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3 Lessons I Learned From Hiring in 2011

I did quite a bit of hiring (resulting in both successes and failures) through 2011. As I’m gearing up for continuing to build our core team here at Tout, I thought it would be prudent to write down some lessons learned based on the things that worked well this year and the things that didn’t.

This is not meant to be a huge world-changing post by any means, just three simple things that I know I want to be more mindful about in the coming year. No big deal.

#1 – Growing the team does not necessarily mean you can do more things

Every time I brought someone on this year, I made them responsible for a specific “area” of the business and held them accountable for it with specific goals and metrics. Sounds great right? Well yes, it does if you’re in a larger well established company (where I got all of my management training).

The interesting thing with Startups is that while we are doing a lot of things and wearing many hats — we’re not doing any of those things very well. In fact, we’re barely grazing by, applying the 80/20 rule to the best of our abilities.

So what happened when I hired? I essentially spun up yet another thread thinking that another person is inherently growing the capacity of the whole organization.

Wrong. In 2012, each hire I bring on is going to be designed (atleast initially) to help us do what we’re already doing better.  I’ve already started to apply this principle with Amy, our new Happiness Officer, and I think its shaping up very nicely.

#2 – Saying something does not necessarily mean the other person agrees; Get in “hard sync”

I say this all the time: even with all the technology we have today, even though we’re more connected than ever before, we still suck at actually communicating.

Far too many times, we had issues where the conversation stalled at “Oh, I didn’t realize thats what you meant.” This happens when a team works out of the same office; but it happens 10x more often when a team is distributed.

The truth of the matter is, human beings naturally like to think what they want to think. They like to stick to their respective mental models. As a manager, unless you force the conversation to get into hard sync on what each person is saying and what they mean and what that looks like almost to a pedantic level — you’re guaranteed to have miscommunication.

In business, especially in Startups, you get a small handfull of do-oevers. So don’t risk miscommunication — get in hard sync.

#3 – There is only one expectation: Excellence

There are two ways of managing a team.

    a) Get into a trap of micromanagement where you constantly have to set short term expectations and assign tasks.
    b) Set a goal. Demand excellence. Enforce independent thinking.

Obviously you want the second. However, it is all to easy to degrade, get stressed, start thinking short term and move back to the first mode of operation.

I oscillated between the two through 2011 with different members of the team and finally realized that either I get each person in the team to operate in right way or we die.

This brings forward some hard decisions because you may find that while certain members of the team can do great things when micro-managed you literally can’t scale the company and take it to the next level if you have to do that — ergo, they are not the right fit.

I am far from cracking the recruitment puzzle or the building the team puzzle, but I think this insight helps: Hire people that can operate at the goal level and deliver excellence. If you can’t find those people, then keep looking — don’t just hire for the short term.

As a Startup Founder, do you have any big lessons learned from 2011? Share your thoughts below.

6 Comments

Categories: my thoughts.

By Tawheed
— December 28, 2011 at 4:27 am

Experienced Hires at Startups: Don’t Forget The Prime Directive

 

Bringing in an experienced hire into an immature organization (such as a startup) is a seriously delicate endeavor. I saw this first hand at my previous job when a company that traditionally hired smart kids from Ivy League schools started to hire seriously seasoned professionals to get us closer to “excellence.” Ignoring or perhaps conveniently forgetting what I had learned during that time, I did the same as I started to hire in Tout. I wanted to bring in someone seriously experienced in Sales so that we can build out our systems and processes and you know… sell more of Tout.

While a lot of things went well with the engagement, a lot of things didn’t and it caused pain for both parties. I saw it in my previous job and I saw it here in Tout. And so, I’ve been giving this a ton of thought to figure out what can be learned.

After much reflection, I think it comes down to one thing. Experienced Hires need to keep “The Prime Directive” at the top of their mind.

What is The Prime Directive?

For you non-trekkies out there, here is the official Wikipedia version of the Prime Directive:

In the universe of Star Trek, the Prime Directive, Starfleet‘s General Order #1, is the most prominent guiding principle of the United Federation of Planets. The Prime Directive dictates that there can be no interference with the internal development of alien civilizations.

It has special implications, however, for civilizations that have not yet developed the technology for interstellar spaceflight (“pre-warp”), since no primitive culture can be given or exposed to any information regarding advanced technology or the existence of extraplanetary civilizations, lest this exposure alter the natural development of the civilization.

The Prime Directive by Example

Much like early civilizations, early stage startups are at the stage of asking “What is water? What is air? Why do we exist in this universe?” On the other hand, advanced civilizations and on that note experienced hires are well beyond that and are now asking “What is particle X? What is particle Y?” — you know, stuff well beyond the basics.

Interestingly enough, this does not mean that the early civilization is sub-par or the experienced hires are better off . A member of an early civilization can go up to an experienced hire and ask “What is air?” — and while the member of the advanced civilization can give a succinct explanation of “Particle X” they may still utterly fail at truly communicating and defining “What is air?” — a definition they’ve learned to take for granted and have internalized.

