Startups hiring and Culture

Part 11 of Stanford’s How to start a startup class. Presentation by Ben Silbermann (Pinterest), John Collison (Stripe) and Patrick Collison (Stripe) on how to hire and create a strong corporate culture. All notes are consolidated on a single page here.

– who do you hire
– what do you do everyday, why you do it
– what you choose to communicate
– what you choose to celebrate (and punish)
– have everyone informed (transparency), which becomes a challenge as your company grows
– have everybody aligned on the vision

– hire people that look like you and share your values
– look for multitalented people who have a lot of interests outside of work [ties into what E.Schmid is calling “smart creatives”]
– nobody knows your company, so you will have to fight lack of awareness and relatives telling future employees not to join
– have your early employees refer friends, word of mouth is a very powerful way to recruit
– get people early in their career, most of them will likely be undervalued
– genuine, straight people, trustworthy, who like getting things finished, with no ego getting in the way
– there is no wrong place to find people

– you never 100% know if people are going to be good [remember to use that trial period as a real trial period]
– ask yourself what’s really world class. Ask people who are world class at a certain thing what you should be looking at in a new hire, the questions to ask
– good people want to solve tough problems, to come on hard things
– be very transparent why it’s an amazing opportunity, but also explain that it’s gonna be hard.
– tech people: spend a week-end working with the person

– either you fail, or growth becomes your number one problem [Better be good at it]
– try to make people feel like they are in startups inside a larger organization. Let people control the ressources and priorities and let them know how success is measured.
– recreate diversity inside teams (designers + writers + programmers together)
– as you grow, your time horizon grows. At the beginning you hire people for a month, then you hire them for years
– at the beginning, you need people who can contribute immediately. After a few years, you can make longer term investments, start working on things that will pay off down the road and not immediately.
– your tools will need to evolve (from email to better communication tools, because it becomes harder to copy the whole company on emails)
– make sure people don’t HAVE to grow into leadership roles. Some early hires have what it takes to become managers, others don’t. Don’t create an organization where the only way to evolve within the company is by taking a management role.

That millennials rant

Just saw another presentation by a speaker who claimed to decode millennials for a bunch of baby-boomers. I’m getting so tired of these talks. I understand it’s a good business model to make CEOs panic by telling them “you don’t understand anything, pay me a huge amount of money and I’ll make sense of all this for you”, but my god this is such a slippery slope:

  • No, this generation hasn’t invented revolutions. Totalitarian regimes have been overthrown way before social media and mobile phones
  • I’m not seeing a generation with “stronger values”, or that is more “environment conscious”. These kids are like all of us, they would kill for having a new phone every 6 months. I’m sure H&M and Zara are still producing with cheap labour in Bangladesh, and make more money than ever.
  • Any presentation that offers “facts” when making generalizations about a group of hundreds of million of people is suspicious to me. I’m pretty sure geographical, cultural and socio-economical differences make this population heterogeneous.
  • “Millennials are not loyal to brands”. I have no idea how that can be measured, seems to me that running away from bad services or products has nothing to do with age. Have you heard of instagram and snapchat? I feel like millennials are pretty attached to these brands.
  • Millennials want instant gratification in their interactions with brands, but isn’t that the case for everyone?
  • My analysis is the more it changes, the more it stays the same.
  • Still watching hours of entertainment, my time was MTV, now it’s YouTube
  • Consumerism as high as ever, just not on same products and brands and maybe shopping differently (still Amazon = 2% of US retail)
  • People still struggling with how the world goes, same as any youth any time (hippies, punks, grungies, etc)
  • People relying on their friends to make decisions, network just got faster and bigger but that’s about what the novel part is about
  • Entrepreneurship making a comeback, not appearing. Making a comeback, just like after any of the numerous economical/innovation crisis in history
  • People still animated by those ancestral forces: ego, need for attention, social status, peer recognition, etc
  • A generation bringing new tools to the workplace, just like my generation (email, internet) or my dad’s generation (fax, computer) or my grandad’s generation (phone).

Startups culture

Part 10 of Stanford’s How to start a startup class. Presentation by Brian Chesky (CEO, Airbnb) and Alfred Lin (Sequoia, former Zappos) on how to build and sustain a strong corporate culture. All notes are consolidated on a single page here.

