On October 27, 2010 I wrote a blog post about the “57 Things I Learned Founding 3 Tech Companies.”
It has been awesome, flattering, and humbling to see that post went viral and has been seen by so many thousands of people — mainly aspiring entrepreneurs — and has been translated into many languages.
This past week while I was in Tokyo for meetings with potential partners for Fab, I was invited to participate in a panel discussion on startups. The discussion quickly turned to those 57 things. Amazing. Thousands of miles away and two years later, people still want to talk about those 57 things!
As the questions came in, I realized that my 2010 list was great for what I had learned as of 2 years ago, but it also was in desperate need of an update to include what I’ve learned more recently, especially as we’ve pivoted from fabulis to Fab in 2011 and then scaled Fab to more than 7.5 million registered users, 7500 supplier partners, 600 team members, and a run-rate of more than $150M in sales in just 15 months.
So, here goes.
90 Things I’ve Learned Founding 4 Tech Companies:
- Find your company’s One Thing. Your One Thing falls at the intersection of 3 truths:
The one thing you and your team are most passionate about.
The one thing you and your team have a realistic shot at being the best in the world at.
A huge untapped market opportunity.
- If what you’re doing does not fall at the intersection of those 3 truths, you’re doing the wrong thing.
- Only do your One Thing. Everything else is a distraction. Don’t do side projects. Don’t take unnecessary meetings. Anything that distracts you from executing on your One Thing is just that, a distraction. Say no to everything that does not contribute to your One Thing.
- It’s all about the product. Always has been. Always will be. The only thing that matters is how good your product is. All the rest is noise. At Fab, our virtual product is our website & apps, our physical products are the merchandise we sell, and our experience product is our operations and service. Getting all 3 parts of our product right is everything.
- The only judge of how good your product is is how much your users use it and value from it.
- In the early days the key determinant of your future success is traction. Spend the majority of your time figuring out how to cultivate pockets of traction amongst your early adopters and optimize around that traction. Traction begets more traction if you are able to jump on it.
- If you cannot gain traction in 1 year, pivot. I firmly believe that in this age where the product development life-cycle is so short and user feedback comes so quickly, you will know within a year whether you are focusing on a worthwhile one thing.
Sure, you’re not going to get it right at first, no one does. But, you can iterate and iterate on features, but you cannot iterate your way to a business model. I’ve seen too many businesses get stuck or fail because of their endless pursuit for the magic new feature that is going to help them gain traction. Stop. There are plenty of interesting problems out there to solve.
If you can’t show some measurable and real traction within 1 year, move on to working on another problem. I bet you, if you are working on your startup for a year and you have not yet experienced real traction, if you poll yourself and your team and ask the 3 questions: (1) Is this the problem we are most passionate about solving, (2) can we realistically be the best in the world at it, (3) and is it a huge untapped market, you’ll likely uncover that you are working on the wrong one thing. So, pivot. Pivot to the One Thing at the intersection of those 3 truths.
Before there was Fab there was fabulis, a social network meets places guide targeted to the gay community. We built a lot of cool features and iterated and iterated, but we never truly grasped our One Thing; instead we just tried doing a lot of things hoping that something would stick. 1 year later we sat down and had an honest conversation with ourselves and realized that our One Thing, the thing we were most passionate about, that we could realistically be the best in the world at, and that was a huge untapped market opportunity was: Design. So, we pivoted from fabulis to Fab.
- Once you pivot, focus, and don’t look back. When we pivoted from fabulis to Fab, from gay social network to design, we made the decision within 10 days to focus exclusively on our new One Thing, and we set a rule that not one person on the team could still do the old thing. We needed every last ounce of resource and mindshare focused on our One Thing. We shut down the old website and apps right then and there. We pivoted the entire company in 10 days, focused on the future, and never looked back.
- Be self-aware. Know your own personal One Thing - the one thing that you yourself are really good at. Likewise, know what’s outside your one thing - the many things that you are not so good at.
