How Founders Win at Fundraising, Sales, and Hiring

1. 0:00 – 0:39

   Winning by getting chased: the 80/20 reality of investor attention

   1. MSMichael Seibel0:00

      Remember the question I just asked was, like, what percentage of the deals do you chase versus what percentage of the deals kind of come in your front door? And the answers I got only varied between 80/20 chase and 90/10 chase. [laughs] If you can invest that time in making your company something that investors will chase after versus decksmiting, you're, you're playing into the odds versus playing out of the odds.

   2. SPSpeaker0:23

      Yeah. And again, I, I think we're not supposed to be saying this.

   3. MSMichael Seibel0:27

      [upbeat music] This is Dalton + Michael, and today we're gonna talk about a very simple and easy topic, how to win.

   4. SPSpeaker0:38

      That's it.

   5. MSMichael Seibel0:38

      That's it.

   6. SPSpeaker0:39

      Just win.

2. 0:39 – 1:39

   Leverage as the hidden variable behind fundraising, sales, and hiring questions

   1. MSMichael Seibel0:39

      Just win. How to win. One of the things that kind of triggered this is, um, at YC we spent a lot of time talking about leverage, and going into any type of situation understanding whether you have leverage or not.

   2. SPSpeaker0:54

      Yeah, it's the, it's the question behind the question, where we would get a lot of questions like, "How do I raise a good round?" Or like-

   3. MSMichael Seibel1:02

      Yeah

   4. SPSpeaker1:02

      ... "How do I hire good people?" Or how, you know, like very broad questions.

   5. MSMichael Seibel1:06

      What should be in my pitch deck? [laughs]

   6. SPSpeaker1:08

      And I found that to be not a very useful line of questioning to go on.

   7. MSMichael Seibel1:14

      No.

   8. SPSpeaker1:14

      And instead I would sort of stop them, and I'd be like, "Well, how much leverage do you have?" [laughs]

   9. MSMichael Seibel1:20

      Yes. Yes.

   10. SPSpeaker1:20

       And the answer to how much leverage do you have would have far more weight on the actual thing they were asking-

   11. MSMichael Seibel1:27

       Yes

   12. SPSpeaker1:27

       ... than, um, you know, having a better pitch deck or, or running a better process. And so leverage came up in, like, every office hour basically, right? So why, why don't you define...

3. 1:39 – 4:15

   Why founders misunderstand leverage: the 'school' mental model vs. the real world

   1. MSMichael Seibel1:39

      Yeah. Like, it's, it's interesting to think about how to define leverage 'cause I almost want to define it the opposite. I think that most of the young founders we worked with, their most formative experience was school. And if you think about school, most of school is built in a way where you don't need leverage. Most of the school is built in a way where people are very much trying to help you-

   2. SPSpeaker1:58

      Yep

   3. MSMichael Seibel1:59

      ... as their job, and you're kind of being invested in with time, attention, material, and there's, I would argue, very little expectation of return. And I think that when those people come out into the startup world, they wanna create the same analogy in their heads. Like, "Oh, the investors are here to support me like my teachers. They'll give me the money I need to go do things. My customers are gonna work with me because, like, that's gonna help me accomplish my goals," right? Like-

   4. SPSpeaker2:28

      Yes

   5. MSMichael Seibel2:28

      ... everything is this kind of like [laughs] ...

   6. SPSpeaker2:29

      They're at the center of the universe.

   7. MSMichael Seibel2:30

      Exactly. And I think a lot of what we had to do at YC is be like, "No, this is a different world." This is a world where, like, you have to have something of value. And I'd argue that, like, leverage is really just take whatever audience that you're interacting with, do you bring something of value? Are you asking for more value than you can offer? Or are you delivering more value than you're asking for? And when it comes to fundraising, it was always so frustrating 'cause it'd be like, "Is this the right title of the slide," you know? And it's like...

   8. SPSpeaker3:02

      It was just the wrong frame.