Essentially, this means is that both members of different civilizations are working off of two very different abstraction layers.

Now, finishing up on that parallel, what if the advanced civilization felt sorry for the early civilization and just “gave them” all of their technology? What then? Would the early civilization leap frog ahead? Ofcourse not. That civilization would basically be screwed. They’d fail to go through the natural progression and learnings that are inherently important to mature in a healthy way. Meaning, they may leap ahead but eventually they’d stall out and die or even worse, lead an incredibly dependent and blind existence off of the advanced civilization.

Connecting the Parallel to Startups, my advice to Experienced Hires

I think the same essential principle (or directive if you will) needs to be applied to Startups and their natural growth cycle. Meaning, if you are an experienced hire, my experience is that your natural inclination will be to sit down and start going down your laundry list of things that are “missing” from the current immature organization which were “obvious” things to have in your previous mature organization.

My advice? STOP.

Yes, the previous organization had a CRM. Yes it had an automated system for scoring leads. Yes, it had Food Replicators that made whichever food you commanded and it would make it appear out of thin air. However, don’t forget what that organization had before that. They probably had an Excel spreadsheet. Before that, maybe a piece of paper or that one marquee lead.

That was the progression, and through each of those progressions, that organization learned valuable lessons, instilled values, established principles and matured their DNA. Those steps were equally important to get them to their success, the success that afforded them great innovation and more importantly: survival.

And most importantly, its important to recognize that while that last organization eventually reached certain conclusions or established certain designs, it does not mean that thats the best design for this particular civilization/organization/company/startup.

What this means is that all the experience and success you bring to a new organization is only valuable if you learn to put it into the context of the Prime Directive, that is if you learn to harness that knowledge and learn to apply it at the right time, in the right way, and most importantly, in tune with the natural progression of the startup’s maturity.

Connecting the Parallel to Startups, my advice to Startup Founders

I know how it is. You’re living in your straw hut. And then you see into the sky a bright and shiny flying saucer. And you think, dude. I want that. Its natural as a Startup Founder to want to find ways to get that competitive edge; to raise the maturity level; and undoubtedly — to get that shiny gadget that sets you apart.

My advice? Pause.

While a competitive advantage or finding that edge is important for your business, nothing beats a strong and fundamental understanding of your business and doing the things necessary to get that. So when you are bringing on experienced hires, or even thinking of investing in that expensive piece of technology — make sure it doesn’t violate the Prime Directive.

 

 

2 Comments

Categories: my thoughts.

By Tawheed
— December 27, 2011 at 4:04 am

Take It Easy

One of our investors, Ben Li, keeps a private wiki for his portfolio companies. It is a place where we can ask questions, have discussions, and just exchange ideas. As I was going through my backlog of emails today, I came across an email from him about one such discussion.

It said:

Subj: Diaspora Co-Founder Ilya Zhitomirskiy passes away at 22 

Hi TK,

I hope you are very well always.

http://wiki/wiki/display/general/Be+relaxed

When your time allows, you may share what you think about it in the wiki. Thanks.

Ben Li

I had no idea someone had passed away in the startup community. That too, someone so young.

Truth is, I probably missed a lot of things over the past few months as I’ve  been heads down building the business. However, over the past few weeks, I have been thinking hard about how I can be more present even while running my business.

I achieved a lifelong dream in 2011: I’ve been able to focus my time on one thing, one product, one company. It’s always been about college + startup, or day job + side project, or consulting projects + startup dream. And then, in 2011, I was able to ramp down on everything but Tout and it felt great.

Working Non-Stop Does Not Scale

However, to somewhat of a surprise, it came with a huge responsibility. It meant that while before there was a forcing function governing how much time I had on something and away from something, there was nothing there now. To make matters more extreme, even more forcing functions went away when I moved 3,000 miles away from my friends, family and wife and set up a space in Mountain View to live+work 24/7 on Tout; even worse, I managed to convince Derek to do it along with me.

It felt amazing at the time, and needless to say our efforts paid off in many different ways to get us to where we are today.

However, only a few months later did I really realize the downside to doing such things. I felt burnt out, pulled in different directions, living on a plane straddling both coasts, moving forward on a product to get the next group of customers while keeping our current paid customer base happy.

I think only idiots actually think that Startups are actually easy. I knew that none of this would be easy. In fact, to the contrary, I knew this would be hard. Anyone I talked to reiterated that this would be hard, that there would be pain. And I think that is probably what made me ignore my own pain and made me keep forging ahead.

At the end of the day though, this doesn’t scale. And with startup founders everywhere trying to iterate fast and build businesses that scale exponentially are in fact, ironically, doing it all in a manner which does not scale. Any successful startup takes 18+ months for a medium sized exit (non acq-hire) and atleast 3 years to become an overnight success. 

I came  to this realization about two months ago and since then have been spending a lot of my time simplifying my life. No more bi-coastal team. No more straddling both coasts. Less hectic, more zen. More focus, less open threads.

Bottom line? Take It Easy.

What it means to “Take It Easy”

Sure, I know what you’re thinking. “I saw your tweets TK, you worked through Christmas on that Year In Review thing, this post is bulls*it.”

