Advice for 2013: Deliver On Your Promises

There has been a lot of discussion out there about the Series A crunch, the consumer sector falling out of favor, VCs getting more conservative, the need to focus on revenues instead of users, and so on and so forth.

All of this is going on and the environment is certainly getting tougher for entrepreneurs. As I have said before, we have had the wind mostly at our back for the past seven years and I feel the winds changing on us. They are headwinds not tailwinds right now.

At times like this I think it is critical to focus hard on the most important things for your business. That could be revenues but may not be. That could be user traction but may not be.

I would like to tell a story. The company in this story will go nameless. It is not material to the story. We met the team a year ago as they were just launching. They had huge ambitions for 2012 and we thought they were delusional. We passed on the investment even though we really liked the team and the market. They came back in a month or two ago. And not only had they accomplished everything they said they would do, they got done a few things that were not even in their plans at year end 2011. We committed to lead their next round at a full valuation. There will always be money for teams and stories like this.

But as I look around the broader startup market (and certainly in our portfolio too), I don’t see a ton of those stories in 2012. I see delays in getting important new product initiatives out. I see revenues coming in well below plan. I see new ankle biter competitors emerging and taking share causing a loss of focus and missed numbers. I see “black swan” events that could not have been predicted causing short term disruptions.

None of these are fatal to a startup but in the environment we are in they will not help you. Investors are not giving the benefit of doubt in markets like this. And your employees aren’t going to be patient forever either.

So if I can give entrepreneurs a single piece of advice for 2013 it would be to deliver on your promises. Not just to your investors but also to your team and ultimately to yourself. This is no time to be in denial. That is a lethal attribute in times like these.

> composed in chrome on my nexus 4. excuse the typos and lack of links.

#VC & Technology

Comments (Archived):

  1. William Mougayar

    This resonates well and is tough to argue against. It is so important to properly manage the expectations of your investors relating to the metrics they judge you by, and more importantly to reset these expectations if they change. Otherwise, they’ll be thinking one way, and you’re going another way, and they’ll think you’re not doing as well as you thought you are, although you might be getting things done.And yes, product delays suck.But the flip side is if you deliver on the promises (as you’re saying in the post), it boosts the confidence and trust levels, and helps to facilitate further investments. At the end of the day, the VC’s are taking the risks with you, and “trust” lowers their decision-making barriers.

  2. matthughes

    Word.Only the best of the best come out on the other end of a headwind.2013 should produce some legit contenders (edit).Back to basics.

  3. JimHirshfield

    Say what you do. Do what you say.

    1. LE

      And game the system by DELIVERING MORE THAN YOU PROMISE!!!

      1. JimHirshfield

        Ah, expectations exceeded. Good one.

    2. JamesHRH

      Do what should be done & needs to be done.

      1. JimHirshfield




      1. JimHirshfield


      2. William Mougayar

        Exactly. We had 100 articles written about us in 2012. 80% were unsolicited & came on their own.

      3. bsoist

        very well said – as usual

  4. Dil-DominΓ© Leonares

    Great post. I like what David Cohen said yesterday on Twitter…”The funny thing about winter is that it comes every year. It’s just a cycle. Great startups get funded no matter the season.”It’s completely true. Show the value and deliver on your word, the money will come.In the VC world, it’s not what you could do – it’s what you did.

  5. Bora Celik

    I love this post. Way too many people are talking the talk in a sea of smoke. It’s difficult to walk the walk.

  6. Alan Pearlstein

    true words Fred. As a serial bootstrapper, I am always putting myself and my team in a position where we “have to deliver”. IMO entrepreneurs should find your thoughts and the new reality exciting and motivating. Anything less and they should move on.


    Is there an echo here at AVC?

    1. fredwilson

      As in echo chamber?


        I see this advice for 2013 post twice on the home page..It could be my eyes as I’ve been coding a bunch lately. lol.Good advice Gadgeteer, thx.

      2. jason wright

        as in double vision – suntory time?

        1. takingpitches

          for good times, make it suntory time πŸ™‚

          1. jason wright


    2. jason wright

      two for the price of one?so good he wrote it twice?too much saki?


    “I see new ankle biter competitors emerging and taking share”.I was just recently thinking about forgetting the *cutting-edge scene* (see to move into ankle biting. No more looking for funding that doesn’t exist because investors want proof. With ankle biting you have proof.

  9. Chris Johnson

    I’m going to say this right now: the environment is not tougher for entrepreneurs It is easier this month than it was 3 months ago to start a kickass company. It will be easier still in three months (but you won’t have started).It’s not “tough times” for entrepreneurs these are salad days, amazing times to be alive and producing in.

    1. David Petersen

      I think you are right.It’s easier than ever to build a 1-5 person company with revenues over 1 million, which is more than enough to secure a high quality of life for all involved.It might be harder to create a billion dollar company, or maybe not. Who can tell?

      1. kidmercury

        definitely easier for the small stuff. next step is to federate the small stuff to create a big thing. stay niche, my friends.

      2. awaldstein

        Five people, $1M gross?Even abstractly how does this create quality of life practical incomes on a cash flow positive basis for 5 companies?

        1. David Petersen

          Let’s say you have 200k/year in costs other than salary, so 800k/year to split between the 5 people. Seems reasonable for a web business that doesn’t sell a physical product.That’s 160k/year each. Pretty high quality of life in Arizona, where I live, and most parts of the country for that matter.Or let’s say you have a partner and pay each other 100k each, plus 3 sales guys who make 50k/year. That leaves you with 550k/profit, and a business worth maybe 3.5 million.