   9. MSMichael Seibel3:04

      [laughs] Yeah.

   10. SPSpeaker3:04

       Like, it was like the whole frame-

   11. MSMichael Seibel3:06

       Yes. [laughs]

   12. SPSpeaker3:06

       ... was like, "No, no, no, no, no. Why are we talking about-

   13. MSMichael Seibel3:08

       Yes

   14. SPSpeaker3:08

       ... the title of the slides? Are you growing?"

   15. MSMichael Seibel3:10

       Yes, exactly. [laughs]

   16. SPSpeaker3:11

       How fast are you growing?

   17. MSMichael Seibel3:13

       If you're growing fast enough, you might not even need this deck. If you're not growing and not launched, in many ways working on this deck could be the biggest waste of your time. [laughs] And like, like, the idea that the deck is doing the work, the deck isn't doing the work at all.

   18. SPSpeaker3:29

       And so, you know, we'll go into some details in a second, but I think-

   19. MSMichael Seibel3:32

       Yes

   20. SPSpeaker3:32

       ... the real frame for you all watching this-

   21. MSMichael Seibel3:34

       Yes

   22. SPSpeaker3:34

       ... is to get comfortable with this terminology of leverage-

   23. MSMichael Seibel3:38

       Yeah

   24. SPSpeaker3:38

       ... and get good at asking yourself in every situation where you might be negotiating-

   25. MSMichael Seibel3:43

       Yes

   26. SPSpeaker3:44

       ... how much leverage do I have?

   27. MSMichael Seibel3:46

       And what can I do to bring more leverage to the table? Because negotiating is 10 times easier when you have leverage.

   28. SPSpeaker3:54

       Yes.

   29. MSMichael Seibel3:54

       Leverage is also another way of thinking about is your ability to walk away.

   30. SPSpeaker3:58

       Yeah. How bad do you need this thing to happen?
4. 4:15 – 6:09

   Fundraising leverage: traction makes the deck almost irrelevant

   1. SPSpeaker4:15

      So this is one of the, like, most misunderstood aspects of Y Combinator-

   2. MSMichael Seibel4:20

      Yes

   3. SPSpeaker4:20

      ... I think, by people that aren't in it.

   4. MSMichael Seibel4:22

      Yes.

   5. SPSpeaker4:22

      You ready? I think some people think Y Combinator is fundraising school, and you get in, and the partners, like, teach you how to pitch for three months and build a deck with you and build hype, and it's just like-

   6. MSMichael Seibel4:37

      Jesus Christ

   7. SPSpeaker4:37

      ... a university for fundraising.

   8. MSMichael Seibel4:39

      We wouldn't have made it if that was all-

   9. SPSpeaker4:40

      Oh, yeah. I would, I would never-

   10. MSMichael Seibel4:42

       [laughs]

   11. SPSpeaker4:43

       Yeah, would not have worked a decade at that place.

   12. MSMichael Seibel4:45

       No. [laughs]

   13. SPSpeaker4:46

       That's the worst.

   14. MSMichael Seibel4:46

       Literally.

   15. SPSpeaker4:47

       That's dystopia, okay?

   16. MSMichael Seibel4:48

       Just the kind of week and a half we had to do that was painful enough. [laughs]

   17. SPSpeaker4:50

       Yeah. Well, yeah, you can see people like, "Wait, r- it's not that?" Like, I'm sure there's some people watching that they're like, "What are these guys talking about? Of course that's what it is."

   18. MSMichael Seibel4:57

       Yes.

   19. SPSpeaker4:57

       Um, no, no, no. The, what it actually is, and this is, this is like a Paul Graham thing-

   20. MSMichael Seibel5:02

       Yeah

   21. SPSpeaker5:02

       ... which is the way to be very effective at fundraising is to be growing so quickly-

   22. MSMichael Seibel5:08

       Yes

   23. SPSpeaker5:08

       ... and have so many proof points that your startup is working-

   24. MSMichael Seibel5:12

       Yes

   25. SPSpeaker5:12

       ... that you could be really bad at fundraising and put very little effort into it-

   26. MSMichael Seibel5:17

       Yep

   27. SPSpeaker5:17

       ... and do it in a very short timeframe, and that counterintuitively putting no effort into trying to prepare for fundraising and just doing it sort of seat of your pants at the very end is way more effective than doing a bunch of prep.

