One of the pivotal decisions I made at CCAW was to hire other high-level thinkers in critical areas. We hired people to lead operations, technology, and product. CCAW was bootstrapped, so we didn’t have tons of cash available to attract the caliber of talent we needed. After much thought and many discussions, I decided to offer some of them equity compensation in the form of stock options. If we achieved certain milestones, their equity compensation would vest and they would have the opportunity to own part of CCAW. This was a good way to align all our interests. We worked toward the same goals.

Equity compensation is a very powerful tool. It can help you land high-caliber talent you otherwise couldn’t afford. When I chose to offer it, I created an employee equity pool. This meant that a certain percentage of CCAW ownership was available for the company to use to compensate employees. Before that, I was the 100% owner of the company. After creating the equity pool, I owned less of the company. I was OK with that.

Founders who want to build big companies will likely need to compensate talent with equity (unless they have substantial cash with which to offer market-rate salaries). Founders who are considering the equity route should research how much equity compensation is appropriate for the stage of the company and the experience level of each candidate. Offer too little equity, and the candidate might reject your offer. Offer too much, and you may not have enough equity left to offer other critical hires.

Company equity is complicated, but it’s something founders should consider understanding sooner rather than later.  

Today marks the end of my seventy-third week of working from home (mostly). Here are my takeaways from week seventy-three:

• Alignment – People are more aware of values and purpose. They’re openly discussing how they factor into their decision-making. I’m hearing more people talk about this in relation to their work and as consumers (i.e., what companies they’re willing to buy from).
• Cancellations – A lot of meetings were cancelled by other people this week, for various reasons. It happens, of course, but not usually this much!
• Unexpected outcomes – A few scenarios played out in ways I didn’t expect. It was a reminder to be ready for anything.

Week seventy-three was a good, productive week. Looking forward to unwinding this weekend and getting ready for next week.  

I have a good friend looking to start a B corporation who asked for my thoughts. I’d heard of them but didn’t know much. He explained that he wants to create a company that’s profitable but also socially responsible. He wants it to make purpose and profits priorities—not put profits over everything else. I spent some time learning more about B corporations. I don’t think they’re applicable to all situations, and there are a fair number of hurdles, but I like what they’re created to do.

A few months ago, I shared my thoughts on skilled workers making purpose a priority in their employment decisions. I think this trend will continue to accelerate, and companies that put profits and purpose on an equal plane will win in the long run.

People and companies are beginning to be driven by more than financial gain. This is a great trend, and I can’t wait to see how it evolves.

Had a great chat with a founder friend today. We’ve known each other a long time and were catching up. We agreed that personal things have affected how we’ve approached entrepreneurship. We both love entrepreneurship, but at times we’ve had to scale back what we give to it when people in our personal lives have needed our support.

Founders live, eat, and breathe their company. They often have little to give in other parts of their life. When I started CCAW, I was fine with giving my all to it, and my family was too. They were supportive. They cheered me on as I worked crazy hours. But there came a time when they needed more from me. I adjusted and directed a lot of my energy away from CCAW and toward them. When their time of need passed, I refocused on CCAW.

The entrepreneurial journey isn’t traveled just by founders—their loved ones are along for the ride. If you’re considering entrepreneurship, be sure to think about the people you care about. Will they be OK with your giving so much of yourself to your new thing? And will you be there for them when they need you more than your business does?

A friend read my post yesterday and asked for my thoughts on shipping companies. At CCAW, we spent a ton of money on shipping over the years, so I learned a lot about this space. UPS and FedEx have their strengths. UPS’s roots are in ground shipping (three to five days’ transit time). FedEx’s core is express and overnight shipping. For many years, these two were the only game in town for nationwide small parcel shipping . . . and then came Amazon.  

Amazon has been building out its own logistics and delivery systems for years. It leased planes for an air network, built a large fleet of semitrucks, and partnered with independent contractors who deliver packages to customers’ doorsteps. With these, in combination with its warehouse infrastructure and logistics technology, it has built a formidable shipping operation.

I think Amazon will follow a similar playbook to build its AWS cloud computing business. Its e‑commerce business required substantial cloud computing resources to support its rapid growth. Amazon opted to build this infrastructure and invite other companies to use it too. This meant that Amazon offset some of the costs of the infrastructure with revenue from AWS customers. Fast forward to today, and AWS is one of Amazon’s most profitable business units and a growth engine.

