Startup Lifestyle

Take Care of Yourself

I’ve previously written about the importance of taking care of your team and taking care of others. It’s also important and acceptable to take care of yourself. I’ve already written about how startups tend to extract a pound of flesh and pint of blood. After running a marathon, you have to rest and recover. Take a nice vacation with your family. Treat yourself to something you enjoy.

After my last startup was acquired at the end of 2012, I finally allowed myself to buy a nice Nikon camera system. I gave myself permission to invest time to learn to be a good photographer. Four years later, I now shoot about 20,000 to 25,000 photos a year. Some photos are about creating fine art. Other photos are about capturing memories. Still other photos are about giving to others by making quality pictures of their special moments. Taking photos provides me with a way to wind down and step away from the frenetic pace I usually keep.

But in allowing yourself to explore your passions, it is important to do so within healthy boundaries. It’s fine to get a nice car, travel to see the world, or upgrade your house. But acquiring a fleet of super cars or buying a ten-bedroom mansion can lead to a life with unhealthy or non-existent boundaries. It can also provide fertile ground for your kids to grow spoiled, as effectively you are spoiling yourself. Instead, consider the examples of Mark Zuckerberg who generally drives a $30K Volkswagen GTI and Warren Buffett who lives in a nice, but still modest $650K house in Omaha, Nebraska. Both can clearly afford to indulge in multiple exotic cars and homes that induce envy even in the wealthiest celebrities, but they choose not to.

In order to keep me somewhat rooted, my wife encouraged me to blend my passion for photography with a way to give back. I decided to volunteer to teach photography to underprivileged kids and to raise money for our kid’s school. I also volunteer as an event photographer for several non-profits and schools.

So feel free to decompress. Enjoy life. Travel. Pursue a hobby. But as you do so, think about ways to build community or invest in quality time with your family as you pursue your interests. One particularly good way to stay connected and grounded is to volunteer in your kids’ schools. It’ll help you get a feel for a big part of your kids’ daily lives while also deepening your connection with them. In doing so, you will probably find that the relationships you foster and the community you build will provide more satisfaction than any prized possession or individual (isolated?) pursuit.


Startup Lifestyle

Take Care of Others

Startups provide great opportunities to grow. Startups are hard work, but they are fun, challenging and rewarding. And should your startup result in an exit, you can live comfortably, enjoying many of life’s good things. In the midst of your success, my encouragement to you is to share in some way with others. Besides just being the right thing to do, it keeps you connected with people and can ward off some unexpected maladies (like affluenza).

Financial security is a blessing, but it can also bring some hidden curses. We can easily fall into living an insulated life, leading to a privileged attitude. This becomes most apparent in your children. As parents, we want our children to have the best life has to offer. But as life enables you to have many things, children can develop an expectation of always getting their way. Kids can whine and insist on having the latest iPhone even though they just received a new phone last year. This happens when they haven’t learned the hard work needed in order to enjoy good things. You worked hard for your wealth, but your kids didn’t.

Warren Buffett’s Wisdom

While it’s not realistic to expect your younger children to earn a salary to pay for life’s expenses, it is reasonable to help them learn the value of hard work and stay connected with others who are less fortunate. One of my favorite stories is one where Warren Buffett was approached by one of his adult children for a $41,000 loan to remodel her kitchen. His response was epic: “You can go to the bank [to get a loan] like everyone else.” If you know anything of his life, you know that this response was not rooted in a selfish hoarding of his wealth, but in a desire to teach his family a set of values.

It Starts With You

Staying well-rooted starts with you. A parent who doesn’t set an example for their kids will wonder in frustration why their kids haven’t adopted their words of wisdom. Giving back to others is an important way to stay grounded. You don’t have to have the wealth of Bill Gates or Mark Zuckerberg to be able to share. If you’ve enjoyed an exit, you probably have more than enough to live comfortably.

Kishore is a friend of mine that sold his startup and subsequently started a charitable foundation to give back. His foundation drove an innovative, self-funding clean water project in India. In addition, Kishore heard of a young child that needed a costly surgical procedure that her parents could not afford, so he paid for it. Similarly, my own family is the beneficiary of someone else’s generosity. My youngest daughter is adopted from China. As an infant, she was left in the cardiac ward of a hospital because she needed open heart surgery to correct her VSD and ASD (two holes in her heart). She almost died several times, but a local businessman heard of her plight and donated the equivalent of seven years’ of a factory worker’s wages to pay for the surgical procedure. I do not know the man who paid for the surgery — I don’t even know his name — but my daughter is alive and thriving today because of his kind and generous gift.

Practical Paths

If you’ve decided to share, it’s important to plan. If you’ve received a windfall, make sure you consult a financial planner with many startup founders among their clientele. One benefit of being charitable is the opportunity to soften the tax burden in your years where your income will be abnormally high. Set up a charitable fund. Both Schwab and Fidelity have simple, low-maintenance charitable funds that you can participate in without being a billionaire. If you are fortunate to be in the multi-, mutli-million dollar territory, consult your financial planner about the benefits of setting up a charitable foundation.  (If you need a referral to a financial planner, I’ve had good relationship with Larry Steckler at Capital Financial.)

