https://cyrilgrislain.substack.com/p/startup-restructuring-101
Hundreds of startups burning billions of dollars on broken economic models and bloated organizations, often in very crowded and each time narrower serviceable markets.
Too many companies hire frantically, spiral-up cash compensations, out-bid each others on costly benefits and perks, and ultimately over-bloat their payroll.
- People with ‘Admin’ in their noscripts are frequently strong candidates to be let go.
- The past two years created a new type of hype: PMs. Until the Tech Giants (eg: Google, Meta) made PMs the ‘new normal’ of how to get any product functionally built and delivered, down to the tiniest button, startups used to do just fine with no PMs. Chances are very high you could do with less (no?) PMs. Also an excellent forcing device to kill some of your internal bureaucracy.
- Cut all ‘necks’: any position who is between one superior and 1 or more direct reports.
- Suspend issuance of hiring offers.
- We are close to year-end: don’t promise any cash bonus yet.
Case 1: Software startups who have not yet proven Product x Market Fit
Immediately scale back to a nimble and scrappy A-team that can fit in a meeting room around the Founders. Scale down to a low monthly burn until you firmly secure PMF.
Case 2: Series B+ with indisputable PMF, but no proven economic model
No matter how massive is your user base and MoM growth, you need to acknowledge your company is on slow-death mode and interiorize that survival is a pre-condition to growth.
In his own way, Elon is currently applying the playbook to Twitter:
- Scale back drastically, ideally the closest to your Series A size and cost base.
- Protect your core: engineering and science.
- Founders must go back in the trenches and own back the direct leadership on: product development, engineering, monetization and hiring.
- Make sure all your teammates are on the same new page. Get rid of misbelievers and road-blockers in no time.
Hundreds of startups burning billions of dollars on broken economic models and bloated organizations, often in very crowded and each time narrower serviceable markets.
Too many companies hire frantically, spiral-up cash compensations, out-bid each others on costly benefits and perks, and ultimately over-bloat their payroll.
- People with ‘Admin’ in their noscripts are frequently strong candidates to be let go.
- The past two years created a new type of hype: PMs. Until the Tech Giants (eg: Google, Meta) made PMs the ‘new normal’ of how to get any product functionally built and delivered, down to the tiniest button, startups used to do just fine with no PMs. Chances are very high you could do with less (no?) PMs. Also an excellent forcing device to kill some of your internal bureaucracy.
- Cut all ‘necks’: any position who is between one superior and 1 or more direct reports.
- Suspend issuance of hiring offers.
- We are close to year-end: don’t promise any cash bonus yet.
Case 1: Software startups who have not yet proven Product x Market Fit
Immediately scale back to a nimble and scrappy A-team that can fit in a meeting room around the Founders. Scale down to a low monthly burn until you firmly secure PMF.
Case 2: Series B+ with indisputable PMF, but no proven economic model
No matter how massive is your user base and MoM growth, you need to acknowledge your company is on slow-death mode and interiorize that survival is a pre-condition to growth.
In his own way, Elon is currently applying the playbook to Twitter:
- Scale back drastically, ideally the closest to your Series A size and cost base.
- Protect your core: engineering and science.
- Founders must go back in the trenches and own back the direct leadership on: product development, engineering, monetization and hiring.
- Make sure all your teammates are on the same new page. Get rid of misbelievers and road-blockers in no time.
Cyril G.
Startup Restructuring 101
Because your lifeblood, Revenue and Funding, are drying up
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For 20 years, between 1993 and 2013, 10% of all US electricity came directly from dismantled ex-Soviet nuclear weapons. US bought highly-enriched uranium from the warheads and put it in peaceful nuclear reactors. The bombs that were once aimed at cities now powered them.
https://en.wikipedia.org/wiki/Megatons_to_Megawatts_Program
https://en.wikipedia.org/wiki/Megatons_to_Megawatts_Program
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