28 Things I’d Do Differently Next Time Around

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I love reading blogs by founders who try to give back and share what they’ve learned building their companies, so today I’ll try and do the same.

When I look back over the last 15 years building 4 different companies (most recently Bigcommerce), here are some things I’d do different if I was to start another company, as well as a few things I wouldn’t change.

If you’re just getting started, keep in mind that it’s at least a 7-10 year journey, so when the going gets tough I found it can be useful to get some perspective from other founders who have gone down the same path.

Stay focused, be positive and know that even when you “get big” it’s still a roller coaster of ups, downs, highs, lows, fun and fu*ks. That’s why having a big, compelling vision and building a great team around you is so important.

Here’s my list. I hope you find it useful.

Things I’d do differently

  • Hire top down after the first 10 people
  • Invest in design (team or agency) from day one
  • Be tied to your vision and problem statement but not your approach
  • Define customer personas up front and segment by pain/needs
  • Focus on a single pain point and a single persona first
  • Do less, but do it better, especially in product and marketing
  • Start competing in a red ocean but try to redefine the market so it becomes a blue ocean
  • Don’t rely on a single lead source driven by high demand and limited supply
  • See your platform as multiple products not multiple features
  • Hire product managers with strong domain experience
  • Run a 6 month (minimum) closed beta and nail your USP (Unique Selling Point) before going live
  • Go for fewer customers at a much higher ACV
  • Tie a good amount of everyone’s bonus to a customer success metric
  • Build an open platform from day one (RESTful API, also consumed internally)
  • Be patient and work on a 5/7/10 year timeline – ignore competitors and focus on the market opportunity not feature wars
  • Listen to your gut more, especially when it comes to people – assume all resumes are B.S. and back channel at least 5 people who worked with, for and above each candidate
  • Listen to the entire organization (especially those in daily contact with clients) in a way that scales as you grow
  • Build a customer advisory board who are incentivized to provide valuable feedback often
  • Amplify the brand by building and remunerating a team of influencers
  • Understand the 4 styles of leadership and use each effectively depending on the person you’re leading
  • Know which stage your company is in (product market fit, getting ready to scale or scaling) and only read books/blogs related to that stage
  • Make sure all senior leaders have their own executive coaches
  • Listen to and respect opinions, but realize they’re just opinions
  • Don’t be emotional about the business – balance an intense focus on work with family, friends and fitness
  • Realize no one cares as much as you do, and that’s OK
  • Fire fast and be less forgiving of mistakes, especially in departments that are measured with raw numbers, like sales and marketing
  • Don’t speak at conferences – they’re a massive waste of time
  • Don’t assume everyone has honest intentions just because you do
  • Don’t beat yourself up because you make mistakes

Things I’d do again

  • Bootstrap to a MSP then raise a round as soon as you achieve product market fit
  • Recognize people for their achievements in front of the whole company on a regular basis
  • Solve a problem you’ve personally experienced and that you could work on for the next 7-10 years
  • Create a culture that’s different, unique and feels like the founder(s) of the company
  • Constantly ask yourself “who is the BEST person in the world to help me solve X?” and reach out to ask for help – know you can’t fix everything on your own
  • Negotiate hard on valuation to keep as much equity as possible, all the time – give way on terms before equity
  • Early on, raise money from investors who have “been there, done that” – don’t take money from “spreadsheet VCs” because they only understand numbers
  • Hire the best people, regardless of where they are and incentivize them heavily with equity
  • Personally answer as many support inquiries as you can for the first year
  • Own the product for the first year or two to make sure your vision is in the team’s DNA
  • Know who your real competitors are and pay attention but don’t let them distract you from your original vision
  • Be the face of your company and learn how to speak in front of large crowds
  • Be confident hiring people who are twice your age and realize the only place age is a barrier is in your head
  • Celebrate the good times but be brutally honest with everyone when things aren’t going well – and share your plan to get things back on track fast
  • Communicate your vision until you’re blue in the face, then keep talking about it
  • Do what you’re good at and delegate everything else to people who are much, much, much smarter and more experienced than you are
  • Know when it’s time to hire someone to replace you – get a deep understanding of your skills and passions and hire that person before you top out
  • Own the culture and continually shape what it means, reinforce why it’s important and fire anyone who breaches your core values
  • Have zero optionality – no “side project”, no job to fall back on, no plan B. Put your entire life into the company for 2 years then put your head up to assess where you are, how you’re going and decide if it’s time to crank it up or call it a day
  • Get good at pitching your vision and answering tough questions when you’re on the spot
  • Be a genuinely caring person and try to change the world from a place of humity, humbleness and honesty

How do you know when it’s time to fire a manager at your startup?

How to know when to fire a manager
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For first-time entrepreneurs, leading and managing a team of people can be daunting. Yes you have a vision of where you want to take the company, but there’s a huge delta between having an idea and hiring a team to turn that idea into a company with products people will pay you for.

There are countless stories of companies that built great products but failed. And most of them failed for a similar reason – poor execution, or more specifically, not hiring the right people when they were needed.

A CEO’s job is really “just” 3 things:

  1. Set and communicate the vision with all stakeholders
  2. Have enough money in the bank
  3. Hire the best people you can

Point 3 is another way of saying that you also need to fire people you’ve hired who are poor performers. This, I’ve found, is one of the hardest things to do in reality – both for myself (during the early days of Bigcommerce) and for the first-time founders I advise.

So if we all agree that the best companies can hire and retain the best people – and that keeping poor performers around hurts you, your company, your customers, your employees and ultimately your culture, then how do you know when it’s time to fire someone in a management role, such as a manager, director, vice president or even a C-level executive?

I think this is a question that trips up a lot of first-timers. They constantly rationalize keeping a poorly performing manager on the team by sayings things to themselves like:

  • “She did so well at [previous company], maybe it’s my leadership style?”
  • “He helped scale [previous company] from [low revenue] to [high revenue], so maybe it’s our product?”
  • “She’s [older/more experienced/more connected] than me, what would happen to my company if I fired her?!”

Turning rational decisions into emotional ones it the biggest mistake you can make as a founder.

It sounds harsh, but there are frameworks for (almost) every situation you can think of when building a company. Knowing when to fire someone is the perfect example of when a framework or guidelines can help. It takes the emotion out of the equation and helps you make a rational decision.

Firing people is never easy (and it doesn’t really get easier) and it’s the hardest thing you’ll have to do as a CEO. But keeping poor performers on the team will eat at you daily and you’ll become stressed and miserable fast. Better to move them out and move on.

So here’s the framework I’ve used dozens of times to assess whether it’s time to fire someone in a management role. It comprises of two parts: leadership style and time.

Leadership Style

Management 101 teaches us there are four leadership styles you can use when managing people:

  • Coaching – hands on “this is how you do it”-type teaching
  • Directing – tell people exactly what to do and how to do it
  • Delegating – trust a person/people on your team to make a decision and execute
  • Supporting – acting as a sounding board and helping managers think through their ideas and strategy

When you’re a tiny startup, you’ll probably spend most of your time coaching and directing. After all, you’ve got limited cash, limited time and you have a very clear vision for what you and the other 3 people in your startup need to get done.

As time goes on and you hire dozens or hundreds of people, you’ll eventually build out a layer (or a few) of managers. Maybe you start top-down and hire VPs or C-level execs as soon as you raise your series A/B. Or maybe you go bottom-up and hire a few managers to get you by.

