance between us.

That’s when I realized that it’s wasn’t my friends that were wrong, but myself. They were exactly where they should be and I was trying to have them reflect my views back on me to validate where I was. Many paths exist and you are exactly where you should be.

Lessons from My 20s

3MINDFULNESS

COMPASSIONthrough understandingHumans perceive and react to each other and the world around them exactly as they should -- based upon their current conceptual model. It is pointless to label or attach meaning to such actions.

Life conditions force us to adapt to our environment by constructing new, more complex conceptual models of the world to handle these problems. Spiral dynamics explains this model as eight stages (colors) of development.

Lessons from My 20s

3MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

The best conceptual model I’ve come across is called

spiral dynamics, which presents eight stages of development, separated

into two tiers, with the use of varying colors.

Lessons from My 20s

MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

The level of basic survival; food, water, warmth, sex, and safety have priority.

Lessons from My 20s

MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

Magical spirits, good and bad, curses, and spells which determine events.

Lessons from My 20s

MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

First emergence of a self distinct from the tribe; powerful, impulsive, heroic. Feudal lords protect underlings in exchange for obedience and labor.

Lessons from My 20s

MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

Life has purpose with outcomes determined by an all-powerful Other. This Other enforces absolutist principles of "right" and "wrong."

Lessons from My 20s

MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

The self "escapes" from the "herd mentality" of blue, and seeks truth and meaning through experimental or objective reasoning. Highly achievement oriented, especially toward materialistic gains.

Lessons from My 20s

MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

The human spirit must be freed from greed; feelings and caring supersede cold rationality. Values diversity, multiculturalism, relativistic value systems

Lessons from My 20s

MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

TIER 2:Differences and pluralities can be integrated into interdependent, natural flows. Knowledge and competency should supersede power and group sensitivity.

Lessons from My 20s

MINDFULNESSCompassion through Understanding

Holistic(0.1% pop)

Integrative (1% pop)

Egalitarianism(10% pop)

Individualistic(30% pop)

MythicOrder(40% pop)

Egocentric(20% pop)

Animalistic(10% pop)

Instinctual(0.1% pop)

Source: Ken Wilber’s “The Theory of Everything”

TIER 2:The world is a single, dynamic organism. Self is part of larger, conscious, spiritual whole that also serves self.

Lessons from My 20s

MINDFULNESS

Reflection Exercise

Compassion through Understanding

Holistic

Integrative

Egalitarianism

Individualistic

MythicOrder

Egocentric

Animalistic

Instinctual

We are all blends of several colors with varying intensities.

Take 5-10 minutes to contemplate where you see yourself on this spectrum? Wrong answers don’t exist.

Lessons from My 20s

4MINDFULNESS

you can’t see the TruthONLY A PERSPECTIVE

If Truth is the mountain, we only see our perspective in the form of its reflection in the lake.

The calmer the lake (your mind), the more accurate the perspective.

Lessons from My 20s

5MINDFULNESS

live withGRATITUDEIf we see this world as sacred, then gratitude comes to us immediately and naturally. We've been giving the incredible gift of living right now in this moment.

Beauty is all around us and in us -- the touch of a breeze on your face, the sweet taste of a strawberry, the world we often miss under our feet. Let us give thanks to all the matter of the universe that makes this life so extraordinary.

Lessons from My 20s

MINDFULNESS

embraceUNCERTAINTYIn 2003, the Hubble Space Telescope pointed its camera at a dark spot in the night’s sky. It revealed thousands of galaxies... 6Source: http://www.nasa.gov/mission_pages/hubble/science/xdf.html

Lessons from My 20s

7MINDFULNESS

a step back often becomesA STEP FORWARD While working on OpenAction, a mapping technology for nonprofits, I felt like my heart and mind were aligned. Although the business didn't meet the growth trajectory we expected, with every conversation there was nourishment for the soul.

I contrast this with the more "business"-centric approach of BuzzTable where it seemed like spiritual capital was exchanged for (potential) financial gain. Whether I sacrificed a meditation session to ideastorm or failed to hold space for friends, a gain in one area always felt like a loss in another.

In hindsight I have come to realize that I wasn't losing this personal growth I attained, but rather expanding the humility I felt grew within me during this seemingly low point in my spiritual journey.

Lessons from My 20s

8MINDFULNESS

perfect timingDOES NOT EXISTIf you are looking to start a meditation or mindfulness practice there is no reason to wait until you “have more time.” This is a false dichotomy and will never come to the present moment.