Not quite. There is a method to my madness. What I’m suggesting by “Take It Easy” is not to go all “lifestyle business” on your startup; but what I’m suggesting is to keep the biggest picture in mind as you’re killing yourself to build your company.

As I reflected over the last 15+ years of me being an Entrepreneur (both in traditional businesses and in high-growth startups), I’ve tried all different ways of working. 100 hour work weeks, multiple projects/jobs at once, and even this past summer where I lived and worked in the same space. After having tried these different things, I’ve come to believe in two key principles to reach peak performance:

Principle #1 – “Time away is just as important as time on the job”
Being completely engulfed in one thing almost always is a disaster. It almost always diminishes your perspective, makes you lose sight of the goal and most importantly gets you to reach a local maximum at best. So the next time you think you’re adding value on your 80th hour on the job — think again.

Principle #2 – “Choose 1 thing, don’t end up neither here nor there”

This one took some time to figure out for me but I think is quite profound. On any given day, you’re going to have a million things you HAVE TO AND SHOULD get done, but in reality you’ll probably get 3 of those things done. That is just a matter of reality. The worst thing we do as Entrepreneurs is ignore that reality and try to accomplish it all. Where that leaves us is the dreaded “neither here, nor there” state. You accomplish nothing, you’re stressed at the end of the day, and worst of all, you lost a whole day only to feel the same way the next day. You’re neither here, nor there. I think for cases like these, the best thing to do is to embrace reality and choose the one thing you’re actually going to do. And yes, that 1 thing could very well be to go to the beach, because you’re tired and burnt out and you really can’t produce anything better.

–

This is hard. But that does not mean it has to be painful. Let’s be present in this beautiful moment we’ve all been given as an opportunity to change the world and let’s do it without killing ourselves in the process. Take it easy.

16 Comments

Categories: my thoughts, Principles, self improvement.

By Tawheed
— December 27, 2011 at 2:37 am

Customer Service at Startups

One of the things I’ve been thinking about lately as I build Tout as a business is how we deal with Customer Service. It’s the natural progression of things, you first figure out how to build a product that people give a damn about, then you get them to actually use it, and then you come to the realization that a) people aren’t perfect and b) software isn’t perfect. Enter: Customer service, and the pursuit of “Great customer service.”

“Great Customer Service” is not a real goal

After nearly a year of growing Tout, I went from doing all our customer service via email — to getting a ticketing system — and then to hiring someone for “owning” community management. Through this time, I’ve come to learn one thing: there is no such thing as great customer service.

Naiively perhaps, I always figured that there was one true way to do customer service. You give the customer what they want, as fast as possible and they’ll be happy, they’ll pay you, and everything will be fantastic in the world. Simple, right?

Wrong. It turns out much like most things in business, what you define your Customer Service experience to be is determined largely from a series of tradeoffs that you determine based on the goals of your business.

As we’ve grappled with the different challenges around meeting our customer’s needs within the natural limitations of a Startup, here are the key principles that I’ve followed to guide my decisions so that we can get to providing “Great Customer service.”

#1 – Know your Priorities

This may be obvious but in practice we tend to forget this all the time. When it comes to your customers, and taking care of them, know where it falls in terms of Priority. When it comes to choosing between handling the 100 E-Mail tickets that came in today vs. Releasing that 1 feature that will get you another 5,000 users, know which one is more important.

The idea behind prioritization should bubble upward and downward as well. Meaning, you should know how you want to prioritize your 100 tickets (priorities bubbling down), and you should also know how important customer tickets are on a given day, week or month with respect to your higher level (bubbling upward) business goals.

You have X number of hours in a day, by explicitly prioritizing, you can atleast tell yourself the truth. There is a huge difference between working on your next killer feature while worrying about your customer tickets in the back of your mind (you know that nagging feeling) VS. working on your next killer feature and NOT worrying about your customer tickets because you’ve made an explicit decision in your mind.

I don’t think there is a cut and dry prioritization here — which is the basic truth everyone should come to terms with. Just know what YOUR prioritization is. Given the stage of your business, your customers may not be #1 — and that is OK — as long as it is explicit.

#2 – Know the different ways you can say “Yes” to a customer

This one took a while for me to realize and define. The goal of a customer interaction is not to give them what he or she wants immediately regardless of what your company can afford to do — the goal is to make the customer feel “good” or even “Ok” with the situation if you cannot get to “Great.”

We often think that the best service organizations are the ones that always give the customer exactly what they want or go above and beyond. Not true.

I think the best organizations know how to make the customer feel good about the situation where they may have been originally feeling bad, and then work with the customer to solve their problems on a timeline that is realistic for everyone.

So, remember that saying “yes” is not the only currency you have. Figure out what else you can offer the customer that can alleviate their concern until you can solve the root of their issue.

One example of this is telling the customer “I’m sorry, but we can’t help you immediately because of X but I’m going to keep you updated through the process, and in the mean time, we’re going to comp you for X months.”  – giving your product gratis is a form of currency. So is sending them a hand written card, or giving them a phone call instead of firing off another Email.

