humbledMBA

Dear MBA friends, professors, fellow entrepreneurs:

It's time for a real discussion about why our business school programs are failing at the education of entrepreneurship.

This is not yet-another rant about how business schools students suck at startups.  That's been done, over and over again.  I would like to engage you all in an actual discussion.  I have one goal: to help our business schools get better at teaching entrepreneurship.

I judged a business school entrepreneurial pitch event in May.  Teams of hard working MBA students had spent 10 weeks preparing investor pitches for their companies. Faculty were heavily engaged.  Successful entrepreneurs were brought in to judge the teams.  And as I listened to each team present, all I could think about was how silly this all was.  Absolute silliness.  These students' presentations were so removed from what actual investment presentations look like.  One judge told me in the hall that he had seen more entrepreneurial savviness from a 12 year old's lemonade stand.  He was only half-joking.  And this was an elite top 10 program.  What is going on? Seriously, what is going on with our MBA programs??

It wasn't from lack of effort.  They had worked really hard.  I talked to many of the teams and this project was one of the most important activities they had done in business school thus far.  They were truly proud of their hard work.

It wasn't from lack of support.  The faculty were fully engaged and passionate about teaching these students.

It wasn't from lack of good ideas.  Some of these students had ideas that I know could be immediately fundable if done right.  I saw several that had the potential to become big businesses.

Seriously.  What is going on?  I talked to several faculty members.  These are scholars and teachers for whom I hold the upmost respect.  I told them that this whole eship program was a disservice to these students.  The students had not only failed to learn about entrepreneurship, they had learned many things that were just plain wrong, totally divorced from real world application.  This program was not a foundational piece of education that would help them be successful once outside of classroom. It would hurt them.  As in, they would literally have been better off without going through the experience.

 

And here's the kicker.  The faculty members agreed.

 

That's right.  They know.  They know this is awful stuff.  And they're desperate to get it right.  They know that their entrepreneurship programs are an eye-sore, and they want to make changes.  They're turning to alumni for advice.  They're creating strategic steering committees to discuss the problem.  They want solutions.

It's time for a real discussion.

 

***

 

I've been thinking a lot about this for the last several years.  And I've got some opinions to share on the topic.   Let's be real though.  There aren't going to be easy answers.   We need to dive into some tough topics, and I need your help to do it.  For the time being, I'm focused specifically on helping actual business schools.  As a Y Combinator alum, I know that there are other ways to teach entrepreneurship outside of the classroom.  This is my attempt to focus on fixing it inside the classroom. I've listed out a few initial questions I would like to tackle:

1. What are the root causes leading to business schools failing at the education of entrepreneurship?

2. What are the current best practice for teaching entrepreneurship in a business school setting?

3. What solutions can we recommend to business school faculty to help them make real positive change in the curriculum?

I would like your help with these questions.  Please feel free to leave your comments here on the blog or on Hacker News.  Also feel free to write your own blog post and link to it in the comments.  Please email me your more substantive thoughts at humbledmba AT gmail.com.  I would like to find several people that are interested in joining me in a collaborative follow-up post.  Please send me your perspective — I won't publish anything without your permission.

Please also forward this on to your MBA and entrepreneurship friends and colleagues.  I am contacting Tuck, my alma mater, to have some candid conversations with them.  I would love to hear from people at other schools.  I'm going to do several more posts on this subject.

I'm really looking forward to this discussion.

 

Most Sincerely Yours,

 

Jason Freedman

 

 

 

Find discussion of this post on Hacker News

 

I did an unvacation in Tupelo, Mississippi this past week.  An unvacation is my new M.O., in which I travel to someplace fun but don't take significant time off while there.  My old friends Henderson and Rebecca live  in Tupelo, and it was a really special opportunity to spend some time with them.  One of the many great benefits of doing startups is that it's not that difficult to work from anywhere.  So for the last few days, I've been working out of cafes in downtown Tupelo, enjoying the warm Southern hospitality.