– Culture is important to scale the business and the team. How to build a company culture?
– company culture = beliefs and actions leading towards the company goal
– Mahatma Ghandi: “Your beliefs become your thoughts. Your thoughts become your words. Your words become your actions. Your actions become your habits. Your habits become your values. Your values become your destiny.”
– Why does corporate culture matter? Provides alignment, stability, trust, exclusion (what not to do) & retain right employees.
– Why does corporate culture matter? Returns of best companies to work for close to double of others

– Create a “core value worksheet”
1) what are the personal values most important to the founder(s)?
2) what are the most important values for business success?
3) what values will you look for in employees?
4) what could not be tolerated?
5) incorporate your mission into your core values

– Elements of high performing teams:
1) trust
2) trust leads to the ability to have debates and constructive conflicts
3) if you don’t have debate, there can be no commitment. You need to come to the right answer before people commit
4) If people don’t commit, you can’t hold them accountable
4) if people can’t be held accountable, there will be no results

– Some best practices for culture:
1) incorporate your mission with your values
2) think harder, deeper, longer about values
3) interview for cultural fit
4) evaluate on culture as well
5) make it a daily habit

Brian Chesky, Airbnb

– First you build a product, then you build a company. To build a company you need a culture
– Our product changed, but our values didn’t. There have to be things that don’t change, that are unique to you
– Wrote core values before hiring anyone
– First hire took time, because this person would bring some of their DNA to be added to the company’s DNA
You want diversity of culture, age, background, education, but you don’t want diversity on values
We want people who join the company for the one thing that will never change: the mission of the company. Not because they like the valuation, or the money.
– Constraints bring creativity. The less money ou have, the more creative and frugal you will be
– Three things you never hear about culture:
1) nobody talks about culture, it’s mystical and fuzzy
2) culture is hard to measure, and what’s hard to measure has a tendency to be discarded
3) culture doesn’t pay off in the short term. If you want to make money quickly, don’t pay attention to culture. Culture makes you hire slowly, which in the short term can slow your progress down.
– hire only people who are world class and adhere to the culture
– have people interview on technical aspects (employees with similar jobs) but also on culture (with employees doing other jobs, that can meet with the potential hire only in the culture)
– Airbnb was ripped off by Rocket Internet who cloned the site, and at a time Airbnb was 90 people they put together a team of 400 with 90M raised. Airbnb shied away from buying them because they wouldn’t fit culturally. Mercenaries vs missionaries.
– Your brand evangelists are you employees. The stronger the culture, the stronger the brand because it will be relayed by all employees.
Don’t communicate on the details of your products, communicate on your mission (cf Apple’s think different campaign)
– In the early days, airbnb communicated as a utility: save money, find many rooms. Then changed tagline to “travel like a human”, meant to say the company thinks in a certain way, that the world should be a village. Did a lot of story telling.
– Role of the CEO: vision, strategy, people.
– Automate services after they took off. Example: photographers making photos of hosts’ rooms. First was the founders doing it themselves. Then named an intern to manage the process. Then interned was upgraded and hired other interns to manage the photographers. Then it became impossible to manage by hand and then airbnb built a system for it.

Startups: how to raise money

Part 9 of Stanford’s How to start a startup class. Presentation by Marc Andreessen (Venture capitalist, Andreessen Horowitz), Ron Conway (Founder, SV Angel) and Parker Conrad (Founder, Zenefits) on how to raise money. All notes are consolidated on a single page here.

– Think about a startup as having all conceivable risks on day one (right founders? can you build the product? right technology? launch risks? market acceptance risks? revenue risks?). Raising money helps you peel away risks from the project. Each round has to help you remove some risks from the equation.
– To pitch: show for each round what risks you’ve eliminated. Show what risks the money you’ll raise will help you get rid of.
– questions asked about founder: is this person a leader? is the person focused and obsessed by the product?
– look for communication skills, because to be successful you will need to communicate a lot, especially with your team
– better founders are solving a personal problem, something they really struggle with
– Venture capital is about outliers, you’re looking for people that are different. There are only a few winners every year
– Invest in extreme strength rather than lack of weakness. Look at extreme strength that makes a project an outlier, but projects with extreme strengths also have weaknesses
– Make sure the startup does not conflict with an existing investment
– Think in terms of opportunity cost: is this really the best way to use that money/time/bandwidth? Every investment reduces the capacity of the investor to make other deals.
– Ron Conway: “we invest in people first”.

