On any given day, Iāll get about three LinkedIn inquiries asking about joining Jane or, more broadly, how to break into the cannabis tech space.
I love that people want to join this space. More capable people are always welcome, because theyāll contribute to the ultimate goal of safe, efficient access to cannabis for any adult that wants it.
In light of the wave of layoffs and founders stepping down, I do have a piece of advice:
If itās too sexyā¦run.
What does sexy mean?
There are two types of companies in cannabis:
Companies that put their heads down to solve real problems. Sometimes these companies arenāt sexy
Companies that earn style points. These are the sexy ones
In my early days of selling at Jane, some people preferred the look and feel of competitive eCommerce menus. Thatās fine, because we didnāt build the menus to please our buyers - we built them to generate the highest possible conversion rate for end users.
And we told people that. Here was a common rebuttal if someone didnāt love our layout:
āI understand. But frankly, it doesnāt matter what you like. It matters how many people actually place an order.ā
And, because we consistently proved superior conversion rates, we won a lot.
Butā¦it was not sexy.
What does sexy look like?
You know sexy when you see it š
Just kidding. Hereās a cheat sheet:
Lots and lots of press releases - usually about immaterial enhancements or fluffy nothingness
Gigantic booths at trade shows
Astronomical fundraising, where the math around the valuation doesnāt make any sense
Paying lip service to stewardship of the plant, while mistreating employees
Layoffs
Ah, the layoffs.
My feed has been inundated by quality people announcing their cannabis tech job losses over the last several months. Itās a deluge. Recruiters, engineers, salespeople, marketing. āSo grateful for my time here, Iām on the marketā is the general sentiment.
In a tech company, itās incredibly tempting to scale your team fast in an attempt to scale your product and market share fast. Especially if you have money. Throw heads at it, the thinking goes, and weāll figure it out.
A sexy company doesnāt hire deliberately, though - there seems to be a lack of purpose for each individual headcount. After a while, it becomes clear that revenue targets are unattainable, and companies need to batten down the hatches. They go from āletās grow!ā to āletās survive!ā And thatās when the layoffs come.
Letās never blame the employees that are let go, btw - the blame should be placed squarely and solely on senior management.
I donāt feel bad for CEOs that have to conduct layoff phone calls. You shouldnāt either. Itās a product of choosing sexy over sustainable.
Some guidelines
Itās hard to tell which companies might scale irresponsibly and leave investors / employees holding the bag, but here are some pointers for new entrants (and out-of-work employees):
Dig deep into leadership. Why are they making the moves they are making? They hold your livelihood in their hands
Look at hiring relative to scale rate. If the company is blasting off with headcount, does their scale match that growth rate? Or are they reducing their per-person productivity over time? (I prefer lean teams that do a lot of hard work vs. a huge team - especially in sales)
Look at the total addressable market (TAM) and path to profitability: is the market big enough to support the current plan? Is there an actual plan? Has it changed often? Deliberate, decisive course changes are great - waffling or big sweeping changes in priority are often a telltale sign that something is amiss
Sexy companies are intoxicating. They are flashy and they are cool. But, more often than not, there is a lack of substance that could impact your job. Stay wise and keep it crispy.
(PS I really do feel for everyone impacted by the cannabis layoffs of late - reach out to me directly if I can be of any help)
š tl;dr
There are sexy companies, and there are substance companies
Sexy companies often make a lot of noise and have a flashy public presence
The sexy companies are often covering up a lack of direction, which sometimes leads to layoffs and other bad results
It is Thursday