I love working from other places because it helps me leave the echo chamber of Silicon Valley.  Within the U.S., Tupelo, Mississippi is about the farthest one can possibly be from Silicon Valley.  My friends Henderson and Rebecca met at Ole Miss (Hotty Totty!).  They've been married for 4 years now and have made Tupelo their home.  Henderson is practicing law and Rebecca is teaching high school, while also working on her masters.  They have rabbits in their backyard, and they look forward to starting a family together. And just like everyone in Tupelo, they think about money.  They save every chance they get.  And while they're not poor, they can't afford to waste.  Henderson and Rebecca are good people, working incredibly hard to build their lives together.  I'm so proud of them.

After 4 days, I'm now heading back to San Francisco.  With a bit of perspective, I've been thinking a lot about what we're all doing here in StartupLand.  Specifically, I'm thinking about our startups and how they are affecting life for Henderson and Rebecca in Tupelo.  There is one moment from this trip that has randomly become stuck in my mind

Before I left Tupelo, we asked a passerby to take pictures of us.  We each handed her our own camera for the picture.  She took the pictures and handed our cameras back to us.  

So I know this is nuts, but whatever, I'm a startup guy.  I immediately thought of photosharing services, of course.  We were using separate cameras!  I thought of all the entrepreneurs I know that are working their asses off to be involved in that exact moment.  Instagram, Facebook, LiveShare, Color, Path, TwitPic, Posterous, and on and on and on...

It makes me just a bit sad.  Henderson and Rebecca asked me all weekend to tell them about what goes on in Silicon Valley.  They felt like I was a window into this world where the future was being written one line of code at a time.  I wanted to tell them about all the incredible innovations that are occurring in startups right now.  Cool, new technologies that will make their lives better in incredible ways.  I wanted to demonstrate something awesome that would immediately play a role in their lives.  And while I did tell them about a lot of cool stuff.  I left feeling like it was unsubstantial.  

 

Is it just me?  Does anyone else feel this way??

How many of us are solving real problems?  How many of us are doing something that is going to improve the lives of Henderson and Rebecca in Tupelo, Mississippi?  How many of us are making something that is going to help them save money or help them make money or help them increase their quality of life?  

It's been 3.5 years since Tim O'Reilly told us all to stop throwing sheep and do something worthy.  He told us that day, "You have to ask yourself, are we working on the right things?"

 

***

I'm glad we've moved past throwing sheep at each other on Facebook.  I'm glad we've moved past acquiring users by downloading someone's contact list and spamming their friends.  The startup ecosystem is much healthier than it was in 2008.  But still, I'm concerned.  As a fellow geek and early adopter, I'm psyched for one of the photo-sharing concepts to really take off.  I think it'll be sweet to instantly share pictures with my friends in cool new ways.  But I know it's not a huge problem for Henderson and Rebecca.  It's just not an issue that affects them.  I'm concerned about how many of us are working on problems that just don't matter all that much to the rest of the world.

This is just a reminder for all of us, myself included, to stay focused on solving problems.  Real problems, not just the ones that ride the current popularity wave.  Build something people want because it makes their lives better.  When we all stay grounded in this focus, we as an entrepreneurial community do great work.  I know it's possible to make money with fads and flips, but the real value for us all is in solving real problems.  

I apologize for being melodramatic, but fuck it, this is how I feel.  Henderson and Rebecca in Tupelo, Mississippi are counting on us to do meaningful work.  I want to make them proud.

 

 

Find discussion of this post on Hacker News

 

I talked with an uber-talented 27-year old the other night.  She's been working at the same startup for 3.5 years, helping it grow from 7 employees to over 100.  While she started as a utility infielder, helping out with everything that needed doing, she's now become a sophisticated online marketer.   She's ready to try something new, and she asked me if I could be helpful.   I don't know her well, but I'd be comfortable making reasonably introductions on her behalf. We had the following exchange:

 

Me: What are you looking for?

Her:  Anything, really.  I just want it to be a good a fit.

Me:  What sized company would be right?

Her: I'm comfortable with both big and small companies.  It's more important that I like the people.

Me: Is there a particular industry that interests you?

Her: I want to be passionate about the product, but I'm otherwise industry-agnostic.