          1. awaldstein

            I don’t want to quibble but the number is low.If you have $1M and 3/5th of your staff are there to bring in that revenue, they wouldn’t be making $50K each.I get the point I just think the numbers are off.

          2. LE

            “It’s easier than ever to build a 1-5 person company with revenues over 1 million” (my emphasis).I would agree that it’s certainly easier now than it was when I got out of college (and I think you would agree with that as well). Comparing all the things that I had to do to start back when I did there is simply no comparison. There was a barrier to entry which included not only money (which you simply didn’t get from anyone after college) to things like:1) A business location (either retail, commercial) since most things required that. Sign a lease, fix it up, etc. Forget operating from home.2) Printed stationery and brochures. Or maybe a catalog if you were doing mail order.3) You needed actual phone service. There was no google voice which you could forward to your cell phone or a landline.4) There were not even fax machines. (That was a big productivity boost when they came out).5) There were no cell phones. If you had a driver and a truck they had a beeper and they had to find a pay phone and call you back. Same with a sales person. No text messaging.6) You had to pay real money to advertise you couldn’t simply test an idea or get any word of mouth for free.7) You had to pay for ads in the newspaper to hire people8) If you could borrow iirc interest rates were 15% to 18% or so.9) People most certainly didn’t take young people that seriously. And entrepreneurship was practically off the radar. I went to an entrepreneurial program and I can assure you that it was not a coveted major or admired by your girlfriends parents.10) Computers were expensive (remember green bar paper?) and there was limited software.11) When you needed to speak with someone you could only get them if they were at home (or at the office).12) Obviously, no internet. When I bought a computer system (Unix) in the mid 80’s I had exactly one book from a bookstore and a set of manuals that came with it. That’s it. No internet to find answers or help. Same with anything you needed to know. You had to work hard to figure things out. I remember going to the law library when I had a legal problem to work through and spending hours researching. No videos to watch explaining how to do everything and anything.12+) I’m sure I’m leaving out literally hundreds of other things.One thing was better though. Health care coverage for employees was really really cheap. We paid $65/month for an individual for the best plan, no referrals, no co pays, no out of pocket, choose any doctor. No limits. We even covered families iirc.That said while it is certainly cheaper and easier to start a business (and to iterate if your idea doesn’t work) it’s not any easier to find a business that you can make money with.The lack of friction and money required simply allows you to cheaply try more ideas and allows people who wouldn’t stand a chance in the old system to make something work. So really in my opinion that is the key.

          3. David Petersen

            13) You couldn’t rely on a search engine to send you traffic.

          4. Mark Essel

            wow, I’m seeing $600/month for an ok plan, no families or spouses.That translates into $2000+/month for a small family. But there has been inflation since you first started out, not quite the 2% / year – eggs are still $1-2 per dozen and McDonalds still has a dollar menu

          5. LE

            I just inflation converted the number and it comes to about $133 per month. I spend more than that at Starbucks every month.

          6. James Ferguson @kWIQly

            I prefer my startups skinny and lean !

          7. Mark Essel

            Thinking 1 million net?Gross revenue doesn’t tell us much, but a tangible net profit + base salaries and bottom line growth – that’s a healthy business.Ps: sales staff certainly need incentive, and we’re biased by NY cost of living

          8. awaldstein

            Don’t know…I agree and am a big booster of building businesses in the ‘lifestyle’ category. And bootstrapping them.Change your life not change the world as a goal.I’m just not a big believer that saying it is possible is the same as saying it is simple.It’s not.

          9. PhilipSugar

            To keep it simple and precise you haveRevenue – Cost of Goods Sold = Gross Margin: Top LineGross Margins – (Operating Expenses) = Profit: Bottom LineWhen you are a owner and the investor your salary comes out of Profit (yes it is an Operating Expense, but if you don’t have the cash you aren’t going to get paid)When you work for yourself all you care about on the Top Line is Gross Margin. It is the only thing that feeds the Bottom Line which is how you get paid.When you work for someone else you might only care about Revenue because that is the metric you are measured by, you don’t get paid from the bottom line.When you work for a VC that cares about growing big networks, you might care about something before revenues like monthly unique visits, repeat visits, etc that are before revenue, because in this case the bottom line is very negative, but that’s ok because if it wasn’t there would be no need for the VC.If you are rational, you know what you are and act accordingly.

          10. takingpitches

            this is a great comment. thanks!

          11. Donna Brewington White

            Really helpful.

          12. Mark Essel

            awesome Phil, you nailed all the benchmarks on various report cards depending on position and goals.

          13. Donna Brewington White

            You are going to find higher cost of living in the more common areas for startups. There is an irony of sorts to that.If I was hiring a sales team for my business — I mean people going out there bringing in a significant portion of the revenue, I might want their paychecks to be bigger than mine. Although I see a lot of founders also actively involved in revenue generation.

          14. PhilipSugar

            There is irony in that because I’ve never heard a customer say I will pay you more or less because of where you are based, nobody cares.And you do want sales people to make more, because they span the gap. Their base is in the operating expense which you want to keep as low as possible, but the commission is in the cost of goods sold. So you would rather have 1 great person that sells as much as 2 mediocre people, because the operating expense is half (all good: monthly nut small equals survive-ability), and since all you care about is gross margin, which is just sales – commissions from a sales perspective, it doesn’t matter.

