Here's how I handle why your terms of service are a ticking legal bomb. We break down the complex legal jargon into actionable steps for early-stage founders. This is the guide I wish I had.
What I've Learned From 58 Companies
Across 234 angel investments, including Anthropic, a few patterns in terms of service come up again and again.
The founders who handle terms of service well understand that simplicity beats complexity every time.
Why Most Approaches Fail
Many common approaches to terms of service are flawed at the root.
The root cause is usually one of three things:
Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
The Framework That Actually Works
Here is a simple framework for evaluating terms of service. It's not complicated, but it requires discipline.
Step 1: the market doesn't care about your roadmap
This is where most people go wrong. They skip this step entirely and jump straight to execution. Don't do that.
Step 2: the data tells a different story than your gut
Once you have the foundation right, this becomes much easier. I've watched founders struggle with this for months when the answer was staring them in the face.
Step 3: Iterate relentlessly
Nothing works perfectly the first time. The companies that get terms of service right treat it as an ongoing process, not a one-time project.
Real Talk: What Actually Matters
Here is what actually matters in terms of service.
First, execution speed beats perfection. Every time. Companies rarely fail because they moved too fast on terms of service. Many fail because they moved too slowly.
Second, measure everything. If you can't measure it, you can't improve it. Set up tracking from day one, even if it's basic.
Third, talk to your users. It sounds obvious, but many founders make decisions about terms of service in a vacuum. Get out of the building. Talk to real people.
This connects to broader themes around terms of service, startup law, compliance that I've been thinking about a lot lately.
Final Thoughts
There are no shortcuts in terms of service, but there are smarter paths.
The strongest teams treat terms of service as a competitive advantage, not a checkbox. They invest in it early, measure it obsessively, and never stop improving.
If you're just getting started with terms of service, don't be intimidated. Everyone starts somewhere. The key is to start with the right mindset and the right framework, and then execute like your company depends on it. Because it probably does.
Frequently Asked Questions
Q:Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.
Q:How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.
Q:What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.