Me: So, how can I be helpful to you?

Her: If there are any good startups you'd think would be a good match, I'd love an intro.

 

Well, this just drives me fucking crazy.  I actually really want to help this person.  I also have the ability to help her.  But I need her to help me engage.  She doesn't realize it, but she's making it very hard for me to really provide concrete help (read: introductions).  Because she was flexible about everything, I can't really think of a good contact to offer.  I like making introductions when it feels like there is a high probability of a match.  However, I don't want to waste anybody's time, so I won't help her throw darts at the startup map.  Her inability to make any specific preference decisions makes it sound like she hasn't thought through what she really wants.  I'm thinking in the back of my head:  go figure out what you want, and then come back when I can actually be helpful.  But what I tell her is this:

 

Sounds good.  I'll let you know if I hear of anything.

 

And I won't.  She won't pop into my head again.  Maybe if someone in the next 2 days randomly asks me if I know anyone in online marketing looking to make a jump. Maybe then.  But really, she just lost out on an opportunity to make some real progress in her job search.

And here's the kicker.  She was being 100% honest.  She's done small and big companies.  She's done several different industries.  When she says she wants to be passionate about the product and have a great fit with the team, that's all true!  She has honed in on what works for her.  She thinks that by being flexible, she's expanding her possibilities.  

However, the opposite is true.  She'll have fewer opportunities come her way because people like me can't figure out how to help her.  But there's a trick to solving this problem.  It's not super hard to pull off, and I've seen it work fabulously for many people.  Here's the trick:

 

Step 1: Create a Specific Plan A

This little trick is all about positioning.  Whenever you talk to someone about job search stuff/career advisory stuff, give them a very specific interest.  For instance, tell me that you're interested in joining a seed-stage team focused on mobile payments.  Or a post-Series A startup doing social discounts.  Or a high-growth startup in advertising optimization.  Whatever!  Just make it very specific.

If she had said she was interested in mobile payments at the seed-stage level, I would have immediately thought of several people with whom it would be ideal for her to chat.  I would send a warm intro saying that she shares a similar passion and ask them if they would be willing to chat with her.  These people, regardless of whether they were hiring, would be happy to make further introductions if she impressed them with her passion and intelligence.

And now, she would be making progress.  Talking to great people.  Meeting founders of startups.  This is HOW she'd find that group of people out there that will make a great fit.

 

Step 2:  Create a Specific Plan B, Plan C, and Plan D

Now that you're making progress meeting people related to Plan A, start a new stream of networking around Plan B.  Let's say you're also interested in social discount companies.  When talking to a new person that could be helpful with introductions or advice, tell them that you want to get into social discounts.  Don't make mention of mobile payments.

And presto!  You've got a new stream people to meet.  New startups, new founders, new opportunities for serendipity to strike.  

As long as you're being respectful and not wasting anyone's time, most people won't care that you have other interests.  You can even caveat it a bit if you want to let people know that you have other interests outside of your 'focused' plan.  But don't caveat too much.  One, having multiple interests usually goes without saying and two, the goal here is to present an ability to focus.

 

 

 

If you're one of those talented people that works incredibly hard, has contagious energy, but hasn't quite found the the perfect place yet...ping me on LinkedIn and I'll do anything I can to help.

 

But one final note.  There are some people that seem to network as a full-time obsession.  If you're one of those people and you take this advice to an extreme, you'll come off as unauthentic and untrustworthy.  As with anything, apply some reason and some respectful tact in how you handle yourself.

 

 

Find discussion of this post on Hacker News

When we were raising money for FlightCaster in Fall 2009, we met with dozens of investors, both VCs and Angels.  Most of them turned us down.  The investors that did put money into FlightCaster provided us a ton of value, both in terms of their capital and all the support/guidance/networking.  

And what about all those investors that had turned us down?  They actually ended up providing a lot of value as well, and that's what this post is about.  I had noticed a funny trend from each one that had turned us down.  They all closed with a variant of this statement:

"If there's ever anything I can ever do to help, please let me know."