          15. Matt A. Myers

            I don’t understand how a business doesn’t have sales as part of their overall flow. You should always be trying to monetize, and I don’t see how any parts can be separated from this. Sure, you can have a person in this flow that’s a good closer – though really the sale should hopefully have occurred prior to that call/contact. I don’t like high-pressure mind you, and I find manipulative distasteful – though that’s made me structure what I’m planning to offer to be valuable enough for what they’ll be paying – and it’s “freemium-like” – so no real pressure. I hope I don’t have to sway from this, might mean I am doing something wrong then too.

          16. Donna Brewington White

            I am not the expert on sales for startups — @awaldstein:disqus and @philipsugar:disqus would be good ones to respond — and many others,However, some initial thoughts are that: the role of sales and when it becomes a separate function will vary from company to company, and will often emerge sooner in a B2B/enterprise level than a B2C. There are also business development and account management type roles that do not involve active solicitation of customers but fall within the realm of sales, the former focused on developing key business relationships that the company must compete for and the latter securing the customer relationship once it exists and maximizing it.What was once the VP Sales role is now the Chief Revenue Officer role at many companies. Sales has become much more consultative and relational over the years — high pressure and manipulative are old school.A discussion of sales/business development in the startup setting would be a great post by Fred, I think. But, my daughter just called from the mall for a pickup so off I go. Hope you are well, Matt.

          17. PhilipSugar

            Sales is the dirty topic that nobody likes to talk about. Kind of like sex. When you bring it up polite people recoil, but bottom line it is really important just like sex in a relationship and if you think you are going to learn it OTJ or by Gossip that is stupid.The analogy I gave below is a simple one: What are your Gross Margins and what are your Operating Costs, and do they relate? I.e. if you have big scale and high operating costs does that increase gross margin or if you have high margin but low operating costs how do you protect that?But that is only a lens. Because you have those that you buy from and those that you sell to, you are the lens in the middle. That’s a long post. I need to write about that.

          18. Donna Brewington White

            That would be a great post, Phil.I’m a fan of sales as a function and a profession. And of course my own work has a sales element.

          19. Donna Brewington White

            50K for a sales person is low…unless maybe strictly order takers

      3. Mark Essel

        easier than ever considering inflation adjustment?

      4. PhilipSugar

        I agree completely with this….I would clarify and say Gross Margins of over a million. But when you work the numbers at the worst case you have 2 founders making: $300k each, 3 employees making average $90k and $10k a month of general office expense.That’s at the worst end of your spectrum. Grow that gross margin by 20%, or increase efficiency and you get to $500k each for two founders….that is not a bad life. Good VC investment? Hell no.I completely agree with LE’s post of how much easier the systems have become.I also agree with Arnold, when he says its not easy, because its easy to say get $1mm of gross margin. Its really hard to do it, and all the employees and vendors are going to want to get paid before you bring in dollar one, (and before you get paid dollar one) so its one hell of a sprint up the hill to ramen profitable, i.e. paying yourself a living wage, but once you get to that point if you keep that accelerator down pretty soon the worm turns and life is good.

    2. ShanaC

      yes, but creating vs raising money are two different things



      2. LE

        Pick a traditional business or service and use the efficiencies that are available today to you to build that business. You don’t have to go the “raise money” route for an idea that has a 2 in 10 chance of succeeding.

        1. ShanaC


      3. Donna Brewington White

        But the two should be correlational, right?

        1. ShanaC

          not necessarily.

    3. Kasi Viswanathan Agilandam

      upvoted. words of a enthusiastic entrepreneur…world needs more of you.

    4. Nathan Hangen

      It’s easier to start, which means the markets are more competitive. Right now, you have to be good to get paid, which is as it should be. However, when you are just starting and trying to find your way, you might have less runway than you did a few years ago.

      1. Chris Johnson

        Are you serious? It’s so much easier to sell than it’s ever been. I know. I’m selling. I launched a product ( in 2 weeks that filled a niche that now earns thousands daily. Seeing holes and filling them and getting press is dead simple.

        1. Nathan Hangen

          Sounds like you chose a good market and built a good product, but your evidence is anecdotal.

          1. Chris Johnson

            If It wasn’t the third time I’d done it in a year, maybe. I’ll do it 5 times next year, and so can anyone else. Nothing is special about me. It’s easy.

  10. Bob Whaler

    Great post Fred. It’s funny how frothy environments make investors and boards more forgiving, as if competition for funding companies clouds their judgement.Tight times mandates tight execution, which is good for investors and entrepreneurs alike.

    1. fredwilson


  11. kidmercury

    aw man my comment isnt showing up. perhaps serves me right, since the comment was kinda long. it is showing on my disqus page though:

    1. kidmercury

      oh! it seems like there is another URL for this post, with some comments appearing on that one:

        1. fredwilson

          Are there comments on both?

          1. William Mougayar

            Yes. Kid’s long one is there.

      1. fredwilson

        sadly, i decided to nuke that double post. sad because the comment thread contained your excellent comment. but saving it meant doing more work on my vacation than i want to.

        1. kidmercury

          i am glad you are taking it easy in japan. i just repeat the same stuff over and over so it is no problem, i’m sure i’ll have plenty more opportunities to repeat the same stuff in the future anyway

          1. bsoist

            truth πŸ™‚

    2. fredwilson

      I just replied to it. It should show up

    3. William Mougayar

      You could repaste it into the post version that remained?

