1-Read-A-Day: what I learned running a newsletter, October edition

Every month, I share what I’ve learned running the 1-Read-A-Day newsletter. Here’s the first month.

How well is it doing?

  • Subscribers: 230 (only 10 new subs since September)
  • Open rate: 22.6%
  • Click rate: 2.5%
  • Most opened email: Lesson 5, Making Yourself a CEO by Ben Horowitz
  • Most clicked email: Lesson 39, How Mint beat Wesabe by Noah Kagan

What did I learn in October?

  • Readers were quiet this month. Several commented that they enjoyed the 10-question quiz after Lesson 50
  • I recorded three short audio summaries for Lessons 1, 2, and 3. Just experimentin’. They’re around a minute each. You can hear them by clicking the big blue button near the top
  • I published another 101, Startup Mistakes and Failures. 27 great links featuring Max Skibinsky, Siqi Chen, Derek Sivers, and more
  • I wish there was an easy, effective way to convert emails into blog posts. There are plugins that convert RSS feeds into emails, but I can’t find a good plugin to do the opposite. With email newsletters growing in popularity, I hope this problem is solved soon
  • I wish Mailchimp allowed me to better manage autoresponder emails in bulk. Right now, if I make a design change to one Lesson, I need to manually repeat that change more than 50 times!

What’s coming up

  • More 101s: Hiring, Product, and Stories
  • Once I hit 100 lessons, I’ll create a draft Startup Textbook (a well-designed PDF file featuring the 101s and the summaries). Hope we’ll be there by December
  • I haven’t marketed the newsletter (beyond blog posts and tweets), but subscribers are not growing (5% since September). I’ve been unwilling to make a big push, and I’m not sure why (perhaps I don’t think it’s good enough?)

Thanks to all subscribers for your feedback. It’s been a pleasure to do this. Here’s to showing up and getting to work. Cheers!

PS. If you run an email newsletter, I’d love to hear what you’re doing and what you’ve learned

1-Read-A-Day: what I learned running a newsletter, September edition

Every month, I share stats and learnings on the 1-Read-A-Day newsletter. Here’s the launch post.

How well is it doing?

Subscribers: 220 (last month: 161)
Open rate: 22.9% (22.8%)
Click rate: 2.6% (2.2%)

Thanks to Kale’s feature, I got 27 signups in a single day. By far the largest jump since the July launch. I highly recommend subscribing to his Hacker Newsletter and also enjoy his Wayback Letter, a nice way to re-surface classic content that has disappeared from the interwebs.

What did I learn in September?

1. Per Tommy’s advice, I customized the Gmail preview snippet.

Open rates have increased, but it’s correlation, not causation. The change makes me feel better, though.

To customize the snippet and not harm the email’s readability, I explored several options but went with this one: the text snippet is placed it at the top of each email, then the font size is set to 1 and font color to white, so it’s invisible to readers.

2. Readers complained they couldn’t distinguish direct quotes from my color commentary. So I added a quote symbol inside each yellow box. This has received positive feedback, but there is a downside: before, each email was image free and did not require you to click “Display images below” (if you’re using Gmail) to load the quote-symbol-image. Another lesson: product “improvements” are often double-edged swords

3. Quizzes are the most complimented feature, so I added more questions to each quiz. I will also have a big, 10-question quiz after Lesson 50. I’m even thinking of launching startup quizzes as a separate project. “test your startup IQ” sort of thing

4. There’s a tension between esoteric and popular content. Well-read startup folks appreciate the esoteric content, but it’s often esoteric for a reason (niche appeal, out-of-date, too technical). However, I do agree that I’ve relied heavily on popular content, so going forward, I will feature more esoteric/lesser-known articles and bloggers (such as this thoughtful essay from Max)

What’s coming up – niche email courses and audio lessons

My goal was 50 lessons before I began to widely market the newsletter and release topic/problem-specific email courses (eg, 20 email lessons on hiring engineers, or 35 email lessons on raising a VC round). I’m on lesson 50 (congrats if you’ve read all of them), so these are coming soon.

I’m also planning to record 60-second podcasts for each lesson, for those who enjoy audio learning and have time to kill on the daily commute or while at the gym.

