How to reduce churn by winning back cancelled customers

Edited excerpt from Why a SaaS customer hasn’t churned when they cancel by Andrew Tate:

Send a succinct, targeted survey that forces the cancelled customer to pick the biggest and smallest reasons for churning. These surveys work best in three main forms: An exit survey that’s displayed upon hitting cancel, an automated (but seemingly personal) email survey in the cancellation confirmation email, or a highly personalized email with an open-ended question: What made you cancel?

Then, catalog why the customer is leaving and align the easiest solution to bring them back:

Bought away: Customer feels they aren’t getting value. If you don’t have properly aligned buyer personas, you’ll likely here this excuse considerably more than if your pricing is aligned correctly. Solutions: discounts, downgrades, and better customer persona alignment.

Moved away: The customer decides your services are no longer needed. Especially true of customers who “graduate” to an enterprise product or downgrade to a lighter weight option. Solutions: trials and product feature/plan expansion.

Pulled away: Customer switches to a competitive product. Solutions: discounts/downgrades, re-aligned value propositions, and better feature hooks.

Pushed away: A member of your customer’s team starts briefing against your product, or customer feels that the service is poor quality or that expectations of the service have gone unmet. Solutions: Better communication and customer support.

(1) Cf. How to conduct customer cancellation interviews in the “Job To Be Done” framework.
(2) Cf. How to reduce churn — a process, also by Andrew Tate.
(3) Cf. The customer success role — a job description.

How to conduct customer cancellation interviews in the “Job To Be Done” framework

Edited excerpt from Doing SaaS Cancellation Interviews (the Jobs-to-be-Done Way) by Ruben @bidsketch:

My favorite way to implement the Job To Be Done framework is by doing “switch interviews”, in which you focus on how the customer stopped using one product and started using another. Here’s how to do switch interviews for cancellations / churn.

Switch interviews typically last 45 minutes, so recruiting people can be a little tricky, particularly someone that just cancelled. We used an incentive ($100 Amazon gift card) and recruited inside the app.

Switch interviews focus on the actual story of someone getting fed up with a product enough to switch to something else. The decision to cancel didn’t take place the day they cancelled, so you can’t just get the story of the day they cancelled. You need to build the entire timeline of key events that led to the cancellation:  (i) first thought that the product wasn’t working for them, (ii) started considering alternatives, (iii) a time sensitive event that triggered active looking for an alternative, (iv) evaluated options and actually bought/canceled, (v) when and how they consume or use the product, and (vi) product satisfaction.

Below is our cheat sheet for these interviews:

Setting the stage

Thank them for taking the time and explain that we’re doing these interviews to learn how we can improve Bidsketch. Mention: “We love blunt feedback, so don’t worry about hurting our feelings, it’s not going to happen.”

Tell them: “We’re going to focus on the story of how you started using Bidsketch, first started struggling or not finding it helpful, and then eventually cancelled. So we’re going to ask detailed questions about where you were and what was happening, to just help paint the picture.”

Key questions

– Why did you initially sign up for Bidsketch? Did you evaluate other tools?
– When was the first time you thought that maybe Bidsketch wasn’t going to work? Or realized that you weren’t using it?
– What happened the last time that you used Bidsketch for a proposal?
– What happened the first time you had a proposal that you didn’t use Bidsketch for?
– Why did you cancel the day that you cancelled? Why that day, and not the day before or after?
– What are you using now? How did you start to prepare to use the new product (export data, etc.)?
– What happened the day you started to move to the new product/solution?
– Why did you start that day and not after?

(1) Here’s the basic framework for Job To Be Done. See the notes there.
(2) Remember that in the “Job To Be Done” framework, an alternative solution for the customer might not be a similar product, but a work-around. So don’t expect customers to switch only to competitive products.

Why startup founders should learn to code

Edited excerpt from If you’re “looking for a developer” you’ve already failed by David Olk:

I’m not telling you to become a professional manufacturer of software. I’m simply saying that learning how to code will be very helpful to the journey because it will:

(i) make you more interesting to the people you want to work with if you can speak their language – literally and figuratively;

(ii) show you’re not just another person who’s smarter than everyone with a big idea, but with no ability to learn, hustle, and execute;

(iii) provide the foundation where you can actually kick start your big idea on your own with your own time, money, and effort;

(iv) help you understand what you are actually asking people to build for you; and

(v) actually provide some relevant friends and colleagues that can ingrain you into the community you are seeking out in the first place – but from a different more appreciated angle.

I’ve personally found that software engineers love it when people try to learn how to code. They are always helpful and nurturing and accepting.

Anyway, learn how to code. It’s fun and not as hard as you’d think at a basic level. There’s so many resources to help now as well. Just check out Codecademy if you don’t even want to leave your house.

(1) Thank you John Gannon, founder of BEMAVEM, for the tip.
(2) Cf. Startup founders need to be learn-it-alls.

How to reduce churn — a process

Edited excerpt from How to reduce Churn by building a bulletproof retention process by Andrew Tate:

The key to fighting churn is to develop a systematic, defined retention process, that allows you to find all the small ways to reduce your churn. Here are 5 steps of a retention process:

1. Define your goals
Your overall goal is to reduce churn, but to make this actionable you need to both quantify this goal and break it down further into smaller goals, corresponding to the 3 stages of churn. For example, Main Goal: reduce churn by 50%; Stage Goals: reduce short-term churn by 20%, medium-term churn by 20%, long-term churn by 10%.

2. Ask the right questions
Drill down to specifics as much as possible. Brainstorm ideas for reducing churn in the short term, during the first few months of use, then the medium term, then the long-term. Segment customers by how they use your product, and target specific experiments at them.

3. Develop your hypothesis
Developing a hypothesis forces you to think about your questions in more detail and the impact of experiments on churn. It helps prioritize ideas, through defining the probability of success of the experiment, and resources needed. Low impact, high probability, low resource ideas should be high on your list —  a number of them will add up.

4. Test and analyze your ideas
Get the minimum viable test up and running as quickly as possible. Don’t overthink the experimental design or over-engineer a solution. You are looking for quick results. If the experiment didn’t reduce churn, what assumptions did you make in the hypothesis that led you to think it would, and how can those be fed back into the process to improve future experiments?

5. Refine, reject, repeat
Perform a post-mortem on your techniques so that you can optimize the process for future iterations. Were you improving over time? Did you improve your accuracy? Did you run enough experiments?

(1) On reducing short-term churn before medium-term churn, cf. The first ten minutes of a customer’s experience are crucial.
(2) Cf. How to reduce churn and The customer success role — a job description.