- It’s not about you, part 1. Building a successful company is less about you and more about your ability to bring out the greatness in the people around you. When we pivoted from fabulis to Fab, we pivoted towards building a business around the unique tastemaker talents of one of our founders, Bradford Shellhammer. Fab was born from my own realization that we could be the best in the world at something by taking Bradford’s unique and eclectic sense for color, humor, quirkiness, and his passion for products that brighten up people’s lives, and bring that to the entire world. It takes guts and a whole lot of of self-awareness to build a business focused around someone else’s talents.
- It’s not about you, part 2. It’s not about you, it’s about your customers. At Fab we have been focused from day 1 on making our customers smile. From the start we said that we would never make a decision as to what features to build or what products to sell based on revenue alone, rather we would focus on things that make our customers smile and by doing so lots and lots of revenue will fall out over time. Sticking to that philosophy has been one of the keys to Fab’s success.
- Have amazing co-founders who are better at what they do than you could ever be. I’m fortunate to have started Fab with some amazingly talented people like Nishith Shah and Sunil Khedar who previously built one of the first truly viral Facebook apps and who co-founded socialmedian with me in 2008; like Veerle Pieters who I uncovered in 2009 on a hunt for the most talented graphic designer in the world whose design aesthetic matched my own, and, of course, Bradford. Fab started off as a collection of all of our abilities and passions, and it remains so today, albeit with 600 more people helping us take it even further.
- Work with people you love. Work with people you get excited about. People who thrill you. People you trust. People who you can look at every day and say: There is no better person in the world for this job AND no better person that I’d rather go to battle with. I’m a deeply emotional person. Love is CRITICAL to business success.
- Position your desk in a way in which you are staring at your co-founders and they are staring at you. If you aren’t enjoying looking at each other each day, you’re working with the wrong people.
- Don’t work with people you don’t love. Bradford and I have a rule: As long as we’re running Fab, we’re only going to work with people we love to work with. If we don’t enjoy working with someone - an employee, a partner, whomever - we’re just not going to do it. There’s no short term gain that is worth sacrificing for working with someone you do not working with.
- Founders need to personally own something big themselves. It’s not enough just to lead, you need to own something big and critical to the business and your brand. And you need to really, really own it. My personal belief is that since everything comes down to the product, the best founders are product managers. Bradford and I split ownership for our virtual products, which I own (our Website & Apps) and our physical products, which he owns (the merchandise we sell). To this day, not a single pixel gets on our website or apps without my input, review, and approval. It’s that important. Likewise, not a single designer gets approved to sell on Fab without Bradford’s input, review, and approval. It’s that important. Sure, we employee lots of amazing people whom we trust to help us make it great, but as Founders we still own and control the final product. I can’t imagine it any other way.
- As CEO, you need to also do the stuff that no one else can do. Typically that means stuff like pitching and choosing investors, managing your board, coaching your execs, helping your team understand and build towards the bigger picture, motivating and rallying the troops, and most of all, providing clarity of focus. These are the things that only the CEO can do, and you cannot outsource them.
- Work with people who argue with you and tell you no.
- The most important hiring criteria for your executives is cultural fit. You need to work with people who work like you do, and who enjoy and appreciate your style and pace. It doesn’t matter how smart or experienced people are, if they don’t match your style it’ll never work. You need to love working with them, and them with you.
- Be willing to fight like hell during the day but still love each other when you go home.
- As the CEO, you and only you can figure out where the company needs to go, how to get there, and how to marshal the resources you need to get it done. Sure, you’ll need a lot of input to figure out the plan, but you and only you can provide that clarity of focus that is required to say, “this what we’re doing” and then align the resources to match the direction. The biggest enunciation of strategy is how an organization allocates its resources.
- Make deliberate decisions. There’s no time to dicker around at a startup. Pick a path and go with it. Better to make a decision followed by a mistake and some learnings and course corrections than to sit around idle while contemplating the direction. Leaders need to lead.
- Inspire. Startups are hard work. They’re emotionally draining and tiring. Inspire your team to push forward, accomplish the impossible, and persevere.
- Push the people around you to care as much as you do.
