Learn Fast to Grow Fast
And the framework Coinbase uses to make decisions
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Today at a glance:
Opportunity → Investor Audits
Framework → Coinbase Decision Making
Tool → ReplyGuy
Trend → Virtual Business Address
Quote → Clock Speed
💡 Opportunity: Investor Audits
Investors can be customers too.
When VC firms, family offices, and angel investors do internal audits they have to collect financial information from every single one of their portfolio companies.
It becomes a tedious process that’s frustrating for founders too. You end up spending a lot of time gathering data when you should be building the company.
This becomes an increasingly large time-suck as your startup gets larger and adds more names to the cap table:
Most investors ask about the same types of data, though, just at different times. Founders currently have to compile the data every time individually.
This is a good opportunity for an aggregator.
Imagine an automatically-updating portal where founders can link their product metrics, financial data, and more docs once to make them available to investors. This way the data is always up to date, and every time a new type of data is requested it only needs to be added once.
You might be thinking — but what if I don’t want the data to be accessible all the time? There’s a lot of sensitive financial info about my startup that would be in this tool.
Solve this by requiring investors to request access to the data each time, and founders just have to approve the requests. Investors would be ok with this since it’ll still be faster than their current solution — emailing and waiting for the founders to do the compilation work.
Founders would also get to see a history of who looked at what, and when.
It’s a win-win because it makes the process significantly easier for investors but still allows founders to control who sees their finances and when.
I’d start by marketing this to mid-to-large VC firms who have many investments. Smaller firms with lower management fees may not have the budget or the request volume to be your initial customers.
🧠 Framework: Coinbase’s Decision Making Framework
Low-risk decisions should be made pretty quickly. For high-risk decisions, a decision making framework can be helpful.
I’ve seen a lot of decision-making frameworks. But I like this one from Brian Armstrong, the founder of Coinbase, because it works both for quick 15 minute live meetings and over multi-week strategic decisions.
You might think this template looks overly simplistic, but what I like about it is that it’s just meant to record the context around the decision and provide a clear voting framework.
It forces the actual decision-making process to happen through live conversation. And no matter what you’ll end up with a clear, numerical score for the option that you collectively favor.
It’d be a good addition to any co-founder operating system in particular, since co-founders are peers who tend to treat their votes with equal weight.
🛠 Tool: ReplyGuy
Experienced founders know that distribution is everything. Finding customers can be one of the hardest parts of building a big business.
ReplyGuy is an AI that scours the internet to find the best places to mention your product. It finds the Reddit and Twitter convos where people are looking for your product and casually mentions it in the conversation. Try ReplyGuy here.*
📈 Trend: Virtual Business Address
Founders hate busywork, and nothing feels more like busywork than answering physical mail.
But if you don’t stay on top of it you can end up owing thousands in fees and penalties to various federal and state agencies for things like employment taxes.
Since the pandemic, virtual business addresses have become a lot more popular. Instead of handling your mail at your home, it gets sent to a separate addressed where it is processed and added to a digital app for you to look at and take action on. Personally, I use Stable and highly recommend it.
As this trend increases, there are opportunities to build AI agents that not only show you what mail you’re getting but also proactively take action on it for you.
Would love to see someone tackle this space from a first-principled perspective with AI in mind.
💬 Quote: Clock Speed
Speed is your biggest competitive advantage as a startup. You can move fast, big companies can’t (even though they want to).
But it isn’t just your speed of shipping that matters.
Arguably more important is the speed at which you learn. How quickly are learnings shared throughout your team and internalized? And then, how quickly are they acted on?
The best companies have a fast clock speed.
🔗 Houck’s Picks
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Recent data on valuations for successful raises from Carta (Link)
Why AI startups should focus on “zero-risk” solutions first (Link)
Why Silicon Valley is still the best place to raise capital (Link)
Benefits from going fully remote and asynchronous (Link)
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How Trader Joe’s avoids bureaucracy with incentives
Why you should start a new project by reaching out to experts
How to hire a good “Head of Growth”
What the bar is to raise a Series A
How to think about raising venture capital for your startup
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