Kathryn Minshew: 7 Classic Startup Founder Mistakes (And How to Avoid Them)

I'm basically here to talk about a couple of the most classic mistakes that I see whether it's those I see when I advise other founders and I would say I probably made all of these myself in one form or other so before I dive into the seven mistakes and take you through them I want to give you the kind of quick background I am the founder of a company called the muse that helps about a million people a month figure out what they want to do with their lives and we work with about 120 companies some in New York some in Silicon Valley some elsewhere in the US to help them hire and communicate their culture more effectively so I also get the benefit of learning from their mistakes so what are some of the class up entrepreneur and startup founder mistakes I'm gonna run through the gamut relatively quickly in the next 20 minutes the first is idea versus product market fit so how do you understand and test and refine an idea before you launch how do you then find the right business partners and the right founders how do you make sure you're focusing on the right things and you're getting you know your work out there where says waiting for it to be perfect we'll talk a little bit about how to create an audience and velocity around what it is that you're building so you know whether it's working or not because you have an audience of people who are not your family or your college roommate how to find a team to work with you on the idea and then finally when to and when not to believe the hype so the first thing I want to talk quickly about is product market fit this is a phrase that gets thrown out quite a lot when people are starting businesses but ultimately it means how do you know that you have the right idea and the right specific iteration of that idea for your market this is really kind of the essence of testing and refining an idea and I like to call it your college roommates approval does not mean market demand I talked to first-time entrepreneurs all the time and I myself was very guilty of this in my early days who say I had this idea I told my five best friends and my mom and they all think it's brilliant that's great they might be right but people love you and ultimately to get a sense of whether your idea is really going to be a fit in the broader market you've got to get in front of people who don't know you who don't like you and ideally people who have no reason at all to be nice to you once you do that you can start to collect data like it's your job because as the founder of a business especially one that lives online it is when we launch the muse we used crazy egg a tool called crazy egg to track mouse movements we used Mixpanel to see what people were clicking on and we're able to learn about the ways that people were using our product that were nothing like how we had potentially envisioned it more on this later but I want to quickly say when you're starting a business or a product and pushing it out into the world there's also often a tendency to look for founders with certain skill sets that you need and to feel alone enough that any founder will do this is a massive classic mistake and I think honestly if there's one thing you can take away from my experience and the things that I wish I had learned it would be to think very very carefully about people that you partner with especially in the early stages of your business this is myself with my two co-founders of the muse I honestly can say that I would take a bullet for each of them but that hasn't always been the case and in fact in a previous business I started a company with little more than the agreement written on two pieces of notebook paper and it ended very very badly so as hard as it is in the beginning when all you want to do is get started and get it you know get building I think it's very very important to sit down and think about you know what happens if we're about to run out of money and we have to tap network so we have to take out loans how comfortable is everyone in the partnership with things that might happen in the absolute worst-case end of the spectrum and in the absolute best case so if the New York Times calls and says we want to feature your company and we want to talk to one of you who is that going to be and getting alignment on those things early on will save you a lot of trouble and heartache down the road and I'm happy to speak from experience about that later on third is perfect versus done I like to call this the just launch already slide I think that you know there's a lot of people especially again when you've got an idea you started thinking about it and you begin to turn it into reality you can turn on a little bit like Gollum in Lord of the Rings where you sit there polishing in the corner saying my precious my precious and it's gorgeous and it's beautiful but again no one has seen it there's a lot that you need to there's a lot that you need to push your product out into the public for before you can really understand how some of it works we saw this very much firsthand when we got into Y Combinator which is an incubator program run by Paul Graham out in Silicon Valley we had started with our job search site it was very much in its infancy we were starved for cash and so when we got this infusion of advice respect and funding that came with Y Combinator we thought to ourselves this is our chance to go big we're gonna create the best job product in the entire universe so this was the first thing that we came up with if you look at it it has seven different massively complicated features we were going to do data visualizations we were gonna integrate with every possible social network we were gonna tell you based on X Y & Z what would be the right job for you it was a really interesting idea but again something like this would take six months to build and so we went into our first meeting with Paul Graham and we told him excitedly this is what we're thinking of doing he cut us off already and said by the time you build this your company is going to be dead you need to just launch already and he was right we really needed to simplify we wanted to distill down all the brilliant things we thought we might want to do at some point into the one core thing that our existing team could execute on ideally within seven to ten days and that's actually what we did one all-nighter and about 12 business days later we launched the very first product on TechCrunch now I'm not particularly proud of this product it's not the most beautiful thing we've ever done but it accomplished the point which was putting something out there in the world