When I wrote about how to run your startup in a downturn, the world was on the brink of recession. The economy contracted sharply — and the effects of the 2020 recession will persist.

Coronavirus cases in the US have now reached their highest level since July, bringing a terrible human cost and further economic uncertainty.

If you are a founder, you can help. You can build companies that connect people, create employment, and spark lasting change.

“Building is how we reboot the American dream,” declares Marc Andreessen, venture capitalist and co-founder of Andreessen Horowitz. In his rallying cry ‘It’s Time to Build’ he writes: “We need to break the rapidly escalating price curves for housing, education, and healthcare, to make sure that every American can realize the dream, and the only way to do that is to build.”

Yet building requires capital. How do you raise funding when the economy is headed into uncharted territory? I spoke with 6 top venture capitalists to find out.

How has investment behavior changed?

• Deal velocity has gone up
• The bar for investments is rising
• VCs are nurturing existing investments and “proto-founders”

The recession did not cause activity to stall. In fact, deal velocity has gone up.

“It’s almost like a superheated environment right now,” says Bill Trenchard, general partner at First Round. “The speed with which partnerships can quickly meet with a company that’s of interest is so much higher in the Zoom world. It’s changing our thinking around velocity in the market, which was already very high.”

“We’ve been as active as we were before,” agrees Dan Rose, chairman at Coatue Ventures. “Maybe even slightly more active because I think more good companies are raising as kind of an insurance policy. When it became clear that we weren’t going to be able to meet with founders in person anymore, we snapped to Zoom.”

Velocity may be rising, but investors now require more data to reach conviction.

“The pricing is still the same but we see risk going up,” explains Bill Trenchard. “You need to be very rigorous on your investment theses and how you’re looking at companies. We’ve been looking for more grapple hooks and more data for things that we do invest in, so that we have more conviction when we do.”

“There’s been almost an immediate shift in terms of expectations from VCs,” agrees Brianne Kimmel, founder of early stage venture firm Work Life. “Companies have been forced to come in with more richness and customer development, a clear path to revenue, a lot more of a strategic approach around the core mechanics of the business and more specifically the business model.”

Sarah Guo, general partner at Greylock, also has high expectations for founders.

“There certainly is capital available, but it’s not for everyone anymore,” explains Sarah. “I do not feel that the rounds that I have been a part of very recently are in any way cheap or structured differently than previously. I would say that there’s been flight to quality and more attention paid to burn.”

“There’s no reason not to continue to invest in things that you believe really could be durable and important,” adds Sarah.

Facing multiple simultaneous challenges, it seems inevitable that the venture ecosystem must evolve.

Merci Grace, a partner at Lightspeed, agrees: “I’m spending a lot more time with people who are evaluating ideas and finding co-founders — I’m calling them proto-founders.”

“A lot of exceptional people have read the market and realized the end of one bull market is the start of another one,” remarks Merci. “This is an incredible time to start a company. New work and consumer behavior is emerging. There’s a lot of creative problem-solving ahead in our industry.”

How has sector focus changed during COVID?

• Some VCs are sticking with pre-pandemic themes
• Remote tooling is a major area of interest
• VCs are excited by innovations directly addressing the pandemic

Founders don’t need to pivot to raise funding. Many VCs are staying true to their original investment theses.

“I’m trying to resist the urge to over-index on the current moment,” says Charles Hudson of Precursor Ventures. “I know there are a lot of my friends in the venture business who earlier this year said ‘we’re only doing things that are remote oriented.’ But I also think: at some point people are going to go back to work in some way, shape or form.”

Dan Rose of Coatue has also remained on theme during the pandemic.

“At a macro level it hasn’t really changed our structure around enterprise, consumer and FinTech because we still think those are the big trends, the ones that we’re excited to invest in,” explains Dan. “I think that the virus has actually accelerated a lot of a lot of trends in all three of those categories.”

Other VCs are leaning into change — especially where products address needs that have been brought about, or accelerated, by the pandemic.

“It’s changed my investment focus quite a bit,” admits Sarah Guo of Greylock. “There’s going to be dramatic damage that we continue to suffer in the economy and in terms of human costs, but there’s also massive behaviour change and organizational change. And that opens up daylight for a lot of new solutions.”

“How should people work in a remote world in terms of tooling?” asks Sarah. “How should companies communicate in a remote world? And how do people communicate with their customers? I think the focus on figuring out digital as a stronger part of everything is going to be increased.”

