Zebeth Media Solutions

EC Column

How to effectively manage a remote team during wartime • ZebethMedia

Alex Fedorov is CEO and founder at OBRIO, an IT company with Ukrainian roots that develops products in mobile applications, web products and SaaS. Business owners always say that each company has to live through a real crisis before it becomes a real business. All big companies we know have experienced a few big crises during their lifetimes, and they are still in the game. There are a lot of studies about crisis management on the web, but none of them tell us how to manage a company during times of war. Our company had never seen a real crisis before February 2022. However, even before we did, I always told my team: “Every company has its time in the sun and a time of crisis.” When the Russo-Ukrainian War began on February 24, all Ukrainian businesses faced a crisis. I’ll use our example to explain how we dealt with it. Here are six tips for effectively managing a team during a war. Establish an emergency communication channel In such times of upheaval, people will require a lot of up-to-date information about what is happening. When people don’t know what’s happening, there arises a vacuum that can be filled with rumors or distorted news. To avoid this, you must establish a special communication channel that’s active around the clock. Slack notifications, for example, can be automatically turned off outside of working hours, so make sure you utilize a channel that your team uses most often so they are less likely to miss important notifications. This might seem like an easy and pretty obvious step, but it is the most efficient way to help your team when they’re feeling lost or disoriented, which is only natural when there’s a war raging around them. Communicate with your team twice as often Training to manage stress, anxiety and personal finance will help your employees build the needed knowledge and respond to tough situations. Great leaders communicate with their people, and we must all remember that “overcommunication is good communication.” For us, this saying has never been more correct. Communicate as frequently as there are updates on the issue but not less than twice a day. Additionally, follow your usual rules for team communication: Be honest, empathetic and humane. Finally, when there’s a serious crisis, most people’s critical thinking faculties can be hindered. In such situations, you may have to over-explain things to your team more than usual. Do not shirk this responsibility. If your team needs its hand held, be there to hold it. It’ll pay off in the long term and help you stay in control from the early days of the crisis until things calm down. Stop investing in R&D and get people back to work ASAP As a leader, you must save your business, as it is something people rely on in times of uncertainty. The first thing to do here is to save as much cash as you can in order to stay in business as long as you can. That often means cutting back on non-essential spending. This can be a tough decision, but it is a sacrifice you may have to make. After our team was in safe locations, the best way forward was to get them back to work and help them calm down. It sounds strange, but this is the best way to direct the anxieties and nervous energy of war. At work, where everything is known, prescribed and straightforward, people find calmness and a continued sense of purpose. In my experience, the first wave of crisis is the most difficult because of the high levels of uncertainty. However, once you get over that phase, there will be fewer variables, which is when you return to investing activities if they are still feasible. Use your standard remote-work policy When the war broke out, it was very difficult to manage the team and reestablish our business processes. So we waited to do it after our team was evacuated and relocated safely. Proven remote policies were a lifesaver when our employees were not in their usual environments. Nobody discounts the value of team spirit, so invest in it more since people will need each other’s support at a much greater degree during times of great strife. Among online team building activities, AR activities proved to be an amazing mood enhancer. Conduct special training to support your team Crises, thankfully, are rare, but that also means people often do not have enough knowledge to handle the loads of unusual information they’re bombarded with in such situations. In such situations, you should: Educate people by conducting special training with the help of experts. Training to manage stress, anxiety and personal finance will help your employees build the needed knowledge and respond to tough situations. The Ukrainian Center for Strategic Communications has created a guide titled “Psychological support during the war,” explaining how to spot and assist with mental health problems. Invite successful and respected people to share positive thoughts on the situation and perhaps explain how they’ve faced especially tough times. Authority bias is real and it works as a morale booster when a team needs direction and a sense that things will turn out to be fine. Share relevant positive news to cheer up your team and create a vision of a better future. Tie business goals to social initiatives When war broke out, people wanted to help. This was good, but we realized it can affect focus on work and could eventually lead the business to an even more profound crisis. In such times, put your over-explanation tool from Step 1 to work and educate people on how your company’s success benefits society. As a result of what your team accomplishes at work, your company can invest more resources in charity initiatives when growth or profitability is maintained or improved. As a consequence, your team can do more and have more resources to do something significant for society. This should have no effect on your existing

