2. On Incentives and Investment Memorandum

Dear Co-creator;

I am really excited to document our journey, so much so that I don’t sleep well these days thinking about things. Work-life balance be damned but I will survive.

Today I want to update you on what happened in the last few days and talk about our participation process. Remember, these are all warm-up exercises – we haven’t started just yet.

Updates:

• I reached out to a few exciting institutional partners – you will love them. And they seem to like my crazy experiment.

• I made progress with our DIY MVP surveying/account management tech (read: Google Spreadsheets, some coding and tie-in with ChatGPT).

• We got the newsletter tech under control and opened up our twitter account: https://twitter.com/add_shortcut. I tasked my colleague to experiment there utilizing portions of the newsletter, and other cool stuff. Her KPI is a modest 1,000 followers in 1 month from scratch. It is a learning from absolute scratch (my personal account has only 49 followers 😉). But ever since Elon torched the place (he is the epitome of optionality and will share my personal Elon story in the future), Twitter seems like a good hunting ground for us, entrepreneurs. As always we will share all our findings, tools, experiments, etc. with you: another optionality to be part of our community.

How do we co-create?

Let’s start with incentives.

I have always been a proponent of Slicing Pie method for founder equity calculations. I will be allocating 5% (500,000 shares) in options to the first 1,000 partners in community. You will earn these options as you learn with me and spend a bit of time co-creating. Today we have 77 folks in our newsletter, and another 64 in our Slack group. So, we are about a 100-strong community a week after our soft launch if you will. The bi-weekly newsletter is an easy one-way push to your inbox so you are always cleanly updated, and Slack will serve for a pull/guided interaction. I am going to add a monthly shareholders virtual meeting at some point so we can see each others’ faces 😉.

Participation Method #1: I will post one research query a week to solicit your guidance in the form of a short survey. You answer the question (will take literally 5 minutes) and get 20 options. If you were to participate this way all throughout 6 months, you’d have 480 options. Not every one of you will participate (and research suggests 5% sustained participation in such community endeavors). And that’s ok. My last poll at Slack got 22% participation rate for instance (and looks like our ambition is to go for a moonshot!).

I am currently pegging our community currency (e.g. options) to your time at 10 options/15 minutes exchange rate. Let’s see how that goes.

We need at least 100 quality answers though, so we need to really get to 1,000-strong community for any statistical relevancy. I really really need your help to get from 100 to 1,000, AND SOON! Forward this newsletter to your friends. They will not regret it, and we will gift them Premium Membership.

Most importantly, we need their inputs in our startup!

Participation Method #2: And some of you will want to participate so much more and you will be compensated for your time per the task. I figured 5% equity may be enough, but hey, this is your house so there is absolutely no cap for you. My first ask is to bring your friends to the table, it will be an awesome community and more importantly we need them.

First such task will be to create investment memorandums on our 5 ideas by August 1, 2023. An internal and confidential investment memorandum is the distillation of a venture capitalist’s research and is used to recommend an investment in the startup. My friend and classmate Roelof Botha who now manages Sequoia Capital (arguably the best venture capital firm in the world) wrote the definitive memo on YouTube back in the day. His 9-page beauty (access in the Premium Member section) that convinced Sequoia to invest in YouTube (and the rest is history) is what we will aspire to. Don’t worry, we will do it together (obviously) but I will recruit 3-5 folks from our community for each of the investment memorandums. I suspect they will spend around 3-5 hours, and therefore get 200 options each.

Don’t forget: An entrepreneur is an investor. We invest our time and energy. We need to really convince ourselves and there is absolutely no better way to use the best tools, and there is no better tool than a “confidential investment memorandum” that we will write for ourselves and vote on the matter just how an investment committee at a venture capital firm does.

See you in a few days, and be well. Oltac

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