learn

Some of the things I learnt.

  • Have a single brand for your company
  • Press releases always have bloated numbers except in a few cases
  • Be vocal about good feedback
  • Any bad feedback to your team member should be told immediately in private in as much honesty as possible
  • An absolutely great product is a must. Let’s not debate about it
  • Choose an office space that’s good and easy to reach. You’ll never find a space that everyone is happy about
  • Hire people because they believe in your mission not because you are backed by YC or a leading investor or that you’re just two blocks away from their house. It’s hard to screen this during the interview but try
  • Frugal is good and necessary but being stingy leads to bad output. Allocate $x per team member (I hate the word employee) in your budget and buy them the stuff they want
  • Keep investors updated.. always. If you aren’t disciplined to send a summary e-mail every month, keep sending ad hoc e-mails if you signup a customer or anything that’s worthwhile to share
  • Don’t worry about competitors. They can’t affect the pace at which you grow. Just keep growing
  • Referrals for hires are good but don’t attach a weight to the referrer while interviewing the person. It’ll skew the results. Interview him/her like how you’d for anyone else
  • Customer relationships are important. Signing them up is just a small step. Maintaining the relationship and making them successful is a big thing. Get someone dedicated to do that

3 metrics

A company = f(customers,product,team)

Customers love great products that solves a pain
Great products are built by great teams
Great teams in turn attract great people

There are only 3 metrics that are essential to make it happen and it’s the same for both customers and the team.

For customers/product
a. On-boarding: Is the first experience of the app impressive and successful? (define success based on a parameter that makes sense for the product)

b. Engagement & retention (they go hand-in-hand): Is the product becoming a habit for the customer? Again, you can define “habit”. Once customers are engaged with the product, the retention metric automatically grows. Your product becomes sticky.

c. Virality: Are customers able to refer other people to the product? This is by far the best marketing strategy ever.

For the team
a. On-boarding: Is the experience on the first day/week so stunning that it looks like the person is high on caffeine and excited to work?

b. Engagement & retention (they go hand-in-hand): Is everyone in the team excited to come to work and not have monday/tue/wed blues? Are they really participating in discussion about product and strategy as opposed to just finishing off todo list? A highly engaging environment where everyone’s ideas matter is such a good atmosphere to be in.

c. Virality: Is everyone in your team able to convince or refer their friends to the company?

Customers love great products that solves a pain
Great products are built by great teams
Great teams in turn attract great people

SaaS pricing

Here are some of the parameters I found to be essential when pricing a SaaS product.

Scale
When one of your customers’ doubles in size, does revenue from that customer also double? or at least 1.5x? If revenue is not proportional to the growth curve of your customers, the pricing is incorrect.

Habit
Is your product becoming a part of daily routine for your customers, at least to a certain section of people? This is important because once it becomes a habit, you don’t have to worry about churn much (the only exception being your product deteriorates in quality) because the thought of unsubscribing from your service will never occur.

This is a great stage to be in because growth is now purely driven by science & logic (put a dedicate account manager to get feedback from customers, iterate, up-sell, etc) than art.

Spreading across teams
If team X is using the product, can team Y which is performing a similar function in the company also benefit from your product? And how broad can you define the team? The broader you definition is, the better. For eg: it’s better to say your product will be useful to any developer in the company than being useful just to backend programmers.

How can you expand to be useful to all of them who perform that function? Once this is achieved, the word generally spreads quickly within teams and the land & expand strategy works beautifully within the company. Soon, your product will be adopted by the entire company and it’s a strong foothold to expand to other continents or locations as well.

Right proxy value
Some SaaS companies like Box have an advantage – the product will be used by everyone in the company. I’m guessing the time to get a commitment from a potential customer will be high but once landed, it’s smooth sailing from then. This is a perfect example of a company that follows rule #1. If you hire a new employee, you’ll need to get her a box account or else she can’t see or collaborate with anyone in the team.

But not all companies enjoy this luxury. In fact, most don’t. In that case, we should identify a reasonably proxy value to the section of people we are selling to (zendesk => customer support; salesforce => sales; interviewstreet => hiring managers) and map to the size of the company. Eg: If your product is going to benefit recruiters, then figure out the ratio of no. of recruiters : size of company and accordingly price the product/recruiter.

This is a hard one and although I’m working on some models for my startup as well, I haven’t found anything conclusive to determine an accurate proxy value.

