August 26, 2022
How To Move Fast While Keeping Burn Low

It’s never been more important to extend runway, move fast, and move towards profitability than in today’s uncertain market. This is precisely what Eddie Hudson, host of Tech Backstage, discusses with Christopher LaFerla, CEO of Tatem.


It’s never been more important to extend runway, move fast, and move towards profitability than in today’s uncertain market.

This is precisely what Eddie Hudson, host of Tech Backstage, discusses with Christopher LaFerla, CEO of Tatem.

Transcript

Eddie Hudson: (00:07):

Hey, y'all happy Thursday. Welcome to another episode of tech backstage. My name is Eddie and I'm joined with our guest today, Chris, the CEO and founder of Tatum. How you doing Chris?

Chris LaFerla (00:19):

I'm doing great. Thank you so much for having me.

Eddie Hudson: (00:21):

Yeah, dude. Thanks for, uh, taking the time to, to be on the show. And I'm really excited to be talking about what we're gonna talk about today. Uh, we'll get to the topic in just a second, uh, but definitely really relevant to, you know, what's happened in, in, in the economy and the industry right now as a whole. But before we dive into that, uh, I'd love to hear a little bit and just let the viewers know a little bit about who you are and, and your background story. I think it's, it's really interesting and I think it, it's definitely really relevant to the topic. So, um, would love to hear just a little bit more about you before we, we get going on that.

Chris LaFerla (00:54):

Awesome. Yeah, so I, uh, I'm Chris, I, uh, I went to Berkeley knew early on. I wanted to be a tech founder. Um, and so kind of positioned myself as that seemed like a good place to go up in San Francisco. Um, my first job actually was not in tech though. I was an investment banker at Barclays. I was covering software companies, internet companies, marketplaces like Uber, um, and, uh, lots of stories from there. If we wanna go there on what investment banking's like, but, uh,

Eddie Hudson: (01:23):

Yeah. Yeah, of course

Chris LaFerla (01:25):

I went into a startup itself. I went to fair. Um, the online wholesale marketplace, I was a pretty early employee there, I think 90 or a hundred now, I think they're like, well over 1200 employees. So that was an incredible experience, learned so much, um, phenomenal team in business there. Um, afterwards I started my first company. Um, it was a online marketplace for interior design. We raised venture capital, um, built the business, built the product. Um, unfortunately that one didn't work out. Um, lots to talk about with today's topic regarding that. And, uh, afterwards I started Tatum, um, which I am now building with the team and it really solves a lot of the problems that I think we had at companion at my first startup. Um, so that's kind of high level overview.

Eddie Hudson: (02:08):

Cool dude. That's, that's really exciting. Yeah. I was looking at your LinkedIn and I was like, it's like just, just finance and, and uh, and co-founding or founding. And I was like, okay, all right. We're very direct into the point here. Like I, I have, I come from a very different background, so like I, uh, very much in high school, I used to be, uh, like we used to program games into calculators, but we always thought we were gonna be musicians. So I kind of took the meandering path to software engineering and then becoming a founder, um, as very much

Chris LaFerla (02:36):

Drums Eddie.

Eddie Hudson: (02:36):

So that, well that's yeah. I mean, if you ever wanna jam, I got my, my base over here in the corner. We could make probably a, a pretty solid rhythm section, I think. Exactly. That's awesome, dude. That's great. Cool. So, uh, I guess we got a lot to cover here, so maybe we'll just jump straight into the topic because, um, again really relevant to what's going on in the world today. But, uh, today we're talking about how, how to move fast while keeping burn low. Um, do you wanna maybe just, uh, fill us in a little bit on, on, on the topic and, uh, why, why this is something that's so passionate to you?

Chris LaFerla (03:12):

Yeah, so I, I think there's not as many founders who come from investment banking or finance based backgrounds. A lot of us go into venture capital. So the people who fund the startups are very often, um, X investment bankers or management consultants. So they think similarly, but to your point on your story of programming games into calculators, most founders are generally software engineers, product managers, um, and that's like a slightly different career path. I kind of fell into that, um, becoming a product manager and then, you know, starting my own company. And then, you know, you just learn on the fly and that's what you end spending time on. Um, but as a result, I'm really, really passionate about how teams, especially in the really early days when you're under 10 employees, under 20 employees, as you're scaling to 50 employees as you're hitting hundred, how these teams should be managing their finances, because it's really the number one reason that these startups fail, right?