   28. MSMichael Seibel5:33

       If you invested that extra time in building, launching-

   29. SPSpeaker5:36

       Doing something good, yeah

   30. MSMichael Seibel5:37

       ... talking to your users-
5. 6:09 – 9:41

   The opportunity cost of low-leverage fundraising (and why investors string founders along)

   1. MSMichael Seibel6:09

      ... all the time, um, as related to Standard Capital as well as YC, but I would think about for non-YC companies-

   2. SPSpeaker6:17

      Yeah

   3. MSMichael Seibel6:17

      ... how many hours they would spend fundraising-

   4. SPSpeaker6:20

      Yes

   5. MSMichael Seibel6:20

      ... to raise a seed round.

   6. SPSpeaker6:21

      Yes.

   7. MSMichael Seibel6:21

      And how, if they spent those hours working on their startup, how much more value would've been created in the world? Like, just-

   8. SPSpeaker6:28

      Yes

   9. MSMichael Seibel6:28

      ... like, let's, you know, we could do an estimate.

   10. SPSpeaker6:30

       Yeah.

   11. MSMichael Seibel6:30

       And again, you, viewer, if you've ever raised money before, how long did that take?

   12. SPSpeaker6:34

       [exhales]

   13. MSMichael Seibel6:35

       And what would you have rather done with that time?

   14. SPSpeaker6:37

       Yes.

   15. MSMichael Seibel6:37

       And how much more value would've been created in your life-

   16. SPSpeaker6:40

       Yes

   17. MSMichael Seibel6:40

       ... if that time were spent elsewhere?

   18. SPSpeaker6:42

       I mean, it's crazy. I remember, you know, one of the times we almost died at Justin.tv, you know, I had spent the eight months prior trying to fundraise.

   19. MSMichael Seibel6:50

       Yep.

   20. SPSpeaker6:50

       And we were burning every month. And when it became eminently clear we weren't gonna raise, you know, we, we had two months of runway. [laughs]

   21. MSMichael Seibel6:58

       [laughs]

   22. SPSpeaker6:58

       And it was like, "Okay, we gotta figure out how to make this thing profitable or we're gonna die." And the amount of shit we got done in that two months versus slinging decks, like-

   23. MSMichael Seibel7:08

       [laughs]

   24. SPSpeaker7:08

       And that's the thing. Like, you know, um, we love investors. Uh-

   25. MSMichael Seibel7:13

       [laughs]

   26. SPSpeaker7:14

       But, like, if you just think about how much time is wasted.

   27. MSMichael Seibel7:19

       Oh.

   28. SPSpeaker7:19

       It's like a v- it's like a drag on the industry-

   29. MSMichael Seibel7:21

       Yes

   30. SPSpeaker7:22

       ... to be, to have a low leverage fundraise. Again, we're, we're basically-
6. 9:41 – 11:11

   Case study: Socialcam vs. Twitch—what leverage looks like in the room

   1. MSMichael Seibel9:41

      Yeah. It's funny 'cause we had this moment with Socialcam where we were, like, the number two app in the App Store, and so leverage, right? And I remember our pitch decks were hilarious. Like, one of our pitch decks kinda just was like, "Here's some questions you can ask us. Here's, like, all the g- the stats that we track going up to the right. Like, what else do we have to show you?" But I remember at the time thinking, Justin.tv and Twitch, we had such a hard time fundraising. I wanna do a bit of a case study 'cause, like, these investors will tell me shit now 'cause they all wanna invest. And I remember the question I just asked was, like, "What percentage of the deals do you chase versus what percentage of the deals kinda come in your front door?" And the answers I got only varied between 80/20 chase and 90/10 chase. [laughs] And it's like, to your point, if you can invest that time in making your company something that investors will chase after versus deck smithing, you're, you're playing into the odds versus playing out of the odds.