Even before the pandemic, productivity and collaboration was an area of focus for Merci Grace of Lightspeed. At the beginning of 2020, Merci’s market map identified eight categories: messaging, voice and video, calendar and meetings, documentation, project management, design, search and context, and low code/no code and internal tools.

“I think we may have been on the cusp of re-bundling productivity tools by 2021 if the pandemic hadn’t taken place, but now I think that these 8 categories won’t collapse into each other for much longer,” explains Merci Grace.

“One of the most nascent categories, internal tools and low code/no code, is quickly becoming a must-have as companies focus on reskilling and upskilling their existing workforces.”

Are VCs backing different kinds of founder?

• Founder character matters more than ever
• Founder ability to recruit and lead matters more than ever
• Expect more founders to be oriented around design and community

“Who founders are as people and how they carry themselves in the world matters more now than it ever did,” advises Merci Grace of Lightspeed. “And that trend will just continue. There’s no longer a separation between your personal life and your business.”

“The culture of accountability we’re experiencing now will continue, and bad actors will have to be accountable for their actions inside and outside of work.”

“These sort of moments actually breed a very unique type of founder,” observes Brianne Kimmel of Work Life. “The companies that have historically performed well in recession actually start with a very strong opinion on design and a very strong point of view on community.”

“It’s more about connecting with users and really having an informed opinion on where the sector is about to go — rather than leaning too heavily on shipping an MVP quickly.”

Career-change founders might also find opportunities to build during the recession, according to Brianne. “I think that we’ll see a new type of entrepreneur: someone who has grown up in a different sector with different expertise, and is able to move laterally into a new industry and build a new type of company.”

Are valuations shifting?

• VCs disagree on whether valuations are changing
• Founders are becoming more intentional on pricing and partnership
• Non-pandemic factors may have the strongest impact on valuations

When it comes to valuations, the jury’s out: VCs are observing different trends.

Bill Trenchard of First Round, who invests at the seed and series A stage, notes that valuations have not changed despite increased risk. “What I’m shocked about is that prices haven’t changed and that deals are actually going faster,” says Bill.

Sarah Guo of Greylock, who also invests at the seed and series A stage, agrees. “My view is valuations, for the set of things that we want to be looking at, are actually not going to adjust very much. But fewer things are going to get funded.”

Charles Hudson of Precursor, who invests at the pre-seed stage, has noticed that valuations are down. “I’m even seeing valuation pullback from the group that I thought would be most immune to it, the repeat founder.”

To Dan Rose of Coatue, founders are now less interested in maximizing price and more focused on picking the right price and the right partner. They are now asking: “What’s the right price for me at this round in this stage of my company? And how do I make sure that I’m bringing in the right partners to help me grow to the next level?”

Brianne Kimmel of Work Life notes that valuation depends highly on the business. “I have not yet seen a cooling from a valuation standpoint if you are a repeat founder or have already curated a very senior team,” says Brianne.

“It depends on first-time founder versus repeat founder, it depends on pre-product or post-product,” elaborates Brianne. “I think it also depends on distribution advantages. Have you come from a related company where you’re building something in a similar space, where you deeply understand the buyer already? Are there any advantages that actually set you apart? It really depends, and that influences the valuation.”

How should founders prepare for tough times?

• The effects of the recession will be long-lasting
• Founders must lead with compassion
• Challenging circumstances reveal a company’s true team
• Growth must be planned carefully

It is very difficult to predict the shape and duration of this recession’s effects.

“How quickly we can recover is tied to the pace of scientific discovery as well the action or inaction of the federal government,” says Merci Grace of Lightspeed.

“It’s also a time of both feast and famine, depending on the vulnerability of businesses to the specific public health measures that prevent the spread of COVID-19.”

But the message for founders is clear: prepare for the long haul.

“I expect things to be slow and sluggish through 2021,” warns Charles Hudson, founder at Precursor.

Charles continues: “There are two big questions. One, how well-organized is the policy response? We have 30 to 40 million people whose relationships to the labor market have been severed. And then we have COVID-19, which is still a very big business disruption, at least in the United States. It does not yet feel to me like we have an operating procedure that allows the economy to fully get back to steam.”

First Round’s Bill Trenchard also foresees long-term economic pain.

“I would guess towards a 2-year slowdown until we really come out of this,” says Bill.

It is not enough for startups to be well prepared. According to Dan Rose of Coatue, inspiring leadership is also essential: “The ability to stand up in front of your company and articulate a vision for why what you’re doing is going to survive and thrive, regardless of what happens in the market.”