Chris LaFerla (04:04):

Startups die by suicide, not murder is the, the famous quote. Yeah. And, uh, you know, competitors often are a problem, but generally the markets that people are playing on are big enough to at least build a small business. It doesn't mean every business is gonna be the next Airbnb. Um, right. But the reason that many startups end up failing actually is mismanaging their finances because it doesn't give them enough time to build a truly incredible product that customers love. It. Doesn't give them enough time to iterate and pivot that product because maybe the first attempt that they had, they learned that's, there's no customer demand there. So they need to build a second product. They, they run their business as if they know what it's going to be from the day they found it and they give themselves 18 months or 24 months to build their business. And that's right. Not a long time to, to build. So, yeah, it's very dear to my heart because it's an area that I think can help a lot of early stage founders. People who wanna be founders, people in tech, who are just interested in startups, um, learning really best practices there, I think.

Eddie Hudson: (04:59):

Yeah. And I, man, I, so much of that I agree with and I resonate with it and I think it's so important too, cuz like you said to your point, most founders are not investment bankers. Um, I've talked to some investment bankers and, and you know, some, some people in, in PE and VC and uh, they're very like the way that, uh, you know, people like you and, and people in investment banking, look at companies it's very analytical, right? There's no, there's no motion involved in it most it's just, you know, Hey, these are the numbers. This is, you know, this is the, uh, this is the market size. This is the, the percentage we're trying to capture. This is the traction that we've had over the last 12 months. You know, this is our burn rate and you guys just kinda like put your, you know, magic sauce on it and then, uh, come out with like some sort of probability on the other side, right?

Chris LaFerla (05:48):

I mean, one of our managing directors at Barclays, one of them used to say managing directors like the head of a team, essentially in investment banking, they used to say, um, we covered tech and generally analysts at a college or MBA programs. They want to join a group that, um, they're passionate about. Like I love software. So I wanna join a software group. And at the end of the day, the MDs would say, it really doesn't matter what these companies make. All they make is EBIDA or they don't make EBIDA. So you're exactly right. They very unemotional approach to evaluating whether businesses are, you know, good investments or good to represent for an IPO or to sell, which is, you know, what, what I was working on. So very much focused on the analytics and, and how to build an incredible business quantitatively.

Eddie Hudson: (06:30):

Right. And so that, you know, juxtaposed against, I think in my opinion, the ideal founder, the ideal founder is somebody who has identified a problem that they have a unique solution to, and that they are passionate about, uh, bringing to market. Right. Mm-hmm <affirmative> and so there's a lot of these, that's really more the emotional side, right? Because they're, they're not necessarily concerned with how it looks on paper or IBIDA or anything like that. They're like, look, I got this awesome solution to this problem and I gotta get it out there. And

Chris LaFerla (07:08):

It's so emotional because you have to believe it when everyone is going to tell you, that's not a good idea that right. Even if it is an incredible idea, right? Like the amount of times that you're gonna get no, as an early stage founder are insurmountable, which is why most of my friends in finance work at very high paying, you know who from, from investment banking, their VCs getting paid a lot of money. They're in private equity, getting paid a lot of money. They're at big tech companies getting paid a lot of money. They're risk averse. Generally the people who are willing to take on the risk and say, I see a future where this is going to solve a problem that I've identified or a problem for other people that I've identified or my own problem in a magical way. And I'm gonna build a big business out of that. That's so much emotion. It's passion. It's, it's really something that usually the founders like love, right? Like I love what I'm doing at Tatum. Like, it doesn't feel like work. I work six, seven days a week because it's exciting to me what I'm doing. And I believe in that vision, but there's millions of people who would tell you that what we're building, you know, we shouldn't be, or, or whatever it would be just cuz of the nature of early stage startups.