Why you should bootstrap your startup before raising money

Edited excerpt from After raising $125M at my last company, I’m bootstrapping PeopleSpark — here’s why by Mitchell Harper:

Bootstrapping or raising money aren’t mutually exclusive. There are immense benefits to bootstrapping before you raise money:
1. You’re 100% focused on generating revenue and profit as quickly and as efficiently as you can
2. You learn to keep costs low and keep an eye on anything taking money out of your pocket
3. Your employees adopt your mentality — careful where they spend money, resourceful with limited resources
4. You’re forced to experiment with different, low/no cost ways to win customers
5. You invest in your product, which matters more than anything else, and spend less on superficial stuff like a nice office, catered lunches and all the other crap most startups waste money on
6. You don’t have to spend time preparing board slides or attending board meetings
7. You can still get access to great (future) investors and pick their brains — the best VCs will understand that you don’t want to raise money right now, but will still work hard to build a relationship with you
8. Bootstrapping significantly de-risks your business in the eyes of future investors —“If they can get to a few hundred grand in revenue a year with no outside investment, imagine what they could do with $5M!”
9. If you can get to profitability, you have immense leverage when you decide to raise money, because you’ve done what probably less than 2% of startups have done

(1) Cf. Why you shouldn’t raise too much money in your early funding rounds
(2) Re. “If they can get to a few hundred grand in revenue a year with no outside investment, imagine what they could do with $5M!” — see The real difference between funding rounds

Do the most important stuff first thing in the morning

Edited excerpt from 8 Things Every Person Should Do Before 8 A.M. by Benjamin Hardy:

Willpower is like a muscle that depletes when it is exercised. Similarly, our ability to make high quality decisions becomes fatigued over time. The more decisions you make, the lower quality they become — the weaker your willpower.

Consequently, you need to do the hard stuff first thing in the morning. The important stuff.

If you don’t, it simply will not get done. By the end of your day, you’ll be exhausted. You’ll be fried. There will be a million reasons to just start tomorrow. And you will start tomorrow — which is never.

So your mantra becomes: The worst comes first. Do that thing you’ve been needing to do. Then do it again tomorrow.

If you take just one step toward your big goals every day, you’ll realize those goals weren’t really far away.

(1) Not sure that “the worst” should come first. Surely it should be the most important task to hit your long term goals?
(2) Re. “The more decisions you make, the lower quality they become” — Cf. Limiting decision fatigue.
(3) The core advice here is to think about your goals and start your day by being proactive, not reactive. Cf. If you want to get more done, stop doing these things.
(4) Because the ability to focus and block out distractions is so fundamental to startups’ success, I’ve broken out a new category for Focus vs. Distractions. You can find it in the list of Best Practices for Startups.

Why mobile-only business models aren’t working

Edited (heavily) excerpt from Mobile App Developers are Suffering by Alex Austin:

If you look at the relative traffic to the top 1,000 non-games in the iOS App Store, the results are frightening. The 10th most popular app (Skype) has a small fraction of the traffic seen by the top app (Facebook), and the 1,000th app (Pixable) has just 0.2%. Yet in the past four weeks, there were 45,000 new apps submitted to the iOS App Store. The chances that any of them will ever break into the top 1000 are effectively 0%, and even if they did, they’re still not seeing any amount of traffic to build a successful business.

Monetization is an even worse story: According to a study done by Activate, the top 20 app publishers, representing less than 0.005% of all apps, earn 60% of all app store revenue.

Why is the power law so harsh for the app ecosystem? By far the most challenging problem that developers face is app discovery. Paid promotion is completely unsustainable for most apps given that the cost for an active install increased to $4.14 in the last few months. In the app stores, the search function is unusable unless you know the name of the app you’re looking for, the home page is reserved for the select few with a relationship to Apple or Google, and the top charts are self-reinforcing.

Then, conversion to download the app is dramatically reduced by the fact that the app store page is incredibly limited in terms of display, and the user must be willing to give away their precious disk space to the app.

(1) Cf. Why mobile traction is getting harder, not easier and The biggest challenge in mobile.
(2) Another key reason: if your app isn’t a daily habit, you’re toast.

Five principles for how to structure startup compensation

Edited excerpt from eShares 101 by Henry Ward:

1. Compensation (salary + equity) is determined by the market for your skill set, and your skill level. That means there is no automatic annual raise of 2.4%. There is no subjective increase based on whether your manager likes you better than the others. Your compensation is exclusively determined by your marketability.

2. Increase compensation by increasing marketability. Lobbying, staying late, taking credit, buying beers — these have nothing to do with your compensation. If you want to increase your compensation, become better at what you do. It is very simple. The rest is noise.

3. You will be marked-to-market at your 9-month anniversary and every 12 months thereafter. If the market for your skill has increased in value, or your individual skill has increased, your compensation will increase. Similarly, if the market value of your skill set has decreased or your skills have atrophied, your salary will adjust down.

4. We target being in the 75th percentile for your compensation. That means if you were to interview elsewhere, we would expect 1 in 4 companies to offer you a higher salary than us. Why don’t we just pay top-of-market?

5. We earn our people. The best people are recruited, not bought. The companies who pay top-of-market will always win the salary-optimizing people. The best people optimize to learn. Winning and retaining those people means creating an environment where people are willing to trade short-term compensation for long-term career capital. Many companies think paying the most gets them the best people. They are wrong. Companies that teach the most get the best people. Our compensation structure is our checksum to ensure that we offer the best learning environment.

(1) Henry says that these principles are drawn from Netflix (presentation here) and Mark Suster’s Learn vs. Earn. The Netflix presentation also had a huge impact on how we think about compensation at Seeking Alpha.
(2) Note the balance between paying people well (75th percentile) and not targeting “salary optimizing people”. Do you think he gets the balance right?

Why VCs push startups to scale prematurely

Edited excerpt from The most fatal mistake to avoid as a startup, a presentation I gave to a group of startup founders:

1. VCs are not product people, they are momentum investors. They look at their companies which are growing (ie. found product-market fit and are now scaling) and incorrectly pattern match to your company. “My most successful companies invest a lot in customer acquisition, so you should too”. But they don’t realize that those companies found product-market fit, and you haven’t yet. It’s like saying “The most valuable buildings have many floors, so you should be adding floors to this building” — when you haven’t yet finished the foundations.

2. They just invested money in your company, and they want to see you use it. VCs often view a successful investment as one which accelerates a company’s growth, and they want to see you achieve that growth immediately. For example, they’ll ask: “What’s your hiring plan?” But scaling your hiring is one of the key things you shouldn’t be doing before product-market fit.

For these reasons, VCs often add bad pressure on founders to scale prematurely.

(1) “Most VCs are not product people” — see VCs are not product managers and Investors, VCs and product advice.
(2) “…they are momemtum investors” — see Most VCs are momentum investors.
(3) VCs can add bad pressure — see For CEOs and VCs: Good pressure or bad pressure?

How to handle public questions you don’t know the answer to

Edited excerpt from How To Demo Your Startup by Jason Calacanis:

Take a moment to think about the question. You can even say “Hmmm… that’s a good question. Let me think about that for a second.” Folks appreciate a little consideration when someone takes a question.

If you don’t have an answer be honest and say you don’t. The worst thing to do when you don’t have an answer is to b.s. the person. No one has an answer for everything, except a b.s. artist. So, feel free to say you don’t know –- folks find it refreshingly humble and honest. There are many ways to say this including: “I’m not really sure, I’m going to have to think about that for a bit and get back to you,” or “I’m not sure to be honest. What do you think?”

Feel free to think out loud and brainstorm with the person. You can do this by saying “I’ve never really considered that. Perhaps you can expand the question a little and we can explore it right now.”

How low retention of customers and suppliers bankrupted Homejoy

Edited excerpt from Homejoy at the Unicorn Glue Factory — Why Homejoy Failed by Christina Farr:

Only about a quarter of Homejoy’s customers continued to use the service after the first month, and less than 10% used it after six months. Many first-time customers were not satisfied with the cleaning, or experienced a last minute cancellation.

Cleaners who excelled would sometimes strike independent relationships with clients. This often resulted in a pay increase, and some cleaners even attracted enough new clients to start their own small cleaning businesses.

