Some highlights from Ed Catmull’s Creativity Inc. Ed is the President of Pixar.

“If there is more truth in the hallways than in meetings, you have a problem.

“The desire for everything to run smoothly is a false goal.

“The truth is, the cost of preventing errors is often far greater than the cost of fixing them.

“Rules can simplify life for managers, but they can be demeaning to the 95 percent who behave well. Don’t create rules to rein in the other 5 percent—address abuses of common sense individually. This is more work but ultimately healthier.

“The first conclusions we draw from our successes and failures are typically wrong. Measuring the outcome without evaluating the process is deceiving.

“An organization, as a whole, is more conservative and resistant to change than the individuals who comprise it. Do not assume that general agreement will lead to change—it takes substantial energy to move a group, even when all are on board.”

This guest post is by Tyler Willis, an entrepreneur and angel investor. You can learn more about him on AngelList.

For several interesting macro-economic reasons [1], more and more people are becoming angel investors.

This is a good thing – it allows more investors to participate in a high-growth (but high-risk) area of our economy. That said, investing in private companies is very different from investing in public companies.

People who are just getting started in angel investing should get comfortable with the inherent risks and learn the strategies required to be successful angel investors. Without doing this, you run the very real risk of losing every dollar you invest in this market.

Two years ago, my first company was acquired by Oracle and four members of our early team, including myself, became part time angel investors. Before I started investing, I tried to learn as much as possible about angel investing. In all of the things I read and people I talked to, two posts stood out as particularly helpful: Paul Graham’s post How to Be an Angel Investor and Naval and Nivi’s How to be an angel investor, Part 2. These posts were helpful because they did away with the inside baseball and tried to present a comprehensive overview for a novice investor.

This year, several of my friends became accredited and asked for my advice on angel investing. Inspired by the opportunity to help them, I looked back on my first year of investing and tried to tie all of those lessons up in a comprehensive overview–think of it as Angel Investing 101. Drawing on the previous two posts, I called the presentation How to Be an Angel Investor, Part 3.

Success as an angel investor boils down to whether you can pick the right companies. The information in this presentation won’t make you a successful angel investor on it’s own, but it can help you avoid the common pitfalls and develop a better understanding of how this market works and whether you’re ready for it.

Because these investments are illiquid, you won’t know for many years whether you are doing a good job of picking the right companies. My best advice is to focus first on learning as much as you can so you can avoid common pitfalls. Once you’ve done that, budget money you can afford to lose and start slowly. You’re generally going to be better served by spreading your initial investment budget over several years, rather than trying to invest it all in a short period of time.

If you find this useful, I intend to create more free resources for angel investors (including video interviews with successful investors sharing their best advice). If you’re interested in more information like this, check out

[1] Broadly, we’re creating a much more affluent upper middle class. Tyler Cowen’s book Average Is Over is a good read about this if you’re interested.

Specifically, there are a few big changes that have created more angel investors.

  • Startups provide equity compensation by default, so the influx of new startups means that more people employed under this model.
  • Companies are staying private longer, which incentivizes investors to move to private markets in search of good returns.
  • It seems likely that startups will share more equity with employees than they have historically (this is a prediction, but we’re starting to see early examples of this)

Must be a 1-(wo)man startup.

Must code. Must write good copy.

Must be passionate about solving problems for our customers, not “designing.”

Must fix other people’s designs and front-end code on production (people ship whenever they want).

Must help our 1-(wo)man startups with their design problems. Must force your help on them when needed.

Must take the words of our founders/whomever straight to mocks without worrying about whether we’re going to build it. Make the mocks, then start evaluating the idea. Pivot it when necessary (always).

I do the onboarding for all new AngelList team members. Part of it is asking them to read the following (many candidates have read these before they even come in for an interview).