Eddie Hudson: (08:04):

Yeah. Yeah, totally. And I think, you know, people like you that are founders, but also have a background in, finance's kind of like trying to find, you know, like a super senior full stack engineer that can do everything. It's just, it's not, it's not a combination. That's common, which is why like you see it's like they just don't exist. Right. Um, so it's why this is, you know, this is a topic, especially right now with, with the, the economy and the way, you know, we just, uh, you know, talking to, to, to some of my other friends who are founders, the money's tightening up right now and, and

Chris LaFerla (08:42):

Ly. Yeah.

Eddie Hudson: (08:42):

Yeah. And they're really, you know, I've noticed that they're really starting to shift the VC dollars towards companies that have already proven product market fit have already proven traction, you know, you know, during COVID and during the pandemic. And I'm interested to hear your opinion on this as well. But in my opinion, you know, money was going just about anywhere. It's like, oh, you got a good idea. Yeah. I'll throw a million bucks at it. If

Chris LaFerla (09:03):

You anything in crypto, just add zero to the valuation, you know?

Eddie Hudson: (09:07):

<laugh> yeah, yeah. Right. Yeah. So it's like all of a sudden, you know, C's happening and there's just a ton of money. And like, I think we're all still kinda like trying to figure out where all that money was coming from. And we're like, doesn't matter, just invest. But now it's really, we're moving back towards, you know, Hey, you need to have, you know, the scalable business model vetted, you need to have some product market fit. Hopefully you have some traction in a user base already. And so talking about this is really important right now, because even for companies that have that, like going out and raising that next round, like you really gotta be ready for that. You know, for the, if you're a series a, you gotta be ready for that series B. And if you're a series B, you know, cuz you're not, and there's also all this stuff in between too. It's like, well, what if you're series a and you need to raise a bridge to get to series B like, like right now is probably not the best time to be needing to raise a bridge and

Chris LaFerla (10:03):

Definitely not.

Eddie Hudson: (10:04):

Yeah. So I, I think, I

Chris LaFerla (10:06):

Think it's really, it's coming back to the fundamentals, like you said, right. It's coming back to the idea. I think we lost sight of that in 2021. Everyone's just like, if you're just building tech, you're gonna be a multimillionaire and every employee at your company and you're just gonna kill it. If you're building anything in, in software or whatever it has. And, and then we are reel that all the way back, even further than, you know, pre pandemic to does your business generate profit, like profit people forget there's a simple formula. It's just revenue minus cost. So mm-hmm, <affirmative> not only does it generate profit today. It's okay. If you're an early state startup and it doesn't. Um, but does it have the potential to, to one day generate profit? And you're seeing even the big public tech companies like Uber, like Airbnb just getting hammered in the markets if they're not profitable.

Chris LaFerla (10:49):

Right. Yeah. You're seeing 60, 70, 80% declines in these stock prices of these companies that were high flyers in 2021 cuz they are growing really fast. And then I think there's a, a look back now where it's like, well actually that company is losing money every quarter though. Yeah. And they've been 15 years in business, are they ever going to be able to generate profit? And I think that it's in the early days that you build that culture of profitability, you build that cultural of frugality that enables a company like zoom, which did go public pretty recently. Not that you know, uh, old of a company, but they are profitable because from day one they, they thought, okay, how are we going to build a business where today in the early days we're gonna work towards profitability. We're gonna work towards having good unit economics and we're going to scale that way. Yeah. And I think that's where, um, you know, that's the vision for us at Tatum and that's the vision I'd like to share with other founders as well.