that explains the essence of what we were trying to do with the muse so we could see how people reacted I also like to call this one an ugly baby is no but is is better than no baby at all which means again if you wait and wait and wait for your product to be perfect before you release that into the world you will often never get there so I am a big supporter of the Minimum Viable Product and taking something that is again the the simplest explanation of your idea and putting in the marketplace so you can start to get feedback so next number four productive or impactful this was something that was particularly challenging for me as an entrepreneur because you know I like to feel very productive I like to get a lot done and it was very easy for me to wake up every morning and look at my inbox and just start going down the list and going down the list and I could easily spend hours answering email maybe taking meetings with people and feel like I had a very productive day but if I wasn't accomplishing the things that moved us towards our most important metrics then I hadn't really accomplished anything at all an example is we used to have when we first launched the very first version of the muse we had videos that people could watch to see inside these different companies and not as many people were watching videos as we had anticipated they would so we spent a lot of time thinking to ourselves well how can we increase the number of people watching videos and as a team we spent hours and hours in a be testing different ideas well maybe if we put a big playhead on the video or maybe if we put a call to action over here but ultimately having people watch more videos is not the core point of the muse if you really ask us what are the key metrics that our business is going to live or die on it's our people applying to jobs are they sharing the site with their friends and if watching more videos means that they have a better experience and therefore are more likely to apply to a job or to share with their friends that's great but just getting people to watch videos in and of itself is not a key metric for us and we really eventually after spending a good amount of team time on this how to take a step back and say alright is this the most important problem we can be solving I kind of think of it as if you know that that classic time management story that you've all probably heard where you know if you have a jar and you fill it with big rocks then you can put little rocks in and then you can put sand in that you can book water and every single day I think it's really important to figure out what are the tasks or the metrics that are most important for my business success today and make sure that you clear enough time for those because everything else you've just been an indefinite amount of time doing alright this one is a personal favorite of mine this idea of how do you create velocity I think people often feel like if if I build it they will come great line from a movie not so helpful in practice with startups in fact for the most point if you build it they won't come because unless you can figure out a way to get people to learn about your product in the first place and then share it with others it's really hard to sort of start the engine of customer acquisition there's a couple of classic strategies that people usually use word-of-mouth is fantastic you can get it but again people have to have heard of you in order to be able to share social media is another good one making something that people are excited to share on facebook on Twitter Pinterest or LinkedIn I know some great startups that have done contests to really jumpstart social media spreading the word blogging I think is a really important one we did this very successfully at the muse when we first started we didn't have enough jobs on the site or enough of a job search engine to make anyone particularly interested in our product but we did have with some great career advice and so we started getting people to write about how do you ace an interview how do you deal with you know a really difficult question or how do you write a very successful thank-you note and not only did we publish these pieces of content on our own site where a lot of people came to see them but we actually called up Forbes Mashable Yahoo and gave them that content for free as well with links to our pieces back links back to the muse throughout the middle we had maybe 5,000 people in the very first month that we were alive find us this way and that number has grown every single month since because again by blogging on your own site or for someone else it's an amazing way to get your link out there and get your name out there um advertising I generally don't recommend in the early days because spending a lot of money acquiring users can mask the fact that people may not actually want what you're building which as I said is one of the most important things to find out early on if you can convert a dollar spent on acquiring someone into more than one dollar of revenue by all means go do it but I see a lot of people who instantly get their first little bit of revenue and say I'm going to buy users to come look at my free product and that can be very very dangerous and then finally writing op-eds impress so this is pitching your story or your perspective to a wider audience and I find this really helpful in a couple of ways obviously if you are launching you want to get it in front of a reporter to write about you or you ask them for permission to write a guest post that you can publish yourself for example if a place like Venture Beat won't necessarily write about you you may be able to write about your experience of creating a new product or something else about your own lessons in your own process and get that published and said for the audience and you know I like to think about thinking about what is the reporter getting out of it so most of you I'm sure some of you in here have worked in the press before they get hundreds and hundreds of email a day from people who say I'm smart and special and launching this great new thing please write about me and it's really hard to even process that amount of information much less understand you know which stories to write personally I found that tying what you're doing to macro trends is really helpful for getting people's attention so saying that you know the number of women earning undergraduate degrees is on the rise and therefore my product that relates to this in some way is going to you know either counteract or increase this trend very very much ups your chances and also thinking about it as a story my very first company before