Don’t be satisfied with sales, seek love

Edited excerpt from Happy Birthday HubSpot! 9 Lessons From Our First 9 Years by Dharmesh Shah:

Because you’re human, you probably seek love. It’s natural. We spend a fair amount of time and energy looking for love (hopefully in some of the right places). I’m going to posit to you that you need to carry that sentiment to your startup. I’m talking about the hope to find someone that “gets you” and “likes you for who you are and what you believe”.

Yes, I know that sounds a bit strange. But it’s not that strange. Chances are, there are some companies or brands that you love. All I’m saying is that as a startup, you need to seek that love.

Let me explain by telling you how we do this at HubSpot. Like most growing companies, we want to get people to buy from us and become customers. But, unlike most companies, for us, deep-down inside, that’s not enough. We don’t just want people to buy from us. We want people to love us. We want them to love what we love and respect what we do, even if they don’t buy from us. Even if they are unlikely to ever buy from us. Because what we believe is that the more people that love us, and want us to succeed, the more likely we are to do so.

Notes:
(1) People who say they love your company are often drowned out by complainers, because complainers tend to be more vocal. In Jason Fried’s words, “remember that negative reactions are almost always louder and more passionate than positive ones”. Cf. When your product change is greeted by a torrent of complaints, what should you do?
(2) Sometimes events prompt the people who love your product to speak up. I just promoted Eli Hoffmann to replace me as CEO of Seeking Alpha. The announcement prompted a remarkable outpouring of appreciation for Seeking Alpha. As I pass the running of the company to Eli, it’s inspiring for the team to see how much they and their work are loved by our readers and contributors. See the remarkable comment thread on the announcement.

Don’t waste your board meetings on updates

Edited excerpt from Peter Fenton, quoted in Sunday Conversation #1: Peter Fenton, Benchmark Capital by Semil Shah:

Great board meetings are focused on asking tough questions and applying critical thinking, as opposed to just updates. I encourage a lot of the entrepreneurs I work with to get rid of the PowerPoint. A typical board meeting will have 30 to 60 PowerPoint slides. So, I ask entrepreneurs to think about that as a Word document. Can you reduce it down to something we can read before the board meeting, so we don’t sit there looking at slides for three hours?

If you think about it structurally, I think there’s something ideal in a board meeting where about a third of it is update. “Here’s how we’re doing, here are the financials, here’s the progress against commitments we’ve made.” The second third should be some meaty topic, you know, competitive landscape, potential product road map, any number of things, but a really meaty discussion which is bringing out the best of the board members. The last third should be an open dialog where the group thinks about the problems of the business.

It’s amazing what happens when you change the dynamic from being one of reporting to a bureaucratic structure to engaging with minds. It’s profoundly different.

Notes:
(1) Peter Fenton suggests here that you should get three things done in a board meeting: updates, examination of a “meaty topic”, and “open dialog” about the problems of the business. Personally, I think that’s too much, and would lead to excessively long board meetings.
(2) We take an extreme approach to board meetings in Seeking Alpha — there are no updates. The updates are in the board letter and time series charts, which we send to the board and expect everyone to read before the meeting. The entire meeting is devoted to discussion, and lasts no longer than three hours.
(3) Here’s exactly how we run board meetings at Seeking Alpha.

Two benefits of walking meetings

Edited excerpt from Why Walking Helps Us Think by Ferris Jabr:

When we go for a walk, the heart pumps faster, circulating more blood and oxygen not just to the muscles but to all the organs—including the brain. Many experiments have shown that after or during exercise, even very mild exertion, people perform better on tests of memory and attention. Walking on a regular basis also promotes new connections between brain cells, staves off the usual withering of brain tissue that comes with age, increases the volume of the hippocampus (a brain region crucial for memory), and elevates levels of molecules that both stimulate the growth of new neurons and transmit messages between them.

Because we don’t have to devote much conscious effort to the act of walking, our attention is free to wander—to overlay the world before us with a parade of images from the mind’s theatre. This is precisely the kind of mental state that studies have linked to innovative ideas and strokes of insight.

Edited excerpt from Why Walking Is Important for Your Health by Ronesh Sinha, M.D.:

If you look at parts of the world where people live the longest, they aren’t doing intense daily cardio workouts, running or cycling countless miles, or attending bootcamps. They simply walk, stand, bend and squat more throughout the day, and do much of it outdoors. Nearly all of the health risks I see in my patients can be improved by walking more steps. Studies show that walking lowers blood sugar and triglycerides after meals, lowers inflammation, modestly lowers body fat, lowers stress and improves immunity, prevents falls in the elderly and increases longevity.

