Category Archives: Entrepreneurship

What to do the day after the launch of your company or announcing new features

There is always a sense of euphoria after a “launch” of any sort. Especially if you have been working on your product / service for many months and are not particularly sure how it will be received. Then you get a chance to go “public” with your features / product or company. It tends to be exhilarating, but brings its own set of things to do after the launch.

There are 3 major buckets of items that you will encounter the day after the launch.

They fall into the “do now”, “do later” and “do never” bucket.

First the “Do Now” bucket. I would put thanking people that supported you on the top of the list. Send personal emails to the reporter, initial users, advisors and mentors with a list of links (combine all coverage instead of sending multiple messages) that indicate the coverage your received for the launch. Even if all you did was launch it on HN, it helps to take a screen shot, or even provide a link to the comments. If you have a team, I’d highly recommend you collate all the links, and put them into a document to share and discuss when you meet. It helps to set context to something you have all been working on. Even if the feedback on the launch is negative or “meh”, I’d still recommend you put it together.

I’d also immediately put together a spreadsheet with the major items of feedback and perspectives, and put them into feature requests, comments, questions and general feedback. Some of them you can action and others likely not. Either ways, it is quicker and more helpful to capture all the feedback just after the launch rather than go back and revisit it later.

Finally I’d spend quite a bit of time providing customer support - helping answer user questions, addressing their issues (without coding new features immediately) and also documenting the bugs they encounter – maybe you might want to even fix the blockers or P zeros (priority zeros).

Second, for your “Do later” bucket. I’d write a blog post to collect your thoughts, and write about your experience overall – what were the highlights when you got your start, what the low lights were, what your journey was and how you made critical decisions. In that blog post I’d also add the links to the launch coverage.

I would also spend some time after day 1 on your traffic analytics - where did you users come from, where they spent time and finally what they did. These will help you prioritize the key elements of your go forward plan and help you target the right press or channels going forward.

This is also a good time (do later, not immediately) to check all your social channels – Quora, FB, Twitter etc. to capture your feedback. I dont put these in the do now bucket, because while you might get some feedback that needs immediate attention, they tend to be a big drain and time sink. You will end up responding to some of the feedback, but most of the response from your side will be emotional – either happy, because your launch was well received, or sad because you were panned.

Finally the “Do never” bucket. You will get a lot of email from potential recruiters – who have “a rock star ninja” who wants to join your team and mentioned your company by name, or potential partners who “want to set up time over coffee to talk about potential ways to partner” or other principals and associates at investment firms who “followed” your launch or were tracking you on angel list or tried your product and would like to setup some time to learn more.

These waste the most amount of your time. I’d highly recommend you push them all out by a few weeks and use it as a technique to buy some time and gauge their interest after 3-4 weeks. While I have learned that there’s some truth to the “strike when the iron’s hot”, these are rarely hot irons, but more “flat coal”.

I’d love your feedback. What’s been on your do now, do later and do never bucket after launch?

The toughest transition for a #startup founder: From a position of control to one of influence

One of the toughest transitions most entrepreneurs have to make when their organization becomes bigger is to move to being a leader with influence rather than control.

They will no longer be able to have the command and control over their product, customer relationships or employee engagement as they did when the company was smaller, when they did all those things themselves.

The most critical milestone is when you raise your series A. That’s typically only 10% of companies that start, or about 3000 companies a year in the US, about 100 in India, each year.

Of those, there are less than 10% of the founders who are engineers or developers.

They have the toughest time transitioning from being a founding entrepreneur to a CEO.

The series A typically involves getting institutional or professional investors on board, who have critical milestones they set and also help set the pace for the next set of milestones.

Usually during this period, many (not all VC’s) will have the conversation about bringing on a professional CEO on board.

Most investors will give the founding CEO a chance to make mistakes – usually 2-3 times before they start talking to one another about bringing “outside help” with “grey hair”.

The challenge I have seen most developer / hacker CEO’s have, is in understanding the move from being a founder with control to a CEO with influence.