Story

When you narrate your story to your future generations, it’ll be a boring one if you keep winning all the time. That’s why you lose some battles. Believe in something that you’ll die for, get someone who will be with you till the end, fight like a maniac and you’ll win the war that matters the most. Godspeed

New world

There are lots of problems in the world. Lots of “real” problems which haven’t changed much for decades (or probably centuries). I looked around and identified five areas in which I’d put my clones to work in. [1]

a. Transport
We have got fancy cars, different models, purely electric cars, etc. but the mode of transportation is still an object having four wheels, a steering wheel & a gear. Nothing has really changed. It still takes 25 hours to fly to India from US, the commute time between SF & San Jose or Delhi to Bangalore hasn’t changed in decades. Unless it’s a road trip or a holiday or you genuinely want to enjoy the drive, transportation/commute is usually viewed as something that isn’t a good use of time. People hate sitting in the Caltrain for an hour, hate waiting at the airport and given a choice of transport that could reduce the time to travel by half, I bet a huge majority will just say ‘yes’. Nothing has really changed though but there is hope.

b. Health
Curing cancer is a separate problem but at least there should be a way to detect it beforehand. I’m not sure whether it’s going to be in the form of a Jawbone style band or something embedded in your body, but everyone should have the power to know if there are symptoms for something that’s going to go wrong so that it can be acted on quickly – not only for cancer but for every possible sickness that can affect the human body. It should be a default thing everyone in the world should have.

c. Food
It is related to the health category but solving a different problem. This is a hypothesis with a reasonable sample set (everyone I know) – The stuff we love is the most infrequently eaten because it’s usually unhealthy. If you love french fries or hot coffee or chocolates, etc. it’s usually shot down as having a high concentration of <insert-a-substance-name-here = oil/caffeine, etc.> preventing us from having a lot of it. You can afford it, you love it but still can’t eat a lot.

Why can’t we make food that tastes exactly like the original but doesn’t have any harmful effects on the body? french fries without increasing cholesterol, chocolates and coffee without affecting the heart and so on. Let people relish the taste of good food without thinking about any harmful effects and if at all something is going to go wrong, you always have the device we invented above.

People are starting to work on this, there is hope.

d. Terrorism
I cried when I saw this. [2] The motive & the plan behind it was terribly shocking to hear. It was ruthless! And know why he did it? – for fame & money.  He didn’t have a job and was convinced that his family will receive a lot money and he’ll attain fame by just killing innocent people. Economic disparities, lack of jobs, wrong information & knowledge about religion/communities, political influences has led us to this state – a horrible state where countries & people’s lives are constantly threatened. How can we stop this? to build a world where there is no fear after all everyone is a human.

When I interviewed a wildlife photographer long ago, I asked him whether he wasn’t scared of the lions & tigers in the jungle, to which he replied, “I’m more scared of humans (naxalites) than animals in the forests“. Sad.

e. Communication
There has been HUGE improvements in this area. Internet, broadband, phones & apps built on top of it (Facebook, GMail, Skype, etc.) have reduced the barrier to communication to almost zero. There is always a way to quickly communicate with your friends & family irrespective of which part of the globe they are in. However, the feeling of “touch” is still missing. What can we build to make terms such as “remote teams” or “distributed teams” or “long distance relationships” invalid? What can we do to bring the feeling of closeness, the sensation of touch?

It’s good to have a mission in life. Something you really believe in and pursue to make it work. The company I’m part of is really (indirectly) helping accelerate the rate of innovation in each of these five industries.

I am going to help construct a world where the farthest points in earth takes only two hours to travel, coupled with a great form of communication giving you the ability to “feel” the person on the other end (minimizing the distance effect to zero), eating what you want without worrying too much about your health because you know you’ll be alerted if something is wrong and all this bundled together with the confidence that you can jump onto any plane, walk on any road, go to any place in the planet without any fear.

 Notes
[1] There are people who are already working around these areas in different ways
[2] He was the only terrorist caught alive in the dreadful Mumbai terror attacks
[*] There are exceptions to every rule and possibly much bigger problems to solve but this is my view of the world.

Great ideas come from inexperience

History says it. The disruption in automobile industry wasn’t from Ford, the disruption in travel & renting industry wasn’t from the CEO of Hilton, the disruption in phone industry wasn’t from Nokia or Motorola and so on..

Being inexperienced in something gives you the liberty to question anything. There are no rules. One of India’s famous directors, Mani Ratnam once told about a shot in his film. He never went to a film school and didn’t receive any formal training from any director. In one of his movies, he had asked the cameraman to tilt the camera and put it in a weird position. The cameraman (an experienced one) said that’s not possible and it doesn’t work like that. He insisted on doing it and the shot came out beautifully. The cameraman later asked Mani on how he learnt this technique, to which he replied “Is this a technique? I don’t know about any techniques. I just thought it might be an interesting shot

The same holds true while building a company. It’s essential that the teams working on different operations should interact with each other. The best sales idea might come from a developer and the best way to plan out task deadlines and schedule might come from a marketing person.. who knows. They have no rules.