5 ways biotech startups can mitigate risk to grow sustainably in the long run • ZebethMedia

Omar Khalil is a partner at Santé Ventures, where he focuses primarily on biotechnology and medical technology companies. The unprecedented explosion of investment in life sciences over the past decade has resulted in incredible new therapies for patients, strong financial returns for companies and an overall increase in translational research, which is critical to advancing the next generation of therapies. It has also led to eye-popping levels of capital raised by early-stage companies, some of which were years away from entering the clinic with their first product. Naturally, a generous flow of financing generates excitement for everyone involved. Capital is the fuel that advances scientific and technological innovation, and it means a life science startup can create products that benefit the world at large. But what happens when the funding suddenly dries up? In the world of biotech, for example, it’s extremely capital intensive to develop multiple products that are all going through clinical trials simultaneously. The infrastructure needed to maintain these different programs can be too unwieldy to weather a financial drought. A better approach would be to focus on a lead program — a single product that they can take through various stages of development, ultimately leading to FDA approval. In fact, lead programs validate the value of an underlying platform, enabling companies to raise capital through licensing and partnerships. Founders shouldn’t let peer pressure or investor check size mandates dictate their financing strategy. There will always be ebbs and flows in funding, so here are five ways life science startups can optimize for success regardless of the economic climate. Don’t confuse successful fundraising with a successful company At the end of the day, fundraising is a means to an end. The mission for most life science startups is to improve patient outcomes. However, science is hard, and cash in the bank does not overcome the complexities of human biology. Plenty of companies have successfully raised significant amounts of capital but were never successful in developing a beneficial product, therapy or technology. While not a perfect proxy, the value at which a venture-backed company exits (through M&A or IPO) can be an indication of its success in developing a new product. However, there is practically no correlation between the amount of capital a company raises and its ultimate exit value. Since 2010, the R-squared between exit value and total invested capital — a measure of how correlated the two variables are — for all healthcare exits is a paltry 0.34. When you drill down to a correlation between the exit value and the amount of capital raised in a company’s Series A financing, it drops to a practically negligible value of 0.05, according to PitchBook. These statistics support the notion that just because a company raises significant amounts of capital (especially early on), there is no guarantee of a successful investment outcome. Founders shouldn’t let peer pressure or investor check size mandates dictate their financing strategy. Instead, focus on advancing your program through the key stages of technical and clinical development.

5 tips for launching in a crowded web3 gaming market • ZebethMedia

The first wave of the play-to-earn (P2E) gaming boom seems to be coming to an end. There are still plenty of blockchain studios staging successful multimillion-dollar raises around the globe, but competition for funds has tightened to the point where only standout projects are winning backers. With great strategy more important than ever, here are a few tried-and-true steps you can take that will help set you apart when you’re seeking capital and preparing for liftoff. Leverage experience in the traditional gaming studio sphere The blockchain gaming market is full of builders who are experienced in crypto but haven’t built traditional games. I’m a prime example. Pegaxy was the first game I worked on and the first I launched. Like many other web3 games of its time, its mechanics and graphics were fairly basic at the start. But while simplicity was fine with the web3 gaming crowd, it has become increasingly clear that P2E will need to attract traditional Web 2.0 gamers if it is to scale, and these gamers demand much more. To please this demographic, builders will need games that have it all: superb graphics, strong mechanics and rich lore. You can have the best team and the best game, but without a solid monetization strategy, those mean little. That’s why a founding team that pairs an understanding of web3 fundamentals with experience in building and monetizing Web 2.0 games for mobile, desktop and console platforms will set you apart in this market. It’s also why, after Pegaxy was launched, we founded Mirai Labs. We wanted to assemble an expert team to build games that appeal to the traditional gaming community. Develop a clear, straightforward monetization strategy Most traditional P2E games have fairly simple revenue models that rely on users buying and holding the token that serves as the in-game currency. This means that when large groups join and play a game at once, token prices and revenues rise in tandem. But when market conditions change — or when players just lose interest in a game — there can be a mass exodus of users. This is bad for revenue and can be catastrophic for token prices. Therefore, building a game that succeeds in the long term means developing monetization strategies that can weather market ebbs and flows, those that couple the best of web3 tech with proven Web 2.0 revenue models.

