Study elite teams

As an entry point to everything, I found one exercise particularly helpful: compile a list of brilliant startups and study them in the most granular way possible. Turn over every rock on Twitter, Product Hunt, Reddit, or anywhere else that helps you find teams with extreme taste, talent, and product intuition. It is shocking how many resources these companies and their founders put in plain sight explaining how they operate. If you are lucky, you may even stumble across a company like PostHog or Resend that publishes its entire company handbook for the world to see (one of the coolest things I have found). I have some current favorites, but I could extend the list much further: Linear, Vercel, Resend, PostHog, Ramp, Midday, Fey, Dub, Supabase, Planetscale.

Design the MVP like the final product

Along the lines of the last point, one blog post has become my north star for how I think about the zero-to-one phase: Linear's piece on rethinking the startup MVP. For a while, the framing of early-stage building was to ship a bunch of stuff that did not need to look good or be fully functional, then magically perfect it later. The post argues this no longer works, and I agree. Now, more than ever, you need to deliver a truly exceptional experience from the beginning.

Multiply output with AI

No surprise here, but Cursor has been a huge unlock for building at a fast pace. Delegating low-stakes tasks that would otherwise eat my time when I could be doing more important work is incredible. One example I like is letting Cursor nail pixel-perfect loading states once I finish building a new feature. It delivers that extra polish without the time cost. Things get even more interesting with tools that allow complete end-to-end AI pull requests. I have been experimenting with Seer by Sentry and OpenAI's Codex. They are amazing for triaging and fixing very specific issues on the fly. At first I was hesitant, but in many cases they provide a solid starting point or even write the correct code entirely. Having that head start feels like a real difference maker for fixing bugs, cleaning up UI, and more. If the code is wrong, there is not much lost; it was generated asynchronously while I tackled other tasks. Sentry's Seer even opens pull requests automatically for critical bugs, so I always have a place to start.

The last tool that pleasantly surprised me is CodeRabbit's AI PR reviewer. I turned it on as an experiment, and it caught some niche issues before they reached production. Having another safeguard that might catch a bug first is wonderful. I understand the skepticism around these tools, but when AI integration does not cost much time or effort, it offers leverage we did not previously have. The review can be ignored, the Seer pull request can be closed with one click, and when these tools work, it is pretty incredible to watch.

Prototype in minutes with v0

I could have squeezed this into the AI section, but v0 needs its own spotlight. The unlock it provides for every member of my team is wild. Among other things, v0 lets non-technical colleagues produce working prototypes for the features and ideas they are exploring. They can then hand off that prototype, with working code, to the engineering team and give us a fantastic starting point. All of these AI tools come back to one thing: the jump start. Starting at fifty percent instead of zero is a massive productivity boost.

On the flip side, v0 is great for communicating my own ideas. Instead of explaining or sketching, I can present a new version of a feature, or even a completely new feature, with a functioning UI. If you are skeptical about AI tooling, at least give v0 a shot. The Vercel team really delivered, and you might be surprised by how quickly you can go from idea to fully functioning, shipped feature.

Close the feedback loop fast

This one is simple. Add an extremely minimal, low-friction feedback, product-ideas, or bug-report button everywhere in your app. Pipe it to Slack, email, or whatever lets you see submissions right away. Then, solve a problem reported through that form quickly, and you will earn user trust in no time. Many companies do this, but Ramp is spectacular at responding to customer feedback with speed. I have seen posts where they turn around a bug fix or new feature in record time, and it is good vibes all around. The customer feels seen, something important gets fixed or added, and everyone is happy.

This is just one example, but creating as many feedback loops as possible is vital to understanding whether what you are building is actually helpful. You should not ship every single feature users request, and Linear's post on building what customers need covers that well. Collecting all feedback, though, lets you make actionable product decisions and reach out to users who need help, building their trust in your team.

Parting thoughts

The gloom around AI misses the bigger picture. Jevons Paradox reminds us that greater efficiency leads to greater use, and we are only at the beginning of that curve. Writing software has never been more enjoyable or more impactful. I plan to keep exploring every new tool that appears, and I hope you do the same. Keep shipping.

