From First Round - 30 best advice to entrepreneurs
This office is no longer behind start up ideas. We are keeping up. I am now having many materials/readings for start up. I hope the Prof Jorge Entrep readers and students are keeping up and profiting from these ideas.
I came across the first round site and their 30 best advice to the entrepreneurs. We are glad these are free.
More power to start ups. More power to entrepreneurs.
"It is not about being successful, it is about making others become successful"
"Celebrate your wins "
"To inspire, tell a good story"
"HIre to get the culture you want"
Start up advice forum
The full article:
It started with a gap in the market.
Technology writing comes in many forms. It can be long and lyrical a la The New Yorker. And it can be bite-size — just enough news to grab and go. What we spotted was a lack of tactical storytelling, a need for compelling, long-form writing that would equip readers with tools and hacks they can deploy immediately to build better businesses. Our response is First Round Review.
To date, we’ve featured CEOs from Jeff Weiner to Drew Houston to Aaron Levie, engineering leaders tackling the world's biggest technical challenges like Amazon's James Hamilton, bold thinkers like Medium’s Jason Stirman, and brilliant designers behind lovable products like Mint and Gmail. We did this with one goal in mind: To help incredible entrepreneurs share their insights and expertise so that the next wave of builders may succeed. What follows is a roundup of the 30 best pieces of advice we published this year. Take it with you into 2014, and you may just become the next unicorn.
As for us, we’re just getting started.
Technology writing comes in many forms. It can be long and lyrical a la The New Yorker. And it can be bite-size — just enough news to grab and go. What we spotted was a lack of tactical storytelling, a need for compelling, long-form writing that would equip readers with tools and hacks they can deploy immediately to build better businesses. Our response is First Round Review.
To date, we’ve featured CEOs from Jeff Weiner to Drew Houston to Aaron Levie, engineering leaders tackling the world's biggest technical challenges like Amazon's James Hamilton, bold thinkers like Medium’s Jason Stirman, and brilliant designers behind lovable products like Mint and Gmail. We did this with one goal in mind: To help incredible entrepreneurs share their insights and expertise so that the next wave of builders may succeed. What follows is a roundup of the 30 best pieces of advice we published this year. Take it with you into 2014, and you may just become the next unicorn.
As for us, we’re just getting started.
Intuit Co-founder Scott Cook is
very particular about who he hires. And after 30 years, he has it down
to a science — including how to get the truth out of a reference check.
The reality is that people want to be nice, so almost everyone will
start out by saying how great the candidate is. Cook’s advice is to
completely ignore this opening feedback. When they’re done, ask this:
“Among all the people you’ve seen in this position, on a zero to 10
scale, where does this person rank?” If the person says seven,
immediately ask why they aren’t a nine or a ten. “Then you’ll finally
start learning what this person really thinks,” Cook says. He also ends
every call by asking the person for other people who could speak to the
candidate’s performance. The further you get away from provided
references, the more valuable the data.
Dropbox Founder and CEO Drew Houston should know. By the time he applied to Y Combinator,
cloud storage was already a crowded space. But he wasn’t deterred.
While many entrepreneurs assume they have to be first to market to win
in a category, this is almost never the case. Just look at how Google
trounced Alta Vista, Yahoo, and Ask Jeeves. “The fact is that there’s a
problem with being first,” Houston says. “You create a market, and if
you’re too early, you essentially leave the door open behind you for
someone else to do it better.” So he tuned out the naysayers, and 200
million users later, Dropbox is in the lead.
Andy Rachleff is the founder and CEO of Wealthfront, and before that a co-founder and general partner at Benchmark Capital. Having observed years of varying strategies, he developed the Wealthfront Equity Plan to
align equity with employees’ contributions to the success of their
companies. The tenets of the plan: Avoid cliffs, peg equity to
outstanding performance (not milestones), and invest in annual evergreen
grants to tie long-term tenure and hard work to ownership stakes.
“Encourage employees to think about increasing the value of their
options through accomplishment rather than asking for more when they
complete a task,” advises Rachleff. Evergreen grants smooth out the
vesting process so employees never reach a cliff. “Cliffs cause people
to raise their heads and consider their alternatives. It should be
avoided at all costs.”
This is one of the keys to being a great boss according to Bob Sutton,
professor and management expert at Stanford’s School of Engineering.