   2. SPSpeaker10:40

      Yeah. And again, I th- I think we're not supposed to be saying this. Like, I'm pretty sure the V-

   3. MSMichael Seibel10:46

      Oh, sorry. Um, my apologies. [laughs]

   4. SPSpeaker10:46

      No, I think the VCs would be really mad.

   5. MSMichael Seibel10:48

      Oh.

   6. SPSpeaker10:49

      'Cause they're like, "Oh, this means they won't come pitch it." Like, like, basically the hope that maybe if you meet with them a lot, maybe they will invest, is sort of the hope that makes-

   7. MSMichael Seibel10:58

      Ugh

   8. SPSpeaker10:58

      ... I don't think they wanna... I, I think we're not supposed to say this, right?

   9. MSMichael Seibel11:00

      I think the older, more grizzled ones would rather you just come when you have leverage. [laughs]

   10. SPSpeaker11:03

       That's right. I'm just trying to say, I don't, I think we're, like-

   11. MSMichael Seibel11:06

       Yeah

   12. SPSpeaker11:06

       ... not supposed to be saying this.

   13. MSMichael Seibel11:07

       Okay.

   14. SPSpeaker11:07

       Um, so whatever.

   15. MSMichael Seibel11:08

       Well, don't-

   16. SPSpeaker11:08

       You know, we didn't tell you. Uh.

   17. MSMichael Seibel11:09

       Yeah, don't, don't listen.

   18. SPSpeaker11:10

       [laughs]

7. 11:11 – 12:36

   Sales leverage: never need any single deal

   1. MSMichael Seibel11:11

      So let's talk about sales 'cause I think especially in the early days, people have a misconception about leverage with sales. How, how would you think about sales?

   2. SPSpeaker11:18

      I think it's the same deal where, um, a founder that has not done a lot of sales-

   3. MSMichael Seibel11:24

      Mm-hmm

   4. SPSpeaker11:24

      ... will be like, "Oh, I got a cold email from some impressive, you know, someone from Google emailed me, and they're really interested in my product. We made it." [laughs] "I just need to close this one deal and, you know-"

   5. MSMichael Seibel11:37

      Off to the races

   6. SPSpeaker11:37

      ... "Right off into the sunset." And you kinda can't need any one deal.

   7. MSMichael Seibel11:45

      Yeah.

   8. SPSpeaker11:45

      Like, high leverage is that you have so much customer inbound-

   9. MSMichael Seibel11:49

      Yeah

   10. SPSpeaker11:49

       ... that you can be picky and choosy.

   11. MSMichael Seibel11:51

       Yes.

   12. SPSpeaker11:52

       Um, again, let me give you an example. Let's say someone launches a new product.

   13. MSMichael Seibel11:55

       Mm-hmm.

   14. SPSpeaker11:56

       And you get 1,000 signups.

   15. MSMichael Seibel11:58

       Yep.

   16. SPSpeaker11:59

       You can segment those signups into different types of customers and be like, "You know what? I don't think we're gonna do enterprise. I don't think we're gonna..." You know, you can-

   17. MSMichael Seibel12:07

       Yes

   18. SPSpeaker12:07

       ... segment it down and then make decisions on who you wanna serve and, and all that good stuff. Conversely, if you get no signups- And there's really only one possible customer you can get. You put all of your eggs in the basket of that one customer.

   19. MSMichael Seibel12:22

       Yeah.

   20. SPSpeaker12:22

       And this has all these super bad second order effects-

   21. MSMichael Seibel12:26

       Yeah

   22. SPSpeaker12:26

       ... where you're ba- you know, you don't know if you're close to PMF.

   23. MSMichael Seibel12:29

       Yeah.