At first, it sounded like a standard pleasantry, in the same vein of "I wish you the best of luck." But then, I started thinking about why it was that every investor was saying it.  I realized that there are two forces at work here:

The first is that many investors are genuinely nice guys that do root for entrepreneurs.  Many made it as entrepreneurs and remember the pain and the hustle.  If (and this is an important if) an action is not at odds with their fiduciary duty to their limited partners, most investors will do what they can to support you.  

The second force at work is pure incentives.  Investors know that relationships matter.  An investor that passed on a company may want back in at a later point if that company takes off.  Or she may want to fund a future company of that entrepreneur.  Doing favors without an investment is a cash-free way to prove to the entrepreneur that they have real value to provide in addition to their capital.  

So, back to our story.  I decided to take them up on their offer.  All of them.  I literally contacted every investor that turned us down and asked for a concrete favor.

We had just launched the FlightCaster product and were working hard to meet people in the industry.  My co-founder Evan Konwiser was not yet recognized as the thought leader of the travel industry that he is today.  We had a big conference coming up where every leader of the travel industry would be in attendance.  And we knew no one.

With a few hours on LinkedIn, I was able to see which investors knew someone that knew someone we wanted to meet.  I sent a personalized version of this email to all those investors that offered to help:

 

Thanks for offering to further support us as we build FlightCaster.

Right now, we're preparing for the PhoCusRight conference next week, the travel industry's largest get together.  We're trying to make some connections with people at the conference.  Can you help us connect with leaders in the Business Travel divisions of Expedia or Orbitz?  Or any other introduction that you feel would help us?

Thanks for the help!

Jason

 

And you know what happened?  A huge number of those investors responded within 48 hours, and most of them were able to help in some way.  And it was the most impressive investors that responded the quickest.  Here's the response I received from Ron Conway the next day (using his classic all caps):

 

I KNOW THE CEO OF EXPEDIA…send us an email template to send to him

Ron

 

So, yes, we got introduced to the CEO of Expedia because Ron Conway, who had previously passed on investing in us, was willing to help.  Booyah!!  Why did he do it? Because Ron Conway is also one of those guys that is fundamentally rooting for the entrepreneur.  

The other reason he did it?  Because we asked.  You don't get shit you don't ask for.

 

 

A few tips on asking for help:

 

Ask for what you want

This is a common Paul Graham statement to YC companies.  Figure out exactly what you need and just ask for it.  Don't play games, don't posture, don't hint.  Just ask for what you want.

 

Make your request very concrete

We didn't ask for general advice.  We did our homework and made very specific requests.  It's much easier for people to respond to concrete requests.  Even if they can't provide for that direct request, the specificity of the request helps them find an alternative way to help.

 

Don't use and abuse

I only wanted to ask these incredibly busy investors for help once or maybe twice.  Obtaining industry introductions was one of the most important necessities of our startup. I made sure to ask for something that they could provide with minimal effort and risk.

 

Pay it forward

We're all part of the same innovation community.  This whole entrepreneurship thing is hard for everyone, but fortunately, everyone has something to offer.  Don't procrastinate on giving back.

 

Say thank you

Investors love knowing the outcome.  For both personal and professional reasons, they're interested in long term relationships.  Do your part by keeping them up to date with your successes.  I like to email everyone that helped me immediately prior to something showing up on Techcrunch.  It helps me communicate to them that I appreciate everything they did to be a part of our success.

 

Give it a shot.  The worst that can happen is that they say no.  And even that's not so bad--investors love knowing that you hustle.  So hustle.

 

 

 

Thank you to all the outstanding individuals that didn't invest in FlightCaster but still went out of their way to support us:

 

Stewart Alsop and Gilman Louie of Alsap Louie

Jon Callaghan of True Ventures

Ron Conway, David Lee, Kevin Carter, and Topher Conway of SV Angel

Brad Feld and Shawn Broderick of TechStars

Jeff Clavier of Softtech VC

Steve Anderson of Baseline

Micheal Dearing of Harrison Metal

Mike Maples of Floodgate

Jonathan Ebinger of Blue Run Ventures

Angus Davis

Pooj Preena

George Pierce of Venture Catalyst

Sam Landman and Michael Yang of Comcast Ventures

Peter Ziebelman of Palo Alto Ventures 

David Shen

Sharam Fouladgar-Mercer of Shasta Ventures

and many more...

