Should you pursue a career that your passionate about?

Obviously, they do the fundamentals well. Good brand. Good experience. Good word of mouth. Good PR. Etc. Etc. But after my interview with Ryan Graves, the head of Global Operations at Uber (https://www.growthhacker.tv/ryan-graves), it became clear that they are operationally advanced and this is a huge part of their success. I'll explain. Uber isn't just a single startup, it's essentially dozens of startups rolled into one because every time they enter a new city they have to establish themselves from essentially nothing (except whatever brand equity has reached the city ahead of them). This means finding/training drivers, marketing to consumers, and building out local staff to manage operations for that city. This is where Ryan Graves comes in. He has a protocol of everything that must be done, and in what order, and by who, to ensure the best chance of success in a new city. So how has Uber grown so fast? Essentially, they figured out how to grow in one locale and were relentless about refining their launch process to recreate that initial success over and over in new cities. No plan works for every city, and they've had to adapt in many situations, but it is still a driving factor for their success.

Cash money should be treated separately than sweat equity. There are practical reasons for this namely that sweat equity should always be granted in conjunction with a vesting agreement (standard in tech is 4 year but in other sectors, 3 is often the standard) but that cash money should not be subjected to vesting. Typically, if you're at the idea stage, the valuation of the actual cash going in (again for software) is anywhere between $300,000 and $1m (pre-money). If you're operating in any other type of industry, valuations would be much lower at the earliest stage. The best way to calculate sweat equity (in my experience) is to use this calculator as a guide: http://foundrs.com/. If you message me privately (via Clarity) with some more info on what the business is, I can tell you whether I would be helpful to you in a call.

I love this question. If you have to work on the side while building your business, I recommend doing something you absolutely hate. That keeps you hungry to succeed on your own. You'll also typically save your energy for the evenings and weekends where you'll want it for your business. Don't expect to make much money at your "other job" but you can work it to pay the bills while you build your business. This approach also forces you to build incrementally, and it keeps you frugal. This is not necessarily ideal. Having a bunch of money set aside sounds nice and luxurious, but not having the resources puts you in a position where you have to figure it out to survive. I love that. I started my business eight years ago on $150 and today we do a million a year. Don't wait until you have the resources to start safely. Dive in however you can. And avoid shortcuts. Don't waste your time scheming to make bigger money on the side. Do something honest to live on and create a business that drives value.

I'm answering your question assuming that you hope to be able to replicate it's own success in your own mobile app. There are a couple of factors responsible for it's growth that are instructive to anyone building a mobile app. "Leveraging the intimacy and privacy of the mobile phone." We now have an *intimate* relationship with our phone like no other device in the history of technology. Every internet company that started before around 2010 has built their core interactions around "the old web" one which was accessed primarily via a browser on a computer. Companies that start with a clean slate, should be building their interactions around how to do whatever the app is supposed to do while leveraging what is unique to people's relationship to their mobile devices. Photo-sharing has become a core part of the way we communicate now. Snapchat built something that provided an experience that leveraged the feeling of privacy and intimacy that is unique to mobile. "Provided an escape from the "maturity" of other online services." Too many parents, aunts, uncles and other "old people" have encroached into the social networks of teens and young people. As a result, they've had a desire to find places to express themselves in places inaccessible by older generations. An important distinction is that it's not just parents and relatives that young people are trying to avoid, but also employers & colleges who are increasingly using "mature" social networks to review applicants. "Leveraged PR even bad PR" The fact that the app got so much press about it being used to sext was perfect PR for the company, as it essentially reinforced the brand experience that it has today. Essentially, "if it's safe enough to send a sext, it's safe for any kind of communication I want to have." And although the safety and security of Snapchat is actually not as advertised, it still enjoys the reputation of having less impact than any primarily web-based service. Building a successful mobile application is one of the hardest challenges to face designers, programmers and entrepreneurs in the history of writing software. Happy to talk to you if you're considering building a mobile app, about what I've learned about the "table stakes" for success.

Greater risk = greater equity. How likely is this to fail or just break even? If you aren't receiving salary yet are among 4-6 non-founders with equivalent sweat investment, all of whom are lower on the totem pole than the two founders, figure out: 1) Taking into account all likely outcomes, what is the most likely outcome in terms of exit? (ex: $10MM.) Keep in mind that 90%+ of all tech startups fail (Allmand Law study), and of those that succeed 88% of M&A deals are under $100MM. Startups that exit at $1B+ are so rare they are called "unicorns"... so don't count on that, no matter how exciting it feels right now. 2) Figure out what 1% equity would give you in terms of payout for the most likely exit. For example, a $10MM exit would give you $100k for every 1% you own. 3) Decide what the chance is that the startup will fail / go bankrupt / get stuck at a $1MM business with no exit in sight. (According to Allman Law's study, 10% stay in business - and far fewer than that actually exit). 4) Multiply the % chance of success by the likely outcome if successful. Now each 1% of equity is worth $10k. You could get lucky and have it be worth millions, or it could be worth nothing. (With the hypothetical numbers I'm giving here, including the odds, you are working for $10k per 1% equity received if the most likely exit is $10MM and the % chance of failure is 90%.) 5) Come up with a vesting path. Commit to one year, get X equity at the end. If you were salaried, the path would be more like 4 years, but since it's free you deserve instant equity as long as you follow through for a reasonable period of time. 6) Assuming you get agreement in writing from the founders, what amount of $ would you take in exchange for 12 months of free work? Now multiply that by 2 to factor in the fact that the payout would be far down the road, and that there is risk. 7) What percentage share of equity would you need in order to equal that payout on exit? 8) Multiply that number by 2-3x to account for likely dilution over time. 9) If the founders aren't willing to give you that much equity in writing, then it's time to move on! If they are, then decide whether you're willing to take the risk in exchange for potentially big rewards (and of course, potentially empty pockets). It's a fascinating topic with a lot of speculation involved, so if you want to discuss in depth, set up a call with me on Clarity. Hope that helps!