Thanks to all my subscribers for your participation and feedback. Keep it coming, it’s been a pleasure to do this. Here’s to showing up and getting to work. Cheers!

PS. If you run an email newsletter, I’d love to hear what you’ve learned, what works, and what doesn’t.

Startup CEOs 101: The best articles, blog posts, and Quora threads

For this 101, I focused on what it takes to be a good startup CEO. Topics touched upon, but not covered in-depth, include cofounder relationships and day-to-day operations. Both will be addressed in future 101s.

“A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.” – A VC

Here’s the previous 101 on seed fundraising (updated with new resources courtesy of you guys!!). Here are all of them.

I don't do this for the money, but donations certainly help. Use Venmo or Paypal. Thanks and enjoy!

PS. Please send me links. Please make them free and educational.

PPS. If you want a daily email recommending, and summarizing, a great startup article, subscribe to 1-Read-A-Day.

* * * * *

Startup CEOs 101: Common questions

Total links: 46

Question 1: What are the qualities of a good startup CEO?
Question 2: What are common startup CEO mistakes?
Question 3: How does a startup CEO manage his team?
Question 4: What should a startup CEO know about operations and day-to-day responsibilities?
Question 5: How does a startup CEO create and maintain the right strategy, vision, and mission?
Question 6: How does a startup CEO build the right culture and minimize politics?
Question 7: Stories and advice from the front lines

Question 1: What are the qualities of a good startup CEO?

12 Things Good Bosses Believe by Robert Sutton (HBS)

My job is to serve as a human shield, to protect my people from external intrusions, distractions, and idiocy of every stripe — and to avoid imposing my own idiocy on them as well.

14 Ways To Be A Great CEO by Jason Baptiste (Onswipe founder)

You will be inundated with a list of requests from potential partners, investors, employees, and more. They will all sound absolutely wonderful. As you grow, you will also have the resources to execute more of them. Don’t. It’s easy to say yes, but so very hard to say no. By having an uncanny ability to say no, you can keep your company on track with the large vision you maintain.

Everything is my fault by Derek Sivers (CD Baby Founder)

But to decide it’s your fault feels amazing! Now you weren’t wronged. They were just playing their part in the situation you created. They’re just delivering the punch-line to the joke you set up.

Founder as victim, Founder as God by Peter Thiel (Paypal CEO) and Blake Masters (Judicata cofounder)

Sean Parker might be the paradigmatic example of the extreme founder figure. There was a rise, fall, rise, fall, and then a rise again. His experience in founding multiple things has been a pastiche of extremes. He didn’t go to college. Maybe he didn’t even finish high school. He was involved in various underground hacking circles in ‘90s. He did Napster as teenager. That had a crazy up-down arc to it.

How Andreessen Horowitz Evaluates CEOs by Ben Horowitz (a16z)

The CEO doesn’t have to be the creator of the vision. Nor does she have to be the creator of the story. But she must be the keeper of the vision and the story. As such, the CEO ensures that the company story is clear and compelling.

How to Convince Investors by Paul Graham (YC)

So here’s the recipe for impressing investors when you’re not already good at seeming formidable:
1. Make something worth investing in.
2. Understand why it’s worth investing in.
3. Explain that clearly to investors.

What A CEO Does (continued) by Matt Blumberg (Return Path founder)

Run great meetings. Meetings are a company’s most expensive endeavors. 10 people around a table for an hour is a lot of salary expense! Make sure your meetings are as short as possible, as actionable as possible, and as interesting as possible.

Here’s a meaty review of Matt’s Startup CEO book.

What separates the top 10% of startup CEOs from the rest? by Robert Scoble and others on Quora

Listens and acts. Many CEOs want to tell you what they are doing, but the best ones listen to feedback, and, even, do something with that feedback. My favorites even give credit back. Mike McCue, CEO of Flipboard, tells audiences that I was responsible for a couple of key features.

What We Look for in Founders by Paul Graham (YC)

Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They’re not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That’s why I’d use the word naughty rather than evil. They delight in breaking rules, but not rules that matter.