 

 

 

Find discussion of this post on Hacker News 

 

 

 

 

I chatted with a young guy last night about his new startup idea.  He's got a vision for a social commerce app with a few cool spins on it.  As I listened to him, I was thinking about how I had heard this exact pitch half a dozen times before.  I also knew I had a lot to offer him in terms of help.  I have a good friend that ran an almost identical company and failed.  I've worked in social commerce, and I know a lot of the players.  I have a lot of opinions about this space.  He then asked me that one question that all entrepreneurs with some scribblings on a napkin always seem to ask:

Do you think it's a good idea?

This is the question he had been so excited to ask.  He's just looking for some validation, someone else that believes in his idea.  And I gave him the same response I give to every entrepreneur with a new, unproven vision of the future:

I have no fucking idea.

When a new entrepreneur comes to you for advice, remember this little tidbit.  And no matter how wise/experienced/successful you become, don't forget it.  Your ability to predict the future is no better than his.  

Don't give bullshit advice.  Don't tell an entrepreneur whether you think his idea will work.  You don't know.  You have absolutely no idea.  Entrepreneurs have to see around several corners.  They have visions for a future that doesn't currently exist.  That vision currently doesn't exist because the product hasn't been made in just the right form and/or because the world is just not ready for it.  Yet.  And you can't predict how or when the world will change.  You may have decent product intuition, but the great achievements in innovation are so massive precisely because everyone else got it wrong at the time.  Don't be that guy.

The danger of providing concept feedback goes even deeper.   With any new concept, the degree of innovation will likely correlate with the odds of failure.  Really big swings, the kind that produce booming grand slams, have to defeat all kinds of odds.  How could you possibly know whether this is one of those times?

One of my favorite investors once explained how he looks for the next big thing.  He drew this venn diagram:

The big ideas, the ones that change the world, they have the potential for strong business fundamentals AND they are unfairly unpopular.  The left side is what most junior associates at VC firms focus on exclusively.  They desperately want to know things like cost of customer acquisition, total addressable market, lifetime value of a user, etc.  It's all useful analysis into the business model of a startup.  The right side is where the real disruption hides.  That's where you find the next uber-innovation. When a concept is unfairly unpopular, everyone is missing something.  And the entrepreneur that figures it out has a massive headstart on the rest of the industry.

When you tell an entrepreneur that you don't think his idea will work, there's a good chance you're right.  Given that almost all startups fail, I'd be willing to bet tht you're right.  Congrats Mr. Brilliant.  Go pat yourself on the back.  You also could be telling Mark Zuckerberg that social networking died with Friendster.  Instead, keep your mouth shut about the feasibility of the concept and find others ways to help.

 

A few ways you can help an entrepreneur:

 

Clarify Hypotheses

 There's often a few core hypotheses baked into an entrepreneur's vision.  Sometimes they're hidden amongst dozens of other feature ideas.  I like to help expose them so that the entrepreneur can focus on attacking those key challenges first.  With my bud's social commerce app, we talked a lot about his user acquisition strategy.  If he is building a business model based around viral user acquisition, then testing that hypothesis is one of the keys to building his business.  Tackle that first before obsessing about how you're going to scale.

 

Advise on Process

Clarifying hypotheses is really just providing insight into a process for thinking about product development.  I try to spend most of my time with entrepreneurs checking to see that they're up-to-date on lean, agile development, and customer development.  Usually people have heard the buzz words, but they often need to talk through how to actually implement a good process that will work for them. 

 

Make Introductions

Entrepreneurs usually need 3 types of introductions: to other entrepreneurs, to potential customers, and to investors.  I consider my network of relationships to be one of my most valuable assets.  I'll always try to connect people with the entrepreneurs and potential customers that either are most likely to help them or are most likely to give them quality feedback.  And I'll happily make introductions to investors when if I myself would invest.

