This post first appeared in the WSJ Accelerators series titled The $100,000 Experiment in response to the question “When should you make a substantive change to one or more parts of your business model?”

During the past few years, the word “pivot” has become one of the most overused words with regard to startups. For some, it means a tiny incremental change in the business. For others, it means killing off whatever path you are on and rebooting the business, creating something entirely different. For others, it means everything in between.

A long time ago, I realized that every successful business was a continuous process of small experiments that operated in the context of a long-term vision. When an experiment worked, you did more of it. When it didn’t, you ended it and moved on.

The magnitude of these experiments are dependent on the stage and resources of the company. If you are a three person startup with very little money in the bank, your experiments are tiny ones. As you get bigger and have more success, your experiments can get larger.

I was once on the board of a company that was cash-flow positive early in its life. The entrepreneur decided to raise more money, even though he didn’t need to. I was perplexed and asked him why he was raising the amount of money he had decided to raise. His answer was that when he had no cash in the bank, he was willing to run $1,000 experiments. When the company was cash-flow positive, he was comfortable running $10,000 experiments. He now wanted to feel comfortable running $100,000 experiments, and this financing enabled him to do this. If he ran a $100,000 experiment and it failed, it wouldn’t tank the business.

When an experiment works, do more of it. So the $10,000 experiment that pays for itself in three days by generating $4,000 of gross margin on a daily basis is worth doubling down on and running at the $20,000 level. If this generates $8,000 of gross margin on a daily basis, double down again.

But if the first $10,000 experiment generates nothing, study the data that results from it. Make sure you measure your experiment. Create a hypothesis about what a successful outcome would be. Try to control as many variables as you can while you are testing something new, so you understand what is actually going on. If you find yourself devolving into a qualitative discussion about all elements of the experiment, you won’t learn much.

If your successful experiments are pushing you in a direction that is different from your long-term vision, or from the existing core business you are running, step back and think hard about what you are learning. Are your experiments conclusive enough to cause you to change your strategy? Do they reveal surface problems in your existing business or strong suggestions about better approaches?

If your successful experiments are doing this, then consider a serious shift in your business. But in the absence of this data, be very careful about defaulting into a mode of constantly and aggressively yanking on the steering wheel of your business. Instead, do small experiments, often.

If you want another perspective on this, go read the WSJ Accelerator article by David Cohen (TechStars CEO) titled Use Your Head, But Trust Your Gut.

We are sandwiched between Thanksgiving and Christmas in a country that is recovering emotionally from two disasters named Sandy – one natural (Hurricane Sandy) and one man-made (Sandy Hook). Our politicians in Washington are playing a zero-sum game around the Fiscal Cliff. The CEO of the NRA just held a press conference and said “we should be able to afford to put a police officer in every school” and he called on Congress “to appropriate whatever is necessary to put armed police officers in every school in this nation.”

I get 500 emails a day – sometimes more. Many of them are from people I don’t know looking for advice and funding – I try to respond to them all. Every single day at least one of them goes off the rails as a result of my simple and direct feedback, often that I’m not interested in what they are doing. Here’s an example from a few minutes ago.

well if you ever come across investors who give a fuck the business plan is there online, recently updated this morning.

I did clicked your link, it’s just internet plays, you can’t swing a cat without hitting an investor investing there. Like I said if that meant anything there would be no talks of a fiscal cliff. We been investing in the internet for decades and worst for it.

If you in a hole you stop digging but if you are an internet investor you invest in an app that digs a bigger hole.

Brad you live in the same country I do, so where ever you are on the socioeconomic ladder, you in the same fucking hole. Except you investing in shovels and telling me you an expert in that. Oy vey.

This was in response to me passing because the business was something outside software / Internet and I stated that it was outside my area of expertise and pointed the person at our themes.

If this was a once in a while thing I wouldn’t call it out. But it happens every single day. I suppose if I ignored all the random emails I got, this wouldn’t happen, but then I’d be “one of those VCs that isn’t responsive.”

Fortunately this is 1 out of 500. The vast majority of stuff I get from people I don’t know is positive. The ad hominem attacks I get – either from people I don’t know or people I try to be responsive are part of the drill. But every time I’m on the receiving end of one, I think to myself “that’s not a winning strategy.”