Why We Prefer Founding CEOs by Ben Horowitz (a16z)

Professional CEOs are effective at maximizing, but not finding, product cycles. Conversely, founding CEOs are excellent at finding, but not maximizing, product cycles. Our experience shows—and the data supports—that teaching a founding CEO how to maximize the product cycle is easier than teaching the professional CEO how to find the new product cycle.

Jump back to the ToC

Question 2: What are common startup CEO mistakes?

The 18 Mistakes That Kill Startups by Paul Graham (YC)

Starting a startup is too hard for one person. Even if you could do all the work yourself, you need colleagues to brainstorm with, to talk you out of stupid decisions, and to cheer you up when things go wrong.

I wrote a brief summary of these 18 mistakes.

Avoid Decision by Indecision by Mark Suster (Upfront Ventures)

To me the sin is having the decision implicitly made for you. The weakness is not having conviction. And as I stated previously in this post, decisiveness is one of the most important characteristics of an entrepreneur. You won’t always be right. But if you’re right 70% of the time and correct when you make mistakes you’ll always be better off making the early calls.

Shared Command by Ben Horowitz (a16z)

Shared command always seems really attractive to the people at the top of the organization like the CEO and the board: “we have two world-class people, this gives us the best of both worlds! We shouldn’t get caught up in the conventions of years past. We’re all adults. We can get along.” It looks much less attractive to those who do all the work in the organization. To them it looks more like frustration, chaos, and delay.

Treating the Dysfunctional CEO by Scott Weiss (a16z)

Some of the most dysfunctional organizations I’ve observed have evolved from dealing with a leader’s idiosyncrasies: He’s stereotypically passive aggressive, erratic, a bully, or plays favorites. Whatever the weird behavior, it drives massive turmoil as the company adapts a workaround to the “Emperor’s New Clothes” syndrome.

Why Founders Fail: The Product CEO Paradox by Ben Horowitz (a16z)

And then he ran smack into the Product CEO Paradox: The only thing that will wreck a company faster than the product CEO being highly engaged in the product is the product CEO disengaging from the product.

Jump back to the ToC

Question 3: How should a startup CEO manage his team?

Delegating or micromanaging, threading the needle by Steven Sinofsky (a16z)

Share experiences, don’t instruct. As the work progresses there’s a chance that the manager will see a pattern or similar situation arise. There’s a good chance the way that experience is communicated can come across as either “sage sharing of experiences” or “more micromanaging”. If there are experiences to share then share the story and allow the learning to take place by allegory and not turn the learning into “just do these steps”.

Enforcing Your Top Priorities by Ian Small (Tokbox CEO)

To develop the list I think about the company’s calendar, milestones and key activities over the next three to four months, and send a draft list of the top seven priorities to the management team. If they agree with the list and order, we just drop the bottom two items. If they don’t, we hash it through until we agree.

Fight Like You’re Right, Listen Like You’re Wrong and Other Keys to Great Management by Robert Sutton (Stanford Engineering Professor)

He points to IDEO founder David Kelley as a prime example of a light-touch manager. “David is a master of what I call ‘management by walking out of the room.’” He might convene a meeting, but if things are going well and the conversation is productive, he’ll eventually walk out. “He knows the fact that he is an authority figure can mess things up. The discussion can be more creative without him there.”

Here’s the email summary from 1-Read-A-Day.

Part 9: How to hire a professional CEO by Marc Andreessen (a16z)

Don’t.

If you don’t have anyone on your founding team who is capable of being CEO, then sell your company — now.

If, Why, and How Founders Should Hire a “Professional” CEO by Reid Hoffman (Greylock)

Many of the greatest success stories of the internet era involve founder/professional CEO partnerships. During the dot com era, Yahoo!’s Tim Koogle helped build Jerry Yang and Dave Filo’s startup into the world’s most valuable internet company. Meanwhile, Meg Whitman helped Pierre Omidyar’s eBay become the second most powerful ecommerce company in the world (trailing only Amazon). The Web 2.0 era provides successful examples like Joe Kennedy and Tim Westergren at Pandora, and the current social era provides even more, including Dick Costolo at Twitter and Tony Zingale and Dave Hersh at Jive.