 

Provide Support

The world is changed by determined people who foolishly plow forward, despite perfectly good reasons to quit.  I like to support that foolishness.  I usually just tell them about how many times I've screwed things up...it's helpful to know you're not alone.  And in all seriousness, the road is really, really long.  Having a heart to heart about all the ups and downs can be incredible helpful.

 

If you're an industry expert, this post is especially for you.  You have the most help to provide in terms of introductions and clarifying hypotheses.  And you are the absolute worst person to provide concept advice.  I refer you to Arthur C. Clarke's Three Laws of Prediction: 

1. When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.
2. The only way of discovering the limits of the possible is to venture a little way past them into the impossible.
3. Any sufficiently advanced technology is indistinguishable from magic.

Interested in learning more about why experts get it wrong so often?  I highly recommend Wrong, by David H. Freedman (no relation).

 

And finally a caveat.  There are an incredibly small number of people on this earth who do seem to be able to see around 2 corners repeatedly.  You should go to them for concept advice as much as you possibly can.  Paul Graham of Y Combinator is certainly one of them.

 

Find discussion of this post on Hacker News 

My first startup was Student Lofts in 1998, a loft-building company for college dorms rooms.  I started it on my 3rd day of freshman orientation.  It was the first time I ever created something of my own.  My second startup was DC Discounts, a local discount card company that I started while I was working on Capital Hill.  I started it 3 weeks into my internship when I had grown bored of answering mail.  My third startup was Openvote, an online platform for polling your community.  It was the first time I ever did anything on the web.  My fourth start-up was FlightCaster.  It was the first time I ever found success.  It's been a long road.

1998 - 2002: Student Lofts made good money for a college student.  But on my per hour basis, it was below minimum wage.

2000 - 2001: DC Discounts failed before launch.

2006-  2008: Openvote failed without making any revenue.  It took my investors' money and everything I had, plus credit card debt.

2009 - 2011: FlightCaster sold.

I've been doing startups for over a decade now.  I have skipped summer vacations.  Passed on interesting internships.  Missed on-campus recruiting.  Worked through every Thanksgiving.  I was near-broke for most of my 20's.  I have failed dozens of times.  I've been depressed.  I've been lonely.  In case you were wondering, startups are really, really hard.

Do I regret any of it at all?  Not a chance.  I've sat in BigCo cubicles for very short periods of time.  I know with absolute certainty that it's not the life for me.  I've chosen the life of an entrepreneur because, well, there's nothing else I would rather be doing.  I love creating things from scratch.  I love innovating.  I love motivating people to go beyond what they think is possible.  I love fixing problems.  I love the thrill of closing deals.  I love the rush of being responsible for so many different moving parts.  I love interacting with fantastic people.  I love feeling proud of what I'm doing.  I love being able to go rock climbing at 3pm.  I love biking to work.  Startups are hard, but there are certainly benefits.

It took 4 companies and 10 years of education to get it right just once.  I've read 1000s of blog posts and dozens of books.  I've asked 100s of people for advice.  It's been a long, long road. 

 

I just chatted with an MBA student that came to me for advice.  He was planning on spending his 2nd year of business school working on his startup.  

I asked him: What then?  

He responded: If it takes off, I'll turn down McKinsey and do it full-time.

**sigh**

Sorry dude, it doesn't work that way.

I could be wrong.  Maybe your startup is going to hit the market just right and take off.  You'll be so busy trying to scale, you'll barely have time to deposit checks from investors...

But, I'm probably not wrong.  If you work really hard, you'll get a product launched and hopefully build up some buzz.  Maybe there will be some traction.  But when that decision to McKinsey is due, there is a 99.9% likelihood that you won't have enough traction yet. But if you keep at it, work your ass off, stay determined, iterate like crazy...well, then you might just make it big.

But that's not going to ever happen, is it?

You already know you're going to take that McKinsey offer.  You're Eduardo Saverin from Facebook's infamous history, who did a summer internship at Lehman Brothers while Facebook was skyrocketing with growth.

