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Halvar's Guide to Entrepreneurship

thomasdullien.github.io

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Re: Halvar's Guide to Entrepreneurship

#31

Post by mhluongo »

insanitybit wrote: post #17
tdullien wrote: post #14

Earlier quoted context omitted.

I will add a section. Pay yourself a salary at the very latest the moment you've raised funding. If a VC objects to you doing that, get a different VC. You're in for the long run, and support from your family etc. is important, and you're already taking on a huge risk by pooling all your risk in one company, vs. the VC who is happily diversified. Investors who imply you shouldn't take a salary are no bueno.

I've never once had a VC even ask about my paycheck let alone suggest I don't take one. FWIW the second you run a company you literally have to pay yourself at least minimum age, it's illegal not to. edit: Hm, apparently you can take a literal $0 paycheck. Regardless, it'd be absurd for a VC to tell you to do this imo.

This clearly isn't true for eg a single-member LLC, and likely not true in general.

Re: Halvar's Guide to Entrepreneurship

#32

Post by josephmosby »

frabia wrote: post #28

Great article! One question: you talk about market size, but you don’t address the existing competition in the space. In my opinion, two equally sized markets can have very different levels of competitive pressure. Is that something you factor into your playbook? Or do you simply not find it relevant to judge whether to enter a certain space?

(not the author, but here's how I think about it)

Assuming that you're not a commodity product, it all kinda nets out in the end. If you have a competitive market, you have proof that people want your product at a good price, else no one would be in the market. If you execute better than all of your competitors, then you can theoretically take every last penny of that market.

I don't think the competitive pressure changes the decision whether there's revenue to be made in a certain space, though it may change the personal decision if the operating tactics required in a competitive market are personally fun for you the human being.

Re: Halvar's Guide to Entrepreneurship

#33

Post by pixel_popping »

insanitybit wrote: post #17
tdullien wrote: post #14

Earlier quoted context omitted.

I will add a section. Pay yourself a salary at the very latest the moment you've raised funding. If a VC objects to you doing that, get a different VC. You're in for the long run, and support from your family etc. is important, and you're already taking on a huge risk by pooling all your risk in one company, vs. the VC who is happily diversified. Investors who imply you shouldn't take a salary are no bueno.

I've never once had a VC even ask about my paycheck let alone suggest I don't take one. FWIW the second you run a company you literally have to pay yourself at least minimum age, it's illegal not to. edit: Hm, apparently you can take a literal $0 paycheck. Regardless, it'd be absurd for a VC to tell you to do this imo.

It's not true, as the founder of the company, you aren't even technically employed (unless you become a legal employee), so there is no concept of wage at all, only dividends and buying stuff directly with the company (fine within reasonable limits).

Re: Halvar's Guide to Entrepreneurship

#34

Post by pixel_popping »

tdullien wrote: post #14
softwaredoug wrote: post #13

Maybe a simple question I didn’t see here: paying yourself a salary? How true is it you’ll need to persist under extreme duress unable to pay yourself a salary? Relevant for us with kids / families where we provide the family’s income.

I will add a section. Pay yourself a salary at the very latest the moment you've raised funding. If a VC objects to you doing that, get a different VC. You're in for the long run, and support from your family etc. is important, and you're already taking on a huge risk by pooling all your risk in one company, vs. the VC who is happily diversified. Investors who imply you shouldn't take a salary are no bueno.

Absolutely you should take a salary, one that don't create anxiety and making sure you aren't struggling every end of the month, you don't want a Founder that keep thinking of building another project than the one funded because he is struggling for a matter of thousands a month.

Re: Halvar's Guide to Entrepreneurship

#35

Post by insanitybit »

mhluongo wrote: post #31
insanitybit wrote: post #17

Earlier quoted context omitted.

I've never once had a VC even ask about my paycheck let alone suggest I don't take one. FWIW the second you run a company you literally have to pay yourself at least minimum age, it's illegal not to. edit: Hm, apparently you can take a literal $0 paycheck. Regardless, it'd be absurd for a VC to tell you to do this imo.

