Category: Economy/Business News

He Built A $1 Billion Business Where All 700 Employees Work Remotely

Sid Sijbrandij knows a thing or two about building, scaling and even walking away from companies. His current venture is doing over $100 million in revenue and is valued at over $1 billion.

Originally from the Netherlands, Sid Sijbrandiij is now the founder of one of Silicon Valley’s unicorns that is powering the web through developers worldwide. It’s not his first startup rodeo either.

Sid Sijbrandij recently appeared on the DealMakers podcast. During the exclusive interview, he shared his entrepreneurial journey, the process of finding cofounders, bootstrapping versus raising millions, his addiction to fast-growth startups, and many more topics.

Seizing Opportunities

Sid Sijbrandi seems to have always had a gift for spotting business opportunities.

During high school, he studied applied physics and management science. He chose a kind of program that blends the benefits of an M.B.A., with getting good at several engineering disciplines.

In his first year at college, he also started his first company.

The idea came from a fellow Ph.D. student that had made an infrared receiver you could use to skip to the next song on your computer (the only thing that played an MP3 song at the time). He started buying these infrared receivers from him and selling them in the U.S. You’d send him an envelope of dollar bills, and he would then send you a printed circuit board.

Ultimately, his two cofounders didn’t agree on growth plans concerning hiring more people. Sid wanted to hire faster, so he didn’t have to spend as much time on it, while his cofounders wanted to optimize for free cash flow. They ended up parting ways amicably.

The Two Most important Things for Launching with Cofounders

Sid has experienced several startups and says his two big takeaways when it comes to cofounding a company are:

1) To be smart with the shares

2) To be sure you and your cofounders are aligned in vision

For example, automatically making everyone an equal cofounder, even if they come in way later in that process, can be a mistake.

Sid says it is important that shares “are aligned with their contribution to the company. It’s very important if you start a company to have vesting of your shares as well.”

This helps avoid the free rides, because if someone leaves with all the equity, then people that need to invest like VCs are going to be like, “Why am I investing for just 50% remaining of the business.”

In the Netherlands, Sid didn’t find the goal of local companies to grow really fast. If you do want to grow a company really fast, he says it is beneficial to be somewhere like the Bay Area, where everyone just assumes that is the goal.

Not just your cofounder, but also your accounts person and your lawyer, and everybody else requires the growth mindset.

Passion for Growth

After graduation, Sid spent a few months at IBM and could have stayed there. He had an interest in strategy consulting, as well as building a recreational submarine.

He made a balanced scorecard of all the different ways to make that decision. One of the criteria being, “Is this a good story to tell in a bar?” He showed his dad who said it was a ridiculous way to decide on your career but was very supportive either way.

So, he called someone interested in a submarine venture. His pitch was, “Look, you should really hire me because I have a job offer from IBM. Otherwise, I’ll start working there, and we both don’t want that.” He got the job.

He built the first onboard computer for the submarine. Today, U-Boat Worx is one of the biggest builders of recreational submarines. If you go on a cruise, and they have a submarine, it’s likely from U-Boat Worx.

Still, after five years, it just wasn’t growing at a pace that kept Sid interested. He then went on to do a part-time stint on an innovation project with the government as a civil servant.

During this time, he really got to know himself, and how fast-growing companies with a continuous string of problems to be solved were what kept him interested.

Funding Your Startup

After starting and selling app store Appappeal, Sid turned open-source software GitLab into a fast-growing venture that is on its way to an IPO in 2020.

He took the proceeds from his previous venture, doubled it in bitcoin, and began bootstrapping GitLab.com.

Sid got the first few hundred signups through an article posted on Hacker News. Then together with his cofounder applied and got into Y Combinator. The race to demo day, where they would present in front of top tier investors, was on.

Compressing their three-month plan into just two weeks, the GitLab team had a highly successful demo day, landing Ashton Kutcher as an investor.

