Entrepreneur Office Hours - Issue #14
Startup "cheat codes," recognizing startup success, and the teenager who caused the Dot-Com Bubble
It’s a new year! And, to celebrate, I’m kicking off the first issue of 2021 exactly the same way I ended 2020: sharing more articles and podcasts about startups.
What? Were you expecting something different? If so, you might be subscribed to the wrong newsletter…
For the rest of you, I think you’ll like this week’s collection. In this issue, I answer a question that dives a bit deeper on the issue of warm intros versus cold emails. I also explore the possibility of startup “cheat codes” (wouldn’t it be cool if they existed, right?), help an entrepreneur figure out what startup success looks like, and have a conversation with the guy who may or may not have caused the Dot-Com Bubble and subsequent crash back in the early 2000s.
Thanks to everyone who has sent questions. I’m answering them as quickly as possible, so if you haven’t heard from me directly or seen an answer here, I promise it’s coming. And, if you haven’t asked a question yet, or have more questions, just reply to this email, tweet me on Twitter, or message me on LinkedIn.
To me, building startups has always felt a bit like playing video games. And my favorite part about video games as a kid was using the cheat codes to avoid all the hard stuff. So I started wondering... are there startup cheat codes? If so, I think I know one of them.
Bill Martin - The Teenager Who Fueled the Dot-Com Bubble
The Dot-Com Bubble of the late 90s and early 2000s was such an important part of Internet, entrepreneurship, and investing history that, 20+ years later, people who weren’t even alive at the time still understand and appreciate references to the “dot-com crash.” Because of that, it was fascinating to speak with Bill Martin, the then-19-year-old founder of RagingBull.com, which was one of the earliest online communities for people interested in the market. As you can imagine, a lot of the conversation on his website fed the hype behind the big tech boom and bust.
Hear the full story on:
…or just search “Web Masters” wherever you listen to your favorite podcasts.
Lots of entrepreneurs just assume they’ll know when things are going well and when they aren’t. But that’s definitely not the case. When you’re working on a startup, success is harder to recognize than you probably think, and learning to recognize it is a big part of what will help you know you’re on the right track.
Office Hours Q&A
I just wanted to thank you for sharing initial data supporting your hypothesis that warm intros can be worse than a cold intro. I think many of us share this hypothesis. [Aaron’s Note: He’s referring to this article.]
What are your thoughts on the impact of the standing of the person making the warm intro?
I ask because, I get the feeling that a warm intro will usually run into the issues you listed. However, I also get the feeling that the "wisdom" around warm intros was created based on a "halo" effect of getting an intro from a Brand Name where the positives of that association outweigh the common negatives of warm intros.
You’re hitting on an issue that reminds me of another problem with warm intros I originally wanted to include in the article you’ve referenced, but I couldn’t quite figure out how to fit it in without making myself sound like an enormous jerk. I’ll give it a shot here with the caveat that I hope nobody reading this will judge me too harshly.
Personally, when someone I know -- even someone I love and respect -- makes an intro via email, I kind of hate it because responding doesn’t allow me to feel as good about myself.
Let me explain…
When I get a cold email from someone, I’m in control of whether or not to respond. To be clear, if it’s a reasonable email with a reasonable request, I’ll always do my best to respond. But the key is I was the person who got to make the choice, so, psychologically, it makes me feel like I’m doing something nice for a stranger, and that puts me in a more positive mindset.
In contrast, when someone I know introduces me via email, I feel obligated to respond. I know if I don’t respond, the person who made the intro will see my silence, and I’ll feel judged. Psychologically, feeling judged isn’t as good of a feeling as helping a stranger.
As a result, even though I’m definitely more likely to respond to warm intros, I’m not in as good of a headspace as I’d be if I was in control of whether or not I responded.
To be clear, I’m not suggesting any of this happens consciously. But, I think it matters a lot in terms of what happens in the ensuing conversation (or even if there is an ensuing conversation).
Simply put, when someone cold emails me and I personally make the decision to respond, I get to feel good about myself for helping a stranger. That’s a happy, positive feeling. But when someone I know introduces me to a stranger and I feel obligated to respond, I don’t get to feel good about myself. Instead, I feel like I’m fulfilling an obligation, which, by the way, is how I also feel when I change my toddler’s poopy diaper. That means, from the very beginning of my relationship with the person who I’m being introduced to, I’m subconsciously approaching it as something less positive. Is that the end of the world? No, not really. But it’s not a good thing.
So let me propose something else, which is a strategy I tend to use that bridges the gap between warm intros and cold emails. Rather than asking for warm intros, I ask for suggestions about people who I might consider contacting. Then I take the suggested contacts, find their email addresses on my own, and send cold emails that -- at the very beginning -- mention who suggested I reach out.
For me, this strategy is the best of both worlds. It gives the recipient of my email the ability to choose to respond on their own (which is a positive feeling), and also shows how we’re connected (which makes the email feel more personal). This strategy also subtly strokes the ego of the people I’m cold emailing because they can’t help but think others they know are talking positively about them.
In my experience, it’s this kind of email -- the cold intro with a mention of a mutual connection -- that has the best result.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!