Common mistakes of first time (technical) founders January 14, 2011Posted by jeremyliew in founders, mistakes.
There is a great thread over on Quora answering “what are the most common mistakes first time entrepreneurs make?”. The current top rated answer is from Siqi Chen, one of the co-founders of Serious Business. We funded Siqi and Alex Le at Serious Business. I’ve reproduced Siqi’s answer below but it is worthwhile to follow the link to Quora to read other answers, and the comment thread on Siqi’s answer.
I believe that self awareness and humility are two strong predictors of long term success. I think Siqi showed both qualities in great abundance at Serious Business, and in his answer below. I know that he is learning a lot about how to be a better executive while at Zynga, and I hope to one day work with him again.
I would note that there was no inconsistency in the hiring bar applied to the rest of the management team at Serious Business; Charles Hudson and Mike Jimenez are now cofounders of Atomic Panda and Ryan Ferrier is Chief of Staff at Crowdflower.
These are the greatest mistakes I believe we’ve made at Serious Business:
1. Undervaluing Management Competency
We underestimated the difficulty of managing a team and undervalued the skills of general management, process, and strategy. This failure stemmed from the very top down (that is, me) and affected every level of the company. Having never had any direct reports prior to Serious Business, I simply didn’t know what I didn’t know.
2. Lack of Strategic Focus
We used our limited resources as a startup to attack markets we didn’t understand instead of focusing on our core competencies, which were fairly unique in the market. And we did this repeatedly.
3. Inconsistent Hiring Bar
We’ve made some uneven hires over the course of Serious Business. While we’ve tried our best to maintain an exceptionally high bar, it has been consciously lowered during dry spells of hiring. This has always been a mistake. (This was somewhat mitigated by the fact that we’ve been pretty good at letting under-performers go quickly.)
4. No Product Management Support
For a while, we had a goal of hiring no product managers, ever – with the intention that we would end up hiring product focused engineers. This was a mistake. We ended up with two part-time product managers/designers (Alex and I) supporting (at one point) 3 separate live products with multiple millions of users each. This does not work.
This is the most common mistake I’ve seen other first time entrepreneurs
Overvaluing the Idea
The Silicon Valley wisdom that Execution > Idea hasn’t penetrated as far as it needs to. There are still too many entrepreneurs who are chasing that perfect idea instead of focusing on building the team and processes to make the idea irrelevant
Pivoting January 10, 2011Posted by jeremyliew in pivoting.
Late last year, Aaron Batalion (one of the co-founders of Living Social, a Lightspeed Portfolio company) gave a talk about the many pivots that led Living Social to their current business of local deals.
(You can see the accompanying slides here).
I think this is a fascinating topic. I had dinner with some terrific entrepreneurs recently, including the CEOs of Slide, SayNow (videoegg), Triggit, all companies that made at least two major pivots before getting to where they ended up, and we discussed the topic of pivoting at some length. Here are my notes from the discussion:
- Pivoting has two components, knowing when to quit plan A, and taking on plan B. It’s easy to pivot towards doing more of something that is working and users like. It’s also easy to stop doing something that gets no traction. What’s hard is stopping doing something that is just doing OK, but that is usually the right thing to do.
- Some entrepreneurs want to build companies, not products. They drive their satisfaction purely from the fact that they are making a lot of customers happy, regardless of what the product is. Removing the emotional investment in the original product, and relying on the data, makes pivoting much easier.
- Pivot fast. Once you’ve decided to make the change, run with it right away, and with commitment.
- It’s easiest to pivot when your team is small.
- If your team is large, spend a lot of time over-communicating to employees and give them ways to share information about the pivot…allow room for them to explore the new business
- Expect some employees to leave and don’t try to save them — you want people who are excited by the new focus
- Most pivots are towards solving a smaller/easier problem or sub-problem of what people thought was the “real” problem. E.g. at Paypal and at Slide, the online demo of the product became the product. At VideoEgg/Say Media, one of the three parts of the problem became the sole focus.
- Throughout the life of the company you should be continuously looking at various paths, evaluating alternatives, testing the waters in different directions. You’ll explore a lot of dead end paths along the way, but it is through always keeping several options open that you’ll be able to adapt. It’s unlikely that your first or second idea is right, so always keep your eye out for promising pivots.
Startup CEO New Years Resolutions January 6, 2011Posted by jeremyliew in 2011, culture, growth, HR, new years resolutions, product management.
I asked the CEO’s of the companies that I work with, “What are your company related new years resolutions?”. Each had a different spin, but they mostly fell into a few themes of:
- Great people
- Improve the product
- Stay Lean
- Grow fast
- Internalize culture and values
Lisa Marino of RockYou, a leading developer of social games and advertising solutions for social media, is focused on building a great team with more gaming DNA to improve the quality of the games it publishes:
Make RockYou the place talent wants to be.
Many of the companies had resolutions focused on their product management and development. From the social gaming companies, Will Harbin of Casual Collective, which publishers the popular game Backyard Monsters, said simply:
Mo’ money, mo’ fun
As games like CityVille have shown, mo’ fun usually leads to mo’ money! [And congrats to Alex Le, cofounder of a prior investment, Serious Business, whose first game since the Zynga acquisition is CityVille.]
Scott Albro of Focus, a knowledge sharing community for business people, has fully embraced the idea of constant iteration for 2011, taking the best practices of social media to the business media world.
Plan big, increment small. Meaning: set big, audacious goals for the year, but understand how the little things you do every day link together so you can achieve those big goals.
Encourage more product suggestions from our engineering team. Our engineers often come up with great ideas, and they are the most productive when they work on these ideas. in 2011, I’d like to encourage a culture where this happens as much as possible.
Shawn Gupta of OhLife, a personal journaling tool over email, has similar sentiments in using metrics to drive product innovation:
Make metrics a core part of our product development. It will be a lot easier for us to make improvements to our product when we have data-driven discussions and decisions.
Although the industry is in much better shape than the dark days of 2008 and 2009, many CEOs have fully embraced the continue to internalize the lean startup principles that came out of those years. Joe Greenstein of Flixster, the leading movies app on all social and mobile platforms, wants to take big risks with small dollars.
Stay hungry, stay foolish.
Pursue our passion, build lasting strategic relationships and most importantly use our cash wisely.
Put the pedal through the floor.
Traffic,traffic,traffic! For media sites like ours you are either growing traffic or or you are dying. Our whole focus this year will be on finding new users, improving the user experience and increasing their engagement with our sites.
Two ecommerce companies that have seen tremendous growth are paying attention to their core values and culture to keep their organizations coherent as they dramatically increase in size. Andy Dunn of Bonobos, a vertical web retailer, will be driving attention to one of their core values in 2011:
Focus on self-awareness, the core trait of leaders, both people and firms.
We will measure our traction in three ways:
1. Knowing we are becoming self-aware as a team. Measure of success: 360 degree reviews done smartly (meaning efficiently and not dreaded by all involved).
2. Marketing who we are, not who we may want to be one day. Measure of success: more than doubling our customer base without doubling our cost per acquisition.
3. Developing products based on knowledge of our strengths and curating products based on knowledge of our weaknesses. Measure of success: sales growth and gross margin return on investment.
Brian Lee of Shoedazzle, a personalized fashion etailer for women, is also focused on one of their core values, great customer service:
Treat every client like they are part of your family.
Simplify – Challenge ourselves to simplify, we can strive for perfection in the next version.Celebrate – Take the time to celebrate small wins in all areas of the company, and do it every day as they happen.Feedback – Continue to foster an environment where everybody on the team communicates feedback, good and bad, in an open and honest way.