   24. SPSpeaker12:29

       Maybe this one customer is weird.

   25. MSMichael Seibel12:30

       Yep.

   26. SPSpeaker12:31

       You're over the barrel of, um, doing custom shit for them.

   27. MSMichael Seibel12:34

       Yep.

   28. SPSpeaker12:35

       Like, they know they got ya. [laughs]

8. 12:36 – 15:03

   Pipeline discipline beats negotiation tricks (pricing, discounts, LOIs)

   1. MSMichael Seibel12:36

      Yeah. You might be moving further away from product market fit without realizing it. You know, it's interesting 'cause I think that sales is something that a lot of founders, I believe, don't think too hard about before they start their company, and they kind of realize how important it is once they're trying to get that graph going up. What's so interesting is that a lot of the founders I talk to, when they're on with that hot deal, when they're with that deal that they really wanna close, they have such a hard time doing more outreach, getting more meetings, putting more deals into the funnel. I think they, they tell themselves this fantasy that, like, if they land this deal, everything else will come easy. And so... Or they tell themselves, "Well, I'm working so hard on this deal, I don't have time," when the reality is, like, probably you're working hard in your mind, but you're taking one meeting a week, right?

   2. SPSpeaker13:24

      Yeah.

   3. MSMichael Seibel13:24

      So it's like [laughs] you're not actually working that hard.

   4. SPSpeaker13:26

      It's almost like the definition of leverage in this situation is that if any deal dies, how much do you care?

   5. MSMichael Seibel13:32

      Boom.

   6. SPSpeaker13:33

      Like, do you-

   7. MSMichael Seibel13:34

      Boom. Boom.

   8. SPSpeaker13:35

      [laughs] Right? You're like, "Oh-

   9. MSMichael Seibel13:36

      Exactly

   10. SPSpeaker13:36

       ... it's, the deal died. Oh, well, you know."

   11. MSMichael Seibel13:38

       That's fine. We got eight others in the pipeline. These three are-

   12. SPSpeaker13:42

       [laughs]

   13. MSMichael Seibel13:42

       ... calling me every day. [laughs]

   14. SPSpeaker13:44

       Yeah. Oh, I mean, I'm sad that one died. Oh, well, gee whiz.

   15. MSMichael Seibel13:48

       It's... Yes.

   16. SPSpeaker13:48

       But it's not, like, a big deal.

   17. MSMichael Seibel13:49

       Yes.

   18. SPSpeaker13:50

       That's how you know if you have leverage or not-

   19. MSMichael Seibel13:51

       Exactly

   20. SPSpeaker13:51

       ... when you're doing sales.

   21. MSMichael Seibel13:52

       Exactly. And if you're not doing enough outreach, you will not be in that position. And, and, man, I will tell you, on the flip side, if you're a customer, you don't like to feel that the-

   22. SPSpeaker14:09

       That you-

   23. MSMichael Seibel14:09

       ... company you're considering needs you-

   24. SPSpeaker14:11

       Yeah

   25. MSMichael Seibel14:11

       ... more than you need them. That's not a good feeling.

   26. SPSpeaker14:14

       And, and again, to dovetail this into the topic of negotiation, well, if you have leverage, then of course you could be more aggressive on pricing. Of course you can not give them discounts.

   27. MSMichael Seibel14:23

       Yes.

   28. SPSpeaker14:23

       Of course you can get them to sign a contract and not an LOI.

   29. MSMichael Seibel14:26

       Yes.

   30. SPSpeaker14:26

       Like, all of this dovetails from how bad do you need that deal?
9. 15:03 – 16:07

   Hiring leverage starts with having a real candidate pipeline

   1. MSMichael Seibel15:03

      So I think that everyone kind of understands, oh, I need all these really talented people, but Anthropic's gonna pay them this much money, OpenAI's gonna pay them this much. Like, how do I, how do I have leverage in a hiring situation?

