Jason Cohen's fulfilment framework 🤸♀️💰💛
A Venn diagram for pursuing meaningful (and sustainable) work, “debugging” goals, and responding to the looming hard times with balance.
Happy 2023! Thanks so much for subscribing, reading, and thinking SaaS with us this past year! ✨ We decided to kick off the new year with a fresh look for the newsletter, hope you like it. 😊
Welcome to the 63rd edition of The SaaS Baton. A fortnightly newsletter that brings you three, hand-curated pieces of advice drawn from the thoughtful founder-to-founder exchanges and interviews taking place on Relay (curated with 💛 at Chargebee) and the interwebz. So, stay tuned!
In this edition, you’ll find the following instructive and inspiring pickings:
#1: WP Engine’s founder, Jason Cohen, in yet another incisive, long-form probing of the founder’s self, frames the false hopes and the multiple (invariably vandalous) faces of burnout. And shares how he has understood and addressed: “what creates a fulfilling existence?”
#2: Arcade’s co-founder and CEO, Caroline Clark, with a brief note on an inherently difficult but potentially nifty companion to goal-setting.
#3: Cvent’s co-founder and CEO, Reggie Aggarwal, having survived the dot-com burst, the ’08 financial crisis, and the pandemic (especially so, being in the events space), advises founders to avoid extremes, however standard they may seem.
🗞 Recently on Relay:
Heuristics and Hunches — Growing Sustainably, a Realistic Take on the Current Moment in Tech, and Lessons from Grab with Momos’ Co-Founder, Andrew Liu
So, yes. Large markets still matter. If you can identify broad axes that have made it difficult to crack these markets, whether they’re technological reasons, things to do with timing and geography, or the workforce, there are major wins to be had.
#1: Finding fulfilment
(From: WP Engine’s Jason Cohen) (Source: A Smart Bear: Longform)
It is possible to be empowered to work how you want (Autonomy), to be leveraging your skills and expertise (Mastery), and to be proud of your role in a cause (Purpose /Why), and yet still dislike every day of your existence. More than contentment (ikigai), you need joy.
Not only is this possible, it is common. There’s the classic example of the startup founder who wakes up six years into the journey, realizing she’s been surreptitiously brought to a boil, burned out, dreading each day, drinking too much “to turn my brain off so I can sleep” but actually because she’s deeply unhappy…
Eight years ago I created my own framework for understanding how I could avoid this burn-out trap at WP Engine, especially when making decisions that are contrary to ego.
The ego says “Being the CEO is the best.” Silicon Valley says “The founder being the CEO is the Only Way.” So it’s hard to convince the ego to let go of being the CEO, as I did at WP Engine, even if being the CEO creates unhappiness.
Here’s the insight: Not only do you need all three of the following components, but any two alone create a specific trap:
Trap: Joy + Skill - Need
At the intersection of Joy and Skill is “being in the zone,” a.k.a. Flow. Wonderful! Unless you’re working on something the company doesn’t need done. Being in flow is intoxicating, and does “recharge the batteries,” but it’s unproductive…
A classic example is the technical founder writing code instead of making sales, fixing the website, handling the accounting, or hiring the next great team member.
Trap: Joy + Need - Skill
The company needs to begin advertising. You’ve never done AdWords before, but you always wanted to try it, and anyway it’d be fun to learn something new.
You might hire someone to do it later, but not now, because how do you hire and manage someone else without understanding the job yourself? So you make the AdWords campaigns. And since you’re unskilled at both marketing and AdWords, you waste three months…
You tell yourself that now you can hire that person, because three months of flailing somehow makes you an “expert.” As founder, no one will contradict you, so you indulge, and the company falls that much further behind.
Trap: Skill + Need - Joy
This is classic burn-out. When you do the work all day, you feel drained and exhausted rather than energized (as you would if it were Flow = Skill + Joy). You do the work, because the company needs it done. You do the work, because you are undeniably great at it.
Even though you hate doing it, you’d rather take it on yourself rather than foist it on others, whether because you want to “protect them from the drudgery,” or because you believe they can’t do as good a job as you can, or because you can’t afford to hire someone.