If you have been lucky enough to hire smart and talented people on board, you will realize quickly that they have ideas, thoughts, vision, direction and strategies of their own as well. Which is why you hired them.

Unlike the first few “believers” they are more likely to join because of the market opportunity as well as the “founding team”.

So, as a founder you have to quickly adopt the influencing approach to leadership.

The most important thing to learn about influence is changing how you communicate.

Making room for other ideas, giving them space to voice their opinion and also get their thoughts heard is going to be the most important element of your leadership.

You no longer need to have all the ideas or solve all the problems.

There are others, many who are likely experts in their area of work, whose role it is to solve the problem.

Here are 3 examples of what the change means:

1. Asking more questions than giving answers. When folks come to you with questions, it is extremely hard to not get into a “brainstorming” mode and help think through the problem. Unfortunately, what they really want you to do is to help them come up with the answer.

2. Giving perspectives they have not thought through, than giving advice. People who work for you will come with a plan, strategy or a roadmap for implementing a program. Rather than give them your perspective, which is in most cases your opinion, you are expected to give them a 360 Degree view of the problem with perspective they have not yet thought though, so they can make a well rounded decision, instead of advising them on the way forward.

3. Encouraging problems to be brought out, instead of beginning with solutions. You will be given reverence as a founder, and most people wont want to call your baby ugly, so in many cases you will get a varnished view of the world. Instead you have to encourage problems or challenges to be brought forward so you can help the best minds come up with a solution.

All of this takes more time than before, which I believe is the biggest challenge for most founders. When things were smaller, you could move fast, but now that you have a series A and a larger organization, things might seem to move at a glacial pace.

That’s okay though, since you have more people to work on bigger initiatives than smaller problems you had to tackle earlier.

If you want to still be productive I suggest you always be an individual contributor as well.

Vision, Execution and Communication, what makes entrepreneurial founders, great CEO’s

It is often said that the most important things a startup founder and CEO needs to focus on is setting the vision and communicating it effectively, hiring the right people and making sure there’s enough money in the bank.

In the early stages though, the vision is less clear for a company for many founders. What’s more clear (to most entrepreneurs) I assume is the problem they are trying to solve. Or, in many cases the solution they are trying to build.

If you over index on good or excellent execution but have not a clear, well thought out vision, the market, investors and employees will give you time and room to develop. Case in point, it was not always clear what Twitter’s vision was to most people (and probably is still not clear).

So, if you have a great, compelling vision for the future of how the industry (like Marc Benioff did with Salesforce.com), then it does make it easier to grow, fund and scale the company, but if you dont, I wont sweat it.

There are many forms of communication, but the 3 I am focusing on are public speaking, written communication and articulation in a personal setting.

Not surprisingly, if you are afraid of public speaking (which apparently is the 2nd most feared thing for most people after death), the market does give you some leeway. There are many entrepreneurs and senior executives who I know, personally, who are poor public speakers and are not at all charismatic. That usually does not seem to stunt their progress though.

If you are not great at written communication, (which can easily be fixed BTW, with practice), the world is not going to end. It does help, but you only have to keep in mind that over 80% of successful founders in the unicorn list have trouble writing something meaningful even with the 140 character limit that Twitter proposes.

If however you can’t articulate the problem you are trying to solve in 1-1 situations or answer the difficult questions about why your company exists, what it does and how it will solve a problem, then potential co-founders, employees, investors and customers will not give you much leeway.

There are certain situations when even poor articulation (which I have seen multiple times when folks come to pitch their product to us) is something we accept and assume we can help with.

That situation is when someone has executed very well. Whether it is building a compelling product, getting early customers, growing user base or raising funding rounds, doing beats telling 95% of the time.

From time to time, we (potential employees, customers or investors) get enamored by a good story, articulated by a charismatic, passionate and visionary founder, and it may happen more than in exceptions than the rule.

The thing is though, you can’t argue with execution at the partner meeting or at the customer review or when you are talking to your friends about a company you want to join.

Either they did what they did or did not – either they got users and growth or not. They have customers or they dont. They have a product that users like or they dont.