– Don’t ask people to sign a NDA, it tells the investor you don’t trust them. Relationship has to involve a lot of trust
– Send a really great, short executive summary. Investors are busy. If you make the cut you’ll get a phone call. If phone call goes well, you’ll get a meeting, and then there is a good chance the investor will invest.
– You want the investors to understand in your first sentence what you do. Get that first sentence perfect.
– Pitch to a lot of people so that your pitch gets better
– Raising capital is the easiest thing an entrepreneur will have to do, much easier than hiring, or promoting your product. If you get in a situation where raising money is hard, keep in mind the hardest is yet to come
– Biggest mistake from founders is to not get things in writing. When somebody makes a commitment, email to them and confirm what they just said to you. Investors have very short memory, forget the valuation, etc. Get rid of all controversy by putting everything in writing. Take notes in meetings, and follow up on what’s important.

– investors with a good rolodex and domain expertise will add more value than their money. Dumb money vs smart money debate…
– Seed stage: find someone who can introduce you to VCs for your A-round
– You’re going to live, deal with and go to war with your investors. It’s like a marriage, make sure you like these people because you will spend a lot of time with them. Shared values and ethics are a must. Second time founders take that point very seriously. It really matters who you partners are.
– Your 2 hours meeting with an investor is a microcosm of years to come, so make sure you learn from them and enjoy their presence

– Bootstrap as long as you possibly can, if you can don’t raise money [point coming from a VC…]
– don’t forget there are ways to borrow money instead of selling capital.
– raise as close to your needs as possible, don’t raise too much money because you will dilute yourself too much and complicate your life further down the road (C+ rounds)
– Identify investors mental thresholds. Example: just go below 10M and suddenly the investors turning you down might fight for bits of your project
– How much should a founder sell?
Seed stage: sell between 10 and 15%
Series A: sell between 20 and 30%
Real question: at what point of dilution does the founder get demotivated? If you give away 40% on the seed round, not much remains for the founders who could lose interest.

– Raising money is not a success, it’s not a milestone. Don’t let your ego get involved. Raising money just puts you in a position to do other things.

Startups: do things that don’t scale, and how to handle the press

Part 8 of Stanford’s How to start a startup class. Presentation by Stanley Tang (Founder of Doordash), Walker Williams (Founder of Teespring) and Justin Kan (Founder of TwitchTV) on their respective experiences, and how to deal with the press. All notes are consolidated on a single page here.

Stanley Tang (Doordash, food delivery startup)

– wanted to start a delivery business, but felt like something was wrong. How could customers be so unhappy about this, yet nobody had figured it out?
– built a prototype in an hour: simple homepage with PDF menus from restaurants and phone number. People called on founder’s mobile number who was handling delivery. [ties back to previous lecture on how you first do manually what you’ll automate/simplify later]
– used square to charge people, apple’s find my friends to keep track of drivers, google doc for orders tracking
– people started to call, and they knew they had a market
– learning experience through contacts with clients, restaurants, drivers
– 3 things: test your hypothesis, launch fast, it’s ok to do things that don’t scale (figure out how to scale once you have the demand)

Walker Williams (Teespring, ecommerce platform)

– advantage of a startup: you can do things that don’t scale.
– finding first users: there is no silver bullet. First users as impossibly hard to get. Do whatever it takes to bring them in.
– don’t focus on ROI at the beginning, focus on growth
– don’t give away your product for free. Value your product, free could give you a false sense of security
– delight users with experiences they will remember, talk to them (constantly, for as long as possible)
– you’ll never get a better sense for your product than listening to users

– reach out to churned customers. Painful but will really help you make your product better.
– listen to social media and communities

– the feature set you start with is not the feature set you’re going to scale with
– if you turn them around, frustrated and unhappy users can become the best champions
– only worry about the next order of magnitude. When you have 10 users, worry about 100. When 100 worry about 1000. You’ll find a way to make it work.

Justin Kan ( How do you get press?