   2. SPSpeaker15:16

      I think when I'm debugging, um, a founder's hiring pipeline, the biggest issue is they don't have a pipeline.

   3. MSMichael Seibel15:24

      Mm.

   4. SPSpeaker15:24

      Like, they have so few candidates at every stage of the pipeline-

   5. MSMichael Seibel15:29

      Mm

   6. SPSpeaker15:29

      ... that if they actually get someone good through some miracle-

   7. MSMichael Seibel15:34

      Yeah

   8. SPSpeaker15:34

      ... they have no leverage.

   9. MSMichael Seibel15:36

      Mm.

   10. SPSpeaker15:37

       And it's not clear why that person would join them. So for instance, if you need to hire, I don't know, two engineers-

   11. MSMichael Seibel15:42

       Mm-hmm

   12. SPSpeaker15:42

       ... ideally, if you had 1,000 possible candidates, and then you passed 50 of them to first screen, et cetera, et cetera, et cetera-

   13. MSMichael Seibel15:50

       Mm-hmm

   14. SPSpeaker15:50

       ... that's how you have choices, so that it... that way, if any one candidate chooses not to work with you, or if anyone asks for something that you can't give them-

   15. MSMichael Seibel15:59

       You're fine

   16. SPSpeaker16:00

       ... you're like, "Okay, well..." Versus if there really aren't any other candidates, they kinda got you in that negotiation, didn't they?

10. 16:07 – 17:51

    You’re not always competing with Google: target the 'startup adventure' candidate

    1. MSMichael Seibel16:07

       You know, it's interesting. When I think about this, I wanna kinda start with a inspiring thing. I think that a lot of times a lot of founders think they're competing with Google directly. But you have to ask yourself, is the kind of person who would take a job at 100 and, is it 75,000 person company-

    2. SPSpeaker16:25

       Yeah

    3. MSMichael Seibel16:25

       ... the same kind of person that would take the job as a first 10 employee at a startup? I'd argue that there's some overlap in that, but way smaller than you think. So it's entirely possible, in fact, likely, especially in the early stage, you're in a different hiring pool than you think.

    4. SPSpeaker16:41

       Yes.

    5. MSMichael Seibel16:42

       And you're probably competing against that other early stage startup, not Google. [laughs] Which, which makes you feel 10X better, right? [laughs] Like, it's easier to develop leverage against the other early stage startup. I think the other thing that if you get into the mindset that the people you wanna hire are excited for this high leverage adventure, where they get to have their hands on the controls, right? You can use that even when you're much smaller. You can tell them about all the responsibility they're gonna have.

    6. SPSpeaker17:08

       Yeah.

    7. MSMichael Seibel17:08

       And if they look at you weirdly, they're not a good fit.

    8. SPSpeaker17:11

       Right?

    9. MSMichael Seibel17:11

       And if they're like, "You're gonna give me the keys to this whole thing?" And it's like, "Yeah." [laughs] Like, um, I think another thing is, like, you can talk about the hardest challenges, and it's like, if they're like, "Oh, yeah, that's what I'm..." Great. If they're like, "Oh, that might mean I have to... You know, you mean the website goes down over the weekend?" It's like...

    10. SPSpeaker17:30

        Yeah.

    11. MSMichael Seibel17:31

        And so I think that it turns out you have more leverage than you think when you're looking to hire people who are excited for the adventure. You have way less leverage than you think when you're looking for someone who's like, "I wanna get in at OpenAI pre-IPO. I've mapped out, like, the least amount of work to the most-

    12. SPSpeaker17:49

        Yeah

    13. MSMichael Seibel17:49

        ... amount of money." [laughs]

11. 17:51 – 19:58

    Treat hiring like sales: high-touch closes and same-day offers

    1. SPSpeaker17:51

       Maybe one other thing to add, um, is I would ask founders when they're asking about hiring how much effort they put into it.

    2. MSMichael Seibel17:59

       Mm.

    3. SPSpeaker18:00

       And-

    4. MSMichael Seibel18:00

       Mm.