There was so much interest in their seed round, they rolled right into the Series A financing round. They’ve since followed that up with a B, C and D financing rounds, raising a total of $158 million at $1.1 billion valuation.

Today, some of their investors include Khosla Ventures, Google Ventures, August Capital, ICONIQ Capital, 500 Startups, and Sound Ventures to name a few. It doesn’t get much better than that as a hyper-growth startup.

In order to do this, Sid and his team had to master storytelling. This is being able to capture the essence of the business in 15 to 20 slides. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.

Embracing The Remote Work

Sid states they “don’t do in person.“ At Gitlab they encourage having meetings with webcam. They believe there’s something to see in the other person even if it is via video.

To put this into perspective, every day, employees have a company call, and it’s a thing you do with a limited set of people. In this regard, there are about 20 in each group, and they just hangout.

During the group calls there are all types of topics discussed that vary from movies to magazines. Topics are not necessarily work-related.

Sid and his team very much believe that their company is more than just, “Hey your work…”

As part of Gitlab‘s culture, the social interaction plays a key role and they have a lot of ways in which they facilitate this inside the company. Even if this happens remotely.

M&A Made Simple

Recently Sid and GitLab have been very active when it comes to acquisitions on the buy-side. That includes Gitorious in 2015, Gitter in 2017 and Gemnasium in 2018.

When it comes to acquiring companies, they’ve made the process incredibly simple, and are actively looking for more companies to buy.

In this regard, they like to acquire teams that have built a product before. Preferably a team that made a great product, but didn’t get distribution. Especially because typically they shut their existing product down.

To make things easier, they have an acquisition offer page. It even includes a calculator, so you can go online and calculate how much they’re offering.

Listen in to the full podcast episode to find out more, including:

  • When to pull the plug on your startup
  • The advantages of SAFE notes for raising money
  • How GitLab does meetings and culture around the globe
  • Why they pay based on where team members live
  • Tips for recruiting top engineers
  • Why you should read the GitLab handbook

Follow me on Twitter or LinkedIn. Check out my website or some of my other work here.

I am a serial entrepreneur and the author of the The Art of Startup Fundraising. With a foreword by ‘Shark Tank‘ star Barbara Corcoran, and published by John Wiley

Source: He Built A $1 Billion Business Where All 700 Employees Work Remotely

Advertisements

Here’s Why We Suddenly Stopped Hearing About A Recession

Topline: Economists—especially after the stock market took a dive in December—had been warning that a recession was coming, and possibly imminent. But a combination of low-interest rates and an improving labor market has quickly silenced those fears — and complicating the hopes of Donald Trump’s foes in 2020.

  • The risk of a recession decreased last week after the Federal Reserve declined to raise interest rates this year, said Brian Rose, senior Americas economist at UBS Global Wealth Management’s Chief Investment Office.
  • Combined with a stock market bounce-back and a growing economy, investors are now optimistic — a big shift from earlier this year.
  • Major economic predictors showing an increased threat of a recession have scaled back it’s predictions in recent weeks.
  • Asterisk: If President Donald Trump escalates the trade conflict with China by adding more tariffs on Chinese imports—particularly auto parts—the economy could suffer, increasing the chances of a recession, Rose said.

Earlier this year, half of economists surveyed by the National Association for Business Economics predicted a recession in 2020. Another poll of economists by the Wall Street Journal in January put the chances of a recession at 25 percent—the highest since 2011.

Coverage piled on (a few examples: “4 Signs Another Recession Is Coming―And What It Means For You,” “A recession is coming, but don’t flee markets yet,” “The Next Recession Is Coming. Now What?”), with many predicting bad news for Trump (Politico: “Trump advisers fear 2020 nightmare: A recession”). Some industries girded for the worst, like online lenders, who tightened its rules to lessen risk.

And then, suddenly, the panic eased. Now Goldman Sachs economists say there is only a 10 percent chance of a recession. What happened?

