How Entrepreneurs Can Survive a Bear Market Coatue Ventures President Writes These 11 Tips

Dan Rose, president of Coatue Ventures, shared some lessons learned from his early entrepreneurship through Twitter, providing guidance for Web3 entrepreneurs.

Dan Rose is President of Coatue Ventures and Coatue Growth. Before joining Coatue, Dan spent 20 years in leadership roles at Amazon and Facebook. He was working at Amazon at the beginning of the new millennium, when Amazon's market value fell by 95%. Later, while working at Facebook, he negotiated a "bloodshed financing" that lowered the valuation in 2009, and later in 2012, Facebook's stock fell 50% after its listing. Dan Rose, who used to be a member of the board of directors of a bankrupt listed company (Borders) and a closed start-up company (Hello), recently shared some experience and lessons of personal early entrepreneurship through Twitter, which PANews translated and provided for Web3 entrepreneurs guide.

1. Raise funds when possible, not only when needed. Amazon started converting debt in February 2000 - if we wait another month, we won't be able to survive. Nine years later, I raised funds at Facebook at a 33% lower valuation than the previous round (PANews Note: In 2007, Facebook received Microsoft’s investment at a valuation of US$15 billion; in 2009, Facebook received DST’s investment at a valuation of US$10 billion $200 million investment), although we have ample pipeline. But don't wait until you're cornered.

2. Cash is king . Forget about valuations, depreciation, etc. - none of that matters when you're done spending cash. Borders defied the internet, using its own cash flow to buy back stock for years. In 2009, a private equity firm fired the board and asked me to join, but by then there was no turning back.

3. Growth can wait, but survival cannot. Amazon's stock topped $100 in 1999 and bottomed out at $6 in 2001 (just months before going bankrupt). We stopped the bleeding by raising prices and cut $1 billion in cash burn to become cash flow positive. Revenue growth slowed to 3%, but we survived.

4. Change the tone. In 2000 Amazon made a small but symbolic slasher. Around that time, Amazon founder Jeff received a T-shirt from the team, kicked the team out of his office, and banned all corporate giveaways. We even removed the aspirin in the lounge and provided coffee and water. (PANews Note: According to the reply below this Twitter, the provision of aspirin in the lounge may give employees a psychological hint of frequent headaches, back pain and other problems under work pressure, when the focus is on pain, excuses, complaints, etc. can’t focus on work.) Small gestures set the tone.

5. Leaders should set an example. Facebook founder Zuck wore a tie to work in January 2009 and has worn it every day for an entire year. His message to the company was: "It's time to get serious about our business." Every time we had a meeting with Mark, we were reminded that things had changed.

6. Reorganize the team. During the pandemic, I spoke to the management executive team of a travel startup whose revenue dropped to zero overnight. I encourage them to reevaluate their teams, some of the people who came forward in the crisis are the future leaders of the company. Others will leave the team, which is also a welcome "break away".

7. Hope for the best and prepare for the worst. 5 years ago, I was the only external board member for a startup struggling to raise capital. I should have helped them prepare for a soft landing instead of slamming their heads against the south wall. There is a hard reality to accept - most startups fail.

8. Accept the unacceptable. Amazon's stock doubled after I joined, but I'm broke because of the 1 year lockup period. 3 years later, I sold the restricted stock at $8 per share (PANews Note: Amazon’s stock price exceeded $3,700 in 2021, and it is now $2,300 in US stocks). In 2008, I sold Facebook stock in the secondary market for $1 per share (PANews Note: Facebook’s stock price exceeded $380 in 2021, and it is now $200 in US stocks) to pay my rent in Palo Alto . Do what you have to do and never look back.

9. Communicate positively. When Facebook's stock plummeted after our IPO, I worked with the employees to address the issue instead of pretending the stock price didn't matter. It is easy to fall silent in difficult times. Don't do that, your team needs you more than ever.

10. Keep telling your story. During this time, I stayed with Amazon because Jeff showed me his vision. When the global financial crisis delayed Facebook's IPO by four years, Zuck never stopped talking about the mission. Churchill taught the world the power of storytelling in times of trouble.

11. Embrace the abyss. Every great leader has tested their mettle in times of crisis. Every great company overcomes existential threats. Heroes must traverse an abyss—no one chooses it, but everyone faces it eventually. How you respond... that's all that matters.