But the most important thing is being aware of yourself and your
actions. When you’re in power, people start watching everything you do
very closely. At the same time, you start getting more credit and/or
blame than you deserve for company performance. It’s called the
“magnification effect” — and it’s so strong that while data shows that
leaders tend to be responsible for about 15% of outcomes, they usually
get 50% of the blame or credit. As Sutton says:
- Author: Camille Ricketts - Editor
“When you become successful is when you should be especially wary you are going to turn into an idiot.”
“Then break it down into an execution plan,” says Todd Jackson, one of the lead product managers behind both Gmail and Facebook News Feed, and now co-founder of Android startup Cover.
To rally his troops behind feature changes, he would make mockups
showing what the future could look like, and use them to tell a
narrative. To gain buy-in for a News Feed redesign, he made the product
personal. “Your friends are posting so much awesome content,” he told
them. “What if we made it look so good that people looked at twice as
many stories a day? If that happened, people would spend twice as much
time on the site. People would get twice as many likes, and we’d get
twice the revenue. This is something users are going to love. This is
something your friends and family are going to love.” If you get
engineers excited about what could be, they’ll work hard to make it
happen, Jackson says.
6) Get rid of luck.
“When you get lucky, it’s because you didn’t know what was
going to happen. The corollary is, if you know what’s going to happen
then there is no luck. There is no uncertainty and there is no risk.” David Friedberg, founder and CEO of The Climate Corporation,
always favored certainty over luck — and this year he sold his company
for $1 billion. Of course every business comes with a degree of risk.
You don’t know where your market is headed, what your competitors are
planning, even whether people will buy your product. But the more of
these uncertainties you can identify, the easier it is to take them off
the table. “Identify the unknown, mitigate the unknown,” Friedberg says.
“Only then can you enable the outcomes you want and increase the value
of your company.”
Traditional management never quite agreed with Jason Stirman. In fact, at blogging platform Medium,
he’s helping invent a culture without managers. But before that, he ran
his own engineering team at Twitter and discovered some leadership
hacks of his own. “I’d hear that someone on my team had a problem with
someone on another team that brought everything to a standstill — just
because they didn’t like each other. I thought, what if I just got them
in a room together and we all talked about everything except the problem
at hand? When we did, we got some casual conversation going, they
discovered some similarities, and by the end of the hour they were
talking about how to solve their issues. This was a conflict that
literally kept me up at night, and as soon as there was space for them
to connect as people, it was fixed. I thought, holy crap, this is a
super power.”
Great interview questions focus on specific examples of candidates’ contributions, actions, decisions and impact, says Neil Roseman,
former technology VP for both Amazon and Zynga. He suggests the
following questions for every project or accomplishment a candidate
mentions:
- What was the background of what you were working on?
- What tasks were you given?
- What actions did you take?
- What results did you measure?
For the best results, only bring people in who worked on
projects and products that were significant to their prior companies,
even if they didn’t succeed. “You want the employees that worked on
important teams,” Roseman says. “Companies like Microsoft make sure to
get the best people on the highest profile products.”
Brooke Hammerling, founder of Brew Media Relations,
has become the go-to startup whisperer when it comes to getting press.
And if she has one piece of advice it’s this: Find your company’s story
and stick with it. To help her clients nail down their message, she
separates the stakeholders and fires questions at them about the
product: “What are you? Why are you? Who are you? What problem are you
soling and why should people care right now?” What does each person say?
Where are the differences? Where are the overlaps? This is how a
narrative comes together. But a startup can run this strategy without an
agency or communications team. “Come up with your own ideas, compare
notes, develop it together,” says Hammerling. “You might end up
somewhere you didn’t predict.”
Brooke Hammerling, Founder, Brew Media Relations.
10) Share everything. Hide nothing.
Jonathan Rosenberg defined
Google’s product strategy for nearly 10 years. He has a lot of rules
for great managers, but the underpinning of leadership needs to be
transparency. “At Google, our default mode was to share all
information,” he says. “We strived to empower everyone equally. In the
internet age, power comes from sharing information, not hoarding it.”
Employees like being trusted and hate being surprised. A policy of
complete transparency feeds these needs. Rosenberg's rule of thumb:
“Back up your position with data. You don't win arguments by saying, 'I think.' You win by saying, 'Let me show you.'”