- As CEO, you are responsible for every hire. Until Fab reached 150 people, Bradford and I interviewed every single person we hired. To this day, as we approach 600 people at Fab, we personally interview every manager and we still personally review and approve or disapprove most hires throughout our entire organization. If we make a hiring mistake - and we do from time to time - I put that blame on me, not on anyone else.
- Hire people who are passionate about solving the specific problem you are trying to solve. Passion for building a business is not enough; there needs to be passion for your customer and solving your customer’s problem.
- As CEO, you set the tone, the style, the pace, the expectations. My tone is confident but humble, and challenging. My style is to cheer on our wins while focusing our management on our challenges. And, I’m direct and transparent. No one ever has to wonder how Jason feels about something. I wear it on my sleeve (and on my blog). My pace is fast. My expectation is passionate pursuit of perfection, knowing that we’ll make plenty of mistakes along the way. I like to say that at Fab we celebrate our challenges and focus on why we suck more than why we’re great. That’s our tone. We also challenge each other in meetings so that we get to amazing results. There are no free rides. It takes thick skin to work at Fab, and I like it that way.
- Be tough. Sometimes you have to even be a jerk. Not too often, but sometimes. If every day is a happy day, it’s too easy. I’m not saying be an asshole for no reason. I am saying that greatness comes from pushing people outside their comfort zone. Push. Managers especially need to be cool with this and understand this. If it was easy everyone would be doing it. It’s hard sometimes because we’re creating something special. When you do 98% work and I ask you where the other 2% is, that’s a good thing.
- Be authentic and transparent. Tell the same story to yourself, your executives, your general employees, reporters, external observers, and your investors.
- If you are down on someone, the rest of your team will already know.
- Give a bad seed a day before firing them. Fire fast.
- Cultivate and coach people vs. churning through them. At my first startup I soured on executives too quickly, blaming them vs. accepting ownership myself. Coach and mentor. Give a good seed who is not performing several months to turn it around. It might be you, not them. There’s a difference between a “bad seed” someone who just isn’t capable or doesn’t fit in vs. someone who is capable and is a cultural fit but whom isn’t performing at the level you expect for them.
- Treat people well on the way in and on the way out. We’ve let go of a small handful of people at Fab and — unless it was because of woeful underperformance or horrible attitude — with each I’ve coached our team to go out of our way to offer more than generous exit packages. In most cases it didn’t work out because the person wasn’t a fit for Fab, not because they didn’t work hard. I take the approach that everyone who ever works for Fab will come in contact with at least 100 people who we eventually want to be Fab customers. We want our former team members to respect and appreciate our company and our brand, forever.
- Provide feedback. Even though Fab is a fairly new company, we’re already put in place a recurring feedback process. We do twice-yearly reviews of all Fab team members. But it should never be a surprise. If it’s done right, feedback and postmortems are regular activities and reviews are just the official aggregation of such feedback.
- Even executives need reviews. Here are the criteria I review Fab’s executives on:
Fab Culture. Does the executive personify our culture, cultivate it, and help us nurture it?
Fab Passion. Is the executive passionate for our specific Fab mission or could they be working at any company? Is Fab their life? Were they made to work at Fab?
Manages Up. How well does the executive manage up to me and keep me informed about their activities, go to me for input when they should, and not when it’s not needed.
Manages Horizontal. How well does the executive manage and coordinate with his/her peers? Do they operate in silos or do they foster teamwork and collaboration? Do they come to me to solve and referee issues between the executives, or do they bring their peers together and come to me with options? Btw. This is one of the criteria that most executives in startups struggle the most with.
Manages Down. How well does the executive lead and manage their team? Do they provide direction? Do they make sure that all of their team members are clear about their mandate and responsibilities? Do they coach and build people up?
Inspires. How well does the executive inspire people around them? Do they lead by example and motivate people to give their all for the Fab mission?
Takes Ownership. Is the executive accountable for results, both good, fair, and bad? Do they take big projects on their shoulders and get shit done?