The biggest factor in that shift came when the Federal Reserve opted not to not raise interest rates, a pleasant surprise to economists. Rose said lower-than-expected inflation led the Fed to keep rates modest.

The economy, too, has grown, allaying recession fears. According to the latest job numbers, the U.S. has the lowest unemployment rate in 50 years.

“It is hard to have a recession when unemployment is this low and interest rates are this low,” Richmond Federal Reserve president Tom Barkin said on Wednesday.

The biggest risk of recession comes from Trump himself. If he increases tariffs on more goods than the $200 billion in Chinese imports he’s already promised, the risk of a recession increases, Rose said. As trade negotiations remain rocky, investors are increasingly concerned.

“Left on it’s own, there’s little risk to the economy,” he said. “The real risk of a recession comes from policy, particularly trade.”

Barring another recession, positive economic growth should mean good news for Trump in 2020. But as it stands, Trump is still relatively unpopular (his approval rating sits at 46 percent, although that is a high for him). And most forecasters agree the economy won’t grow as much as the White House says it will.

“A normal president with these economic numbers would have job approval somewhere in the vicinity of 60%,” Republican pollster Whit Ayres told the Los Angeles Times. “But Donald Trump is a nontraditional president, and he has, at least at this point, severed the traditional relationship between economic well-being and presidential job approval.”

Still, a recent CNN poll found that 56 percent of Americans approve of Trump’s handling of the economy. And while many Democrats haven’t focused on the latest job numbers, Senator Amy Klobuchar (D-MN), who is running for president, tried spinning the numbers a different way during an appearance on CNN, crediting President Obama with job growth.

I’m a San Francisco-based reporter covering breaking news at Forbes. Previously, I’ve reported for USA Today, Business Insider,

Source: Here’s Why We Suddenly Stopped Hearing About A Recession

DoorDash Is Now Worth Nearly As Much As Grubhub After $400 Million Funding Infusion

Investor appetite in food delivery companies is growing, notwithstanding a rash of customer complaints about how these startups pay contract workers. On Thursday, DoorDash announced it had raised another $400 million in a Series F funding round led by Temasek and Dragoneer Investment Group. The cash infusion brings DoorDash’s total capital raised to $1.4 billion, of which $978 million came from funding rounds in the last year.

Source: https://www.forbes.com/sites/bizcarson/2019/02/21/doordash-funding-400-million-grubhub-7-billion-valuation/#3df12b267e10

How Two Millennial Women Made Over $130,000 While Traveling the World Full-Time

 

Last year, I left my corporate life in New York City behind in a vow to give myself one year to design my dream job. Shortly thereafter, I took off on a 9-month-long social experiment, in which I would circumnavigate the globe by couch-surfing exclusively through my social network. Seventeen countries, four continents, and over a hundred encounters later, I have learned that I am not alone in my quest to earn a living while traveling the world: there are so many people out there right now who are making it work.

Source: How Two Millennial Women Made Over $130,000 While Traveling the World Full-Time

Forbes Mutual Fund Ratings: The Honor Roll

These funds have done well over the long pull while beating peers in bear markets. We evaluated 1,261 domestic stock funds. Twenty-six were good enough to make our Honor Roll. The select list includes some familiar names, like Vanguard Primecap and Fidelity Contrafund, and some less familiar ones like Parnassus Core Equity. Honor Roll members cleared three hurdles. They had to beat the stock market over three market cycles going back to October 2002. They had to hold up comparatively well in down markets, earning an A+ or A. They had to keep their expenses to a reasonable level: below the 1.5% median for this collection of mutual funds……

Source: Forbes Mutual Fund Ratings: The Honor Roll

5 Savvy Ways To Invest $10,000 In 2019

What would you do if you suddenly had $10,000 in cash at your disposal? Would you splurge for a trip to some far-flung corner of the world? Trade up for a nicer vehicle? Buy new furniture and a hot tub for your backyard deck? Those ideas might be the first that come to mind, but they may not be ones you will feel proud of ten or twenty years from now. Unless you have high interest debt you could pay off, your best bet with any “found money” is always going to be investing it for the long haul…..