Derivative Lawsuits and Ambulance Chasing

Derivative lawsuits, initiated by shareholders against corporate insiders like executives or directors who have allegedly failed in their duties, are meant as tools for shareholder activism to address internal mismanagement and protect the corporation. However, their complexity often leads to misuse. Known as "ambulance chasing," this practice involves targeting companies suffering from setbacks to launch lawsuits for quick settlements, exploiting these situations more for profit than genuine governance reform.

The Case of Elon Musk and Tesla

Elon Musk's recent experience with Tesla underscores the implications of derivative lawsuits on corporate governance and investor relations. A Delaware judge recently decreed that Musk's $56 billion compensation package from 2018 be rescinded, raising questions about the fairness and integrity of its approval process. This lawsuit, initiated by a shareholder with just nine shares, argued that the compensation plan was excessively large and its goals misleadingly portrayed as difficult to achieve.

This sets an unbelievably bad precedent not only for current founders and CEOs but also for future ones. In this case, the incentive structure could not have been more aligned for everyone involved. Elon asked to be compensated solely in stock, contingent on the company achieving very ambitious milestones. This is the exact type of incentive structure that we want to see in all companies. If he delivers, the shareholders benefit tremendously. The fact that a judge can come in and retroactively change the terms of a contract that all parties agreed upon is a dangerous path to go down. This encourages more of the same old Fortune 500 executives who buy back stock and take on debt to hit short-term objectives. Pardon the informal take, but... These execs are boring!!! They never do anything interesting that creates long-term value for the company. If you look at a company like Ford, you will see that they have been doing this for years, and it has not worked out well for them.

Stop Making Things Harder for Founders

The last thing we need is to make it more difficult for founders to build companies. The odds are already stacked against them. It is disheartening to see that those merely seeking quick profits undermine individuals trying to build the future. We should encourage more people to take risks and start companies rather than creating additional mental hurdles for founders to overcome.

The Impact on Capital Markets

These lawsuits significantly undermine efficiency within capital markets by diverting resources from productive activities. Each dollar spent on litigation is a dollar not used for innovation, employee development, or shareholder returns. Furthermore, the threat of litigation can discourage companies from pursuing bold initiatives that might lead to substantial long-term advancements, stifling both innovation and progress.

Although derivative lawsuits serve as crucial mechanisms for addressing actual corporate misconduct, their frequent misuse reveals deeper systemic inefficiencies. When manipulated, these legal strategies can distort the competitive landscape and hamper economic growth. Stakeholders must understand these dynamics and actively push for reforms that discourage lawsuits while strengthening mechanisms for corporate accountability. This shift will guide public companies away from defensive legal stances and towards authentic economic and ethical leadership.

Lofty Metrics and Thresholds

A significant barrier to going public is the increasingly high benchmarks that companies are expected to meet. The prevailing wisdom at the moment suggests that a tech company needs to reach a $10 billion market cap or $1 billion in revenue before considering an IPO. This expectation can be daunting, especially for companies thriving in the private market but yet to hit these arbitrary thresholds.

Often dictated by market sentiment and investor expectations, these lofty metrics can seem impossible. However, they shouldn't be the sole determinants of a company's readiness to go public. For many companies, waiting to meet these thresholds could mean missing out on crucial growth opportunities and market presence.

The Fear of Markdowns

According to data from Coatue, many secondary markets are currently trading at the same discount as public markets. This parity challenges the belief that staying private shields companies from the volatility and scrutiny of public markets. In reality, these companies will eventually need to face the music. The reluctance to go public often stems from a fear of markdowns and the transparency of public trading. However, this avoidance can be a double-edged sword. Investors are increasingly savvy and will inevitably find ways to appraise a company's true value, regardless of its public or private status.

The Myth of Stability

There's a standard narrative that staying private offers stability that public companies lack. This narrative falls apart under scrutiny. Just because a company doesn't face daily public market valuations doesn't mean its intrinsic value remains unchanged. Private companies are not immune to market forces, and their valuations can fluctuate based on the same economic conditions affecting public companies.

