Jay Sebben

CEO of L Street Corp, a growing Chicago based evergreen and diversified holding company. Buy-Build-Invest. 25+ yrs of entrepreneurial finance & SMB strategy.

[Jay Sebben @jaysebben]

"Entrepreneurship is the pursuit of opportunity beyond resources controlled."

~ Prof. Howard Stevenson, HBS entrepreneurial studies godfather

This is by far and away my favorite definition of entrepreneurship. Why?

Out of the gate it implies motion. The verb "pursuit" is deliberate and is the opposite of sitting and waiting for just the right moment.

But by far the most important piece of that short phrase is "beyond resources controlled."

This is pure gold. You won't see this as deliberately and succinctly applied in any other definition.

What he is basically saying is - you need to go and do things without knowing how you are going to get there or where you are going to get the money/resources/talent/knowledge.

Too many people wait for the perfect moment. Or complain they don't have the capital.

That is not entrepreneurship. That's just day dreaming.

[Daniel Priestley @DanielPriestley]

Under capitalism, socialists are free to build socialism.

Under socialism, capitalists aren’t free to build anything.

Nothing stops a group of socialists pooling their money, forming a company, and splitting every wage and every pound of profit perfectly equally.... Or to donate all profit to the government.

It’s legal. It’s easy. Owning the means of production is as simple as setting up a company.

Marx wrote his manifesto before the invention of limited liability companies. Back then “seize the factory” meant seizing it from the handful of families who could afford one.

That argument expired the day anyone could start a company with limited liability, raise investment and hire who they want.

Socialists are free to lead by example and demonstrate their system works. They can out-recruit, out-motivate, out-build and out innovate based on their ideas if they like. It would prove the philosophy works. Capitalism will happily host their experiment.

The fact that nobody does this tells you a lot.

[Catturd ™ @catturd2]

Biggest hoax in history.

[Brycent @brycent]

The best job cut post I’ve ever read.

This should be required reading.

[Zeb Evans @DJ_CURFEW]

Today we reduced headcount by 22%. The business is the strongest it's ever been. So I think it's important to be direct about what I'm seeing and why.

First, I made this decision and I own it. I did it because the way to operate at the highest level of productivity is changing, and to win the future, ClickUp needs to change with it.

Second, this wasn't about cutting costs. Most savings from this change will flow directly back into the people who stay. We'll be introducing million-dollar salary bands. If you create outsized impact using AI, you'll be paid outside of traditional bands.

Most importantly, I have the deepest gratitude for those affected. We're doing this from a position of strength specifically so we can take care of people properly. Everyone affected receives a package aimed at honoring their contributions and easing the transition.

I only see two options: wait for this to play out gradually in the market or be honest about what I'm seeing and act proactively.

THE 100X ORGANIZATION
The primary change is that we're restructuring around what I call 100x org. The goal is 100x output. The roles required to build at the highest level are fundamentally different than they were a year ago.

Incremental improvements to existing systems won't get us there. We need new ones. That means creating enough disruption to rebuild rather than iterate on what's already broken.

The common narrative is that AI makes everyone more productive. It doesn't. Many of the workflows of today, if left unchanged, create bottlenecks in AI systems.

These roles will evolve. But waiting for that to happen naturally means falling behind now.

The 100x org is actually heavily dependent on people - infinitely more than today. This is only possible with 10x people that have embraced and adopted new ways of working.

THE BUILDERS, AGENT MANAGERS, AND FRONT-LINERS

— THE BUILDERS: 10X ENGINEERS
I don't think most companies have internalized what's actually happening with AI in engineering. The common narrative is that AI makes all engineers more productive. That may be true in isolation, but at an organization level - that is the farthest thing from reality.

Here's what we've validated recently at ClickUp: the great engineers, the ones who can orchestrate, architect, and review, are becoming 100x engineers. They're not writing code. They're directing agents that write code. The skill is judgment.

AI makes the best engineers wildly more productive, and everyone else using AI slows these engineers down.
Think about it - the bottlenecks are (1) orchestration - telling AI what to do, and (2) reviewing - what AI did. Everything is leapfrogged and no longer needed.
So who do you want orchestrating and reviewing code?

And how do you want your best engineers to spend their time?

If your best engineers are spending time reviewing other people's code, then this is inherently an inefficient bottleneck. These engineers can review their agent's code much faster than reviewing human code.

The new world is about enabling your 10x engineers to become 100x.

The wrong strategy is to push every engineer to use infinite tokens. Companies doing this are celebrating 500% more pull requests. But customer outcomes don't match the volume of code being generated.

I call this the great reckoning of AI coding, and every company will face this soon if not already.

More code is just another bottleneck to the best engineers, and ultimately to your company's impact as well.

— THE BUILDERS: 10X PRODUCT MANAGERS
Product management and design roles are merging.

Designers that have customer focus, become more like product managers.

And product managers that have intuition for UX become more like designers.