Take 10 minutes out of your day today to sit still. Listen to the world around you -- whether that’s the wind and leaves, car tires against the pavement, or phones ringing and people walking around the office. After a few minutes you may start to recognize your own breath.

Pssst... you are meditating.

Lessons from My 20s

9MINDFULNESS

breathingEXERCISESIntroduction to Meditationhttps://www.youtube.com/watch?v=yMz_UagXkFk

Nadi Shodhana or “Alternate Nostril Breathing”https://www.youtube.com/watch?v=Xbbr6Udg1UA

Bhastrika Pranayama or “Bellows Breath”https://www.youtube.com/watch?v=J4nf-NISmJw

Lessons from My 20s

10MINDFULNESS

deepening yourPRACTICEI have not experienced the programs below myself. They are here because I am interested in exploring them and thought they may be helpful to you.

Art of Living - http://www.artofliving.orgInner Engineering (ISHA Foundation)Vipassana Meditation (10 day silent retreats) - http://www.dhamma.org/

Lessons from My 20s

part 2: life

HEALTH

Lessons from My 20s

1HEALTH

eat yourSUPER FOODS

Reduce your intake of:sugars, alcohol, soda, processed food, gluten, and animal products.

Increase your intake of:quality proteins (fish, chicken, eggs, tofu)fruit (blueberries, bananas)vegetables (kale, broccoli, avocado, sweet potatoes, carrots, brussels sprouts)nuts (peanuts, cashews, walnuts, almonds, pistachios)seeds (chia, pumpkin, sunflower, hemp)

Lessons from My 20s

2HEALTH

practicePREVENTIVEHEALTHI’m rarely a procrastinator except when it comes to doctors. It took me thirty years to finally take responsibility for my own health. Now I’m asking about family history, setting annual check ups, and doing all I can to maintain my current health.

Lessons from My 20s

3HEALTH

get your heart rateUPExercise is good for the heart and mind. I’ve always enjoyed lifting weights, but hated running. I found cycling a few years ago and have biked up to 80 miles in a single day.

If you love running that’s great! For those that don’t, find another activity or two that you love doing while getting your heart rate up.

Lessons from My 20s

4detoxANNUALLYI started detoxing once a year after the holidays. The start of a new year is a great way to refresh your mind, body and soul.

Sample 3-Day Detox: http://vegnews.com/articles/page.do?pageId=5685&catId=2

HEALTH

Lessons from My 20s

5YOGAis more than “stretching”Yoga has been shown to improve sleep quality1, strengthen your posture and body, and relieve stress.

I was first exposed to yoga in college, but wrote it off quite easily. A roommate in San Diego had several yoga-instructor friends who gave me a personal invite to join them in class.

Almost immediately I felt the benefits. Instead of feeling tired with 8 hours of sleep, I woke up naturally after 6 with more energy than I was used to.

HEALTH

Source: 1http://www.ncbi.nlm.nih.gov/pubmed/15707256

Lessons from My 20s

part 2: life

RELATIONSHIPS

Lessons from My 20s

1RELATIONSHIPS

you can’t change others,ONLY YOURSELFMany people in relationships want, and often try, to change their partner’s habits to be more in line with their own “normal.” People do change as they grow, but it will always be by their own free will. The only thing you can actually control is your ability to accept your partner for who they are. The “good” with the perceived “bad.” If you can’t, do both of you a favor and move on.

Lessons from My 20s

2RELATIONSHIPS

DEPOSITSand withdrawalsAlthough relationships can’t be easily expressed with words or analogies, I will attempt to draw a comparison to a bank account. The balance is the level of trust you share. To strengthen the relationship you must make deposits in the form of thoughtful actions.

It’s inevitable that at times you will hurt your partner. As long as you have a positive balance, you can usually recover. Don’t wait until your account is overdrawn, make a deposit today. What will it be?

Lessons from My 20s

3RELATIONSHIPS

INVEST TIMEin people you care aboutI wish I could say this realization came to me early in my twenties, but I’d be mistaken. It’s always been easy for me to achieve “flow”, the state of immersing oneself in a passionate activity, where I lose track of time. I was terrible at staying in touch with the people I cared most about in life. Everyone is busy. If busy keeps you from spending time with the people you cherish most, what’s the point of being busy to begin with?

Lessons from My 20s

4RELATIONSHIPS

NETWORKINGshould benefit all partiesIf everyone showed up a networking event for selfish reasons then everyone would leave with less than they arrived with.