“Good engineering is about finding the most cost-effective
solution to a problem, whether it’s measured in dollars, hours, morale
or lost opportunities,” says Kris Gale, VP of engineering at Yammer.
“But some costs are less obvious than others. Among the most
dangerously unconsidered costs is complexity cost — the debt you accrue
by complicating features or technology in order to solve problems.” An
app that does 20 things will always be more difficult to refactor than
an app that does one thing, so changes to its code will take longer. In
software engineering, complexity cost is introduced in both product
design and implementation, but PMs, QA and developers should all be
ready to bust it when they see it. If they don’t, that cost is passed
along to users, who you may end up losing simply by adding too much.
“There is no better way to enforce culture and values than by who you hire,” says Brett Hurt, co-founder and former CEO of BazaarVoice.
The individuals you choose to bring onto the team speak volumes,
highlighting the traits perceived to be the most valuable for the
organization. The same is applicable to firing. “If you fire brilliant
jerks, it says to everybody, ‘That’s not going to be condoned.’ If you
hire people who have real passion and who love your calling, it’s going
to feed on itself,” he says.
13) Make decisions fast and early. Especially when it comes to people.
“The longer someone works for you, the harder it is to change their behavior,” says Michael Lopp, head of People Ops at Palantir.
“The longer you don’t deal with something, the less likely you can fix
it.” Known to the blogosphere as Rands, Lopp has become somewhat of an
expert on managing performance and knowing when to cut people loose. His
number one recommendation: “Fix situations as soon as you see them
going wrong.” In the end, poor performers end up costing you three to
five times more than you think — including your credibility as a leader.
“If you're leading a team, your job is your people.”
Michael Lopp speaking at First Round's 2013 CTO Summit.
Max Levchin is known for many things, among them building one of the best engineering teams in tech history at PayPal.
His counter-intuitive contention: Diversity of thought can slow
startups down right when speed is their most valuable weapon. “Working
solo is the most efficient way to operate,” he says. So when you start
to grow, it only makes sense to hold on to this ethos by keeping teams
small and on the same page. “The moment a software team wastes time
debating which version of Python to use, it’s lost its nimble edge.” To
build this early, like-minded team, Levchin took some advice from
co-founder Peter Thiel:
He wrote down every brilliant person he knew in college. “It turned out
to be a list of about 30, and we ended up hiring about 24 of those,” he
says. “Then that team was forced to write down everybody smart they
knew that they were absolutely confident we could never hire. We went
after them like banshees and they would eventually crack.”
“A lot of people say don’t fire great engineers, but they’re wrong,” says Joe Stump, lead architect at Digg and
co-founder of SimpleGeo. “It only takes one asshole to destroy an
entire team.” You should fire them immediately, he says. And after that,
take on the employees with hero syndrome. “You know, that guy who
leaves on Friday and comes back on Monday exclaiming, ‘Hey! I re-wrote
the whole site!’” Heroes burn out or they crush team dynamics when they
go off and do their own things. Stump prescribes mandatory vacations.
Lastly, you have the technical zealots. “The ones who think every screw
needs to be tightened with Rails. If you allow your engineers to become
zealots, it will force you down a path of only hiring specialists. You
don’t want to get into arguments around technical religion. You want to
use the best tool for any given problem.” Keep an eye out for zealotry
and require flexibility.
Airbnb almost
wasn’t. Early on, they had a bunch of listings up but no one was
biting, growth stalled, and they didn’t know why. That’s when
Co-founder Joe Gebbia spied
a pattern: the photos all sucked. “You couldn’t even really see what
you would be paying for,” he said. The solution (courtesy of advisor Paul Graham):
Go to New York, rent a fancy camera, and replace the amateur
photography. There was no data backing this decision. They just did it,
and a week later the results were in: improving the pictures doubled the
company’s weekly revenue — the first improvement they had seen in
almost a year. Initially, Gebbia says the team thought everything they
did had to be scalable. It was only when they gave themselves permission
to experiment with something non-scaleable that they hit a turning
point.