the muse we tried to keep ourselves as founders completely out of it we thought you know the the focus should be on the product and on the company and no one wants to know about us and unfortunately unless your product or company is already successful people do actually want to know about you and in fact they might care much more about your own story than they would about a company that doesn't necessarily have a persona so we found a lot of success by really thinking about and pitching ourselves our relationship and our process of starting this company as the kind of hero of that story number six is team building I think this is really important for a few ways this is part of the team at the muse were a little bit bigger than this now and you know the way that we were able to reach out and find and attract every single one of these people and convince them in most cases to take far less money than they would have taken elsewhere it was a really interesting learning process during which we made lots of mistakes firstly in terms of where we find people you have the classic job sites LinkedIn indeed as well as newer sites like Angel list is a great one obviously the muse we as well but in the early early days most the people that you're going to be talking to who might be a great fit to join your company are going to come from either your networks your employees networks or potentially what I like to call lurking I've done this to great success and a lot of people who have as well it's essentially looking on communities that you're part of online in my case hacker news Twitter but for other people it may be different ones and finding people whose work you really admire whose voice you find very interesting or who work at a company that has recently suffered a major financial difficulty and reaching out to them to see if they'd be interested in working with you I have not hired anyone off of the ladder but I know a couple of people who regularly in their early days looked on industry blogs to see what companies were dying or hit by major lawsuits and then aggressively reached out to really interesting people at those companies to say if you're thinking of your next opportunity I'd like to talk to you and again it's not these days about what you're offering from a financial perspective which is great because usually if you're starting a business money is one of the things you have in shortest supply in general what we see across all the companies that hire with us is that people are much more driven by these factors it's the work that you're going to be doing who you're going to be doing it with and for what is the atmosphere and I think that's actually an incredible asset for anyone who's trying to get something off the ground and recruit people to join them because again you may not be able to compete even remotely on salary I've seen people take fifty sixty in one case 70% salary cuts because the idea of joining this project of this company in the early stages was so interesting and they believed in what the founder had to offer so I think this is something that you know that is a great obviously as you grow you can increase perks you can increase salary but I think it's really important to never lose sight of the fact that generally people are working with you because there's a vision they believe in or an opportunity to learn they think they can get that they may not get elsewhere I think it's really important as you know someone now who's responsible for a number of employees to constantly think about what can I do and what can we do as a company to help each of them get to where they would like to go with that and then you know within that point you got to interview wisely some people seem fantastic on paper they may even make a great first impression I think it's really helpful to drill down into new questions around their motivation so what is it that you're excited about working on this company what are you excited to do on a day to day basis and really be transparent yourself so that the expectations they have and the reality of the positions are going to be joining a line because well sometimes I think a classic startup founder mistake is to recruit people so aggressively that they either don't vet them properly or they over promise and under deliver and neither of those situations results in a team that's really going to be with you for the long haul and then last but not least don't believe the hype I think this is the reality of a lot of startups in their early days and it is a train wreck one that is actually fallen out of a window and plummeted to the ground below it's very very common for young companies to feel inside like everything is going wrong while projecting an external image that everything is going right and I think it can be very very difficult when you're getting something off the ground to spend too much time in the press of your industry and it seems like everyone's getting covered by the most sexy press and sexy blogs everyone's getting funded by the best possible investors and everyone else has it together but ultimately that's generally not true and as you grow you start to see some of the cracks behind other peoples carefully put together facades and that's actually why I think going back to the beginning that it's so important to really make sure people want what it is you're offering you surround yourself with great founders and a good team and that you're relentlessly testing that in the market to make sure you're heading in the right direction because otherwise it can be really hard to stand up to what seems like you know everyone else doing better doing differently than you when we were first starting the Meuse and getting it off the ground I pitched 150 investors in a row at which 148 said no and two said yes and it was not fun and people asked well how did you not give up after the you know 95th person said I don't know this is a good idea I'm not going to back you and the answer is because we were we were tracking things we were watching the numbers we were talking to users who were people we didn't know and that gave us the confidence to push forward and to believe in the product and when you know 300 users turns into 3000 turns into 30,000 turns into three million suddenly you've got something that's too big to ignore but you've got to get there first by not believing the hype so that's it those are my kind of seven classic mistakes I'm gonna stick around afterwards for a bit and happy to talk more but thank you guys so much [Applause] [Music] you

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Length: 18min 9sec (1089 seconds)

Published: Wed Sep 23 2015