Meanwhile, Homejoy’s cost of customer acquisition was crippling. By mid-2014, thousands of people were scooping up deeply discounted first time Homejoy cleanings for $19.99 on daily deal sites like Groupon. The company offered these aggressively even though its own internal data showed most of these people never used the service again.

By focusing on growth above all else, other projects to boost retention and reduce costs fell to the wayside.

(1) Thank you Zach Abramowitz, founder and CEO of ReplyAll, for the tip.
(2) Homejoy is a striking example of a company which scaled customer acquisition before achieving sufficient product quality, ie. basic product-market fit. The tell: poor customer satisfaction, low repeat usage, and high churn.
(3) See: The most fatal mistake to avoid as a startup

Why startups shouldn’t scale prematurely

Edited excerpt from The most fatal mistake to avoid as a startup, a presentation I gave to a group of startup founders:

What’s so bad about scaling prematurely?

  • Low ROI, high burn rate: Sales and marketing for a product without product-market fit will suffer from low conversions and low renewals.
  • Frustration: When you don’t have product-market fit, everything seems too hard, and everyone is frustrated. See:
  • Not building permanent value: When you eventually fix your product, you’ll have to redo your sales and marketing anyway.
  • Distraction: Managing all those people will distract you from your key task — finding product-market fit. (See: The most important factor in startup success.)

Bottom line: Don’t scale before you have product-market fit. You’ll burn money, delay true success, and be miserable.

How to price your product based on quality versus the competition

Edited excerpt from Five Words Of Wisdom From SaaS Office Hours With Bill Macaitis (CMO of Slack, ex-CMO of Zendesk and ex-SVP Online Marketing of Salesforce) by Tom Tunguz:

The price a software startup can charge is a function of the difference in net promoter score between that startup’s product and its competition’s. In other words, a startup product with a very high promoter score compared to the competition can charge a premium in the market and vice versa. High promoter scores indicate great product market fit, good customer relationships, and substantial value creation, all of which translate into pricing power.

(1) I like this a lot, because it reinforces the centrality of product quality (in this case measured by NPS, net promotor score) for everything a startup does.
(2) For more on NPS, see Net promotor score — how to set up the survey and How to use net promotor score surveys to improve your product.

Documenting your product-market fit hypotheses

Edited excerpt from A Lean Alternative to a Business Plan: Documenting Your Product/Market Fit Hypotheses by Sachin Rekhi:

The most efficient way to operate during the earliest phases of a startup lies in between a formal business plan and unstructured iteration. The process I’ve used involves documenting your initial product-market fit hypotheses, and systematically validating, iterating on and updating them.

1. Target Audience. Who is the target audience is for your product or service? Be as specific as possible. Name the “core” audience to whom your product is best suited, as opposed to the “total addressable market” for folks who might get value out of it. In B2B products, specify both the end users of the product and the business decision makers who have the budget.

2. Problem You’re Solving. What specific problem or pain point does your solution solve for? There is no substitute in product development for developing an incredibly strong understanding of the problem space of your target audience.

3. Value Propositions. Value propositions shouldn’t be the features that you are building, but the “promise of value” that you are giving your customer. This should be phrased in the customer’s terms in how it will address the problem you’re solving as well as improve their lives or business.

4. Strategic Differentiation. What unique assets or capabilities will your solution have or take advantage of to make it a superior offering?

5. Competition. Who is the competition and how are they doing in addressing their customer needs? For nascent markets its important to take a very broad view of competition, including alternatives and substitutes to your solution.

6. Customer Acquisition Strategy. What are the primary ways you expect to drive awareness, interest, desire, and adoption of your solution? As you iterate, developing a more detailed understanding of your acquisition strategy involves understanding the cost of acquisition of customers for each of your primary acquisition channels.

7. Monetization Strategy. How will you generate revenue from your product or service? A more detailed understanding would cover price points and an understanding of willingness to pay in the market, often based on understanding the value you are creating for the customer or based on comps to existing solutions in the market.

8. Key Performance Indicators (KPIs). Document the key performance indicators which you plan to use to gauge how well you’re business is doing. Defining these are early as possible is critical. I like to have a suite of acquisition, engagement, monetization, and customer satisfaction metrics.

(1) Compare this to the template in Clarifying your strategy using a simple template.
(2) Note also how this can provide clarity for marketing and PR. See: Questions to answer before you talk to a journalist.

If you must use Powerpoint…

Edited excerpt from How To Demo Your Startup by Jason Calacanis:

Do not make slide after slide explaining your business in bullet points, because it’s really, really boring. Powerpoint slides that are not boring include charts, product shots, feature set tables and the like. Things that explain big concepts with ease and grace are great, but bullet points of obvious facts show that:

a) you don’t have the ability to create a compelling story with data

b) you don’t think that much of the person being presented the information

I’m not a huge fan of “funny slides” or lots of graphics for graphics sake. You’re not pitching your company to get laughs–unless you’re on stage–you’re doing it to raise capital, close a partnership or get on stage at a conference. Keep it focused and to the point.

How to deal with anger at work

Edited excerpt from How to get rid of anger by Eric Barker:

How can you control emotions of anger in yourself? Here’s how:

— Suppress rarely. They may not know you’re angry but you’ll feel worse inside and hurt the relationship.
— Don’t vent. Communication is good but venting just increases anger. Distract yourself.
— Reappraisal (changing the story you’re telling yourself about the event) is usually the best option. Think to yourself, “It’s not about me. They must be having a bad day.”

Sometimes someone gets under your skin and suppression is the only thing you can do. And sometimes reappraisal can cause you to tolerate bad situations you need to get out of. But that said, telling yourself a more compassionate story about what’s going on inside the other person’s head is usually the best way to go.

And what’s the final step in getting rid of that anger over the long haul so you can maintain good relationships? Forgive. Forgiveness makes you less angry and more healthy.

(1) On interpersonal relationships at work, see also: A better way to view people and Ideas spread inside a company due to positive energy; 8 ways to increase it.
(2) On managing emotions and pressure, see: How to stay calm under immense work pressure — Charlie O’Donnell and How to stay calm under immense work pressure — Jason Lemkin.

Net promotor score — how to set up the survey

Edited excerpt from A Practitioner’s Guide to Net Promoter Score (NPS) by Sachin Rekhi:

How NPS is calculated. Ask your customers: “How likely is it that you would recommend our company to a friend or colleague?”, with the possible answers ranging from 0 – 10. Group your customers into Promoters (9-10 score), Passives (7-8 score), and Detractors (0-6 score). Then subtract the percentage of detractors from the percentage of promoters and you have your NPS score. The score ranges from -100 (all detractors) to +100 (all promoters). An NPS score that is greater than 0 is considered good and a score of +50 is excellent.

Additional NPS questions. It’s essential to also ask the open-ended question: “Why did you give our company a rating of [customer’s score]?” This turns the score from simply a past performance measure to an actionable metric to improve future performance.

Sample selection. Survey a random representative sample of your customers each NPS survey. We found strong correlation between engagement and customer tenure and NPS results, so ensure your sample reflects your user base.

Collection methods. The survey is normally sent via email to your customers or delivered through an in-product prompt. Use one of the NPS survey solutions that support collection and analysis across a variety of channels and interfaces, such as SurveyMonkey’s.