This turbulent period also represents an opportunity for founders to identify those who truly believe in the overall vision.

“The opportunity in these situations is to really look around the table at the people that you have on your team,” says Coatue’s Dan Rose. “These moments separate the folks that are really in this for the right reasons, and have conviction in what you’re doing over the long term, versus the people who may be there because they saw a short-term opportunity.”

For companies finding ways to grow, the message is to grow in a controlled way.

“Be cautious that some of your growth might be turbocharged by the current environment,” warns Charles Hudson of Precursor. “Don’t over-hire thinking that the current situation is the new normal for your business forever. But don’t be afraid to be aggressive in going out and signing up customers and putting the pedal on the gas.”

Merci Grace of Lightspeed agrees that founders should balance their aspirations to grow with careful preparation for challenges ahead.

“You should both lean into that growth and do it with fewer resources and lighter fixed costs than you would have a few years ago,” counsels Merci.

What’s the best strategy for fundraising right now?

• Founders from top tech companies remain attractive to VCs
• Show great revenue, churn, and unit economics
• If raising pre-seed, ensure you can close the round

According to Bill Trenchard of First Round, high performers who started products at top-tier tech companies remain attractive to VCs.

“They’ve got great product skills, they’ve got great engineering skills, they’ve got really great insights and they’ve seen something scale from early stage,” reflects Bill.

However, founders now need to go beyond revenue, and show great churn and unit economics.

“Most founders are focused on finding product market fit and on traction, metrics, usually revenue growth. I’d add to that churn numbers, as well as unit economics,” Bill explains. “I think that people don’t focus on the quality of the revenue very early on in the business. Being able to show really solid unit economics is way more important today.”

Founders raising pre-seed need to be sure they can close the round.

“We’ve made one big change at Precursor,” reveals Charles Hudson. “I used to be open to doing our 250K to 300K check up front and just saying, ‘Hey, take our money, get going, we’ll find the rest of it later.’ Now we’re much more focused on making sure that there’s a minimum amount of money around the table before we wire.”

For Brianne Kimmel of Work Life, the traditional pre-seed is also on hold.

“Raising too little in this environment is really quite dangerous,” cautions Brianne. “The companies that I’m seeing struggling today are ones that raised from a pre-seed fund. They didn’t raise enough capital, they raised at a very low valuation, or they raised in a manner in which you’re almost consistently fundraising.”

“It distracts you from building product and spending your time on actually hiring great people,” elaborates Brianne. “And it forces you to be in this constant panic mode, where you’re always trying to figure out to what extent can you layer in more capital?”

“Startups that I’m seeing that are fairly recession-proof, or ones that are less anxious in this moment in time, have raised very solid seed rounds: less concerned on valuation, but more concerned with getting enough cash in the bank to be heads down and to focus for the next 18 to 24 months.”

How should founders pitch VCs over Zoom?

• Shifting to Zoom has advantages
• Developing a rapport over Zoom demands more effort
• Zoom enables global fundraising
• References are more important than ever

VCs and founders have shifted almost all their communication to video.

“I basically just lived on Zoom with a team that I was thinking about making an investment in,” says Sarah Guo of Greylock. “I probably wouldn’t have spent the entire four days with them if it wasn’t for video. It was really interesting. You could never do that previously.”

VCs and founders are also grappling with the challenges of remote communication — particularly in building great rapport.

“I try to spend time with founders that isn’t transactional, even if it’s just spending more time asking them about their lives and motivations, than I would have previously,” says Merci Grace of Lightspeed. “You do miss a lot of useful information by not being in person, but video calls are a close second.”

The opportunities that Zoom presents arguably outweigh the negatives — particularly in terms of geography.

“First and foremost, it makes it possible for us to invest in founders all over the world now without having to get on airplanes,” enthuses Dan Rose of Coatue. “If you no longer have a hard requirement that you’d have to meet somebody in person before you can invest in their company, you’re suddenly unlocking entrepreneurial talent from all over the world.”

“It allows investors who don’t live in Silicon Valley to invest in companies that they may not have been able to reach before, because now they know in the inverse direction that that requirement is dropped.”

“You can meet with people more frequently, with less intense meetings, which is also a super valuable way to meet people,” continues Dan. “There’s less friction and you don’t have to be in the same place at the same time. We’ve done a bunch of early stage deals in the last few months with founders who we never got to meet in person. And with companies that we’re really excited about, including one in Europe that frankly, I’m not sure we would have been able to meet in person — but because we were able to do it over Zoom, it worked great.”