Either way, your management style for each leader can give you insight into which managers are doing a great job and which ones need training, clearer goals or need to be replaced.

Time

Assuming you’re beyond product-market fit and into the “getting ready to scale” or scaling phase of growing your company (let’s say 30+ people with at least 3 managers, but typically 100+ people and 5+ managers), think about the manager(s) you spend the most time with where you’re leading by directing as opposed to delegating or supporting.

Let’s say you meet for 2 hours each week with your VP of Sales, Support and Marketing. The meetings go well and because you’re playing a supporting role here, you listen to their ideas, give them advice, things to consider, etc. Like Jack Dorsey says, you’re an editor, not a writer (video).

Great.

Let’s also say you meet with your VP of HR every week for 2 hours, but feel like that meeting is simply you telling him how to do his job. “We need to use this recruiting firm”. “I’d write the job ad like this”. “Go and talk to Joe at [company], he’ll show you how to handle benefits”. You’re taking more of a coaching or directing style of leadership here, definitely not a delegative or supporting one.

Let’s also say you spend 6 hours on average with your VP of HR, not 2, like you do with your other managers. And you come away from every meeting with him scratching your head wondering why you both seem to clash on everything.

“I may as well run the damn HR department!” you say to yourself on a regular basis.

In a situation like this, I’d raise the red flag. You either need to coach your VP of HR and give him a finite amount of time to meet the crystal clear goals you’ve given him (you have given him S.M.A.R.T. goals, right?), or you need to think about replacing him. Fast.

The Holiday Question

A final point I’d add here is something a former mentor once told me.

He essentially said that every time he goes away for a holiday with him family, he thinks about which of his leaders he was spending the most involuntary time with – in other words, where he was forced to spend his time to improve the business.

If that time wasn’t productive and the leader just didn’t get it (i.e. he had to continue to direct instead of delegate or support), he fires that leader and starts the search for a replacement immediately.

Remember that after the first 10 people, your growth, culture and future prospects are determined more by the people you hire (and keep around) than by yourself or your own efforts.

So hire slow, fire fast. Every time I’ve broken that rule it’s hurt. A lot.

How To Hire Software Engineers As A Non-Technical Founder

How to hire software engineers
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Introduction

Engineers are critical to the early success of a technology company, but what if you’ve got a great idea and aren’t technical? How can you go about bringing your idea to life?

Well, there are a few options. You could learn to code using Code Academy, but then there’s opportunity cost – you might pick up the basics of Ruby or Node in a few weeks or months, but during that time you could’ve hired an excellent engineer or two to build your MVP in half that time.

The second option is to find a technical co-founder. This is relatively easy when you’ve got some success behind you. Maybe you sold your previous company, have good relationships with a few investors with strong networks, etc. But if you’re a first-time non-technical founder, it’s hard. Really hard.

The third option is to focus all of your time and energy learning how to hire a great engineer or two. This is the option I’d recommend if you’re a first-time founder without a technical background.

I advise, mentor and invest in quite a few startups under the radar and I’m also writing this guide for them. Not every technology company needs a technical founder and not every successful technology company was founded by an engineer. Most were, but not all of them.

The key, then, is being able to 1) identify top talent and 2) convince them to join you.

Let’s start with identifying top talent. This is part art, art science. And it all starts with how you write your job ad.

Writing your job ad

Sure your first engineer needs to be good technically, but they need to be (almost) perfect culturally over and above everything else.

What do I mean by that? Well, you know the cliche image of a guy in a hoodie with headphones who just wants to sit in the corner and code? You’re not going to hire him – at least, not at this early stage.

You need to write your job ad to focus 70% on who the person is and 30% on what they can do technically. Most ads for engineers focus 100% on their tech skills and 0% on who they are.

By focusing on who they are first and foremost, you instantly turn off engineers who just want to code. And that’s exactly what you want to do. Again, there’s nothing wrong with those engineers, but your first engineering hire needs to want to communicate, brainstorm, be helpful and solve problems in a collaborative way.

Your job ad should be a series of hurdlers – or filters – that turn off 98% of engineers reading the ad. Because it’s the remaining 2% that you want.

So where do you start? Well, you want to keep your ad short. 500 words max in total. Start with an opening paragraph about what you’re building and why it’s important. Immediately after that, jump right in to the attributes you’re looking for in candidates. Some examples are:

  • Honest
  • Hard working
  • Friendly
  • Excellent communicator

List the top 5 attributes you feel are important to you as a founder and that you want to form the foundation of your core values (down the track, when you create them).

Next up, write a few bullet points or a paragraph talking about what a typical day will be like for them. In here you want to talk about a mix of technical and non-technical duties. This acts as another filter. One of the best things to include in this list is customer support. You want the kind of engineers who like customers, not those who are turned off by having to support them.

Round out your ad with benefits, perks and a few bullet points on the technology you need them to be proficient with. One final thing to do is really emphasize that learning is important. Languages and frameworks change so fast that you should aim to hire an engineer who is obsessed with learning.

Finally, including something like this at the end of your job ad:

To be considered for this role, please make sure you tell us your favorite place to vacation as part of your application.

As you start receiving applications and emails, this can help you figure out who read your ad and who simply mass-emailed you their resume. If there’s no mention of where they like to vacation (or anything else you want to include – have a bit of fun with this) then you know they didn’t even take the time to read your ad. If they can’t take a few minutes to read your ad, you shouldn’t hire them. Plain and simple.

Once you’ve written your job ad, it’s time to post it. Without a doubt, the best place to post your ad is Stack Overflow. I’d recommend posting it to a few different high quality, high reach job boards that are specifically focused on engineers and developers as opposed to the general job sites like Indeed or LinkedIn.

Filtering initial candidates

Once your job ad is posted, you’ll start receiving resumes, applications and emails within a few hours. Start by filtering out the ones who didn’t include an answer to where they like to vacation, or whatever question you used. Just go ahead and delete them right away.

For the remaining candidates, read their cover letter or email. You’re looking for excellent writing skills including grammar, spelling and punctuation. You also want their cover letter to be interesting and not cookie cutter. Look for candidates who have taken the time to email you from scratch as opposed to sending you a pre-written template.

How can you tell whether they’ve just copy-and-pasted you a pre-written email? It’s pretty easy. If they reference something specific in your job ad (like your tech stack, your location, your industry, your web site, etc) that’s a good sign.

If you need to hire an engineer in the same city as you (and you aren’t prepared to cover relocation expenses), then read through the resumes and delete any candidates who aren’t from your city.

Going through this process will typically give you maybe 20 candidates out of 100 that apply. The next step is to filter those 20 candidates down to 5.

Screening via video answers

For the 20 candidates left, you’re now going to ask them to record (via their web cam) answers to 3-5 questions. To do that, use Hirevue or Spark Hire - two great platforms that help you get a real sense of each candidate’s communication skills before you spend a minute of your time interviewing them.

What kind of questions should you have them answer? Focus on questions that tell you more about them as a person, such as:

  • What are you looking for in your next position?
  • What are 3 words you would use to describe yourself?
  • What are you currently learning outside of work?