Survey frequency. At LinkedIn we found it best to administer our NPS survey quarterly, which aligned with our quarterly product planning cycle. This enabled us to have the most recent scores before going into quarterly planning and enabled us to react to any meaningful observations from the survey in our upcoming roadmap.

(1) Net promoter score, writes Sechin, was “devised by Fred Reichheld at Bain & Company in 2003 and introduced in a seminal HBR article The One Number You Need to Grow, which I highly recommend anyone serious about NPS to read in detail. Fred found NPS to be a strong alternative to long customer satisfaction surveys as it was such a simple single question to administer and NPS score was correlated with long-term company growth.”
(2) See How to use net promotor score surveys to improve your product, also from Sachin Rekhi.
(3) Compare Net Promoter Score to Sean Ellis’ “One Question That Matters”.

Here to get independent references for a job candidate

Edited excerpt from The Big Reference Check Scam! by Tim Sackett:

Stop accepting references candidates give you. Instead, during the interview ask for names of their direct supervisors at every position they’ve had. Then call into those companies and talk to those people. Even with HR telling everyone “we don’t give out references,” I’ve found you can engage in some meaningful conversations off the record.

(1) Cf. How do to reference checks: Mark Suster.
(2) This is the final post (for now) on how do to reference checks for job candidates. You can see the entire series in the section Reference Checks in Best practices for startups — a list by topic.

Why startups should raise money after finding product-market fit

Edited excerpt from What I’ve Learned About Venture Funding by Mark Suster:

I know in my bones that there is a magic moment where capital plays a hugely differentiating role. As in back-up-the-truck, load on $20-30 million and let me blast the market with all I’ve got.

I’ve seen it.

I’ve seen companies who raise the mega round after they’ve truly started to scale and put scale on steroids. I’ve seen the companies that had they not raised the big round would have evaporated. I’ve seen companies who avoided the big round and then struggled without enough resources to ship products on time and then missed market opportunities and sold in mediocre outcomes as others sailed by them.

How can it be that over-funding is bad, bad, bad and then the best possible outcome? And what is the inflection point? It’s subjective. I know many inexperienced market prognosticators claim “VC is dead,” “capital is a commodity,” “crowd-source to the finish line” or “stay lean for life”. But I’ve seen directly just how much capital can separate the winners from the losers when raised at the right time.

(1) Cf. The real difference between funding rounds.
(2) Cf. Raising capital as an offensive strategy.

When checking references, get each of these types

Edited excerpt from Anatomy Of A Reference Check by Tom Tunguz:

I find it’s valuable to speak to references who have worked with the candidate in different roles:

Peers provide fair feedback. They often competed or worked closely together and are often the most impartial checks.

Managers offer the best insight on day-to-day interactions and work quality.

Direct reports tend to be a bit more positive than others. But they provide insight about culture, team building and mentoring.

Close colleagues are the least valuable checks. Friends at work don’t have much direct experience to share save for personality.

How to get the most out of attending a conference

Edited excerpt from Startup Founders Guide to Hustling a Conference by Dan Martell:

As a founder, it is your responsibility to carefully manage your startup’s resources, and invest your time and money in areas where you will see the highest return. This means that your decision to spend $1500 on a three-day conference should be based on expected returns, not just a decision made on a whim.

In order to do an effective post-mortem on the return on the conference, set aside some time before the event to determine your metrics for success, and use these as benchmarks to hold yourself accountable throughout the conference. For example, often times entrepreneurs attend events to meet new people, expand their network and get introduced to specific people. Make a clear list of the those you want to meet at the event and make sure you get the proper introduction. Other metrics for conference success could include recruiting, learning, discovering new innovations/ideas, or chatting about what you are working on.

(1) On setting measurable goals and metrics for marketing, see A better way to measure the value of marketing?
(2) Cf. Being “hot”.

Don’t overestimate the importance of launch and fundraising announcements

From Nine common things that start-up founders tend to underestimate or overestimate by Boris Wertz:

Start-up founders typically want to make a big PR splash when they’re launching their product or closing a funding round. A major launch announcement can make a lot of noise in moment, but it’s more important to focus on generating continuous demand than your 15 minutes of fame. Likewise, fundraising announcements can drive investor interest for future financing rounds, but I’ve found it’s usually better to just stay under the radar and build the company.

(1) Cf. Should you make a big PR push when launching a product?
(2) Contrast with: The case for PR.

How to demo your startup

Edited excerpt from How To Demo Your Startup by Jason Calacanis:

Show your product within the first 60 seconds. Most folks start their presentations with information like the size of the market they are tackling. The longer it takes for you to show your product, the worse your product is. Folks who have a kick-ass product don’t spend five or ten minutes “setting the stage” or “giving the background.” Folks with killer products CAN’T WAIT to show you their product. Their demos start with their homepage and quickly jump into the users experience.

The best products take less than five minutes to demo. The better the product the LESS time it takes to demo. If your product demo takes more than five minutes to demo, it probably sucks. All the tiny little features that matter to you are of course important. However, when presenting your company, you don’t have to show them. Leave people wanting more.

Talk about what you’ve done, not what you’re going to do. Weak startups and their leaders seem to immediately start talk about “what’s next,” as opposed to focusing on the core product. Who cares what you’re going to bolt on to your startup? What really matters is the core functionality of your startup.

How to think about mobile

Edited excerpt from Forget about the mobile internet by Benedict Evans:

For as long as the idea of the ‘mobile internet’ has been around, we’ve thought of it as a cut-down subset of the ‘real’ Internet. First, the phones themselves could only do a little bit of the internet. Second, and partly as a result of these limitations, our mental model of how and where you used ‘mobile’ was that it fitted into specific, occasional places and times where you were walking or waiting or needed a single piece of information and didn’t have a PC. That in turn shaped how people thought about their ‘mobile’ site – that you needed to think of ‘mobile use cases’ and provide only a little slice of your proposition.

I’d suggest it’s time to invert that. Mobile today does not mean ‘when you’re mobile’. It means ubiquity — universal access to the internet for anyone at any time. People use their smartphones all the time, very often when there’s a PC in the same building as them or the same room, or on the sofa next to them.

Mobile is a universal product in a way that the PC never was. Smartphones themselves are much richer, more sophisticated and powerful internet platforms than the PC web browser. What happens when almost everyone on earth has a pocket supercomputer connected to the internet? It’s not a subset of the internet – it IS the internet.

This is why thinking about ‘mobile’ as another bullet point next to ‘SEO’ misses the point: mobile becomes the platform, and it’s a much richer and more powerful one.

How to interpret negative feedback from a job candidate’s references

Edited excerpt from How to Make Better Reference Calls by Mark Suster:

You need to be careful about how you actually interpret references. If you get somebody who doesn’t say totally glowing things about your candidate:

  • Think critically about whether that person may have biases that led him to the conclusions he has about your candidates;
  • Ask other people about those specific qualities that the reference said weren’t good – even if you have to call back people with whom you’re already spoken;
  • Understand whether any negative information is something that would stop you from wanting to hire the person. Everybody has weaknesses.

(1) Cf. A simple rule for interpreting references for a job candidate.
(2) “Understand whether any negative information is something that would stop you from wanting to hire the person” — cf. The goal of checking a job candidate’s references.

A simple rule for interpreting references for a job candidate

Edited excerpt from 3 Essential Steps to Doing a Thorough Reference Check by Jeff Markowitz:

It’s hard to predict anyone’s failure or success in a given role, but I’ve found that references tend to be overly kind during a reference call. Roughly speaking, if you downplay positive feedback by 30% and amplify negative feedback by the same amount, it should give you a pretty good picture of the candidate.

