The 4 P’s of Startup Success – Passion

This is the 2nd in a series of what I believe are the four basic components needed to turn a start-up into a successful long-term company.

The second ‘P’ is passion. When hiring people you want individuals that share the same level of enthusiasm and excitement as everyone else on the existing team. Passion goes beyond liking a particular product or industry. Just because you like Ferrari’s does not mean you would make a great car mechanic or car salesperson. However, if you eat, sleep and breath cars and in particular Ferrari’s then you might make a great addition to the Ferrari organization. You have to be consumed by that product or industry and want to read everything about it and learn as much as you can.

I started my career as a technical person building large scale wide area networks and spent countless hours optimizing routers to get TCP/IP packets from destination A to destination B. Did I have a passion for it, probably not. Since the 7th grade, I have been consumed by financial markets. Most of my classmates thought I was going to be a stockbroker because I was reading the Wall Street Journal back then. I love technology but financial markets are my true passion for reasons even I don’t fully understand.

When you are passionate about something you just naturally tend to be more knowledgeable about that topic area because it interests you. And when you are more knowledgeable it adds so much more to the team. The drive and passion does not have to be in the main area of the company. If you are a technology startup and your CFO is in love with Excel and gets excited by P&L statements, then lucky for you.

An example of someone with a lot of passion is Gary Vaynerchuk. Gary has a passion for wine and it shows – he runs a retail wine shop in New Jersey but has became an internet sensation with his Wine Library TV podcast. When you watch one of his podcasts you can feel the excitement and passion he has for wine industry and he can talk about vineyards like its second nature. Gary has turned a field that was typically dominated by older middle aged men and “crushed it” as he would say. With passion comes knowledge and it shows, Gary is someone you would trust blindly because he eats, sleeps, breaths and drinks the wine industry.

Startups have enough drama on their own in the early days and you want the core team to stay and build up the company. Early on, having team members come and go can throw off the overall rhythm of a startup. By finding passionate people they hopefully will stick around even if things look grim because they are enthusiastic and excited about the product or industry they are in.

But finding passionate candidates is not straight forward. Luckily in this age of social networks, you can keep tabs on someones blog or twitter stream to get a better understanding of what interests them. More often than not, you have to interact with them on an ongoing basis to build a mental social graph of what truly gets them enthusiastic, excited and passionate.

The above article was syndicated on VCCircle.com and GQindia.com.

The 4 P's of Startup Success – People

Over the next two months, I’m going to discuss what I believe are the four basic components needed to turn a startup into a successful long term company. They are – people, passion, perseverance and profitability. I will highlight each of these four components in separate posts in the coming months.

It may sound cliche but the most important component is having great people. It took me many years to figure this out, but people truly are the cornerstone of any company. You might have a great idea but without the right people the idea might never reach its full potential. Not only do you require smart people, but people who share the long term vision of the startup. With the early employees you want to build the right culture which is needed to attract top talent as the company grows. For many years Google was the place to be in Silicon Valley if you were a coding genius, the culture was built by early employees who were from a computer science background and insisted on the corporate motto “don’t be evil.” Nowadays, all the top computer science talent wants to work at Facebook partly because of the stock options they would receive but also because the other top people they would be working with. Top talent likes to work with top talent.

In addition to having smart people who know the market you also want people that can challenge business decisions in a constructive manner. Initially, you will spend a large part of your time with the core team building out the business and having people who are easy to get along with in a work and personal environment is highly recommended. Startup’s are inherently stressful and the last thing you need is to surround yourself with negative people. People who are always negative can be very destructive and should be removed immediately, no need for additional drama from within the company.

An excellent example of two companies that have gone in opposite directions even though they are in the same space – Google and Yahoo. As stated before, Google has a history of treating it’s employees like kings such as providing free gourmet cooked meals, haircuts and so much more. They even provide their engineering staff with something called 20%, where a programmer can work on anything that interests them. Google’s real asset is their search algorithm but without the right people to tune it and tweak it might have ended up like so many other internet search giants. At the other end of the spectrum is Yahoo – in the early 90’s it was the Silicon Valley startup to work for, but over the years many top ranking employees left. This led to a vicious cycle where other people left and then they couldn’t attract new talent that was sorely needed in such a competitive industry.

One of the most difficult tasks for any company is hiring people. That difficulty is even more amplified at a startup, as many people don’t want to take the risk of joining an unknown entity. And, if you are lucky enough to experience hyper-growth then you have all sorts of people applying and the hiring standards usually get relaxed in order to fill a job role. By maintaining a strict adherence to hiring great people can only benefit the company in the long run.

The above article was syndicated on VCCircle.com and GQindia.com.

Information Overload

That feeling you get when you come back from vacation is reality smacking you in the face. There are two parts to it, the first part is you are no longer on vacation experiencing new things and new places. The second part is more sinister, it’s when you start plugging back into the grid – email, RSS, Twitter, Facebook, LinkedIn, voicemail, to-do’s, etc…

Some people just declare email bankruptcy once they come back from vacation and figure if something was that important the person will email again. There are many startups and even Google is trying to prioritize your email for you and present what is believes are the most important emails to respond to. Luckily, I’ve been able to tame email using a ton of filters so I don’t have to go down the path of declaring email bankruptcy.

However, what smacks me in the face when I get back from vacation is my RSS feeds. RSS feeds allow you to track the content of various websites into a single location so you don’t have to visit 10-15 websites on a daily basis. I use Google Reader to aggregate the information that easily tops over 400 new pieces of content on a daily basis. If I take a 3-4 day vacation my RSS feeds would easily top 1600 articles, there is no way I’m going to scan 1600 titles in Google Reader…hence RSS bankruptcy.

When I got back from my most recent vacation I decided I needed to really tame my RSS feeds. For me, I like reading articles but I’ve come to realize many of the articles that I read are just worthless and a waste of time. I believe I read these type of articles for two reasons: it diverts me from work that I should be doing and second I gain knowledge about a particular subject. The problem is if you waste 15 minutes reading garbage you won’t get time to read another article that might actually be useful. Coincidentally, my friend Sahil sent me a link saying that “keeping up with RSS is poisonous.” I would completely agree with the article.

So what did I do? I nuked about 75% of the RSS feeds I had and started following those particular websites on Twitter. Secondly, I started following several new people that seem to send out useful articles via Twitter. The idea is I might miss a particular tweet from
Engadget when it first comes out, but if the article is really useful it will get re-tweeted many times and then I can read it. You kinda have to have faith in the people you follow and truly believe in the wisdom of crowds. Twitter has now become my curated personal news aggregator.

So what were the big news stories when I was on vacation for 3 weeks? Two seem to stick out 1. Google buying Motorola Mobility and 2. The VC funding misadventures of Rand Fishkin at SEOmoz. The second story was heavily re-tweeted and even Sahil sent me a link to the story. Using my old method I would have seen story #1 pop-up in my RSS feed but story #2 would have been buried…and story #2 is actually a GREAT read if you are looking for VC funding.

I’m sure while on vacation, I missed out on thousands of stories. Let me guess there were several Top 10 articles on how to grow traffic, effectively use Facebook for your company, maximize your Google ad spend, etc…all noise to be honest. It’s the fear of missing out that drives people to track everything and read everything. The article I’m really looking for is how to score a 2012 Lamborghini Aventador since it has a 3 year waiting list.