After setting up the questions in Hirevue or Spark Hire, you’ll receive a link which you can share with candidates to see your questions and record their answers. Send each candidate a short email inviting them to answer your questions, like this:

Hi John,

Thank you for your application. From what I can see on your resume and application letter, I’d like to invite you to the next round, which involves answering a few simple questions via your web cam using Hirevue – an interview platform we’re using.

You can go here to see the questions and share your answers with us:
[link here]

Thanks and I look forward to seeing your answers.

The great thing about this hurdle is that it will turn 15 out of the 20 candidates off. And again, that’s what you want. If someone can’t invest just 10 minutes of their time to record a few short video answers, you probably don’t want them at your startup.

The good news is that between 3 and 5 of the candidates will answer your questions. You can then watch their video responses from the Hirevue or Spark Hire dashboards. Look for how they communicate as well as their body language and passion. Do they seem excited by the role or are they flat and disinterested?

From the 5 or so candidates that complete this part of the process, you can now choose the ones you want to interview. I’m a big believer that your first interview, regardless of whether you’re building a co-located or remote team, should be done over Google Hangouts or Skype. It saves both you and the candidate a lot of time and effort.

Initial interview on Google Hangouts

To organize these interviews, just email each candidate to let them know you’ve seen their video answers and that you appreciate the time they took answering your questions. Then offer 3 times over the next few days when you can meet with them on Google Hangouts. These interviews should be scheduled as 30 minutes in your calendar.

During this interview your one and only goal is to answer these 3 questions about each candidate:

  • Would they be a good cultural fit?
  • Are they committed to learning?
  • Are they a genuinely good person?

To get these answers, focus on asking bucket 2 questions. Get to know them as people. What’s important to them in life? What are their values? What do they teach their kids? Who do they spend time with when they’re not working? Who are their idols or mentors?

These interviews will narrow the initial 5 or so candidates down to 2 or 3. At this point, you want to assess their technical skills.

Assessing technical skills

The best way to assess an engineer’s technical skills is to have them complete a technical test. This acts as yet another filter and that’s by design.

You want to create a technical test that takes a few hours to complete. Don’t use multiple choice questions and don’t download one from the Internet.

Ideally you want to find a strong engineer who can help you craft a technical test in the context of 1) the job you’re hiring for and 2) the product you want the engineer to build.

If you don’t know any good engineers, use eLance or oDesk to post a job ad and find an engineer who can help you create the technical test. On eLance, most engineers take technical tests and you can see the results of those tests on their profile. Look for engineers with high ratings on the technologies you’re planning to use as well as excellent ratings for English – ideally those from North America, Australia or the U.K.

In 2-3 hours a great engineer can help you create a technical test that you can share with your shortlisted candidates. The test should focus on having each candidate create a project based on a real feature or use case of the product you’re planning to hire them to build.

The technical test should give them some information on your idea and explain in detail how one particular feature would work. Include wireframes or high-fidelity visuals for that feature and ask them to create that feature as part of your technical test.

If you have a tech stack in mind (such as Ruby on Rails, MySQL and CoffeeScript) then include that in your tech test as well, so you can assess their code using the same languages they’ll be using every day if you hire them.

Once each candidate has completed the technical test, you can pass their code to the engineer you know (or the one you found on oDesk) to have him/her review and rate it on a scale from 1 to 10. Ask the engineer to explain, in detail, what they liked (or didn’t like) about each candidate’s code and why.

The final step

So, you’ve shortlisted 100 candidates down to 3. They’re all great people with the tech skills you need – great. The final step is to setup a Google Hangout for 30 minutes with each candidate. On the Hangout, ask them to walk you through their technical test assuming you have no understanding of programming.

This is critical, because it does two things – first is shows you whether they can “dumb down” the explanation of their models, SQL queries, framework choices, etc and second, if they can explain technical concepts in lamens terms, it shows they’re more than just a “code monkey” – i.e. they’re a great programmer and a great communicator.

On this 30 minute Hangout your only goal is to see if they can actually explain the feature they built as part of the tech test in plain English. Start by asking them to walk you through their code and probe in a few places. Ask questions like:

  • Why did you name that variable like you did?
  • What does the code on line 93 do?
  • Can you tell me a bit more about the pros and cons of CoffeeScript?
  • What would you do differently if you did this test again?

At this point you might have a clear winner or even a few candidates you like. You can then go ahead and choose the best fit – which should really be the candidate you feel you’ll get along with and that your team (if any) will like and learn from.

Conclusion

Hiring great engineers is hard. Someone can be incredibly personable and fun in an interview only to write spaghetti code and argue all day with other engineers.

By walking through the process I’ve described in this post, you should be able to filter out most of those engineers to find the ones who are genuinely good people that value learning and collaboration while seeing engineering as their craft as much as their profession.

Good luck!

Focusing On Averages Will Kill Your Company Culture

Company Culture And Employee Net Promoter Score (eNPS)
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At a macro level there are dozens of ways to get insight in to how your company culture is changing as you grow – you can send quarterly or annual surveys using SurveyMonkey. You can ask for feedback via email. You can do anonymous Q&A at your all-hands meetings, etc.

But the problem with a macro level view is that it’ll tell you, on average, how your culture is and how your employees feel about the company. It’s the average you should be worried about. Instead, you should focus on the whole picture.

For example, if you use eNPS (Employee Net Promoter Score), you might get 64% which on average isn’t bad. But if you were to look across the spectrum of results in this example of a sample company with 414 employees, the eNPS result is deceiving:

Employee Net Promoter Score (eNPS) Sample

Here we can see that 317 (305 + 12) employees love working at the company and are extremely likely to refer their friends for open positions. Great, right? Yes, but what about the sum of all detractors, who are the employees that will go out of their way to speak negatively about your company and tell their friends to stay clear of open positions?

10 + 4 + 8 + 9 + 5 + 6 + 8 = 50. That’s 50 employees out of 414 who really, really don’t like working at your company. Again, on average, your eNPS is pretty good at 64, but ignore the detractors and there’s a good chance things will get worse over time and not better.

Employee Net Promoter Score surveys are typically anonymous, so you might be asking how you can turn those detractors in to passives and then promoters. Good question – and it’s something I’ve spent a lot of time thinking about and experimenting with over the years.

At Bigcommerce, our mojo (which is our eNPS equivalent – remember Austin Powers and his mojo? Yeah, that’s where it came from) on average, has trended up over the years. There was an 18 month period where the wheels came off and it dipped quite a bit across all departments, but we managed to get it back on track and kept it on the up after that.

One big lesson we learned during the dip is that as you grow, it becomes necessary to add layers of management to effectively scale the company. While it’s fun to have 30 direct reports in the early days (ahhh, 2009), no one really likes doing that – founders tolerate it because we have to, but seasoned executives won’t. More growth means more layers: C-levels manage VPs who manage directors who manage managers, etc.

This layering can be dangerous and screw up your culture if anyone in that chain doesn’t fit in to your culture. I wrote previously that fast-growing companies don’t always get hiring right and we’re as guilty of that as anyone else. All of those layers make it harder and harder for founders or the CEO to keep a true pulse on the company’s culture.

The great thing about Bigcommerce, though, is that every member of the executive team obsesses over culture. And they each have their own ways of keeping their finger on the pulse.

The way that’s worked best for me over the years doesn’t scale. It isn’t sexy and you won’t read about it in Fast Company or on The Harvard Business Review blog. And I guess it evolved by accident more than by planning.