Here’s the email summary from 1-Read-A-Day!

Line management by numbers by Cennydd Bowles (Twitter design lead)

Score your employee out of ten for:
-Current motivation
-Experience in the role
-Skills

Then look at the lowest number of the three.
0-3: adopt a tight, management-heavy approach until performance picks up.
4-7: take a supervisory, mentoring approach.
8-10: occasional coaching is all you’ll need. These are the good times.

Losing The Team by Fred Wilson (Union Square Ventures)

If I think about the times I have had to remove a CEO, by far the most common reason was the loss of confidence of the team in the CEO. You get the call from one of the senior team members. They tell you that they are going to leave and so is everyone else on the senior team unless you do something about the leader.

Making Yourself a CEO by Ben Horowitz (a16z)

A popular and sometimes effective technique for feedback beginners is something that experienced managers call The Shit Sandwich. The technique is marvelously described in the classic management text, The One Minute Manager. The basic idea is that people open up to feedback far more if you start by complimenting them (slice of bread #1), then you give them the difficult message (the shit), then wrap up by reminding them how much you value their strengths (slice of bread #2).

Here’s the email summary from 1-Read-A-Day.

Jump back to the ToC

Question 4: What should a startup CEO know about operations and day-to-day responsibilities?

13 Things You Must Do Every Week As A Startup CEO by Jason Goldberg (Fab founder)

Exercise. I can’t stress enough the importance of this. Make yourself go to the gym at least 4 days per week, preferably 5 or 6. Working out gives you the energy and stamina to solve complex problems. Being CEO is incredibly mentally challenging. Use the gym as a way to stay fresh and to clear your head.

As a startup CEO, what is your favorite productivity hack? by Dustin Moskovitz (Facebook, Asana) and others on Quora

One of my favorite hacks is No Meeting Wednesdays, which we borrowed from Facebook. With very few exceptions, everyone’s calendar is completely clear at least one day out of the week. Whether you are Maker or a Manager (http://www.paulgraham.com/makers…), this is an invaluable tool for ensuring you have some contiguous space to do project work.

How much should a start-up CEO make? by Seth Levine (Foundry Group)

I think market (and this seems to be true whether you’re in San Francisco, New York, Boulder or somewhere else) is that companies that have raised $1M or less tend to pay their CEO between $75k and $125k (skewed very much to the low end of that scale – companies that have raised less than $500k tend to top out at $75k for CEO comp). Companies that have raised between $1M and about $2.5M tend to pay their CEOs around $125k.

How to Be Startup CEO by Ryan Allis (entrepreneur)

Be as creative as you can, offering ownership in your company in exchange for early employees’ work or for critical services like legal and accounting, or requesting deferred payment so that you can pay when you are able to. Keep your costs down, as low as possible, until your monthly revenues grow and enable you to increase your expenses. And do contract consulting work on the side if needed to have money to live on.

The CEO’s Weekly Checklist by Scott Weiss (a16z)

Shortly after our first round of funding, my co-founder, Scott Banister, turned to me and said, “I’ve heard you tell 100 different people a slightly different version of the same story. I had no idea you spend so much time selling!” He was right, I was constantly selling: soliciting investors and advisors, signing recruiters and PR firms, hiring employees, securing first customers, conducting company meetings, convincing reporters and sparring with industry analysts.

Here’s my email summary from 1-Read-A-Day.

The Entrepreneur’s Guide to Conflicting Advice by Joe Heitzeberg (entrepreneur)

This blog post isn’t about how advice is useless, or that you should go it alone. Au contraire – surround yourself with SuperMentors, advisors and investors who are aligned with your goals and who believe in you and can bring out the best in you — by applying relevant experience to your particular challenges — now and in the future.

Here’s the email summary from 1-Read-A-Day.

What Harvard Business School is Teaching This Tech Entrepreneur by Ryan Allis (entrepreneur)

One of the key “HBS takeaways” from the last few weeks for me has been that to continue to grow beyond initial success, an entrepreneurial founder CEO must change their very nature and slow down to:
1. Create effective processes for disciplined information sharing.
2. Give up as many operational roles in the company as possible.
3. Bring the senior team in early on during strategy formation.

