Trevor McKendrick - How not to kill your company

Good morning -

What an incredible week it has been!

If you’re on twitter, or even tangentially into crypto, you’ve seen the insanity of what’s happened at FTX.

Any “summary” I could link to is already outdated, as basically every day this week had a new explosion….

So instead I’ll send you to Matt Levine, who will undoubtedly have a good summary later today in his daily Bloomberg article.

Trevor

How not to drive your company off a cliff (article)

The times they are a’ changin’.

Many, many startups are going to die in the next 6-18 months. The entire market has corrected & cash is now actually be valued appropriately!

This will have significant consequences in how startups are run: employee compensation, # of hires, budget sizes, micromanaging founders, how lean companies are. I believe the cliches are generally true… barring one off high leverage mistakes, the best companies will thrive.

There’s been mass delusion among silicon valley that the only thing that ever mattered was growth. This is factually incorrect. In the long run, all companies are measured by free cash flow per share. End of story.

Now, when a startup should be measured by that metric is open to debate, and growing quickly can certainly lead to much larger free cash flow per share, but the final goal is always FCF/share.

The Choice (book)

I’m rereading Edith Eger’s memoir of surviving the Holocaust & becoming successful in the US after. Not an easy book but a worthwhile one.

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