Jason's Blog

How Boston Can Step Up Our Game (hint: we are so close!)

It wasn’t too long ago that the Boston startup scene seemed to be panicking a bit.  Lots of discussions started to form around how to step up our game and get our groove back.  There were talks of rebranding, convincing newly-minted college graduates to stay in the area, and about the sting we felt every time another young company headed out to the west coast to follow their dreams.

It seems we have come a long way since those days, and they weren’t that long ago. TechStars is booming.  Amazing programs like Founder Mentors and DartBoston have been established to support young entrepreneurs in their quest to build companies.  And it doesn’t stop there, Dogpatch Labs emerged, Microsoft NERD stepped up to host/sponsor all kinds of great events, and most importantly, there is a heck of a lot of new startup activity here in Boston.  Not that I have been around for THAT long, but I am seeing far more activity than I’ve ever seen before.

Increasing startup activity and the framework to nurture these startups is a big piece of the puzzle.  Not all of them will be successful, but more and more are emerging with strong founders, seed funding, great products, real user traction, solid revenue models, and some good hype and media attention around them.  This just wasn’t the case when I quit my job to start RunKeeper in 2008, and we should feel really good about the strides that we’ve taken.

While this is all amazing progress, we are still missing a critical piece of the puzzle.  The first step may be to get these vibrant startups with real momentum off the ground, but at some point, large corporate acquirers start knocking.  If you keep executing, they keep knocking and the knocks start getting louder.  At a certain point, without much invested capital in the business, it may be tempting to sell. While the outcomes in these instances may not be ‘home runs’, in many cases, selling the company at this point is not the wrong move.  Some wealth is created, the founders get a ‘win’ under their belts, and they can move on to the next one.  Only next time, they can swing for the fences with a proven team, an established track record, and without having to worry as much about how to put food on the table along the way.

The problem is that most of these large acquirers are based out west.  The implication is that, in many cases, the founding team moves to the west coast as part of the deal.  Lock-up is maybe a year, then they’re itching to break free and go do it again, this time going even bigger.  In most cases, when they do head out for the next one, they stay out west and don’t return to Boston.  The most notable recent example of this is Quattro Wireless - A terrific founding team, a great exit to Apple, and a CEO that relocated out west as part of the deal.  He stays for a time at the acquiring company, quits to go do the next big thing, and then  joins Highland Capital Partners (which has a big Boston office), but will be working out of Menlo Park.  Ouch!  I am not close to that situation at all, and by no means mean to single Andy out.  His decision may be for reasons that have nothing to do with any of this.  But it seems that our promising young companies getting acquired by companies in other regions is a primary cause for the continued talent drain of some of the brightest entrepreneurs from Boston into other parts of the country.  Until we stop the bleeding, Boston will continue to stunt it’s own growth.

What Boston needs is for more of these promising young companies to break out and grow into the kinds of large scale Internet powerhouses that become acquirers themselves.  This will give the people that are along for the ride a phenomenal education and skillset, and the resources and network to go out on their own when the time is right (think PayPal mafia, or Xooglers).  It also means that when these promising young companies get acquired for ‘base hits’, the acquirers will be other Boston companies that will keep this talent in Boston. 

There are some local companies poised to go in that direction, such as Hubspot and Gemvara.  And I would be lying if I said that RunKeeper doesn’t have similar aspirations and ambitions.  But getting more of these emerging startups over the hump and on the path to build the next Amazon, Salesforce.com, or Facebook is the missing link to shift the pendulum dramatically in Boston’s favor.  Not only would it stop the bleeding, but it would quickly turn the tide so that Boston can begin acquiring companies (and therefore talent) from other regions as well, thus dramatically shifting momentum as this plays out over a longer period of time.

The exciting part is that we have all of the pieces we need to make this happen!  We have tons of large military/defense contractors and financial institutions stifling and underemploying a generation of ambitious, impatient, highly capable young engineers.  We have more resources, both formal and informal, to provide mentorship and guidance than ever before.  We have deep pocketed institutional investors that are terrified of letting the next Google or Facebook emerge out of Boston and head west.  We have what we need, now we just need to go and do it.

We are in an age where everything is accelerating and nothing is immune to the seeds of disruption and change.  It is happening with individual company growth (i.e. Zynga, Groupon, etc.), and it is happening with the shifting balance of power between countries at the macro level.  There is no reason why it can’t happen in terms of regional technology hubs, and no reason why Boston can’t emerge as the next major technology mecca.  Let’s make it happen!