Amazon will likely do something similar with shipping. It will offer shipping options that compete directly with UPS and FedEx. It will be able to offer lower prices because it has other revenue streams (e-commerce, digital advertising, cloud computing, etc.). The more customers it attracts, the more it will build out its offerings. When all’s said and done, its shipping operation could be bigger than UPS’s and FedEx’s.

I’m not sure when this will happen, but I’m confident that it will. And I think the competition will accelerate innovation, which we’ll all benefit from.

Over the last few months, I’ve tried to order various things but haven’t been able to because they’re back-ordered. Talking to retailers and manufacturers, I learned that supply-chain issues are at the root of the problem. I spoke with a friend whose employer manufactures and imports enormous quantities of products from overseas. It’s experiencing supply-chain issues that are affecting its forecast for the rest of the year. It isn’t sure when they’ll be resolved and has begun educating its sales force on its supply chain so they can reset customer expectations.

All this got me thinking. I remember being affected by supply issues at CCAW. As I learned how parts of the supply chain worked in our industry, I always thought there were many opportunities to make it more efficient. There wasn’t enough incentive to change back then, so it stayed the same, which frustrated me.

Today’s pain might be a big enough catalyst to bring about supply-chain change. I’m not sure yet if that’s the case, but I’ll be watching this closely. If the pain continues, we likely will see supply-chain innovation that could have broad implications.

It was reported that the crypto exchange FTX raised $900 million dollars last month. The founding round valued the company at $18 billion. This is a massive amount of capital and a huge valuation for a two-year-old company. I decided to learn more about the company, because I’d like to understand why investors are bullish on it. I began by learning more about the CEO, Sam Bankman-Fried.

I found a podcast where Sam describes how the crypto market works. He clearly explains things like leverage and risk in the crypto market. One of the traits of a great founder—and Sam has it—is the ability to explain complex things in simple terms, which requires a deep understanding of the topic. Sam is sharp, and I can see why people want to back him.

I’m still learning more about FTX and its business model, but I get the impression it has a strong, visionary founder and strong founder–market fit. I’m looking forward to learning more about FTX’s business and how it earned such a large valuation is such a short time.

This week, I was told no and I had to tell others no. Not just at work, but also in my personal life. “No” is difficult, whether you’re on the giving or receiving end. But it’s part of life—something we all must accept. A friend observed that “no” doesn’t bother me. But that’s not totally accurate. I get disappointed like everyone else, but I tend to move past the answer quickly and focus on the why behind it.

I don’t tend to ask why when someone tells me yes. But understanding why people have told me no has taught me a lot. When I don’t get the outcome I’d hoped for, I’m still focusing on how I can achieve it. Understanding why someone told me no shows me perspectives I might not have had—or understood—before. I can use them to adjust my plan and increase the odds of hearing “yes” next time.

Hearing no is tough, and it can be frustrating. But it isn’t the end of the world. If you believe in what you’re doing, try to understand the why. It will help you move past the rejection and position yourself for a yes in the future.

Today marks the end of my seventy-second week of working from home (mostly). Here are my takeaways from week seventy-two:

• No – This week, I’ve been told no and I’ve told others no. In my personal and professional lives. It’s not easy to say it or hear it. This week was a reminder of that.
• Conviction – This was top of mind last week, and it still is. I’m considering more bold moves and want conviction to factor heavily into my decision-making.
• Intention – I had a great conversation with a founder who recently retired. He shared his views on his intentionality as he starts his next chapter. He has a great perspective and he’s using some interesting frameworks. I hope to borrow from some of the things that are working for him.

Week seventy-two was another busy one. I’m glad it’s over. Looking forward to a nice weekend!

Early founders are usually down in the weeds of their business. Resources being limited, everyone is doing everything. The founder is usually the only person who understands how all the pieces fit together. I like to think of the company as a galley and the founder as the person who makes sure everyone rows in sync. An incredibly valuable role in the early days, but not the founder’s only role. Founders are also responsible for making sure the ship is headed in the right direction. A critical role some founders lose sight of. The rowers can be doing an amazing job, so the ship’s moving at a nice clip, but it will run aground if it’s pointed the wrong way.

Evaluating the business from a high level when you’re constantly down in the weeds is easier said than done. I struggled with it for years. Something always needs to be fixed or improved. I found it was helpful to force myself to think about the big picture by scheduling time to talk about the business with outsiders. I used an advisor and a peer group. They didn’t want to hear about the latest customer service ticket—they wanted to know what I was doing now that would help me achieve my three-year goal. Some of those conversations were the catalysts for making hires that got me out of the weeds.

If you’re an early founder deep in the weeds, ask yourself: How am I going to make sure my ship doesn’t run aground?