The Advantage of Liquidity

While some argue that going public too soon can result in becoming a micro-cap company with limited analyst coverage, the benefits of liquidity often outweigh these concerns. Being a public company provides access to a broader range of investors and can facilitate more significant capital-raising opportunities. Moreover, the public market can offer discipline and scrutiny that drives better corporate governance and operational efficiency. The transparency and accountability required of public companies can lead to more sustainable growth in the long run.

Conclusion

The tech IPO landscape is shifting, but the underlying reasons for staying private may hold less water than they once did. Companies should consider the benefits of going public sooner rather than later. The artificial thresholds and fear of markdowns should be balanced with the advantages of liquidity, broader investor access, and the growth opportunities that come with being a public company.

Ultimately, it's about striking the right balance and making strategic decisions that align with the company's long-term vision and growth objectives. The sooner companies embrace the reality of the market and leverage the opportunities available, the better positioned they will be for sustainable success.

1. Transparency is Key: To me, this is non-negotiable. Being as transparent as possible about company financials and progress is one of the best ways to build trust within the team. Whether it’s fundraising, new customers, revenues, or burn rate, keeping everyone in the loop creates a shared sense of ownership. Plus, it avoids any unpleasant surprises later on.

2. Make Hiring Less Stressful for Candidates: The hiring process should focus on getting to know the candidate's real potential, not just how well they perform under stress. Avoid using LeetCode-style problems as a qualifier. Instead, try more high-level, collaborative exercises to see how they think and work in real-time. Candidates tend to perform better when they aren’t anxious, which means they’ll showcase their skills more effectively. I have had this experience firsthand and it’s been a game changer.

3. Skip Story Points and Estimates: Honestly, just focus on getting things done. If you’re using an agile process, you’ve probably dealt with story points. In my experience, story points are a huge time sink and do little to provide accurate estimates. Instead, focus on building out tasks directly. If something feels too big, break it down into smaller, manageable pieces. The key here is to strike a balance between planning the thing you want to build and just building it.

4. Allow Engineers to Experiment: Let them cook! Giving engineers the freedom to experiment when they hit friction is often the secret sauce for innovation. Pain points are often signals that something could be done better, and giving your team room to innovate can lead to better long-term solutions.

5. Highlight Contributions Across the Team: It's easy to focus on the leadership team, but don’t forget to shine a light on other key contributors as well. This doesn't mean showcasing every individual (especially as your team grows) but making sure that significant accomplishments and team efforts are acknowledged. This not only helps create a sense of inclusion but also reinforces that the company’s success is a collective effort. Whether it’s a shout-out in team meetings or highlighting a big win on your website, recognizing contributions goes a long way in boosting morale and building a stronger culture.

6. Too Much Process and Meetings = Bad: This one is no revelation, but we’ve all been there, meetings about meetings, endless standups, and bloated processes. At a certain point, the processes start to hinder productivity rather than enhance it. Keep things lean and efficient to give the team more time for actual work. If your team is bogged down by meetings, consider reducing them to one or two key check-ins per week, or replacing them with async updates to keep things moving.

7. Focus on Doing a Few Things Really Well: It’s tempting to build out every feature that customers ask for, but trying to do too many things at once often leads to mediocre results. Instead, focus on mastering one or two core features that truly differentiate your product. Doing so helps you create a standout experience, and it allows your team to build deep expertise in key areas. By narrowing your scope, you’ll also reduce technical debt, ship higher-quality updates faster, and set clearer expectations with customers. Remember, it’s better to be known for doing one thing exceptionally well than to deliver a dozen underwhelming features.

There’s no perfect playbook for startups, but sharing our experiences helps us all navigate the ups and downs a little better. Keep experimenting, keep learning, and don’t be afraid to adapt along the way. I’d love to hear your thoughts. What strategies have worked for you, and what challenges have you faced?

What are pro forma financials?

Pro forma financials are adjusted statements that reflect the impact of specific events or transactions, whether past or anticipated. Adjusted EBITDA, for example, is a standard pro forma metric that can exclude this non-cash expense to show a company's earnings without the impact of SBC.