So to summarize, figure out all the different things you can do for your customer — it’ll give you a lot more flexibility and remove a lot of stress for you.

#3 – Know whether you’re going to for “quick fixes” vs. “systematic fixes”

This principle actually doesn’t just apply to Customer Service, but can apply to any function in your business. As you’re working through your tickets, it can get very easy to just “do” them. In fact, thats what us human beings love doing — we love to “do.” It feels good.

Well, pause and take a step back. Its important to figure out what strategy you want to follow as you’re addressing customer issues. For any given customer problem, you always have the option of “going into the database” and “doing a quick fix” by “flipping that field.. or deleting that record” — OR — taking a step back, figuring out how many tickets are of this same nature and seeing if releasing a quick bug fix or feature enhancement would solve the problem for not only the tickets from today but will have a serious impact on your ticket volume overall.

Quick fixes are easy, fast, and gets your customer to a happy state. Systematic fixes preemptively solves the next 10 tickets that are going to come in.

Given the amount of development resources you have and the time cost of the person doing tickets — figure out which strategy you want to be following.

#4 – Try to be more “Proactive” vs “Reactive”

Over here at Tout, we think of anyone we hire around Community and Customer Service more as Content Creators and Communicators rather than “Service Reps.” In fact, I hate the term “Service Rep,” “Customer Service Associate” or anything of that nature — it is boring, uninspiring, and it just plain sucks to be in roles like that.

With that said, most Startups (and companies) take a more reactive approach to Customer Service. They wait for tickets to come, they resolve them, and then they move on.

We hate that. We hate the idea of only interacting with our customers when something goes wrong — and even worse, waiting until they write in about something going wrong.

So, our Tout Happiness Officer (we’re hiring one more by the way), not just responds to tickets, but is responsible for developing content for Tout University where our new customers can learn how to use Tout to be successful. She’s responsible for proactively reaching out to customers so we can learn how they are using Tout and feature them on our blog, and even flesh out our Knowledge Base where customers can go for quick help.

This principle reminds us that solving just this customer’s problem today is not success, but success is putting the systems and resources in place that can help the next 10 customers.

In Conclusion…

We have all these misconceptions and frustrations around Customer Service. I think it has become one of those phrases and roles that we take for granted without stopping and thinking… well — “What does it really mean?”

Our team works and thinks hard about customer service every day. There are things that frustrate us, there are things that we work hard on, and there are things that are working quite well. It ain’t perfect but atleast with these principles, we’ve started to get an understanding of how we want to serve our customers and how we can get there.

In fact, the next thing we’re doing to make our service more excellent is to hire our first full-time Tout Happiness Officer. If all these principles and the things I’ve talked about here are interesting to you, drop me a line.

 

No Comments

Categories: entrepreneurship, my thoughts, Principles.

By Tawheed
— November 16, 2011 at 9:02 pm

We are moving to San Francisco

It started about two months ago. Mahrin and I sat down and reflected on our life and career goals. Then, I sat down and reflected on my goals for Tout. Finally, it ended in a simple Facebook update a few weeks ago, slowly letting our Friends and more importantly Family know: We are moving to San Francisco.

Now, this isn’t going to be one of those deeply reflective and analytical posts about how I came about this decision. There isn’t much more to it than “it just felt right.” It actually has very little to do with the ongoing Silicon Valley vs. New York debate (which I hate). In fact, I truly believe location has very little to do with how successful a company is, in fact I think it has more to do with how the location makes the Entrepreneur and Team feel.

Simply put, I just felt more at peace in San Francisco while building Tout. And so, I’m going to be spending the last three weeks of October in New York, making sure our extremely valued NY Sales Team can continue to function with me in SF, saying goodbye to our dear family and friends (whom I’ve known for 18 years of living in New York, and Mahrin has known through the ~3 years we’ve been married), and enjoying as much of my Mom’s home cooking as possible. And then, Mahrin and I will be buying a one-way ticket and flying to San Francisco.

Consider this our way of staying hungry and being foolish.

4 Comments

Categories: my thoughts.

By Tawheed
— October 10, 2011 at 10:24 pm

Everything you can learn from Steve Jobs via Youtube

Steve Jobs’ death impacted me emotionally in a way that I didn’t expect at all. To cope, I’ve been watching a ton of his videos off of Youtube. Maybe its just to hear his voice, maybe its to extract all the “genius” I possibly can out of him while his energy is still strong in this world, or maybe because I need him now to build Tout (my startup) more than I ever have before.

Either way, these videos have been helpful for me and I thought I’d share them in one blog entry. Now that he has passed on, here is everything you can learn from Steve Jobs via the magic of Youtube.

Steve Jobs on Branding

The Apple brand is recognized across the globe, it stands right up there today with Nike and Coca Cola. However, it wasn’t always that way. Here is Steve Jobs talking about what needs to be done to bring Apple’s broken brand to the likes of Nike. I love this video because here, Steve talks about the essence of Branding and Marketing. He teaches us the core lesson he consistently applied to make himself a great salesman: don’t sell the product, sell the dream.