Eddie Hudson: (11:38):

Yeah. And I wanna, I actually do want to dive into this a little bit more, um, because I know that you said, you know, when we were talking about this backstage, you were actually saying that you have specific advice for founders, but one question I have for you before we dive into that, because this is something that I think about a lot and I'm not trying to knock these brands at all. Um, but like Netflix, for example, going out and spending literally billions of dollars, um, to, you know, build out this studio division and, and do their own, you know, be able to make their own films and stuff like that. I always wonder if that's setting a bad example for, because those are not, there's not a lot of companies out there that can go out and spend that kind of money. And I feel like maybe it's setting a bad example for other companies that don't have that much money because it's kind of like that, you know, just like burn it all to the ground and then will make money later. And that's not really, that's not a sustainable business model for most companies. So I'm, I'm interested to hear, you know, with your finance background, like how do you think that affects, you know, how startup founders are thinking? And do you think that has, you know, somewhat of a negative impact on, on people that, you know, might be starting their first company or, uh, are just getting going?

Chris LaFerla (12:52):

Yeah, I definitely think it does. And I think that that's actually a solid strategy for Netflix, right? Cause they're building a serious entry. Like it's very hard if I can't go compete with Netflix right now, I, I can't pay the cast of stranger things like for a single minute of content, let alone 10, 10 episodes. Um, but it's all at the right stages. And, and that's where people lost sight in 2021, meaning people forget that Netflix was founded on the side of Reed Hasting's first company, which was a B2B software company. So he was already wealthy before he very wealthy before he founded Netflix and they were incredibly frugal in the early days, they went through many periods where they thought they were going to go outta business. They were so lean so scrappy at one point, I think in the early days they had to lay off half their staff when they were still under a hundred employees, they went one time with their tail between their legs to blockbuster saying, please buy us cuz we're running outta money.

Chris LaFerla (13:44):

So people lose sight of what it was like in the early days of these companies, right. When Amazon cutting down doors and making tables out of them because Jeff Bezos was so frugal that he didn't wanna build, you know, like pay for an actual table. Um, and they look today when yeah, Amazon paid a billion dollars. I saw recently for the Lord of the rings, um, estimated yeah. You know, TV show. So that's where I think it can get confusing to people who are a, either just starting in their first company or, you know, maybe just aren't in this industry where they, they see these huge, big tech companies spending billions of dollars on things that seem pointless, but they forget that to get to that point. It was years of working out of a garage <laugh>, you know, like right. No salaries. Um, and that's where in 20, 21 we lost sight, which was, oh, just raise a bunch of money and just start spending like that from day one. Well, that, that doesn't work. Right, right. We didn't build business that has the profitable underlying fundamentals.

Eddie Hudson: (14:37):

Yeah. No, and I love that. I think that's a great, uh, great point of view. So, uh, for those that are listening, you know, I think that there's definitely a lot of startup founders that are, that are interested in understanding how they can be more efficient with their money. So I'd love to dive in and focus on, um, you know, some of your advice, uh, as a two time, uh, founder now, um, about how people can, can continue to move fast, they can continue to scale work on that product market fit and, and work on, on scaling the, the, the business model, um, without burning through their entire cash reserve. So, you know, interested to hear kind of like, you know, where you think, you know, where you think startup founders, uh, should actually get started with that.

Chris LaFerla (15:18):

Yeah. And like I said, I think it all starts with creating a culture of frugality at your startup. So what do I mean by that? Cuz some people are like, well just don't pay anything don't spend on advertising. Don't don't build a sales team. Don't even build a product. No. What, the number one, according to Peter teal, who I think is, uh, you know, obviously preeminent thought leader in this space, an incredible founder himself. Um, the number one trait that determines whether startup is going to succeed, that's most correlated is the founder salary in the early days. So, um, what does that mean? It means that right away, first recommendation cap, the entire team's salary with your own salary as the founder. So there's two ways to do that. You can either set your salary as the highest at the company. So you could say, I, the CEO I'm gonna make, you know, a hundred thousand dollars, no one at the company makes more than me.

Chris LaFerla (16:06):

The CEO that's generally, you know, makes sense to them. They're like, okay, like probably not doing more for the business than you are. Um, and that's one way. And that, that is still better than some things that I see for sure or a lot of companies in the early days. But the better way is to set your salary at or near year zero. Right? And you, a lot of people might be thinking who are listening well, you know, I'm not rich. I can't just not pay myself. It means it doesn't mean you're rich. It means that you're willing to do whatever it means. Moving back to my parents' house when I had a beautiful apartment in San Francisco and living for, and not paying myself a salary, which is how we do it. I, I think I actually pay myself like $500 a month cuz I need to call for health insurance.