Startups are here to save the world
Things we care about at AngelList
Doing the wrong things the right way


Ask forgiveness, not permission
1-(wo)man startups
No email at AngelList
6-year vesting
Customer Service
Internal 360 Review (redacted)
Company Strategy (you wish)
Internal Github engineering wikis
AngelList Twitter Favorites

Writings that have influenced us

Engineering Management by Yishan Wong, ex-Facebook Engineering
Hiring by Paul English, co-founder of Kayak
Freedom & Responsibility by Netflix

We care about:

  1. Eliminating frictions so startups can change the world
  2. Connecting startups with their ideal partners, on the best terms, fast
  3. Building tools for investors to help startups
  4. Telling startups and investors what we would want to know in their shoes
  5. Building products that scale, instead of manual processes or throwing bodies at the problem
  6. Having team members work on things they’re excited about, rather than what we think is important

Some things we try to care about at AngelList.

Learn More: Startups are here to save the world, The entrepreneurial age and No tradeoff between quality and scale

How much traction do you need to raise $1M? AngelList’s Ash Fontana has the answer on TechCrunch:


Read the post for details and also see these comments by meMichael Wolfe, and Shallaba.

We use very little email at AngelList. Most of our communication happens on Yammer, HipChat, Tracker and face-to-face. This probably gets us a 90% reduction in email.

If you’re running your company via email, you’re missing out on newer, more effective communications technologies.

Yammer is our company mailing list

Yammer has nested conversations, search, inline images and likes. It is also our company directory. And they have a mobile app.

We use it for asynchronous communication across the whole company. Most of all, it keeps our company “mailing list” out of email.

Yammer, HipChat and Tracker all have email, mobile and desktop notifications. You don’t need to check them every 5 minutes.

HipChat is for IM

HipChat is an IM app for desktop and mobile. It has inline images, presence, search and a company directory. The (buggy) iPhone app keeps you accessible when you’re out of the office.

It also supports multi-person rooms (we have a room for our engineers) and it has an API that we use to feed other rooms with exceptions, GitHub notifications and deploys.

We use HipChat for synchronous 1-on-1 and group communication.

If you’re using Skype for IM, try HipChat. Alternatives include Yammer, which has rudimentary IM. Or a Facebook group which has a wall and basic IM. But I recommend HipChat.

Tracker is for product specs

We use Tracker to spec out goals and tasks for new features. Each spec has its own todo list, image attachments, comments and status. It’s also easy to re-prioritize features and assign them to different people. Some people prefer Asana or Trello for specs.

Face-to-face is for everything else

The biggest companies weren’t built remotely. Families don’t live remotely. Sports teams don’t train remotely.

Face-to-face is for high bandwidth communication, sub-communication (body language and facial expressions), leaving an impression, new ideas, overhearing other people’s conversations, bonding with your co-workers, whiteboarding, throwing chairs, and everything else you need to say to build a big business.

When we use email

I discourage new team members from using email, but there are a few places where we use it.

First, when we need to communicate with people outside the company.

Second, when we need to have a conversation with an ad hoc group of people inside the company. HipChat is not great for ad hoc groups that only need to discuss a single task like, “how should we negotiate this deal.”

Third is laziness and stupidity (guilty).

Update: There’s an excellent discussion of alternative approaches on Quibb.


Here are screenshots of the mobile apps. They all have desktop apps as well.








My Inbox


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Every team member of AngelList is on a 6-year vesting schedule. Including the founders. Why?

Because it takes a long time to build something important. And we want everyone to stick around for a long time.

Because we want people who are here for the mission, not a payday.

Because it sells prospective hires: the team you’re joining isn’t going anywhere.

Does that mean I get more equity?

Everyone asks whether they get more equity to make up for the longer vesting schedule. A good way to think about that is whether we would give smaller grants if new team members were on a 4-year schedule. And the answer to that is ‘yes’.

There are a lot of benefits to getting additional equity now, instead of 4 years from now:

  1. The strike price is today’s strike price, not a higher strike price 4 years from now.
  2. The clock on long-term capital gains starts as soon as you exercise the grant.
  3. A new grant 4 years from now wouldn’t be as big.
  4. Any acceleration is likely to consider the entire grant, not a smaller 4-year grant.