 

Steve Jobs on Passion and Persistence

In this short video, Steve talks about what it takes to be successful. Although what he’s saying here isn’t anything profound or original, maybe more startup founders will actually listen. The key to success is Passion and Persistence. If you don’t love it, you’re not going to succeed — even if you pivoted into it and your customers say they’ll pay for it — if you’re not IN it — you won’t stick to it long enough to truly succeed.

Steve on Giving a Demo

One of the things I noticed about Steve is that when it comes to giving demos, he moves at about 10 miles per hour (a.k.a. slow). There is no feature too minute, no detail to graze over, and no person that is unimportant enough when it comes to giving a Demo. Although we are used to seeing his presentations during Keynotes, I thought this video of Steve giving a demo of a new Apple Store is a great way to exemplify this point. Just watch how he takes his time, starts with the overall conceptual model of the whole store and then slowly starts to go over “features and benefits” all at a 10 mph pace as if he’s talking to a 5 year old.

Steve on Customer Development

Thanks to Eric’s Lean Startup Movement, “Customer Development” is one of the key phrases often being used constantly. However, I think very few people actually know what “success” looks like when you’ve truly done proper customer development and when you truly have an informed hypothesis about your target market. In these two videos, Steve talks about the customer development they did at NeXT and lays out bit by bit how the entire company’s product development and marketing will be planned based on their learnings.

As a separate note, I’d like to reiterate another point: take a look at how much effort Steve is putting into spreading the knowledge throughout the entire company. He’s takin the time to do this “chalktalk” and walk each and every person in the company through the thinking process he is using to make critical decisions for the company. There’s only one other person I’ve seen do this in my career, and he was a billionaire too.

Steve on Life

I left this one for last because a) this is the best video of Steve and b) this is probably the video you’ve already seen. In his commencement address, Steve talks about his life’s story and talks about his philosophy behind life. Best of all, he doesn’t claim to have known all this all along, he gives this advice as a synthesis of what he’s learned so far based on his life’s journey. If you haven’t watched this before, this is a must watch.

And that is all. That is pretty much everything you can learn from Steve, atleast via Youtube. We’ve lost a tremendous person, but I am thankful that we live in a time (partly made possible by him) when we can spread the knowledge he imparted on the world faster than ever before.

Stay hungry, stay foolish.

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Categories: my thoughts.

By Tawheed
— October 9, 2011 at 9:42 pm

Death

 

 

 

 

 

 

 

 

Steve Jobs died today.

I offer my most sincere condolences to his family, friends, and coworkers.

There are no words that I can say to even begin to express what I feel or how I felt toward Steve. He is a man that I have never met and yet he impacted both my physical world and my spiritual world in such a profound way.

In fact, the only thing I really can comment about is “Death.”Here’s a re-post of an entry I wrote when I first truly learned about what Death feels like — it was when my Grandfather died in 2003.

Steve Jobs
1955 – 2011
Rest in peace…

Below is the repost (from my original Xanga blog)

–

Before January 9th 2003, I always believed that I did understand death, but boy was I wrong. Its such an amazing thing when you really think about it. Something that can only be compared to its counterpart: birth…and something that makes everything else seem so weak, feeble and inconsequential.

At the same time, it has the power to glorify ones life and has the ability to bring out the best in people surrounding the deceased.

On January 9th, I had perhaps the biggest epiphany of my life when my grandfather died. It wasn’t like I’ve never known of a person to die…you hear it all the time on TV, distant relatives pass away… but this… this was different. That day, I realized I found out the true meaning of death.

It made me think twice about all the things I obsess about in my day to day life, all the things I aspire for, all the thoughts that run through my head about my future….Needless to say, it was one of the most painful things for me, to have him pass away.

At the moment I found out, I had a part of my life flash through my mind, the days I used to spend with him when I was a kid…we were incredibly close. When I was a kid, I didn’t have too may friends my age, I used to spend a lot of time alone and just being bored out of my mind. But all the time, my grandfather was the one that used to come to my rescue to spend time with me and teach me all different things.

I feel that before this, I never really felt real pain, or sadness… And even today, a good couple of weeks later, I’m convinced that the pain never really goes away, but thats really the nature of death.

Death is permanent….read that again….Death is permanent….I don’t think I ever really understood the word permanent before like I do now. Death is permanent in the way that I can never call up Bangladesh and hear my grandfather’s voice on the phone…Permanent in the way that I can never go to the airport and give him a hug and welcome him to New York. Permanent in the way that I can never e-mail him again telling him about how school is going..Permanent in the way that I can never introduce him to the woman I love. Permanent in the way that only a day before January 9th, I was having a wonderful phone conversation with him but now I can never call him ever again.

Even amidst my sadness, which I still feel today, and even through the random times I remember him and still come to tears, I feel proud and happy for him. He was a truly great man, through his life, he went against the odds, and helped countless people and accomplished so much that I can’t even begin to tell…After all of that, after living such a fulfilled life, he left this world with nothing but a smile on his face…with hundreds of people at his funeral remembering him and his life……what more could a man ask for?