Jump back to the ToC

Question 5: How does a startup CEO create and maintain the right strategy?

2004 Founders’ IPO Letter by Larry Page and Sergey Brin (Google founders)

Our employees, who have named themselves Googlers, are everything. Google is organized around the ability to attract and leverage the talent of exceptional technologists and business people. We have been lucky to recruit many creative, principled and hard working stars. We hope to recruit many more in the future. We will reward and treat them well.

Here’s the email summary from 1-Read-A-Day.

From Vision to Values: The Importance of Defining Your Core by Jeff Weiner (LinkedIn CEO)

Mission – Overarching objective of the organization; should be measurable, achievable, and ideally inspirational. Should not be used synonymously with a vision statement. A great mission statement is brief, easy to remember, minimizes the use of the word “and” (to prevent a laundry list), shouldn’t require follow-up clarifying questions when first presented, and ideally proves to be uniquely identifiable to the company

Here’s the email summary from 1-Read-A-Day.

How to Analyze Your Startup Like A VC in 15 Minutes Or Less by Tom Tunguz (Redpoint)

The BMC describes the key operations of a business: the Value Proposition, the Key (Operating) Activities, Partners, Assets/Resources, Customer Relationships, Go-To-Market Channels, Customer Segments, Cost Structure and Revenue Streams.

How to build companies that matter by Eric Ries (Lean Startup author)

The Lean Startup takes agile practices and evolves them for use in a startup. The net result is a focus on experimentation and extremely rapid deployment. At IMVU, my most recent startup, we built the systems that allowed us to deploy code to customers fifty times every day. When releases are measured in minutes, not months, you can build a company culture designed to avoid the biggest waste of all: building product nobody wants.

How to Make Wealth by Paul Graham (YC)

There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars’ worth of pain. For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years. In a startup you compress all this stress into three or four years.

Startup = Growth by Paul Graham (YC)

A good growth rate during YC is 5-7% a week. If you can hit 10% a week you’re doing exceptionally well. If you can only manage 1%, it’s a sign you haven’t yet figured out what you’re doing.

Here’s my email summary from 1-Read-A-Day.

Jump back to the ToC

Question 6: How does a startup CEO build the right culture and minimize politics?

Cult Creation by Steve Newcomb (Powerset founder)

The best way to prove to yourself, potential investors and to any potential future employees that you have a killer idea, is to get a number of A-level engineers to join full-time with equity-only deals.

Here’s the email summary from 1-Read-A-Day.

How to Minimize Politics in Your Company by Ben Horowitz (a16z)

The difference between managing executives and managing more junior employees can be thought of as the difference between being in a fight with someone with no training and being in a ring with a professional boxer. If you are in a fight with a regular person, then you can do natural things and they won’t get you into much trouble. For example, if you want to take a step backwards, you can pick your front foot up first. If you do this against a professional boxer, you will get your block knocked off. Professional boxers train for years to take advantage of small errors in technique. Lifting your front foot first to take a step backwards will take you slightly off balance for a split second and that’s all your opponent will need.

Here’s the email summary from 1-Read-A-Day.

What strong beliefs on culture for entrepreneurialism did Peter / Max / David have at PayPal? by Keith Rabois (Paypal, Square) and others via Quora

Extreme Focus (driven by Peter): Peter required that everyone be tasked with exactly one priority. He would refuse to discuss virtually anything else with you except what was currently assigned as your #1 initiative. Even our annual review forms in 2001 required each employee to identify their single most valuable contribution to the company.

Jump back to the ToC

Question 7: Stories and advice from the front lines

90 Things I’ve Learned From Founding 4 Technology Companies by Jason Goldberg (Fab founder)

It’s all about the product. Always has been. Always will be. The only thing that matters is how good your product is. All the rest is noise. At Fab, our virtual product is our website & apps, our physical products are the merchandise we sell, and our experience product is our operations and service. Getting all 3 parts of our product right is everything.

Here’s the short summary from 1-Read-A-Day.

