If you’re a founder in the first inning of your career, please read this… The most important thing you need to do right now is get some experienced operators in your circle. Specifically, these operators can NOT be your investors or board members. I’ve watched founders be gaslighted by their investors before, despite the assumption that investors want you to be successful. They want you to succeed, but their underlying incentives are misaligned with yours. This can cause a founder to fail when they otherwise would have been fine. Here’s an example concerning growth: - Founder gets funding - Starts hiring a team - Everything’s going well - Investors tell them to grow faster… 10x faster. - Founder thought they were already great at 5x. - Founder trusts investors, starts hiring at a 10x pace. - Company starts burning 15x cash (hiring faster costs more!) - Something happens, growth slows down. - Company can’t tolerate such a high burn rate. - Founder forced to make sizable layoffs. - Or worse, close down. All along the best person to decide optimal burn rate was the founder, but investors wanted to see 10x growth, pressuring the founder to make decisions against their better judgment. This result is often caused by misaligned incentives, here’s a couple examples: Investors have a portfolio of companies where a founder has one. The portfolio model relies on outlier results to cover the zeros. Investors have raised larger and larger funds. The dirty secret of their model is that large funds mean more management fees. In order to get more management fees investors need to deploy their funds faster. Investors are looking to see if they should reinvest another $10M where a founder is looking to make every dollar count. There’s many other examples of founder/investor incentive misalignment. My point here is that an investor's advice should be taken with a grain of salt. Advice is just that, advice. It's up to the recipient to balance that advice with what's best for their company and their situation. Someone parachuting in monthly or quarterly isn't going to have the same context as someone in the seat each day. This relates to a radically underestimated cognitive bias: Perception bias. Perception bias is the tendency for humans to digest and regurgitate information as it relates to themselves instead of the facts. In every single conversation or exchange of information you’ve ever had, perception bias applies. For a founder, this means that an investor giving you strong advice on how to run your company is covered in their perception as an investor at the 100,000 foot level. This advice will sound very confident, because it is. They are very confidently telling you their opinion as an outside investor, not a hands-on operator. Only they won’t say it while admitting their lack of knowledge, they’ll just say it, which can lead you astray. Your company is ultimately your responsibility, and you need experienced operators in your corner giving you impartial advice.