My approach simply involved meeting every month or two with about 6-8 different people in the company that 1) were not members of the exec team, 2) were individual contributors or managers, 3) were a good representative sample of the mojo in their team or department and most importantly, 4) would tell it to me as it is and not sugar coat problems.

During out meetings there would be no agenda and I’d just ask what was on their mind. We’d talk about a mix of subjects, from work to what they were learning, what I was doing and what I focused on, when they were next going to Austin or Sydney or SF (depending on which office they’re in), etc.

Besides flattening the company and learning a lot, I’d always leave with one or two nuggets of actionable insight that would help make a change to improve our culture. Doing this with 6-8 people every month or two really gave me a lot of insight. It led to all sorts of actions – people being promoted, fired, moved from one project to another (for good reasons or bad) and even me forcing people to take leave to just rest after a huge project was completed.

As I mentioned earlier, this approach isn’t “text book”. It doesn’t scale, takes a lot of time and can uncover things you don’t really want to hear about people in your company. But man, it’s effective.

The important thing to getting this right is to meet with people who are a good representation of their peers and who have a realistic (not pessimistic, very important) view of their team, department and the company as a whole.

If you end up meeting only with people who are detractors then you’ll leave each meeting feeling disheartened – so choose wisely.

Another important point here is to be yourself and speak openly and honestly about challenges and opportunities in the company. When shit hits the fan, tell them why and get their perspective on the problem and even what they think you should do to fix it. Good advice comes from everywhere in a company, especially individual contributors who are passionate about seeing your (their) company succeed.

For me, these meetings are fun and very informative. They help put things in to perspective and give me valuable insight I couldn’t get from surveys or our executive team. If you’re at the point where you can no longer meet with all of your people one-on-one, then this approach will give you more actionable insight in to your company culture than anything else.

What Company Culture Is (Hint: It’s Not Free Beer, A Hipster Office Or Ping Pong)

R.A. Speaking
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Like most founders, when Eddie and I started Bigcommerce in 2009 (which came out of our previous company, Interspire, which we founded in 2003) we had no idea what company culture was – we simply tried our best to hire a small team of engineers and got to work.

As Bigcommerce started to get legs (10,000 paying customers in the first year with no VC money – all bootstrapped) our goals and ambitions started to get bigger. Instead of aiming for 20,000 customers we started to wonder if we could build a company worth $100M and then $1B.

Today that goal is $1B revenue in the next 5 years.

We knew there were a lot of “ingredients” we’d need for our “recipe” to build a large, lasting technology company. There was the usual stuff every founder knows they intuitively need – cash in the bank, a bigger office, more people and a leadership team.

At the time, I know I didn’t think too much about our company culture. My view was that if we lead by example and tried to hire the best people we could find (and afford), we’d be OK.

And to a certain size that was true.

We would do long days in the office – sometimes working from 8am to 4am. Because most people at the company had no wife/husband and no kids, they did the same. We were honest, friendly and went out of our way to make sure our small team had fun while building great software.

Soon after we raised our series A of $15M in 2011 from General Catalyst, we had our Sydney office and a small team in Austin, Texas. We also hired our first real executive – Robert Alvarez, our CFO.

Rob is still kicking goals and taking names at Bigcommerce and is now our CFO and COO. Much like Jack Dorsey considers Dick Costolo a co-founder at Twitter, I consider Rob (or “RA” as we all call him) a co-founder at Bigcommerce. Bringing him on board was one of our key “founding moments”.

When we started to grow deliberately (raising VC, building out an executive team, delegating the things we each didn’t like or weren’t good at) as opposed to having the slowly-but-surely bootstrapped mentality we had until that point, I started doing a lot of research and reading about how to build a great company culture.

Most of what I read talked about building a start culture that revolved around free beer Fridays, ping pong tables, an XBox, a funky office, expensive chairs, nice Apple laptops, etc. So we did all of that.

But as we started to grow, none of it made a difference – and probably impacted our culture negatively.

I think the real turning point for me and when I started to really “get” company culture was when I started to hear that Rob had been given the nickname of “The Priest” – because everyone would confide in him, ask him for advice and meet with him regularly.

We were dozens (maybe hundreds) of employees by 2013 and I found out Rob was having 1-on-1s with everyone in the Austin office and a lot of the Sydney team. Not as a way for them to vent or complain, but just to chat with them and ask about their family, their life, how they were feeling at the time, etc. Similar to how Jason runs meetings at Medium.

That’s a lot of 1-on-1s every month. 20 on the low end and 40 on the high end. And he did it because he understood what’s involved in building a strong company culture that becomes the foundation on which to scale everything.

After going through the usual ups and downs of a fast-growing startup between 2011 and 2014 (during that time we’d raised $125M, gone from less than $1B in GMV to well over $5B and grown the company from about 20 people to over 400 spread across 3 offices), I remember Ed telling me that he was fascinated with how Rob built out his own team with such incredible people. They were all amazingly smart, humble and genuinely cared about the company, our clients and the people they work with. And he’s never lost or had to fire anyone.

It was at that point Rob explained his “bucket 1, bucket 2″ interview process.

In short, bucket 1 is what you need the person to “do” in their role. For an engineer, it’s creating code. For a sales rep it’s closing deals. For a marketer it’s creating campaigns, etc. 99% of companies hire by simply asking all bucket 1 questions:

  • So tell me about the marketing campaigns you created for Google
  • And what was your role in scaling the technology for Salesforce?
  • Did you meet your sales quota that quarter?

Bucket 2 on the other hand is all about who the person is, how they see the world, what they believe in and what they care about. What does their family mean to them? What built their character over the years? What makes them strive to be better every day? How was their upbringing? Which values do they instill in their kids?

After learning about his bucket 1, bucket 2 hiring approach I was more surprised to learn that during interviews, he spends 95% of his time having conversations around bucket 2 questions. He doesn’t care about their resume and doesn’t prioritize whether someone has “done it before”. He looks for people that align with how he sees the world and what he values in people.

More than that, Rob shares the incredible story of his upbringing and how he turned adversity into enormous personal and professional success. It’s a very personal story, so I won’t share it here. But he “opens the kimono” (as he likes to call it) and shows who he truly is as a human being.

When someone interviews with Rob they walk out of the interview with a mixture of feelings and emotions: they are amazed, humbled, excited, tearful and proud. It’s incredible.

Today, all of our hiring managers and HR team have been trained to understand Rob’s bucket 1, bucket 2 interview process – and they use it not because they have to, but because they want to.

We’ve always hired and fired based on our values, but I now feel we’ve embodied our values at a deeper, more human level thanks to Rob.

Every company has core values, but as you grow your company it’s impossible for the founders to interview everyone – and believe me, we tried. We interviewed every single candidate for the first 100 people we hired. Probably over 1,000 people in total.

For whatever reason though, sometimes hiring managers miss the mark. They might feel they need to fill a role fast and so they compromise by hiring for skills (bucket 1) not cultural fit (bucket 2). This doesn’t mean they’re bad people – it just means that they might’ve been overwhelmed or under-resourced at the time.

By training anyone and everyone who comes in contact with candidates to use the bucket 1, bucket 2 approach (I agree, we need to give it a better name), we’ve transformed our company culture and it keeps getting better every day. Of course it’s not a silver bullet, but to me this is a variation of our “would I have a beer with this person?” view of how Ed and I hired our first 100 people.