Notes:
(1) See also the other benefits of walking meetings.
(2) Buy a Fitbit for all your employees, and invest in Nasdaq: FIT?

Three pieces of advice if you’re building a community, platform or marketplace

Edited excerpt from 16 product things I learned at Imgur by Sam Gerstenzang:

1. You can A/B test individuals, but it’s nearly impossible to A/B test communities because they work based on a mutually reinforcing self-conception. Use a combination of intuition (which comes from experience), talking to other community managers and 1:1 contact with a sample of your community. But you’ll still be wrong a lot.

2. Public forums are not a useful way to get feedback, but are a useful way to get buy in from the community. This is true of both online and offline communities.

3. Communities are unpredictable. Don’t take the community’s criticism too personally or you’ll become afraid of change and slow. Instead, be open, thoughtful and move quickly.

Startup = blood, sweat and tears

Edited excerpt from Playing Startup by Lee Hower:

My first startup job was as an early employee at PayPal. When I first started working there, I only made it home for dinner 3-5 times a month. I worked, usually at the office not remotely, at least part of every weekend for the first year or so. There were frequently late nights. One of my fellow PMs did sleep routinely under his desk in a sleeping bag he kept there for that purpose. On multiple occasions I’d get in to the office in the morning and find our CEO (Elon Musk at the time) asleep on the couch.

I fear a meaningful number of people are “playing startup” today.

What I mean is that people are joining startups because working in a startup seems cool or lucrative, not because they want to change the world and they’re fundamentally committed to putting in all the blood, sweat, and tears that entails. We’re hearing more about people new to startups asking their seed stage company how many months of severance is included in their package. We see co-working spaces where the ratio of work to non-work (ping pong, beer, startup talks, etc) is pretty low. Entire startups exude a rah-rah environment during the all hands, and then at 5:15pm the office is a ghost town (even though everybody rolled in after 10am).

Charging for content will only be successful if this condition is fulfilled

From Cracking the Paywall by Frédéric Filloux, January 2012:

The Times builds its paid-for strategy on three key factors. Of these three factors, the uniqueness of content remains the most potent one. The New York Times has no equivalent in the world when it comes to great journalism, period. More than any other newspaper in the world, the NYT has a huge base of loyal users.

With the inflation of aggregators and of social reading habits, the natural replication of information has turned into an overwhelming flood. Then, the production of specific content — and its protection — becomes a key element in building value.

From Pando erects paywall of irrelevance by Adam Tinworth, June 2015:

Pando have decided to erect a paywall. I guess we’ll find out how many people are willing to pay for undifferentiated opinion in a heavily over-provided news space (startup-centric tech), huh? Having spent over a decade working with paywalled business, both successful and unsuccessful, it’s pretty clear that people will pay for news they can use – and not undifferentiated news and opinion. My experience of reading Pando is that they have the latter not the former.

Notes:
(1) Both Frédéric Filloux and Adam Tinworth agree on the same requirement for charging for content, but use different phrases: Frédéric talks about “uniqueness of content”, and Adam “differentiated news and opinion”.
(2) I suspect that many content entrepreneurs overestimate the degree to which their content is unique. What many content entrepreneurs see as differentiation in subject matter and style is often indistinguishable to readers. Perhaps this is the core of Adam Tinworth’s criticism of Pando.
(3) Note Adam’s addition that “people will pay for news they can use”. See: The content business: Entertainment, or helping users make decisions?
(4) What are the implications for Seeking Alpha’s subscription businesses, PRO and Marketplace? (a) Seeking Alpha’s content is unique and differentiated (for example, Seeking Alpha is now the only venue for meaningful analysis of many small cap stocks), and (b) high quality analysis of stocks is intrinsically valuable.
(5) Our challenge is to ensure our paid content is unique and differentiated versus what we give away for free. Yesterday I met a hedge fund manager who said “I use Seeking Alpha regularly, and it’s free. Thank you!”