Unlearning
This leads to an interesting aspect of “unlearning”. It essentially means if you have to grow fast in your role and invent something new, you will have to be willing to unlearn what you already know. And it’s going to be damn hard to do that because the question that’ll popup immediately is, this has been working for decades, how can we change it? At that instant, I point them to this video.

Lame or disruption
So, why don’t we hire a team full of inexperienced people? we can disrupt the disruption. The risk in all these new ideas is it can either be a completely innovative one or can be totally lame.

Powerful team
In essence, a powerful team would consist of a right mix of experience and young blood, with every department interacting with another on a regular basis, and everyone willing to unlearn what they already know.

Hiring lessons Part 3 – Annoyance

I’ve hired a lot of people, let go some of them, a few of them went to Facebook & Google and a couple to start their own companies.

In all these ups & downs, the one strong quality I’ve noticed with people whom I enjoy working (and who are really damn good) is… annoyance. In a positive outlook, it may be called obsession but the feeling expressed to show your obsession is usually annoyance at something wrong/missing.

There are so many variables in a startup that it’s not possible to control everything. An easy solution can be to just give up or put the blame on someone else or something external (“oh.. I didn’t know we’ll hit HN front page, else I’d have done a better job”).

Startups require an extraordinary amount of sustained persistence with a continued obsession about the product. I’m super proud that *everyone* in the current team exhibit that quality which is what keeps us moving.

An e-mail from our designer.. 
I have spent the day working on designing the homepage below the fold and specifically submission-details (which would be carried over to the submission page) but I am frustrated with where the home page is. I can ‘t justify how the current content we are presenting entices a user to request an invite, or continue to tweak their bot….. <some info redacted>. Basically, I find myself rearranging deck chairs on the titanic, when I feel the real issue is the content that we arepresenting (not what it looks like)…I think this permeates into the interface. 

An e-mail from our VP, sales
There are four items in the milestone. For the next week, everything we do should be to complete these items. If you’re working on an issue thats not on this list, please adjust your priorities. If I ask you to do something thats not on the list, tell me to shut up. :) If you have a “blocker” because something isn’t ready… Speak up! :) If you need text, copy, or something, just let the team know and we’ll all pitch in.

I can list a sample e-mail like this for everyone in the team. Remember that it’s an almost flat hierarchy and we’re just 15 people.

I realized that each individual has their own priorities set. However, to build a company requires the collective effort of all of them. The sales guy requires a feature from a developer, the developer requires elements from the designer and so on.. Add a bit of default startup chaos on top of all this. It becomes a mess.

Only someone who’s truly obsessed about her work can clear through all this and come out because she “owns” the piece. And naturally, there are going to be instances when you’re annoyed.

If you have never been annoyed, you have never been obsessed about your work. If you have never been obsessed about your work, you shouldn’t be working at a startup.

Hire obsessive, opinionated people. They’ll not only stimulate great discussions but also help in building a great company.

Originally posted on Medium

 

Hiring lessons – Part 2

A startup’s first two hires.

Once you raise money, the default action is usually to hire more programmers to build fast and experiment more. Unfortunately things won’t move in the pace you expected it to. A lot of things fall into your plate – setting up insurance, payroll, a small kitchen, visiting the bank for a company credit card, buying computer peripherals & accessories for employees, decorating office space & many more. This leaves very little time to think about product & hiring and hence slowness sets in.

The first hire to make is an office manager. It might seem steep to hire one when you’re in very early stages (3-5 people team) but it’s totally worth it! You can try part-time and see how much your life improves as a founder. Operational work in a startup is a disaster and time killer. And if you’re on a growth spree, it’s best to consider a COO. One of the very early hires for Square was Keith Rabois as a COO so that Jack could focus on the product. Vinod Khosla (one of our investors) keeps saying this – “Any time the founder doesn’t spend on product or hiring is not worth it” and is absolutely true.

The second hire to make is a founder’s coach. National & international basketball teams have a coach. The best tennis player talks about how impactful a coach has been, the best cricket player gets a coach but not an entrepreneur.  Why? We mask under the term advisor but usually an advisor or a board member is a top CEO who has very little time for herself. An incubator/accelerator can help you guide only so much and is not realistic for them to spend focused time with you after you “graduate“. It’s the same case with VC’s. Their time is limited and would like to get just an overview or the health of the company and not every single detail. They’re always there for advice but can never be your coach.

I got to know that this role does exist in the startup ecosystem  when John Hering mentioned about Kevin Hartz being a “coach” than an advisor. I later met Mark Jung. We met once in 2 weeks, then once a week and then twice a week before I felt guilty of using his time and made a formal proposal. He has been incredibly helpful in shaping the company and me as a better entrepreneur. Some of the things which are tough to do as a young first-time entrepreneur.

