This is an excerpt from Rob Solomon’s (Ex-President and COO Groupon) chat with a group of entrepreneurs at Telluride Venture Accelerator. Errors and omissions are mine, credit for all the insightful stuff goes to Rob.
About: Rob Solomon has served as President and COO at Groupon during its mega hyper growth phase. He joined Groupon at headcount just crossing 100 and in around 20 months the company grew upto 8000 employees in 45 countries with growth rate of 2500% and IPO valuation of $25 billion. Quite a stint. Prior to Groupon he served as Venture Partner at Technology Crossover Ventures, President and CEO of Side Step that was acquired by Kayak that later got acquired by Priceline at $1.6 billion. He also served as SVP at Yahoo and is at the board of several companies but he describes his best job ever as his first job doing game testing at Electronic Arts.
Rob # Customer acquisition is the most imp thing to focus on after building a great product. If you don’t have a great product you have lost before it started; if you don’t believe in that products greatness that’s even worse. With a great product and a belief in it, customer acquisition is the single key imp thing that you should work on. You need to acquire them and then you need to constantly engage them. Search Engine Optimization and Search Engine Marketing are turning out to be old techniques, perhaps 5 years old. Social Web is the new game; how you leverage different mediums to converge your traffic to build your customer base is the name of the game. As Andrew Chen says, “Software will eat the world”, face book and twitter remains top two mediums for Customer Acquisition and Customer Engagement. Based on who you target, Linkedin comes next for more formal engagements.
Rob # While establishing your venture / startups, you need to build a brand and create the followers. Single most important factor is the unique original content that you produce. Content remains the king. You need to become a thought leader in your area of expertise. If you are super relevant in your respective space, people would listen. Relevance is easy to get, hard to pursue and harder to maintain. But it’s the most critical thing.
Rob # In order to achieve relevance, entrepreneurs and businesses need to get their focus. Maintaining your focus is the key. The reality is that you can do one thing really well, may be 2 if you are great. But beyond that, it’s a trap. Saying NO is the hardest part for entrepreneurs, especially young ones. Startups and early stage companies start accepting too many things that they lose focus. There is a common saying in Silicon Valley, “More companies die out of indigestion rather than starvation”. You are excited by so many different opportunities coming your way that you lose track of your priorities.
Rob # Build awesome teams. While you are building up the teams, people remain the most important part of your equation. Surround yourself with truly awesome people. This would be the the single most important favor you can give to your self and your organization. Shoot for the best and the brightest; your philosophy should be very crystal about your potential employees.
There are many times you make wrong choices; organizational needs, priorities and playground changes dynamically. You might have hired somebody not anticipating the shift in your organizational strategy and future needs; they may be good at that stage but cannot deliver in changing times as it may be beyond their capacity. DON’T WAIT to make decisions on moving on with people. Nothing hurts that more than anything else. Try if you can transfer roles, if possible, as far as you are able to control ego’s but move timely.
When you are in hyper growth phase, spend 25-50% of your time in recruiting. Mostly founders spare 5-10% of their time in recruitment, but you need to choose right people. As they say, if you set up the right people, expectations and processes, outcomes will take care of themselves.
Rob # Another key important factor is to have enough CASH. Raise enough but DON’T raise too much. That hurts. Always try to raise money from more than one investor simultaneously. Use the competition in your negotiations with investors. But NEVER LIE to your investors. That comes back too often to hurt badly.
For early stage startups, cash is like oxygen as the people are the real expense. Try to have less number of people but have the BEST. Have the key roles filled, but contract out the partial things. Conserve cash as much as possible. For early stage companies, raise as much as you can. And don’t take anybody’s money. Look for smart money i.e. someone who can add value other than the cash. Bring them as advisors or your brand ambassadors. Make them fall in love with your company or product. But watch out for overly involved money i.e. don’t let the investors start dictating you on routine operations and decisions. Then your thought process stops there.
Angel investment is good, though I always wonder how angels make money. But the ecosystem is established that way. However, there is another concept of Super Angels emerging, which are not exactly angels but VC’s. However, they have covered that up to get more investments done in the seed rounds and early stage companies. As a matter of fact, try to get institutional funding in your seed round. It’s your best bet to lead quickly and smoothly into the second round.
Rob # And lastly, make yourself product centric and user centric. We have a great example of Jeff Bezos; Amazon strives for the Best experience. They give great service to their customers. You have to be most product centric and user centric. If you don’t have the best product, there is no way you can get the buy in of your customers. Strive to create the best experience for your user.
Entrepreneurship 3.0 