      1. kidmercury

        good idea i’m going to do that now

    4. kidmercury

      here is my comment, apologies for going suster/graham on my fellow fredlanders, will try not to do it again:long, thoughtful post for a guy on vacation. i’d like to diss this post on grounds it suggests you are not enjoying japan enough. (but it was very good otherwise and as always not long in the suster/graham sense, only long relative to your status as a vacationer).no time for denial is absolutely right! this is the bursting of bubble 2.0 — it wasn’t as epic as bubble 1.0, so the downside won’t be as epic either, but the sooner it gets acknowledged the sooner we bottom and buying/building season resumes in full swing. although we’re in the new age now, so i think what comes out the flip side is going to look a little different. i really don’t see the US IPO market coming back — although i thought that in 2008 and we got bubble 2.0, so perhaps there is time for another tech bubble. i doubt it though and think if there are going to be IPOs, it’s going to be in the natural gas sector with all those companies selling the illusion of 100+ years of cheap natural gas in the US to a market that really wants to believe it. if the IPO opportunity is ending and the stock market is transforming in some way, that changes the whole trickle down process, and implies the emergence of a new world order.kid mercury’s guidelines for surviving in the new world order:1. stay niche, my friends.2. open source production communities will commoditize a whole lot of proprietary software and SaaS stuff, AND this will result in decreased market value for software developers.3. seek to federate wisely.4. it’s not about open vs. closed. it’s about GOVERNANCE. think about your values and govern your platform accordingly. whoever you get your money from is ultimately whom you serve and what will determine your governance values if you wish to survive.5. the concepts of 4th generation warfare will increasingly apply to internet competition as well. fourth generation warfare is basically the story of how terrorist groups beat huge armies that have way more money. likewise, remember that as you scale and your infrastructure costs increase, it will be easier for competitors to attack it at low cost (i.e. think of how anonymous takes down huge corporations with relatively little cost). don’t scale — spin off. stay niche, my friends.

      1. takingpitches

        “going suster/graham””stay niche, my friends”loving it. you are on a roll, Kid!

        1. kidmercury

          i really love the suster/graham joke. it’s to the point where i’ll actually be sad if they shorten their posts because it will mean the joke is over.

          1. takingpitches

            haha!Serious question — how does the 4th generation warfare theme fit in with the theme (which I think I recall you sometimes commenting on; apologies if mis-remembering) that amazon and its economies of scale means that other players will lose.

          2. kidmercury

            4th generation warfare is basically the idea that the hot current hot trends in war are more about disrupting systems, infrastructure, and morale levels rather than about military tactics. for instance, consider how anonymous attacked sony and took down its network for a sustained period of time. how much did it cost anonymous to do this? very little, relative to sony’s infrastructure-related operating costs. because it costs so little to disrupt big, expensive systems, i think the end result is that systems won’t scale beyond the cost of disrupting them. for instance, taking down a niche vertical social network may cost not much less than taking down a big social network like facebook — and so it will make more sense to operate a niche vertical social network, because they are less lucrative attack targets and less costly to insure against. that is one of the reasons i am so bullish on verticals. stay niche, my friends.

          3. takingpitches

            Interesting…enable a network of niche networks…sort of paralleling the early Internet infrastructure.

  12. Richard

    “Promise less than you can deliver and deliver more than you Promise” I repeat this mantra often.

    1. JamesHRH

      See other comments re: the D word.

      1. Richard

        The power of delivery!

    2. fredwilson

      The secret to winning in business

      1. LE

        Half the battle is just showing up.You asked me a question last week (re: .net) and I was curious and looked into the person/company that sent you the email.I contacted them (not mentioning you of course) and they immediately jumped on the opportunity to monetize some names that we have. They were really excited. It looked like something good for both of us. I was ready to go forward.I then asked a few further questions and haven’t heard back.It’s been over 5 days.I’d like to say this is unusual but it’s not. Most sales people are really poor with follow up. I built my first company simply by getting back to people quickly and answering all their questions and not making them think. If you can’t handle the pre-sale well where will you be after the sale?

    3. kirklove

      Exactly! Under promise, over deliver.I’ll also add – stop fucking talking about your company. Hyping it, retweeting crap articles, bragging, etc. God, I hate that. Just crush it. Others will do plenty of talking for you, if you do, and it will be a ton more sincere and accepted.

      1. LE

        I think you have to separate what might be annoying and what works irl.Donald Trump is annoying to many people. Most of them are not living the lifestyle that he is. I’m sure it doesn’t bother him one bit that people make fun of him, his hair, and what he says. Al Sharpton was annoying and all over the place. Now he’s a respectable TV host.While there are people who toil in obscurity and nobody is annoyed with, from my observation, starting with a guy when I was young that was a lawyer and was just about the biggest “tool” you could imagine and now is very well known, that have done quite well because what you see is not necessarily what the populace sees or cares about.

        1. kirklove

          What works for some though assert it causes more harm in the cases you point out.I’ll keep my rep and tact for $200 Alex.

          1. LE

            Holy crap. You worked for Morris. He got the idea to morph his company from me.

          2. kirklove

            You mean Morris Ballen? If so, yes, I worked at Disc Makers.

          3. LE

            Yep. Morris Ballen Discmakers. Know him back from when he was in still in Philly.

          4. kirklove

            Nice. Morris taught me a lot. So did his right hand man (who I really worked for directly) Tony van Veen.

      2. fredwilson


      3. AlexBangash

        Can’t stand promoters.

      4. takingpitches

        hell yeah; time that is usually better spent elsewhere!



  13. ShanaC

    isn’t this true for everything?

    1. Richard

      Im not sure that is the case, but it certainly is when you are working with OPM.

      1. ShanaC

        how about things that just affect other people’s lives. OPM yes, but also if you bake cookies or something (I’m on a baking kick. tomorrow is gym and I think gingerbread cookies)

      2. LE

        Are you saying that someone should have more commitment when they are using OPM vs. their own money?