    5. SPSpeaker18:01

       I actually think if hiring is a big issue, if you're post PMF or whatever, you probably should be putting as much effort into that as you are into sales.

    6. MSMichael Seibel18:08

       Yeah.

    7. SPSpeaker18:09

       And I think a lot of people find that shocking, right? Again, maybe someone's like, "Yeah, yeah, yeah, Dalton, I know."

    8. MSMichael Seibel18:12

       No, I just want people-

    9. SPSpeaker18:13

       A lot of people-

    10. MSMichael Seibel18:14

        Recruiters will do the work, right?

    11. SPSpeaker18:15

        They're, they're shocked-

    12. MSMichael Seibel18:16

        Yeah

    13. SPSpeaker18:16

        ... to hear that the amount of, like- ... emotional energy you have to put into hiring-

    14. MSMichael Seibel18:22

        Yeah

    15. SPSpeaker18:22

        ... is on the level as getting customers, 'cause you're basically selling a job at your company.

    16. MSMichael Seibel18:26

        Yeah, yeah.

    17. SPSpeaker18:27

        [laughs] So you have to run a sales process.

    18. MSMichael Seibel18:29

        Yeah.

    19. SPSpeaker18:29

        You have to... All the same, uh, advice we just gave about sales-

    20. MSMichael Seibel18:32

        Yeah

    21. SPSpeaker18:32

        ... needs to apply to hiring. It's not like, "Oh, I put up a job listing. Why is no one applying?"

    22. MSMichael Seibel18:37

        Yeah. [laughs]

    23. SPSpeaker18:38

        This is, [laughs] this-

    24. MSMichael Seibel18:39

        Well, this is-

    25. SPSpeaker18:39

        It's not that easy

    26. MSMichael Seibel18:40

        ... this is one that I think my old co-founder Justin taught me. Like, he was a great recruiter, and I am, I remember so many parts of our recruiting process were, like, Justin and Emmett literally being like, "What would be a great process?" And one of the things that we did that I just thought was amazing was that if someone was good, we had a printed and signed offer letter, like r- like, that was handed to them at the end of their last interview, and we had a pre-scheduled, like, drinks or dinner invite. It was just like-

    27. SPSpeaker19:13

        Yeah

    28. MSMichael Seibel19:13

        ... it was like we are, to your point about selling, like, when we know we like this person, we are showing them the love. And it wasn't, "Oh, the recruiter will get back to you in a week," or like-

    29. SPSpeaker19:22

        Yeah

    30. MSMichael Seibel19:22

        ... "We have to collect our notes, and we don't know what..." It was you got a taste for what being at the company would be like through that process.
12. 19:58 – 23:53

    Marketing & PR leverage: stop chasing gatekeepers; tell your own story

    1. MSMichael Seibel19:58

       Do you wanna talk about marketing and PR as the last one?

    2. SPSpeaker20:00

       Yeah. I think, you know, there's, there's a theme here. It's recurring. I, we noticed over the years that too many founders were obsessed of getting the press to write about them. Of like, "Man, I really, if I can just get, you know, The New York Times or, or whatever-

    3. MSMichael Seibel20:15

       The New York Times

    4. SPSpeaker20:15

       ... to write a-"

    5. MSMichael Seibel20:16

       TechCrunch, that was the-

    6. SPSpeaker20:16

       Well, again, let's start with the... And then they'd be like-

    7. MSMichael Seibel20:18

       Okay

    8. SPSpeaker20:18

       ... "Okay, well, if I can get TechCrunch to write about me-

    9. MSMichael Seibel20:20

       [laughs]

    10. SPSpeaker20:20

        ... then I made it." One thing that's funny is that we would track this, and we would, we would have the founders tell us how many clicks or signups or customers they got from-

    11. MSMichael Seibel20:31

        Yes

    12. SPSpeaker20:31

        ... getting like a... And it is shocking how little, um, getting press helps a startup. Shocking.

