Eric Paley

Latest from Eric Paley

  • The plague of rationalization Crunch Network

    The plague of rationalization

    Failure doesn’t usually happen “to” startups. It happens when founders rationalize problems until it’s too late. Attack problems early and the startup will advance. Rationalize that the problems don’t exist and you’ll just be another depressing startup post-mortem. Read More

  • Learning to embrace conflict as a part of startup culture Crunch Network

    Learning to embrace conflict as a part of startup culture

    Most team leaders will agree on the majority of decisions that need to be made and good startup teams seem telepathic at times, but there are inevitably going to be profound disagreements. It’s critical that entrepreneurs embrace these conflicts because solving them properly is often the difference between success and failure. Read More

  • Toxic VC and the marginal-dollar problem Crunch Network

    Toxic VC and the marginal-dollar problem

    Venture capital should come with a warning label. In our experience, VC kills more startups than slow customer adoption, technical debt and co-founder infighting — combined. VC should be a catalyst for growing companies, but, more commonly, it’s a toxic substance that destroys them. VC often compels companies to prematurely scale, which is typically a death sentence for startups. Read More

  • There’s no shame in a $100M startup Crunch Network

    There’s no shame in a $100M startup

    The era of unicorn startups has created a distorted view of entrepreneurial success. All the talk about billion-dollar exits has inflated the numbers that define a win. Starting and selling a company for $100 million dollars is an outlier event in terms of pure entrepreneurial probability, but such outcomes are viewed as well short of success in many corners of today’s startup world. Read More

  • Overdosing on VC: Lessons from 71 IPOs Crunch Network

    Overdosing on VC: Lessons from 71 IPOs

    Venture capital is a hell of a drug. Used properly, it’s like adrenaline energizing many of the greatest companies of the past fifty years. Used incorrectly, it creates toxic dependencies. The conventional wisdom in the startup community is that when building the very best companies, more capital can be leveraged to accelerate even greater growth. But does this “go big or go… Read More

  • Venture capital is a hell of a drug Crunch Network

    Venture capital is a hell of a drug

    Cheap and accessible capital has advantages: More founders get to pursue big dreams and previously “unfundable companies” not only raise huge amounts of money, but some achieve unicorn status. Discussions about the downside of this trend are usually about systemic risks, but few are discussing the problem as it relates to founders — but who is bearing this risk and what really… Read More

  • The Probable, The Possible, The Delusional Crunch Network

    The Probable, The Possible, The Delusional

    In 1961, President John F. Kennedy committed before a joint session of Congress that before the end of the decade America would put a man on the moon. This was not an empty political promise to get elected, but a commitment of a sitting President boldly exposing himself to political ridicule in the face of failure. If we can take ourselves back to that moment, it would be fascinating to… Read More

  • When Burn Rate Outweighs Enthusiasm Crunch Network

    When Burn Rate Outweighs Enthusiasm

    Many business critics of Uber contend that the company is spending “unsustainably.” Despite that nearly all venture-backed startups burn capital unsustainably, Uber’s level of spending is viewed as particularly problematic among its naysayers. Negative press notwithstanding, Uber has now raised billions of dollars — many times over. How is this possible? Read More

  • The Platform Paradox Crunch Network

    The Platform Paradox

    I often hear VCs say that they don’t back products, they back platforms. I find that logic backwards and in many ways dangerous for founders. Platforms can provide a durable competitive advantage, and it’s easy to understand why startups would want to create one, but great platforms are nearly always born from companies first creating great products with narrow, but compelling… Read More

  • Wasting Time With The Joneses Crunch Network

    Wasting Time With The Joneses

    Starting a company is like attempting to bend the world to your will. There are obstacles at every turn, and it’s never easy. Fundraising is one of those huge obstructions. Not only is the process of finding the true believers akin to finding the proverbial needle in the haystack, it’s also incredibly distracting. Read More

  • Running Out Of Money Isn’t A Milestone Crunch Network

    Running Out Of Money Isn’t A Milestone

    Nearly all startups use the same methodology to figure out when to raise their next round of capital. The founder projects the planned burn rate and estimates the day they will run out of cash. Then they subtract a margin for fundraising approximately four months from the date the company’s bank account will be empty, and declares the difference the fundraising-process start date. Read More

  • The Fine Line Between Success And Bankruptcy Crunch Network

    The Fine Line Between Success And Bankruptcy

    When seed capital hits the books, the outlook of every startup is one of unbridled optimism. Founders, team members, and investors are inspired by a singular vision and believe it can materialize into a world-changing company. If things go right and the product gets amazing results, optimism turns into euphoria. There are few experiences more rewarding than making big collective bets and… Read More

  • How To Sell Your Company Without A Buyer Crunch Network

    How To Sell Your Company Without A Buyer

    Conventional wisdom is that startups are bought, not sold. The logic follows that no matter how much an entrepreneur wants to sell a company, there needs to be an eager buyer and no amount of seller desire can manufacture one. Some people interpret this wisdom to mean that they should spend no time getting to know buyers and when a large company is ready to buy their startup, they’ll… Read More

  • After Funding, Watch Burn Rates And Beware The Tyranny Of Incrementalism Crunch Network

    After Funding, Watch Burn Rates And Beware The Tyranny Of Incrementalism

    Every dollar the founders take out of the company sets the tone for the entire business going forward. Every dollar spent is a dollar of dilution, as it costs equity. Every unnecessary dollar spent on the founders sets the tone that cash should be more important than equity to everyone involved in the business. Read More