  14. awaldstein

    Fred…good advice that we should all adhere to, all the time actually.But it also speaks to making certain you define your promises smartly. You want more than a delivered plan, you want a plan that delivers met objectives that really speak to some gut confirming data of market possibility and your ability to shag a meaningful chunk of it.

    1. LE

      “ability to shag a meaningful chunk”Totally unique phrase you just came up with Arnold. That really resonates. I wish I had a business I could use that as a tag line for.

    2. William Mougayar

      But promises can change with iterations. Therefore you’ll need to refine the promises accordingly so that the investors are in lock-step with them.

      1. awaldstein

        Yes…but here’s the rub of course as you know well.You can iterate ongoing but you aren’t creating new goals with new iterations usually, you are iterating your products around gut driven goals that you have built metrics and promises around.Different things.It takes real time to get anything done. Rule of thumb–4-6 months to get any inkling of real data on the consumer side. And if you have any seasonality you aren’t going to make any changes after Q2ish at all. So, iterate as you will, you get one maybe two market objectives and markers a year to attack.I don’t buy constantly evolving goals as a rule. Exceptions accepted of course.

        1. William Mougayar

          Maybe it’s semantics, but re: “you aren’t creating new goals”, I think you may be creating new metrics during iterations, and that’s what I’m talking about. For eg, you start measuring something in phase 1, then in phase 2, something else becomes more important.

          1. awaldstein

            Maybe….I’m always concerned when evolving/iterating a product comes along with a whole new set of top line objectives. It’s a red flag or an early sign that something is not holding together.Hyper dependent on each situation.

          2. William Mougayar

            The metrics priorities change. For e.g. take Foursquare. Early on, # of users or # of checkins were probably primordial, whereas now, it might be # of promoted reviews/offers, or revenues from them. So all I’m saying is that the set of metrics will shift as you evolve and iterate along your roadmap.

          3. awaldstein

            I’m generally being difficult today (yesterday as well) I think so don’t take it to heart.All generalities and one liners sound like palaver to me so I’m signing off and heading to the gym after my morning calls to sweat it out of me. Painful/wonderful intervals are what I’m prescribing as the antidote to grumpiness.

          4. ShanaC

            this seems to be somewhat normative until it is very very clear how the business model impacts the product and visa versa. You need to have a general idea of what your metrics are going to be, but as you iterate through the product, they will change because your profit center/potential profit center will start shifting

          5. awaldstein

            True and well said. Less true if we are talking about goals around a large A round in today’s market.

          6. ShanaC

            true, but then you are optimizing for raising money, not a company πŸ™‚

          7. William Mougayar

            yes, agreed.

    3. Donna Brewington White

      “…define your promises smartly. “Oh that’s good. I have learned the hard way that managing expectations is as important as meeting them…at least in a business with client deliverables.But I am taking these words from the broader perspective that they are probably being delivered from.I see that someone already noted that meaty phrase at the end of the comment although I’m having trouble shaking the colloquial British use of that verb…watched Bridget Jones’ Diary too many times.

      1. awaldstein

        Actually didn’t think of the Britishism when writing πŸ˜‰ Shagging flies is what we do when we play outfield in baseball of course…When I’ve hired senior non sales execs where a large part of the comp was MBO based, defining those MBOs were as much a sigh of expertise and meeting them at times.No one should ever get 100%. But if they missed by more that 15% then the definition was incorrect and raised larger questions to me.

  15. Brandon Burns

    I think its more fair to title this post “execute” rather than “keep your promises.”The half-hearted break promises. They are not in it to win it from the start. They say they’ll sacrifice, yet don’t. They say they’ll study up, yet don’t. They say they’ll do all they can, but don’t.But those who are committed to make change, and to build a business to sustain that change, they don’t break promises. They promise themselves and those who support them to do all they can to bring their dreams to life, and they do. They do all they can. They give up their time, money, health and sanity in the name of their goal. Sadly, many times those goals are not met and those dreams don’t come true, but that is due less to an inability to keep a promise and more to an inability to execute. Not everyone is well equipped to fight the battles on which they choose to take a stand, and anyone with a zero loss record should pick up a stone and hurl it inside the glass house they stand in.To those who fought hard and failed, who poured their heart and soul into their work yet still came up empty handed, I tip my hat to each and every one of you. There is much the half-hearted can learn from your efforts.

    1. kidmercury


    2. JamesHRH

      Brandon, I would disagree. The post needs to be focused even more.DELIVER.Execute makes people think about themselves. Deliver makes people think about the stakeholders that matter: customers, investors, employees, families.

      1. Brandon Burns

        I’ll agree with that disagreement

      1. Brandon Burns

        Thanks for the repost, Nick. Sorry for the delay in response… I’m going in and out of consciousness, high on NyQuil in an effort to kill the plague that is trying to kill me. Sigh… winter…

        1. ShanaC

          Get off the web and go to bed! Oy, you don’t sound good.Shana L. Carp.@ShanaCarp <https:”” shanacarp=””>LinkedIn <http:“” in=”” shanacarp=””>I never look back darling, it distracts from the now – Edna “E” Mode, The Incredibles

          1. Brandon Burns

            But I have AVC posts to catch up on! I’ve been away for more than 48 hours! That’s, like, an eternity!*cough, cough*

        2. Nick Grossman

          No worries!Gotta rid yourself of the plague before you go after it wholeheartedly in the new year!–http://nickgrossman.ison the fly

  16. anne weiler

    I read somewhere once that companies who start in down times are strongest because they needed real customer value and business models. Bring it on, I say!

