Avoiding the Mentality of Hiring “Rock Stars”

There’s this sub-culture in startup-land where everything revolves around hiring and retaining “rock star” engineers. And I think it’s mortifying. Not the idea itself, but the implications.

I have heard it over and over from people I respect. But there’s a subtle insinuation that the blame of poor execution rests on whether or not somebody is a “rock star.”

Let’s flip the focus around: what is the difference between a good and bad manager? It’s simple:

  1. Good managers make everybody better. Bad managers don’t help anybody, but hopefully don’t make anybody perform worse.
  2. Blaming somebody for not being a “rock star” is an easy way to shift the blame from yourself.
  3. If managing “rock stars” and firing “non-rock stars” is what management boiled down to, managers wouldn’t be needed.

Hiring a Kobe Bryant for your basketball team is a good idea. But it’s preposterous to blame a losing record on the lack of a 5-man Kobe team.

History is full of leaders pulling off great feats with an unknown team of rookies. Be that leader. Elevate the team. The role of a manager is to help people produce their best work — “rock stars” or not. And, if anything, great leaders forge the rock stars everybody ends up talking about.

How Amazing Features Can be a Waste of Time

Differentiation is another way of saying: define your own market. By doing this well, you can avoid the problem of unseating incumbents because they don’t exist or are significantly weaker.

Why Most Features Aren’t About Differentiating

You’ve got 5 seconds. Tell me how you’re better than the incumbent I am currently using. If your pitch to me — as a customer, partner, or investor — is that your site has the most features: you’re screwed. Here’s why, from the perspective of each:

  • Customers & partners: Yes, but, who are you again? I don’t put my eggs in nests that might disappear tomorrow, even if the nest has a built-in heater.
  • Investor: So your company is a feature away from being destroyed?

In the Internet Era, features are cheap. Big or small, a company can bang out a feature in a week or two and start testing it. You disagree because said company would “never” build that feature? Never say never. Innovative companies always surprise people. Hoping your competition doesn’t want free money on the table is tantamount to gambling, and there is a much safer, more logical way of approaching this problem.

So many “feature” companies (i.e., they’d just be a feature in a bigger company’s product) are born everyday. The criticism isn’t that these companies are doing something “easy.” The problem is that many startups use a specific superior product experience or feature as a key differentiator, without considering whether or not it helps them corner a new or different market. Being “better” isn’t enough.

Same Thing, Different Optics

Certain feature sets, if marketed right, completely change your target market. This is key. Let me say it again:

Certain features put you in a different market.

Most all companies are chasing a specific market. 18-24 females. College students. People who like coffee. Couples. Widows. Canadians with houses.

Not all features are created equal. Most features just add further convenience or refinement (i.e., “single signon,” “AJAX uploading,” “mobile support.”). Focus on competing in a way that assures your competitor’s destruction if they were to follow your lead.

Why Incumbents Ignore Certain Features

Like I said, some features change who a company’s customers are. In worst case scenarios, some features alienate your existing customers entirely (i.e., killing your existing revenue stream).

For example, your feature might be a free, ad-supported version of an existing model. A very famous site called OKCupid did exactly this a few years ago. Even today, this is what they’re known for. Why didn’t the other players in the market copy them? Because going free would mean changing their customers from their users (who pay a monthly fee) to advertisers (who pay for data and exposure). Yes, much like Facebook, OKCupid’s product is its users, and its customers are its advertisers (mmmm sweet, sweet data).

While the main differentiating feature, being free, is an easy feature to build, even to this day, incumbent sites like eHarmony and Match remain paid services. They are ultimately after different markets. You and I can intuitively see that there is likely a well-defined difference between the two markets of people willing and not willing to pay for dating (income, what they are looking for, age, etc.). It’s clear now that there was always two markets in the dating space, and OKCupid successfully cornered it using a simple marketing message.

The key for you and I is to understand and learn from this lesson: figure out what differentiators you introduce that give you unique access to a new or different market from incumbents.

Don’t Get Distracted

In any given startup, there is probably a backlog of 100 features to choose from. And most of them are from customers. Think about it.

Customers ask for features.

These customers are asking you to pick their market. With each feature you work on, your are moving toward a given audience. If this is a market you don’t want, ignore the feature. A feature that doesn’t help you define, carve out, and keep a specific target market is a waste of time.

In some markets, usability is everything (mobile). In others, aesthetics (marketing). Yet again in others, speed (search engines). Maybe in another, depth of technical end points (APIs). And within these markets, there are niches with even finer requirements.

Identify your core desired audience and build features only they yearn for. Everything else is a distraction.

Feature != (does not equal) Technical

A feature isn’t necessarily a boat load of programming. A “feature” is a marketable unit of software development. The complexity of that development is irrelevant. It can be as simple as a change in design, pricing, copy, or even name. Here are some examples:

  • Pick an XXX domain for your Pinterest clone: bam! PinPorn (NSFW). No difference in technical features from the original, but the site successfully corners its own market via community (the feature).
  • Want to be a Groupon for gay people? Fab. (Another year later, they’ve exited their niche and become a mainstream fashion site.) You know how they did that? They built a sizable mailing list of the gay community from their original ideas to be a gay Facebook and/or Yelp. Fab’s differentiator? Good taste, according to them.
  • Instagram’s killer feature was tight social integration (arguably pretty technical); yet Hipstamatic came first. Instagram brought easy sharing to a paid digital photo filter market that Hipstamatic defined.
  • And, of course, there’s Facebook: a MySpace for college students. The killer “feature” was that you had to have a “.edu” email address. Facebook probably would have perished in its early days without those 5 lines of code (maybe less).

The Real Meaning of Market Differentiation

Recall my example about the free dating market. Rewind 10 years. Online dating was something you paid for. That was it. Maybe this is easy to recognize now, but this market dichotomy (free vs. paid) was not apparent until only recently.