I have found that if you spend time trying to figure out how you can help others achieve their goals, it will often come back to you.

This is especially important if you are starting your first company. You probably feel even more pressure to turn an immediate ROI on the event. Play the long game instead.

Lessons from My 20s

5RELATIONSHIPS

surround yourself withMENTORSWhen I was going through the acquisition with Sysco, I asked the CEO what is one lesson you would have told your 30-year-old self if you had the chance. He’s response -- “surround yourself with great people.”

I’ve heard that before, but it’s simplicity often causes the lesson to get brushed away. Find individuals that are where you want to be in 10 years and reach out to them.

Lessons from My 20s

part 2: life

INVESTING

Lessons from My 20s

INVESTING

1PERSONAL GOALS should dictate your strategyMoney is a store of value, not an end goal. Your investment strategy should be molded after your lifelong goals. For me, it’s a year of traveling with my fiancé and starting another company.

Estimate how much of this money you’ll need over the next 3-5 years and set that aside from what you will invest. Remember, while the stock market typically gains 8% annually, it may be up or down 20% from year to year.

Lessons from My 20s

INVESTING

2if you remember one thing,ASSET ALLOCATIONOne year emerging markets may post record returns, while another year it will be large cap US. The point is, it’s nearly impossible to guess. Once you decide on your stock-to-bond ratio, maintain this each year while rebalancing annually. This often forces you to sell high which can help returns.

As you grow older (and wiser) you will adjust your stock-to-bond mix to favor more stable assets like bonds, value stocks producing dividends and cash.

Lessons from My 20s

INVESTING

2exampleALLOCATION

David Swensen is CIO of Yale University and author of Unconventional Success. His “lazy portfolio” uses low-cost, tax-efficient total market funds, real estate, and inflation-protected securities (TIPS).

Consider checking out A Random Walk Down Wall Street by Burton Malkiel and Winning the Loser's Game: Timeless Strategies for Successful Investing by Charles D. Ellis. These two books are where/how I formulated most of my initial thinking.

US Stocks30%

Int’l Devlopd15%Emerging

5%

Real Estate20%

Bonds15%

TIPS15%

David Swensen’s Lazy Portfolio

Lessons from My 20s

INVESTING

3INDEX FUNDS to the finish lineActive portfolio managers (e.g. mutual funds) and wealth managers rarely beat the market as a whole. A manager may have a few good years, but it's nearly impossible to consistently beat the market.

Avoid additional fees and unnecessary risk, invest in index funds.

Lessons from My 20s

INVESTING

4dollar-costAVERAGINGReduces the impact of market volatility when investing large amounts of capital.

Lessons from My 20s

INVESTING

5interestRATESStocks tend to suffer as interest rates go up, but do well when interest rates are low. Money tries to find best rate of return.

Lessons from My 20s

STOCKSThe best measure of whether a stock market is overvalued is the Shiller PE Ratio.The all-time average is 16.55. As of Oct 2014 we’re at 25!

INVESTING

6Source: Ryan Allis’ Lessons from My 20s and http://www.multpl.com/shiller-pe/

Lessons from My 20s

INVESTING

7BONDS• When interest rates rise, bond prices fall to make existing bonds competitive with

new ones being issued at higher rates. When rates fall, bond prices increase.• The longer a bond’s term to maturity the greater the risk and the greater the

resulting yield• If you are wealthy, you will prefer tax-exempt bonds and stocks that have low

dividend yields but promise long term capital gains• Avoid junk bonds that may pay in good times, but likely to go sour if the economy

falters• Inflation is the deadly enemy of the bond investor

Lessons from My 20s

INVESTING

8REAL ESTATEYou can buy properties, fix them up, and sell them or manage tenants directly as an active investor OR act as a passive investor giving up some of the return with the hassles of managing tenants, toilets and trash.

There are 2 ways to invest as a passive investor:

•Also known as hard money loans•Typical holding period is 6-18mo•8-12% interest rate most common•Require borrower with great credit,

previous track record, and first trust deed (your interest is secured by property in first position)

•Seek loan-to-value < 75%

•Unlike debt financing, here you would be an equity holder. You’ll take on more risk, but potentially higher returns

•Typical holding period is 3-10 years•Work with sponsor to acquire property in buy-and-hold strategy•You are entitled to share of cash-flow from rents as well as share

of proceeds when property is eventually sold (appreciation)•Unlike stocks which are liquid (you could sell today), real estate is

very illiquid and you probably won’t be able to pull your money out for many years.

