

Jason Calacanis: What to do if your startup is about fail - jasonlbaptiste
http://blog.ramamia.com/2009/02/startup-fail-stop-believing-jason-calacanis-post/

======
smanek
_During the final year of Silicon Alley Reporter I made cold calls and set up
lunches to sell folks on our new product, Venture Reporter (the rebranded
Silicon Alley Reporter). It works. When people see the CEO making sales calls,
they respect the company and take it seriously._

If I got a cold call from the CEO I would think they were desperate, doubt
that they would be around in 6 months, and probably decide that I wanted to do
business with someone more stable.

~~~
lionhearted
I flew from the East Coast to Europe to speak at a big conference, and we got
sales leads there. I was sitting there with my sales guy, and I didn't like
something he was doing on the calls - I forget what exactly, but something
didn't sit right with me.

I couldn't quite articulate what was going wrong, so I just I started dialing
up a bunch of people myself. "Hi, this is Sebastian... yeah, me, I run things
around here... anyway, how'd you like the talk? Oh cool. Anything I could've
done better? No? Nothing? Come on now, don't mess with me dude. Oh, that _is_
interesting, thank you. Anyways, I wonder if our company can make your life
better. Where you at right now? Uh-huh... and how about this particular
solution? Uh-huh... yeah mate, I got something good I reckon we could do for
you."

People _love_ hearing from the high-ups in a company. And you completely lose
track of real life if you're not actively spending time in the trenches. That
means doing any role you yourself can do periodically, and buying tea/Japanese
food for engineers and technical people whose jobs you don't understand, while
really testing their patience with your dumbass, Luddite questions. And
constantly reminding them that you know you're a Luddite, but you really want
to understand what the hell is going on in the trenches anyways.

Call people. They love it. You won't come across as desperate unless you
actually are desperate, and even then, the desperation vibe will fall off if
you call even more people.

~~~
smanek
I'm totally in favor of having higher-ups help existing customers (I know a
few companies that do this, and I like it too).

I'd even be OK with a CEO sitting in on late game sales calls/meetings, but
that's a whole different issue than having a CEO make cold calls (or even
having a CEO on early sales calls). It gives the impression of a one-man shop,
which prospective clients will, in most cases, try to avoid.

~~~
humanlever
YMMV, but with a larger operation having the CEO get involved in customer
engagements that don't mean either closing a big sale or ensuring one isn't
lost causes most clients to assume the CEO is their buddy.

This means he's now their go-to guy for the most trivial of issues. Besides
being a PITA for the boss this also effectively neuters the account team. Not
ideal.

------
eterno
This is one of the most brilliant startup stories I have read in a while. Im
not a big calcanis fan and dont think too highly of mahalo, but the amount of
wisdom and insight in this post left me reading this over and over again for
almost an hour (Normally, I dont read anything 1/10th this long and even if I
do, I just skim.)

~~~
danbmil99
I agree. I knew Jason back in the day, and frankly, he was a bit of a dipshit.
he was hot and trendy, and knew it and played it. It sounds like he's grown up
a bit. Maybe we all have (group hug?)

~~~
jasonmcalacanis
1\. Even a broken clock is right twice a day. 2\. you can't help but a learn a
couple of things after three or four startups. :-)

~~~
danbmil99
Reminds me of a russian proverb my co-founder attributed to his great-uncle:

"The first time you get hit by a train, it really hurts. The second time, it
still hurts. By the third time, you start to get used to it."

------
tptacek
"11. Having staffers who you really need to double down and focus walk out the
door after you helped make their careers."

Holy shit, is he serious?

~~~
eterno
He is dead serious and that is an incredibly honest and accurate piece of
advice.

~~~
tptacek
He laid off half his staff.

Then he laid off half his staff again.

He's spending 20 hours a week on the phone with irate creditors he's trying to
renege on.

His investors are saying they're going to ruin him.

He laid off half his staff again.

He's being sued 6 times over.

One of his creditors is physically stalking him.

The press is writing stories calling him a fraud.

He hasn't slept in six months.

His customers aren't paying.

And he's _pissed_ that his staff is accepting other job offers? Because he
"made" them?

I helped kill a startup in 2001 too. I didn't tell myself I had done a favor
for the people I brought along for the ride.