If you’re interested in a 6-year vesting schedule, AngelList is hiring engineers and designers.

Related: 1-(wo)man startups and Ask forgiveness, not permission

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The entrepreneurial age will be as important as the industrial age and the information age.

In the industrial and information ages, we learned how to put physics and information to great use. Physics and information were also the basis for an organization’s differentiation and victory.

In the entrepreneurial age, physics and information will be replaced by entrepreneurship: the ability to serve a customer at the highest level of quality and scale, simultaneously. We will learn to put entrepreneurship to great use and it will be the basis for an organization’s differentiation and victory.

This is not a statement that the winners are going to win. It is a statement that (1) the best strategy is to attempt to deliver the highest quality with the highest scale and (2) other types of differentiation should only be tactics that serve an organization’s entrepreneurial capability.

Differentiation is being commoditized

Physics, information, hardware, software, marketing, press, business development, recruiting, training and every damn thing a business needs to do is quickly becoming available as a service. And innovations by one company are quickly made available to its competitors by other entrepreneurs.

It is no longer effective to rely on any type of differentiation—organizations must focus on delivering the best product in the world to as many people as possible. All other activities just help them on their way.

Scale is getting easier

In the past, scale (low cost, high distribution) was so difficult that organizations with bad products and great scale could win. And it was so difficult to scale the very best products that they never left the boutique.

The challenges of scale are now diminishing rapidly. Scale is now available as a service—see Foxconn (manufacturing), AWS (hosting) or Facebook Platform (distribution).

But scale is not being commoditized

Scale is getting easier and other forms of differentiation are being commoditized. But scale will not be commoditized. It is as important as an organization’s product development capabilities.

Why? Because the best products require unique means of scaling. The delivery of the best products is tied into the product itself. For example, look at Apple’s efforts to develop new manufacturing techniques and stores for its products.

If you don’t scale quality, you will be shut out of the marketplace

Today, it’s too easy to spread the word about the best products to leave any room in the marketplace for merely good products.

The organizations with the greatest entrepreneurial capability will collect the most customers and greatest profit. They will also attract the best talent, who will continue to build the best products, with the greatest distribution and highest profits, which will attract the best talent and so on.

It’s not bad enough that the winner is collecting the greatest profits, it’s also collecting the best talent, leaving competitors without the people it needs to stage a comeback.

The industrial and information revolutions are enabling the entrepreneurial revolution

The continuous improvements in our ability to manipulate physics and information are helping us commoditize every capability on the planet.

These improvements enable entrepreneurs to deliver services to other entrepreneurs—and these services are commoditizing every type of differentiation except product development and delivery.

If you’re interested in building a steam engine for the entrepreneurial age, AngelList is always hiring engineers and designers.

Related: Startups are here to save the world and There is no finish line for entrepreneurs

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For an entrepreneur, if it is possible to make it better, she must make it better. If it is possible to make it more accessible, she must make it more accessible. If it is impossible to make it better or broader, she innovates.

Starting a great Italian restaurant is not entrepreneurship because the proprietors make no attempt to scale it. Running McDonald’s is not entrepreneurship because they make no serious attempt to build a better product. Apple is an entrepreneurial venture because it is in the business of delivering ever-increasing quality at higher scale.

There is no tradeoff between quality and scale

Quality measures how far a product advances the customer. Scale measures how many people use it.

For entrepreneurs, there is no tradeoff between quality and scale. The job is to do both—not one or the other. If it can’t be done, you innovate.

Quality without scale is not entrepreneurship—it is a tree falling in the forest with no one around.

Scale without quality is also not entrepreneurship—it is business as usual. And it leaves businesses exposed to competitors who steal its customers (and, worse, employees).

Anyone who attempts to serve a customer at a new level of quality and scale is an entrepreneur. Anyone who does not, is not.

If you’re interested in helping entrepreneurs never reach the finish line, AngelList is always hiring engineers and designers.

Related: Startups are here to save the world

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