This approach scales much better, has more of an impact and can easily be taught to anyone involved in hiring people.

Like most things that can transform a company, this is a simple principle. But having the patience to dismiss a candidate (or fire someone) because they’re 10 out of 10 for bucket 1 and 2 out of 10 for bucket 2 takes patience and determination. To build a sustaining company, you just have to do it.

As we march towards the 500 people mark, it’s a calming thought to know that Rob’s vision for culture is now ingrained in the DNA of Bigcommerce. And the proof is in the pudding. Our mojo reports (our version of employee NPS) are trending up across the company, everyone is extremely motivated and most importantly aligned around our original vision of democratizing commerce for millions of fast-growing businesses.

So in summary, culture isn’t free beer, a nice office or a ping pong table. It’s the composition of the human beings you hire, what they value in life and how they see the world. Make sure those things are right and you’ll be an unstoppable force.

And one more thing – we’re hiring in almost every department across our San Francisco, Austin and Sydney offices.

The 4 Part System I’ve Used For 4 Years To Achieve 10x Productivity

How To Be Productive
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To say I’m obsessed with productivity and time-ROI is probably an understatement. For as long as I can remember I’ve been fascinated with the art and discipline of goal setting. Over the last 10 years I’ve probably tried every system there is. And none of them worked. So I decided to build my own hybrid approach which I’ve been using since 2011.

There are thousands of articles that talk about the impact of goal setting so I’m not going to go there. What I do know, though, is there’s no one-size-fits-all approach. By hacking together the best approaches from various systems and mentors, I’ve created something that I would estimate has helped me to be 10x more productive over the last 4 or so years.

What do I mean by productive? I mean getting more leverage from the resources I have and accomplishing more while exerting less personal effort. I mean defining a clear roadmap for the next 12 months that’s balanced across the important areas of life: health, business, relationships and contribution. I mean knowing what to say yes to – not because it sounds interesting, but because what you say yes to is in context and part of the roadmap you’ve defined for the coming year.

Before any goal setting or productivity system will work, though, you’ve got to have the right people on your team. That means the right leaders (if you own a company), the right partner (if you’re married), etc. Fix your people problems first otherwise they’ll slow you down massively. That lesson is hard to learn but easy to give.

So the system I’ve been using for a while is pretty basic and there are 4 parts. I’ve shared it with maybe 20 people I know (employees, friends, relatives, etc) and it’s changed their lives by dramatically boosting their focus, productivity and clarity. Basically it will make you outcome focused so you stop doing stuff just to be busy.

#1 – Goals categorized by area of focus

Every year starting on December 1st, I spend about a month brainstorming goals for the different areas of my life. I scribble those goals down – even if they aren’t clearly defined yet. I come back to them whenever a new goal comes to mind and add it to the unsorted, messy list.

Once the list is finished, the goals are moved into areas of focus that are important to me. Those areas are:

  1. Family
  2. Marriage
  3. Financial
  4. Giving Back
  5. Investing
  6. Travel
  7. Fun & Hobbies
  8. Possessions
  9. Stuff

It’s no mistake family and marriage are at the top of the list. The areas here come from Ted Leonsis’s great book The Business Of Happiness. His book will change your life and is a must-read.

Ted is a personal mentor of mine and is part of Revolution Growth, through which Steve Case sits on the Bigcommerce board. He is also owner of the Washington Wizards NBA team, which makes flights to Washington exciting.

After you move your goals into the areas of focus, you prioritize them. Most important goals at the top of the list, least important at the bottom. Easy.

#2 – 12 month timeline

The next step is to use something like Google Docs, Photoshop or Trello to create a horizontal timeline of the calendar year. You then go about roughly placing your goals across various months of the year – about where you’d expect to complete that goal.

For example, if you plan to hire a head of marketing early next year, put that goal in February. If you plan to take a trip to Japan later in the year, place that goal in October.

After you’ve placed all of your goals on the timeline, you end up with something like this (click for a larger version):

timeline

This is the timline I created last December for this year (2014). For privacy reasons I’ve blocked out most of the goals, but you can see that I categorize goals by color as they’re laid out on the timline.

As you progress every week, you move the green bar across the timeline to represent where you currently are in the year. As you achieve your goals, you grey them out, like this:

Timeline (December)

This is my actual timeline that I updated this morning. Again, I’ve just blocked out the details. You can see I’ve achieved all but one goal for the year. Goals that were really important for the year are marked with a magenta color as they’re completed – just to remind me of their importance as I look back on them.

You might think it’s weird to position your goals on a timeline like this, but it’s incredible what it does to your subconscious mind. By writing something down and giving it a completion date, you find your goals are almost automatically completed within a few days of that date.

Your brain works behind the scenes to figure out the resources, team, advisors, communication, planning, etc you need to get something done.

#3 – Draft look back statement

You can’t predict the future. Or can you?

Once I’ve laid out my goals on the timeline, I then write a 2-3 page look back statement. I start by asking myself this simple question:

It’s December 31 2014. Knowing you’ve achieved all of your goals, how would you describe the year when you look back?

I look across all of my areas of focus and the goals I’ve set, and I write a story that talks about the success I’ve had during the year. Now you have to remember I’m writing this before the year has even started. I write this on December 31st of the previous year for the upcoming year.

Why do this? It comes back to your subconscious mind. The power of writing something down can’t be underestimated. If you’re a visual learner, the timeline locks the goals in your head. If you’re an audible or kinesthetic learner, the look back statement locks the goals in your head.

So how do you write a look back statement? Organize your list of goals not by area of focus but by overall priority. Start at the top of the list with the most important goal you will achieve next year and work your way down.

Then just write a paragraph describing what achieving that goal means for you today (remember, you’re standing a year in the future from now) and why achieving it was so important for your life.

You must write these paragraphs in past tense, as in, you’ve already achieved them. This is another way to trick your brain and subconscious mind. Your brain has no idea if what you’re telling it is true or not and it assumes everything you say is true and works to make it so.

This has been proven over and over again by science.

#4 – Wheel of life

I’ve borrowed the wheel of life from Tony Robbins. It’s a simple construct that helps you grade each area of focus every week. For areas where you grade yourself low (on a scale of 1 to 10), you dedicate some time and focus to boost your rating – say from a 4/10 to a 7/10.

Your wheel of life is structured as a circle and the areas you want to focus on are included as spokes on the circle, like this (click to see a larger version):

Wheel Of Life

Areas you’re doing well in get a rating of 8, 9 or 10. Areas where you’re doing OK get a 5, 6 or 7. Areas where you’re struggling get a rating of 1, 2, 3 or 4.

The analogy Tony uses for the wheel of life is a tire on a car. If you look at how you connect each of the spokes on the wheel – and if that were a tire on a car – how would the car drive?

A high performance tire is round, so if you look at the example wheel of life above, you’ll see that the spokes are connected with lines that are jagged. If this was a tire on a car, the car would barely drive.

And that’s the idea. You need a focused approach to all of the areas of you life that are important to create a well-rounded tire. If you rate your business progress a 10 and family a 2 then your wheel will be off – and your car (your life) won’t drive (function) well.

See the 3 highlighted areas of focus in yellow? Those are the 3 areas you choose to focus your efforts on over the coming week. Generally you choose the 3 areas where you’ve self-rated the lowest.