    1. LE

      If you have a product or service that sells with no effort and marketing you are not in a position to get business when that demand slacks off or to deal with competitors when they enter the market. (This happened to the local Bell Telco’s as only one example when they were de-regulated they had no clue about marketing because they had a lock on the market.



    3. Donna Brewington White

      Maybe it should be “companies that start and succeed in down times…” Although, perhaps, that’s implied.

    4. Matt A. Myers

      The logic here could be that people with money available still previously made good investment (like aren’t sheep), meaning they knew / know what they are doing – that understand the business model they are investing in or at least enough of it to see the value.

  17. Bruce Warila

    Promises have been devalued. Every time I click a TOS (I agree) button, I am making a wildly unknown promise. Privacy respect (secrecy on the web) is a pre-broken promise. Appointments are rough estimates. Etc.Back in the old days, we used a knifecut handshakes, swore on our sister’s virginity, and promised our firstborn. The only thing I get these days is “sorry dude”. In my experience, simple, signed contracts that cover carrots and sticks are the best way to obtain delivery on a promise.

    1. James Ferguson @kWIQly

      @brucewarila:disqus – The best contract is the one you understand and don’t need. It fits because both parties benefit under the vast proportion of foreseeable circumstance.IMHO if you have a clause in a contract that you think you will need to enforce it’s probably better to renegotiate.This is why I love SaaS concepts – pay while you are happy, leave when you want, take your assets with you – no lockin.It then behooves the supplier to deliver the best they can, and the buyer to give the most honest and open feedback they can.

      1. Bruce Warila

        @kwiqly:disqus – James, I think you misunderstood my comment. I was referring to short and simple one page agreements that you make between employee and employer (for example). Sort of like i-promise-notes, that specify the deliverable, the reward, and possibly the penalty. Nothing elaborate. Just something to memorialize the commitment.

        1. James Ferguson @kWIQly

          @brucewarila:disqus – No I got it – And agree – I was merely extending on the principal. For example my version of ideal employment would be:I pay you rewardX to do your job to the best of your ability, you leave if you wish. If I don’t want you to stay I give compensationY and you leave.Everything else covered by statute (eg employees right to be free from abuse, employers right to employee loyalty while employed).So my simple world view is: Don’t enrich the lawyers as it’s a lose-lose for all non-lawyers. BTW an excellent legal advisor gets this.

  18. James Ferguson @kWIQly

    >> Investors are not giving the benefit of doubt in markets like this.This tells us about investors, and is very probably true and current, but I think it does not make the advice valid.I think the advice holds generally as nicely written aphorisms that are not particular to 2013 or any other particular climate.So when would the following be poor advice ?>>it is critical to focus hard on the most important things for your business.>>This is no time to be in denial.>>deliver on your promises

    1. JamesHRH

      1998, 1999 & early 2000.Anytime a bubble occurs flipping beats building hands down.Or, ‘Hi, my name is Mark Cuban.’ He wrote an article called something like “The Best $50M I Ever Spent’. It was about the $50M in derivatives he bought to protect the downside of his Yahoo stock.Have to give him credit. A man for his season.

      1. James Ferguson @kWIQly

        @jameshrh:disqus So do you believe that during a bubblea) Flipping is not the most important thing for your businessb) Being in denial will help recognition of market conditionsc) Failing to deliver on your promises will somehow be harmful. ???I wrote that these where aphorisms – words that are concisely written and sage advice – I hold that position.BTW I find the notion of flipping a business a bit tasteless – I prefer the dedicated long haul (I know that’s not rational on a purely monetary yardstick – but my success yardstick is different – I gave up working for the man when I decided to start a business – Money is an objective but not everything) !I would be interested to hear if VCs want entrepreneurs who want the best for the business or the best for shareholders – its not always the same thing. In my view if you are swinging for the fences you should have the two totally aligned, but when it goes slightly sour do you call “rain stopped play” or dig deeper and decide to win under adverse conditions. I know which I would invest in.Would I want an investor who was prepared to hedge against me – nope – I want someone all in on the upside ! Sometimes irrational positions change market conditions and having a safety blanket amounts to either way I don’t care.

        1. JamesHRH

          Fair enough on the ‘vaguely stated in order to be widely applicable’.I am a ‘create value for customers business forever type’ by nature.My point was that environment matters.

          1. James Ferguson @kWIQly

            James – I agree environment matters, and with all respect to @Fred – I think the “vaguestatedness” of his advice for 2013 took something away from the value of this post. Having said that it’s the trigger for communal input / wisdom that really pays. Fred brilliantly leverages the community resource, even when he is asleep in the Far East !

  19. AlexBangash

    In boom years, entrepreneurs and VC’s crowd into same areas, reducing potential payoff for all. In 2007-2008, more money flowed into India PE than ever. Looking back those years are shaping up to be the worst vintages for India PE.Part of Fred Wilson, Peter Thiel, Peter Fenton and a few other select investor’s genius has been to recognize themes before they were popular, some even unpopular.Best VC’s can get access to choice opportunities, beating competing term sheets at lower valuation. Companies that grant access have built-in high expectations. Most of these companies can easily disappoint because so much is expected of them. Some–like Color–in a spectacular manner.It would be interesting to study whether the best returns have come from unpopular or controversial area or consensus “hot” spaces.

  20. AlexBangash

    This company is executing like a demon–Hailo…

  21. Roberto Inetti

    “There will always be money for teams and stories like this.”That’s a very inspirational line, thank you.