They executed or they did not.

Which is why, even if you being told you dont have a great vision or that you are poor at telling your story or you have bad communication skills, take heart.

If you out-execute and show the proof in the pudding, by numbers, metrics and growth, the market and the participants will let you get away with your “weaknesses” or perceived faults in vision or communication.

Before you know it, your startup is now a “big” bureaucracy with “approvals” for everything

Often when I meet wannabe entrepreneurs at events, I ask the question, why they are willing to give up their relatively easy job, with good pay to take up the roller coaster world of starting their own company. About 20% or so of the folks I meet at these events work at another startup (typically < 3 years old, about 20-50 people). I think of most of these companies as startups as well, so I am curious as to why, after seeing all that happens in an early stage startup, they want to start their own company.

Sometimes it is because they want to be their own boss, or they see the success of the founders, who they claim have little intelligence, but still managed to start their own company and be moderately successful. At other times, I hear the burning itch to start and solve a problem or other times it is because they always wanted to start one, but were not able to because of other constraints.

Every so often I will get a person who was the 1st or among the first 10 employees of a startup. They will reminisce about the “early” days of the startup they are working at and talk about how everything was simple and easy during those days and how bureaucratic their 50-100+ person startup had become.

When I press further about the “bureaucracy” and what makes things slow and inefficient, the word that always comes up is “approvals”.

“Approvals” are the tool misguided managers use to make themselves feel important.

If you are a person that needs to feel important so you can “approve” things, you dont have enough work to do.

Approvals are used by big companies to kill any ounce of individual responsibility and trust. They also kill the very initial set of values and culture that you might set out to build your company’s foundations on.

Approvals send one of many messages:

1. I did not hire the right person so I have to ensure they “stick” to the rules of the company that HR has arbitrarily come up with.

2. We have hired way too many people who dont have enough work to do, so they have to be around to “approve” things.

3. We need policies and procedures for everything since we dont trust the folks we hired to use their judgement.

Notice that the common word in these (and most other) examples is “hiring”.

Approvals are the child of poor hiring and recruitment.

You can cop out and say it is a HR problem. It is not actually.

As a founder, it is your responsibility to ensure that the vision and culture of the company are consistent with the ethos you started it out with.

The first 10 employees are indicative of the zeal you brought to the table, which convinced them to join a high risk startup at such an early stage.

If these first 10 and many other employees feel that the company is “approval” heavy and requires big company (productivity killing and sans accountability) procedures, then you have something wrong with your hiring, not with your HR policies.

Remember this, if a manager in your company feels so important to want to “approve” everything anyone does in his organization, he has practically no work and likely a heightened sense of importance.

How to come up with the “one metric” to track and improve at your startup

Yesterday, we had a discussion about OMTM (One Metric that matters) with Chase of GoSkip. There is lots of information about how to chose the metric that matters, and also enough about why it is important. The missing part is how do you choose the metric depending on the stage of your company, the industry you are in and the way to make sure the metric matters to your employees, customers and investors.

It is fairly easy to say that you need to focus on growth – which is fairly obvious, but the question becomes grow what? Users? Revenue? Shares? Likes? Churn?

Picking an arbitrary metric wont hurt you in the short term, but it will not get you to the point of moving your startup forward.

The OMTM changes by stage of the company – from idea stage to prototype and to MVP and PMF. In fact, you will be tempted to put one metric for each part of your organization – engineering, sales, funding etc. – I suggest you dont. It completely defeats the purpose of the OMTM.

There are 3 criteria you need to consider when coming up with your OMTM.

1. The direct impact of that metric to the monetization or valuation of your business – depending on how you intend to eventually monetize, you want to make sure the metric is very closely aligned with that number.

2. The validity of that metric for the duration (time period for which it will be valid). If you come up with a metric that’s going to be valid for less than your next major milestone, I would reconsider it.

3. The ability for anyone in your startup to action based on that metric. If you end up putting a metric together that most people cannot take a direct action within their span of work, you end up not having the metric be meaningful to most of your employees.