Most use these terms interchangeably and fail to implement them beyond executive lip service. But LinkedIn CEO Jeff Weiner is
convinced that clearly defining both and living by them every day was
key to the company surpassing 200 million users. “Vision is the dream, a
company’s true north. It’s what you constantly need to be aspiring to,”
he says. He defines LinkedIn’s as “Creating economic opportunity for
every professional.” Mission, on the other hand, needs to be expressed
in terms of concrete objectives, and a company can and should measure
how well it achieves them. Along these lines, LinkedIn’s mission is
“Connecting the world’s professionals to make them more productive and
successful.” Many startups only have one or the other, but a vision
without reference to what the company actually does is unmoored from
reality, and will fail to inspire and organize the people who work
there.
When most people approach hiring, they look for the
equivalent of a third baseman who bats .320, hits 40 home runs, 120 RBIs
and who’s won a Golden Glove, says former Square COO Keith Rabois.
“If you think you’re going to hire someone like that at the early
stage, you’re just kidding yourself. This means you need to hire people
who are a little less proven. If you think someone could one day bat
.320 but hasn’t had the chance, hire them. Because once they do bat
.320, you probably won’t be able to.” Rabois put this in action by
pulling in a large first intern class at Square. Of the 17 interns
recruited, he says four were probably on par with the top 10 to 20% of
full-time employees. The whole program was worth it just to have access
to that talent.
Keith Rabois at First Round's CEO Summit.
As the founder of IdeaLab, Bill Gross has
backed and advised 100+ companies and overseen 35 successful IPOs and
acquisitions. To make it to the promised land, he says, you need to
build a team with four types of people with varying strengths, ideally
in large doses:
- Entrepreneurs: The idea people who explore what it takes to get ideas of the ground.
- Producers: The doers who push projects forward and get them done. They make the product, sell it, and answer customers’ questions.
- Administrators: The process builders who plan, organize, devise protocol. They keep your organization running smoothly as you grow.
- Integrators: The emotional centers who help everyone get along even when they view the world differently.
You want all four people in the room during big decisions,
and all four on your management team. At the very least, you want each
of these characteristics represented at your company, Gross says.
By the end of its first year, Pandora was already running out of money. Founder Tim Westergren went
from pitch meeting to pitch meeting with no luck, and the company’s
core team of 50 ended up going over two years without a regular salary.
Looking back, Westergren credits this fortitude to several things:
everyone’s pure love of the product; total transparency with his team no
matter how bad things got; hiring carefully for people who would come
together in a crisis rather than break apart; and knowing, as a leader,
that he needed to be the first one in and the last one to leave every
day. This didn’t just mean long hours — he went as far as paying
salaries with his own credit cards. If you’re a struggling founder, you
have the opportunity to put a positive spin on sacrifice.
Promoting work-life balance has its benefits, including
driving down recruiting and operational costs — and opening your company
up to a larger, often more experienced talent pool, says SurveyMonkey CEO Dave Goldberg.
It guards against burnout and poaching, and makes it much easier to
hire brilliant, seasoned executives who have families when you get to
that point. In order to make this a reality, Goldberg had to walk his
talk. Today, he leaves work at 5:30 p.m. “If you want to shape a culture
and build a workplace with a diverse team, you need to prove it with
your actions.”
“Remember, ‘good for now’ earns opportunities for ‘great’ later on,” says Jeffrey Kalmikoff, lead designer at Betable.
Founders, designers and product leaders are all primed to strive for
perfection, but this attitude can get in the way. To keep moving
forward, teams need to get in the habit of taking on ‘design debt’ —
that queue of tweaks and to-dos that could make existing features better
eventually. When you’re moving at startup speed, the important thing is
having the features out there at all.
“Done is better than perfect. There does not exist a time when no product is better than product.”
Aaron Levie has defied the odds in many ways — he’s a young founder who managed to scale Box 10x
into a billion dollar business without compromising culture. He
attributes much of this success to keeping the bar high on hiring, no
matter how pressing the need to fill a role. To limit “desperation
hires” at all costs, Levie’s instituted what he calls the 10-person test.
“For anyone you hire, would you want them to be in the first 10 people
at your company?” he asks. “If you’re hiring the 400th employee, you
would still want that person to be in your original 10. There’s no
reason you ever have to relax your standards. People do because of the
need for speed and the need for growth, but you don’t have to if you put
the right processes in place.”
Aaron Levie at Box headquarters.