In addition to being generous with your money, remember to be generous with your time. Sometimes, it’s too easy to write a check and stay disconnected from true human need. Volunteer your time. When you volunteer, look for opportunities to talk to people you are helping. Listen to their stories. Connect with their difficulties. Involve your family — your kids might not be able to make substantive financial contributions to pay bills or fund a charitable cause, but they can still make a difference in someone else’s life by giving of their time and heart.

One of the things I’m most proud of is how my children give to support kids with special needs. My son just graduated from high school and has volunteered almost every week for over six years as a coach for e-soccer — a full-inclusion program for both typical kids and kids with special needs. He currently works a summer job helping children from low income families. He has developed an empathy and compassion for others far beyond the typical high schooler.

Startup life is amazing. There are great rewards professionally and personally. Should you be fortunate enough to enjoy an exit, remember to give back. When you give back, do so in a personal way that involves your family. You may just find that the rewards from doing so far exceed the benefits from your startup’s exit.


Startup Lifestyle

Take Care of Your Offensive Line

NFL quarterbacks are key to their teams’ success. And key to the quarterbacks’ success is the offensive line. The offensive line protects the quarterback in the passing game, while opening up running lanes to establish the ground game. The success of ground game activates the passing game by keeping the defense from just pinning their ears back and using the quarterback for target practice. A smart quarterback maintains a great relationship with his offensive line. Quarterbacks often treat their front line to fine dinners each week. Stories also abound of quarterbacks that present their blockers with expensive gifts such as Rolex watches, paid from their own pocketbook.

In the same way, a founder is key to the startup’s success. The founder manages the game, calls an audible at the line based on the defensive set, makes split second decisions, and delivers the ball where only the receiver can catch it. A seasoned founder also knows that his (or her) success is dependent on the surrounding team. Founders who take care of their people end up building strong, loyal teams. Should the startup enjoy an exit, the founders are in a position to ensure that everyone feels victorious.

During the negotiations with a potential investor or acquirer, founders should be careful to evaluate the impact of the terms of the transaction on the team in general. Even though these negotiations are fast-paced and stressful, founders need to make sure to run scenarios on how the transaction will impact the compensation of the employees. I’ve seen transactions go down where the executives preserve a reasonable equity position for themselves, but the rank and file employees get the short end of the stick. Put yourself in the shoes of your team. Would you, as a non-founder, be happy with the outcome of the transaction? Negotiate not just for yourself, but for your team. Where the numbers make it difficult and the broader employee base might get squeezed, can the founders carve out a portion of their own equity to make the employees whole?

In most exit scenarios, founders should have some room to share. Founders have much more equity than the average employee and can afford to be generous. There’s nothing wrong with founders earning a payout that is many times larger than the average employee. There’s nothing wrong with a quarterback getting paid many times more than a special teams player. The roles they play are dramatically different. Founders take the risk, flirt with failure, lead into uncharted territory, and shoulder the burden of making some of the most difficult decisions in the company. But in the same way that NFL quarterbacks take care of their offensive line, founders should remember the players that make success possible and be generous with their team. If you’ve done a good job as a founder, you’ll do just fine financially with the exit. Generosity results in the founders enjoying not just financial wealth, but also great friendships. Your team will appreciate the money, but will remember the loyalty. And as any older, wiser person will tell you, close relationships are more valuable than the size of your bank account, so do good and share.


Startup Lifestyle

Not Your Baby

Founders are a rare breed. They are driven by a vision of what can be to take risks. Founders often invest years of blood, sweat and tears to build and grow their startup. Given the amount of energy, effort, and sacrifice required, it’s not surprising that many founders consider their startup their baby. Some founders use this metaphor casually. Others use it quite literally. In light of the huge commitment required by a startup, founders have to be careful to maintain perspective and balance: a company is not a baby.

The Fun Toddler Years

It took a leap of faith for me to start my own company back in 2001. It was exciting to watch the small seedling that was my company germinate, take root and grow. The volume of work quickly exceeded our capacity and we began to hire employees and sign multi-year contracts. We nurtured and babied every customer. With a strong focus on providing technical expertise with phenomenal service, we soon grew to several hundred customers.

The Challenging Adolescent Years

And that’s when things got hard. Not every employee was the perfect hire. Not every customer was reasonable, nor did all of them pay their bills on time. As both the Chief Architect and CEO, I split my time designing highly available data centers while also securing financing and lines of credit to fuel the next stage of the company’s growth. We counted several top-15 e-commerce web properties and online marketing companies among our customers, including several with millions of daily transactions and billions in revenue. We grew faster than expected, meaning employees often bravely accepted responsibilities that they weren’t completely prepared for. Good employees rise to the occasion, but it certainly was turbulent at times.