Everyone is allowed to feel how they want to feel. But recognize that if you are an entrepreneur, trying to create a business, raise money from investors, sell products to customers, and hire employees, that angry, hostile, and bitter is not a winning strategy. And – if it hasn’t been working for you, maybe try something different in 2013.

Amy and I wrote a meaningful amount about entrepreneurs and depression in Startup Life. Since we finished the final draft a few weeks ago, I’ve given several talks where depression came up as I’ve woven my own experience with depression into the short (less than 15 minute) version of my story. I’ve received a surprising (to me) number of emails from people thanking me talking about it publicly, along with my discussion of the anxiety disorder (obsessive compulsive disorder) that I’ve struggled with my entire adult life and that was severe during the serious depressive episode I had in my early to mid 20s.

So the idea of depression has been on my mind. It doesn’t surprise me that I feel down and flat as I sit here in the Charlotte, North Carolina airport on my way to Lexington, Kentucky on day 16 of a 19 day trip. I’m tired, strung out, missing home, missing Amy, and running out of extrovert energy. I’ve had a great time with all the people I’ve been with and the events I’ve had around Startup Communities. I’ve had several extraordinary experiences like dinner last night in Toronto with a dozen fantastic entrepreneurs who I hope to have continuous involvement – as a friend and potential investor – in the future. But as I sit here, I’m surrounded by a lot of grey, and it’s not just the clouds outside that are the remnants of the storm.

I’ve reached out to most of my friends in New York to check in on them. They are all doing fine even though a few were hit hard and are now effectively homeless as lower Manhattan gets cleaned up. I picked a spot in the airport far away from the TV – I couldn’t stand the endless news cycle that mixed Sandy with Romney with Obama. I had some extra carbs hoping that would help – it just made me feel sleepy. Yup – I know what this feeling is.

I know many entrepreneurs who deal with different levels of depression. My close friend Jerry Colonna is extraordinarly eloquent about this and how it impacts entrepreneurs. Ben Huh, the CEO of Cheezburger, wrote a powerful post about his struggle with depression titled When Death Feels Like A Good Option. And I’ve had many conversations with other entrepreneurs about my, and their, struggle with depression.

For some reason we’ve embraced failure as an entrepreneurial trait that is ok, but we still struggle with acknowledging and talking about depression. Entrepreneurs function with a wide range of stresses and emotions that often have overwhelming intensity. In many cases, we are afraid of admitting depression, and are often highly functional when we are depressed. But that doesn’t deny the fact that entrepreneurs get depressed. To deny this, is to deny reality, and that’s against my value system.

I just went back and read what we wrote in Startup Life about depression and it made me smile. I’m really proud of the work that Amy and I did on that book – I think it is the best book I’ve been involved in writing (Venture Deals, which I wrote with Jason Mendelson, is a close second) and I’m hopeful that it has a lot of impact and value for entrepreneurs and their partners.

Just writing all of this makes me feel better. Thanks for listening. Time to get on the plane and go to Lexington.

Amy and I shipped the final draft of Startup Life: Surviving and Thriving in a Relationship with an Entrepreneur yesterday. “If you are interested in this book, go pre-order it now on Amazon to help our pre-order numbers“, said Brad the Book Salesman.

The backlog of things on my to do list is at an all time high. I’m normally super responsive to everything and have zero backlog. That is not the case right now.

The only thing in front of me for the next seven hours is the Detroit Marathon which I’m going to go suit up for after I finish writing this blog post. I don’t expect this to be a pretty marathon – I haven’t been running very much, or consistently, since my bike accident six weeks ago, but I’m running to support my partner Jason Mendelson who, along with Jill Spruiell and Becky Cooper from Foundry Group, are running their first marathon. Our partner Ryan McIntyre is also running today, along with Andrew Tschesnok of Organic Motion. I think it’s pretty cool that 36% of Foundry Group is running this marathon.

While my backlog is huge, I’ve been focused on making sure I’m responsive to all the top order stuff. In my hierarchy this is Amy, my partners, the CEOs of companies I’m an investor in, anyone else who works for a company we are investors in, and our LPs. That’s it – everything else is in “the next bucket.” I’ve gotten plenty done outside of this, but all my excess available time over the last thirty days has been allocated to shipping this book. If you check with Kelly and ask about my schedule, she’ll suppress a laugh as she tries to fit you in somewhere.