Big Picture. Does the executive get where Fab is going over the long term and what we need to do in order to get there.
Attention to Detail. Does the executive meticulously and thoroughly follow up on tasks? Does nothing fall through the cracks?
Exec Ready. Could the executive run the company for a month if I was away? Could they easily transfer to another country or region and step right in and lead? Could they present to investors or reporters about Fab?
- You’re never as right as you think you are. That goes for you and for your company.
- Think 5 steps ahead. Very hard to do, but it’s what differentiates great companies from good companies. Think where things are going, what the impact of today’s decisions will be tomorrow. What the chain of events is likely to be. Tough stuff, but so important.
- Build all of your own technology. This is a must if you want to build sustainable competitive advantage. If you think you can build the next great company on someone else’s stuff, you’re kidding yourself. (I’m not saying don’t leverage open-source or established platforms. I am saying don’t outsource your code).
- Bake social into your company’s DNA from the start. It has proven to be a core advantage for Fab. We think social first and we are defining and inventing what social commerce can be. Getting social right is hard. You will get it wrong a lot. Keep at it. 1 billion people use Facebook. 1 billion. Your customer is growing up on social media.
- The time to start thinking mobile first vs. web first was 6 months ago. At Fab, mobile is already 33% of our visits and sales and we just launched our mobile apps nearly a year ago. Very soon mobile (smartphones and tablets) will be a majority of the usage of Fab, and of your service.
- Go to the gym and/or run at least 4 times per week. Keep your body in shape if you want to keep your mind in shape. So many people get this wrong yet it is so very important. I take it to the extreme - I run every morning and I also lift weights at least 4 nights per week. It’s not just because I’m a fitness freak (ok, I am), it’s because it keeps my body and mind fresh to fight big emotional and physical battles. It’s also because the gym is scheduled private time with myself in the morning (I watch TV shows while running on the treadmill) and with my partner Chris in the evening. It forces us to do something together every night besides just sit on the couch or work, which is a great thing.
- Don’t drink on airplanes unless you are on a flight of longer than 8 hours. It ruins you and wastes your time.
- The first thing I do, without fail, when landing in another country after an overnight flight is hit the gym. I don’t care if it means delaying my first meeting by an hour. That post-flight workout counteracts the jet-lag and gets me ready to face the challenges ahead.
- Follow your gut, and back it up with data. At Fab we like to say that we start with emotions and then support our emotions with data to learn whether our emotions were right. But, it’s emotions that come first. I firmly believe that’s how it should be.
- User experience matters a lot. More than most people realize.
- The best designed user experiences get out of the way and just help people get shit done. Less is more. If you have to explain it, you’ve already failed.
- Be technical and understand how technology is built. Not every leader has to write code but you do have to understand how it is built, what the engineering process is all about, and how the technology works.
- It’s easy to farm out the parts of the business you don’t particularly enjoy, but you can’t allow it to be your blind-spot. For me, that’s operations, so even while I’ve taken the approach of hiring people smarter than me and more operationally passionate than me to run Fab’s operations, I’ve also challenged myself to be deep in the details and challenged our organization to make our operations a competitive advantage. Take the part of the business you know the least about and shine a spotlight on its importance. Force yourself out of your own comfort zone.
- Stack rank your features; and it’s all features. Every request for use of scarce resources needs to be prioritized vs. alternative use of the resources. No two features are ever created equal. You can’t do everything all at once. Force prioritization.
- Ship it. You’ll never know how good your product is until real people touch it and give you feedback. If you’ve been working on some technology for more than 4 weeks and you have yet to have a user start to test it, you’re likely working on too big a chunk of code. Break it down into small milestones that allow for rapid user feedback.
- Ship it fast and ship it often. Don’t worry about adding that extra feature. Ship the bare minimum feature set required in order to start gathering user feedback. Get feedback, repeat the process, and ship the next version and the next version as quickly as possible. If you’re taking more than 3 months to launch your first consumer-facing product, you’re taking too long. If you’re taking more than 4 weeks to ship updates, you’re taking too long. Ship small stuff weekly, if not several times per week. Ship significant releases in 3 week intervals.