Recruiting as a Strategic Weapon

Many people talk about the importance of recruiting in building a startup. What most people mean by that is that attracting and retaining key talent is incredibly valuable.  Here at RunKeeper, we agree.  But our recruiting process is important to us for another reason beyond who we end up hiring – the actual process we go through to identify key hires is as valuable as the end result.

I’ll give you an example.  Now that we launched the Health Graph API, we are currently searching for a head of platform evangelism.  This is a key hire for the company, as building out the Health Graph ecosystem is a cornerstone of our future direction and success.  We need to make sure that we get the right person to come in and be the face of the company to the developer community.

When we started looking for this person, the first step was to calibrate internally on a job description.  The next step was to start socializing it with thought leaders in the industry.  This includes platform evangelists, people who have built teams of platform evangelists, product managers and heads of business development from web platform companies who have worked closely with platform evangelists, and so on. 

This socializing process does few things. First, it enables us to get feedback on how we are thinking about the role from people who have been doing it for a long time.  This helps us refine the profile of the person we are looking for, and get a better sense of how we want to go about building out the developer community.  It also enables us to start building up a rolodex and credibility in the platform evangelism world.  The more platform evangelists that know about our efforts and think highly of what we are doing, the easier it will be to establish credibility once we identify the person we ultimately want to hire. 

 As we start to cover more ground, word starts to spread and when these platform evangelists come across others in their peer group who may be thinking about making a career change, we will be top-of-mind and the first person they put that person in touch with.  Before long, interesting candidates start bubbling up.  And when they do, we have a clearer idea of what we are after from the discussions we have had with other platform evangelists along the way.  We then narrow the process down to a short-list of candidates who we like and feel good about, check references, and from there, hopefully choose the one that is the best fit and move forward with a shiny new head of platform evangelism!  The process we use to narrow down the candidates probably merits a separate post altogether, so I won’t even try.

Along the way, all of the seeds we have planted with other thought leaders from the industry are not wasted effort.  These then serve as the foundation for a rolodex we can leverage as we then seek to hire product managers, heads of business development, and other key hires as we grow.  These conversations and relationships can also lead to additional unintended benefits, such as partnership opportunities, introductions to key investors/advisors, and general buzz/excitement around our company and the market opportunity that is in front of us.

So as you can see, while our main objective is to hire a star, we get a lot of additional benefits out of the recruiting process beyond the person we end up hiring.  I have been meaning to write this post for a while, in order to share some of the tips and best practices that we try to follow when building out our team.  I would love to hear from others about the approaches you have found success with, as I am sure that we can learn a lot from what all of you are doing as well.

Stop Raising Money and Build Your Business

If you are a first-time startup founder, then like mine was, your instinct when starting out may be to try to go out and raise money right away.  After all, it is scary starting a company that is funded entirely out of your own pocket.  You want desperately to find a team to build your product, and paying salaries feels like a distant dream.  You see clearly how much needs to be done, and can’t wait to head down the path even faster.  Plus, funded companies seem to get so much more visibility and exposure.  What better way to accomplish all of these things than to go out and raise your very own round of funding, right?  WRONG!

The last thing that a startup should be thinking about in the earliest phases of development is raising money.  The further you can get a business without outside capital, the more value you are creating along the way.  While it may seem like building relationships with investors early on “for the future” is strategic, in reality, your time is much better spent building product, buidling a team, talking to potential customers and thought leaders from your target market, and getting mentorship from serial entrepreneurs with relevant startup experience.  What will get investors most excited is the team you assemble, a real product with real users and real traction/momentum,  and clear direction on how the product and model will evolve over time.  None of these aspects can be furthered by having early discussions with investors, and the only thing those discussions will accomplish is to distract you from doing the things that will ultimately make your company an attractive investment.

Even if you are able to raise money successfully early on, I would argue that you still may not want it.  Operating a startup without capital may be the most stressful phase of the business, but it is also the most fun.  You have no one to answer to other than your co-founders.  You can take your time to tune the model, experiment in fun and important ways, and really push the envelope in terms of the product and business decisions that you make.  It isn’t that you can’t still do these things once you get the right investors involved, but getting those investors will take a lot of time that could have been better spent building the business.  Plus the longer you wait and the more value you create in the meantime, the more efficient your fundraising process will be, the higher the caliber of the investor group you will assemble, and the less of your company you will need to give up in the process.

I’m not saying that there aren’t times/places in a company’s lifecycle where it makes sense to raise outside capital - there absolutely are, and at those points, not raising capital may be the wrong move.  But many first-time entrepreneurs seem to fall into the trap of thinking the time to raise capital has come well before it should.