Chris LaFerla (16:45):

But what you're signifying to yourself to your early stage team, to your investors, you're saying I'm going to do whatever possible to build this business and make it successful. And this is the number one way right away that you can immediately create a culture of frugality, right? Cause mm-hmm, <affirmative>, you're gonna then start treating that money in the bank. That's the investor's money or the friends and family money, or literally, maybe you invested some of your own money to boost rabbit it as the last amount of money that you may ever have. You're going to take it further. You're gonna stretch it further. You're going to be very, you're gonna be very focused on generating revenue because you're not gonna get a salary until the company generates revenue. So right away. Yeah. I think that's number one and I have a lot more, but just wanted to see if you have any thoughts on that.

Eddie Hudson: (17:24):

Well, I, a hundred percent, I agree with you. And um, you know, we, we bootstrapped our company from the ground up and I mean, we're a little bit different cuz we're a services company versus, but we are in the tech space and, but I can, I can tell you that I check the bank account every day and every dollar in that bank account counts. Um, because there is no, there is no backup plan to that. And you have people that you're responsible to, that you have to pay salaries to, you have to pay health insurance. And if you're, if you're irresponsible with that money, then you know, it's, it's gonna, it's, you're gonna hit trouble pretty quick. Right. And then, you know, when we did start taking on, you know, we just took on our first small, um, you know, friends and family round something about a friends and family round, something about having your friends money, sitting in your bank account, still having your

Chris LaFerla (18:17):

Mom's 401k money sitting in your company's bank account. Yeah.

Eddie Hudson: (18:21):

It's terrifying. Um, it's absolutely like the scariest thing that's ever happening

Chris LaFerla (18:27):

Mere and Horowits money and being like, well, if we lose this 10 million, you know, it is what it is. So yeah.

Eddie Hudson: (18:31):

Right.

Chris LaFerla (18:32):

Yeah. The best way is that was number two. So you naturally led there is invest in your own startup. Not only did I set my salary at zero, not to say that I'm doing all the right things. We make a lot of mistakes, like every startup, but I also put the first $50,000 check into TA, which again, I'm not a, I don't have $10 million in my bank account. Like $50,000 is a meaningful amount of money to me. Right. A huge amount

Eddie Hudson: (18:53):

Of money.

Chris LaFerla (18:53):

Yeah. Um, and you're continually putting yourself in a position where you have to win. Right? Yeah. And I think that's what it takes in the early days. Right. To get from the Netflix that was, you know, had to lay off half their staff that was begging blockbuster to acquire them that did anything possible to succeed. And then when they did succeed with the mail discs, if you guys remember the old Netflix yeah I

Eddie Hudson: (19:16):

Do. Yeah.

Chris LaFerla (19:16):

On that business totally down and said, you know, we need to build a whole new business here, which is streaming or Amazon with the desks and apple and you know, Steve jobs, parents, garage, whatever, it might be. All of these that's you have to just break through walls, cuz it's really hard to build an early stage of business. You guys bootstrap, you guys know it's, it doesn't matter what category, whether you're a services business, a tech startup, whether you're a healthcare consumer retail, it's just incredibly difficult. There's so many competitors, it's very hard to acquire customers. You have to build a product with nothing. And so if you're putting yourself in a position where you're saying to you and your team there, we have to, we're just gonna make it work. Right. Like we don't need to raise another $5 million in the next round. We're going to take the money that we have right now. And we're gonna build a meaningful business with that. Not only are you building a, a very great base for that business, you're probably also gonna attract the next round of investment. Right. Cause who doesn't wanna invest in that type of founder and that type of business.