But since VCs don’t have much opportunity to meet founders in person, references matter more than ever.

Merci Grace sees personal references and customer calls as a useful way to make a holistic assessment of somebody: “To manufacture the serendipity you’d otherwise get by seeing how someone treats people in the service industry, for instance,” says Merci.

How should companies survive a downturn?

• Conservative fundraising suggests lower ambition
• Cut back carefully so that the company remains relevant
• Founders should prepare for when customers return

Sarah Guo of Greylock would advise founders not to be too conservative when fundraising.

“Sometimes the reaction to that position of lower confidence is ‘we should not ask for too much money, so we don’t get told no’,” observes Sarah. “You aren’t your most ambitious self because of the environment. I think that’s a mistake: the very best investors are still thinking in a very long-term mode.”

When cutting costs, founders should ensure that the company will still be relevant long after the recession.

“You have to ask yourself: in 18 months are we going to be ready for our customers when they come back?” says Charles Hudson of Precursor. “And that can be building out product features that you know that you’re going to need, shoring up internal processes, making sure that you’re close enough to your market and your competitors and your customers.”

“Don’t cut or tweak the business so much that you don’t have something interesting coming out of the recession,” urges Charles. “You’ve got to be ready as demand comes back.”

Founders face a huge number of challenges during this period of economic uncertainty. But the combination of high deal velocity and the shift to Zoom is creating an unprecedented opportunity to raise.

For founders and VCs alike, 2020 has changed the game for good.

Thank you to Bill Trenchard, Dan Rose, Merci Grace, Brianne Kimmel, Charles Hudson, and Sarah Guo for contributing to this post.

At Superhuman, we are building the fastest email experience in the world — part of our wider mission to help every professional feel happier, more productive, and closer to achieving their potential. Come join us! Learn more or email me.

This piece was first published in TechCrunch on September 17, 2020.

How to raise funds in an uncertain economy was originally published in Superhuman on Medium, where people are continuing the conversation by highlighting and responding to this story.

As COVID-19 runs its course, it now appears certain that we will enter an economic recession.

For startups burning through cash, there are two forms of advice:

1. Do whatever it takes to get to profitability
2. Do whatever it takes to get to a certain amount of runway

For example, Steve Blank recommends doing whatever it takes to get to at least 24 months of runway. If you have less than 24 months of runway, please stop reading this and read Steve’s article — every day counts! But if you already have 24 months of runway, what do you do?

Let’s consider both options.

Get to profitability

Getting to profitability will feel good and will also give you leverage. You will never need to raise funding unless you want to, and this ability to walk away is key to raising on great terms.

However, getting to profitability will probably mean that you have to hire and build slowly.

If you raised money from venture investors, then you are likely in a big market that can support a massive outcome. While you focus on profitability, it is almost certain that a venture backed competitor will invest more aggressively. If they are competent, they will generate compounding momentum such as brand recognition and network effects. And if this competitor survives the recession, they will end up significantly further ahead.

Get to a certain amount of runway

Let’s assume you do whatever it takes to get to 24 months of runway.

Are we out of the woods? Not quite yet.

What if you miscalculated, and it later turns out that you only had 18 months of runway? Or what if 24 months passes, and it later turns out that the market for capital is even worse?

These are not far-fetched scenarios. No team executes perfectly, and we may be entering a recession that could last many years. From my perspective as an angel investor, I have seen early stage valuations drop 20-30%, and I have seen term sheets pulled.

How long will a recession last? Historically, the longer it takes for a crash to reach the bottom, the longer it takes to recover. And on average, it takes roughly 3 times as long to recover from the bottom than it takes to reach the bottom from the peak.

We have seen the markets recover in response to the stimulus package and the more recent news of the virus slowing down. I would love to believe that this mark the end of any crash, but the path from peak to bottom is often interrupted by false rallies.

At Superhuman, we are planning for a recession to last 2-4 years.

Which strategy is optimal?

You could do whatever it takes to get to profitability. Or, you could do whatever it takes to get to a certain amount of runway. In practice, neither strategy is optimal.

For many startups, I think that this is the optimal strategy:

1. Choose how much runway you want to maintain (e.g. 24, 36, 48 months).
2. Every year, adjust your net burn such that your runway is always at this level.
3. You can reduce net burn through revenue growth and cost reduction; conversely, you can increase net burn through faster hiring and more marketing.