  • How do you hire for a VP, sales role when you’ve never been there?
  • What’re the metrics you’ve to be focused on? and how to improve them?
  • How do you handle when an employee complaints about something gone wrong and you don’t know how to fix?
  • How do you manage/split time as a founder?
  • What are the parameters to consider to decide the compensation & equity options for X?

and many more.. 

Sure, you can learn everything by trial & error. But a coach uses his experience of building companies to guide you faster. It’s very hard to get a coach who’s willing to put in the time to your company but worth every bit to build a much bigger company.

Hiring lessons – Part 1

I’ve made a ton of mistakes in hiring people and wanted to write down the lessons I’ve learnt till now.  I’m not sure how many parts this post would have, here’s the first one anyway.

Speed vs hire
Why does a company having 5x more programmers than you, move slowly or at the same pace as you? Apart from the overhead to manage more people, it’s the failure to maintain a high hiring bar that’s causing the slowness. I made this mistake. It’s a very rationale thing for anyone to ensure that the hiring bar is kept high. But why do we slip? or more precisely, why did I slip? Some of the reasons below may resonate with you. Let’s call the bad hire, Joe.

Insecurity
I had an insecure feeling that if I didn’t replace the programmer who quit, immediately, my product would slow down, it’d affect customers, revenue would go down and so on. It’s bad to hire (or even interview) anyone with that sort of a mindset. It makes you twist facts, rearrange some of the evaluation parameters just to make that hire and feel “secure”. Ironically, all the things I feared started to happen, before I asked Joe to leave.

Size
The most dumbest way to evaluate a company is to base it on it’s size [1] and more often than not that seems to be the metric everyone is bothered about. The first question anyone (friends/investors/press) you meet asks is “How big are you now?” This made me feel weak as a founder since I thought I wasn’t “growing”. Thankfully I didn’t make any hires based on this but I did have those moments.

Betting
Someone with a really impressive profile  is interested in your company but doesn’t completely convince you. What do you do? I made a mistake of hiring Joe thinking he’ll eventually contribute because he has a strong profile. That never happened. The “eventual” in a startup is a few weeks or maybe even days.

Goal
One bad goal that you can set for the company is determining how many people you want to hire in the next x months. How many times have you heard a statement similar to this “We’d like to double our team by next quarter“. That’s a sure sign of lowering the bar at some stage in order to meet the goal. 

All of the reasons directly relate to desperation to hire someone to grow the company. It’s okay to wait for 3 months with a slow growth and then hire someone who’ll make the growth exponential to match the goal at the end of the year, than hiring when you’re not completely sure of.

==
Notes
[1] Instagram was worth $1B when they were just a 12 people team.

Advisor’s probability

 

Advisors help a company fasten it’s growth. You ask advice on a burning issue in your startup (there are usually more than one) and if you’ve good advisors, you come back enlightened. Some companies setup exclusive advisory boards. Incubators/accelerators and VC’s also are advisors.

Probability
What I realized recently which might sound obvious looking back, is every advisor only gives you a probability of their advice working well. And that probability is based on the environment they are in, the startups they watch, the founders they interact with and the company they have previously built.

This means, PG’s advice would hold a strong bias based on how YC startups grew and Vinod Khosla’s would be inclined to how he built Sun. It’s very likely that some of their advice won’t work for you but their stature might make it seem that it’s 100% the way to go.

When your advisor says “Do this”, it actually means, you stand 80% chance of doing well by “doing this”.

Fail
The surest way to fail is to follow every advice from your advisors. Empirically speaking, there was nothing new created by doing something that people have already done (falling into the 80% bracket all the time). Every company is unique in it’s own way. For eg: the slow product movement might work for Dave Morin but not for you.

The way to succeed would be then, to find the right permutation of choosing which ones to follow and which one to not.  While I’m starting to figure out how to choose the permutation, here are some of the things that has helped me.

Data
A lot of decisions are based on gut by default. While it might be good in early stages of startup, this is unhealthy as you grow when you have substantial data. Always dig deep to see if you’ve enough data to see if you can take a decision. Surprisingly, data reveals a lot of things you didn’t know.

Co-founder
The simplest way to resolve the conflict in your mind is to ask your co-founder what to do (this is one HUGE plus of having a co-founder apart from many other reasons). She’ll have the same amount of data as you have and is usually as absorbed in the startup as you are. [1]

Background
I’ve started asking my advisors/investors on why they think what they think. This has become so much useful in helping me make the decision. You can see if you can map to the situation or not.

Advisors/investors can be insanely useful and accelerate the growth of a company. It all depends on how the entrepreneur drives the discussions and the relationship.

Notes
[1] However, most likely both of you are confused on which path to move forward.