Eddie Hudson: (20:10):

And that's actually, that's a, that's a great point because, um, that's one of the first questions that I hear from anybody. That's an investor. Right. So, uh, is it's Hey, is your founding team, are they, are they full-time invested in this or is this a side gig? Yeah. And I think that's one of the first indicators, you know, just like you said is like, if you're full-time and you're investing your own money in it, that means, you mean business,

Chris LaFerla (20:36):

The founder of, uh, jet.com previously diapers.com. I think, um, I forget his name, but very famous, you know, they were acquired by Walmart and he kind of led that and now he's doing something new. He famously, I think invested some like non round number in his startup. And I think they were like the investors at the time. Um, I think it was his first startup before any of those. And they were like, well, we're not a hundred percent sure on the investment, but like, why did you invest like $263,000? Like why, why, why that number? And he's like, that's all the money that I had. Right. <laugh> and you can imagine that they definitely invested once they heard that. Right? Yeah. They're like this guy is, he's gonna be a maniac. He's gonna do whatever it takes. He's gonna be an incredible founder. Now. I'm not saying I didn't invest all of my money.

Chris LaFerla (21:18):

Like that's a risk that, you know, that's a big risk, but it does mean exactly. Like you said, making yourself a principle, there's this idea in finance of principle, like it's your money essentially in a transaction or an agent, which is like the investment bank. Like we don't take any risk. It's easy when you don't take any risk to like, yeah, just try something and then walk away. And it's like move on to the next thing. But when you make yourself the actual owner in a way of the, the outcome, you're going to find yourself doing more. You're gonna find scrap your ways to do things. You're going to be able to do more with less, which the next point is keeping your team small. Right. People forget that Google was launched with four people, unpaid mm-hmm <affirmative>, Microsoft couldn't even afford the Allaire that they were building their original, basic code for.

Chris LaFerla (22:00):

They couldn't afford. I think it was like $400. They couldn't afford that. So they built it and tested whether it worked or not during the pitch to the company that they trying to sell to. They're like, wow, it works. They were more excited than the company. Cause they're like, well we've never even tried it. Um, yeah, forget that Apple's second product. So after already being successful was a team of 25 that launched like the Mac two, this idea in the past 10 years in startups has been like, you need a hundred person team to build a widget that goes into Gmail is like not true. False. Yeah. Right. Like having a super lean team and running it efficiently again, that's gonna give you way more time to discover what's resonating with your customers, with your product. Yeah. Give you the time to iterate. Sometimes it just takes two years to build a magical product.

Chris LaFerla (22:40):

Right. Companies, more recent ones like notion, uh, years that they were in private data. Right. Like it took a long time to just build that type of technology. And that's, you know, not even complex compared to if you're building, you know, something deep tech like autonomous vehicles or something, it takes a long time. It's not something you just, you know, oh great. 12 months have gone by. We just figured out how to make, you know, fully autonomous vehicles that takes years. Yeah. And so keeping the team small, having everyone wear multiple hats, have everyone really grind, cuz this is the startup that you're, you know, you're focused on is also incredibly important in combination with the prior, you know, kind of recommendations.

Eddie Hudson: (23:15):

Yeah. And I a hundred percent agree there and there's a book called working backwards about the, the, the Amazon process. I'm sure you've heard of it, but there's one thing in there that uh, when Jeff Bezos was talking about the early days of Amazon, you know, there's always that saying of work smarter work hard. And Jeff Bezos was basically like, well you have to work smart and hard. Yeah. That's a great book. <laugh> yeah. And I love that. And um, you know, but I think that really goes to the fact that when you start talking about your founding team right now, they have to really, really be sold on the idea as well. And I, I think it also is important, you know, this is my humble opinion, of course, that they have, you know, skin in the game and they have a stake in it. Because like you said, you're not gonna scale up a hundred people to build a widget for Gmail. It's gonna be a small team. They have to be dedicated to building a quality product. And you know, like, I'm sure you're probably the same as me as like, sometimes we don't have a life, you know what I mean? Sometimes we're working on Saturday night, you know, trying to get a new feature out the door that, you know, we thought was gonna be done on Friday and it's not. And so you've gotta find that small team and they gotta be passionate mm-hmm <affirmative> and if they're

Chris LaFerla (24:23):

Gonna unite them, like for like, we use our own product from day one when it was like horrible to now, when we think it's a pretty magical product for kind of task management and we're only five months into this. Right, right. And it's that bonds the team. So if you can solve something that you, your own team can build, I think that's a huge advantage because your team is gonna become passionate about something that you use every day. Now, not everyone has that advantage. Some people are building consumer apps, but what it does mean is use whatever your product is. So I don't even think this was one of my recommendations I had, but it's a big one is dog food in your product is incredibly important if your team isn't trying whatever you're building every single day, seven days a week, six days a week, five days a week.