All CEOs Should Be An Outside Director For One Company by Brad Feld (Foundry Capital)

Now, imagine you are a CEO of a fast growing startup. Wouldn’t it be awesome to be able to spend a small amount of your time in that same emotional and functional detachment for someone else’s company? Not only would it stretch some new muscles for you, it’d give you a much broader perspective on how “the job of a CEO” works. You might have new empathy for a CEO, which could include self-empathy (since you are also a CEO)

Among Max Levchin’s lessons learned as a young entrepreneur, which are the greatest? by Max Levchin (Paypal, Slide) on Quora

If there is any doubt about hiring a candidate for your first 5-6 positions, there is no doubt — do not.

Here’s the email summary from 1-Read-A-Day.

Entrepreneurs Who Create Value vs. Entrepreneurs Who Lock Up Value by Andy Kessler (entrepreneurship author)

Carlos Slim Helu comes to mind who briefly passed Bill Gates in 2007 and 2010 to become the richest man in the word. He controls 90% of the phone lines in Mexico and 80% of cellular customers. He didn’t invent anything. He doesn’t drive down prices. There is little innovation. And why should there be? He is milking this franchise for all it’s worth.

Entrepreneurshit. The Blog Post on What It’s Really Like. by Mark Suster (Upfront Ventures)

You have secret doubts about your co-founder. She seems depressed. And she isn’t pulling weekends anymore like you are. I know, right? Total bullshit. She’s just not as committed as she once was. I don’t think she really believes any more. If I told my VCs would they then lose interest in our next round? Would they blame me? Would they back me or think I had gone off the rails?

Here’s a related Suster post on CEO health and fitness.

Startup Advice by Sam Altman (Loopt, YC)

Hire friends and friends of friends. Go after these people like crazy to get them to join. Some other candidate sources are ok, but I always got bad results from technical recruiters.

Here’s the short summary from 1-Read-A-Day.

Swapping Drivers on this Long Road Trip Together by Rand Fishkin (Moz founder)

Sarah likes to describe the last 6 years at Moz as a road trip. I’ve been driving and she’s been in the passenger seat, navigating. But while I really loved having the wheel for most of the journey, we’re getting into terrain I don’tlove as much, and it might be time for Sarah and I to switch positions. She’ll be a different kind of driver and I’ll be a different kind of navigator, but we, the vehicle, and the passengers, will all be fine.

The Hardest Lessons for Startups to Learn by Paul Graham (YC)

Startup founders are naturally optimistic. They wouldn’t do it otherwise. But you should treat your optimism the way you’d treat the core of a nuclear reactor: as a source of power that’s also very dangerous. You have to build a shield around it, or it will fry you.

The Struggle by Ben Horowitz (a16z)

This is not checkers; this is mutherfuckin’ chess – Technology businesses tend to be extremely complex. The underlying technology moves, the competition moves, the market moves, the people move. As a result, like playing three-dimensional chess on Star Trek, there is always a move. You think you have no moves? How about taking your company public with $2M in trailing revenue and 340 employees, with a plan to do $75M in revenue the next year? I made that move. I made it in 2001, widely regarded as the worst time ever for a technology company to go public. I made it with six weeks of cash left. There is always a move.

What does it feel like to be the CEO of a start-up? by Paul DeJoe (Ecquire founder) and others on Quora

You feel guilty when you’re doing something you like doing outside of the company. Only through years of wrestling with this internal fight do you recognize how the word “balance” is an art that is just as important as any other skill set you could ever hope to have. You begin to see how valuable creativity is and that you must think differently not only to win, but to see the biggest opportunity. You recognize you get your best ideas when you’re not staring at a screen. You see immediate returns on healthy distractions.

You’re not the CEO – you’re the Fucking Janitor by Zach Bruhnke (entrepreneur)

My employees never looked at me as a boss but always as a colleague. They knew that if they didn’t pick up that broom to sweep the floor then I certainly would and that led to a much more productive work environment.

Jump back to the ToC

Entrepreneurs as predators, not risk-takers: Malcolm Gladwell’s The Sure Thing

Malcolm Gladwell in high school trackAnother classic article from the Gladwell archives.