  22. andyswan

    Struck me as similar to the 3rd slide in my regional-famous presentation for entrepreneurs is: “Hyman Roth”You know why Hyman Roth, a mobster in the Godfather lived to die of old age despite the odds? “I always made money for my partners.”It’s pretty hard to wind up dead when you keep your promises.

    1. LE

      Hyman’s last words (at the airport):”I’m a retired investor living on a pension. I came home to vote in the Presidential Election because they wouldn’t give me an absentee ballot.”

      1. andyswan

        Best. Ever

        1. LE

          Here’s the death trifecta (or trifecter as they would say in NY). Fredo, Hyman, Frank. You have to sit through an annoying 30 second pre roll ad.

    2. Dave Pinsen

      I thought he died of lead poisoning at the airport.

      1. William Mougayar

        No, he was shot at the airport by a Corleone guy posing as a reporter.

        1. andyswan

          that’s “lead poisoning”…..wait for it……

      2. andyswan

        Why split hairs he was old πŸ™‚

  23. Wendy Yu

    I think Taleb would say that “black swan” events are by definition events that cannot be predicted. I like how your post resonates with his new book (e.g. tough times are tough in the short run and speed up the learning process in the long run).

  24. pointsnfigures

    β€œNever make excuses. Your friends don’t need them and your foes won’t believe them.”― John Wooden, Wooden: A Lifetime of Observations and Reflections On and Off the CourtHere is his TED Talk. Wooden was a great life coach as well as Basketball coach.

    1. James Ferguson @kWIQly

      Wow – thanks for that – 20 minutes I will remember as best I can – fantastic material and the type of reason people come to AVC

  25. Michael Duda

    Overpromise and deliver.Headwinds or tailwinds be damned. Great companies transcend all the macro analysis.

  26. mcbeese

    Hmmm. “Over Deliver.” “Walk the talk.” “Exceed your promises.” “Never disappoint your funders.” The implication is ‘minimize risk’.I feel a little like I just woke up and I’m back running a 9-figure P&L for the big Telco vendor I grew up in. I’m back reviewing budgets and head count numbers with my EA and sales VP on a company jet on the way home from a meeting with AT&T.I had fallen asleep and dreamed I had become an entrepreneur running a disruptive startup. All of the wise sages in the startup world were preaching “no risk, no reward”, “fail fast”, “celebrate failure”, and so on.My background makes me resonate with Fred’s points – these are the principles that I built my career on. Having said that, I shake my head a little at the amount of inconsistency in the advice that is directed at new and impressionable startup leaders.I don’t know any startup founders who are intending to deliver any less than Fred recommends, but with the risks we must take, many will fail. Becoming risk-averse will hurt more than help, in many cases. No, I don’t think Fred is suggesting that startups abandon risk-taking, but some experience-based input on where and where not to focus risk would add value to the principle of ‘keep your promises’.



  27. Kasi Viswanathan Agilandam

    ” And your employees aren’t going to be patient forever either.”+100 on that.

  28. Kasi Viswanathan Agilandam

    Advice: Deliver on your promises.deliver before the advice becomes a scream !!!Scream: Deliver or quit you dumbass

    1. FakeJLM

      What ??

      1. Kasi Viswanathan Agilandam


  29. BillMcNeely

    The prospect of employment at the startup I am going to be interviewing at Friday as a biz dev guy seems good. One theme in the comments is to manage expectations with your customers. What I hear though, is to have proper messaging that ensures your firm’s offering is clearly differentiated from potential competitors.Example if your firm manages gift card purchases for high end salons, bars, clothing stores etc. You want to make sure business know they will add to their customer check instead of 1 off visitors like the daily deal sites do.

    1. Anne Libby

      Good luck, Bill!

  30. Pete Griffiths

    I am intrigued to know why you ‘thought they were delusional.’ That is a strong word and given that they executed so comprehensively…

    1. fredwilson

      it just didn’t seem possible to do everything they planned to do. they did.

      1. Pete Griffiths

        Time to recalibrate. πŸ™‚

  31. Sudarshan

    Amen, totally in agreement. With our startup, our biggest achievement this year has been consistently delivering on what we promised – uptime, features etc. Once you’re able to do that, often bigger milestones come your way in terms of x no customers and revenue. Great post, thanks for sharing.

  32. Techman

    Chrome on Nexus 4 eh? Doesn’t the Typepad app have some feature for links? Then of course you can always use the anchor HTML code. Otherwise from that, great post. I agree. It is harder for people to start new businesses and all of the “garbage” as I call it at Washington is not helping it.

  33. jason wright

    the vc lens can be very distorting. start organic, build a sustainable team of skills, and keep it real.David Heinemeier Hansson – “make a billion or die trying”… is not his chosen epitaph.



  35. Donna Brewington White

    “This is no time to be in denial.”Given that it’s hard to know you are in denial when you are in it, how do you safeguard against or figure out this is happening?BTW, pretty powerful post for a guy on vacation. Although I imagine Tokyo to be invigorating.

    1. Donna Brewington White
  36. markslater

    sage advice.We have 5 things we are going to accomplish in 12 months – these together define our obolix on the horizon – if you cant see it – stop what you are doing is the message we give to our for the new year to you fredand to all the entrepreneurs, contributors, and conversationalists on this great blog!