Chris LaFerla (24:59):

It's uh, why are you beta testing with actual users, right? Like you are the team that should be thinking, wow, this really solves one of my problems or this talking to hundreds of your potential customers, if you're not solving your own problem. Um, so I think that's incredibly important. And uh, I think it's, it's also a matter of efficiency. So on the, the flip point there, I actually think attem, our team has a pretty great work life balance. I work a lot because I love it. But we end Friday at 3:00 PM. We have like summer, Fridays every day, every Friday. And that's because again, focusing on what really matters efficiency, meaning no one does any work from three to 7:00 PM on Fridays. Like even in investment banking, like I didn't do any work. Like, like no one, you just sit there and you wait until like it's acceptable leave and you do.

Chris LaFerla (25:44):

Yeah. So focusing on where you're actually going to get those productivity games Monday through Thursday, really grinding maybe. Yeah. You do have to work over the weekend because it's a new release, but it also means just being very efficient, not boiling the ocean internally, having a founder or the founding team, or whoever's leading your product. Who's really very much linear in their thinking that they're creating a linear process. That's like, here's where we are. Here's where we need to be. Here's the hundred things that we need to do. That's gonna give efficiency back to the team. You're still gonna need to work incredibly hard. You're still gonna need to pull long nights or you need to work weekends, but you can alleviate some of the view that if I don't work seven days a week for three years straight, uh, my startup's gonna fail. And that's like not true. Right. It's it's balances.

Eddie Hudson: (26:23):

Yeah. I agree. And I think also too, like, I mean, as a software engineer, there's, you know, if you don't take breaks, like there's times when, like I sit down and look at the code and I just like, I mean, sometimes you can't even read your own code cuz your brain's just so fried. You know what I mean? So I, I do think that work like life balance is really important even for founders. I mean, I'm the same as you, you know, I'll be answering emails on Saturday night at 1130 and, but that's, you know, that's because that's my personality, but that doesn't mean that I don't disconnect. And if you don't disconnect, you're gonna run the risk of burning yourself out. Um, and I think that that also is, is, is something that you have to take into consideration is that you have to kind of know when it's like, you know, let off the gas and like just, you know, go for a run or, you know, go to the beach for a couple days or just do something. I mean, because otherwise, you know, you're gonna kind of run yourself into the ground. I mean, that's that, that's been my experience as a founder is that, and I kind of know when it's time now, because like I'll just be sitting there and like, I'll just kinda, like you said, about Friday afternoon, I'll just be sitting there. It's like, you know, Monday morning and I'm like staring at my computer screen. I'm like, I probably went a little bit too hard in the paint the last couple weeks. Huh?

Chris LaFerla (27:29):

Yeah, yeah, exactly. Yeah. Um, totally agree. And I think that, you know, a, another big one that people just forget is referencing some of those companies that I gave examples, apple, Google, Nike, Phil Knight, you know, he bootstrapped the company as an accountant, which is a brutal job, especially then because accountants were, I think, more akin to investment banking a little bit there wasn't investment banking wasn't really career. So I'm sure he was pulling long nights. Right. He definitely was like weekends, like working and he did that for years paying Nike's bills. So I think, again, it's a lot of this coming back to the idea of just people have forgotten, like what it really takes in the 2020 year. One era of you can just say you're building anything and someone is gonna give you $5 million to build it of like what it takes to go from that stage in the early days to then a successful growing business in the second, third, fourth year.