After his death, I really started to take a long hard look at myself…and in my college years, as I’m constantly changing the person that I am and turning to be…..I came to some conclusions about what I want to do in life and what kind of a person I want to turn out to be……and as I did so…I constantly found myself turning to look at the life of my grandfather and how well he did it all….

Borrowing from what my brother wrote in his xanga about all this..

See you at the crossroads, so you won’t be lonely..
See you at the crossroads, so you won’t be gone..

K.M.M Abdul Kader
February 1st, 1924 to January 9th, 2003
Rest in peace…

2 Comments

Categories: my thoughts.

By Tawheed
— October 5, 2011 at 8:59 pm

The New York Startup Scene is Important, but for Different Reasons than You Think…

Now that Ron Conway, Paul Graham, Dave McClure and many others have opined on how New York is and isn’t important, I think its time some real New Yorkers shared what their thoughts are about this scene. I’ll start.

As an Entrepreneur straddling both coasts, I get asked the same question almost every day: “So are you going to stay in Silicon Valley or go back to New York?!” The questions intensified when I went back this past week, so I decided to reflect on it a little. I had always been bullish about New York but after spending this past summer in California, and after having spent about 18 months in California back in 2006, I thought I’d compare, contrast and reflect here.

The New York Startup Scene is Important

Not to be overly dramatic or anything, but the New York Startup Scene is going to be incredibly important. But after experiencing Silicon Valley all over again, I came to the realization that New York is never going to be Silicon Valley, but it’ll be important for a whole different set of reasons — that is if New Yorkers choose to let it. Let me explain by drawing a parallel in the Finance industry.


When it comes to the financial industry, most think of New York to be the center of that world. Images of stock brokers, wall street, and huge bonuses come to mind. The opening bell in the New York stock exchange beacons the start of trading for the worlds complicated financial ecosystem.

However, there is one other key “center” that actually takes precedence over New York. Not becuase of the volume of trades, or for being the source of actual innovation, but because of its location and it’s reach in terms of distribution. London, because of its relative centrality to all timezones, serves to be the true center and financial mediator of our advanced financial world.

The brokers in London, through the course of their workday, have the most access and therefore the most liquidity with all relevant financial markets. In an industry where real time connections drive profits, London’s ability to get on the phone with any important financial market through the course of their natural workdays makes it the real center of the financial world.

With that said, I believe that while Silicon Valley will be the center of pure technology innovation for the foreseeable future, New York is quickly becoming the London of the tech industry.

Let’s think about that analogy for a second. Undoubtedly, Silicon Valley has been the chief source of grand technology innovation for the last 50 years. And because of that, we’ve become incredibly good at rolling out new and exciting applications of that pure technology to solve real industry problems.

However, much like how New York is at a disadvantage in reaching out to world markets during their official trading hours, Silicon Valley faces a similar disadvantage due to lack of convenient access to domain knowledge in industries in need of tech innovation.

Enter New York, the London of the tech industry. With unlimited access to countless industries, any meetup, bar, restaurant or social event you attend will be filled with domain knowldedge from atleast 5 different industries.

In this era where pure tech from Silicon Valley allows people to release beauiful, functional, and diruptive applications in just 3 days, it is no longer about tech innovation, it is about problem space innovation. This makes New York very very important.

New Yorkers: quit trying to catch up to Silicon Valley

So New Yorkers, my advice to you is to quit trying to mimic, model or catch up to Silicon Valley. If New York is going to become important in the tech sector, its time you do what every nerd does when they come of age and finally stop trying to mimic the popular kids: Play to your strengths.

9 Comments

Categories: entrepreneurship, my thoughts.

By Tawheed
— September 29, 2011 at 12:58 am

The Suboptimal Outcome

Every day, an event occurs in your business that falls short of expectations. Whether it was a missed deadline, a failed deal, a frustrated customer or even a small tiny bug in your latest release to production. As human beings, we are pre-programmed to look past these seemingly small suboptimal outcomes and forge ahead — we’re accustomed to keep doing, we’re creatures of habit, and unless something huge happens to stop us on our tracks, we’re by and large going to continue to do what we do and keep ignoring these suboptimal outcomes.

Why Suboptimal Outcomes can Kill your Business

I learned in my previous job, in fact I was trained rigorously, to always be cognizant about the fact that a suboptimal outcome is not just a small bad outcome. A suboptimal outcome is usually the type of thing that is indicative of a LOT of things that can be wrong about your business. And so, as our team grows, as we take on bigger things, as we go into uncharted territories, I’ve started to see and notice more and more of these little suboptimal outcomes — and it scares me.

What are the suboptimal outcomes going on in your business? How do these seemingly small occurrences connect to bigger patterns/trends that may be happening in your business?

I’m realizing today that I can’t answer these two questions and I’m going to do something about that.