The bottleneck of user research is gone. It takes us just one mention of an agent to kickoff research and analyze results.

The bottleneck of product <> design iteration is also gone. The product builder iterates on their own, along with agents and skills that ensure alignment with quality and strategy.

Also controversial today - I believe that the wrong strategy is to have your PMs shipping code - that just introduces another bottleneck that the best engineers will waste their time on.

To be clear, PMs should be coding but they should do this in a playground to iterate, validate, and scope. That code should not go to production.

Everything outside of managing systems, orchestrating AI, and reviewing output becomes a bottleneck.
That's why the other roles that are critical along with these are the systems managers (to reduce bottlenecks) along with a bottleneck you can't replace - customer meeting time.

— THE SYSTEM MANAGERS
Ironically, the people that automate their jobs with AI will always have a job. They become owners of the AI systems - agent managers. We have many examples of these people at ClickUp.

The underlying systems in which we operate are absolutely critical to get right. I think most companies are delusional to think they can iterate on existing systems and compete in this new world.

You must create enough disruption so that old systems are deprecated entirely. If there's any definition for 'AI native' that's what it is.

— THE FRONT-LINERS
In a world that will become saturated with AI communication, the human touch will matter more than anything to customers.

This is a bottleneck that you shouldn't replace - even when agents are high enough quality to do video meetings.

One-on-one meeting time with customers is something that shouldn't be automated. The systems around the meetings should be - so that front-liners spend nearly 100% of their time with customers.

REWARDING 100X IMPACT
In a world where companies are able to do so much more with less, where does that excess money go?
In our case, much of the savings in this new operating model will flow directly back to those that enabled it.

We must reward people that create productivity accordingly. This aligns incentives on both sides. Plus, in a world where your best people create 100x impact, you can't afford to lose them.

You should aim to retain these employees for decades. The context they have and their ability to efficiently orchestrate and review will be nearly impossible to replace.

Compensation bands of today should be thrown out the door. We're introducing $1 million cash/year salary bands with a path available to nearly everyone in the company if they produce 100x impact by creating or managing AI systems.

THE FUTURE
Nearly every company will make changes like these. The ones that do it proactively will define what comes next.

The future is not fewer people. It's different work, new roles, and better rewards for those who embrace it. We're already seeing entirely new roles emerge, like Agent Managers, that didn't exist a year ago.

ClickUp is positioning to lead this shift, not just internally, but for our customers too. I've never been more certain about where we're headed.

[Jay Sebben @jaysebben]

@tom_sietsema Smart move

[Jay Sebben @jaysebben]

Great series of posts below. I know this sounds nuts to trained deal people, but I can’t tell you how many brokers (and even lawyers)… then by default of learned behavior, sellers… at the lower end… have tried to tell me “you’re buying assets” (as in the legal structure in an asset sale),

and then expect to hoodwink you out of appropriate inventory or AR levels or cram AP on you, or whatever, without any adjustment to value expectations.

Sometimes it’s out of ignorance. Sometimes it’s deception. Usually it’s because an advisor did a poor job of coaching the seller.

The full value of a business is as a going concern. A moving train. Not a startup where you buy equipment and inventory and then… ready-set-go!

[SMB Attorney @SMB_Attorney]

It was the worst business buying story I’ve ever heard.

A buyer moved his family from Georgia to Utah mid-deal.

The negotiation was messy, but he was excited to close.

Working capital started at $800k.

Then dropped to $500k.

Then got negotiated down to $300k at the last minute.

He thought he was getting $300k to run the business.

Within 30 days, he realized he had a problem.

Most of that “working capital” was stale accounts receivable.

Money that was never going to be collected.

The purchase agreement didn’t protect him.

Nothing carved out AR over 90 days.

Within three months, he was running out of cash.

He drained his $200k 401(k) to keep the business alive.

Told his wife it would be a quick blip.

He’d pay it back soon.

Then sales stalled.

He needed more cash just to operate.

Banks said no.

He couldn’t bring himself to ask friends or family.

So he started using cash that was supposed to go back to the seller.

The seller sued him.

Everything unraveled fast.

By month nine, he was in default.

By month twelve, he was in bankruptcy and receivership.

Employees walked off the job.

The business collapsed.

He came to me among others around month eight searching for a solution.

At that point, it was already over.

A post-closing analysis showed the truth.

The business actually needed about $1.5M in working capital to run properly.

He got a fraction of that.

That’s the game.

If you don’t understand working capital, you’re not buying a business.

You’re buying a problem.

In today’s episode of Main Street Deals, Kevin and Sam unpack the most important lesson in business buying.

What working capital actually is.

How to negotiate for it.

And how to manage it post-closing.

Enjoy.

[Aaron Levie @levie]

“If AI can make employees more productive, which is widely accepted as fact, then companies are going to want as many productive units of labor as possible. This is a key reason why I am changing my mind.”

