Being a wartime CPO

Being a CPO during wartime is very different from peacetime¹ .

Wartime means the company is under existential threat — lacking Product Market Fit, running out of funding, being severely disrupted by a new competitor or technology that has emerged.

Peacetime is everything else. The company is generally fine, and your job is to hit growth targets or come up with something new to add on to what the company already does.

I’ve done this a few times (all B2C), some successful and some not (we ran out of money). B2B is a bit different, in that the tolerance for trying risky new things with existing customers might be low instead of high to keep cash coming in, but the mentality is otherwise the same.

A few tips:

1. Obsessive focus on the goal. Which requires knowing the goal, the strategy, and getting complete alignment² .

2. Zero tolerance of distractions. No side projects or favors for other teams. Just the mission.

3. Increased risk tolerance. Instead of requiring 70+% confidence, maybe we’re ok with 60%. Maybe we just ship it and find out³ .

4. Stakeholders need to get on board or get out of the way⁴ .

5. Intense execution with a massive focus on speed to learning and iteration. We have to know what we need to learn, learn it quickly, and incorporate it asap.

6. Minimal process. This can mean throwing out the cadence of two week sprints, sprint ceremonies, stakeholder review meetings, etc.

My nature is generally very collaborative, delegating to my team, letting them learn by doing. Not during wartime. I’m a dictator. That doesn’t mean I assume I have all the answers. But I definitely know what answer we need to get. I’m assigning tasks with urgency and getting everyone clear on where we’re at, what we need next, and what winning looks like.

The Workshop

This is a newsletter-only section where I share a half-baked idea in hopes that y’all who are smarter than me can work it out with me.

Breaking news: Private equity firm Permira is acquiring Squarespace for $6.9B in cash.

I find this fascinating on so many levels.

First, private equity in general is coming for tech companies in a bigger and bigger way, and I think this is a really good thing. I think VC money, ZIRP, and low churn / high margin SaaS has allowed an entire generation of tech companies to get big but have their growth stall out because they are poorly run. The newer generation of PE firms are buying these companies and forcing financial and strategic discipline (replacing the exec team if needed), selling these companies for 2-3x in ~5 years. I’ve been told by someone who works in PE that a bunch of companies are coming up for sale right now.

Second, Squarespace obviously has a great brand, great product, big install base. But also are under serious threat because they lack network effects. Their core product (website for small businesses) is sticky (high LTVs, which pay for all those podcast ads) but ultimately a commodity and not differentiated from competitors. GenAI is going to make that even more true.

They’ve tried a bunch of other ways to grow — e-commerce, payment processing, restaurant online ordering. But they are looking more and more like GoDaddy or Web.com, and less like Shopify (which has its own challenges).

Permira is a firm I got to know because they acquired the company I worked for in 2018. They’re really smart, and they genuinely want to make changes that help the company become fundamentally more valuable. Squarespace has the cash flow to fund the business while they dip out of view of the public markets to figure out what the next chapter looks like. I’m excited to see what direction they go, and I hope it’s one that adds some actual defensibility.

1  Ben Horowitz popularized the wartime vs peacetime CEO concept back in 2011 and again in his book The Hard Thing About Hard Things. Which is a really fun read, I recommend it. Another one I recommend is Founders at Work by Jessica Livingston (who cofounded Y Combinator along with her husband Paul Graham and two others). She interviews a bunch of successful Silicon Valley entrepreneurs; each chapter is a different founder interview.

2  Being clear on the goal is usually the easy part, since the goal is to survive. It’s being clear and aligned on the strategy that is the hard part. By nature of the situation, stakes are super high because everyone realizes there is limited time left. Which means being right on strategy becomes everything. Your CEO is probably going to be the one calling the shots on this one, but you’ve got a lot of influence. Take the extra couple days, think it through, and then commit. Do not make the mistake of wavering a week later.

3  And we’re certainly not A/B testing small stuff. Big stuff where we can read it out within 1-2 weeks? Sure, sometimes that’s necessary. But usually the old before/after observational data is good enough, because our goal here isn’t precision, it’s direction.

4  Everyone reacts differently under threat. Some will get cautious, or timid, or indecisive. Others might be the opposite: loud, angry, stubborn. We’re all scared. But what we can’t be is slow.