How we are tracking Suboptimal Outcomes

Starting next week, I’m planning on introducing a new “tool” that I learned about at my previous job. It’s a simple, centralized, logbook where every single suboptimal outcome that happens in our business is going to be written down with some key pieces of meta-data (by all employees):

  1. What was the suboptimal outcome?
  2. Who was responsible for this outcome?
  3. When did it happen?
  4. Why did it happen? — this will be filled out later with all the team members in a room when the suboptimal outcome is diagnosed.

Note: These are four high level questions, but if you really dig deeply into each of these questions, you’ll see that entire blog entries can be written dedicated to thinking about how to ask and answer and think through each of these questions.

If you are interested in learning more about this, email me and I can share some good reads with you.

3 Comments

Categories: my thoughts.

By Tawheed
— September 28, 2011 at 12:43 am

Reflecting on my Summer at 500Startups

About four months ago, I packed up my bags, said goodbye to my friends, family, and wife in New York and ventured out to California. I had been fundraising for Tout and during that process made the decision to join Dave McClure’s 500Startups accelerator program.

This post outlines my key thoughts and reflections on the overall experience of being part of Batch 001 of the 500Startups Accelerator Program.

Note that this is a seriously long blog entry, so you may want to skim through the headlines first and then zoom into the parts you are interested in.

Thoughts on startup accelerators in general

Tout is not my first company. It is actually my 3rd startup, and the 4th company I (co)founded. Out of the 4, one completely failed, one had an exit and one proved to be a very successful family business for a long period of time. So naturally, whenever I came across suggestions to “apply” to accelerators/incubators like YC, TechStars or any others, I always felt that it’d be more of a distraction.

However, when Dave offered to invest in Tout he also casually asked “why not spend the summer in California and do the accelerator program?” I really had to stop and think. Hmm… why not?

After having gone through the program, I’ve found that the maturity of a company and the level of experience of the Entrepreneur is by and large irrelevant when it comes to deciding on whether to do an Accelerator.

An Accelerator gives you five key things (in order of value):

  1. Initial investment (although it may be costly)
  2. Advice/Guidance/Mentorship
  3. A natural forcing function (i.e. Demo Day) to rile up the troops and perform at non-human levels
  4. The “social card” that only Medical Students and Surgeons enjoy to get out of any of your social and life obligations
  5. Credibility for PR, More Investments, Recruiting

Now, as with any other business decision, anyone that comes to me these days asking “Should I do YC/500/TechStars?” — I basically tell them “It depends on what your goals and needs are for your business.”

So if you are pondering whether an accelerator can truly accelerate your business, you should figure out the top 3 Goals you have for your business and then figure out whether any of the things above can help you achieve your goals faster. After you’ve figured that out, it becomes a simple Cost/Benefit analysis of whether the amount of equity you give up is worth the amount of “acceleration” you receive. Simple.

Thoughts on 500Startups

I honestly don’t know what the true “pecking order” in the world is for 500Startups vs. TechStars vs YC and frankly I don’t care. I viewed selecting accelerators the same way I viewed Fraternity rush back in College: You don’t go pick the Fraternity with the biggest house, the raddest parties or the hottest chicks, you pick the house based on how good of a time you have AFTER the rush event is over when you’re just shooting the shit with the brothers. You pick a Fraternity because of the people, and you should pick your Accelerator program or even your Investors based on the people. Its all about identifying common values.

Given that benchmark, I give 500Startups an “A-.”  Over this past summer, I’ve met some of the most humble, most interesting and most intelligent people I have ever come across — all qualities that I deeply value.

You know you’re surrounded by great people when the ideas they are working on become irrelevant. The ideas become irrelevant because as you talk to them you know that sooner or later, one way or another, this guy (or girl) is going to figure it out and make it rain. And I think this very aspect of 500 is what makes it more than just another accelerator program or investment fund — this very thing is what makes it a Family. A Family that is fornicating like mad to selectively establish blood lines across the globe.

“How does it feel to be Startup #89 in Dave’s 500?”

I used to get insecure when people snarkily asked me this question in the beginning of the summer. Now I just laugh.

500 is a family. When you start to internalize the concept of a VC fund that is building a family you start to understand why that is a stupid question. Most investment funds are built to function in a 1:N interaction model. Dave is building a system to meet the needs of portfolio companies that fosters N:N connections rather than the traditional model of 1:N connection that Partners in funds usually stick to.

When you start to think about building systems for N:N connections, everything including the scale at which you can execute drastically changes. Things such as SMASH Summit, Inbox Love, 500′s Mentorship program, and even the Mailing List is just the beginning of building a system that supports these N:N connections — and I’m excited to see where Dave takes it.

So just in case you want my official answer: It feels great.

Key Lessons Learned

Overall, the accelerator program was one of the best things I think I could have done for the long term viability of Tout. While we were slightly ahead of most of the companies in the batch in terms of product, Tout was way behind in terms other core foundational things such as having a team and having a full understanding of why we exist. Going through the program helped myself start to clarify our long term vision, think and re-think through the “A-Z” acting as if we just started, and even start to build out a core team around the company.

With all things turning out “as expected,” I still think its important to always pause and reflect. So, here are the high leven take aways that I think are important to mention:

Lesson #1 – In business, a sprint is almost never worth it.