Accelerators, more than seed funds have created the glut in early stage companies

There are 3 major trends that have driven startup formation over the last 7 years.

First the cost of infrastructure, thanks to AWS has dropped from hundreds of thousands of dollars to hundreds of dollars – 3 orders of magnitude.

Second, the number of seed investors has gone up 5 fold, from 35 to over 250 now.

Third the number of accelerator programs has gone from < 10 to over 635 in the US alone.

The number of startups in technology has remained though constant, at about 20K to 30K per year from the US alone. There has been a slight increase, but not by much. So what gives?

Some questions – has the failure rate increased? The anecdotal evidence is yes, but the real data is inconclusive.

Are startups talking more time to mature? I call maturity as time to get to series A from the time they were formed. If you look at 2007 data, the time to get to VC series A funding (crunchbase data) was 2.2 years.

If you look at 2014 data, the time to get to series A has dropped to 1.6 years.

The size of the rounds have gotten higher, as startups are taking in more money.

The number of side projects (indicated by participation in hackathon’s, which is a proxy but not an easy to measure metric, has increased dramatically by 400%.

So, AWS has allowed you to really reduce the cost of experimenting, more than building a startup alone.

If you look at 2007 data and see the number of seed funded companies that got VC funding as a percentage, the % has reduced by 2014 – largely because there are a lot more companies getting seed funding.

The real difference is the accelerators in the US – they have gone from bringing out 250 companies in 2007 to over 2000 in 2014.

That’s the big (4 times the number of early stage companies) change from 2007.

Accelerators are causing the glut in startups getting in front of institutional investors more than angel funds.

The self inflicted wounds that cause early burnout among startup entrepreneurs

Envy.

That’s the word of the day.

Try to avoid keeping up with the Kevin’s. That’s the digital entrepreneur equivalent of keeping up with the Joneses.

I know many entrepreneurs who are constantly comparing themselves to other fellow founders and wondering a) how did they raise money for “xyz” company, or “how did they raise money so quickly? b) why did I not come up with that idea? or c) how come they are growing faster than us? d) how are they able to get more press than we can or e) why is everyone talking about their company more than ours?

There are any number of reasons why entrepreneur’s envy other founders.

Envy causes a ton of stress. It is not limited to entrepreneurs alone, take the case of MIT students.

Stress causes you also to make irrational conclusions and bad decisions. When you operate under stress, you will end up making the mistake of “good data, wrong conclusion, bad decision”.

So, how do you handle stress? Since this is largely a self inflicted wound, it is “curable”, but requires a lot of discipline.

1. The most important thing I have learned is to keep routines and exercise to relieve stress. Many folks read to relieve stress, others cook, still others eat. The worst of the 3 of these is to eat. I have known at least 30% of the founders who come to our accelerator program, gain more weight after the program. The biggest reason for the weight gain is the increased food intake, especially bad foods such as those with excess sugar.

The time that I found most of our entrepreneurs eat the worst is between 2 pm in the afternoon and 6 pm in the evening. The afternoon snack is likely the worst.

Most entrepreneurs tend to wake up late, so they tend to skip breakfast. Lunch, most likely will be relatively healthy since they tend to have guilt from the previous night’s drinks. Dinner is takeout for most days among the founders I know. The older ones tend to eat at home with the family, so they tend to eat a healthy dinner.

2. Make healthy choices about eating. More than not exercising eating bad causes more weight gain. That’s one of the prime reasons to carter food to your office, instead of “grabbing a burger” for lunch. Sit down with the team and eat healthy. That’s going to work wonders for the team and you tend to eat a lot healthy.

3. Have small milestones weekly that you can celebrate. I am a big fan of frequent celebrations, for achievements, how ever small. They reinforce the belief that your team is in it together and everyone is contributing towards building the company. Celebrations also tend to reinforce culture.

Above all, try to reduce your stress by not comparing your startups progress to others, even the competitors. It may seem to be that winning is all important and that you have to beat the competitors, but I found that the founders that achieve the best or “top dog” status, believe that their sacrifices were rarely worth the stress.