Gladwell argues that the conventional view of entrepreneurs as hot-headed risk-takers is wrong. The most successful entrepreneurs are actually cold-blooded, calculating predators. From Ted Turner to John Paulson to Sam Walton, Gladwell arrives at the conclusion that the most successful entrepreneurs aren’t taking risks at all – they simply see an opportunity that others miss or undervalue, and consistently minimize chances for failure along the way.

Full article here.

The write-up below is included in my 1-Read-A-Day newsletter.

Highlights from the article

Gladwell starts by explaining how Ted Turner bought a local broadcast station and built it into TBS – against the advice of everyone around him:

“We tried to make it clear that—yes—this thing might work, but if it doesn’t everything will collapse,” Mazo said, years later. “Everything you’ve got will be gone. . . . It wasn’t just us, either. Everybody told him not to do it.”

[Turner] was a drinker, a yeller, a man of unstoppable urges and impulses, the embodiment of the entrepreneur as risk-taker. He bought the station, and so began one of the great broadcasting empires of the twentieth century.

The character portrait is a romantic one, but inaccurate. Turner had significant advantages from day one: the billboard company he inherited from his father gave him plenty of cash and excess inventory to advertise the new network.

Further, Turner paid a reasonable purchase price and didn’t put a penny down.

The truly successful businessman…is anything but a risk-taker. He is a predator, and predators seek to incur the least risk possible while hunting.

Examples of other risk-minimizing entrepreneurs include:

  • Giovanni Agnelli (the founder of Fiat) who kicked out his initial investors to gain majority control
  • George Eastman (the founder of Kodak) who shifted early financial risk to his wealthy friends
  • Ingvar Kamprad (the founder of Ikea) who had his furniture built in Poland instead of Sweden – at half the cost

Then there’s hedge fund manager John Paulson. By 2004, Paulson was managing $2B and was,

“Zuckerman writes, a “solid investor, careful and decidedly unspectacular.” The particular kinds of deal he did were “among the safest forms of investing.”

In the housing boom of 2004-2005, Paulson began shorting subprime mortgages – to the tune of $25 billion dollars (!).

Most people thought the trade was too risky; they believed Paulson was crazy. But Paulson – through meticulous research – saw an something they missed.

“There’s never been an opportunity like this,” Paulson gushed to a colleague, as he made one bet after another. By “never,” he meant never ever—not in his lifetime and not in anyone else’s, either…In 2007 alone, Paulson & Co. took in fifteen billion dollars in profits, of which four billion went directly into Paulson’s pocket. In 2008, his firm made five billion dollars. Rarely in human history has anyone made so much money is so short a time.

Paulson and Turner are PREDATORS. They’re not braver or crazier than the rest – they’re MORE ANALYTICAL. They see opportunities that others miss and they act immediately and aggressively.

In Turner’s case, he even became physically sick when his family purchased a competing billboard firm, a deal he considered too risky:

It was a good deal, not a perfect one, and that niggling imperfection, along with the toll that the uncertainty was taking on his father, left Turner worried sick. “During the first six months or so after the General Outdoor acquisition my weight dropped from 180 pounds to 135,” he writes. “I developed a pre-ulcerative condition and my doctor made me swear off coffee. I’d get so tired and agitated that one of my eyelids developed a twitch.”

When you look at the winning hedge funds in the subprime mortgage collapse, they all shared the same behavior: predators who did their homework, found a marketplace anomaly, and made a big, calculated “bet”.

You could even argue that the entrepreneurs who take the most risks are most liable to fail.

Taking over an existing business is always the best bet; failed entrepreneurs prefer to start from scratch. Ninety per cent of the fastest-growing companies in the country sell to other businesses; failed entrepreneurs usually try selling to consumers, and, rather than serving customers that other businesses have missed, they chase the same people as their competitors do. The list goes on…a good many of these risks reflect a lack of preparation or foresight.

