Founders often ask me whether they should be asking for stock options in their own company. Some of them feel sheepish for asking. Some feel entitled. There’s no one right way to think about founder incentive compensation, but here’s how I have approached it over the years.
I was with one of our e-commerce CEOs yesterday when I heard this one liner: “Retail is detail”. So simple, but so true.
All businesses involve detail, but retail e-commerce stands out. When you operate with the margins that come from selling goods vs. selling software you have to get things right.
Most commerce businesses are horizontal in nature: reselling goods made by others. These business have low gross margins. The only way to make them work is at massive scale. This is why Zappos was not profitable despite having $1B in sales at the time of it’s exit. The most extreme example of this is Amazon (who bought Zappos). They reached truly massive scale before turning one penny of profit.Continue reading Retail is detail
Venturebeat declared in an article yesterday that “The CFO is dead, long live the COO”. The premise of this piece, written by a CFO, was that today’s CFOs are intimately involved in growing their businesses. Rather, than just reporting on historical results, they are a key partner working across the company to promote better strategies and decisions, leveraging current, real time data, not just histocial financials.
All of this is true, but there is a big difference in my books between an actual COO and a CFO who happens to be adding value across the business. The COO is ACCOUNTABLE for those results. She will have P/L responsibility and will be managing a large team that is directly tasked with delivering those results.
They say that the co-founder relationship is like a marriage. Indeed, founders probably spend more of their waking hours together than with their spouses. So, it should come as no surprise, that just as many marriages fail, the same is true of founder relationships.
I have been part of many startups where one or more founders left (or was asked to leave). It was always disruptive when it was happening, but always better in the end.