When smart people ask you about your market differentiation, this is what they mean. They are asking you if you’ve found a market angle that existing players will gladly give up because they either don’t value it or can’t compete in it due to conflicting interests.

So next time you’re looking at a list of features to work on, ask yourself: “is this feature putting us in the market that we want to be in?”

Three Analogies for Pitching Your Startup Right

Below are three analogies on how to prepare and pitch your startup better.

TLDR: Don’t focus on being right. Don’t rush the sale. Find believers.

I recently got my startup funded. It was an extremely, extremely challenging exercise. Today’s post is short; I’ll save the funding journey for another time. Today, I wanted to talk about pitching. I’m going to focus on three big, often overlooked issues.

1. Friend-speak: “That’s an awesome idea!” => “Good luck, bro.”

Friends tell you what’s wrong with your idea, but they often say it nicely. Listen to your friends carefully, and recognize that “That’s a cool idea, but what about blah-blah?” is a veiled criticism of your idea. Listen and understand their concerns. A good pitch patches up these holes before they’re even asked.  Often, when an idea is criticized, it’s natural to want to be defensive. It’s important to take criticism as something to solve for, not something to “be right” about. Ok here’s the analogy:

You’re a pirate. You’re practice fighting with your buddy pirates when they accidentally shoot a hole through your hull. But you’re smart so you win the argument with them that there is in fact NOT a hole there (Uhhhh). You decide to go out and challenge some Brits to a battle to the death without first addressing the damage your buddies left on your idea — er, I mean — ship. Oops!

2. You need more time to sell

I haven’t pitched that many people specifically to get money (a lot of pitches were over partnerships), but when I felt rushed there wasn’t a second meeting. When you are trying to convince somebody to give you — a nobody — enough money to buy a few cars (or a house), they need time to digest things. Here’s the analogy:

Your startup is like a restaurant. First you lure in a customer to try out your food. Once inside, you serve your customer what they are going to eat. It’s a game changing meal, so they’re naturally skeptical. They start to nibble on it. Maybe it’s good. Maybe it’s not. But you’re in a hurry so you jam the food down their throat, ask for money, and remind them to leave a good review on Yelp. They throw up and get major indigestion.

Like with any good meal, make sure you have a full hour to pitch. Your pitch should be 30 minutes max. Leave 30 minutes for questions (which will be sprinkled throughout your presentation).

3. The Crazy Idea Train needs passengers

You’re the conductor of the Crazy Idea Train. You built it, actually. It’s a little rocky, but it’s speeding along! But there’s no passengers. Your friends say they’ll get on the train later. Strangers say you need to pay them money for them to get on board (it looks really ghetto and unstable, after all). And nobody really knows where it’s headed. Maybe it’s going to Billion Dollar Land; maybe its going to Unemployment Mountain. You think it’s the former. But it looks like most people believe it’s the latter.

I’ve thought about this a lot, and I’ve decided that this is actually super duper important not just from an investor’s point of view, but from a founder’s point of view. If you can’t convince one person to join your Crazy Idea Train, then is it really a good idea? Finding a co-founder is social validation that your Crazy Idea has legs. Without this, investors are left to imagine the worst.

I’ve also heard cases of people unsuccessfully looking for co-founders. Again, this to me is a sign of a crappy idea or worse. There’s a lot of reasons why somebody would be unable to find a co-founder, and most of them are bad signs. Are you arrogant and un-friendly? Do you seem untrustworthy? Do others have no confidence in your ability? Are you a terrible leader? Are you all talk? Are you no fun to be around? Do you kill kittens for entertainment? Maybe. Maybe not.

Your number one job as a founder is to sell the company to future investors, acquirers, and employees. If you suck at this, that’s a death sentence. Start with selling to a co-founder.

Summing it up

Don’t focus on being right. Don’t rush the sale. Find believers.

Bonus pro-tip: make sure your lawyer doesn’t put your cell phone number in the SEC filings. Yeah, that happened.

What Agile is NOT

Agile Will NOT Make People Work Faster

People will work just as slow or fast as before. It is not a miracle drug. Agile DOES ensure people are working on the stuff that matters at that particular moment. Which leads to the next point…

Agile Does NOT Mean You Can Change Your Mind All Day Long and Still Ship on Time

If you change your mind that the product should do X instead of Y, you may have to throw away code. This is a fact of life. Agile DOES encourage making key decisions at the last possible moment so that the cost of change is minimized. Agile (a la retrospectives) exposes why or how the deadline was missed and how costly bad decisions were.

Agile is NOT a Better Way to Manage Down

Yes, there are lots of little tasks now. And yes, they are all prioritized and bite-sized so it’s easier to micromanage, right? But you’ve missed the point. Agile let’s the engineers tell the managers what is going on. Agile IS a way to manage expectations (e.g., “managing up”).

Bonus Non-Issue: “We Need to Focus on How It Will Scale”

I’ve heard this a lot. It doesn’t matter (and if you disagree, then you probably aren’t ready for Agile). Agile is about making stuff that works – right now – so you can see if what you’ve made has any value. If it has value, then you worry about scaling. If it’s garbage, nobody will care how it was architected. Get it to work first; scale second. Getting stuff in the customers’ hands and then making decisions based on the feedback is your top priority. If you aren’t focusing on that, you’re probably on your way to creating your very own crappy product that nobody uses.

Today we learned that “agile” is a loaded word.

Avoid Gloss on Dark Business Cards

So we just got our business cards. The company logo is on a black/dark backdrop. We decided to gloss it up to give the cards that extra sexy shine.

Instead, we ended up with an ugly smudge magnet. Don’t make the mistake we made.

See for yourself (covering our catch phrase on purpose):

Our business card