Chris LaFerla (28:24):

Um, and it is a, a mix of grinding, working hard, working smart, being incredibly lean. Um, but also like you're saying on this most recent point, making sure that you think that this is a marathon, right? Cause it's not gonna be a year of doing this. It's not gonna be a year and a half. It's it's a 10 year journey. It's a seven year journey. It's a 15 year journey sometimes to do it and you have to be ready to kind of build up that pace. And that means you need to make sure you're taking care of yourself, making sure the team is taking care of themselves, making sure you find hobbies a little bit outside of work. Um, you know, I think are very important. Yeah,

Eddie Hudson: (28:55):

Yeah, no, a hundred percent agree with you. Um, we got a couple minutes left here. We blew right past the wrap up period, because this is such a great topic, but um, just kind of interested to hear, you know, kind of final closing thoughts from you about, you know, just any last words of wisdom for, for any, any founders or, you know, anybody that that's looking to maybe start a company, um, that's listening in today.

Chris LaFerla (29:21):

Yeah. I think the last piece there is build lean in general, right? Mm-hmm <affirmative> it means thinking about that approach of how can we give ourselves as much time as possible to really validate whether what we're building has success and that's when you then pour on the money, we kind of touched on it and we got sidetracked to Netflix. There is a time when you should be spending millions of dollars a month, probably probably in like a growth stage, but that's because you've already built the fundamentals where the business works and now you're just trying to grow as fast as possible and then come back towards profitability. But to get to that point, it's all about building very, very lean. And there's a reason that the best startups that all of us are thinking about, they were all built during recessions, right? Yeah. Airbnb, Uber, um, PayPal, etcetera.

Chris LaFerla (30:02):

These were all built either during or right before a huge recession took place. And there's a reason those became preeminent businesses is, and you know, businesses that we look to as huge successes is because they had to build this culture in to succeed at all. They would've just died off if they ran like the companies are in 2021 and that's today too. Right? So there's a huge advantage in my opinion, actually, to building right now, there's less competitors cuz less people are getting funded than ever before. Um, you have the opportunity to actually build, take a little bit slower, build an incredible product. The best thing that you can do in the early days of any startup is just building a truly magical product. You can't hack it. You can't, you can't find a way to create a product that is magical. It just takes time. Mm-hmm <affirmative> and it takes a lot of, you know, iteration and, and kind of talking to customers, continually getting feedback and iterating, iterating, iterating. So I think that's, that's the biggest piece of advice there.

Eddie Hudson: (30:50):

Yeah. I agree. Well, Chris, uh, we're out of time, but thanks so much for taking the time to join us. I think it's been, uh, really valuable conversation, definitely a topic that I'm passionate about, but I know that it's definitely a topic that, um, you know, hopefully will help some, some of the listeners. So I appreciate you taking the time and uh, Carlos, do you want to pop in and talk about the last show that we have on the week?

Speaker 3 (31:14):

Certainly. Eddie. Thank you. Appreciate it. So tomorrow there's only one more show for the week, uh, folks, and that will be with Anand. Dear VM. Amanda is the product management and strategy and innovation that airs. So please join us tomorrow. Right here on tech backstage at 11 o'clock in the morning, Pacific time. Remember show up and have fun during the weekend. Be safe. Everyone. Thank you so much.

Eddie Hudson: (31:42):

Thanks Carlos. And thanks Chris again. We'll see you soon. Thank you.

 

Chris LaFerla Profile Photo

Chris LaFerla

Founder & CEO

Chris is the Founder & CEO of Tatem, a B2B software company redesigning how work gets done. Tatem’s first product is the simplest project management platform on the planet. And it’s not just simple, it’s radically different, designed to help teams love their work. Though Tatem's journey began mere months ago in 2022, the business has already raised a $2.5M Seed Round, garnered an impressive roster of investors such as Caffeinated Capital, Signia Venture Partners, and The House Fund, and is empowering a growing number of teams. Prior to Tatem, Chris Co-Founded his first company (an online marketplace for interior designers) and was an early employee at Faire working on strategy & finance. He started his career as an investment banker at Barclays covering internet and software. He holds a B.S. from UC Berkeley’s Haas School of Business, where he studied as a Regents' and Chancellor's Scholar.