- You’re doing really well if 50% of what you originally planned on doing turns out to actually work. Follow your users as much as possible.
- But don’t rely on focus groups to tell you what to build. Focus groups can tell you what to fix and help you identify potentially interesting kernels for you to hone in on, but you still need to figure out how to synthesize such input and where to take your users.
- Most people really only heavily use about 5 to 7 services. If you want to be an important product and a big business, you will need to figure out how to fit into one of those 5 to 7 services, which means capturing your user’s fascination, enthusiasm, and trust. You need to give your users a real reason to add you into their time. Or, if you’re selling stuff, you need to give your users a real reason to add you into their wallet. Not easy.
- As CEO, you have to balance the needs of the business and the interest of the shareholders. If the two are not aligned, you’re in trouble.
- Only work with investors who share your long term vision. Keep reminding your investors what your long term vision and plan is. If you’ve got an investor with a 2 year return focus while you’re building towards a 10 year or 20 year business strategy, you’re misaligned. And, only you can fix that.
- Always choose your investors based on who you want to work with, be friends with, and get advice from.
- Never, ever, choose your investors based on valuation. A couple of dilution points here or there wont matter in the long run but working with the right people will. Alignment of business objectives and personal relationships means tons more than valuation.
- Raise as little money as possible when you first start. Force yourself to be budget constrained as it will cause you to carefully spend each dollar like it is your last.
- Once you have some traction, raise more money than you need but not more than you know what to do with. This is tricky. Don’t skimp on fundraising because of dilution fears.
- Spend every dollar like it is your last. But, don’t be afraid to spend.
- Know what kind of company you are trying to build. There are very few Googles and Facebooks. A good outcome for your business might be a $10M exit or a $20M exit or a $100M exit or no exit at all. Plan for the business you want to build. Don’t just shoot for the moon — at least until you realize that you are legitimately on a rocket ship. From a money-in-your-pocket and return on time spent standpoint, owning 20% of a $20M exit in 2 years is much better than owning 3% of a $100M business in 5 years.
- Understand whether your business is a VC business or not. A VC business is expected to deliver 10x returns to investors. That means if you’re taking money with a $5M post-money valuation, the expectation is that you are building for a minimum $50M exit. $10M post-money valuation = $100M target. $500M valuation = $5B target. That’s not to say that you might not sell the company for less and everyone involved might be happy with that outcome, but that’s not what you are signing up for when you take VC money with such a valuation. Know what the implications of taking VC money are and what it means for expectations on you.
- Make sure your personal business goals are aligned with the goals of your investors. The business will only succeed if you are motivated. Investors can’t force the business to succeed. And they certainly can’t force a CEO to care.
- If you’re on a rocket-ship, strap on on your seatbelt and aim for another planet. 4 months after we launched Fab, when we hit 1 million members of whom 50% came from social sharing, we knew we were onto something big. So, we started thinking about our business differently. We started thinking: Just how big could this thing get? In January 2012 when we looked back on our first 6 months and we saw that 2/3 of our daily sales were from repeat buyers, 50% of members still from social sharing, and just how emotional our customers were about Fab, we realized that we had a unique opportunity to build a brand for the decades, so we started thinking less about near term results and more about what Fab could look like in 5, 10, 20 years. And, then, we started really building our business that way: What will it take to build the next amazing global brand around everyday design became our focus, not hitting any near term numbers.
- Find yourself a “sherpa.” This is someone who has done it before — raised money, done deals, worked with startups. Give this person 1 to 2% or even up to 5% of your company in exchange for their time. Rely on them to open doors to future investors. Use them as a sounding board for corporate development issues. Don’t do this by committee. Advisory boards never amount to much. Find one person, make them your sherpa, and lean on them. I’ve leaned on Allen Morgan for the last 8 years through 4 companies and all sorts of ups and downs and twist and turns. He’s been an essential consigliere who has helped me navigate acquisitions, sales, investors, and all sorts of corporate governance issues. Find your Allen Morgan. If you do this right it will pay back in spades.