– before you reach out to the press, ask yourself who do you want to reach (investors, customers, industry)
– getting in the news is useless unless is fulfils one of your business goals
– target your message geographically (sometimes national is less good than local coverage)
– what’s a story? Product launches, fundraising, milestone/metrics, business story (happens once you’re succesful), stunts, hiring announcements, contributed articles
– think about your story objectively… Most of the things you do people won’t care about
– be original: be the first one in your field, this will make things much easier. First game console to raise money on kickstarter got good press, second one much less.
– Keep your contacts fresh [also: give before you receive]
– help your fellow entrepreneurs get coverage, they will help you back

– think of it as a sales funnel (talk to lot of people, won’t all convert)
1) think of a story
2) get introduced to reporter(s). Ask people who got recent coverage, and ask them to introduce you
3) set a date (4-7 days in advance) for news to go out
4) reach out (get a commitment to invest time). More time reporter spends with you more likely they will cover you.
5) pitch. Write out all the key points you’d like to see published
6) follow up a couple days before the story goes out. thanks for meeting, collateral (photos, videos), how to spell important peoples’ names
7) launch your news
– make sure getting press is worth it, it doesn’t mean you’re successful
– press is not a scalable user acquisition strategy

– can only help with contacts (maybe) and follow-up
– can’t generate stories
– are expensive (generally not a good use of money in the early days)
– can help know what’s interesting about your company

Video of the presentations here.

How to Build Products Users Love

Part 7 of Stanford’s How to start a startup class. Presentation by Kevin Hale (Founder Wufoo, Partner Y Combinator) sharing insights on how to build products users love. All notes are consolidated on a single page here.

How do you build products people are so passionate about they want the company to succeed?
Think of new users like people you need to date. Existing users are people you’re married to.

– First impressions are important for the start of a relationship.
– First time interaction: no room for error. Make your homepage, landing pages, plans/pricing/login/signup/first email/account creation/login link really good
– There is taken for granted quality and enchanting quality, shoot for the second one
– show your personality immediately

– Vimeo, makes you feel like the experience is going to feel different
– Cork (social network for wine lovers): signup form offers funny tips below each field. Makes you like people behind this, gives personality to the product.

– Chocolat: when trial expires they change the font to comic sans

– Wufoo programming contest, prize was a (real) battle axe, makes people program for weapons 😉

– just like in real life, it’s ok to argue every once in a while
– Real life and startup equivalents:
Real life vs startup
Money = Cost/billing
Kids = User’s clients
Sex = Performance
Time = Roadmap
Jealousy = Competition
In laws = partnerships
– user support is what happens between all the steps of your funnel
– programmers and designers are divorced from the consequence of their actions (= users complaints)

– before launch, everything looks perfect, no negative feedback
– after launch, one needs to get into customer support, but also fixing crap, business crap, hiring crap, and well, crap. We thing of all the crap things as something we want to outsource to other people. But you don’t want to outsource because it divorces you from users needs
– Feedback driven development, everyone should do user support
– Ex: Kayak has a red phone that customers can call. Reasoning is that after 3 clients call the engineers to fix a problem, engineers start fixing the problem and stop getting phone calls about it.
– the four horsemen of why people break up: criticism (“you never listen to users”), contempt (someone purposely trying to insult another person), defensiveness (trying to make excuses), stonewalling (shutting down). Stonewalling happens all the time in startups (which is one of the worst thing you can do, cause of large churn)
– good founders do support all the time [example: when I met Craigslist’s founder he was constantly answering customer emails – after more than a decade in business]
– in feedback form, add “emotional state” drop down to let people communicate on how they feel (filled 75.8% of the time by users despite not being mandatory)

– there is a direct connection between how much time we spend being exposed to our users, and the quality of our design. Direct exposure is important. Minimum every 6 weeks for at least 2 hours.
– Wufoo: developers exposed to users 4 to 8 hours a week
– Knowledge gap is the gap between your users’ capabilities to use your product, and the knowledge they need to use it well. Adding new features increases the knowledge gap.

– constantly add energy to the relationship
– Ex: Wufoo had a system where new features would be listed and timestamped. Every time a new user would login, his last login time would be compared to the list of new features, and he would get an alert showing him what’s new since he last came to the site. This really showed users the team was catering to their needs, and that the product was lively.
– send thank you cards to your users (handwritten).
– also something you want to do with your team. Ex: “king for one day” at Wufoo. One person would be chosen as the king, and could decide what the company would work on for a week-end. Allowed to release new features very quickly, and made people feel like they had made a difference.