Startup founder errors to avoid: not checking job candidates’ references

From Nine common things that start-up founders tend to underestimate or overestimate by Boris Wertz:

I’m always surprised at how often people still get hired without extensive reference checks. When you’ve got a good feeling about someone, it’s tempting to just move ahead without any kind of due diligence. But informal reference checks can be very revealing, particularly if you can talk to people that weren’t provided by the candidate, but know him or her very well.

(1) “People still get hired without extensive reference checks” — perhaps because “by the time the hiring manager is calling she is often already pre-disposed to hiring the candidate”. See The goal of checking a job candidate’s references.
(2) Re. “informal reference checks can be very revealing, particularly if you can talk to people that weren’t provided by the candidate” — see How do to reference checks: Mark Suster.

Tom Tunguz on reference checks: Questions to ask

Edited excerpt from Anatomy Of A Reference Check by Tom Tunguz:

— Where does the referenced person shine? What kinds of work did the referenced prefer to do?
— What kinds of people does the referenced need around him/her to be successful?
— How is the referenced persuaded or convinced? What kinds of motivation does he/she respond best to?
— What is it like to work with the referenced day-to-day? How would you characterize your typical interactions?
— Would you hire or work with this person again? How highly do you regard this person? Top 25%, 10%, 5%, 1%?

(1) I’ve excerpted the questions which I think are most interesting. Tom’s post includes a complete check list of questions, and is worth reading.
(2) “Would you hire or work with this person again?”. This is similar to a question I asked when hiring senior people for Seeking Alpha: “If you were starting your own startup and you needed someone in this role, would you want this person to be part of your team?”.

How to name your product and create its tag line

Edited excerpt from The Simple Rules That Could Transform How You Launch Your Product by Brenden Mulligan:

Boil your product name down to two words max
Picture only being able to say a few words to potential users to convey what your product does. What would you say?

Summarize your product in ten words or less
If you can’t describe what your app does in ten words or less, something is off. Maybe you’re trying to launch too much at once. To troubleshoot and help economize your language, try asking yourself the following questions:
— What is the hallmark superpower of this product?
— What is the primary problem this product fixes?
— Who cares about the challenge that this product solves?

(1) That this is written about mobile apps. Is there any reason it shouldn’t apply to other products?
(2) Cf. Why messaging and positioning are fundamental to every startup’s success and The importance of product positioning, and how to get it right.
(3) “What is the primary problem this product fixes? Who cares about the challenge that this product solves?” — see Build your product to explicitly address a “Job To Be Done” and How to identify your customers’ “Job To Be Done”.

The goal of checking a job candidate’s references

Excerpt from How to Make Better Reference Calls by Mark Suster:

Seek “disconfirming evidence”

The strange thing about most reference calls is that by the time the hiring manager is calling she is often already pre-disposed to hiring the candidate. Most people delay reference calls until that point both due to expediency of time (why make phone calls unless you think you might hire the person?) and in fairness to the employee (why call a bunch of people and then not hire him – leading others to wonder why he didn’t get the job?).

I agree with the goal of waiting until late in the process. But the problem is that by the time you actually call people you really WANT to hire the candidate. So often people who do reference calls ask softball questions. That’s not your job. Your job is to seek “disconfirming evidence” meaning you go in with the assumption that Stacy is great but you want to be sure there isn’t something you totally missed.

How to ask the right questions when checking references

Edited excerpt from 3 Essential Steps to Doing a Thorough Reference Check by Jeff Markowitz:

Ask open-ended questions and get specific examples (e.g., “How would you describe the person’s leadership skills?”), not yes or no questions. Most importantly, don’t settle for vague answers such as “He/she is an experienced leader.” If you get an answer like that, ask the reference for an example of the candidate’s leadership skills in a specific situation. If the reference can’t think of one, then you should seriously question the relevancy of the reference.

As much as possible, always seek specific information about the candidate’s work and actions rather than generalities.

(1) “Ask open-ended questions” — this is one of the principles of asking questions generally. See How to ask great questions and Don’t ask multiple choice questions.
(2) “Always seek specific information about the candidate’s work and actions” — compare this to best practices in interviewing, in How to run a job interview.

Tom Tunguz on reference checks: How to find out about someone’s weaknesses

Excerpt from Anatomy Of A Reference Check by Tom Tunguz:

Asking for weaknesses tends to put the referencer on the defensive, as if he or she is sharing something illicit. Instead, I ask the referencer the question below. Everyone has strengths and weaknesses. And most jobs require teamwork. The best team members complement each other’s weaknesses. This is an indirect path at reaching the same answer. It doesn’t always work, but it’s my preferred route. I spend the most time of the interview on this question:

What kinds of people does the referenced need around him/her to be successful?

(1) Cf. Hanan Lifshitz’ approach: “After conducting dozens of reference checks filled with over-optimism, I found the best way for breaking through the praise is to say: “Listen, none of us are perfect; I have weaknesses, you have weaknesses, everyone has weaknesses… Now, what are John’s weaknesses?” At that point the truth almost always comes out.”
(2) Cf. Scott Cook’s method for finding out about someone’s weaknesses — see How do to reference checks: Scott Cook.

Can you achieve great things if you’re a regular Facebook or Twitter user?

Edited comments from Matthew Crawford, quoted in In an age dominated by distractions, there are still reasons to focus:

Just as food engineers figured out how to create hyper-palatable foods by manipulating levels of salt, fat and sugar, there are some forms of media that have created hyper-palatable stimulation that seems to tap into something hard-wired in our brains.

Strategies for asceticism or self-regulation are having a renaissance right now – which is interesting because it’s not an idea that we associate with consumer capitalism. You can sign up for these services that will turn off your Wi-Fi for some particular period of time. People are finding ways to use technology to regulate themselves against the temptation to use more technology, which makes perfect sense.

But ultimately, I don’t think we’re going to be able to either liberate or self-regulate our way out of mental fragmentation. I think the remedy is rather to be absorbed in some worthy object that has intrinsic appeal, the kind that elicits our involvement in such a way that our mental energies get gathered to a point. And once that gets under way, I think it feels more like abandon than self-control. I work on motorcycles and make parts for them, and when I’m in the shop, hours go by without any sense of distraction. I get really, really into it.

(1) “There are some forms of media that have created hyper-palatable stimulation that seems to tap into something hard-wired in our brains.” As entrepreneurs, this is the explicit goal we strive for — to create highly addictive products. The exemplar is Facebook, which has crushed Twitter on frequency of use.
(2) But from a consumer’s perspective, having easy and constant access to addictive digital products is destructive. As Matthew Crawford writes elsewhere, “Just as clean air makes it possible to breathe, silence makes it possible to think.”
(3) To achieve anything meaningful, we need to clear time for deep thinking. That is probably inconsistent with being a regular user of Facebook, Twitter, HN, Reddit etc. See Justin Musk’s description of How Elon Musk manages his time.
(4) As entrepreneurs, we need to ask ourselves whether the products we are building are good for users. Or are they the digital equivalent of heroin?
(5) Perhaps this question shouldn’t be binary, but about frequency of habit and usage. Seeking Alpha is a good thing — it helps you make better investment decisions, empowers you to think and decide for yourself, fosters open debate about stocks, and has created community and friendships for people who help each other with their investing. But is there a usage level above which it becomes negative? We’re nowhere near there yet — but would we have the courage to limit usage if we got there?