You then take those areas and look at which of your goals you can work on in the coming week to drive those ratings up.

In the example wheel of life, those areas of focus are:

  1. Business
  2. Learning
  3. Health

To improve each of those, you’d look at your goals timeline (part #2) and pencil time in your calendar to work on progressing towards the goals you’ve selected. It’s OK to add new goals to your list if you need to as well. The idea is that a system is just a system. It’s there to provide structure and to support you, but it’s not set in stone.

You should review all 4 parts of the system at least once a week and pencil that time into your calendar as a recurring event. I like Sunday afternoons or Monday mornings for an hour.

Once you’ve decided what you’ll focus on for the week, make sure you block out that time in your calendar as well. It’s a forced discipline that lets you “set and forget” so you end up with at least 50% (ideally 70%) of your awake time accounted for. And that’s the time where you’re making progress on the goals you’ve decided are important to you.

That’s it

It’s a pretty simple system that works. The idea is that your yearly goals define your quarterly focus which defines your monthly and weekly priorities which are what you work on to improve the areas of focus that are important to you.

I don’t believe you can be happy when most of your areas of focus aren’t performing well. With this system, you’re forced to give attention to the things you’ve decided matter to you, so it keeps you progressing on all fronts throughout the year.

Like all systems though, it only works if you stick with it. Once I came up with the system it took me a few weeks to get used to it, but now I can’t live without it.

I don’t think it’s a great system if you’re planning incremental gains in your life next year. For those, you can use Clear, Omnifocus, Google Tasks or some other basic system. But if you want to 10x your productivity, goals and progress then maybe give it a shot and see how you like it.

Goals First But Routine A Close Second

Austin Wall
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There are hundreds of goal setting and productivity books, courses, videos, strategies and methodologies you can use in both your business and personal life. And over the last 15 years I’ve tried all of them. I guess I’m what you’d call a productivity nut. I like to do in one year, what most people would be happy accomplishing in 3-5 years.

I see productivity as a game and also as a hobby. I like to 1) find ways to get more done, while 2) producing more output over time while 3) using less of my own time so 4) I ultimately use leverage to achieve the same goals.

There are some basic examples of this I’m sure you’ve heard before. Steve Jobs had a work uniform consisting of a black turtleneck sweater, jeans and running shoes. The idea is that the fewer decisions you have to make in a day, the less likely you are to end up with decision fatigue, reserving more of your brain cycles to make decisions on the things that really matter and that will move the needle.

I’ve found that one of the best ways to eliminate decision fatigue and progress towards your goals almost effortlessly is by structuring a constant and predictable routine of tasks and actions that you just do, regardless of circumstance, external pressures or anything else that might try to get in the way.

Before we get to that, though, let’s talk about goals and goal setting. There are dozens of books on the topic and they range from interesting to mundane, but most of them leave out the most important part of setting any goal – the why. Why will achieving a specific goal improve your life?

Charlie Munger, Warren Buffett’s right-hand man is well known for training his managers on the why principle whenever they’re communicating MBOs (Management By Objectives) to their troops. He will go so far as to fire any manager who doesn’t explain why hitting each MBO is so critical to the business and to each particular individual. If you look at the performance of Berkshire Hathaway, it’s hard to argue with his results.

So, before committing to any goal, understand why achieving that goal is important and what it will mean for you. If there’s not a good enough why, think hard about removing that goal from your list.

Once you have a clear why for each of your goals, the next step is to really break each of your goals down into mini milestones that you can achieve on your way to hitting the bigger goal. For example, let’s say your goal is to make $1M in the next year (all goals should have a deadline, too). You might break it down into milestones as follows:

  1. Make $100,000 in Q1
  2. Make $200,000 in Q2
  3. Make $300,000 in Q3
  4. Make $400,000 in Q4

Now you have four milestones along the way and your brain can focus not on the huge goal of making $1M in the next 12 months, but on the easier milestone of making $100,000 in the next 3 months. It’s a subtle shift in thinking, but perception becomes reality. To your brain, making $100,000 in the next 3 months is a real possibility and exists in your reality, while making $1M in the next year might not feel realistic just yet.

Once you’ve got your milestones worked out, you need to be pig-headed about structuring a routine that will get you to your next milestone. For our example of making $100,000 this quarter, let’s assume you’re a sales rep. Let’s also assume you know how many calls you have to make, your conversion rate, your average deal size and your commission. You can then work backwards to determine your daily work routine – that is, how many calls do you have to make every day to guarantee you’ll hit your milestone:

  • Average deal size: $5,000
  • Commission: 30%
  • Conversion rate: 30%
  • Calls per day: 60

So there it is. Your daily routine must now be scheduled in your calendar to block out the time you need to make 60 phone calls. If that’s 9 hours a day, then it’s 9 hours a day. Jump into Google Calendar, block out 4 hours in the morning and 5 hours in the afternoon and defend that time like your life depends on it.

The thing about achieving goals is that it really can be as easy as the simple process I’ve described above. Now of course you should always be working on a mix of goals that involve health, family, finances, contribution, etc – and these will all have their own mini milestones and time booked into your calendar so you can make progress on them every week.

How many goals you work on at a single time is up to you. There’s a fine line between hitting your goals and feeling like you’ve taken on too much, but that balance comes with time. After a year or two of goals backed with routine, you’ll get a good sense of how much you can take on at any one time and will optimize around that.

Like I said at the beginning, there are hundreds of ways to track and work on goals, but the system you use shouldn’t be complicated or get in the way. For every goal, if you:

  1. Know why it’s important to you
  2. Break it down into mini milestones
  3. Block time on your calendar every week to make progress on the next milestone
  4. Review your progress weekly and course correct along the way

Then you’ll be ahead of 99% of the general population and easily 90% of people who actively set goals. The simpler the process you use, the more likely you are to achieve success. At least that’s what I’ve found.

How to pitch a room full of investors and get a term sheet

Pitching
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In my last post I shared 8 tips for creating the perfect pitch deck. After such an overwhelming response (tens of thousands of readers, 45 questions via twitter/email and almost 5,000 shares via social media) I decided to follow up with a second piece on a topic that’s discussed even less than creating a pitch deck – actually standing in front of potential investors and pitching for capital.

As part of my 5 year journey building Bigcommerce, I’ve raised 3 rounds of venture capital financing. A $15M series A in 2011 from General Catalyst, a $20M series B in 2012, also from General Catalyst, and a $40M series C last year from Steve Case’s Revolution Growth for a total of $75M.

For each round of financing, we created a pitch deck and went on a road show. For all 3 rounds, we received term sheets very early in the process and cut our pitching short, allowing us to get the capital and get back to building the business.

Here are 9 tips to help you do the same – that is, pitch fewer potential investors, get term sheets faster and raise capital so you can get back to building your business and executing on your vision.

Tip #1: Know the investor and their portfolio in detail

Before you pitch a potential investor, spend a few hours on their website. Get to know who the partners are, whether each of them has any operational experience running a company as founder and/or CEO, whether they took their company public or had it acquired and what they’re good at.

A lot of partners at venture capital firms blog too, so search for “[partner name] blog” and read through their posts to learn more about them and their views.

You also want to figure out which other companies they’ve invested in, why, how much and over how many rounds. You’ll want to avoid any investors who have put money into one of your direct competitors, as that would be an obvious conflict of interest and a waste of time.