This strategy seems deceptively simple. But it provides a clear algorithm — that everybody on your team will understand — for balancing the need to grow against the headwinds of a recession. It also guarantees positive outcomes in a wide variety of scenarios:

1. In the scenario where the capital markets do not recover, you will not have to fold or take a down round.
2. In the scenario where you execute imperfectly, you will not have to fold or take a down round.
3. In the scenario where revenue growth resumes, you will reinvest as much as possible in your team and roadmap.

How much runway should you maintain?

If you do not have much cash and are not making much revenue, you may have to choose a 24 month plan. If you recently raised or are making lots of revenue, you may be able to choose a 48 month plan.

But be aware of this critical tradeoff: the shorter the runway, the harder it is to maintain that runway. If you choose 24 months, you have to reduce net burn by 50% every single year in order to maintain 24 months of runway. But if you choose 48 months, you only have to reduce net burn by 25% every single year in order to maintain 48 months of runway.

For example, imagine you have $10M in the bank. This is the 24 month plan:

Notice how you never actually run out of money, as you always have 24 months of runway.

In 2020, you can grow net burn to $417k per month. But in 2021, you have to reduce net burn by $208k per month. This is equivalent to increasing your annual run rate by $2.5M. If you are not sure that you can do this, this plan becomes very risky.

With the same capitalization, this is the 48 month plan:

In 2020, you can grow net burn to $208k per month. This means that you only hire half as many people in this plan. But in 2021, you need only reduce net burn by $52k per month. This is four times more feasible than the 24 month plan!

This tradeoff is why many companies are topping up their last rounds — it will let them execute the 48 month plan with a reasonably sized team. If the business performs then they can invest in growth, but if the business does not perform then runway can be maintained with only moderate corrections.

How frequently should you adjust net burn?

To keep these examples simple, they adjust net burn once a year. But the markets are changing rapidly; if you adopt this strategy now, you will probably want to adjust it more frequently.

At Superhuman, we plan to adjust net burn every quarter.

Have you adjusted your revenue forecast?

You can reduce net burn through revenue growth and cost reduction. You can increase net burn through faster hiring and more marketing. But which of these four levers do you actually control?

You fully control three of them: costs, hiring, and marketing. But right now, for most companies, revenue is hard to control.

If you have not yet adjusted your revenue forecast, please consider doing so before using this strategy. Many startups are seeing churn, contraction, and all kinds of new problems. Most startups that I know are planning for revenue growth to be less than half of previous estimates. And although this is hard to predict, you can use the product/market fit score to help.

Ask your users “how would you feel if you could no longer use the product?” and measure the percent who answer “very disappointed.”

You might assume that you lose most users who answer “somewhat disappointed” or “not disappointed”. You might assume that you retain most users who answer “very disappointed”. Even for companies with strong product/market fit, this would lead to a revenue headwind of 50% or more.

Try it yourself

If you would like to try this strategy yourself, just checkout this spreadsheet:

The fine folks at Coda also created this interactive calculator.

All you will need is your current cash balance and the amount of runway that you would like to maintain!

Closing thoughts

We are all still concerned for the health of our loved ones, and many of us are figuring out a new way of living. The last thing any of us want is a recession that will impact friends and family.

I would love to be wrong, but a recession seems inevitable. Companies that have raised money need to figure out how they can not only survive, but thrive. For most companies, getting to profitability will stifle long term momentum. But for most companies, picking a fixed amount of runway will be a bridge to nowhere if this recession is bad.

I think that the optimal strategy is to choose the amount of runway to maintain, and then adjust net burn regularly in order to maintain this runway. This is very easy to understand, and leads to success in a wide variety of scenarios. If competing companies all run this strategy, the winner will be the one that executes best — which is exactly as it should be!

Thanks to David Ulevitch, Bill Trenchard, Dharmesh Shah, Helena Hambrecht, Ed Sim, Dave Tisch, Peter Lauten, Mike Ghaffary, Celine Halioua, Des Traynor, Joshua Siegel, Jeremy Fiance, Andrew Romans, Masha Drokova, Todd Goldberg, Nikhil Kundra, and Jason Calacanis for comments and suggestions on this post.

At Superhuman, we are building the fastest email experience in the world — step one of our wider mission to help every professional feel happier, more productive, and closer to achieving their potential. Come join us! Learn more or email me.

How to run your startup in a recession was originally published in Superhuman on Medium, where people are continuing the conversation by highlighting and responding to this story.