Most VCs are momentum investors

Edited excerpt from The Hacker’s Guide to Investors by by Paul Graham:

This is how most venture investors operate. They don’t try to look at something and predict whether it will take off. They win by noticing that something is taking off a little sooner than everyone else. That generates almost as good returns as actually being able to pick winners. They may have to pay a little more than they would if they got in at the very beginning, but only a little.

Investors always say what they really care about is the team. Actually what they care most about is your traffic, then what other investors think, then the team. If you don’t yet have any traffic, they fall back on number 2, what other investors think. And this, as you can imagine, produces wild oscillations in the “stock price” of a startup. One week everyone wants you, and they’re begging not to be cut out of the deal. But all it takes is for one big investor to cool on you, and the next week no one will return your phone calls. We regularly have startups go from hot to cold or cold to hot in a matter of days, and literally nothing has changed.

(1) Cf. There are only two ways to raise money for a startup.
(2) Implications for startups: Don’t raise money if you don’t have momentum in your key metrics, or you’re at an early enough stage that you can “sell the dream”.
(3) Cf. What one early stage VC looks for when he meets companies.

A better way to view people

Edited excerpt from 10,000 Hours with Reid Hoffman: What I Learned by Ben Casnocha:

People are complicated and flawed. Root for their better angels.

Too often, people classify someone’s competence or character in black and white terms. He’s brilliant or he’s an idiot. She’s got a heart of gold or she’s an asshole. He’s an ethical prince or a conniving win-at-all-costs hustler. It’s an unfortunate tendency. Expertise is always relative. Every saint has a past and every sinner has a future, as Oscar Wilde said. People are complicated.

Reid Hoffman is widely known as the ultimate connector. One of his underrated gifts is that he maintains very complicated portraits of the people he knows. He appreciates the full spectrum of strengths and weaknesses of a particular person. He’ll acknowledge a friend’s character flaw — say, self-centeredness — but also their unique strengths. Flaws that cause others to completely disengage are, for Reid, “navigable” en route to their better side.

Reid forgives mistakes in his friends. If you make a mistake (or three) or if a weakness of yours gets exposed – you’re not dead to him. It’s just another data point in a rich tapestry in a long-term relationship. He’ll rarely let a single failure or shortcoming overshadow your successes or noble aspirations. And he’ll always root for your better angels to prevail. It’s no wonder his friends are so loyal to him.

It’s a philosophy that reminds me of my late friend Seth Roberts, who promoted an “appreciative” approach to life. When evaluating someone, instead of starting with their weaknesses, first ask what’s uniquely excellent about them. When evaluating a study, first ask what we can learn from it, instead of jumping to a critique of the study’s flaws. Let an appreciative point of view imbue everything you do.

(1) Implications for managers: Try to place each person in a role where their strengths have the biggest impact and their weaknesses and flaws don’t matter.
(2) Then, you can celebrate your team’s strengths and be forgiving of people’s flaws.

Why the Facebook threat to most media businesses will only get worse

Edited excerpt from Facebook hosting doesn’t change things, the world already changed by Eugene Wei:

When Facebook announced its offer to host content from media sites like The New York Times, the media went into a frenzy of apocalyptic prediction. But whether media sites allow Facebook to host their content or not won’t meaningfully change things. Let’s just list all the conditions that exist and won’t change one bit whether or not you let Facebook host your content:

1. News is getting commodified.
2. Distribution is effectively free.
3. Marketing is cheaper, using social media.
4. Competition for attention is at an all-time high and getting worse.
5. Facebook will continue to gain audience.
6. Facebook and Twitter and other social media drive a huge % of the discovery of content.
7. Media ad experiences are awful.
8. Media business models are not great.
9. Tech companies have better ad platforms than media companies.
10. Tech companies have a tech hiring advantage on non-tech companies.
11. Design skill is not equally distributed.
12. Tech companies are rich.

I can offer some positives. A media company may not be able to be world class at every layer of the full stack, from distribution and marketing to ad sales and producing great content, but it doesn’t have to be. Far better to be really good at one part of that, the one that tech companies are least likely to be good at, and that’s producing great, differentiated content. The fact is, great content is not yet commodified.

(1) The litmus test for the survival of a media business is: “If someone is interested in [the area we cover], why do they have to read our content?” If you can’t answer that question, you’ll lose to Facebook, because it has become the daily content aggregator for most people.
(2) There are two acceptable answers to this question for a media company: (i) “We publish content that the reader cannot miss”, or (ii) “We tell you everything you need to know about this topic (even if you can find it elsewhere), but without the noise.”
(3) Very few media companies publish “can’t miss” content because most of them are in the entertainment business, and entertainment is optional. They are not in the help-you-make-decisions business, where great content is mandatory.
(4) The good news for us: Seeking Alpha is a must-read site for investors. If you invest in small cap stocks, for example, you have to subscribe to Seeking Alpha PRO because much of the coverage of small caps has moved to Seeking Alpha. The bad news for us: “Media ad experiences are awful. Tech companies have better ad platforms than media companies.”
(5) Cf. Charging for content will only be successful if this condition is fulfilled.

The 4 characteristics of the most addictive products

Edited excerpt from Addictive Consumer Products by Austen Allred:

As I tried to drill down into why so many people, including myself, love and use certain sites/apps/services, I’ve found common threads that tie addictive Internet products together:

Rapid Cadence. Cadence is the rate at which the content flows or changes. How often you can find something new determines, to a large extent, how often we check in on a product. Among the most popular layouts on the Internet and mobile is the “waterfall” design. Newest stuff goes to the top and slowly falls down over time. The design is incredibly simple – one column of content, with all of the external stuff thrown around the outside. Basically a big list. The tricky part from a product perspective is how to get the list just right.

Signs of User Activity. Social proof is a very real thing. Every successful consumer product that I can think of has user interactions front and center. They have numbers of upvotes, points, comments, likes, retweets, favorites, repins, etc. on every piece of content, and on the home page.

One-Click Interaction. Every product I can think of consists of serving up a list of content that people can react to with little to no effort. Almost all consumer products are driving you to do one thing. They put that one thing front and center. That thing is usually typed out, also — you can either click a thumbs up on Facebook or you can click “like.”

Notification of Interactions. I’ll go back to a product every now and then if I think there’s going to be interesting stuff happening there. But if there’s going to be something that involves me? I’ll hit that site all the time. The quickest way for any new user to reach the “aha” moment is to have a solid, positive interaction on your product. Sometimes that just means somebody paid attention to them enough to respond to a comment. Sometimes that means “karma.”

(1) “How often you can find something new determines, to a large extent, how often we check in on a product… The tricky part from a product perspective is how to get the list just right.” Another way of putting this: You must achieve high content liquidity and high relevance (signal-to-noise ratio) for the user.
(2) Cf. Addictive product = high content liquidity + high signal-to-noise ratio.

Why more funding won’t help you find product-market fit

From Nine common things that start-up founders tend to underestimate or overestimate by Boris Wertz:

No amount of money in the world is going to get you to product-market fit. And raising too much money before you find product-market fit will usually kill your start-up.