A number of studies have shown that people perform better
at math and science activities if 50% of the participants are women,
making gender distribution a key priority. This is definitely true at Etsy,
a company that increased its female engineering staff by 500% in one
year. Its primary strategy: Providing grants for women to enroll in
Hacker School, a three-month intensive training program. Immediately,
applications from women skyrocketed, and the company ended up hiring
eight last year alone. Etsy CTO Kellan Elliott-McCrea says
the grants went a long way toward making the company more welcoming for
women. If you’re interested in creating a more gender-balanced
workforce he has the following advice:
- Be serious but inviting. Make it clear the standards are still high.
- Take a chance on more junior engineers with a wide range of skills; senior women engineers are hard to find.
- Make it clear the interview process is about building things together, not just proving how smart you are.
25) Give people the “Sunday Test.”
Stripe won’t
hire even the most outstanding candidates if they don’t fit the
company’s engineering culture. To cut to chase on this question, CTO Greg Brockman uses
the Sunday Test: “If this person were alone in the office on a Sunday,
would that make you more or less likely to come in and want to work with
them? If the answer is not a clear yes, then don’t make the hire. In
the short-term, you might miss out on some really great people, but you
have to play the long game.”
“Hiring bad eggs can impact your ability to hire top talent in the future.”
A tiny startup has much different needs than a company like Square or Dropbox. To right-size security strategy, Evernote CTO Dave Engberg refers
to the rule of tripling. Basically, when your company goes from 3 to 10
employees, or 30 to 100, the entire tenor changes and there are many
new considerations. There are smart ways to approach securing your
company’s data at every phase, but there’s one rule in particular
Engberg recommends to make sure your efforts are on-point: “Only do
something when the cost to implement a security measure is less than the
risk you’re protecting against.” Otherwise, it’s easy to misuse
valuable resources that you should be funneling into product
development.
In the last year, Sincerely launched
five successful products, made possible because it actually released
closer to 15 — some were just behind the scenes. High-velocity
development has allowed the company to learn more about what customers
want and how to deliver at lower cost. But, as CEO Matt Brezina advises,
achieving this speed requires a few hacks. First, he recommends testing
off-brand. Create a separate developer account and ship product. You’ll
see how people use an app without an official launch. Sincerely even
tested in Canada to flesh out ideas before bringing products to its
major market. Second, test on Android before building for iOS. “It takes
quite a bit longer for an iOS app to get approved, and that’s a
damper,” Brezina says. “With Android, you can have something in the Play
Store within a few hours. So it’s worth testing small changes in your
Android app and then implementing them on iOS if they’re working.”
Former RockMelt CEO (and current Yahoo Product VP) Eric Vishria has
realistic expectations. He knows it’s virtually impossible to find
candidates who are perfect and amazing across the board. Even if you do,
hiring them is a long-shot. “Instead, you should hire for strength in a
couple of areas that matter most to your business right now — someone
who’s world-class in the area that is most impactful for you,” he says.
“When you search for people, consider your short-term needs. Don’t think
about what you’ll need two years from now. After 12 months, the person
may scale, your business could change, you may have to replace them.
These are all facts of life, but you’re not going to even get to 12
months if you don’t do this.”
2013 was a big year for Jeff Bonforte, the veteran company-builder who just sold his latest, Xobni,
to Yahoo. His board helped a lot, but it took him years to learn how to
use board members and meetings effectively. His number one takeaway:
Don’t waste time feeling intimidated, put your board to work for you.
“Once I learned the board was there to help and not judge, I became
better at asking for things.” He started giving board members homework —
everything from introductions to funders to recruiting top employees.
To his surprise, they actually embraced the opportunity to be useful. Be
bold, Bonforte says. “You can tell your board the talent you need and
assign them to go get it for you.”
30) Celebrate your wins.
“Make sure you and your team celebrate the wins even when they are small,” says SinglePlatform Founder and CEO Wiley Cerilli.
“I know it’s stressful being a CEO, but you have to celebrate with your
team. Set goals earlier on that you can hit to build the team’s
confidence in their ability to achieve them and your ability to properly
set them.” With this in mind, Cerilli sends out a weekly email to the
entire company detailing every department's goals. If they’ve been met,
the team celebrates. They go go-karting. They ring a gong in the office.
There’s ceremony around it. To drive this point home, he quotes Magic
Johnson:
“It's not whether you can be successful, it's how many people you can help become successful. ”
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