Short Term Long Term

Lessons from My 20s

INVESTING

COMMODITIESCommodities include energy (crude oil, natural gas), industrial metals (aluminum, copper), precious metals (gold, silver), agriculture (coffee, corn, sugar) and livestock.

Some investors, like Warren Buffet, avoid this asset class because it’s based on what people are willing to pay for it in the future and tied to the dollar. However, given that commodities have dropped 30% from 2009-2014 due to the strong equities markets and dollar, I personally see some upside over the next few years.

Benefits of having commodities in your portfolio:• Hedge against currency devaluation, inflation or deflation

• In the extreme, yet unlikely scenario of political unrest, commodities like gold are seen as value protection

• Interesting to note: France, Italy, Germany, US have 65% of foreign reserves in gold; Russia and India are at 8%.

9

Lessons from My 20s

INVESTING

10peer-to-peerLENDINGLendingClub is the largest based on loan volume and revenue, followed by Prosper. Collectively, they’ve serviced almost 200,000 loans.

While it seems advantageous for both borrowers (better rates than traditional banks) and lenders (higher returns compared to savings account), these loans are unsecured personal loans. That means, if the borrower defaults, there is not much you can do as a lender to get your money back. For that reason, and the fact that 90% of the “best” loans are taken by hedge funds before making it to individual investors I tend to avoid this vehicle.

I prefer hard money loans instead. These loans are secured to a hard asset like real estate. In the event that a borrower of this type of loan defaults, you will have the property as collateral.

Lessons from My 20s

GOALSpart 2: life

Lessons from My 20s

GOALS

When I do this again at 40,

how do I hope todefine my 30s?

Lessons from My 20s

GOALS

GOALS help you check in with yourself

Lessons from My 20s

GOALS

GOALS help you check in with yourself

SURPRISINGLY, VERY FEW SET THEM AND CHECK IN EACH YEAR

Lessons from My 20s

&

GOALS

Mine are driven by 3 things:

MINDBODY SOUL

Lessons from My 20s

GOALS

mind.knowledge

body.health

soul.meditation

(Hopefully) I’m here

Lessons from My 20s

GOALS

A good way I’ve found to

ALIGN MY GOALS, is to think of them as 6 themes

Lessons from My 20s

GOALS

HEALTH TRAVEL & ADVENTURE

WORK

FINANCES RELATIONSHIP GLOBALIMPACT

A good way I’ve found to

ALIGN MY GOALS, is to think of them as 6 themes

Lessons from My 20s

GOALS

HERE ARE MINE...

Lessons from My 20s

GOALS

NOW IT’S YOUR TURN...

Lessons from My 20s

GOALS

GET A PEN & PAPERSTART WITH A BLANK PAGE...WRITE “LIFE GOALS” AT THE TOPTHEN SPEND 10 MINUTESTHINKING ABOUT THE 6 THEMESWHAT DO YOU WANT TO ACHIEVE BEFORE LEAVING THIS PLANET?

Lessons from My 20s

GOALS

DO THE SAME FOR GOALS AT...10 YEARS, THEN 1 YEARSPEND 5 MINUTES EACH ON THESE

Lessons from My 20s

GOALS

NOW CREATE A 90 DAY ACTION PLANTO START TACKLING YOUR 1 YEAR GOALS

Lessons from My 20s

GOALS

FINALLY, CREATE YOUR PURPOSE STATEMENTWHAT MAKES YOU COME ALIVE?THINK OF WORDS YOU’D LIKE PEOPLE TO USE TO DESCRIBE YOU.

Lessons from My 20s

GOALS

NOW, TAKE ALL THESE NOTESAND ADD THEM TO THE NEXT SLIDEPRINT IT OUT. HANG IT. SHARE IT.

LIFE PLAN OF ______________________

LIFETIME GOALS 10 YEAR GOALS

AREAS OF FOCUShealth, adventure/travel, work, finances, relationship, impact

1 YEAR GOALS 90 DAY ACTION PLAN

LIFE PURPOSE

FIRST CREATED ON ______________. LAST UPDATED ON ______________.

Lessons from My 20s

hope this was as helpful to you as it was therapeutic for me =)

I want to thank the following people for helping review this before I made it public:Jenn Harn, Xander Page, Aaron Rankin, Amit Kumar, Jon Howard, Jay Shek, Mike Wenger, Arjun Dev Arora, Samantha Smith, Jared Paul and Spencer Ton

Get in touch with me: john@buzztable.com - @worldlyjohn