(1) Why is it that more money doesn’t help you find product market fit? Because building your core product and understanding your customers’ needs are best done by a small team. Small product teams work better because product innovation requires brainstorming and collaboration, and they are easier with fewer people. Hiring more people doesn’t help.
(2) This is why startups beat large companies. Having a larger team doesn’t help you with core product innovation.
(3) If you expand your company before finding product market fit, you’ll pay the price in two ways: (i) your burn rate will increase, (ii) it will actually be harder to find product-market fit because you’ll be distracted by other activities. This is a common mistake made by some VCs — after investing in a company, they push to expand headcount without verifying that the company has found product-market fit.
(4) Cf. Why you shouldn’t raise too much money in your early funding rounds.

Why you shouldn’t raise too much money in your early funding rounds

Edited excerpt from What I’ve Learned About Venture Funding by Mark Suster:

I believe firmly in capital efficiency in the early days of a startup. It forces innovation. It forces the founder to spend time in front of customers. It forces teams not to expand too quickly. I know it’s easier said than done when capital is floating around and feels like it will ease up everything. I don’t blame you for taking more than you need. But if you take $10 on $30, $40 or even $50 G-d help you if you need to raise your next round and haven’t demonstrated amazing traction or you raise after the next correction. You are building a one-option startup. And I can tell you that almost certainly you will spend your money inefficiently.

(1) Cf. Tom Tunguz’ five keys to building a successful company.
(2) Cf. Why capital efficiency is critical for SaaS and subscription businesses.

The best work question to ask yourself every morning

Edited excerpt from How to Spend the First 10 Minutes of Your Day by Ron Friedman:

Ask yourself this question the moment you sit at your desk: The day is over and I am leaving the office with a tremendous sense of accomplishment. What have I achieved?

This exercise is usually effective at helping people distinguish between tasks that simply feel urgent from those that are truly important. Use it to determine the activities you want to focus your energy on.

Then—and this is important—create a plan of attack by breaking down complex tasks into specific actions.

(1) I like this question a lot, because it forces you to be proactive. It’s easier but far less effective to default to reactive, “feel busy” tasks, like replying to email.
(2) See: If you want to get more done, stop doing these things and How to clear time for deep thinking.

Why you should incentivize sales people for customer retention

Edited excerpt from Why This CEO Will Never Hire Another Salesperson by Brian de Haaff:

Here are four reasons why emerging technology companies will not look to commissioned salespeople to drive their business:

1. Relationships. Growing a business is about fostering trust and relationships, not pushing product. The goal is to show the value of the product and build a relationship with the customer. The only thing that matters is the customer’s success.

2. Authenticity. People crave honest suggestions, and can tell when someone is pushing an agenda. They do not want to be cajoled to buy something, especially a product that is a poor fit.

3. Collaboration. It’s much more exciting to collaborate to understand the customer’s needs vs. making a disjointed pitch when there is a bad fit.

4. Information. Today’s buyers have access to endless information and peer feedback like never before. New data on B2B sales shows that 60% of a typical purchase decision is made before talking to suppliers and up to 90% of the buying cycle is done before buyers speak with sales reps. This brings transparency to a process that was previously veiled. They don’t need someone to connect them with products anymore. What they do need is to be engaged, surprised, and delighted on their own terms.

Don’t get me wrong. There will always be people who work with customers, but I doubt that in the most successful companies that their compensation will be tied to the deals they close.

(1) Brian’s right that the traditional commission structure for sales people misaligns their interests and their company’s and customers’ interests. But that in itself isn’t an argument against sales people. It’s an argument for fixing their incentive structure.
(2) Sales people are traditionally commissioned on closing a sale. That’s appropriate for businesses where the initial sale is the most important driver of profits. But in an increasing number of businesses, revenue per customer is spread out over a multi-year period, so lifetime customer value is determined more by customer retention than by the value of the initial sale. This isn’t only true of SaaS and subscription businesses, but of any business where growth will come from retaining customers as much as adding new customers.
(3) So how do you incentivize sales people for customer retention? Compensate them disproportionately for renewals vs. the initial sale.

If you have to have group meetings, do them like this

Edited excerpt from The Anti Meeting Culture by James Whittaker:

Get the right attendees and be aggressive about it. Invite people who can contribute and when people sustainably fail to contribute, un-invite them.

Make coming and going kosher. Halfway through a meeting and you realize you can’t contribute or don’t need to be there? Leave. Hold meetings in open areas where coming and going is more natural and fuss-free. Or remove the chairs from the conference room and stand up. You’ve just made the door easier to get to.

Big agendas mean lots of time switching topics. Too many decision points means too much debate. A long list of topics ensures that some people won’t have a stake in some topics and that’s a poor use of those people’s time. Single purpose meetings are the best: this is what we are here to do, now let’s use the meeting time to do it.

Multiple presenters — the more, the less merry. Each one has to do their little warm up and wind down and each must pay the technology tax of switching laptops and dorking around with display settings.

Follow up a scheduled meeting with scheduled work time. If a meeting has a purpose and requires action to be taken (like any good meeting should), schedule time immediately following the meeting to take that action.

Build an anti-meeting culture within your organization. Every meeting is useless until proven otherwise. Meeting organizers need to be put on notice: make this meeting meaningful, it’s your job.

(1) A key reason bad meetings persist is that there’s no feedback loop from the attendees to the person running the meeting. Nobody asks the question “Was this meeting a good use of your time?” The solution is to do this.
(2) Re. Get the right attendees and be aggressive about it — cf. The optimal number of people in a meeting is…
(3) Re. Make coming and going kosher – see The antidote to bad meetings.
(4) Re. Meeting organizers need to be put on notice: make this meeting meaningful, it’s your job — cf. How to stop regular meetings from clogging up your time.

Should team leaders in startups write weekly reports?

Edited excerpt from Tips for Startup CEOs by Evan Schumacher, via David Cancel:

Every Friday have all your direct reports submit a “weekly update” one page or less focusing on progress against metrics, key accomplishments for the past week and summary of what’s on deck for the next week. Then, aggregate/consolidate/summarize those updates, add CEO level stuff, and forward to your board on Sunday night.

Why this approach?

— Every team member should spend 30 minutes reflecting on the week. The key is that these updates are shared with other executives who are expected to read them prior to the team Monday morning management meeting (another management tip). That way the meeting is productive, focusing on issues and not “status updates”.

— By sending a report to board members on Sunday nights, you’re on top of their inbox when they are catching up on their weekend emails so there’s a chance they’ll read it. Then they’ll be up to speed on your business during their Monday internal meetings, which makes them look good (and thus, you as CEO look good).

(1) In Seeking Alpha, we standardized on monthly reports. Some team leaders and their team members also chose to write weekly reports, while others found them too onerous. Wonder what the wider experience of this is.
(2) Re. That way the meeting is productive, focusing on issues and not “status updates”: We find that providing written materials before meetings eliminates the need for updates during meetings, and therefore makes the meetings far more effective. We follow Amazon’s practice in allotting time at the beginning of meetings for people to read the written materials.
(3) Cf. How to write a monthly report for your investors or manager.

How to interview a VP SaaS Sales — questions to ask

Edited excerpt from Jason Lemkin in 10 Great Questions to Ask a VP Sales During an Interview:

1. How big a team do you think we need right now, given what you know? (If he/she can’t answer — right or wrong — pass).

2. What deal sizes have you sold to, on average and range? (If it’s not a similar fit to you, pass. If he/she can’t answer fluidly, pass).