How can early-stage startups improve their chances of getting H-1Bs? • ZebethMedia

Sophie Alcorn Contributor Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives. More posts by this contributor Dear Sophie: How can I launch a startup while on OPT? Dear Sophie: How can I protect my H-1B and green card if I am laid off? Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies. “Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.” ZebethMedia+ members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off. Dear Sophie, We have a stealth early-stage biotech startup. Do we qualify to petition a co-founder on STEM OPT for an H-1B in the lottery? Is it worth it or are there better alternatives? — Budding Biotech Dear Budding, It’s absolutely possible for an early-stage biotech (or tech) startup in stealth mode to successfully petition a founder or founding engineer for an H-1B in the lottery or even an H-1B transfer. Here’s how, starting with some background on how the H-1B lottery works for startups. In recent years, U.S. Citizenship and Immigration Services (USCIS) has leveled the playing field for startups entering an employee or prospective employee in the H-1B lottery by creating an electronic lottery registration system. Because the demand for H-1B visas far outstrips the annual supply of 85,000 (20,000 of which are reserved for individuals with a master’s or higher degree), USCIS uses the random lottery process to select companies that are eligible to petition for specific beneficiaries. Before 2020, companies had to submit to USCIS a completed, paper-based H-1B petition package for every employee and prospective employee they wanted to enter in the annual lottery. USCIS adjudicated the H-1B applications that were picked in the lottery and literally mailed the unselected paper applications back to the lawyers. The time, energy and legal costs for submitting an H-1B application made participating in the lottery under this system quite onerous, particularly for startups, because you had to commit to paying for a full H-1B before you knew if your candidate had a chance. Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window) That all changed in 2020, when USCIS instituted an electronic registration process for the lottery. Now, sponsoring companies only need to pay a $10 fee to register an employee or prospective employee in the lottery, which significantly reduced the barrier to entry for all companies, including startups. That means that you can enter as many candidates you would like to sponsor in good faith into the lottery. If people quit after they are selected and before you file, you don’t have to follow through with a full H-1B. If your budget doesn’t allow for you to currently sponsor your entire international remote team but you still want to give everybody a chance, you can do that. Can early-stage biotech startups get H-1Bs? Yes, most definitely! The biggest issues facing early-stage startups when getting an H-1B visa for their founder or co-founders are:

A prep checklist for startups about to undergo technical due diligence • ZebethMedia

Matt Van Itallie Contributor Matt Van Itallie is the founder and CEO of Sema, which provides codebase analytics for M&A. Previously, the author offered a detailed overview of the technical due diligence (TDD) process investors conduct before injecting cash into early stage startups. In this follow-up, he offers a detailed checklist for C-level executives and senior managers who are responsible for helping VCs determine whether their “codebase is safe enough for investment.” Product roadmap Explain how you collect user and customer feedback. Provide a sample subset of the most granular user/customer feedback you collect. Provide the results of the synthesis of user/customer feedback. Provide the last 12 months of product management data for Engineering (e.g. Jira tickets). How much was spent on new features / functionality compared to maintenance? What are the major items on the list? Explain the roadmap for the next 12 months. Code quality How much does Finance invest in tech debt prevention and remediation? In security risk prevention and remediation? In IP risk prevention and remediation? Which software languages do you use? Is the use of new languages managed? Is a refactoring being considered or possibly needed? Which testing methods do you use and what is their breadth? Do you perform unit tests, automated tests, manual QA testing, and user acceptance testing? Share the most recent results from each type of test. Is a line-level scanning tool such as SonarQube in place? If yes, share a sample report. Is third-party code managed through a manager, stored in the code, or both? Why? Describe your architecture and provide architectural diagrams. Intellectual property

