I recall conversations with some uber-rich individuals in those dark, early days of the financial crisis, and I was struck by their pessimism. These people didn't have their money in Lehman, and yea they took a huge haircut in the stock market – but they were still insanely wealthy. And yet, the news of the day put a rain cloud over their heads and they started making emotionally-fueled decisions about tightening up on this investment, or that investment...
And then, on the other hand, there were a few folks who saw it as a massive opportunity, who fully expected things to recover even if it took a while, and – this is key – didn't radically change their approach to things.
Guess who did better?
The piece of advice that really stands out in this article is "have a safety net, ideally one year's worth of expenses." Advice that's good for any of us.
I have friends in the music industry, and there's been a few instances of people getting these really big advances. Then come the big, expensive sushi dinners, flashy parties, etc. It looks like the record company is picking up the check... but not really. The artist is on the hook.
I think there's a lesson there for startup founders too. If the fundamentals aren't there, it can be hidden by a lot of frothy cash floating around. That cash can be addictive, and people get used to a certain quality of life. Retaining control means knowing when to say no to taking on more than you actually need. If you let money people inflate your balloon further than it should go because they need a huge balloon to pass along to someone else, ask yourself whether it's really good for your company.
And then, on the other hand, there were a few folks who saw it as a massive opportunity, who fully expected things to recover even if it took a while, and – this is key – didn't radically change their approach to things.
Guess who did better?
The piece of advice that really stands out in this article is "have a safety net, ideally one year's worth of expenses." Advice that's good for any of us.
I have friends in the music industry, and there's been a few instances of people getting these really big advances. Then come the big, expensive sushi dinners, flashy parties, etc. It looks like the record company is picking up the check... but not really. The artist is on the hook.
I think there's a lesson there for startup founders too. If the fundamentals aren't there, it can be hidden by a lot of frothy cash floating around. That cash can be addictive, and people get used to a certain quality of life. Retaining control means knowing when to say no to taking on more than you actually need. If you let money people inflate your balloon further than it should go because they need a huge balloon to pass along to someone else, ask yourself whether it's really good for your company.