And that's okay, if that's your decision.  I don't have grudge against the jobs that 99% of people do.  Entrepreneurship is not for everyone.  If you decide to take a job that makes sense for your career and helps you support your family, I support that decision 100%.  But when you ask for advice about your 'startup,' my response is never going to be about your product.  I care far more about you and the potential implications of you romanticizing what it means 'to do a startup.'  My advice:

Don't waste too much of your own money.  

Don't waste anyone else's money.  

Don't drag any co-founders or employees along with you.  

Do it as an educational hobby, but don't call it a startup.

If you're on the fence about entrepreneurship, just don't do it.  This is a big plunge.  If you're not ready to jump both feet first, than you're just not ready.  If you want to be an entrepreneur, a real entrepreneur, you should know up front what you're going to do with that BigCo offer letter.  Skip the whole romanticizing entrepreneurship part. There will be lots of failure.  Lots of opportunities for giving up.  Real entrepreneurs, for whatever reason, keep going at it.  And they know that from the start.  If you're signing up for that long road, give me a call.  I'll help you in any way that I can.

 

 

Find discussion of this post on Hacker News 

 

 

My first company, Openvote, was a question and answer site where people could poll their community.  We had dreams of the site being a forum where bold conversations could take place.  We wanted people to expose the real issues going on at their school or company and really push the envelope of controversy.  We knew that, if successful, we could become a powerful way to give people a voice.  We also knew that the site could easily spiral out of control.  We were very concerned about this prospect.  Very concerned.

We knew we would need ways for users to flag comments that were inappropriate.  But wait, what if people were flagging good comments just because they disagreed? We'd need a way to monitor who was flagging what and allow the community to vote on whether a comment should be removed.  This would probably require some sort of moderator system to help facilitate the process.  Which would also mean that we would need a process by which the community could elect moderators.  They'd need a page so that there would be transparency in the community.  There was a lot to do.

Fortunately, a lot of companies have tackled these types of problems.  We researched how the Wikipedia community is managed.  We looked into Digg's sorting algorithms.  We studied Reddit's process for using moderators.  We followed Hacker News's karma system.  And all of these sites had one thing in common:

 

They had users.

 

We had no one.  No one was spamming us.  No one was leaving inappropriate comments.  No one cared about us.  We were irrelevant.  We weren't pre-product-market fit; we were pre-product!  

We were solving problems that hadn't occurred yet!  And I see this from entrepreneurs all the time. It makes sense.  You pitch your vision all the time.  You invest emotionally in a dream and begin to believe in it as if it's already happened.  You have to because investors/advisor/friends/employees need convincing that this thing is really going to happen. 

And if you let those big fictitious plans infect your product development process, you're in a lot of trouble.  Product development is about figuring out the single most important problem that exists right now and doing that and only that.  It's much harder to do than it sounds.  Somebody has to keep the whole team focused on those issues that are most critical right now.  And that somebody is you.

 

Tips for focusing on the right priorities:

 

Read Getting Real

I recommend this book more than any other book.  Written by the guys from 37 Signals, Getting Real flips the way most people think about product development. Instead of starting with the big vision and working backwards.  You figure out the most important features and build those before doing anything else.  Every single MBA interested in entrepreneurship needs to read this book.

 

Break features into V1, V2, Vx

Take all those awesome, creative, forward-thinking ideas and throw them into a bucket that you label VX.  Keep V1 as your minimum viable product.  Put your next feature request into V2.  You'll be shocked how many times you re-prioritize after V1 and never end up doing what you originally planned for V2.

 

Do stuff that doesn't scale

This is one of my favorite tricks.  Anything you can do upfront that reduces development time, you should do.  Even if that means doing something manually.  Even if it means calling up people one-by-one.  Sign-up forms don't have to be implemented up front.  A recommendations algorithm can be replaced early on with brute force hustle.  

 

Create hypotheses

The goal for a startup is to find product-market fit before running out of money.  Once (and if!) you find it, your goal will be building your business.  But until that happens, you should assume that your hypotheses are wrong and work as quickly as possible to disprove them.  Make sure everyone involved in the company understands the hypothesis on which you're currently working.