8 questions to answer before your startup faces technical due diligence • ZebethMedia

Matt Van Itallie Contributor Matt Van Itallie is the founder and CEO of Sema, which provides codebase analytics for M&A. Investment activity is down now, but it’s likely to pick up in 2023. And when investments ramp up, so does M&A. Will your organization and your code pass technical due diligence when it’s your turn? Let’s start with the positives: If an investor is proceeding with technical due diligence (TDD), you’ll likely pass. You’ve passed the tests for product-market fit, financials and competitive differentiation well enough that they now want to look under the hood. Here’s the not-so-good news: Companies can pass the business test, but fail TDD. Especially for non-technical executives, the code-examination process can feel like … an audit … conducted in another language … with a loud clock ticking away incessantly. Not fun. Our firm has analyzed the code of hundreds of billions of dollars worth of deals, from three-person software companies to firms with thousands of developers. We’ve looked at the contributions of over 200,000 developers who have collectively written 4 billion lines of code. Poor codebase health is more often than not “caused” by other teams rather than by engineering. From that dataset, we’ve distilled eight questions that you can ask yourself now. Even if TDD is not on the horizon, having good answers to these questions will ensure your codebase is healthy. A quick primer on TDD Before we go any further, here’s a bit more context on technical due diligence for software: TDD applies to traditional software companies and non-software companies enabled by custom created software. It involves the examination of code written by employees or contractors. TDD is conducted by in-house experts or by specialist consultancies. Investors and acquirers, especially the larger and elite ones, may ask to conduct a quantitative code scan to supplement qualitative interviews. Such a code scan is effectively mandatory if the investor is seeking reps and warranties insurance (RWI) for the deal. The goals of TDD are to: De-risk the deal by determining if the codebase is safe enough for investment. Identify opportunities for improvement if the transaction goes through. We say “codebase” because it’s more than just the source code that’s under the magnifying glass. Your documentation, processes and most importantly, the software developers will also be under examination. The functional scope of TDD includes code quality, code security, intellectual property, DevOps, IT and, sometimes, product management. Because it’s more than just the quality of the code, we talk about codebase health to encompass all of these areas. Question 1: What have you been working on? Making sure that the organization is working on the software products that matter most is an important part of de-risking the deal. This may sound obvious, but sometimes, a company claims to be working on a new product, but will actually be spending the majority of their time on custom development for major clients or not working much on anything at all. Consider this example of a company’s software development over two years. Not only is there a cyclicality in the work (higher in summer), but it has declined significantly over time, especially in 2022. Image Credits: Sema Important point: Here, and for all questions in TDD, any answer might be sufficient to clear the examination. This leads us to TDD Theme #1: The most important part of TDD is ensuring the state of the codebase is aligned with the organization’s business objectives. For example, U.S. education software companies typically see cyclical software development — higher in summer and lower in fall — to minimize disruption for customers when school starts. Question 2: How much unit testing does your codebase have? We like to distinguish between underlying code quality to include such measures as its maintainability or the ability to be extended, and the functional code quality — how the product works for users. “Technical debt” is another way of describing any lack of perfection in the underlying code.

