If your company lacks meaningful official values, take the liberty of defining those values for your team. - Reid Hoffman

Social networks do best when they tap into one of the seven deadly sins. Facebook is ego. Zynga is sloth. LinkedIn is greed.

Having “extra” capital gives you a cushion for when outcomes do not in fact follow your plan. Moreover, it increases your optionality — if you need to invest in growth, you can do much more without having to go through the time-consuming process of raising another round. As Mariam Naficy, CEO of Minted, told me, “Act like you’ve got half the amount you have in the bank because you’ve got to factor in all the failures and all the optimizations that kill great entrepreneurs and businesses all the time. Both of us know so many people who had good ideas and were on the right track, but just ran out of money.” At both PayPal and LinkedIn, we raised large financing rounds right before a market meltdown (2000, 2008), and we sure were glad we did. In the case of PayPal, that money allowed us to keep growing during the dot-com bust; without it, we wouldn’t have made it to our IPO. In the case of LinkedIn, the situation wasn’t as dire, but I realized that the value of the optionality from additional funding far outweighed the potential negatives of equity dilution.

Despite all the chaos, and the inefficiency of manufacturing and shipping in small batches, Zara’s gross margins continue to exceed those of its competitors H&M (55 percent) and Gap (29 percent). That’s because all that inefficiency incurred in the pursuit of speed allows Zara to avoid one of the biggest drags on gross margin for almost any apparel company — overstock of designs that failed to sell. Ortega devised this model when he was sixteen years old — don’t order inventory and hope it sells; instead, figure out what people want, and then make it.