Through the summer, Derek and myself ran a serious sprint. We lived and breathed Tout24 hours a day, pretty much checked out of our social responsibilities and cranked out features, code and updates at a ridiculously ridiculous pace.

Needless to say, when Demo Day arrived and went away, we slowly came out of trance and came to realize that the level of productivity we saw through the summer didn’t come at a low cost.We were totally consumed by Tout and I don’t regret a moment of it. But if I were to do it again, I’d figure out a better way to harness all that energy and make sure we ran it more like a marathon than a sprint. Unless you are building a “built it and flip it” company — something I am fundamentally opposed to anyway, you shouldn’t run a sprint.

Lesson #2 – Demo Day is a day, which means there is a “Day after Demo Day”.

This is one place where I have to seriously ding Paul and Dave. To us Freshmen, the way Demo Day was described to us was sheer mania. Investors, craziness, pitches, checkbooks, checks being written, deals getting done, cow bells being run because of the funding coming in.The truth is most of the things that will happen ON Demo Day will happen because of what you did leading up to Demo Day (by forging relationships and starting conversations) and anything else that you expect to happen around fundraising will actually happen AFTER Demo Day as you start to have more detailed conversations.

You can argue here that “Wait a minute! Thats not how it works at YC Demo Day… people really do write checks on the spot” — yes, they do.. but thats only for the Top 10% and maybe 5% of the class. And let’s be honest, they didn’t need Demo Day to make that happen, that was going to happen anyway.So, related to #1, realize that there is preparation to be done leading up to Demo Day (always be raising), and make sure you save your real energy for the weeks after Demo Day. It is a marathon, not a sprint.

Lesson #3 – An Accelerator is just the Lubricant. You still have to have the Sex.

Pardon me for being explicit here but there is really no better way I can phrase it. Within the first week of the program, I came up with my “wishlist” from 500. Meaning, the accelerator program can enable you to move faster through your game plan, but you still have to drive the car, run the company, put in the gas and actually know where you want to go.With that said it is also important that you hold the people running the program accountable and give them feedback (Dave and Paul will be getting a book from me in addition to this blog post). You gave them a good chunk of your company, make sure you make them work for it and you get your moneys worth.

Lesson #4 – When it comes to Early Stage, California is a better bet even if it is temporary.

I’m a New Yorker. I have lived in New York since age 10. I went to College in New York. I love the New York tech scene. In fact, that is where I got my start.

However, I have to be honest. When it comes to early stage, when you are at the very beginnings of your idea, you are going through the “Shawshank Crawl” — you’re dealing with all kinds of shit, figuring things out as you move along, and there are tons of unknowns and very few things working.

When you are at this stage and unless you are seeing instant success (i.e. you are the rare lucky one), there is only one kind of investor that truly understands what you are going through and has the mental capacity, context and extrapolation skills to figure out whether you are a good bet or not. That investor is the guy (or girl) that has built a company already, been through the same “Shawshank Crawl” and now can invest in you.

New York has very few of these investors. Instead, what you have are investors that ask you questions that you obviously do not have answers to because they just don’t know any better. Its the same reason why Boston lost the Zuck, and the same reason why New York still loses great Entrepreneurs today.

This will get better. It will only get better as more NY Entrepreneurs exit and as more Entrepreneurs that came FROM New York exit (I’m looking at you Matt M.) and then go back to NY to invest. This will also get better as more California investors look to NY companies and set up shop there (this is starting to happen to).

So on a macro scale, New York is getting better. But when I’m giving advice 1on1 to an Entrepreneur I believe in and care about, I tell them: Go to California. Spend atleast a summer there.

Lesson #5 – Using the Accelerator as a point of leverage works

Regardless of which state you are actually in as a company, being in an Accelerator paints the picture of an extremely early stage scrappy startup. So make sure you use that to your advantage in all your negotiations. Use it with customers to make them feel like they’re “getting in early” on something new and exciting, use it for recruiting to show not only as an opportunity to work for the company but also be part of the larger accelerator, and definitely use it to get price breaks.At numerous points through the summer, each of our batch mates were able to negotiate significant discounts with various vendors for the WHOLE class just by asking for it. It’s free exposure/marketing for them and well its money saved for you and your class.

In Conclusion…

This has been a summer I will never forget. It is also a summer that I could not have done without Derek Hopper being by my side slowly taking on the reigns around our Engineering team and Margaux G. ramping up so quickly to take on our Community Management. Most importantly, I definitely could not have gone through this summer without the unequivocal support of my wife Mahrin.

I’m more excited than ever with where we are headed with Tout, but regardless of what happens next, to all of our batchmates, to Dave, Paul and everyone else at 500, and to Team Tout: It has been an honor. Although 2011 is already turning out to be quite different than I laid out in my original plan for the year, I will never forget the summer of 2011.

Now, let’s go Make It Rain.

Loved this article? Hated it? I’d love feedback: tk@toutapp.com. Also, We are hiring.

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7 Comments

Categories: entrepreneurship.

By Tawheed
— September 26, 2011 at 1:22 am