This clearly isn't true for eg a single-member LLC, and likely not true in general.

If you're raising VC money then I assume you're not an LLC. But I think you're right that the owner can take a $0 salary.

Re: Halvar's Guide to Entrepreneurship

#36

Post by satvikpendem »

softwaredoug wrote: post #16

I see a pattern where companies end up becoming consulting firms with a bit of proprietary tech. Then all their efforts are put into a handful of clients. The companies call them “design partners” but they’re basically clients. Seems like a particularly risky trap for bootstrapped companies desperate for revenue. At the same time the best companies I see out there are relentlessly customer focused. How do you draw th…

Do what Basecamp does [0]. They have one price for any size of customer and more importantly do not let any one customer, no matter how big, pay more for Basecamp and turn into a client as you say.

[0] https://www.inc.com/magazine/201606/jason-fried/saying-no-to...

Re: Halvar's Guide to Entrepreneurship

#37

Post by alexashka »

If you have a thing people want that you spent a decade making that isn't easily replicatable, the rest doesn't matter.

If you don't have that, the rest also doesn't matter. Unless you're obsessed with money, in which case, you are very confused and should not be guiding anybody to anything.

Guides regarding minutiae from lottery ticket winners are tiresome. I think anyone over 30 has learned what these 'guides' amount to from looking at Paul Graham.

Re: Halvar's Guide to Entrepreneurship

#38

Post by insanitybit »

pixel_popping wrote: post #33
insanitybit wrote: post #17

Earlier quoted context omitted.

I've never once had a VC even ask about my paycheck let alone suggest I don't take one. FWIW the second you run a company you literally have to pay yourself at least minimum age, it's illegal not to. edit: Hm, apparently you can take a literal $0 paycheck. Regardless, it'd be absurd for a VC to tell you to do this imo.

It's not true, as the founder of the company, you aren't even technically employed (unless you become a legal employee) , so there is no concept of wage at all, only dividends and buying stuff directly with the company (fine within reasonable limits).

I feel like I was an employee, I don't really recall the details when I spun up my C-Corp tbh. It does seem that a CEO can take a $0 salary.

Re: Halvar's Guide to Entrepreneurship

#39

Post by [deleted] »

feoren wrote: post #30
ramon156 wrote: post #2

I resonate a lot with these reasons. I definitely know I am not the most optimal employee, but often times the people I clash with are people that I cannot respect. Either - They think they're higher than me (you cannot collab like that) - They want it their way, despite there being multiple ways to Rome, and will cut off the conversation with orders, not arguments - They pretend to be technical and are only making t…

> They want it their way, despite there being multiple ways to Rome, and will cut off the conversation with orders, not arguments I don't know about your experiences, but insisting on this point can be a death sentence. I've spent most of my career as "technical lead", carefully building an approach that works for what my team does based on an underlying theory that is very difficult to verbalize. I've found through…

[deleted]

Re: Halvar's Guide to Entrepreneurship

#40

Post by tptacek »

This is all great. One thing I wanted to call out in particular is Thomas' take on investor verbal agreements. YC has a thing about this: it's called the Handshake Protocol.

The idea is: you and your investor agree on (1) an amount to be invested, and (2) a valuation or cap. Maybe you shake hands. Then, after the meeting, you memorialize the deal in an email. The deal is then socially binding: reneging on a Handshake Protocol deal is a big thing, gets noted in Bookface, whatever.

There's nothing magic or even interesting about the protocol; all it does is eliminate a form of ambiguity that professional investors are facile with and founders aren't. Investors are very good at saying "yes" and meaning "no"; they want the option to invest without the commit. If you don't put it to them directly, they'll take the option! The Handshake Protocol puts it to them directly: "are you committing?"

Most of the time, you're going to get a "no" answer to that, which is exactly what you want: clarity, so you can make decisions.

https://www.ycombinator.com/handshake

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