– best price
– best product
– best overall solution

– Everyone at the company had a todo list on a dropbox named after them. At the end of the week, review would happen on what has been done or not.
– Nobody hired only based on interviews. Actually had people work for a week on a project before they would get hired
– make sure people have writing skills (for customer support), ask them to write a letter for 15m during interview

Growth tactics for startups from Facebook’s growth VP

Part 6 of Stanford’s How to start a startup class. Presentation by Alex Schultz (VP Growth, Facebook) explaining growth philosophies and strategies. All notes are consolidated on a single page here.

– retention! it is more important than new users
– you can attract all the new users in the world, if they don’t stick to your product there will be no growth
– so it all starts with a great product that will make people come back
– daily active users is more important than total number of users
– make a graph from user’s activity on the platform. If the line inches towards 0 (i.e. people stop coming to your site after a few days) do NOT hire someone to grow your user base, you will just be increasing number of users that will leave and not create value.
if you don’t have a great product there is no point in growing it
– don’t focus on your returning users, look at the fringes. Example: users closing their accounts, or users not coming for 30 days and resurrecting. These are the people you need to understand (why did they leave?), drive back to your product, and learn how to prevent other users to leave.
– set a north star – a metric that really matters to your business – and have the whole organisation focus on growing that number. It all starts from the top.
– people in the valley think marketing is useless, that you build a good product and people will come. This is not true [anymore in a saturated market like today’s web]. Build a great product, then market it.

– 20-30% active users for an ecommerce site is probably good business
– but for social media you need closer to 80% active users
– depending on your vertical, you will have a different target on activity. Look at heavyweight in your sector and figure out their active users, compare yourself to that

– if you are a startup you shouldn’t have a growth team: the whole startup is the growth team
– if you’re a social site, set monthly active users as the metric you hold people accountable to (ex: Facebook always communicated on that number more than total users).
– if you’re whatsapp, the metric should be the number of messages. Airbnb: metric is nights booked.
– the key metric is real activity, not number of users. Define that as a north star and let the team follow it manically.
– registrations don’t matter unless they become active users
– ex: Uber focuses their growth not only on users, but also on drivers.

– Ebay started a program to attract users in 2004 through affiliates
– affiliates would be paid for each confirmed registered users
– then ebay changed to pay only for activated confirmed users (activated = listed an item, bought or bided on an item)
– overnight, ebay lost 20% of confirmed registered users sent by affiliates, but active confirmed users dropped only by 5%, then it started to grow and accelerate
– before: affiliates would send people to registration page
– after: affiliates would send people to search results for item they are searching, allowing them to engage directly with ebay’s value: find the product you’re looking for

– when is the magic moment users understand the value they are going to get?
– on Facebook, this is when you see a picture of a friend. Facebook tries to show that to you as early as possible
– Airbnb, when you see an amazing house you can stay at, or when you receive your first client wanting to pay to stay at your place

– get people to the magic moment: get them at least 10 friends, and have them use the site for at least 14 days.
– translate the site but in a scalable way. Instead of professional translators, place where community could translate and contribute. Took more time to launch, but after allowed for much faster translation of the service.

Virality = payload * frequency * conversion rate
– payload: how many people can you hit with any viral blast? [note sure how you can calculate that… What was Gangnam style payload?]
– frequency (how many times can you hit them)
– conversion rate (how many open an account)
Viral potential = payload x frequency x conversion rate
– ex: Hotmail: in the early days every message going out had a “get your free account” link. Bottom line for hotmail it had +++ frequency ++ conversion – payload
– ex: Paypal: was targeting ebay users, and to collect their money people had to open an account. +++ conversion rate – frequency – payload
frequency can be an issue: don’t hit people too often because they will get tired and you’ll get the opposite effect. The more people see an ad on Facebook the less they are likely to click on it.
– Another way to look at vitality is through user importing their contacts / inviting others to your service. There is a (possibly) virtuous circle of: import friends list -> send invite to list -> friends click on invite link -> friends signup for service -> newly signed friends invite their friends (and it starts all over again). If you can get more than one newly invited user to invite their friends, you’re viral (because one user inviting gets you more than one new user inviting, it accelerates).