Lessons from our First Ten Hires

As our little company nears our third birthday, our proudest accomplishment thus far is the team that we’ve built.  We’re up to ten people now (eleventh starts today), and while headcount in itself is not a good measure of success, the caliber of that headcount certainly is.

This team is as committed as any team I’ve ever worked with; We work hard, have fun, and all share a common vision for what we collectively can accomplish.  And this team that we’ve assembled is no accident!  It has taken a lot of thought and hard work to get the team that we’ve got in place, and given that, I figured I’d pass along some lessons that we’ve learned along the way.

Lesson 1: Always be recruiting.

We never view hiring as a transaction, but as an ongoing process that never stops. As a result, while we may have a specific role in mind, we are always making an effort to get to know the smartest people we can find with relevant skillsets and mindsets, even if they are not in the job market at all.  The best people are rarely out actively looking, and if we don’t get them now, we figure we may get them eventually. Not to mention, if we build relationships with them and make them fans of what we are doing, it helps build our local brand (see more below), we get to know more smart people who can be valuable sounding boards as questions arise, and it becomes more likely that inbound referrals will come of qualified people for the roles we are looking to fill.

Lesson 2: Build your brand locally and globally.

As a consumer service with a global userbase, of course building our global brand is important to us.  But what may be less intuitive is that building our local brand is just as important, for different reasons.  We’ve made a point to invest in this area from the beginning by getting to know local thought leaders, serving on panels, speaking to classes at local universities, and otherwise investing time/energy in the local startup scene.  This was especially helpful early on, to get us a loyal following of advocates who could help evangelize our brand on the social web (globally), and also really helps for hiring by positioning RunKeeper as a cool place to work in the local startup scene.

Lesson 3: It’s not about convincing, it’s about fit.

There have been a few instances along the way where it felt like we were dragging people kicking/screaming over the goal line, and in those cases, we’ve done a good job of not chasing too hard.  While we absolutely need to work hard to convince people to join our growing squad, if it is truly a good fit, they should want us as much as we want them.  Otherwise we will constantly be convincing them along the way that they really do want to be here, and we have WAY too much to do to be spending time doing that week in and week out.

Lesson 4: Process is over-rated.

Especially as an early stage company, we don’t have time to put people through four rounds of interviews and a personality test (for example).  We try to identify people that we like, get them in front of the right people on our team, dig into their relevant functional skills, get to know them as people, peel back the onion to get to the root of their underlying drivers, motivations, timing, etc. and make a decision.  When we know, we know.  And if we aren’t sure, bringing people in for round after round of interviews because we don’t have the guts to pull the trigger or let them go wouldn’t do anyone any good.  We try to trust our instincts, and to be thorough without slowing down.

Lesson 5: Don’t play games.

Once we know we like someone, we don’t play games.  First, we try to get all of the facts on their current situation, timing, compensation, skillset, etc.  Then, we look at the role we are bringing them in for, the depth and breadth of their experience, internal parity, etc.  And last, we present an offer that we truly believe is fair for all involved.  We try to avoid (and have avoided thus far) lengthy negotiations, once we mutually decide that someone is a fit, we try to get things done as quickly and fairly as possible for all involved.

Lesson 6: Create an environment where people want to work.

Our most effective recruiting tool of all has simply been to build a company where people like to work. We have tried to hire self-starters, give them the tools and support to be successful, cool stuff to work on and hard problems to solve, and then get out of their way.  In doing so, it becomes easier to attract others as they peek inside and see these bright, ambitious people working on interesting things and having a blast doing it, and they want to be part of it too.  Almost (but not) all of our hiring thus far has been from people that work here recommending their friends and former colleagues.

To be clear, we are only eleven people and this is my first startup.  We still have a lot to learn about scaling a business through all of these next phases of growth.  But for anyone who is trying to navigate through the earliest stages of team building, I hope this post can be helpful by shedding some light on one company’s process.

What other tips can you share from your team building experiences?  What did I miss?

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test: is my disqus and tumblr integration working? this is harder than I thought or I am more technically illiterate than I thought.

Back in Time: My Advice for the 21 Year-Old Me

I studied liberal arts in college, and was never much of a student.  I didn’t apply myself, and I wasn’t passionate about or interested in the things that I was learning (or not learning).  I was filled with pent up ambition and nowhere to channel it, and found myself partying in a futile search for excitement and fulfillment.

As I neared graduation, I had increasing thoughts of becoming an entrepreneur.  I had business ideas racing through my head and was constantly coming up with the next one.  Yet a fundamental problem existed - I bounced from idea to idea and I never tried any of them.