Such statements are particularly useful for companies undergoing significant changes like acquisitions or restructuring, or those wanting to underscore certain financial aspects not obvious from standard GAAP statements.

Why pro-forma-ing SBC out of your financials is a bad idea

Stock-based compensation is a non-cash expense linked to granting equity options or other equity forms as employee compensation. It's a staple in the tech sector, helping attract and retain talent while aligning employee interests with the company's.

Excluding SBC from your financials is problematic for several reasons:

1. It Misrepresents Financial Health: SBC, though not a cash expense, still reflects an actual cost. Omitting it paints an incomplete and potentially misleading picture of your financial health, complicating investor assessments of your company's profitability.

2. It sets a dangerous precedent: If you start excluding SBC from your financials, what's to stop you from adjusting other expenses as well? This can lead to a slippery slope where companies can manipulate their financial statements to make themselves look more profitable than they really are.

3. It undermines the credibility of your financial statements: Investors rely on your financial statements to make informed investment decisions. If they see that you're excluding SBC from your financials, they may question the integrity of your financial reporting and be less likely to trust the information you provide.

Consider Snapchat's experience with excluding SBC. The company has been criticized for enriching executives at the expense of shareholders, highlighting the potential consequences of such practices.

Since going public the $SNAP executives have paid themselves ~$8.5b bil in stock based compensation
Shareholders have received -30% versus Nasdaq +268%

It's an executive enrichment scheme posing as a business.

— Tom Hearden (@followtheh) February 7, 2024

The only alternative: show SBC in your financial statements

So, what's the alternative, you ask? Simply put, don't do it. Instead, consider what showing SBC in your financial statements can do for your company. It gives a sobering view of your financial health, helps investors make informed decisions, and builds trust in your financial reporting. It's a strategy that benefits all parties involved.

Excluding SBC can mislead, create dangerous precedents, and erode trust. By presenting SBC transparently in your financials, you ensure a more accurate and reliable portrayal of your company's financial well-being, attracting investors and establishing your reporting's credibility.

I hope this insight is valuable. For questions or further discussion on this topic, don't hesitate to reach out.

The Problem

Many aesthetically pleasing websites are marred by unsightly scrollbars. Take Shadcn's website, for example, where some components are overshadowed by unattractive scrollbars:

This issue echoed in my project, particularly at the ends of the main content area:

My First Attempt

My immediate reaction was to hop on over to Shadcn and use his very nice Scroll-area component. This component is great, however, you need to explicitly use it in every component that you want to have a non-native scrollbar. This was not what I wanted. I wanted to have a global scrollbar that would be applied to every scrollbar on the website without much effort.

The Solution

After sifting through numerous complex or ineffective solutions online, I discovered a straightforward and effective approach. The main reason I decided to write this article was to hopefully save someone out there some time, as it took me way too long to get it just right. I understand that everyone has different tastes, so I will provide you with the code, and you can customize it to your liking. The following CSS, when added to your global stylesheet, offers a customizable and elegant scrollbar design, saving you time and enhancing your site's aesthetics:

::-webkit-scrollbar {
  width: 10px; /* Adjust the width to create space for padding */
  height: 10px; /* Adjust the height to create space for padding */
}

::-webkit-scrollbar-track {
  background: transparent; /* Ensure the track is transparent */
  border-radius: 10px; /* Match the border-radius of the thumb */
}

::-webkit-scrollbar-thumb {
  background: #c0c0c0; /* You can adjust this color for the thumb */
  border-radius: 9999px; /* Match the border-radius of the thumb */
  background-clip: content-box; /* Ensure the thumb doesn't overlap the track */
  border: 2px solid transparent; /* Ensure the thumb doesn't overlap the track */
  box-shadow: 0 0 0 2px transparent; /* Extend the padding with a transparent box-shadow */
}

::-webkit-scrollbar-thumb:hover {
  background: #c0c0c0; /* You can adjust this color for the hover state */
}

Thank you for reading! I hope this guide simplifies your web design process and inspires more visually cohesive interfaces.