Tip #2: Don’t pitch on a Monday

This one is short and sweet. Partners at every venture capital firm meet on Monday mornings to discuss potential deals and vote on investments. If you pitch on a Monday afternoon then you’ll be waiting a whole week to hear back  on whether they’re interested in learning more or discussing a term sheet. By then, they’ll have listened to other pitches and may not hold the same level of interest they did on the previous Monday.

Tip #3: Find partners whose thesis aligns with your vision

Most investors have investment theses that form the foundation on which they research, analyze and invest in companies. For example, one of our investors has had a few different theses over the last few years. First it was travel, then e-commerce, then big data.

Inside a single venture capital firm, each partner can have their own investment thesis and it’s important to make sure at least one investor has a thesis that involves your industry or domain. For example, there’s no point pitching your mobile messaging app if none of the investment partners have formed a thesis that mobile messaging has a huge future.

Tip #4: Understand their fund size, life and stage

Venture capitalists raise money every few years from their LPs (Limited Partners) such as wealthy families and University endowments. Each time they raise (yes, they have to do a roadshow and pitch, just like us!), they create a new fund. These funds are typically numbered in sequence (such as fund 4 or fund 5) and have an investment life of about 10 years.

The life of a fund is important, because if you take capital from a fund that only has 3 years left in its life and receive an acquisition offer that you might not want to take, your investor may push you to sell so they can generate a return and attribute it to the same fund from which they invested in your business.

Always ask a potential investor how much capital they have left  in their current fund and how many years are left before they raise their next fund. It’s not always possible, but you want to receive capital in the first 5 years of a fund, which will give you at least 5 years during which to grow your business before the investor starts thinking about payback and return on the fund.

Tip #5: Speak to your strengths and areas of expertise

If your startup has multiple founders, they make sure you each stick to discussing what you’re comfortable with and what you’re an expert at. For example, if you’re a non-technical CEO then defer to your co-founder and CTO for technical questions about your architecture.

Tip #6: Don’t read your pitch deck line-by-line

Never, never, never load up your presentation and just read through it line-by-line . Always focus on one key point for every slide and talk to that point in detail. Look for queues showing extra interest as you speak as well as body language and drill in to a specific topic if you feel it’s appropriate.

Tip #7: Every headline should be phrased as a selling point

Investors, like everyone else, will skim your deck before you pitch and while you’re pitching. Instead of a headline like “We have 100,000 users”, phrase it as a selling point, such as “We signed up 100,000 users in only 45 days”. Remember – you’re essentially selling equity in your business, so focus on benefits.

Here’s the litmus test: if all they did was read the headline on each slide, would they call you in for a meeting?  Make the answer a yes.

Tip #8: Speak about your competitors honestly and in detail

Have one or more reasons why your product is better than the competition, but never underestimate them. Study their businesses inside out and clearly articulate (both visually and audibly) how you position against them. List their weaknesses and their strengths and if appropriate, talk about your plan to turn your weaknesses into strengths against them.

You want to be able to articulate why an incumbent has a huge market share and convincingly convey why you feel you have a shot at winning over their customers.

When we were pitching for our series A in 2011, we clearly identified our 4 biggest competitors and how we would attack each of them. They were each much, much bigger than we were. Today, 2 of them are barely alive, 1 is dead and we’re close to taking out the final competitor, exactly as we anticipated in our pitch deck back then.

Tip #9: You don’t have to know all the answers

Don’t fumble if you can’t answer a question. Just remember the question (ideally write it down, including who asked) and politely ask if you can email or call the partner with the answer later that day or tomorrow, once you’ve had time to do some research or talk to whomever you need to talk to.

Trust me, it’s better not have an answer than to fumble , get nervous and say the first thing that comes to mind.

The other 99%…

There’s a lot more to raising a round of financing than simply creating a pitch deck and nailing its delivery. That’s 1% of the battle. The other 99% is building the right product, hiring amazing people, building a fantastic culture and understanding your metrics. All much, much easier said than done.

How To Create A Pitch Deck That Gets You Funded

Bigcommerce Sydney Office Entrance
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Creating a pitch deck is hard, especially when you’ve never done it before. If you’re a first-time entrepreneur like I was when we raised our series $15M A for Bigcommerce back in 2011, then you’re probably excited, nervous and anxious about raising your first round of financing.

The good news is that a pitch deck can (and should be) be almost formulaic. You’ve got to tell a story, paint a vision, know your metrics and sell, sell sell. Whether you’re raising a small seed round or a bigger series A straight off the bat, you need to get a few things right and the rest will fall into place. In this post I want to share with you 8 tips to create the perfect pitch deck.

There’s a lot of advice out there about creating pitch decks, so why should you take mine? Well, I’ve raised a total of 3 rounds of venture financing for Bigcommerce over the last 3 years totalling $75M. I’ve pitched to dozens of venture capitalists including most of the tier one and tier two VCs up and down the west and east costs. And I’ve received multiple term sheets, all with strong valuations, great terms and the most important thing – great investors and board members.

So let’s jump in. Here are the 8 tips I think are the most important for creating a pitch deck that will make your fundraising experience short, effective and rewarding for you, your co-founders, your employees, your business and your future investors.

Tip #1: Have a big vision – then make it 10x bigger

Having a compelling vision for where you want to take your business is important, but most first-time entrepreneurs think too small . I know I was guilty of this a few years ago. I can tell you now, whatever your vision is, it needs to be bigger and more compelling.

For example, if you have a vision to make it easy for people in a specific country to solve a problem, then expand your vision to help everyone in the world solve that same problem.

How do you know when you’re thinking big enough?

When you’re uncomfortable and even nervous with the size of the vision you’re adding to your pitch deck. Over time you’ll get used to the bigger vision and you’ll be surprised at how much more aggressive it will make you towards pursuing it.

Tip #2: Explain how you’ll use the capital – in detail

“We will invest half in marketing and half in engineering” is not the most articulate way to address how you will spend the hundreds of thousands or millions of dollars you want an investor to trust you with.

Having a detailed financial model for at least the next 2 years will paint a picture of not only your operating expenses but also your revenue growth, margins and potential profit over that time as well.

More than anything, know by department and ideally by business case where you will invest the capital and if you already have a marketing machine with a predictable ROI (i.e. $1 in brings $5 out) then explain that in detail too.

Having an accurate financial forecast will help mitigate some of the risk potential investors see in your business, especially if you’re pre-revenue and/or are a first time entrepreneur. Remember – the more risk you can take away, the better your chances of closing the deal.

Tip #3: Know your metrics better than anyone

For a subscription business it’s CAC, LTV, CAC:LTV, nett MRR, conversion rate, churn (both number of clients and percentage of revenue), gross margin, etc. For other businesses the metrics will be similar. You need to know your current and future metrics in exact detail and you should be able to talk to how you will improve the metrics that aren’t up to scratch.

David Skok wrote the ultimate guide to metrics back in 2010 on his great blog For Entrepreneurs. It’s a long and detailed post, but it’s foundational to understand if you’re raising capital.

Tip #4: Short main deck

This one is simple. Your pitch deck should have two parts: the main deck and an appendix. In the main deck, include slides that are critical to telling your story, showing your metrics, team and vision. Supporting slides should be in the appendix.