Source: 5 Savvy Ways To Invest $10,000 In 2019

U.S. Stocks End a Dismal, Volatile Year on a Bright Note — TIME

Wall Street closed out a dismal, turbulent year for stocks on a bright note Monday, but still finished 2018 with the worst showing in a decade.After setting a series of records through the late summer and early fall, major U.S. indexes fell sharply after early October, leaving them all in the red for the year.…

via U.S. Stocks End a Dismal, Volatile Year on a Bright Note — TIME

U.S. Travelers Are Benefiting From The Lowest Domestic Airfares In At Least 9 Years – Dan Reed

1.jpg

With only one month left in 2018 it now appears almost certain that the average inflation-adjusted domestic round-trip air fare in America this year will be the lowest it has been in at least nine years.

Based on data and analysis from the U.S. Department of Transportation and Airlines for America, the major carriers’ trade association, the average domestic round-trip fare paid during the first of 2018 was $338, excluding ancillary fees, and $360 including those fees.

That’s 15.1% lower than the $398 that travelers paid, on average, in 2014 excluding ancillary fees, and 14.9% lower than the $423 they paid, on average in that same year when fees for ancillary services are included. The year 2014 turned out to be the costliest, on average, for domestic air travel year out of the last nine years.

Average U.S. domestic round-trip airfares since 2010Airlines for America/ U.S. DOT

The cheapest year for domestic air travel, on average, out of the previous eight years was 2017, when the average domestic round-trip fare, excluding ancillary fees was $347, and $370 with those fees. Those figures were  both about 3% higher than the average domestic round-trip fare in the first half of this year.

All dollar figures in the data and analysis are inflation adjusted and stated in 2018 constant dollars.

The final calculation of the average domestic round-trip fare price for all of 2018 won’t be available until sometime next spring. But it is very unlikely – in fact, it’s almost statistically impossible – for the full-year 2018 average fare price to rise above the 2017 full-year average price. That’s the case for several reasons.

First, to push that much higher from the first half 2018 average fare price, second half 2018 fares prices would have to have been significantly, even painfully higher throughout the second half of this year. But that has not been the case.

Only this week has Southwest been able to push through a modest fare hike that other carriers followed. Southwest is a long-established discount carrier that now struggles with higher costs than traditionally was the case. Still, it tends to set the floor price for fares charged by the nation’s largest, more conventional airlines. Southwest raised its prices $2 to $5 each way on about 90,000 listed fares. American, Delta, United, Alaska, JetBlue and Hawaiian airlines all followed suit.

That increase was welcomed by analysts and investors who had been complaining for months that airlines’ fares were too low this year because the industry had added more capacity than consumer demand could fill without airlines resorting to increased price discounting. But even that new, modest price increase isn’t big enough, nor will it be in effect long enough for it to significantly alter 2018’s downward pricing trend line.

Airline profits in 2018 also are expected to be down from 2017 and from the peak year of 2015, when the group as a whole earned an unprecedented $23.7 billion net profit and an operating profit of $26.8 billion. Last year U.S. airlines reported combined operating profits of $20.3 billion and combined net profits of $14 billion.

Through the first nine months of this year, U.S. airlines saw fuel prices move up 50% from the previous year, only to fall precipitously again over the last six weeks.

The fact that U.S. air travelers are getting a relatively good deal on the average domestic fare prices paid this year does not mean that every passenger is scoring a great deal.

The calculation of the average fare price includes a large number of factors that impact the percentage of seats sold at various prices. Business travelers and leisure travelers willing to spend extra for comfort frequently end up paying twice or three times more than the price of the average fare. Conversely, those willing to forego “extras” or even service features that used to be considered basic (like the ability to choose a seat or carry on a bag for free) frequently pay half, or even only a third of the “average” fare price.