I’m Rahul Vohra, founder and CEO of Superhuman. Over the last 24 hours, we have seen vigorous debate on pixel tracking within email, also known as email tracking or read statuses.

I’d like to talk about what Superhuman does, why we do it, and what we’ll be changing as a result of this debate and the kind of company we aspire to build.

What are read statuses?

Read statuses are a power user feature that show you when people open your emails. Some products also show an approximate sense of location, ranging from city to country, based on the IP address used to read the email.

Read statuses work by using something called a tracking pixel. The email tool includes a tiny image in sent messages. When recipients open these messages, the email client will download the image in the same way that a web browser does. The image server logs these requests, and will often use an IP address to guess an approximate location. This is very similar to how Google Analytics tracks visits — both how often visitors arrive, and approximately what city or country they are from.

Does Superhuman show read statuses?

Yes. Superhuman shows read statuses when people read your emails. In designing an email client for professionals and power users, we focused on speed, automation, and insights such as read statuses. Sometimes, the product shows approximate location data, such as the state or country in which the email was read. We deliberately do not show city level data.

Our users can turn read statuses off (hit Cmd+K → Disable Read Statuses). When this is done, Superhuman will not include tracking pixels in sent email.

Our changes

Over the last few days, we have seen four main criticisms of read statuses in Superhuman:

1. Location data could be used in nefarious ways.
2. Read statuses are on by default.
3. Recipients of emails cannot opt out.
4. Superhuman users cannot disable remote image loading.

On all these, we hear you loud and clear. We are making these changes:

1. We have stopped logging location information for new email, effective immediately.
2. We are releasing new app versions today that no longer show location information.
3. We are deleting all historical location data from our apps.
4. We are keeping the read status feature, but turning it off by default. Users who want it will have to explicitly turn it on.
5. We are prioritizing building an option to disable remote image loading.

Update: all five of these changes are complete.

The criticisms of read statuses

1. Location data could theoretically be used nefariously

This criticism is the most severe. Upon reading the commentary, I have come to understand that there are indeed nightmare scenarios involving location tracking. I should note that we deliberately do not show cities — we only show states or countries — but a determined attacker could still misuse this information.

I am so very sorry for this. When we built Superhuman, we focused only on the needs of our customers. We did not consider potential bad actors. I wholeheartedly apologize for not thinking through this more fully.

We are removing location information in all read statuses for all emails sent with Superhuman, effective immediately. This will also apply to emails sent in the past.

2. Read statuses are on by default

We take the second criticism to heart too. It made sense for read statuses to be on by default when our user base was early adopters. They knew exactly what they were buying, and were excited to buy it. However, over the last few days I have heard from some recent users that they felt enabled to track people by accident.

I am very sorry for this also. Our goal has only ever been to create joyful, magical, and delightful experiences. We should have realized that the expectations of our software would change as our audience changed. We are therefore turning read statuses off by default.

We are still keeping the feature, as Superhuman is business software for email power users. In the prosumer email market, read statuses have been “must have” for many years. See MixMax, Yesware, Streak, Hubspot, and Mailtrack. These products alone have 3M+ users, and each one provides read statuses by default.

Why do so many people want read statuses? MixMax lists some great use cases, including more effective sales follow-up, relationship building for recruiting, and more astute customer support.

Before Superhuman had read statuses, it was both our most requested feature and also one of the most common reasons not to buy. In our market, the demand for read statuses is so high that it has now become table-stakes.

3. Recipients of emails cannot opt out

The third criticism is much more subtle. There are quite a few different ways to prevent email tracking. The most commonly advised and practiced solution is to turn off remote image loading in your email client. How-To Geek has written about this comprehensively. If you want to only block tracking pixels, there is also a rich ecosystem of third-party privacy tools that do this, such as Ugly Mail and PixelBlock.

Update: Superhuman now also has the ability to block tracking pixels whilst displaying other images. Hit Cmd+K → Images to turn this setting on.

I would love to find better technology to solve this problem. I also think we can collaborate on this as an industry — please reach out to me if interested.

4. Superhuman users cannot disable remote image loading

The fourth criticism is accurate. It is true that if you use Superhuman, you currently cannot disable remote image loading. This is not due to any particular belief or philosophy — it is simply because relatively few people had requested this (at the time of writing, only 32 out of 26,000+ requests). However, in light of this debate, we will prioritize this.

Moving forward

Business tools, such as Superhuman, are constantly becoming more powerful. And all else being equal, the market will generally buy the most powerful tools it can.