 

Use link-testing as trial balloons

Have a hypothesis for a new feature that will take 2 months to build?  Design the page in a day, throw it on your site, and invite people to use it.  When people go to click on the link, ask them to join your beta-testing list for this new feature.  You can even A/B test this with alternative features to help you decide which to build first.

 

Track your speed of experimentation

How long does it take you to prove or disprove a hypothesis?  I love seeing early-stage companies that can execute at such a speed that they're testing a meaningful hypothesis about their company every month.

 

As an entrepreneur starting from scratch, you're not maintaining a battle ship; you're inventing a new type of raft while on the verge of drowning.  Don't plug links when you got no boat.

tl;dr: stay lean.

 

 

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So...

 

Just.  Don't.  Interview.

 

 

 

Interviewing is broken.  Has been for years. This rigid commitment everyone seems to have to the standard resume/cover letter/interview system of hiring is just plain insane.

I've been fascinated by hiring processes for years.  Hiring great talent is such a massively tough challenge, and I see so few companies that do it well.  Even the best companies hide a deep dark secret: their hiring processes don't predict success accurately.  It's long been whispered that Google's sophisticated HR scoring system has little correlation with an employee's success at the company.  One management consultant for a top firm told me recently that, despite incredible efforts to improve hiring analytics, the best predictor of success for junior employees was still just their SAT scores.

Paul English, one of the absolute best said this about his style of hiring at Kayak:

 

"At times, I've fired maybe one out of every three people I've hired. That might make people think I'm bad at hiring, but I think I'm quite good at hiring."

So, Paul English, one of the most respected out there, gets 1 out of 3 wrong?  Shit.  This stuff is hard.  But Kayak is at a stage of development where the organization can sustain the disruption of people leaving.  Most startups I know have such difficulty firing because everything is already so unstable.  Can't fire during a product launch. Can't fire during a funding round.  Let's give him 3 more months and see if things improve...

 

I don't claim to be good at hiring, but I do have a particular style that I learned from some advisors.

I never actually interview people.  Ever.

I think of hiring as mutual courting. The only way to court in a work setting is to spend time working together.  Whenever I'm thinking of hiring someone, whether entry-level or senior, we do a project together.  I pay them a reasonable contractor fee for the work, and I make sure it's the type of work that's easily definable, has clear deliverables, and lasts a few weeks.

Sometimes we do this process and the project goes outstandingly well, and we make a full-time offer.  Our ability at this point to define a job description and compensation package is remarkably easy.  We know what we're getting.  The employee is also motivated at this point because we've all proven ourselves to each other. He's learned the real strengths and weaknesses of the business and of working with the team.  A decision to accept a full-time offer at this point is a well-informed one.

Sometimes, the project turns out only so-so, at which point we wish the very best to the applicant and do whatever we can to help him find a role that is perfectly suited for him.  There's no termination paperwork, no 6 months of trying to make it work, no awkward conversations about his progress behind closed doors.

Sometimes, a talented person can't, for whatever reason, commit to a 3 week project.  But maybe there's a smaller project he can do over nights and weekends.  Maybe there's an open source project of mutual interest.  Maybe he can take 3 days off his oyher job and work half a week and a weekend with us.  If it's a student, maybe he can join us for part of spring break.  And if none of that works, then well, we can't hire him.  And we wish him well and do our best to refer him to a company that will work.

But what we don't ever do is engage in some interview/code puzzle/awkward question process that has nothing to do with what it's really like to work with us.

 

Courting great people, working together temporarily as contractors, and then only engaging in full employment when everything proves out as hoped--that's the way to go. This method is spreading throughout the startup world, and I think it's good for everyone involved.  Most of the BigCo business world doesn't work this way.  Most larger companies have HR departments that hire through a more formal process.  I would guess that BigCo Inc. could actually be far more flexible than it currently is, but that's out of my scope of expertise.  I know for certain that startups can be more creative (and less insane) in their hiring practices...and they should.

 

 

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I was just chatting with a friend that is a successful entrepreneur, advisor, and angel investor.  He has 1700 unread emails in his inbox.  1700!