    13. MSMichael Seibel20:42

        I- I- Specifically in directly measurable-

    14. SPSpeaker20:46

        Yeah

    15. MSMichael Seibel20:46

        ... like signups, right? Like-

    16. SPSpeaker20:47

        It's great 'cause your mom and dad see it. You know, there's other cool things-

    17. MSMichael Seibel20:49

        There are other cool things

    18. SPSpeaker20:50

        ... about getting an article.

    19. MSMichael Seibel20:51

        Yes.

    20. SPSpeaker20:51

        But if you're like, "Okay, cool. We, you know, we got the article," and you're like, "Well, let's look at your dashboard," it's-

    21. MSMichael Seibel20:58

        [laughs]

    22. SPSpeaker20:58

        It was, like, so disappointing to founders.

    23. MSMichael Seibel21:03

        Can I go one step deeper on that? So I talked to the editor of a popular blogging platform, and he said to me, "We would selectively turn paywalls on or off-

    24. SPSpeaker21:14

        [laughs]

    25. MSMichael Seibel21:15

        ... on startups bla- like, startup stories. And if we thought it was actually something people wanted to read, of course, we turn the paywall off. If we didn't, we turned the paywall on because we knew that, like, the PR person that was helping them and the like c-

    26. SPSpeaker21:30

        They can get, like, five subs.

    27. MSMichael Seibel21:31

        You get subs because they wanna read that article, and they have to subscribe. And I'm like, "Oh, this poor founder is basically, like, feeding the, their business model [laughs] of this blog."

    28. SPSpeaker21:43

        Yeah. They're, they're driving, like, 10 signups to a paid blog.

    29. MSMichael Seibel21:45

        Yes, and expecting, you know, some impact in their company. They're, they're just, they're burning money.

    30. SPSpeaker21:51

        And so again, where we're going with this is that is low leverage, friends.
13. 23:53 – 24:55

    Wrap-up: leverage is earned in the pre-work, not the final negotiation

    1. MSMichael Seibel23:53

       ... super valuable. So if we wanna wrap it up here, winning is about how much leverage you have, not about how much shit people are gonna give you. And in all these situations as a startup, you can feel like you don't have very much leverage, but there's often a lot of things you can do to increase your leverage, especially against other startups.

    2. SPSpeaker24:11

       Yeah.

    3. MSMichael Seibel24:12

       Especially. [laughs]

    4. SPSpeaker24:12

       And it, and it's usually the pre-work. It's not-

    5. MSMichael Seibel24:15

       Yes

    6. SPSpeaker24:15

       ... it's not the, like, final negotiation. It's all of the work you did beforehand-

    7. MSMichael Seibel24:20

       Yes

    8. SPSpeaker24:20

       ... so that by the time you arrive at the negotiation-

    9. MSMichael Seibel24:22

       Yes

    10. SPSpeaker24:22

        ... you have already won.

    11. MSMichael Seibel24:23

        Yes.

    12. SPSpeaker24:23

        [laughs]

    13. MSMichael Seibel24:24

        Yes.

    14. SPSpeaker24:24

        You're like, "It's over. I won."

    15. MSMichael Seibel24:25

        Yes.

    16. SPSpeaker24:26

        [laughs]

    17. MSMichael Seibel24:26

        Like, it's funny 'cause you think about, like, you know, Usain Bolt. How much work is happening during the 10 seconds of that race? [laughs]

    18. SPSpeaker24:33

        I mean, more than zero.

    19. MSMichael Seibel24:34

        More than zero.

    20. SPSpeaker24:35

        But-

    21. MSMichael Seibel24:35

        But, like, there's years [laughs] of like, you just can't do that much in 10 seconds-

    22. SPSpeaker24:40

        Yeah

    23. MSMichael Seibel24:40

        ... versus all the work that happens before. All right. Great chat, Dalton.

    24. SPSpeaker24:43

        All right, thanks. [outro music]

Episode duration: 24:55