Month: April 2011

For as long as I’ve been working in or with consumer related startups, i often hear folks that don’t embrace this line of work say things like “that company is interesting but I want to work/invest in a company solving a real problem”

I gotta come clean: I think that attitude is bullshit.

There are two problems with the view that consumer web services isn’t “real” or isn’t hard.

First, it doesn’t respect or appreciate how big and important these things can become.

Awhile back Chris Dixon wrote a great post, The Next Big Thing Will Look Like A Toy. It’s a great read. In the comments Nivi amps the post by reminding people that Eric Schmidt originally called Twitter a poor man’s email.

And I remember the days that big internet companies looked at Google search as a feature not a real company that could go the distance. Crazy, huh. 

I’m sure many incumbants looked at Facebook in the early days with same view. 

The second reason why I find the “i only want to work on hard problems” objectionable is because they don’t respect how difficult it is to build and operate a consumer service that supports a growing network of millions of users. It’s a 24×7 job and with crazy stress and difficult decisions and challenging work.

And if you can do something like that and delight your users every day with fun, entertainment, value, information, or a sense of community then you are solving a real problem. Don’t let the haters get you down. 

Update, 4/17/11: I’ve received a few emails and seen a few tweets and there seems to be some confusion about this post. To be clear, I dont’ have any objection to any line of work as long as it’s legal and honest. This post is my objection to folks that look down on social apps or entertainment apps, etc. 

There are number of startups that are growing like crazy these days. We all know the well known names. And there are many startups that aren’t well known that are also quite successful. 

These known and unknown fast growing companies have accomplished amazing things in a relatively short amount of time and they all certainly have plenty of work ahead of them to continue their growth and success. 

But this post isn’t about them.

This post is about young companies that have been around for 3 or more years that are grinding it out. It’s about young companies that aren’t doubling their user base every 6 months or breaking new revenue records every month or whatever the important metric might be. It’s about companies that are figuring out how to survive as they figure things out.

We all know these startups and the team that are trying their best every single day to figure it out. 

It’s not an easy task to run one of these companies. Hiring is hard. Managing investors is hard. Dealing with all the noise in the market is hard. 

Here are some recommendations and thoughts on how to deal with your company during this time.

-First, ignore the press and hype. don’t try to keep up with the Joneses. It’s a different game/animal and not relevant.

-Take care of your team. This is true for any company but if you are grinding it out, you need to keep your costs under control which means to have the core team in place and that’s about it. And you need to take good care of that team by communicating exceptionally well, staying on top of reviews, doing 360 reviews, focusing on the culture and being generous with options. When you are growing fast, you can sometimes get away with a bit of sloppy HR issues but it’s completely inexcusable for most. 

-Reward loyalty. Each startup is different but there needs to be recognition for rewarding loyalty. Your team is more than qualified to leave you and find a job that pays more or has options that are increasing every quarter. When you goto bed at night stressed out, breath deeply and appeciate that your team is loyal to you the founders and to each other. Take good care of that loyalty. Let them know how much you value it. Life is long and good people take care of each other in times of need instead of hitting the door in search of a better paycheck. But there has to be two way love. 

-Pay close attention to your vision. The team needs to know that the company has a higher calling and that the grinding out phase is just part of the journey for a worthy cause (vs an ad hoc approach to staying alive a bit longer).

-Keep an open and honest dialogue and relationship with your investors. Your investors will be tested in tough times and the best ones (and worst ones) will show their true colors. We have a few portfolio companies that couldn’t get any love from new investors when they did their Series B. We ended up doing an inside round, the company ended up executing like crazy and the Series C became a much sought after stock. 

And lastly, i just want to say thanks to the founders and team members of these companies. it’s ain’t easy and I’m proud of you – whether you succeed or fail.

i’d welcome other advice and feedback to the grinders out there.