How Entrepreneurs Survive a Bear Market Coatue Ventures President Wrote These 11 Dim Sum Sutras

Dan Rose, president of Coatue Ventures, shared some of his personal early-stage startup lessons via Twitter to provide guidance to Web3 entrepreneurs.

Dan Rose is president of Coatue Ventures and Coatue Growth. Before joining Coatue, Dan held leadership roles at Amazon and Facebook for 20 years. He worked at Amazon at the beginning of the new millennium, when its market value fell by as much as 95%. Later, while working at Facebook, he negotiated a “blood financing” to cut valuations in 2009, and later in 2012, Facebook’s stock fell 50% after going public. Dan Rose, who was a board member of a bankrupt public company (Borders) and a failed startup company (Hello), recently shared some personal early entrepreneurial lessons via Twitter, translated by PANews, for Web3 entrepreneurs. guide.

How Entrepreneurs Survive a Bear Market Coatue Ventures President Wrote These 11 Dim Sum Sutras

1. Raise money whenever possible, not just when you need it. Amazon started converting debt in February 2000 – if we wait another month, it won’t survive. 9 years later, I raised a financing in Facebook at a valuation that was 33% lower than the previous round (PANews Note: In 2007, Facebook received an investment from Microsoft at a valuation of $15 billion, and in 2009, Facebook received DST’s investment at a valuation of $10 billion. $200 million investment), although we have ample access. But don’t wait until you’re cornered.

2. Cash is king . Forget about valuations, depreciation, etc – none of that matters when you run out of cash. Borders defied the internet and used its own cash flow to buy back stock for years. In 2009, a private equity firm fired the board and asked me to join, but there was no turning back.

3. Growth can wait, but survival cannot. Amazon’s stock topped $100 in 1999 and bottomed out at $6 in 2001, just months after it would go bankrupt. We stopped the bleeding by raising prices, and cut $1 billion in cash-burning businesses to achieve positive cash flow. Revenue growth slowed to 3%, but we survived.

4. Change the tone. In 2000, Amazon made a small but symbolic effort to streamline administration. Around that time, Amazon founder Jeff received a t-shirt from the team and promptly kicked the team out of his office and banned all company giveaways. We even took aspirin from the lounge and provided coffee and water. (PANews Note: According to the replies at the bottom of this Twitter thread, the provision of aspirin in the break room may give employees a psychological hint of frequent headaches, back pains and other problems under work pressure, when the focus is on pain, excuses, complaints, etc. can’t focus on work.) Small actions set the tone.

5. Leaders should set an example. Facebook founder Zuck wore a tie to work in January 2009 and wore it every day for an entire year. His message to the company was: “It’s time to take our business seriously.” Every time we had a meeting with Mark, we were reminded that things had changed.

6. Reorganize the team. During the pandemic, I was speaking to the management executive team of a travel startup whose revenue fell to zero overnight. I encourage them to re-evaluate their teams, and there are people who have come forward in a crisis who are the future leaders of the company. Others will leave the team, which is also a welcome “break away”.

7. Hope for the best and prepare for the worst. 5 years ago, I was the only outside board member for a startup struggling to raise capital. I should have helped them prepare for a soft landing instead of crashing into the south wall. There is a hard reality to accept – most startups fail.

8. Accept the unacceptable. After I joined, Amazon’s stock doubled, but I was living down the drain with a 1-year lockup period. 3 years later, I sold the restricted stock at $8 per share (PANews note: Amazon’s stock price is over $3700 in 2021, today it is $2300 in US stocks). In 2008, I sold Facebook shares in the secondary market for $1 per share (PANews note: Facebook shares over $380 in 2021, today is $200) to pay my rent in Palo Alto . Do what you have to do and never look back.

9. Actively communicate. When Facebook’s stock plummeted after our IPO, I worked with my employees on that, rather than pretending the stock price didn’t matter. It is easy to fall into silence in difficult times. Don’t do that, your team needs you more than ever.

10. Tell your story consistently. During this time, I stayed at Amazon because Jeff showed me his vision. When the global financial crisis delayed Facebook’s IPO by four years, Zuck never stopped talking about the mission. Churchill taught the world the power of storytelling in difficult times.

11. Embrace the abyss. Every great leader has tested their mettle in a crisis. Every great company overcomes existential threats. Heroes have to cross the abyss – no one chooses it, but everyone faces it eventually. How you respond…that’s all that matters.

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