Every time I ship something I have new respect for all the entrepreneurs and people who work for the companies we are investors in. I’ve had a lot of time (almost 30 years) to work on my “prioritization algorithm” and feel like I’ve got it well tuned. I’ve always had a continual overcommit problem – where I take on slightly too much and then have to back off on some optional stuff – and this cycle repeats itself regularly in my life. However, when you commit to shipping something, like a book, you have a deadline and suddenly have to execute against it. The high order priorities come into clearer focus. The separation between them, and everything else, become crisp. When I’m sitting in a hotel room at 11pm after a day that started at 5am, I no longer am thinking that I’m going to get through all of my email. Instead, I’m learning the brilliance of using Google Circles to search my inbox for circle:”foundry ents” label:inbox and make sure I get all of those done before I go to sleep.

While I’ve got a ton of other things I want to get to that are interesting and relevant to me, none of them are either timely or important, at least to me. I realize they are timely and important to the person on the other end so I’ll eventually get to them, but the prioritization filter gets tight and the first constraint to enforce is timeliness. I try not to spend any time on stuff I don’t think is useful. As Amy likes to tell me “I’ll be the judge of that” – and I am the judge of what I want to spend my time on, and I’m sure I get this wrong some of the time.  If you aren’t in the “inner circles” (yes – Google really got this right) then you have to wait. I’ll eventually get to it, but it won’t be first.

Everyone I know talks about how busy they are. And I’m sure they are. But if you haven’t shipped a product lately, I encourage you to configure something you are working on to look like a product that you are shipping. If you don’t have an external deadline, give yourself one. When you are working on something that has to ship in two weeks, you realize how much stuff is trying to get your attention that isn’t a priority, or even relevant to your mission on this planet. It’s a good way to remember how to prioritize. And it’s an excellent reminder to me about the pressure the people I invest in are under who continually ship products.

Here’s an email exchange that I had in the past 24 hours with an entrepreneur. Remember, I try to answer all of my emails and be responsive to any inquiry – this was a random one (which I get between 25 and 100 a day).

Entrepreneur: I just wanted to touch base with you and see if you are taking on new startups right now.

Me: Can you send me a paragraph and I’ll tell you if it’s something we’d be interested in. Everyone else to bcc:

Entrepreneur: It’s difficult to accurately describe the company, myself, and everything else in a single paragraph. To write something so small but somehow include every important aspect is near impossible, if not impossible. My company is too complex to be described in a single paragraph. 

I responded politely that I didn’t think this was something I’d be interested in exploring. I did skim his longer description and took a look at the website (which was a landing page with some a vague description of the business.) I could determine from this that it’s not something we’d be interested in (it’s outside of our themes) but this entrepreneur also missed his chance to engage me more deeply since he couldn’t articulate what he was doing.

I was in Oklahoma City earlier this week with the entrepreneurs at the Blueprint for Business accelerator (it’s a member of the Global Accelerator Network). There were five companies there and in addition to the various talks I did around Startup Communities I stayed at BP4B until about 10pm doing 15 minute meetings with each of the teams. I did my typical 15 minute “top of mind drill” where I start by saying “tell me about yourself as quickly as you can and then let’s spend most of the time talking about whatever is on the top of your mind.” Several of the teams explained themselves in a minute or less and then had 14 minutes to ask me questions; several of the teams took five to ten minutes to explain themselves leaving less time for questions.

I strongly believe that a founder should be able to explain what they do in one paragraph. I’m not a believer in the “one sentence mashup approach” (e.g. we are like pinterest + groupon + facebook for dogs). Rather, I like three sentences: (1) what we do, (2) who we do it to, and (3) why you should care. Sometimes this can be two sentences; sometimes four, but never more than a paragraph.

Yesterday, I spent 30 minutes with one of the teams in TechStars Seattle that I’m a lead mentor for. They are a month away from Demo Day and wanted to practice the very rough version of the demo day presentation. I gave them a bunch of feedback – some specific, some general, including:

• Show don’t tell
• I hate doing the overview / bios at the beginning
• You wasted the first 60 seconds
• Weak explanation of what you are actually doing and why I care
• Still don’t really know what you do

If you are an entrepreneur, you have less than 60 seconds to get an investors attention. Don’t waste it.