And some science to back it up:

When the sociologists Hongwei Xu and Martin Ruef asked a large sample of entrepreneurs and non-entrepreneurs to choose among three alternatives—a business with a potential profit of five million dollars with a twenty-per-cent chance of success, or one with a profit of two million with a fifty-per-cent chance of success, or one with a profit of $1.25 million with an eighty-per-cent chance of success—it was the entrepreneurs who were more likely to go with the third, safe choice.

Gladwell’s a tremendous writer, social theorist, and story-teller. Highly recommended article.

What I learned starting a newsletter (1-Read-A-Day)

I think you misinterpreted...In July, I launched a newsletter called 1-Read-A-Day.

Every day, I recommend and summarize one article on some aspect of starting or growing companies.

Entrepreneurs – especially CEOs – rarely have time to learn. But they are constantly checking email.

I ask them to spend 2 minutes reading my email, and in return they’ll learn something that will make their startup better. If they want to dig, they can read the original article.

The original articles feature well-known guys like Paul Graham and Chris Dixon. They also feature lesser-known people who are in the trenches, struggling every day to build something great.

Like I mention on the signup page, it’s Cliffnotes for startup essays.

Enough pitching. I hope you subscribe :)

Starting today, I’m going to write a monthly post that shares what I’ve learned running this newsletter. I’ll be transparent and include subscribers, analytics, experiments, and general observations.

Please keep in mind that this is a side-project. I’ve spent an hour a day working on it and have no plans to increase my time commitment.

What is it?

  • It’s an autoresponder sequence (also known as a drip sequence) which sends emails on a pre-determined schedule. If you subscribe today, you’ll receive the same first email that a subscriber 2 months from now will receive
  • I’m the only one curating and summarizing the content. Some of the articles I use are influenced by the Hyperink list. Others are sent to me by friends and colleagues
  • I use Mailchimp for everything: from design to sending emails to managing subscribers
  • My goal is 100 of these email lessons. After that, who knows?

How well is it doing?

  • Subscribers: 161
  • Open rate: 22.8%
  • Click rate: 2.2%

The subscriber # is low. Once I hit 50 email lessons, I will start marketing the newsletter more aggressively. For now, I’m content with referrals and pimping it on this blog.

What have I learned?

  • Your subject line heavily influences your open rate. When I mention “CEO” or “VC” in the subject line, the open rates are noticeably higher
  • People enjoy quizzes. I send a 2-3 question quiz after every 5 lessons, to help people retain what they learned. The quiz emails get the highest open rates and positive responses
  • Design matters. My design is simple, but on the sucky side of simple. Look at Sacha Greif’s newsletter then look at mine. I’ve made small improvements but this is a weak area. I will eventually seek help from those much better at design than me
  • I enjoy finding great educational content and summarizing it. This is a central lesson I’ve learned about myself: to keep doing anything, I need to enjoy the meat-and-bones of the work. It seems an obvious insight from simpler pursuits (after all, don’t all successful painters enjoy painting?) but becomes less obvious in more complex pursuits (if you’re growing an enterprise software company, what is the meat-and-bones of the work and do you enjoy that? in that case maybe the meat-and-bones is the actual growing of the company)
  • Email newsletters are in. Old-school online marketers (they of the David DeAngelo and Frank Kerns variety) have known for years that email converts. Everyone hates on email, but its still the #1 online communication tool. My favorite newsletters like Sinocism and Hacker Newsletter just keep growing, and are a favorite part of my daily media consumption routine

I really like this quote from Chuck Close:

Inspiration is for amateurs — the rest of us just show up and get to work. And the belief that things will grow out of the activity itself and that you will — through work — bump into other possibilities and kick open other doors that you would never have dreamt of if you were just sitting around looking for a great ‘art idea.’ And the belief in that process, in a sense, is liberating and that you don’t have to reinvent the wheel every day.

I’ve discovered this truth while building 1-Read-A-Day. Adding emails, listening to feedback, and doing the work has really opened up other possibilities. For example, I plan to launch an audio complement for each email (so you can listen to it while you’re on the road). I will also launch more focused drip sequences, on common problems like “how to raise a seed round” or “how to hire great engineers”.

Here’s to showing up and getting to work. Cheers!

PS. If you run an email newsletter, I’d love to hear what you’ve learned, what works, and what doesn’t.