Because you create great results that the company needs, it doesn’t look like a problem—not to you, nor your team. But because you dislike it, you grow to resent it, and eventually you can’t face it, and you’re finished.
I created and used this framework nearly a decade ago, to recognize the wisdom of changing roles from the CEO of the company I founded (WP Engine) to the CTO, so that both our new CEO and I could operate in the center of our Venn diagrams.
The thousands of people who have since worked at our company concur that this was a fantastic decision, both personally for the two of us, and for the success of the business, which is now a unicorn and an iconic landmark in Austin, Texas.
#2: Failure modes
(From: Arcade’s Caroline Clark) (Source: Caroline Clark)
I've always been goal driven — from annual goals, to quarterly goals, to weekly goals. But it was not until I talked to a successful founder that had two exits that he urged me to think about failure modes. Or, as he put it, "debugging."
So now I think proactively, in addition to goals, about points of failure.
It's not as a pleasant or exciting exercise, but it's extremely useful. Failure modes are very different from goals.
I find that, by knowing ahead of time what the failure modes are, I can better proactively protect against them.
#3: Facing 3 recessions
(From: Cvent’s Reggie Aggarwal) (Source: Scaling Up)
It’s been 22-23 years. Here’s what I’ve learned.
This is what happens, let’s just say a company is worth a billion dollars…And then it goes all of a sudden to $5b and then all of a sudden people realize it’s way overvalued. It gets reset to a billion. It slowly goes back to 5 and resets again.
So the reason I’m bringing this as an analogy is that investors sometimes do things where, all of a sudden, just 6 months later, a company is worth 1/5th the value or 1/3rd the value that it was 6 months ago.
Even though fundamentally nothing changed with that company. That’s going to continue to happen. Right now, we’re in the part where it’s worth a billion again.
But, trust me, it will go up in time once we work through the recession. And then there will probably be a little overzealousness…it’s going to get reset. That’s what we’ve seen in every cycle.
So, having lived through it 3 times now, my view is you always have to have a balanced approach…And that is, you don’t go to the extremes. Like right now some people are having knee-jerk reactions. Cutting everything.
And they’re going too deep because just a few months ago they were hiring like crazy. So it’s all extremes and nothing in life is good when you do extremes.
…we’ve always had a balanced approach to profitability. Cashflow in particular…We didn’t raise outside capital since 2001 until we went public [in 2013], so that created a DNA.
Now, on the other hand, during a difficult timeline…This is what I saw in ’01, this is what we saw in ’08, this is what we’ve seen now in the pandemic, is that it’s a great time to take permanent market share. Everyones cutting back.
Not that we have to be very thoughtful. We’re always a frugal company. Just to give you an example, I’m the CEO of a public company and we still fly economy everywhere. That’s never changed. It’s not an urban legend.
Until we went public in ’13 we would share rooms, including me, when we travelled. It’s the DNA of the company. Which is I’d rather put that $300 bucks into product or customer service or sales and marketing…
But having said all this, it’s that balance of not going too extreme. And what happens with a lot of investors is they’ll say, ‘you’ve got to become profitable in 2 quarters.’ Which is very difficult to do if you’ve been negative 20%.
So I think people go to extremes. And my advice to entrepreneurs is keep a balance. Because fundamentally it always goes back to somewhere in the middle over time. Right now, the balance is EBITDA, so make sure you’re more focused on it.
For us, it’s not a huge shift because we knew a recession eventually would come. It’s been a decade, more than a decade. So we were just always thinking it’s going to happen.
But we just went through a pandemic and for us, personally as a company, we just went through what I call a Category 5 hurricane, earthquake, and flood, all at the same time. It was not a 100-year storm, it was a 200-year storm for our business.
But now we view the potential recession as a bad tropical storm, we’ve been through 3 bad things. This would be the 4th and we’re ready for it. We believe it’s a good time to take permanent market share.
We want to run our business frugally, profitably, but also keeping an eye on ‘hey this is a good time to take that market share while competitors are focusing on survival, or focusing on over indexing a little bit more than they should, in terms of not investing.’
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Until next time,