Negative Signal and Noise

What matters and how to prioritize it

People get caught up in perception and ego.

They need to be seen as smart, growing, powerful, successful.
So people do things and prioritize things that dont matter.

In business, people flaunt headcount and fundraising, like it proves they are somebody.
Its chest pounding- “I AM VERY IMPORTANT”.

NEGATIVE SIGNALS

All that matters is:
- Shipping product
- Getting customers
- Making money

Lets talk about Fast:

124 million raised.
Hundreds of employees.
Looked so legit- so real- so cool.
Now all they are is a website that 404s.

Its been a year since Fast blew up.
In hindsight, we all agree it was a stupid fucking business that will never work.

“One click checkout”- like shop pay? amazon pay? paypal? apple pay?

It wasnt ever a real business.

But- in 2021 you saw a lot of cheering.

“Fast is going to change commerce”
”They raised at a BILLION VALUATION”

This was all negative signal.
The same people who went from machine learning > crypto > ecom >nfts > AI were excited? Yeah avoid that.

Playing devils advocate-
Sure software is hard. Lots of companies fail to make it.
And yes- this company was particularly poorly ran.
And this investor class expects lots of deals to go to zero.

But-
This is just an extreme example of a common problem.

Ballooning head counts, endless fundraising, more and more separation from the decision maker and the customer.

Most people who read this sell a physical product or work with physical products.

This advice is for you:

Selling things for a profit is one of the oldest businesses on earth.

Merchants selling wheat for beer, or beer for wheat, or whatever for whatever, from ancient times until now had one goal- sell your stuff for more than it cost to make.

Your company becomes perverted when you forget that fact.

Sure, sometimes you need start up capital. Raise a small round to kick things off. But after month two, your only focus should be first order profitability.

Because LTV doesnt exist if you go out of business.

“But that doesnt work in my category”.

No… you are either:
- bad at marketing
- bad at product
- not trying hard enough at either

The natural and only sustainable state for all businesses is to move towards first order profitability.

Butcherbox.
Shipping meat, in the mail, to people.
Hard fucking business right?

Half a billion ARR.
Totally bootstrapped.

That means two things:
- they HAVE to be profitable
- and they SCALED profitably.

Why cant you do it selling widgets on facebook?
Selling drinks into wholefoods?

My Advice:

Sometimes I read these and I am like “fuck I sound like an angry stepdad”
And probably 1/3 sends I lose subscribers.

But this is for me.
So I get to say whatever I want you bastards

Anyway-
To clarify my thoughts:

• Move to first order profitability as fast as possible

  • Nothing else matters until you get there

  • LTV is a lie told by brand marketers

• Cut expenses and headcount

  • Does this person in this role make me money?

  • Does this person in this role save me money?

  • Then why the fuck are they there?

    Spend your time exclusively:

    • Talking to customers

    • Improving your product

    • Finding new customers

    • Making new products

Nothing else matters.
Investors, interest, events, tradeshows. Bullshit.
All are noise if they dont accomplish the main 4 things.

Every problem you have right now in your business will be solved if you:
RULE ZERO- get to first order profitability
RULE ONE- talk to customers. what do they need from you?
RULE TWO- improve your product so you can sell it to more people.
RULE THREE- find out how to find more customers.
RULE FOUR- make products for those new customers.