Where will it be deployed? • ZebethMedia

Jeremy Abelson Contributor Jeremy Abelson is the founder and lead portfolio manager of Irving Investors. Combining his experience as an operator and institutional investor, Abelson runs Irving as a multistrategy platform making long-term durable investments in both the public and private markets. More posts by this contributor What am I worth now? For the first time in 4 years, profitability beats growth Jacob Sonnenberg Contributor Jacob Sonnenberg is a portfolio manager at Irving Investors and runs Irving’s Technology and Consumer Crossover Fund. More posts by this contributor What am I worth now? For the first time in 4 years, profitability beats growth Venture fundraising has continued at a robust pace, but much less cash is being deployed. Let’s start with a few headlines: Bessemer in September raised about $3.85 billion for early stage startups, the largest vehicle in the firm’s 50-year existence. Insight Partners in February raised over $20.0 billion, double its predecessor fund (closed in April 2020 at $9.5 billion). Lightspeed in July raised more than $7 billion across four funds for seed to Series B rounds. Battery Ventures in July raised over $3.8 billion with a broad mandate. Founders Fund in March raised over $5 billion across venture ($1.9 billion) and growth ($3.4 billion) funds. a16z in May raised about $4.5 billion in its fourth fund targeting blockchain, bringing its total funds raised for blockchain-related companies to more than $7.6 billion. a16z separately closed $9 billion in fresh capital in January, with $1.5 billion allocated to biotech investments. Tiger Global is rumored to be raising PIIP 16 in what could be an around $10 billion vehicle and its second largest fund ever. The public markets have seen an extreme valuation recalibration, and it’s effectively trickling down into the private markets. All the while, crossover funds and VCs have been watching from the sidelines — capital deployment is in somewhat of a “wait and see” mode. The net/net: More dollars being raised with less deployed equals materially higher cash balances. Image Credits: Irving Investors What the numbers tell us Capital raising Venture capital fundraising has remained somewhat constant this year. VC firms have raised a total of $122 billion so far this year, and are on pace to finish the year with $172 billion. Short-term valuation “work arounds” can become much bigger long-term problems. That’s 20% less than 2021 ($214 billion), a touch below 2020 ($180 billion), and about 11% less than the $194 billion average raised annually since 2019. This strong level of fundraising is in stark contrast to the poor performance of high-growth names in the public markets. For instance, our high-growth SaaS bucket has suffered losses of about 60% to 80% or more. Image Credits: Capital deployment Total capital deployed by VCs in Q2 2022 and Q3 2022 has rapidly declined and now averages just $39 billion per quarter. This is on track to be the lowest reading since we can pull the data from 2017. Currently, capital deployed in Q3 2022 (less than $40 billion) is on pace to be about 70% below Q4 2021 levels (about $118 billion).

Building the bridge between Web 2.0 and web3 • ZebethMedia

Devin Abbott was founder of Deco (acquired by Airbnb) and specializes in design and development tools, React and web3 applications, most recently with The Graph. It’s too early to predict all the implications of the recent Ethereum blockchain Merge, but it definitely addresses the most frequent (and valid) criticism of web3 regarding excessive energy consumption. Critics may still find a new reason to oppose ETH, but my hope is this Merge will lead to something else: A chance for us to also merge what’s best about Web 2.0 with what’s most exciting about web3. There’s seemingly a growing rift in Silicon Valley, with the traditional Web 2.0 industry and the burgeoning web3 ecosystem depicted as being in opposition to each other. And trapped somewhere in the middle are emerging startups. I’m active in all three groups, and I believe most of this controversy is based on wild pronouncements and hype by VCs and other evangelists who are not developers. Incessant celebrity promotions of NFT drops, for instance, have contributed to the impression that web3 as a whole is a Ponzi scheme. In fact, NFTs are only a small part of the web3 ecosystem, and, in my view, not even the most interesting or potentially transformative. While Web 2.0 and web3 may seem incompatible, I believe it’s better to see technologies like blockchain and ETH as potential back-end solutions for scalability challenges that all companies face. In a similar way, web3 advocates should recognize that Web 2.0’s maturity makes it indispensable for many core use cases. Despite web3’s great potential, it’s still much easier to develop a Web 2.0 app simply because the ecosystem is mature and enjoys a large and thriving developer community. Let’s consider a couple examples where each side has something to contribute: From web3: An emerging revolution in open source To capture what’s happening in web3 development now, we have to go back to before the Web 2.0 era. During the dot-com boom, there was quite a lot of buzz over open source, Linux and hot companies like Red Hat. While very few consumers would go on to install Linux as their operating system, this buzz helped contribute to something equally important. In the background, with few people noticing, Linux quickly became the go-to operating system for running the back-end servers of 96.5% of the top million web domains — not to mention the massive Android market.