Fast forward ten years, and all of my experience since college was working in small, fast growing VC-backed startups: first in recruiting, then in sales, then in business development, then as a headhunter, helping VCs hire CEOs to run their technology portfolio companies.  It was all great experience, and I always viewed it as ‘practice before the big game.’  I ALWAYS planned on being an entrepreneur.  But my ideas were never ‘good enough’ and I never though I ‘was ready’.  As I liked to say at the time, I was a serial entrepreneur who was batting O for O, since I had yet to have a single at-bat.

Finally, the stars aligned for me.  I found an idea that I couldn’t stop thinking about, in an area that I was very passionate about and had a lot of experience (and frustration) with as a user.  It was also a large market that I believed was ripe for innovation in the years to come.  So I went for it 2.5 years ago and started my first company.  It has been hands down the best professional decision I have ever made, and I’ve never looked back.

As I sat (on this 7 hour flight with no wi-fi) and reflected on the last 2.5 years (and the last 34 years), I found myself thinking about what advice I would give to a 21 year-old me if I could go back in time.  Here is what I’ve come up with so far:

Do what you love

Life is too short to toil away doing things that you don’t love and aren’t passionate about.  If you aren’t feeling it, stop trying to force yourself to fit into a mold that clearly doesn’t fit.  Instead, focus on putting yourself in a situation where you can be more excited and fulfilled.  What are you most passionate about?  What aspects of your experience around that thing you are so passionate about are frustrating to you as a user, and how could your experience be improved?  I spent a lot of time focused on market opportunities rather than passion.  While market opportunities and timing are important, there is nothing more important than passion.

Get moving

Once you have figured out what you are most passionate about, don’t wait, do something!  I spent years bouncing through idea after idea, and operationalized none of them.  In hindsight, the most important learning doesn’t come from waiting for the perfect idea, it comes from the entrepreneurial process of taking an idea and working towards making it a reality.  And the only way it will ever become a reality is if you try!  As Wayne Gretzky likes to say, you miss 100% of the shots that you don’t take.  Plus, even if you fail, you will learn more from the process of trying than you ever would from a ‘job’.

Tell everyone

When you find an idea, your instinct may be to keep it under wraps so other people don’t copy it.  I fell victim to this along the way, partially since I didn’t want people to copy my ideas, but more so because I wasn’t confident enough about them or about myself as an entrepreneur to share them with the world.   When I look back, I realize that the difference between the one that caused me to ultimately take the leap and the others is that I flipped a switch; for the first time, I told EVERYONE what I was planning to do.  Just the act of sharing it served as a powerful form of accountability, since now other people were watching.   Plus, the day I started talking about it was the day it started transforming from ‘idea’ to something more.  As I look back, if I had talked about more of my ideas along the way, real traction would have materialized more quickly, as would my skillset and confidence as an entrepreneur.

Listen to your gut

Along the way you will come across a tremendous amount of skeptics, who will insist that your idea is doomed.  This will be true of any idea that you ever have, no matter how compelling it is.  My advice is to listen to everyone, as feedback can provide powerful learning, but make sure to trust your gut.  As long as your gut tells you that you are heading down the right path, then block out the noise and persevere.  If along the way your gut starts telling you otherwise, only then is it time to take action.  Just remember that every single billion dollar plus company that has EVER been built had just as many skeptics as you when they were starting out.  The bigger the idea, the less people are going to get it during the early phases of development.

It’s OK to fail

I mostly covered this in the ‘get moving’ section above, but needed to re-emphasize again.  IT IS OK TO FAIL.  In fact, the faster you fail, the faster you will learn how to ultimately succeed.  You can take all of the learnings from your failed venture and apply them to the next one.  That doesn’t mean you shouldn’t try with all of your might to succeed, but you better not let fear of failure stand in the way of going for it.  For me, not going for it would have been a massive failure, so I knew there was no other way.

Don’t go it alone

Birthing a company from nothing is really freaking hard.  If you can avoid it, don’t try to go it alone.  That being said, be extra careful about who you select for partners, as your team is a hugely important success criteria.  When I quit my job I didn’t yet have a team, but my #1 priority once I left (and the reason I did so) was to focus full-time on finding the right team, since I knew how important it was to do so.

I will leave you with one final quote that I had hanging on my wall for many years before I finally quit my job to start a company:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat.”                                                                                     – Theodore Roosevelt

I think that is all for now, young Jason.  Now go out and get in the arena!  And if you can avoid it, don’t wait ten more years to get started.