I mean whatever, I'm being a drama queen about this. I just hate the meme that
startup employees owe founders anything. Most of them have no idea what
they're getting into, and founders like it that way.

~~~
ibsulon
Look at that "hasn't slept in six months" thing again. This tends to play on
someone's emotions quite heavily.

To be fair, it is quite possible that in a media-based startup like a
newspaper, the company did make these people a star. However, I don't think
I'm seeing anger as much as "oh shit, what do we do now?"

~~~
jasonmcalacanis
I think you've got it right. There were people who were nobodies who we hired
out of college and made into brands who jumped ship at the first sign of
trouble. That sucked, but it's too be expected. There were many others who
stayed and fought the good fight.

Imagine having a print magazine about the dotcom industry in 2000 that was 300
pages.... and then the dotcom crash happens and 98% of your revenue goes away
while 90% of the companies you cover go away.

It was _brutal_ to say the least.... but it made me into a killer. :-)

------
Mistone
i think this is one of the best articles/emails i read in a long time. this is
advice for becoming a cockroach and equipping your startup to survive the
nuclear winter. I've actually been waiting for PG to write something that
addresses the current economics for startups and what the huge batch of first
time entrepreneurs are facing. its great to be the inspiration for folks to
quit their jobs at mega Co, when times are good for startups, however their
needs to be an equal amount of guidance and insight for what to do when times
are tough. Jcal has stepped up and let us all know how we need to shift our
priorities to survive. I was deeply inspired.

------
alain94040
I read this and found it very motivational. It also matches my own impression
that the last few years, too many fake startups got the spotlight when _us_
the hardworking, real entrepreneurs, were ignored (I say this with some self-
derision).

To me, the only silverlining in this economic downturn is that the few
startups left are real. No more "social network for cats."

------
jyothi
This is one of the best posts I have read on start-ups in a while.

I have been through all 12 directly or indirectly. Not as a founder (rather
the sole founder doesn't call me a co-founder) but the founder was blanking
out. It is definitely testing time. We shut-down operations. Ran into debt and
paid off with consulting/free lancing money in 4-5 months. After all that I
was drained out.

\- Do I know the reality?

Yes very much. Your time and effort in a startup can't be matched with cash
even if u exit for few million dollars. It is just the satisfaction that
stays.

\- Do I fear of starting again - Will I sign up to go through that again ?

Inspite of going through hell, now i know what I am signing up for if it goes
wrong and I am better prepared. But would I do it for a startup which is not
mine, No.

------
rokhayakebe
The only line that matters and you should put this everywhere in your house
and office: _If you can’t sell your product, it’s not a product–it’s a hobby._

------
staunch
How does legally reducing the salary of a current employee work?

~~~
raghus
Lots of big companies do this too - for example Agilent is doing this now.

~~~
helveticaman
Smart move if you ask me...I mean, it sucks, sure, but you get to keep things
afloat, and everyone's losing out anyway.

~~~
aortali
My decidedly non-tech company (trucking) just did an across the board 2
percent pay reduction, and saved a couple people from layoffs. Bad day for
most, but we are glad to have a job that is stable going forward. The company
has in the past increased the 401k match in good times, and raises are
regularly given, but as Jason says runway is crucial and you must conserve the
cash you actually have- not receivables you think are good (but not paid yet.)
btw Great letter,Jason. Thanks for articulating your appraoch so clearly.

------
steveplace
Step 1: Sell the espresso machine you brag about on your blog.

------
vaksel
pretty much the key point to take away from this, is always ask for freebies,
it costs you nothing...and who knows someone might hook you up, you'll never
know unless you ask

------
chiffonade
I really have to ask, as a resident of California - have there been _any_
massively successful startups to come out of NYC?

I'm being honest when I say I can't think of a single one. Maybe my memory has
selection bias since I live in the bay area and LA.

Based on personal experience I would say that tech companies in NYC have a
huge disadvantage because they're competing with hedge funds and investment
banks for engineering talent.

~~~
dmpayton
I'd say Fog Creek Software is pretty successful.

~~~
chiffonade
That guy is a quack.

~~~
dmpayton
What? The company does quite well financially and Joel Spolsky (like him or
not) is Internet Famous.

~~~
chiffonade
Dude, he runs a small business on the internet. I'm talking about companies
like YouTube, Google, and yes, Doubleclick like the person above you said.

~~~
dmpayton
I guess it all depends on how you measure success.

~~~
chiffonade
I define success by a market capitalization of one billion dollars or more.

Is that cut and dry enough for you?