3 ways to hire well for your startup • ZebethMedia

Champ Suthipongchai Contributor Champ Suthipongchai is founder and GP at Creative Ventures, a deep tech firm that invests in early-stage companies. If you’re hiring for your startup, you need to understand one thing: This is arguably one of the worst times to be looking for talent. While inflation continues to skyrocket and the Fed pumps up interest rates, consumer confidence remains unchanged and unemployment sits at a historical low. The business and market financial outlook is grim, but companies are still at the mercy of their employees, who seem to have endless choices for jobs. Big Tech might have released some 10% of the talent back into the market, but those were generally not employees executing core businesses. How, then, can early-stage founders compete with larger, better-funded companies in this war for talent? View talent through a product-market fit lens Whenever possible, it is far better to slowly integrate a great candidate in as an adviser or part-time contractor and let things play out. Most startups simply do not have the means to compete on the basis of capital, especially when it comes to talent. Your early employees (your first 20-25 people) join you because they are seeking something that bigger companies with money cannot offer them. Your job is to figure out what that something is and make it available. Approaching early-stage recruitment through a product-market fit lens is great way to do this. Think of your candidates as your customers, and get to know them in person, understand their career path and learn what their gaps are. Their gaps are your problems and the role you have to offer is your product. The two have to fit together — otherwise, it’s not a good hire. When you figure this out, explain how they can get what they want from working with you and why they cannot get it from other companies.

Read this before you reprice your SaaS product because of the downturn • ZebethMedia

Torben Friehe Contributor Torben Friehe is CEO and co-founder of Wingback. No matter the circumstances, SasS pricing is always challenging and always will be. Underpricing your product, using a pricing model that is not working for your ICP, not offering self-signup or offering the wrong features as add-ons — all of these pricing and packaging issues (and many more) can cost you a lot of revenue. But the economic downturn has added another element to the mix. Common wisdom tells SaaS founders to adapt their pricing according to changing market conditions, but is that actually helpful advice for SaaS founders? As far as I can see, it isn’t for most. Undeniably, the economic downturn will change buying behaviors and decision-making processes for some of your potential customers. But it’s wrong to assume that this means you are overcharging for your product in the current market. In reality, most budget cuts right now, unfortunately, are the big ticket items (staff). SaaS is comparably just a drop in the bucket. However, that doesn’t mean SaaS is totally safe either. Companies are looking to trim the fat on their teams, often reconsidering entire workflows, and weighing which software can help fill in the gaps. This is especially true of low-code/no-code products where customers can make do with fewer pricey engineering resources. In this sense, SaaS products are just as much a part of the equation. Thinking through a pricing and packaging change right now can help you flourish when things are better again. When you see your numbers not picking up (or maybe plummet) it can get very tempting to frantically start changing your pricing, offer discounts or second-guess your strategies. But before you embark on a price-slashing journey, do some careful analysis. If your sales numbers are lagging behind what you expected, there is another question to ask: What’s actually wrong with your SaaS product or its pricing? It’s important to make a distinction here. Does the real problem lie in how you’ve valued (priced) your product? Is it the market’s impact on your product’s demand? Or is there a problem with the product itself? Each of these are entirely different diagnoses with different prescriptions. If the problem is how you’ve valued your product

Subscribe to Zebeth Media Solutions

You may contact us by filling in this form any time you need professional support or have any questions. You can also fill in the form to leave your comments or feedback.

We respect your privacy.
business and solar energy