- If you want to build a long term business, don’t give in to short term pressures. Once you’ve decided to ride that rocket ship, Pplay the long game, not the short game. Most startups are playing short. Big winners play long.
- Protect and nurture your brand. Too many companies get this wrong. Your brand is bigger than your business. Your brand is the emotional reaction your customers and partners and employees have towards your business. Brands are fragile and they are built through repeated trusted and consistent interactions.
- Service matters more than sales. Sales go up and down, service lasts forever.
- As you grow, the hardest thing to manage is culture. We’ve probably worked harder on trying to make Fab Fab everywhere we operate over the last few months than on any other initiative. Ultimately, culture is a personification of who you hire, who manages, and how they do it. Alignment amongst managers around who we hire, how we hire, and how we manage (and how we have fun doing it) is key to culture. Don’t talk about culture; create culture by hiring smart and managing smarter.
- Don’t defocus your team on strategy. Execution wins. In my first startup we were constantly doing executive strategy offsite sessions, brainstorming together as to where we needed to take the company next. That defocused the team away from executing on the plan at hand. Now, I do strategy by collecting inputs over time and having small dinners with with Bradford (errr, usually on airplanes), and then getting our executive team together twice per year to review and plan together. Between those sessions, it’s all about execution.
- Insist on perfection. Never, ever settle. If you start to settle a little here, a little there, soon enough you’ll turn around and say, “how did we get here?” It’s on me and Bradford and Nishith and the rest of our executives to make sure that Fab is Fab is Fab in everything we do.
- But make mistakes. Insisting on perfection doesn’t mean your team members have to live in fear of making mistakes. Encourage them to try things and innovate. Celebrate mistakes as learning opportunities.
- Just don’t fuck it up. There’s a difference between a mistake that turns into a learning event vs. fucking something up by doing stupid things. It’s not a fine line, it’s a big canyon of difference.
- Celebrate your challenges. We have all-company meetings weekly at Fab and they’re about 30% about why we’re awesome and 70% about the challenges ahead. If you want to grow and do amazing things, that’s how it should be. Our management meetings are skewed even more towards improvement, more like 10% success focused and 90% improvement focused. Again, as it should be IMO.
- Conferences are generally a waste of time. I know many people disagree with me on this one, but it’s just not my bag. I learn more meeting with our team, solving problems, going to talk to customers and partners or walking a trade show than I do shmoozing at events. My rule is that conferences are to be avoided unless it’s purely for PR purposes or if you’re in sales.
- Wear funny socks or colorful shoes. I wear funny socks and red shoes to remind myself to not settle for boring and to be creative. And, to show others that even me, the boring CEO guy, can be fun.
- Do something, anything that shows you’re not just a robot. Let people get to know the real you. I’m known to DJ in our office on random Friday’s at 4pm. I shoot marshmallows at people, in the most loving way.
- Hang a lantern on your hangups.
- Laugh at yourself, and let others do so too. When I fuck something up, I make sure to point it out to our team and make a joke about it. We’re all human.
- Tell a good story. People get inspired by stories, not plans and tactics and results. Bring the results to life by making them personal to you and the people around you.
- But don’t lie. Ever. You can round up, but you can’t make it up. The numbers are the numbers are the numbers.
- Find inspiration in the people around you. Listen to them. Cultivate them. Learn from them. Help them make you better.
- Have fun every single day. If it’s not fun, stop doing it. No one is making you.
- It’s true what they say in sales, you’re only as good as your last sale. At Fab we’re only as good as our most recent damaged order, or worse yet, our most recent order that we couldn’t fulfill.
- Go home. Yeah, it’s cool to build a successful fast-growing company. It’s way cooler to go home to your partner.
- Mature, but don’t grow up.
- Be humble.
- But, change the world. Do something meaningful. Make a difference.
- Smile, you’re designed to.If you read this far, thank you. I write this stuff in hope that it helps other entrepreneurs. It’s also therapeutic for me.-jason
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