How long should your deck be? Generally 30 to 60 slides is about average. The main part of our series C deck, which we used to raise $40M from Revolution, was 26 slides and the appendix was 16 slides for a total of 42 slides.

Tip #5: People grow a company, not capital

The best companies are built by amazing and capable people . Devote at least one slide in your deck to outlining your team and what makes them amazing. Are you an amazing engineer? Spell out your talents and how they contributed to your product. Do you have a strong executive team from A-list companies? Include a mini bio on each executive including the companies they’ve been at and each of their key accomplishments.

For example, has your head of sales built large, high performing sales teams before? If so, call it out. Has your CTO built highly scalable systems that handle tens of millions of users in her previous company? You get the idea.

Investors know you have competitors and generally the strongest team will build the best product and brand and therefore win the market. If you have a strong team, make it known. If your team is just a handful of first-timers then talk to your vision for the team. Who will you hire with the capital and how will you recruit them?

Have ambition to hire and build the best team you can and communicate that ambition in your pitch deck. Be honest about your team’s weaknesses and emphasize your strengths.

Tip #6: Talk about pain and how you solve it

All great pitch decks include a story that guides the reader from the initial pain point to the solution to the promise land (a business with excellent metrics that’s growing quickly). Be sure to talk about the initial pain point your product solves.

How did you come across it? Why are you solving it? Why is your approach the best one and how can you solve the problem for more people as a result of raising capital?

Tip #7: Traction speaks louder than words

Whether you’re generating revenue or not, it’s important to show your product already has traction . Again, this reduces the risk in the eyes of potential investors and gives you a better shot at getting a term sheet.

If you’re generating revenue and it’s accelerating fast, make sure that’s a slide in your pitch deck. If not, look at all of your metrics and choose the one that best represents the potential of your business, such as total number of users, total photos uploaded or similar. Ideally this metric should chart “up and to the right” and show that with a little capital you can push this metric even faster, while on your way to revenue and then profit.

Tip #8: Pitch, polish, repeat

As soon as you’ve wrapped your first pitch, make sure you have a Q&A session at the end. Questions help potential investors get clarity on everything from your numbers to your competitive advantage. Take note of their questions and feedback and use them to tweak your deck before the next pitch.

Repeat this for every pitch you do and after 3 or 4 pitches you should notice you’re getting fewer questions about the content in your deck. Because your pitch deck is continually improving, you should get a lot of positive feedback about your presentation – assuming you’re a captivating speaker and actually have a business that excites potential investors.

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Build a Product Not a Feature

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Over the last few years, access to capital has been cheap and plentiful for investors and that’s had a natural flow-on effect in the startup world. As more money became available to VCs from their LPs (Limited Partners) because of near 0% yields from other investment options, they had the ability to participate in more deals and therefore take more bets.

With the proliferation of sites like KickstarterAnglelList and especially with their new syndication model, VCs are no longer just competing with each other, but competing with a myriad of other money sources, such as entrepreneurs with huge social followings and reach that can build 6 or 7 figure syndicates in a few weeks.

A good example of this was when Tim Ferriss used his reach (via his blog) to create a syndicate and fund Shyp. Up until 1-2 years ago, Shyp probably would’ve raised that financing from a VC. Not so today.

The increase in funding competition has put some VCs at a huge disadvantage, especially those that aren’t tier 1 or tier 2 – i.e. they don’t have a brand name, a track record or dozens of entrepreneurs singing their praises and introducing them to new startups.

In the last few years, that’s led some VCs to start writing checks for feature companies, not product companies – purely so they can deploy enough capital and place enough bets to kick the laws of VC investing into gear (1 in 10 investments will pay back a VCs entire fund – and then some ).

What’s a feature company you ask? Well, let me give you a few examples.

  • Twitter is a product company while Buffer is a feature company
  • Kayak is a product company while HipMunk is a feature company
  • Salesforce is a product company while Streak is a feature company
  • TripAdvisor is a product company while Oyster is a feature company
  • Box is a product company while Hightail (formerly YouSendIt) is a feature company

Now don’t get me wrong – I don’t mean to say that feature companies are sub par to product companies, but there are a few fundamental reasons why I believe you should start by building a full product as opposed to a feature. But before we get to those, what defines a product versus a feature?

Put simply, a product is something that can eventually become a platform on which businesses (B2B) or consumers (B2C) can standardize. The Goliath examples are Facebook, Salesforce, Spotify and Evernote.

A feature company looks like a product company, but because they focus on solving a problem for fewer use cases and therefore fewer businesses or consumers, they are at risk of being squeezed by either the category leader (via the release of a new product or an acquisition of a competitor) or new startups focusing on solving a more common problem statement and therefore providing more value.

So why build a product company instead of stringing together a bunch of features that may or may not become a product that gains traction? Here are three reasons worthy of consideration.

First, you can tell a more compelling story to both the talent you’re trying to recruit and also to investors. It’s a no-brainer that software products aren’t as complex nor as fully-featured as they were even ten years ago, but focusing on building a full product that can stand on its own (i.e. isn’t reliant on a platform like Twitter or being a plug-in to WordPress or an app for Salesforce) allows you to tell a bigger story that addresses a larger market and therefore by default gives you a much better chance of getting traction, because there are more potential customers who will give you money.

Second, the cost and complexity of technology continues to improve day-by-day, so compared to even just a few years ago, it takes less effort to build a product company today. All things being equal, you can now build a product in probably three quarters to half of the time it took in 2004-2008 thanks to Amazon, Github, Heroku, etc.

Third, there’s a better chance you’re focusing on solving a real problem that people will pay you money to fix. Take Kayak (product) and Hipmunk (feature) as the perfect example. Kayak was able to solve a fundamental pain point that all travellers have – wanting a fast, clean and simple way to find and book flights.

Hipmunk on the other hand, solves a use case that a fraction of Kayak’s customers have – displaying flights in a gantt chart view instead of list view. They’ve added hotels and a few other things now, but essentially that’s their value proposition.

Kayak was acquired by Priceline for $1.8B while Hipmunk has raised $20M over a few rounds of financing and looks to be doing OK, but isn’t the Goliath that Kayak is. Yes Kayak invested in building a brand, in partnerships, etc, but it all starts with product-market fit, which Kayak absolutely nailed.

The final reason to build a product company instead of a feature company is that your risk profile drops considerably, primarily because you have a larger TAM (Total Addressable Market) and there’s less risk that one of the incumbents in your space will wipe you out, because it’s harder for them to build a full product than just adding a feature to one of their existing products.

For every point I discuss above, there are dozens of exceptions. For example, Instagram essentially took Facebook’s photos feature and built a $1B feature company . WhatsApp took Facebook’s messaging feature and built a $19B feature company. Then Facebook acquired them both.

Still, I believe your chances of success are much better if you start by building a product company, not a feature company. In that context, I define success as three things:

  1. Starting with a product but ending with a platform on which businesses or consumers can standardize, while developers use your APIs and ecosystem to piggy back on your growth and therefore become revenue contributors by building paid apps for which you take a sizeable revenue share
  2. Building a business with a valuation (either private or public) of $1B or more
  3. Attracting the right kind of talent to help scale the business as it progresses through each stage of growth

If you define success in the same way, then a product company will give you a much better chance of getting there. If not, maybe a feature company should be more your thing. Food for thought, though.

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