  37. Chris Phenner

    This post reminds me of a few things:1. The A16/Mixpanel ‘End to Bullshit Metrics’2. The concept of ‘Native KMs’ (I’ll ‘splain below)3. The use of social user flows within enterprise appsI don’t like to read ‘tone’ into posts I read via plain-text, but this post read more sternly than many of Fred’s posts — perhaps that my coffee intake today talking. But it did get me thinking about how this post could be less finger-wavy and more constructive.And we know that Fred is a fan of native monetization, and with native monetization *has* to come Native KMs (read: Native Key Metrics). A classic example of a Native KM is Facebook’s PTAT (‘People Talking About This’). It’s a trailing seven-day count of FB users who have created ‘stories’ about a FB Page (another FB Native KM).So what if Fred instead said this:’We at USV want to lead by example as others call for an ‘End to Bullshit Metrics,’ and we have scheduled office hours with each of our portfolio companies to help them talk through and agree upon three key metrics we will measure together for 2013.’And because we are big believers in the Network Effects of The Enterprise, we have partnered with our portfolio company Edmoto to provide a shared social stream amongst our portfolio companies where our firms can share their progress with one another, as long as those posts tie directly to our agreed Native Key Metrics.’And we have asked each of our portfolio firms to implement custom Mixpanel objects so that our firms’ Native Key Metrics can be updated weekly, and so that we can avoid any surprises or ‘missed promises’ as we go through 2013 together.’Or something like that.I suppose I envision a day where ‘Board Decks’ are not multi-hour presentation exercises, but they are shared almost as easily as newsfeed-esque flows are shared by platforms like AngelList, Crushpath & Edmoto (among I am sure many others).

    1. fredwilson

      That’s what board meetings are for

  38. Brian

    I wish you would have mentioned this company. Feels like a recruiting opportunity missed for them… *ahem

    1. Donna Brewington White

      Was it your company that Fred mentioned?

      1. Brian

        Unfortunately not.

        1. Donna Brewington White

          Seeing that you are involved in food and technology, I wondered if USV might be entertaining a company with this combination which touches on two of Fred’s (and Gotham Gal’s) passions. Granted that it represents “Large networks of engaged users, differentiated through user experience, and defensible through network effects.” (I’ve been around here awhile.)

  39. jason wright

    how much ‘pushing’ do investors sometimes have to do to get people to keep their promises?

    1. fredwilson

      All the pushing in the world won’t helpIt has to come from within

  40. Fred Grott

    Oh the irony..There is some startup attempting to get me to meet with them concerning becoming cto/cofounder..the speech is similar to what I am telling them..

  41. Kirsten Lambertsen

    I think this has some shared DNA with Steve Blank’s latest post about tenacity.'s the phrase? Everyone’s a genius an up market? It’s the crazy ones who find a way to deliver, no matter what, even in “winter.”On the other hand, I also think Jason Calacanis has good point…Maybe the reality or unreality of the “Series A Crunch” will be determined by the calibre of the startups and founders who are about to go in search of series A funding. What if 80% of them are awesome, showing traction, delivering on their promises? Will the funding for all of them emerge? Will more capacity be created?

    1. fredwilson

      The law of probability suggests that the vast number of angel funded companies in the last few years won’t make it

      1. Kirsten Lambertsen

        You think more so than before the ‘boom?’ In other words, do you think a greater % of startups funded in the last 5 years will fail than in the 5 years previous to that?What I’m trying to get at is, does all this additional angel funding necessarily mean that a greater % of the funded startups are dogs? Or is it possible that the “standard” % of them are dogs, and therefore there will be a greater number of defensible startups in the pipeline possibly stimulating more VC “capacity?”Having lived thru a couple of bubbles now, I’m fascinated by this topic πŸ™‚

        1. fredwilson

          Money doesn’t solve the basic challenges of startups. It just buys you time to solve them yourself. So I don’t think all of this funding did much to change the success ratios inherent in the business

  42. Tim Schreier

    Your lips to God’s ear! Refreshing!

  43. bfeld

    I loved this post, especially the punch line “This is no time to be in denial. That is a lethal attribute in times like these.”I just riffed off of it at Will 2103 Be Harder For Startups Than 2012?

    1. fredwilson

      i saw that brad. felt like commenting but was on my phone on a thin connection so i did not. it would be great to be able to comment to someone else’s post via email

      1. bfeld

        Seems like a feature for Disqus!

        1. fredwilson

          Sure does. But implementing it elegantly isn’t simple

        2. JimHirshfield

          Duly noted.

  44. paramendra

    My Nexus 4 arrives in two days.

    1. fredwilson

      I have a few issues with mineNo 4g/LTEBattery life is not greatThe material on the back developed a hairline fracture across the entire back of the phoneOther than that i like it. I have come to dislike all carrier distributed androids. I like the clean builds you get with the nexus line

      1. paramendra

        I am gungho about the price point: it is globally sound. And the whole not-tethered-to-some-carrier thing is awesome. ( Nexus 4: My First Smartphone )

      2. paramendra

        “The material on the back developed a hairline fracture across the entire back of the phone.”The case for my Nexus 4 arrived this very minute – bought online for $10. The case arrived two days before the phone did. Good timing. I recommend to you a case for your phone. If it is not too late. πŸ™‚

  45. Dan Cornish

    The best thing that can happen to a bootstrapped company is venture companies abandon a market because their investment did not make their numbers. Companies backed by investors who have little patience (unlike Fred) are very vulnerable to Black Swan events, pricing disruptions and product innovation. The can become a prisoner of their projections.

  46. Donna Brewington White

    Important comment.Once again the sage speaks.

  47. JimHirshfield

    Ah yes, mind the gap, gov’nah.