Torstensson's Notes - Issue #8
It is simple but not easy
2024 is coming to an end, and like last year there is a Torstensson’s Notes at the very end of the year. The reason is the same as last year, most of my writing has happened on torstensson.com and this is a way to do a ‘best of 2024’.
I haven’t been as active writing in 2024 as in 2023 (120 posts vs 357 posts), but it has been enough to create a trail of my thinking about startups, technology and investing for the year.
One topic that was heavily discussed in early September was Paul Graham’s essay Founder Mode. My post Founder Mode, take 2 (or: Life is always more complex) turned out to be my second most popular post of the year, and my comments were picked up by Wall Street Journal and GeekWire among others. Basically, I think Paul oversimplified founder vs manager (even if founders are critical for a startup to become a large company).
I think the essay resonated as it touched the nerve of how the startup world is “getting back to normal” after a few years when politics was more important than performance (at both large technology firms and successful startups).
A second example of “getting back to normal” is how technology firms switching back the default from “work from home” to “work from the office”.
A third example is the AI-driven rebirth of San Francisco as the epicenter of technology and startups.
There was a lot more that happened in 2024, but the startup world continuing to get back to normal has been a major theme in my eyes.
My favorite torstensson.com blog posts in 2024:
Founder Mode, take 2 (or: Life is always more complex): Managing organizations is not easy. But it is not quite as simple as Founders are always great (even if I think it is hard to overstate founders’ value to a startup) and Managers are always bad.
Venture capital is an ‘extreme sport’: Venture capital is an ‘extreme sport’. It’s best when aiming to build a very large company extremely fast. […] This is not ‘normal’ nor something that is a good fit for many companies.
When building or investing in startups: Do it your way: There are several ways to build a startup or invest in startups. For a founder or investor I think it is a big win to find the way that works for oneself, where one can be authentic, find enjoyment in the day-to-day work and adapt the work to one’s strengths.
Time for the Swedish government to improve employee stock option rules: Adjustments to the legislation should include eligibility for larger startups (that employ hundreds of people or more) to use QESO (qualified employee stock options) and making sure fintech companies (including banks), that is a Swedish ecosystem strength, can use them. It should also include shortening the vesting cliff from 3 years to the market standard of 1 year cliff and 4 year vesting.
Profits let us build better products: “Before I get to the actual results from last year, I want to explain how we think about financial results in general. We see them as something that enables us to do more of what we’re passionate about. We have been lucky to be very profitable for years now, which is important because it enables us to take a very long term view on everything, including keeping the quality bar for our games very high and enabling us to try new risky things.”
Perkins’ Law: “market risk is inversely proportional to technical risk”.
Liquidation preferences: Liquidation preferences on shares are discussed now and again in the Swedish startup ecosystem. I think Leo Polovets at Susa Ventures explains why 1x liquidation preferences makes sense.
Very good read on founding and leading a startup by Brian Halligan of Hubspot: A bunch of short snippets (“Halliganism’s”) on founding and building a startup including leading, culture, team, strategy, decision making, crisis management, improving your CEO craft, managing yourself, exits, planning and stepping away. This should become a classic like The Hard Things About Hard Things or the original Netflix Culture: Freedom & Responsibility presentation.
The Top 5 Most Read New Posts on torstensson.com:
Napper – building a profitable mobile consumer company with a strong product
Founder Mode, take 3 (one size fits all advice doesn’t fit all)
Book Recommendation
If you haven’t already picked up The Nvidia Way: Jensen Huang and the Making of a Tech Giant by Tae Kim, consider this to be a 5 star recommendation.