This is why jevons paradox is really important to understand with AI right now.

And counterintuitively, this trend is going to increase as AI gets better. The better AI gets at performing tasks, the more companies can take on those tasks, which leads to hiring more people to do the surrounding work of those tasks.

Think about the small business that can’t afford to build complex software. When AI is only a little good nothing changes for them. When it’s really good they can finally hire engineers that have the impact of 5-10X, so they can finally invest in engineering.

The sales team that can automate customer intelligence and outbound demand gen will hire more sales people because they have more leads to go after. The marketing team that can now do higher-end video production than before will hire a video editor. And so on.

This is going to happen in more and more surprisingly ways.

[Jay Sebben @jaysebben]

💯- moat worries are for people scared of winning in the marketplace. Nice to have, not need to have.

[Clint Fiore 🦬 DM for Biz Deals @ClintFiore]

I meet new small business owners making a million a year or more take-home with "no moat", weekly.

Just because other people theoretically could do the same thing doesn't mean it's a bad business.

[Jay Sebben @jaysebben]

Over simplified for sure. And I love your point about how fast a small business owner will fire you. So true.

But there is a massive group of companies with real needs between Fortune 500 and the bakery shop on Main St, as we know. They are already curious and underserved.

I’m old enough to recall when the web came out. A whole bunch of just “website building companies”. Everyone needed help, nobody was online. Some became massive. Most of these companies aren’t around today but for a moment they were flying.

[Jay Sebben @jaysebben]

@Dannic44 I’d certainly like to hear more.

[Jay Sebben @jaysebben]

It’s fascinating to watch people from another generation, who did not participate in the very public debate when it occurred - but are ever more impacted, wake up to discover the obvious and predictable problems with the outcomes as if they are dinosaur bones.

Healthcare, as with higher education and other consolidated and highly regulated sectors, suffer from the same maladies: human propensity for greed and power and the protection of that greed and power by a powerful group at the expense of everyone else and true progress.

Free the ideas. Free the entrepreneurs. Free the markets.

[Wall Street Apes @WallStreetApes]

This is literally mind blowing

Spencer Pratt exposes Los Angeles Department of Water and Power salaries

- Over 100 LADWP employees earn an annual compensation of over $500,000 per year each
- 26 LADWP employees earn more than $600,000 thousand dollars per year
- 4 top level LADWP employees earn more than $700,000 dollars a year
- The LADWP has a combined water and power budget of 11 billion dollars

I looked into it further, and get this

100% of leadership and oversight of the Los Angeles Department of Water and Power are aligned with Democrats

Mayor of Los Angeles Karen Bass appointed the 5 member Board of Water and Power Commissioners, which sets policy and approves major decisions like executive hires and salaries

California is essentially run by the mafia

They are literally giving themselves $500,000 -$800,000 EACH and this is just one department

[Jay Sebben @jaysebben]

@BillAckman @X Bad people with bad intentions much be challenged. Even if it is costly.

[Jay Sebben @jaysebben]

@IlliniJen @themariapappas Completely unsustainable.

[Jay Sebben @jaysebben]

@MillennialVerse Without better outcomes. It is simply theft that pay for mismanagement and fraud. Math is math.

[Jay Sebben @jaysebben]

Most people don’t realize that by making a tax a percentage, it is already naturally progressive.

[Rock Chartrand @RockChartrand]

She’s doing three things at once and hoping no one notices.

First, she blurs rate and amount. A billionaire can show a lower effective rate in a given year because of how capital gains are realized, while still paying vastly more in absolute dollars than thousands of teachers combined. The burden isn’t remotely comparable.

Second, she strips out timing. Most billionaire wealth isn’t taxed yearly because it isn’t realized yearly. Tax systems don’t treat unrealized gains as income. So she compares a steady W2 salary to fluctuating, often deferred gains and calls it unfair.

Third, she redirects attention. Instead of asking where trillions in already collected tax revenue go, she frames the problem as “not enough taken.” That conveniently shields spending, waste, and incentives from scrutiny.

So the real question isn’t “why aren’t we taxing more?”
It’s “why does more revenue keep producing worse outcomes?”

That’s the part this rhetoric is designed to avoid.

[Jay Sebben @jaysebben]

@anvisha Moda

[Jay Sebben @jaysebben]

Moda

[Anvisha @anvisha]

We raised $7.5M to kill AI slop.

Introducing Moda: the world's first design agent with taste.

RT+ comment “Moda” and we’ll design your brand for FREE.

[Jay Sebben @jaysebben]

Tell me you’ve never run a business and can’t get out of the way of your political ideals without telling be you’ve never…

Or just tell me you’re bankrupt.

[Rafael A. Mangual @Rafa_Mangual]

Hang on… Chicago wants to attract more tourists. It has created a marketing campaign to do that; and, in order to fund it, the city is… making it more expensive to stay in Chicago by raising taxes on hotel rooms? Do I have that right?