Jason Calacanis sent out another one of his emails last night and has even posted it to his blog. For anyone who went through the trials of Web 1.0, circa 1999-2001, it’s a must read. It really took me back to my days at WAM!NET, a start-up I spent over 20 years at from 1998-02 (I consider them, “dog years”).
If youâ€™re going to hit the wall, you should do so with three or four
months of capital left in the bank. You should cut down to your core
staff and tell them â€œwe have 120 days of cash left and weâ€™re going to
try to land the plane safely. If you want to leave at any point during
the 120 days youâ€™ll get the reference of a lifetime from me. If you
help us land the plane safely I think weâ€™ll all be better off because
I wish I had this kind of advice back in 2001 when we had to layoff 20% of our workforce. In a day that really sucked, I personally took out 75% of the marketing department I headed. It took a toll that is still with me today but I’m sure all the people affected are doing fine these days. But back then all I had was Michael Wolff’s book, “Burn Rate,” which told the story of an early web entrepreneur’s crash in a scathing memoir. I clearly remember referencing the book when writing our S-1 and being told our CFO had just resigned, almost exactly like in the book. In hindsight, I wish I would have kept my mouth shut and just looked for another job; lessons learned, etc.
If you are leading a tech firm today and grappling with what to do, I’d suggest reading Jason’s thoughts. If you think they are extreme, you have the wrong job; in my experience they are right on the money, as painful as they are to implement. He also just sent a follow up email offering to help coach a start-up with less than 6 months runway; I’d take him up on the offer.