– research what keywords people search about your site (beware of cultural differences! Ex: “cocktails recipes” in the UK, “drinks recipes” in the US):
1) what do people search
2) how many people search for it
3)how many people are fighting for that keyword
4) how much value does that keyword create for you
– get valuable links from high authority websites
– make your site accessible to search engines. For ex: to see someone friends on Facebook you had to click on a profile, then on their friends list. Turns out creating a directory of friends allowed for 100x better ranking from google.
– email is dead to people under 25 (instant messaging instead). If you are targeting >25y it’s a useful channel
– email, SMS and push notifications behave in the same way: you can be blocked, emails can bounce, you can be blacklisted as a spammer.
– be a high class citizen with these mediums
– you can hardly ask users to turn notifications back on after they’ve turned it off
– key metrics are open rate and click rate
– differentiate low engaged vs high engaged users. On Facebook, you want to send a email when someone who is not very active gets a “like”, but you don’t want to send multiple emails to someone who receives tons of likes.
– ask yourself what notifications you can send, make sure you create value

– Search engine marketing (SEM)
– Affiliates / referral programs

Video of the lecture here.

Work for Wired UK in London

My friends at Wired UK are seeking a commercial director to expand their business beyond magazines into events, consulting, and digital touchpoints. Here is one of Europe’s most innovative organisation looking for an entrepreneurial-minded person to join their team. If this is you please contact me and I’ll forward to the relevant person.

Condé Nast is seeking a dynamic and self-motivated Commercial Director for WIRED.

WIRED, launched in the UK in 2009, has rapidly established itself as the country’s pre-eminent voice on innovation, technology, business and design. It has become a multi-platform brand, targeting discrete segments, with different media products, that cut across both consumer and business audiences. What unites these audiences is optimism, fresh thinking and a deep curiosity about the future.

WIRED publishes a monthly magazine in print and digital formats.  It has a website, It will host five conferences in 2014 – WIRED 2014, WIRED Health, WIRED Money, WIRED Retail and WIRED Next Generation. (A longer slate of events is planned for 2015). It has just launched WIRED Consulting – allowing corporates to access the intelligence and insights gathered by the WIRED network.

The role of this person is to head up and develop the commercial side of all WIRED UK branded entities, managing a small team selling print advertising pages, digital packages, events and wider cross platform sponsorships.

They will collaborate closely with the Editor and Condé Nast’s central resources. They will oversee the marketing of the brand to consumers as well as advertisers.

What are we looking for?

  • The successful candidate will be first and foremost of an entrepreneurial mind-set.  There will be a strong appetite for delivering growth and for building the WIRED business, both in the consumer and B2B space. To this end, the successful candidate must be able to identify new touchpoints where WIRED can engage with consumers and advertisers.
  • They must demonstrate strong leadership skills – bringing energy and creativity, and the ability to inspire others. They will display a deep understanding of the WIRED brand – and of its broad potential – so that they can approach partners with authority, credibility and relevant thinking.
  • They will possess strong organisational skills and will enjoy juggling the various and demanding aspects of the job.

The role reports into the Deputy Managing Director of Condé Nast UK.

This is a hugely exciting opportunity for the right person – a rare, senior level opportunity to run one of the most visionary and highly regarded media brands in the UK.

The Vending Machine Supermarket of 1948

A bit of ‪paleofuture‬ for us today: the 1948 vending machine supermarket. When too much technology kills a business as it makes customers’ life more complicated in the end.

Sample merchandise was displayed behind rows of little display cabinets of glass boxes and shoppers selected their merchandise with a key given to them initially. Customers then put the key in labeled keyholes at the merchandise display and selected the quantity. Electric circuits caused perforations to be cut in a ticker tape attached to the face of the customer’s key. The customer then took the punched out tape to the cashier for processing The cashier would insert the tape into a reading mechanism that would electronically read it. That set off electrical and electronic circuits which started the goods sliding down conveyor belts and did the cost tallying in the process. […]

it was complicated, which is what essentially led to its demise. Contemporary technology just wasn’t able to handle the concept. And of course, it wasn’t a fully automated concept…