Novice Investor #19 - Valuing a Pre-Revenue Startup, Dopamine Detox and a New Role Model
Happy September All,
The bittersweet end of summer has arrived. I love nothing more than late evening runs in the sun, alfresco dining and the usual Europe summer trip, but all good things must come to an end. On the sweet side of things, after a bit too much travel, the banality of routine starts to become very attractive. I am enjoying the increased focus that comes with it.
We hosted the Kennet Annual Golf Event last week at Moor Park Golf Club which was a great day out. It definitely beats Zoom calls for getting to know founders. Thank you to everyone who made it!
How to Value a Pre-Revenue Startup?
Last month, I was asked by a friend to help value his pre-seed business with zero revenue. This is something I did not have much experience with given our later-stage focus. However, I did some research and here are my learnings. The video goes through four different methods to value your business/idea at a pre-seed stage. If you know any other ways of valuing pre-revenue startups, I would be keen to hear them.
Mac vs. Windows
At the start of August, I made the big switch from Windows over to Mac for my work laptop. Since the age of 15, I had a personal MacBook but always used Windows in the workplace. After one month of using the MacBook at Kennet, I am glad I made the switch. Here’s why:
The MacBook is much faster. A faster response means less unnecessary tech frustration (which is one source of anger I have not conquered)
Having the same operating system on my personal and work laptop means I can become more skilled on shortcuts without mixing up the commands across systems
The Apple UI is much nicer. Something about working on a MacBook is very pleasant
However, there are definite drawbacks I was not aware of until using the MacBook extensively for the past month. These are worth considering before switching:
Microsoft Office apps are less powerful. On Excel, you can’t use the accelerator key shortcuts. This is a massive negative for Excel nerds like me. Thankfully it can be solved with a cheap software add-in called “Accelerator Keys”. Also For Outlook, Quick Steps do not exist. I have not spent time trying to find a replacement here. If you know one, please shout
The Alt-Tab navigation you find on Windows is far superior to the MacBook equivalent. On a MacBook, I can only switch between apps, not windows. Again for the Excel nerds this is a pain
Dopamine Detox
After a hectic and very enjoyable June and July, I felt ready for a calmer August. I was inspired by TikTok to try out a Dopamine Detox. This involves avoiding social media, Netflix, YouTube, alcohol and junk food (and music, which I actually ignored) over a period of time to wean your brain off constant, cheap dopamine hits.
I tried it out for two weeks. While I didn’t ace the test, I did manage to go cold turkey for 95% of the time. In terms of results, it did feel great to disconnect from social media, my reading skyrocketed and the time it took me to fall asleep dropped markedly. On the negative side, it was boring and I had a nagging feeling I was missing out on interesting content, be it from my friends, YouTubers or random TikTok videos that provide inspiration.
All of these short-term challenges are good to try out, but useless in the long run if they don’t become part of your routine. While I see benefits in being a full-time hermit, life gets too boring. So, for the past three weeks, I’ve incorporated a middle ground strategy. I download social media apps etc. each weekday evening, spend some time consuming content, and then delete them again until the following evening. This helps with focus and sleep without sucking too much fun out of life.
Books & Podcasts
Andrew Carnegie - Insight and Analysis Into the Life of a True Entrepreneur, Industrialist, and Philanthropist
I find autobiographies/biographies make for a great read. They are more exciting than the typical self-help business books but still offer very impactful learnings.
This book gives a detailed account of the early life and prosperous career of Andrew Carnegie, from his childhood in Scotland to his industrial takeover in the states. I didn’t know much about Andrew Carnegie, but after reading this book I definitely attach a high affinity to the man. I am a true debater and rarely agree with people’s views unquestionably, but it is hard to pick fault in the man’s values and his discipline in upholding them. Here’s a few of my highlights to give you a sense:
When you focus on the quality of your work, you, your business, and everything you do will be successful. Once that is done, your business can go on easily. For any business, quality is of prime importance. Everything else, even cost, comes second.
The moral of that story is that the better part of one’s problems are created in your mind and don’t exist in the real world. One may feel that it is real, but that is because it is conjured in the mind. These imaginary issues should simply be brushed aside
Someone who is surrounded by his or her family and nurtured and raised only by the family is much more privileged and better off than the rich child who is raised in the arms of a governess or some caretaker.
It is better to carry out favors for a man who would not be able to repay his “debt” than to do a favor for someone who is capable of returning the favor. The reward for carrying out these favors is simply happiness, which is more important than money or any other sort of payment.
Kennet Partners’ Investment Target
Kennet Partners is a Growth Equity investor with over 20 years of experience partnering with European and US SaaS companies. If you know any companies which fit our criteria, please reach out.
Investment size: $8m - $30m
Maturity: Over $3m in ARR
Growth: > 30%
Type: Bootstrapped and capital-efficient B2B SaaS businesses
Geography: Europe & US
Disclaimer: None of the content in the Newsletter should be taken as financial advice.