I therefore think that we, as an industry, should agree to the level of information that we track and show in our products. If one of us creates something new, and that innovation becomes popular, then market dynamics will pull us all in that direction. This is how we ended up with location tracking inside of Superhuman, MixMax, Yesware, Streak, and many others — not to mention nearly every CRM and marketing automation platform.

At Superhuman, we aspire to help people experience joy and productivity in their email. The team and I will continue to dedicate ourselves to this. In addition, I now recognize that we must deeply consider the overall ecosystem when designing software as fundamental as email. The team and I are committed to this now more than ever. We need to consider not only our customers, but also future users, the people they communicate with, and the Internet at large.

As always, I would love to hear from you!

Please get in touch at rahul@superhuman.com 🙏

Read Statuses was originally published in Superhuman on Medium, where people are continuing the conversation by highlighting and responding to this story.

Mailbox, we hardly knew you.

In December 2012, TechCrunch introduced you as the best email app we’ll ever use. Something that could fundamentally change the way we do things.

In March 2013, 93 days after your debut, Dropbox acquired you for $100M.

Unlimited resources. Global distribution. Your next step: fundamentally change everything, of course.

Except that’s not what happened. Last week, less than three years later, Mailbox was shutdown. And so, with a protracted sigh, you join the long list of acquisitions that went up in a cloud of cash.

As an entrepreneur creating a fantastic new email experience, I can’t help but say this… Looking for a Mailbox replacement? Sign up for Superhuman!

But as a founder who knows how hard this journey is, the demise of Mailbox makes me very sad. (I sold Rapportive, also an email company, to LinkedIn.)

The truth is this: sometimes acquisitions fail, despite everybody having the best intentions. Below are my tips on making yours work.

How to survive being acquired by a big company

Before we jump in, let’s introduce two roles. First, the managing sponsor. It was probably their idea to acquire you in the first place, and they are probably your new boss. Second, the executive sponsor. They likely report direct to the CEO, and it could well be their budget that was used to buy your company. In smaller acquirers, or for larger acquisitions, these two may in fact be the same person; the tips below assume they are different.