The most important quality of a successful startup founder or CEO

Edited excerpt from Sunday Conversation #1: Peter Fenton, Benchmark Capital by Semil Shah:

I think there’s just a profound, deep, innate motivation. A lot of what happens after the fanfare of starting a company and hiring people is, “Why are we here, what’s the purpose, and why are we doing this?” Great entrepreneurs have a motivation that runs so deep that it feels insatiable, and that is infectious. It lets other people around them have that motivation.

I often ask the question of a company, what’s the purpose, why are you doing this. You’d be amazed at how few entrepreneurs can really answer that question. The great ones can. They have a real sense of the purpose, and it’s usually not about them.

Notes:
(1) Motivation is strongly related to courage and the ability to persevere — see Every successful entrepreneur has this quality.
(2) Motivation is also similar to passion. See Necessary qualities in founders – Marc Suster’s shortlist.
(3) “Profound, deep, innate motivation” seems more foundational than the qualities listed by Ben Horowitz in Three key traits in a great CEO — and any leader.

To build a great culture for your startup, be explicit

Edited excerpt from Happy Birthday HubSpot! 9 Lessons From Our First 9 Years by Dharmesh Shah:

In our early years, we didn’t talk about culture much. We hadn’t documented it all. We just built a business that we wanted to work in. But the real return on culture happened when we started getting more deliberate about it. By writing it down. By debating it. By taking it apart, polishing the pieces and putting it back together. Iterating. Again. And again. And again.

Make some small investments. For starters, have some conversations about the who. What kind of people do you want on the team? Try to avoid platitudes. Make a list of attributes and traits that other companies avoid, but tend to work for you. And vice versa. Write this list down, even if it’s just a simple email to the team. Once you start writing your culture down, a couple of surprising things will happen: 1) You’ll realize you got parts of it wrong (because people will tell you). 2) You’ll increase the chances of hiring for “culture fit” without falling into the trap of toxic homogeneity where you just hire people like yourself under the guise of “culture fit”. Short rant on that topic: No company should be able to skip over candidates for lack of “culture fit” unless it has at least a minimal clue of what that culture is.

One of my regrets about culture at HubSpot is that we didn’t wake up to the value of diversity until much later in our evolution. If you’re just getting started, take my advice: Be mindful of diversity super-early and beware the homogenity traps.

The best growth teams maximize the velocity of tests

Excerpt from Growth Lessons Learned from LinkedIn by Sachin Rekhi:

Given there is absolutely no substitute for simply running a test to know whether it’s going to be successful, the very best growth teams optimize for velocity of A/B tests they can run.

There are a lot of things that slow down testing velocity – all of which can be optimized. Ability to divide up your audience into orthogonal sub-segments is important to ensure your tests don’t interfere but you can run as many as possible simultaneously. Improving the throughput of test analysis is important so you limit the time you can decide whether to ramp a test or move on to the next variant. Developing a backlog of upcoming tests and regularly grooming that backlog will help you ensure you always are prepared for the next test. Streamlining your test ideation and brainstorming process will also improve the speed of getting good variants to run.

The point is the single most important thing a growth team can do is not picking the right variant to test, but simply increasing the velocity of tests you are running.

Notes:
(1) Cf. Instilling a culture of experimentation from day one.
(2) Cf. Three advantages of experimenting a lot.

Why another new feature won’t get people to use your product

Edited excerpt from The Next Feature Fallacy: The fallacy that the next new feature will suddenly make people use your product by Andrew Chen:

The average web app faces a precipitous drop-off between initially attracting a user and retaining them over the first month:
– 1000 users visit your homepage to check out your product.
– 20% sign up.
– 80% finish onboarding.
– 40% visit the next day after signup.
– 20% visit the next week after signup.
– 10% visit after 30 days after signup.
– After 30 days, 20 users (out of 1000!) are DAUs.

Two mistakes are often made when designing features meant to bend this engagement curve.  First, too few people will use the feature, particularly if the feature targets engaged/retained users rather than non-users and new users. And second, too little impact is made when they do engage, especially if important or key functions are displayed as optional actions outside the onboarding process.

Picking the features that bend the curve requires a strong understanding of your user lifecycle. First and foremost is maximizing the reach of your feature, so it impacts the most people. It’s a good rule of thumb that the best features often focus mostly on non-users and casual users, with the reason that there’s simply many more of them.

Similarly, it’s important to have deep insights on what users need to do to become activated, so that their first visit is set up properly.

Notes:
(1) Cf. Facebook’s most important advice for product managers.
(2) Cf. Andy Johns on how to build a winning product.