As a first-time CEO, I include myself among the list of employees with more responsibility than ever before. I had to drive corporate strategy, negotiate legal terms, monitor cash flow, analyze markets, deal with angry customers, and ensure that we didn’t over-extend our resources. There were many pivotal moments where the company’s success or failure hung in the balance, and with it, the immediate livelihood of the employees and their families. During these times, stress and anxiety were off the charts. I found myself easily agitated and moody. I worked all the time. I wasn’t enjoying my family. My wife and friends wondered if I suffered from depression.

The Epiphany

Thankfully, I had a great support network. It was through this circle of friends that I got help. Several seasoned gray-hair types gave me perspective. I always considered my company my third child. This was my core mistake. A company is an asset, not a child!

A child is a person, with a beating heart, emotions, and the ability to feel both pain and love. A child is special and needs care, feeding, and connection. In return, a child gives wondrous joys and brings years of fulfillment. Every parent feels this – or at least felt it at one time.

A company is an asset – just like a car, a house, or a stock. Sometimes the asset serves you well and provides a fine return on investment. Other times, the car breaks down, the roof leaks, or the stock you bought loses value. When this happens, you either fix it or you replace it. Though many people spend hundreds of hours building up their car or perfecting their house, these assets don’t love you back. They serve you and we all need them, but they are inanimate objects and can be replaced.

I struggled with this concept at first, but I soon came to realize that life moves on even if your company doesn’t succeed. My wife and kids wouldn’t love me any less. Nor would their love be dependent on the size of our house or the material things in the house. Once I understood and accepted this concept, I was able to install healthier boundaries. I felt liberated. Don’t get me wrong: I still worked very hard to make the startup successful. I still shouldered the same weight, but I was now unencumbered. It was still a significant burden to bear, but I found much more peace and satisfaction with my daily life.

What to Do

We eventually sold our company, so in many ways it was a success. However, the business world is littered with stories of entrepreneurs who amassed small fortunes, but failed to find satisfaction or worse, lost their family in the process. A Google search on “deathbed regrets” is sobering. Click through the search link. Read several of the articles. Though death may seem far off for most, you shouldn’t wait until the end of your days to start living life to the full. Drawing healthier boundaries produces a harvest that you can enjoy now.

Every situation is different. Every founder has different skills, values and motivations. Every company has different strengths and weaknesses. But every employee in the company, from the largest stockholder to the entry-level new hire is a person. And every person needs to establish the right priorities to guide their life and their decisions. My advice to every aspiring startup founder is to seek a trusted group of seasoned and successful counselors to guide not just your company, but to guide you as a person first and an entrepreneur second.


Startup Execution, Startup Lifestyle

Startup Life

Startups are hard. Startups are rewarding. Startups suck the lifeblood out of you. Startups energize teams to overachieve. Startups expose your weaknesses. Startups develop your strengths. Startups periodically take a pound of flesh and a pint of blood. Startups provide deep gratification from doing your best and seeing something grow.

The right role at the right startup can be more educational than an MBA. Not all startups expect you to sacrifice your firstborn child to the gods of success. But not all startups are healthy environments. For individuals earlier in their career, finding the right fit to your skills and your goals is key. For those with some experience behind them (or those playing executive roles), building the right foundation and exercising good judgment is key to growing a healthy startup.

A Little About Me

I am a veteran of five different startups. I left the world of technical/management consulting in 1999 after my wife and I started a family. High-end consulting provides great opportunities to work with very talented people on very interesting customer projects, but the time and travel demands are difficult to balance with a quality family life.

I joined my first startup as an Engineering Director and was promoted to VP Engineering shortly before the company shut down in 2000, a casualty when the Internet bubble finally burst. I then served as VP Applications Engineering for another startup with fantastic market-leading technology, but various internal and external issues resulted in that company also shutting down. I then took a CTO role where I built a team that created the technology platform for a financial services compliance company. After successfully launching the application, I left the CTO role and founded my own startup. I learned a ton as a first-time CEO, culminating in a successful acquisition after seven years of steady, consistent growth. After working several years for the acquiring company, I felt the itch to return to my heritage and joined my fifth startup as VP TechOps. This fifth startup had a stellar engineering team that built the best product in the market, but was designed to run very lean, meaning everyone wore multiple hats in order to build and grow the company. Thankfully, Cisco recognized the value of the engineering team and the strength of the product and acquired the company.

Why I Write

I enjoy helping teams win. I enjoy coaching and sharing from my experiences. In some ways, writing this blog is a form of catharsis after many startup trials and tribulations. I’ve been fortunate to see several successes in my startup career. But the truth is, success wasn’t likely until I learned from several failures. The old adage that you learn more from failure than success is absolutely true.

Many seasoned experts and investors provide good advice on a variety of startup matters, but there are a few topics that I rarely see written about. I hope to cover several such topics over the next several months, from high-level strategy to low-level operational execution. I also plan to crossover and write about taking care of yourself so you can keep up with the ever-pressing demands of startup life. I believe in working to live, not living to work – a message that is sometimes lost in the Silicon Valley rat race. I plan to cover topics as diverse as startup job titles, hiring, product management, channel development, legal execution, giving back, and building a strong foundation for your life. I welcome your comments and hope you find something valuable for you and your situation.