1. The honeymoon period is not a honeymoon. After you sell, there will be a 3 month honeymoon period. Nobody will be bothering you, and you will be tempted to take it easy — especially if your exit was stressful. Under no circumstances take it easy! Instead, take a real vacation before starting, and then work insanely hard to deliver brilliant results ahead of schedule. This will set the tone for your tenure at the company. Several Rapportive investors shared this advice when we sold, and I’m thankful to this day.
2. Be gentle and patient. The best founders I know are unstoppable forces of nature. They leave debris and destruction in their wake. They would swim through a sewer and dropkick a mountain just to make sure they succeed. This may sound like you, but remember: this approach is unlikely to work well at an acquirer. In large organizations, results come just as much from relationship building and leverage as they do from heroic effort and force of will.
3. Get the right job title before you start. When negotiating an acquisition, it is natural to focus on the economics. But do not underestimate the impact of your new job titles. No matter what your compensation is, you will be treated differently as a “Principal Software Engineer” than as a “Software Engineer”. Some differences will be overt — you may or may not be invited to certain meetings. Some differences will be subtle — colleagues may pay more or less attention to your opinions. But overall, your titles can directly affect your efficacy and therefore your wellbeing. (Large companies commonly under-level smaller acquisitions. Since the economic negotiation and the leveling happen in quick succession, they indirectly trade against each other. When faced with this choice, most founders will compromise on titles.)
4. Don’t try to do everything yourself. In your startup, your team must do everything. As CEO, you might personally run design, product, and recruiting; as CTO, you might be responsible for architecture, scheduling, and development culture. But your acquirer probably has world-class talent in most, if not all, departments. You’ll fight it at first — ceding control is not easy — but use these resources. With them, you will accomplish more than you ever could alone.
5. Consider doing things The Company Way. Large companies that scale rapidly tend to have battle-tested “playbooks”. These define a shared way of working, and can cover everything from registering a new domain to spinning up a new city. If there are relevant playbooks, strongly consider following them. They may be slower than doing things your way, but they will make it significantly easier to get help from others within the organization. And if you do that effectively, you will greatly increase your long term speed. Speaking of which…
6. Prepare for the long haul. Although large companies can move rapidly in the long term, they tend to move slowly in the short term. In fact, you will feel like most things take 2x to 6x longer than at your startup. This isn’t because the people are slower — to the contrary, the people tend to be specialized and faster at their roles. It is simply because there are so many more people — and there is so much more planning and communication overhead. (This, by the way, is why startups can run circles around incumbents.) Make sure you accommodate this in your scheduling. And above all, don’t let it get you down.
7. Realize you have a new job. If you’re the CEO of a small company, your job will change the most: you will probably become a product manager. If you’ve never been a product manager before, you’re in for a surprise. You might think that you’ll spend most of your time creating product — after all, that’s what made you successful in the first place. But you won’t: product managers spend far less time creating product than product founders. Instead, expect to write reams of email. Be ready to spend your week in meetings. Prepare to repeatedly sell your vision, argue for resources, and demonstrate how you help the company. As founder CEO, your job is to find a needle in a haystack. As product manager, your job is to move the needle. The haystack is long since gone.
8. Get to know your executive sponsor. Do what you can to meet your executive sponsor regularly. Ask for their feedback on key decisions, and ask for their help on blocking problems. But be careful not to waste their time. To be fully effective, aim to build relationships with all your executives. Your executive sponsor can help tee up these introductions.
9. Earn the “executive hammer.” You should do most things The Company Way. But to make your acquisition successful, you might need to do things that would normally be stonewalled. For example, you might need to obtain exotic hardware, or punch through the firewall, or engage expensive external service providers. In anticipation of this, build your executive relationships to the point where you earn the “executive hammer.” Then, when policy or tradition is thrown in your face, invoke the Hammer — i.e. find a polite way to say “your boss’ boss’ boss said it’s fine”. (Just be sure that whatever you need is, in fact, fine.)
10. Respect the executive hammer. If you winced at the last point, this should be obvious: only use the hammer when you absolutely must. In general, you will be happier and more effective when you accomplish goals gently. But sometimes you will need to exert extreme force. The hammer is most useful in urgent situations, such as working towards an immovable deadline. If there is no urgency, just escalate your issue to the appropriate manager. And if that doesn’t work, ask your managing sponsor to work their magic.
11. Get to know your managing sponsor. Whatever your new role, you are likely to encounter minor speed bumps and roadblocks everyday. As a newcomer to the company, it may not be obvious how to solve these. A great managing sponsor will have relationships all across the organization, and will use this connective tissue to solve the challenges you bring them. Your managing sponsor has a bigger impact than anybody else on your trajectory and happiness. Invest heavily in this relationship.
12. Learn to manage upwards. You may never have had a boss before. If you haven’t, study how to manage an employee-manager relationship. If you’ve read similar material before, read it again from the perspective of an employee. It is very much like investor relations; for example, set expectations and then consistently beat them. If you were good at managing your board, you’ll have all the right instincts here.
13. Build relationships horizontally. In your startup, you are in control of almost everything. As a result, your team can do things very quickly. In an acquirer, to do simple things — such as hosting, DNS, or social media — you may have to collaborate with experienced professionals all across the company. It is much easier to collaborate with people you know rather than people you don’t, so build relationships across functions as soon as possible. Not only will this make your work easier, you might even find the people with whom you start your next company.
14. Prepare for the inevitable re-org. If your acquirer is large and still maturing, be ready for flux and turmoil. Your boss today might not be your boss tomorrow. (They’ll probably be working at Uber.) Your department today might not exist next quarter. Your company’s priorities may change entirely next year. There is a silver lining to this all: you will have ample room for personal growth. Hold on tight, and work as hard as you can.
15. Nurture relationships after you leave. During your time at the acquirer, start relationships that last a lifetime. Once you leave, don’t just slip off the radar; invest in your connections. When you’re next raising money or recruiting a co-founder — you are doing this again, right? — people will certainly do their diligence. You will want folks to speak of you fondly. And finally, whatever you do, do not burn your bridges. The world is surprisingly small, and besides, life is altogether too short.

We should work hard to make more acquisitions succeed.

It is undoubtedly fine art, but I am certain we can do better. It requires experienced acquirers and open-minded founders. It requires sharing lessons and honest dialogue.

If you know anybody going through an acquisition, please send them this post. You might just save their happiness, and spare the world yet another product shutdown.

Thank you to my friends for sharing their experiences, and to Bill Trenchard, Ed Sim, and Jason Calacanis for reading drafts of this post.

Still looking for a Mailbox replacement? Sign up for Superhuman!

RIP Mailbox, or: Founders, how to stop worrying and love being acquired was originally published in The Startup on Medium, where people are continuing the conversation by highlighting and responding to this story.