Then there are business travelers who pay somewhat lower fares for full service treatment because the big corporations for which they work negotiate substantial net discounts based on the high volume of business travelers they place a particular carriers’ flights.  Then there are those who travel for free, or virtually free, by using mileage points earned as members of carriers’ frequent flier programs.

Price-sensitive travelers tend to make up a much greater share of passengers on board any given flight. But the wide gap in prices paid by the most and the least price-sensitive travelers can push the average price up even though relatively few travelers pay those higher fares.

Not surprisingly, data from A4A, the carriers’ trade association, illuminates the effect that different carriers’ marketing approaches can have on the average prices paid by their passengers.

U.S. Carriers’ Average Domestic Round-trip Fares* – 1st Half 2018

Carrier                                 Fare                      Market Share

Southwest                          $261.52                 23.3%

American                            $411.63                 19.6%

Delta                                    $413.01                 18.8%

United                                 $428.70                 14.4%

Alaska                                  $320.78                  6.3%

JetBlue                                $296.36                   5.5%

Spirit                                    $ 90.32                    4.3%

Frontier                               $114.71                     3.1%

Allegiant                              $133.65                    2.5%

Hawaiian                             $349.12                    1.5%

Sun Country                       $268.60                   0.4%

Southwest, which continues to be a discount carrier though it no longer positions itself as industry’s absolute low price leader, had an average roundtrip domestic fare price, excluding fees and taxes, of $261.52 in the first half of the year.

American, the world’s largest airline, had a first half average fare of $411.63, while No. 2 Delta’s was $413.01 and No. 3 United’s was a relatively whopping $428.70.

But because Southwest, which has a very small international footprint, carries an industry-leading 23.3% of all domestic travelers (to the Big Three’s 19.6%, 18.8% and 14.4%, respectively), its first half average domestic round-trip fare of $261.52 has an out-sized effect on bringing down the industry’s average fare price.

The carrier with the lowest average domestic round-trip fare in the first half of this year was Spirit Airlines, at just $90.32. Thus, though it carries only 4.3% of domestic passenger, Spirit, which features Spartan service and extra fees for virtually any service beyond a seat on the plane also has a strong downward pull on the industry’s average fare. Though slightly pricier – and, in each case, smaller that Spirit – fellow “ultra low cost carrier” Frontier, Allegiant and Sun Country exert similar downward pull on the industry’s average price.

Here’s How Bloomberg Should Have Spent His $1.8B For Economic Mobility – Allison Dulin Salisbury

1.jpg

As soon as news hit of Michael Bloomberg’s latest donation to Johns Hopkins University, the praise—and the critiques—started rolling in. If you missed it, the billionaire and former New York City mayor announced last week that he would be giving $1.8 billion to his alma mater to increase need-based financial aid for low- and middle-income students. Bloomberg’s goal, he wrote in The New York Times, was that “no qualified high school student should ever be barred entrance to a college based on his or her family’s bank account.” That’s a well-meaning goal, but it misses the mark on promoting economic mobility more broadly, his ultimate aim, and the purported aim of much of education philanthropy………….

 

 

Donate us if you like

 

The Philippines Per Capita GDP Has Reached An All-Time High Under Duterte – Panos Mourdoukoutas

1.jpg

Philippines President Rodrigo Duterte has a terrible human rights record. But the average Filipino is doing better under Duterte. When it comes to per-capita gross domestic product (GDP), that is. That’s a measure of the total output of a country divided by the number of people in that country. The Philippines’ per-capita GDP was last recorded at an all-time high of 2,891.36 U.S. dollars in 2017, according to Tradingeconomics.com. That’s well above the average of 1,627.98 USD for the period 1960-2017. Also, Filipinos are doing better under Duterte when per-capita GDP is adjusted by purchasing power parity (PPP). That measure, too, reached a record 7,599.19 U.S. dollars in 2017, well above the average of 4969.71 USD……………..

 

 

 

Donate us if you like