3. Tell me about the teams you’ve directly managed, and how you built them. (If he/she can’t describe how they built a team — pass).

4. What sales tools have you used and what works for you? What hasn’t worked well? (If they don’t understand sales tools, they aren’t a real VP Sales).

5. Who do you know right now that would join you on our sales team? (All good candidates should have a few in mind). Tell me about them, by background if not name.

6. How should sales and client success/management work together? (This will ferret out how well he/she understands the true customer lifecycle).

7. Tell me about deals you’ve lost to competitors. What’s going to be key in our space about winning vs. competitors?

8. How do you deal with FUD in the marketplace? (This will ferret out if they know how to compete — or not).

9. Do you work with sales engineers and sales support? If so, what role do they need to play at this stage when capital is finite? (This will ferret out if he/she can play at an early-stage SaaS start-up successfully — and if he knows how to scale once you scale).

10. What will my revenues look like 120 days after I hire you? (Have him/her explain to you what will happen. There’s no correct answer. But there are many wrong answers).

11. How should sales and marketing work together at our phase? (This will ferret out if he understands lead generation and how to work a lead funnel. Believe it or not, most candidates don’t understand this unless they were really a VP Sales before).

Three simple rules to ensure your product team is goal-driven

Edited excerpt from How to say “No” to your CEO’s random product ideas by Brian de Haaf, CEO of Aha!:

As the lead product manager, you hear about the “great new idea” on a daily basis from every team. Each person making suggestions seems to have good reasons why you should add their idea to the product roadmap. Here’s how to say “no”:

1. Goal first. Set your product strategy and then be proactive about communicating it within the rest of the organization. Define your vision and make sure everyone understands it, then your strategy can say, “No” for you.

2. Score ideas. You should rank features and prioritize the ones that will have the greatest impact on the product and the company.

3. Share your roadmap. Our product team shares our roadmap regularly with the entire organization. This ensures that we are all on the same page and working towards the same goals and initiatives.

(1) There’s some valuable advice here, but the mindset of the article — how to say “no” — seems wrong to me. Instead, consider Sam Altman’s advice for product managers to “listen to everyone, then make your own decision”, and Seth Godin’s approach in When you’re given advice, here’s how to listen with an open mind.
(2) I’m a skeptic of product roadmaps. At Seeking Alpha, we find that long roadmaps make little sense. It you have a product roadmap stretching out six months, for example, that’s the same as saying “No feedback from customers or the market, and no results of any tests will impact what we do for the next six months.” That’s obviously crazy.
(3) Instead, a better approach is to have only your top three or five ideas ready for testing or launching. You can revise the list right up until the last moment before development. All your other ideas should be kept in a list — and you can score them there, as Brian de Haaf suggests. So I’d change his third suggestion to “Share your idea list”.
(4) Cf. The best growth teams maximize the velocity of tests and Why another new feature won’t get people to use your product.

How to write a monthly report for your investors or manager

Edited excerpt from Why communicate more with your existing investors (and how to do it efficiently) by Armandi Biondi:

There are two key benefits to sending your investors a monthly recap: a) you’ll give them a broad-enough but meaningful-enough perspective on what’s happening, b) you’ll give yourself a forcing function to generate relevant results in a reasonable amount of time. Here’s how:

  • Short & sweet always win.
  • Be numbers-oriented. How did your key metrics perform compared to the last month figure and the overall total? Where do you expect to go a month and a quarter from now? Those are the only things that matter.
  • Think actionable. Write about what you did and how it generated impact on the company, and what you’re going to focus on in the next 4 weeks.
  • Design matters. Use bullet points, divide the topics by area (I use five: product/tech, sales/clients, funds/corporate, press/pr, team/hr), leave some space, order things by priority.
  • Attach some multimedia content. Examples: the screenshot of the Monthly Numbers on your real-time dashboard, mockups of the UI upgrade, videos of the team at the latest relevant event. Let them be part of the excitement.
  • Include cash position and burn-rate. How much money is in the bank, how much did you burn this month,  how long are you covered for?
  • Trigger their attention. Use the subject “IMPORTANT > Monthly Investors Recap”: it will stand out. And open your email with two lines of “TL;DR” underlining the three most important things you want them to know and remember.
  • Ask for what you need right away. Consider them a resource to tap into. Put it on top and write “The single most important thing that we need is…”.

(1) In Seeking Alpha, every team leader and “metric owner” writes a monthly report.
(2) We fulfilled much of the advice here with a standard template. The Seeking Alpha manager’s monthly report is a Google doc shared with the whole company. It must not exceed one page. It contains four sections: (i) Key Metrics (ii) Candidly, How Successful Was I This Month? (iii) Top Things To Figure Out (iv) Goals For Next Month.
(3) When Seeking Alpha was a fresh startup, I sent a monthly report to investors. After a while I only shared our quarterly board packet. Question: How frequently should companies update their investors, and does that depend on the stage?

Is your startup a zombie? These metrics and behaviors will tell you

Edited excerpt from Zombie Startups by Danielle Morrill:

How do you know if your startup is a zombie? Here are some hints:

  • You don’t want to get out of bed in the morning
  • You don’t want to go out in public for fear you’ll have to explain what you do
  • You haven’t hit 10% week-over-week growth on any meaningful metric (revenue, active users, etc) at some point like launch or some other PR event.
  • You’re working on the same idea after 12+ months and still haven’t launched
  • You’ve launched a consumer service and have less than 2% week-over-week growth in signups
  • You’ve launched an enterprise service and have less than 2% week-over-week growth in revenue pipeline
  • You are the CEO and hole yourself up in the offices so you don’t have to talk to employees
  • You’ve hired consultants to figure out revenue, culture, or product in a company of less than 10 people

Does any of this sound familiar? If so, don’t panic – you can fix this. Acknowledge the reality of your situation. Then figure out what to do next because you don’t want to waste a single moment of your life in denial, in deadlock, in zombie mode waiting for something you can’t control to change or expecting magic to happen.

Does this make someone a troll?

Edited excerpt from points I made in a discussion about the Iran debate:

One of the things we learned from building Seeking Alpha’s successful comment community was which behaviors hindered productive debate and caused animosity. One of the most common is: Ascribing negative motives to someone you disagree with.

When you ascribe negative motives to your opponent, what you mean is: “You’re only saying this because you’re biased, not because you really believe it. So if I can reveal your motives to everyone engaged in this debate, I don’t need to address any of the substantive points you made.”

That, of course, is wrong: even if someone is biased, their reasoning might be right. Ascribing motives is therefore a cowardly way to avoid having to address the points your opponent made.

The ascription of motives to an opponent is also, in most cases, highly questionable, because it’s usually impossible to verify someone’s motives unless they state them explicitly. Once people start ascribing motives to their opponents, the debate becomes an unwinnable mud-slinging match, where each side throws allegations about motives at the other side which can’t be proved or disproved. That’s a sure recipe for acrimony and polarization. Even more troll-like is to ascribe motives to someone which contradict what they themselves have explicitly stated are their motives.

Ascribing motives to people in a debate is therefore a polarizing distraction from the real issues. So if you care about an issue, and you’re discussing it with other people, you should avoid ascribing motives to people you disagree with, or responding to comments by other people who ascribe motives to those they disagree with.

(1) Question for moderators of comment communities: Is ascribing motives to other people sufficiently troll-like to warrant blocking those who do it consistently?
(2) Cf. Should websites shut down comments?