Early in my career, a mentor shared the following. "For the next two years, you should join the highest profile startup you can, ignore everything else in your life, and work your ass off. After two years, quit, then go do it again. Do that as many times as you can so you get stock in as many startups as possible. Hopefully one of your lottery tickets hits so you can stop grinding and eventually live the life you want".
I stayed at my first company for 11 years, during which I came to question the conventional wisdom. Indexing makes sense as an investment strategy, but I'm not sure it is the best approach if you want to solve a worthwhile problem, understand something deeply, or build something of quality that lasts. For this, a better approach is to focus and compound knowledge over a long period of time. Perhaps it was confirmation bias, but as I looked around at the companies I admired, I saw a pattern. As Steve Jobs reportedly said, “if you look closely, most overnight successes take a very long time”.
There is an obvious counter to this. Most startups fail. Does long term knowledge compounding meaningfully change the odds to the point where it makes up for the risk concentration? For every celebrated long term success story, there are 1,000 obscure failures. How do you build a team that takes the long term approach to knowledge compounding, without encouraging reckless risk concentration?
Replit just completed our first ever tender offer, through which current and former employees could get liquidity for their vested shares. Several Replit Employees told me in private this allowed them to pay off debt, buy a house, or look after their loved ones in a way that made a significant difference in their lives. Unlike my mentor’s advice, they were no longer worried about stacking up lottery tickets in the hope they could one day live the life they wanted. It allowed them to take a long term approach, without signing up for the delayed living plan.
As long as I am here, and market conditions allow, we will fight to get employees liquidity on a regular basis. This is a high conviction bet that long term knowledge compounds wins. We are building the team with this in mind. If this resonates with you, come work here.
What about liquidity for investors? We’ve been lucky to work with investors who also believe the alpha from long term knowledge compounding, which benefits all of us, comes primarily from the operating team, the employees grinding everyday to improve the product and delight customers. Accordingly we will look after the needs of employees first. When evaluating investors, we will prioritize those who care about building long term relationships, ideally who were previously founders or operators themselves. To this point, one of the best operator focused VCs out there made this tender happen. Craft Ventures will be joining the team. Craft brings a deep bench of SaaS and product-led growth expertise. Several members of my team had previously worked with Craft and had strong conviction in their ability to add value to our business. Not only is Craft bought into our vision to empower the next billion software creators, they’re already hard at work helping us achieve it. We are thrilled to have them, and grateful for their partnership.
Now, back to building.