In today’s episode of The Startup Chat, Steli and Hiten talk about changing a teams culture versus firing and hiring a new team. There comes a time in every startup’s life that fundamental changes need to be made in the way things are currently done. This could be as in order to solve a crucial challenge, prepare for growth or adjust to the current business environment. How you approach this as a founder is crucial as if it’s handled the wrong way, can lead to negative consequences for your startup. In this week’s episode, Steli and Hiten talk about changing a teams culture, why you may want to do this, how to do this the right way, examples of some companies that have had to do this and much more. Time Stamped Show Notes: 00:00 About today’s topic. 00:38 Why this topic was chosen. 03:15 How Hiten approaches this challenge. 04:25 Why great leadership can help prevent this situation in the first place. 06:41 An example of a real-life situation of this challenge. 08:17 How you may want to approach this issue if it arrises. 10:28 Why changing the culture of a team is hard but not impossible. 11:00 How you should approach this as the leader of the team. 11:44 How founders burn their team sometimes. 12:39 Why you need to convince your team that your idea is the solution. 3 Key Points: My evaluation is first of the leadership. At the end of the day, that leader needs to lead. It’s hard to change the culture of a team but it’s not impossible.   [0:00:00] Steli Efti: Hey, everybody. This is Steli Efti.   [0:00:03] Hiten Shah: And this is Hiten Shah.   [0:00:04] Steli Efti: Today on The Startup Chat, I want to talk, Hiten, about changing a team’s culture versus firing and hiring a new team. Here’s the deal, I just got off the phone with a founder and CEO of a company that has raised a shit-ton of money. That has accomplished a good amount of scale and success. That is now going through a rough patch and the founder wanted to reach out to talk to me, specifically, about the sales team, but I’ll give you the greater context. I’ll tell you about his challenge. Then I thought it would be fun for us, for the audience, and everybody listening, to go back and forth on what somebody should do in this situation, because I think it will apply in many different scenarios. Basically, they had a good amount of success up until this point, and now a lot of things are starting to not work anymore. They used to have a lot of success with inbound leads. They’ve become market leader in their markets and all of that good stuff. They accomplished a certain amount of scale, but now the market is changing. Number one, they’re getting a lot more competition. Number two, the product they’re offering is not as unique, or compelling, anymore. There’s so much competition. There’s also new technologies, so it’s not the newest, coolest thing anymore that all customers want. The paid advertising channels that it used to use, the prices have gone up, so they’re not working as well anymore. For a variety of reasons, they’re not able to grow as well as they used to. Which means, specifically, for the sales team that they have developed, established, that the sales team is now getting less leads. These leads are less qualified. This means the sales team has to work a lot harder and is making a lot less money than they used to. All of a sudden, there’s all this tension, these issues, sales team is really unhappy, people are cranky. There’s all these problems and the founder reached out to me, specifically, with their sales team saying, “Steli, what do I do now? Do I try to pay the sales team more money? That’s going to ruin … I have slim margins, it’s going to ruin my margins and it’s going to be a problem. Do I try to just hire a lot more new people in the sales team? But what do I do with the old sales people? Do I just coach them through this and try to … Do I, maybe, just take out the commission and pay them a fixed income and tell them, ‘Don’t worry about how many or how little deals you close. You’re going to make a little less money, but it’s more stable. What do I do in this situation?’” I’ll jump in and share with you what I shared with him, but before I do that, I’m dying to hear … If somebody came to you with this limited amount of context, and if we zero in, not on the overall business, because there’s a lot to dissect there, but on the specific challenge of having a team that is not happy anymore, and is not happy about the change in the market, and the change in the work they need to do, and the circumstances of their work. Typically, what is your approach? Do you coach that team through the change? Do you just let go of that team, hire a new team? Do you do something in the middle? What’s your initial, immediate, thoughts on this?   [0:03:10] Hiten Shah: Yeah. At that scale, I start with the leadership. What I mean by that is I go to the person who heads up sales, hopefully, it’s not me.   [0:03:24] Steli Efti: Hopefully, it’s not me. I just want to double-click on that.   [0:03:27] Hiten Shah: Hopefully, it’s not me, otherwise I’ve got to go to myself and do this. And say, “Hey, are you able to do what’s required of you, considering the changes in the market and changes in the business? What’s going to be required of you is, basically, starting from scratch in a lot of ways. Also, being able to lead your team through this change.” My evaluation is, first, at the leadership.   [0:03:54] Steli Efti: Right.   [0:03:54] Hiten Shah: Because, if the leader cannot manage the change, is not in on it, then it will never happen. So, I start with the leader. Then I go, “Hey, what’s up? Are you in or are you out?” I’m very deliberate about it, like that. Usually, though, here’s the thing, you wouldn’t find yourself in this mess, if that leader was conscious enough of the situation to be able to already do something about it. Already this hints at there’s a leadership problem over there. The question is, does that leader stay or leave? Because you might not be ready to let that leader leave, because then there’s all this people mess on your hands. But if that person is the one that’s going to have to manage the change. You have to really determine whether that person can manage the change or not, and that’s it. It’s, honestly, that extremely simple. Everyone else makes it complicated, from what I’ve heard, when people evaluate the situation. But, at the end of the day, that leader needs to lead. If that leader cannot lead the company, or sorry, their team through this change, that’s a big problem. That’s where I’ll start, because I’m dying to hear what you said. There’s a lot more to it, but that’s like … For me, if I were dealing with this, that’s exactly what I would do first.   [0:05:13] Steli Efti: I love it, because I do think that those things, if not all things, are leadership issues. Right?   [0:05:19] Hiten Shah: Yeah.   [0:05:20] Steli Efti: And then, again, that’s an inconvenient truth, because if you think that someone whose responsible for running that team is not doing a good job, then you have to ask yourself, again, “Are you doing a good job leading that person?” Right?   [0:05:34] Hiten Shah: Absolutely.   [0:05:34] Steli Efti: “Are you doing a good job having hired that person?” But, in this specific case, unfortunately, he’s the responsible person for the revenue team. I didn’t get a chance to get into too much detail on why that is, but even, let’s say, you talk to the leader and that leader says, “I’m all in. I’m happy to manage the change.”   [0:05:57] Hiten Shah: Yeah. If it’s you, you have to say that to yourself. I guess, it hit on the big point that was … You know what? This is probably the biggest problem. There is no leadership there. It’s the, I guess, founder, CEO, I’m assuming?   [0:06:11] Steli Efti: Yeah.   [0:06:11] Hiten Shah: That’s actually leading revenue himself. That’s probably, honestly, I bet this is indicative of a number of other problems, especially, when it has to do with sales, because this person hasn’t let go of that role yet.   [0:06:25] Steli Efti: The other thing that he had brought up, specifically, is that this company has gone through a first phase of great success, and then they’ve been in this second phase of struggle for a minute now. They’ve gone down different paths of saying, “This is going to be the solution. We’re going to expand into new markets to find growth,” and everybody was excited. New markets, that’s going to be the solution. They invested a ton of money, and effort, and time into new markets. It didn’t work out. They went back to the drawing board and said, “Fuck, new markets, there’s another competitor. They’re much smaller than us, but their technology is much better. Let’s try to acquire them.” Cool, everybody is like, “That’s what we’re going to do. We’ll merge. We’ll acquire.” Worked on that deal for a real long time, eleventh hour, deal didn’t work out. The acquisition didn’t go through. Okay, back on the drawing board, and he said they went through this three times and now you have the overall team morale thing of, “You guys don’t know what you’re doing. We keep changing the strategy.” People are just burnt out on this back and forth. And on top, just like with all of these problems, when I offered some more radical solutions to the problem, he was like, “Yeah, I’d love to do that, but we’re also in the middle of closing our next round. I don’t want to rock the boat too much, right now.”   [0:07:40] Hiten Shah: Wow.   [0:07:40] Steli Efti: Yes, exactly. I mean, is it ever any different, Hiten, when somebody comes to you with these kinds of problems?   [0:07:46] Hiten Shah: No.   [0:07:46] Steli Efti: No. It’s always like stacking, stacking, stacking, stacking, stacking. It’s like, “Yeah, you came to me with the peak of the iceberg of the problem, but when we try to analyze it, obviously, there’s a lot more problems underneath the surface of the water.” This is a much bigger challenge, but, again, you have to be like, “All right. We got 10 minutes, I want to be as useful, as possible.” It’s not the first, or the last, founder that’s going to find themselves in this situation. What do we do? In terms of the … I’ll just seemed a little bit on the basic changing a specific team and its culture versus hiring a new team. I mean, there’s no answer, just like with everything else we ever give, in terms of advice. We always go, “It depends.” Lots and lots of factors, but I do think when you … Let’s say you were leading a team and there must be a radical change in how that team operates, or the reality has changed. It was a cushy, easy job to make a ton of money. Now it requires you to work much harder to make the same amount of money, or to survive. It’s a much more competitive landscape, all of a sudden. The team has to shift from a causal, this is an awesome gig and everything just works out, to a, we’re back in a war phase, where we have to fight for survival, and we have to figure out a new model that will work again. When you have to make that shift, as you said, first of all, you have to ask yourself and look in the mirror and say, “Am I sold on this change? Am I all in on this?” Because you can’t be a little in on this, you have to be all in. If you are, you need to sit down with the team and explain to them, “This is a new reality. These are the new expectations. If this is something that’s … Since things have changed, this might not be the right job for you anymore. You might not want it or you might not be able to do it. We want you. Here’s what we’re going to offer you to make it happen, but this is what the expectation is.” The expectation in attitude, the expectation in work, the expectation in results, and the expectation on our end, our best guesstimate, on how much time we’re going to be in this phase. Then you have to be radical in living that change, and, not just telling the team, “Well, you’re going to have to go through harder times,” then you fuck off back into your office, doing the same job that you were doing. You have to be in the mitts and the trenches, eating the same amount of shit that they eat. Doing the same calls, demonstrating to them what you want them to live. Demonstrating to them the energy, the intensity, the great attitude. Showing them what you want them to do versus telling them what to do, in this crisis phase. Then the people that are joining you, awesome. The people that are not joining you, you have to part ways with very, very quickly, because they are creating … They’re poisoning the well. They are creating a terrible culture, because they’re going to be walking around trying to sell everybody else on having a bad attitude, and this sucks, and this will never work, so you have to counteract that. But that, in a nutshell, is my advice in these situations. It’s hard to change the culture of a team, but it’s not impossible. You’ll have to make very quick decisions and execute on it with clarity. But you also have to demonstrate the change. You can’t, as management, come in and be like, “Well, the market is changed, so this team’s work is now much harder for much less pay. But you know what? Just suck it up and do it.” Then you go back and you do the same shit you were doing when things were good. You’re back in at your desk looking at charts, and slides, and checking your emails. You’re not demonstrating what you want them to be. That will never work. You’ll have to be the crisis faces in the middle of the team, demonstrating, showing them what you want them to do. Showing them that it’s possible. Showing them that you are all in. That you believe it and that you are willing to do whatever you tell them to do. You don’t expect of anybody to do something you’re not willing to do yourself. Then, for the ones that can’t get onboard, they have to get off, off the boat, because they are dragging you down. They have to go, as quickly, as humanly possible.   [0:11:47] Hiten Shah: I’m going to add one thing.   [0:11:49] Steli Efti: Beautiful.   [0:11:51] Hiten Shah: Just for context. Obviously, everything you said sounds perfect. That’s a pretty pragmatic way to approach it, which I think is what you need in this situation. The thing I’m going to add is that he gave you context around something that I see a lot of entrepreneurs get into and founders, basically, especially, CEOs is they burn their team. Not they burnt out their team, they’ve burnt their team.   [0:12:21] Steli Efti: Burned their team.   [0:12:21] Hiten Shah: Because they’ve said, “This is going to happen.” Then they go after this. It doesn’t happen. One time, team, it’s like, “All right, team. We failed, fine.” Second time, “We’re going to do this.” Okay, go after it. Doesn’t happen with lots of effort. The team is like, “Okay. Can I trust this person in what they say?” All it takes is that second time of it failing, and that’s not … Again, this is … I know why this is happening, I’ll explain. Then the third time, you do it again, and by then, you’ve essentially lost trust. I bet people have already started leaving. Here’s the thing, as a founder, you can get super excited about the idea you came up with as solving all your problems, period. What you can’t do is convince your team that it is the solution, and it is the only solution. You are inadvertently do that when you get that excited about finding the solution and rallying your team around it. You need a really specific balance of, “Hey, this is what we’re going to try. If this doesn’t work, we will try something else.” If you don’t do that, then you end up burning the team. Because the team stops trusting you, because you got so excited about it. And they look at you to have the answer. But when you’re in this uncertain time, and you’re, literally, just essentially doing the equivalent of experiments, or attempts, then you make sure the team is ready to do their best to go after the attempt. Then, right away, when it fails, you go to the back of the team and you’re honest about it. It’s like you bookend it. In the beginning, in the first chapter, you’re just saying, “Hey, this is the best idea we have, right now, and this is why we’re going to go after this. This is how long it’s going to take or this is all the next steps. Let’s go.” Then, at the end of it, you say whether it worked or not. If it worked, great, everyone’s cheery and you’re a hero. If it didn’t work, you sit there and say, “Look, this was part of the journey. That didn’t work. We’re going to all regroup and figure out the next thing.” Then, over time, you have to get them more involved in figuring out the next thing, in whatever way you can do. Whether it’s more visibility into the decision making, or just their help, but it’s super critical to keep their trust along the way, and not promise things that might not happen, when there’s that much risk at play. That’s the way I look at it, because you have to … There’s a level of honesty that you need to get to, and it’s honesty that starts with yourself first, of knowing that you’re being overly optimistic, or you’re looking for a silver bullet, as well, and that there might not be any. And it’s going to take a bunch of attempts to get to whatever end goal you’re looking for.   [0:15:07] Steli Efti: Beautiful. I love it. All right. Let’s wrap this episode up with … If anybody’s in this type of situation, if you are listening to this and you’re like, “Shit. Yeah, I might have burned my team,” or, “Shit I have a certain team that’s not doing that well and I don’t know what to do about it.” You can always reach out to us and see if we can give you contextual advice; steli@closeio, hnshah@gmail.com. As always, if you liked the episode, if you enjoy the podcast, give us a five-star review and rating on iTunes. It’s highly appreciated. This is it for us for this episode. We’ll hear you very soon.   [0:15:44] Hiten Shah: Later. [0:15:44]     The post 370: Changing a Startup Team’s Culture vs Hiring a New Team? appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about mental health and how to stay mentally healthy while you are building a startup. When you’re building a startup, staying mentally healthy is really important. Way too many entrepreneurs try to be strong and save face when circumstances are bad and this can lead to depression or worse. Tune in to this week’s episode to hear Steli and Hiten on the importance of mental health, best practices to stay mentally healthy in a startup, what you need to do, what to avoid doing and much more. Time Stamped Show Notes: 00:49 About today’s topic. 01:20 Why this topic was chosen. 01:51 Why you should seek help if things are looking really bad. 02:04 Best practices to stay mentally healthy in a startup. 02:39 How things change constantly in the startup world. 03:29 Why having awareness of your emotions, your mood, and your feelings is the goal. 04:10 The importance of self-awareness. 04:48 The need for self-improvement. 05:59 An example of being self-aware. 06:54 One of the hardest things for founders to do. 3 Key Points: If you’re in a really terrible place emotionally seek help. Having awareness of your emotions, your mood and your feelings is the goal. In the startup world, things can change constantly.   [0:00:00] Steli Efti: Hey everybody. This is-   [0:00:01] Hiten Shah: Shit.   [0:00:02] Steli Efti: Steli Efti . I love that I recorded this.   [0:00:06] Hiten Shah: K.   [0:00:06] Steli Efti: Because, what is said before I hit recording was, “All right. Let’s record the next episode, Hiten, mental health,” and I hit the record button. As I was introing Hiten is like, “Shit.” I love that raw moment. All right. So, today we’re going to talk about mental health, and how to stay mentally healthy while you are starting a startup. Hiten, bless us with your genius and your wisdom. What is everything I need to do-   [0:00:35] Hiten Shah: This is the startup chat.   [0:00:36] Steli Efti: There you go. This is-   [0:00:36] Hiten Shah: This is the startup chat. We don’t know anything about this. Aw, man.   [0:00:38] Steli Efti: How do I stay sane in a startup? What do I have to do? What do I have to avoid. I mean, I feel like we’ve recorded a lot of episodes that relate to this. Right? The emotional side, the mental side of things, but I wanted to do a quick episode on this. I’m not sure if you want to talk about the more serious cases of mental health. I surely don’t. I mean, I’m interested in it, but I don’t feel like I have an authority or confidence and experience to talk about real depression, clinical mental health, other than, if you’re in a terrible place emotionally, seek help, and seek professional help. I think way too many of us, especially entrepreneurs, are trying to be strong, save face, and it becomes a very lonely place. I don’t want to talk about the most severe cases of this, but staying mentally healthy is I think a real priority and a real threat in a startup. I know that you and I have a lot of experience personally, and with a lot of our friends, and people that we work with. What are some things that come to your mind in terms of best practices to stay mentally healthy in a startup?   [0:01:53] Hiten Shah: Oh, man. I don’t think you get the luxury of always feeling sane if you’re going to do a startup or run a business. The one reason I’ll say is because most of us, I think all of us don’t really grow up being built for it. As a kid, you’re there to have fun, you’re going to get educated, you’re going to go to school, people tell you what time to show up. You’re not dealing with change. Literally, in a startup or a business, things can change constantly, almost in every moment sometimes. You can really feel like everything’s really great or everything’s really shitty. This is where my shit came from earlier. Sorry for the language, but it’s not as bad as some of your language Stelly. I think I’ve calmed down with my language lately. But, speaking of insanity. I don’t know. This is something where I think people’s go … If you plan on doing this stuff, and think you’re going to be sane or think that’s the goal. You’re wrong. I think the goal is, to me, and I guess my first thought on it, and I’d love to hear what you think, because I’ve already said I don’t think sane is a good goal. Having awareness of your emotions and your mood and your feelings is that goal. That will give you more longevity in your career … If you want to call it a career, which I don’t … As a founder than anything else. I would say that for any human on the planet, which is this awareness of your emotions, your mood, your feelings. I say those three things very specifically, because that’s all you got. If you have that awareness you can at least figure out what you want to do. You can figure out what’s impacting you, and why you might be either doing or saying or thinking the things you are, or feeling the things you are too.   [0:04:13] Steli Efti: I love that. I think self awareness … Oh, man. Self awareness is so key, but then the next point is self acceptance. Right?   [0:04:26] Hiten Shah: Yeah.   [0:04:26] Steli Efti: Once you know how you feel, and you know what’s going on with you, figuring out this delicate balance between accepting that and forgiving yourself for it, and being okay with how it is. Then from that point of self acceptance, getting to self improvement, where you go, “Okay. I understand this is how I feel. This is okay to feel this way, and now that I sit with that acceptance for a little bit. How do I move on from it. What do I need to do next.” We recorded a bunch of episodes, actually, on self awareness. It’s a big topic for us, but I’ll throw out two that people should listen to, if you haven’t yet. It’s episode 45, Founder Self Awareness, and episode 65, How To Become More Self Aware. I think that, that’s really, really big. I’ll throw out … There’s obviously, a lot of practices that people will share in terms of mental health habits that people will bring up often times for founders. Things like physical activity: working out, going to the gym, doing sports is something that’s really important, yoga, whatever you want to call it. Meditation is something that we’ve talked about before, and people will recommend a lot. I really don’t want to talk about these types of things as much. I think you touch on a really important point with knowing what is going on, and having the self awareness to not … I don’t know … To not be in this hypnotized state where you think what you think and feel is reality, but you have this one step of removal it’s the reality in my current mood. That example of that is sometimes when I don’t sleep well or if I’m hungry I might have very negative thoughts and then I’ll catch myself, and be like, “Ooh. This is not you. This is you tired or this is you hungry.” What that does is it allows me not to believe myself, not to believe my thoughts or not to-   [0:06:39] Hiten Shah: Right.   [0:06:40] Steli Efti: Right? It makes me go, “Disregard all this thinking because you’re so tired right now everything you think is negative, but you can’t believe any of it.” That relaxes me instantly, so not I’m not in this hypnotic state where I think I believe everything I think to be true, I’m acting as if, but I step away from myself and I go, “Oh.” I observe myself and I go, “Oh. This is me not in a clear state of mind. This is me in a really bad mood, so everything I think right now I can not trust. I need to relax, and get myself into a better state first.” The other things I really want to highlight … one of the biggest and hardest things I think for founders to do … For me, I’ll talk about myself, and I definitely project this on many … I see this with many others. I don’t know I will just project or if it’s a reality I’m picking up on. I think founders have a really hard time … Humans maybe, in general, but founders in particular … To speak about their challenges, their problems, and their emotions with other people. I think finding someone or a group of people you can talk to, not to seek solutions. Not necessarily to even seek advice how to fix things, but just to be able to have somebody that can relate to you. So, you can share something to somebody that will understand it. Just that exercise can do tremendous things to your mental health. I had to learn this the hard way. For most of my life I kept all of my problems to myself. I was somebody everybody came to with their problems, and I just figured out my problems on my own. Then I tried to share my problems with others, but I always was like, “This is kind of pointless. They don’t have better solutions that I had. This is not really that useful to me. I don’t know why I should do this,” and then I got into this space now where I realized there’s a lot of value in talking to somebody that can relate to me and that I can relate to, and just sharing these things with no goal to have somebody fix it or give me a perfect solution. Just to be able to verbalize it, to physically get it out of my body and into the real world versus just keeping it in my head and in my body as emotions and thoughts. That alone, that release of saying out loud that I trust and that can relate to it and listen to me. That alone, that release alone is incredibly valuable to stay sane. Finding somebody that you can talk to about your deepest and darkest thoughts and emotions about your weakest moments, just have somebody you can openly share without any pressure to pretend to be something you’re not, and without any expectations for them to fix your problems, is incredibility valuable to stay mentally sane. In many ways, that’s what therapy is for many people. They pay somebody, professional listener, that won’t judge them and that is not really too closely related to their life to just listen to them honestly speak about their thoughts and emotions. I think that, that’s incredibly valuable. I don’t have a therapist, but I might try that at one point. I have a few people that I trust … You’re one of them that I’ll share some things with that I wouldn’t usually shared … 10 years ago I wouldn’t have shared with anybody, and it helps a lot to just have somebody who will listen to you, and for you to verbalize some of your problems. It helps with mental health for sure.   [0:09:57] Hiten Shah: Yeah, likewise. I think you’re one of those people for me, and how could that not be true with 400 episodes, almost, down our belt, or on our belts. I think that this is a super important topic. It definitely impacts most people I know that are founders in one way or another, even if they’re not necessarily emotional or anything like that. You can just tell when you talk to somebody, especially if they’re a founder, and they’re talking to you and telling you about what’s going on in their business how they’re feeling. My friend the other day asked me … He’s a founder as well. He’s very happy. I see him every week and he asked me, “Are you happy?” I actually told him no. I’m not happy, and I explained why, and he’s first thing was … He helped me with some things that I’m working on, and I do the same for him. He gives me advice, and immediately did his best to figure out why I wasn’t happy, and help me in the context he could get to a place where I would be happy. I think that just happened randomly because he happened to be really happy about what’s going on in our conversations and all that, and I am too, but he asked me very directly, and I’m not going to lie to him. While, if someone else asks him. I’ll be like, “Yeah. I’m good.” Like, “I’m good. Yeah. What are you going to do about it?” While, this person I value the person so much, just like I do you, that if they ask me a question … It’s not that I’m lying that I’m not happy or that I’m happy when someone else asks me. It’s just more like, “Hey. I’m going to tell you what’s best for you to hear,” but someone else, depending on the person, I think you should be honest. So, find those people. It’s probably the biggest piece of advice, both you and I can give other people about this. At the same time, I think find your ways to awareness and find your ways to acceptance. I think awareness … One you pointed out about food and being hungry is super interesting to me because sometimes you don’t realize what it is. The really stupid basic thing you can do, and I call it stupid because … Excuse me. I think it’s valuable, which is just start logging your mood, if you can.   [0:12:19] Steli Efti: Ooh, yeah.   [0:12:20] Hiten Shah: Even just notes like this day this time I don’t feel great. I don’t know why. It’s this day this time. I don’t feel great. I’m not sure why. These might be the reasons. You’ll start finding your pattern. I tend to do that in my head sometimes. I tend to just take a moment and just say, “Oh. What’s going on here? How do I feel? Do I feel a little great? Do I not? Why do I not feel great? Okay. How can I just feel great?” Because, a lot of times just saying, “I feel great.” Believe it or not can make you feel great, regardless of what’s going on. A lot of times we just want to dig into problems. A lot of the job, when you’re going stuff as a startup or as a founder, is problem solving. If you keep using that muscle of problem solving all the time you can get into this mode where you’re just thinking about problems. I don’t know how healthy that is. If you’re always just thinking about problems when you don’t need to. Sometimes the problems you’re worried about might not be that important right now. I think that awareness of like, “How am I feeling? Is it because I’m just thinking about problems all the time? Is it because of something else? Does it help me when I go for a walk. Does it help me when I pick up that phone and call somebody or go walk over to someone’s office and say, “Hey. I’m thinking about this. What do you think?” It’s just about finding your ways once you’ve found awareness and the acceptance of those feelings or whatever it is to basically mitigate the emotion, and make it go away, and getting through it. I think there’s many ways that people can do that, but you won’t really know how to figure that out if you’re not discovering for yourself exactly what’s causing these emotions and these moods for you.   [0:13:59] Steli Efti: Beautiful. I think that’s it for us for this episode. Stay mentally healthy. It’s so important. You can’t be an amazing founder if you’re emotionally and wreck.   [0:14:09] Hiten Shah: Right.   [0:14:09] Steli Efti: If you need to somebody to listen to you, give feedback, give advice, help in any way shape or form. If you’re struggling with this, just reach out to us [inaudible] gmail.com. We always love to hear from you, and help if we can. That’s it from us for this episode. We’ll hear you very soon.   [0:14:25] Hiten Shah: See ya. [0:14:25]   The post 369: How to Stay Mentally Healthy in a Startup appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about the concept of company builders or company studios. But what is a company studio? According to Steli, a company studio is a corporate structure that brings together talent and people, develops ideas and prototypes with those people and once those ideas or prototypes become something viable, they infuse capital into that project and incorporate it into a new business. It’s basically something in between starting your own company and being part of an accelerator like Y-combinator. In this episode, Steli and Hiten share their thoughts on what company studios are, the benefits of joining them, the challenges of running one and much more. Time Stamped Show Notes: 00:00 About the topic of today’s episode 00:35 What is a company studio. 01:51 Benefits of joining a company studio. 02:20 Why this idea is appealing to entrepreneurs and first-time founders. 03:19 The different ways of learning how to run a business. 03:57 How company studios function. 04:47 Another key benefit of joining a company studio. 05:06 How these companies differ from Y-combinator. 06:03 The challenges of running a company studio. 06:27 Examples of successful company studios. 3 Key Points: A company studio is a good match for all parties involved, but it’s very difficult to pull off. There are different ways to learn how to run a business. One of the benefits of company studios is that you get to work with people who have done it before.   [0:00:01] Steli Efti: Hey everybody this is Steli Efti.   [0:00:03] Hiten Shah: This is Hiten Shah.   [0:00:04] Steli Efti: Today on the Startup Chat we want to talk a little bit about this concept of company builders or company studios. What is it? How does it work? Is it good? It is bad? Who should participate in that or think about that? First let me give a definition on a company builder or a company studio. This is the concept, it’s kind of something in between starting your own company and being part of an accelerator, like Y Combinator where there’s a bunch of companies that are started in the very early stages that go through a three month period of pivoting, developing, launching, changing and then raising money to go off on the races. A company builder or a company studio is one corporate structure that brings together talent and people, develops with those people ideas and kind of rapid prototypes these ideas and NVPs them. Once that NVP or prototype of a very early stage of an idea has some legs, the company builder basically infuses some capital, puts together the team and incorporates it as a separate entity and kind of like bursts a new company that is being pushed out of the existing corporate structure. It’s this idea of having one company that’s launching off companies, that’s starting off new companies. As a team member when you join a company builder or a company studio, the idea is that you’re an entrepreneur but you’re in a much more supportive environment where there’s going to be money and infrastructure and expertise to come up with the idea. To name the company, to infuse it with money. Only if the early test work out and you have a promising opportunity that’s tested and proven, then you get to take the team and the idea, whatever was accomplished internally in the company builder studio and run with it and become a real entrepreneur in kind of a safer bet or higher chance for success bet. This idea I think has been around for a very long time. It’s very appealing especially for entrepreneurs. A lot of entrepreneurs like the idea of starting a company builder because they want to start so many different companies. It’s also an appealing idea for first time founders probably that are like, “I want to be an entrepreneur but I have such a lack of experience. How do I do this?” It’s a good metro on both sides, but it’s very hard to pull off. I just want to talk a little bit about that concept, what you’ve seen work or not work. Is this a good idea for founders that have done a few startups that are thinking about starting a company builder themselves? What are the pros and cons for a first time founder that is thinking about joining a company builder, studio? Let’s just unpack this a little bit for the audience.   [0:02:48] Hiten Shah: Yeah, you know they say that there’s different ways to learn about how to run a business or learn what you want to learn. The one way is you join a company and you learn. This is if you’re aspiring to build your own business or start your own startup or whatever, whatever you want to call it. Steli whatever you want to call it. I think one way is you join a company builder, they call them like studios sometimes. There’s an example of a bunch like Betaworks in New York or XPO which is in San Francisco and New York or Science Inc which is in LA. I’m sure there’s many others I’m not naming right now, but those are the three that come to mind that kind of cover LA and New York and SF. These are basically organizations that start multiple businesses. Some of them also invest in other businesses, but the primary objective of those organizations is to create new businesses. They give you a lot of support. They know what to do, like Science Inc has always been very focused on eCommerce and that space. They have other few products, but they’ve been focused on that space. Betaworks has been all over the place, they have B2B products like Chartbeat and Bit.ly as well as they’ve done consumer products like various different games. I think Dots was one of their games and then XPO has thrown out something like Reserve.com and Input.com and [inaudible] kit.com I believe and a bunch of others. It’s like another option if you’re not quite ready to go on it on your own. You can get into one of those organizations and learn about startups as well as have your own potentially and just take it from there. I would say that the benefit of one of those studios is the fact that you get people who have done it before. The organization is designed to support you or should be designed to support you in the earliest stages of the business. Now the thing is, these companies aren’t like Y Combinator. These organizations are not taking on like 100 or 200 people at once, so I would say they’re even more selective than Y Combinator. You’d have to talk to them and interview and see if you should join one of their teams or help them start a new business or what have view. There are highly experienced founders though or people I would say in some cases at those organizations that have done it before and know exactly how they think about building companies and can help you in a lot of ways if you need that help or want that support.   [0:05:46] Steli Efti: Yeah. I love the idea of company studios and company builders for many reasons, I think it’s appealing for early and inexperienced founders. I think it’s appealing for very experienced founders that have done it multiple times and are now set on the idea that they don’t want to be an investor. They still want to be an entrepreneur but they don’t want to go through the grind of just committing to one idea for 10 years. It’s kind of appealing for many different reason, but there’s also I think a lot of about it that is a lot more difficult. I think having a successful company studio, builder is in many ways harder than just building a great company. Or becoming a great investor or having a good fund. I think because it is both things at once, so it’s very complicated I think to pull this off. I know a lot of founders that have tried it and failed. I only know one example actually, example that you didn’t name in sass that I’ve been impressed by which is eFounders in Paris.   [0:06:47] Hiten Shah: Right, yeah.   [0:06:47] Steli Efti: eFounders has an incredible track record of sass companies kind of the type of companies and the success that these companies have has been really high. I’ve met a lot of teams and people and I’ve always been impressed by the caliber of people that have been able to attract and to put together in those companies. They’re doing something right. I think for both sides, but especially thinking about the founders that are thinking about joining a company builder, studio, I think it’s important to not just look at the track record of the founders of that as successful or rich people. Go, “Well these guys had great success with a product company, they wanted to do this thing. It’s surely going to be a success.” Really see does the studio have any kind of track record of developing successful standalone companies? I know a bunch of these studies that don’t that have really great founding teams and great talent and a great vision, but have not been able to pull it off and to build standalone companies that grow and flourish after the initial phase. They’ve just not been able to do that. We just look at the track record of the company builder and studio. Again, nothing is guaranteed, and although a studio can be a really exciting environment and I think it can provide some help and hopefully accelerate some of the steps in the early days, it’s not a sure fire thing. You can’t just trust others to figure things out for you and be like, “I’m just going to join the studio and they’re surely going to figure out the name, the brand, the idea of the product and the financing. All I’m going to do is I’m going to be showering in the fame and fortune of being a startup founder and an entrepreneur.” It’s not going to be that way, right? If you really want to be an entrepreneur a lot of the burdens probably going to be on you. You’re going to have to figure out a lot of things along the way. You can’t go into that thing with an employee mentality and mindset, but one in the fame and fortune of being an entrepreneur. That’s definitely not going to work. That’s the biggest advice that I have to give based on the experience, the people that I’ve seen involved with this. Both founders joining a company builder or studio and both a bunch of founder friends of mine that tried to do that themselves. It’s very, very hard to pull off this. There’s very few examples of those that do this successfully. If you join one of these places, you still have to get at it with an entrepreneurial mindset and realize that chances of failure are very, very high still, right, no matter what you do.   [0:09:23] Hiten Shah: Yeah, I couldn’t agree more. I think that it’s another option and I really like your thought around it working for also experienced founders. A lot of the times some of these other things, experienced founders might shun for whatever reason, but these company builders, studios you see experienced founders definitely go into them. Sometimes a lot more often than other types of incubators or anything like that.   [0:09:52] Steli Efti: All right that’s it for us for this episode. Again, if you have any experience trying to build a company studio, builder yourself or join one and you want to enlighten us with your experience, with your feedback, just let us know Steli@close.io, hnshar@gmail.com. Besides that if you enjoyed the Startup Chat and a lot of you are nice enough to tell us that you do, and if you haven’t done that yet, go to iTunes, give us a five star review. It helps us push and be more visible and so it helps us grow the community of the Startup Chat. We highly appreciate it. Until next time we’ll hear you very soon.   [0:10:27] Hiten Shah: Take care. [0:10:28]   The post 368: Creating or Working with a Company Builder? appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about affiliate how to rebrand your company the right way. Sometimes, some founders might decide to change the name of their company. This could be because they don’t like the name, the name is not resonating with their customers or they need a new name that reflects the current state of the company. While it may be a good idea to change the name, doing so a lot comes with a lot of risks and the rewards might not be that great. Listen to Steli and Hiten talk about when the is the right time to rebrand your company, how to pull of a successful rebrand, examples of companies that rebranded the right way and much more. Time Stamped Show Notes: 00:00 About today’s topic. 01:00 Why this topic was chosen? 01:39 How you know that rebranding is a good idea. 01:50 The two main types of rebrand that companies do . 02:53 Why you should think carefully about a name change. 03:12 Reasons to rebrand. 04:00 A major reason why companies change their names. 04:54 Another common reason companies change their names. 05:03 How changing your names is changing the perception of your brand. 06:45 How there’s a lot of risk when changing the name of your company. 07:23 How thinking through whether to change your name helps you come up with a better name. 3 Key Points: You really want to think about why am I changing the name. One of the key reasons companies rebrand is because they are running into a big issue. Changing the name for selfish reasons can work out but there’s a lot of risk involved .     [0:00:01] Steli Efti: Hey everybody, this is Steli Efti.   [0:00:03] Hiten Shah: And this is Hiten Shah and on today’s episode of the Start Up Chat, we’re going to talk about how to rebrand your company. How to change the name, how to change the branding. All right, Steli. What do ya got?   [0:00:15] Steli Efti: I don’t know, I mean this is an interesting one, right? In a prior episode we talked about how to brand your company or start up, how to give your product a name. In this one we wanted to talk about what do you do when you … A. How do you know that you should really change the name if you’re not happy with it or the results aren’t good? And then how do you pull that off? I think just recently, for whatever reason, I saw two examples. We’re not going to name names, but two examples of a company that tried to rebrand and it didn’t quite work as well as they wanted. In one example they even had to backtrack and change the decision again, which I assume was incredibly painful and very costly, very distracting doing so much work to do a new website, a new logo, and announce it to the world and to the company, and then having to a few weeks later take all that back, and go back to the old name. I thought it would be useful to talk, a. When do you know that you should rename or rebrand? How do you make that decision rationally? And then if you do it, how do you do it well so it doesn’t create a massive amount of friction or problems, and you pull it off in a successful way. So let’s start off with the first question. The fundamental one is how do you know that rebranding is a good idea, and renaming is a good idea? I have a sense of how we’re going to start this conversation off, but I always love to throw that ball to you, and see if you’re going to surprise me.   [0:01:41] Hiten Shah: I want to say, there’s two types of rebranding. There’s the kind like Intercom has done, where they went from Intercom.ia to Intercom.com. That’s easy.   [0:01:53] Steli Efti: I didn’t even know, I don’t even remember that, but that makes sense.   [0:01:57] Hiten Shah: Yeah, they were, for the longest time. Yeah. That’s one kind of rebranding, where you’re just changing the domain and you still have the old one, and you’re not changing the name. I think that’s really easy, to be honest. You might even do an announcement, or might just keep it quiet and just do it and call it a day. It think there’s little technical details, like making sure you do a 301 redirect, making sure all your pages are mapped, making sure there’s no 404s, all that good stuff, just for SEO purposes because you’re probably getting some search traffic. That’s an important piece. Not for this call, but pretty basic stuff these days. So find somebody who knows about SER or whatever if you are going to do that, because you should do that right and your engineers will have a little bit of a headache doing it. They’ll figure it out. Then the other type is when you change your name. I think that, for me, when changing the name obviously that SEO stuff’s super important, but you really want to think about why am I changing the name? Why do I want to change the name? What’s the desire? Make a list. Make the list of reasons why you want to change the name. The reason is that’s going to help you come up with a new name. I’m assuming you haven’t come up with a new name but you have a desire to rebrand. Reasons to rebrand are usually like this domain is not representative of our brand anymore, or this brand is not representative of what our product is, or it’s too complicated to say we screwed up in the beginning, we didn’t really think about this too much and we’ve outgrown it because customers don’t know what the brand is and don’t know how to say it. We’re growing and we want to make sure the name reflects either what we do, or the name is just more expansive because we’ve expanded our product offering or we’ve pivoted it and need to be more representative of what we are.   [0:03:53] Steli Efti: I think that oftentimes when people, I mean some amount of time when people want to rename or rebrand, it’s because they’re running into some big issue, right, so it might be that nobody can spell it or all our customers are confused about it, or they’re confusing it with some other product or company, and it really becomes a friction point that’s not just a small thing, but it just becomes a big thing and eventually convinces the founders of the team that hey, we need to change the name. This name is not just not helping us, it really is holding us back or creating a lot of friction and problems for us. That could be a reason, and you’d have to be … I’d be careful to really analyze if it’s true, that it’s that big of a problem or if it just appears to be that big of a problem because you hear it frequently. If you as a founding team, you hear somebody being confused about your name even just once a month, after six months you might think this is a huge issue. You just have to analyze sometimes if that’s true or not. The other reason that I see sometimes is just people are unhappy, they never liked the name in the beginning and as they see success later on they feel compelled to now go again at it with a name that feels bigger or better in terms of grand value. So they might do something super practical and technical in the early days, I don’t know, something that’s very descriptive, emailsendingtoolplus.com or whatever. And then as they see some success, emailsendingtoolplus is really a terrible name. We should really be Zinga or something. We should come up with some kind of cool name that could become a billion dollar business and a big global brand. But in those cases, it’s a very selfish thing. It’s an insecurity thing to say the founder’s not happy with it or the founding team is not happy with the name for personal taste reasons, and then it’s really disconnected. The customers might like the name, the customers understand the name, it’s never been a hindrance to their growth, it’s just a personal thing where they never really liked the name they chose in the early days. And as they see some more success eventually they feel compelled to tackle that and change the name. I think that those are the situations that are the most tricky, where changing the name is a very selfish thing and can work out, but has a lot of risks involved, right? Because people have known you for something, your customers obviously like the name, or didn’t care enough to buy the customers, so now changing your name means changing the perception in the entire market to understand that you’re not this other name anymore. It can create a lot of friction, confusion. Sometimes with names you might, if you don’t do enough homework you might choose a name that means something in another language or another culture that then can create friction if you’ve not been [inaudible] and sensitive about it and people really hate it. So there’s a lot of risk and sometimes the reward is not as big. The reward is almost always not big in the short term, right? Naming the company differently is not going to double your traffic, it’s not going to get you a lot more customers, it’s not going to make people convert at a high rate. More likely than not it’s going to create some friction and confusion, so it’s going to slow down things at first. So you really need to be thoughtful and like, is this purely a taste and selfish thing, or is this really something that’s in the best interest of the business and your customers?   [0:07:31] Hiten Shah: Yep. I couldn’t say it better myself. I think people are going to rebranding for, a lot of times, just the wrong reason. We just want to change it, we don’t like it. That’s not the best reason, so really think through why you want to do it. That will really help you figure out what that new name should be.   [0:07:46] Steli Efti: I love it. All right, that’s it from us for this episode. We’ll keep it short and sweet. If you’re pulling off a rebrand, I’m actually interested in this topic. If you’re currently changing your name or shortening it, or changing your domain, or changing anything around your naming or the branding of your company or product, and you want to share some lessons learned, some thoughts or get some more specific contextual feedback, just reach out to us, steli@close.io, hnshah@gmail.com. We always love to hear from you. Until next time, we’ll be here very soon.   [0:08:16] Hiten Shah: Cheers. [0:08:17] The post 367: How to Rebrand Your Startup appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about how to come up with a name for your startup. Finding the right name for your startup can be challenging, and it’s important you come up with a great name because it can have a significant impact on your success. For example, if you choose the wrong name for your startup, it could fail to connect with customers or worse. In this week’s episode, Steli and Hiten talk about how to come up with a great name for your startup, how they came up with the names of their companies, they share some tips that can help you come up with a name for your own startup and much more. Time Stamped Show Notes: 00:00 About today’s topic. 00:40 Why this topic was chosen. 01:43 Why you should choose a name that makes sense to your customer. 03:00 How thinking about the customer can help you come up with a better name. 03:37 How Hiten and his team came up with the name FYI. 04:17 How to come up with a name that doesn’t take you a lot of time. 05:07 Why it’s a not a good idea to come up with a name and rebrand it. 05:36 Steli wasn’t involved in naming close.io. 06:23 How they came up with Elastic Inc. 07:34 A different approach to coming up with a name. 3 Key Points: I don’t think anyone is exceptional at naming. The best names are the ones that make sense to your customer. I was not involved in naming close.io   [0:00:00] Steli Efti: Hey everybody. This is Steli Efti.   [0:00:03] Hiten Shah: And this is Hiten Shah.   [0:00:04] Steli Efti: Today on this followup chat, we’re going to talk about something I can not believe we’ve not touched on in almost 400 episodes, which is how to come up with a damn name for your startup. This is probably focused on early days. You have an idea and you now need to give that idea a name, or the company a name, or the product a name; and obviously there’s considerations. You know, domain names, competition. What’s easy to spell? Should I spend a lot of time on this and try to get it perfect and really think long term branding? Or should I just MVP it? it doesn’t fucking matter, I can rename it later. Let’s touch on some of these most obvious and big questions on how to help in the early days and how to come up with a name. How do I come up with a name for my idea, Hiten? How do I do that in 2019?   [0:00:54] Hiten Shah: Oh man. I think that on one hand, the people put a lot of weight on a name and make it almost too hard on themselves to come up with a name. The most common thing I hear is I’m not good at naming. I’ll be the first to tell you, I don’t think anyone’s exceptional at naming or anything. I don’t think it’s this big thing you got to be great at. It’s something you don’t really do that many times, to be honest. To me, the best names are the ones that make sense to your customer. Let’s just throw down and just say that because I know you agree with that. Right?   [0:01:36] Steli Efti: Yes. Yes, and it’s the one thing nobody was ex- … It’s one of those things nobody was expecting you to say this at this moment, but nobody’s surprised you said this at this moment.   [0:01:47] Hiten Shah: There you go.   [0:01:48] Steli Efti: Those are the best things because almost every episode right now, we find a way to go back to like, “What does your customer think about this?” Right?   [0:01:55] Hiten Shah: There you go.   [0:01:56] Steli Efti: Or how is this for your customers? But when people come up with names for their startup, the last thing they think about … Honestly, I don’t know if we thought about our customers when we came up with the name of the company, but I don’t think … I’ve never heard somebody go, “What would our customers think? How do they feel about this?” Most people think very quote unquote selfishly, like “What’s a cool name? What do I think would be exciting or cool, or do I like?” It’s a very personal taste that dictates most people’s naming conventions.   [0:02:27] Hiten Shah: I know.   [0:02:28] Steli Efti: But thinking about the customer I think is brilliant.   [0:02:30] Hiten Shah: I know. But think about it. Your’s is Close.io.   [0:02:32] Steli Efti: Yeah.   [0:02:34] Hiten Shah: Close deals. Right?   [0:02:36] Steli Efti: Yeah.   [0:02:36] Hiten Shah: Make sales happen. It works. It works great. You think about your customers, like you go to Close.io. Why? Because it’s software to close deals for you. Right?   [0:02:43] Steli Efti: Yep.   [0:02:44] Hiten Shah: It’s pretty … It makes sense to me. Even names like Salesforce make sense. So, I think another thing I’d say is if you think about your customer and then you think about the name, you’ll know it when you come up with it. For my business, I have a hard domain because I can’t get the domain like you, Closed.com is probably really hard, right?   [0:03:05] Steli Efti: Yep.   [0:03:06] Hiten Shah: So the name’s FYI and FYI.com is hard so we have useFYI.com and for us, we kept thinking about the name, but we thought about the name from a what’s going to make sense to the customer? And our product helps you essentially find your documents, no matter where they are. So FYI was the play on like “For your information.” Right?   [0:03:28] Steli Efti: Right.   [0:03:29] Hiten Shah: We changed it, we don’t talk about this anywhere, but we changed it in our heads to “Find your information.”   [0:03:35] Steli Efti: Interesting.   [0:03:35] Hiten Shah: You know?   [0:03:36] Steli Efti: Yep.   [0:03:37] Hiten Shah: We wanted something common, people will recognize it, they understand it, they can say it. Right?   [0:03:41] Steli Efti: Yep.   [0:03:42] Hiten Shah: But that wasn’t easy necessarily to come up with. We just kept playing with the names. And then one day someone said [fi] or something like that, and then actually we just kept riffing from there and somehow we got to FYI. Then, we had to find a domain that works. We didn’t want like FYI HQ or any of that kind of stuff, we wanted something that felt right. UseFYI felt about right to us, and it was six letters, and it was available. So there, I just gave some tips, right?   [0:04:10] Steli Efti: Yep.   [0:04:10] Hiten Shah: On like some of the basics. But I think the hard part is how do you come up with one that doesn’t take you a ton of time but is very focused on the customer. Look, if we said, “Oh, we’re just going to build some document tool,” not knowing what it was, I think naming it would’ve been a lot harder. But because we knew what problem we wanted to solve for people at the core, naming it was much easier. We also knew, and this is something that I’m sure will have this objection in their head right now, we also knew that this problem wasn’t going to go away. So, if we came up with a name and it was kind of problem associated like FYI and then at some point you’ll be able to find all your information, like just in the world today easily, the problem goes away and the name might not make more sense. I think about that but I don’t think about it too much. I think more about what makes sense to the customer. I don’t like this idea, by the way, of come up with a name and then rebrand it. I think that’s a dumb idea because then you’re kicking the ball way before they’re out and then you’re going to have to pick it up again, and be like, “Oh no. I got to come up with a better name, and now I have thousands of customers. Oh crap, we have to change the name,” and all that kind of stuff. I mean I don’t know, how did you guys come up with a name?   [0:05:27] Steli Efti: All right. I’ll tell you something I’ve never said out publicly. I don’t know. I was not involved in [crosstalk] … I was not involved at all in naming-   [0:05:36] Hiten Shah: That’s the best.   [0:05:37] Steli Efti: … Naming Close, Close.   [0:05:38] Hiten Shah: Lucky you.   [0:05:39] Steli Efti: I have no fucking clue how they came up with this name.   [0:05:42] Hiten Shah: Lucky you.   [0:05:42] Steli Efti: I was busy running a services business called ElasticSales and then they came back and they’re like, “Well, this is our website and everything.” Then I saw the name and I was like, “Oh, kind of makes sense to me.”   [0:05:52] Hiten Shah: Works for me. I love it.   [0:05:53] Steli Efti: Works for me.   [0:05:54] Hiten Shah: Lucky you, dude. Lucky you-   [0:05:55] Steli Efti: That’s pretty much-   [0:05:55] Hiten Shah: … That you weren’t involved and you still came up with a great name.   [0:05:58] Steli Efti: Yeah. So, I don’t know, but I know that with ElasticSales for instance, I was involved with it. And that, the idea there was obviously we’re going to have this massive sales force and everybody can tap into it and scale it up, scale it down, so elastic was a thing, a word that was thrown out there in our brainstorming. ElasticSales.com was available and that’s how we went with it. But I’ll tell you that we used Elastic Inc, which is still the name of the corporation because we had made the mistake before where we named the corporation the same name as the product and then we pivoted hard and were like, “Oh shit. This name makes no sense anymore as the corporation.” So, with Elastic, let’s name the corporation Elastic Inc., that’ll give us flexibility if we ever pivot away from ElasticSales, we could do something else and it’s not that tragic. But I do think that a lot of people are stuck in this they want to get it right but they don’t know if the name is going to be perfect forever. So either they’re stuck because they want to get it perfect and the can’t find a name that they’re really, really excited about; or they’re maybe too thoughtless about it and they just give it some shitty name, CRM, that’s simple and easy dot com. They’re like, “Who cares? We’re not even going to give it any real name,” and then you have to go through the effort of rebranding. Might talk about this at a later episode. One thing that I want to ask, to throw out there, to quickly hear your thoughts on this, is the idea of you said using a name that makes sense to your customers, but then there’s also this approach to naming things, like come up with a name that kind of has nothing to do with nothing. Or having a name that’s very generic that you then infuse with meaning. Think about if I can come up with a good example, but there’s some names that don’t necessarily relate to what the product does. I don’t know, I think about Hulu now, for whatever reason. It’s like that name says nothing. It’s kind of short. It’s kind of cool, easy to say maybe. Although I remember when they came out with it, tech [inaudible] was writing that is a terrible name, if you know the background of it and all that. But it worked out. Sometimes, this idea of use a name that’s kind of a short, cool word that means nothing and then you give it meaning, versus using something that’s more descriptive like Dropbox or Salesforce or Close, or FYI that matter. What’s your stance on that in today’s environment when you start a new product or company? Like giving it some kind of a cool name that maybe doesn’t really say anything about what the product does.   [0:08:38] Hiten Shah: I did one of those in 2005 when we named Crazy Egg, Crazy Egg.   [0:08:44] Steli Efti: Yeah, that’s true.   [0:08:45] Hiten Shah: Yeah. It just felt right at the time. It was two words, really easy to say. We already had the domain. We didn’t feel like making it more specific. I think at that time, that name helped us because people were like, “What is that?” It was nonsense, and New Egg, as well, as an online retailer was pretty big at the time. We didn’t think about that but some people have mistaken me for the founder of New Egg, but that’s not true.   [0:09:15] Steli Efti: Interesting.   [0:09:15] Hiten Shah: So that’s what’s in people’s heads sometimes, but Crazy Egg sounded good and we just did that. I think that it was okay at that time when you could come up with a name like that, there wasn’t that much software out there and the branding around that name with the egg and when we had 404 errors on the site, it was like, “Oh, you’re egg got cracked.” Then when we had downtime, we had this downtime game where there were little drone-like people walking, zombies walking on the bottom, and you’d be able to throw an egg on them, and when you hit them, you got a point. So it was like a fun little office game when we had downtime and we had a bunch of downtime early on. We just played into it. I guess my point is you come up with a name like that, you’d better play into it. I like Mailchimp is another one that gets to play into that in that way. Freddy, their little mascot is pretty awesome. Everyone tends to know Freddy or knows the look of Freddy, or has gotten some kind of swag at a conference about Freddy. I think it’s okay to have a name like that. You just have to really be all about it as much as you can. Your logo has to represent it, you could have a mascot, whatever. It’s possible. It takes a little more skill to do that from a design and aesthetic standpoint. Then, with Kissmetrics, I think it was all about the acronym, like “Keep it simple.” It’s really, Keep it simple, stupid,” and we like to change that to “Keep it simple software. Then metrics, because we’re an analytics company. So that one, we went a lot more practical. And we thought about what does our audience care about? Very similar to FYI. I think with naming, and I’ve named like way more than that many products over the years, but I’m not too crazy about being like it has to be one way or another. I think you have to play to your strengths. If your strengths are we can come of with a mascot, or we can be playful with the copy, or whatever, and it does resonate with your audience to some extent, then that’s fine to have a name that’s not specific to your product or the problem you’re solving. I do prefer names today, though, that are related to the problem you’re solving somehow. That just feels better in a crowded world where people have a lower attention span.   [0:11:43] Steli Efti: Beautiful. All right. That’s it from us for this episode. Look out for a future episode where we might talk about how to pull off a rebrand when you are unhappy about the name you gave your startup and you have to change it.   [0:11:54] Hiten Shah: Let’s just do it.   [0:11:55] Steli Efti: All right, bye-bye everybody. [0:11:57] The post 366: How to Name Your Startup appeared first on The Startup Chat with Steli & Hiten.

Today on The Startup Chat, Steli and Hiten talk about replacing yourself as CEO or the founder of your startup. One of the hardest decision a founder can ever make is deciding when it is time to hand the wheel to someone else. Why it may seem like something that needs to be done, it’s also something that Hiten recommends you don’t do as it can limit the success of the company amongst other things. In this week’s episode, Steli and Hiten share their thoughts on why you shouldn’t replace yourself at your company,  how to do this the right way if it’s something that has to be done and much more. Time Stamped Show Notes: 00:32 About today’s topic 00:47 Why you should replace yourself as the founder of your company. 01:36 Another reason why you shouldn’t do this. 01:55 How replacing yourself reduces the chances of your company succeeding. 04:16 An example of an exception when it comes to replacing yourself. 04:43 The best way to do this. 05:38 Why it is better to promote someone in the company. 06:06 How your customer feels about changes to the CEO position. 07:30 Why a founder might want to do this. 3 Key Points: Your chances of success once you replace yourself go down tremendously You don’t replace yourself as a founder, you are a founder for life. Your business still has to run.     [0:00:00] Steli: … Boom. Hey, everybody, this is Steli Efti.   [0:00:03] Hiten: And this is Hiten Shah. Today we’re going to talk about one of my favorite topics. I’m just kidding. I’ve been through it and it sucks. The topic is replacing yourself as CEO or founder. First thing I’ll say is you don’t replace yourself as founder. You’re a founder for life. Sorry.   [0:00:19] Steli: Fair.   [0:00:20] Hiten: But I want to say it because you might not be the CEO and you might try to replace yourself. So my reaction to this was very personal, and my reaction to this was, “Don’t do it.” And I’m going to say why real quick and then, Steli I’m sure you’ll have some thoughts. So I went through this at my company, KISSmetrics. We had just gotten through a major lawsuit after a couple of years. We had an independent board member who was in the company and we were basically considering making him CEO and we decided to do it. And, honestly, it was the worst decision I every made about a company. I was actually amicable about it. I think there were things about, ironically, sales, that I wanted to learn, and I thought this gentleman running the company as CEO would be able to help me learn those things. I was dead wrong. Nothing wrong with him. It just wasn’t a good fit for our company, and I think people wanted a change. And the thing is, I never got to run the company and grow the company. I had to watch someone else try to do it. That’s why I’m bringing baggage to this conversation. I rarely do, but in this case I am. The other baggage I’m bringing is when I went through this I asked many people. I asked probably like a dozen different CEOs and founders who have done this themselves and replaced themselves, and they all said, “Don’t do it.”   [0:01:48] Steli: Interesting.   [0:01:49] Hiten: So …   [0:01:50] Steli: Go ahead, go ahead.   [0:01:52] Hiten: No, no. Go ahead.   [0:01:53] Steli: No I was like, first of all I love your honesty about this and it’s great to find a topic once in a while that gets you riled up, right? Some kind of a personal experience that gets your blood boiling.   [0:02:05] Hiten: It’s worse. Steli, it’s worse. I went in there again, for six months after, I don’t know, two years. I was still at the company but … Actually, I don’t remember if I was still at the company. But I went in there for six months and I switched out one CEO to another. So I became interim CEO for six months and I did my best to bring in a new CEO. I also had a gentleman there, an executive, that I wanted to fire, that the board would not let me. And so it’s personal. And it’s personal to me because I didn’t just leave the company, I came back and tried to help out again. And help out, though, to replace myself again. So I replaced myself twice. And I think it was just terrible. Here’s the thing. And I might be too blunt about this, but your chances of success as a company, once you get replaced, or replace yourself as CEO, goes down tremendously. And the reason is, what got you here as a founder, is more likely to get you to the next place you need to go as a business, than if someone else is running it. And a lot of things have to change. The team has to change, the culture has to change. The people is the biggest program. And I’m not saying that there’s CEOs out there, or any of the CEOs are bad. But what happens is you’re taking over from the founder. A founder has essentially ingrained their whole DNA across the company. No matter how cool you are as a CEO, that’s a very hard thing to deal with. So it takes a very special person in the first place to want to do it, in my opinion. And then that person has to make it their company. And the founders tend to get in the way. I got in the way. I got in the way the first time. The second time, the second I knew I was going to get in the way, I left. I was just like, “Cool. I’m out.” I tried to help the new CEO once I was interim and, after a while, it just didn’t make sense any more. And you can call it my ego, you can call it my arrogance, I don’t really care. At the end of the day what you see inside a company is that massive change needs to happen when you bring on a new CEO. And it doesn’t matter what size you are. You can be 10 people, or you could be a thousand people. This is something that’s not very easy to do because the people who work at the company, are working there because of the leadership. And stories like the Google story of Eric Schmidt taking over for a while and then the two founders coming back and taking over later, that’s okay. It happens. And it’s the exception, not the rule. I think the rule in this one is it’s a very difficult transition to do. If you’re hell bent on doing it, the biggest thing you need to think through is what is your involvement going to be after, and how do you support that CEO 100%, because that’s all you’ve got. You have to support the person in their decisions and not get in the way and all of us as founders have a tendency to get in the way. So the way to do this the best is transition yourself out of the company as fast as possible, if you really feel the need to replace yourself. Because then the other person has the most opportunity to go make it their company. Again, there are exceptions. Steve Jobs didn’t make this work. But the Google founders did make it work. And I don’t really know why … I know why the Steve Jobs one failed. I don’t really know why the Google one worked. And I don’t think we’re ever going to know. And I think it’s because it’s a rarity for that move to work. This is why you see a CEO come in, and then a CEO leave. And another one come in. Now you’re in the CEO shuffle. That being said. That being said, sometimes when there’s a problem with the founder, like the founder, god forbid, has a terminal disease, passes away, or all kinds of things like that, it is always better, if you can, to promote someone in the company. Always. So that is a little bit of an exception, and obviously dire circumstances. And another way to look at it is that if those situations happen, the company is usually ready to rally around whoever the new person is, whether they’re internal or external. But internal people tend to have better clout and a faster ramp up to that kind of change because they’re already familiar with the company. And I’ll say one last thing, because this is a trend with us, but your customer doesn’t give a shit that the CEO has changed. And that’s a very important thing. And what I mean by that is, year business still has to run. And that’s easy to forget when you’re going through whatever turmoil you are, because you don’t want to be CEO anymore. Or someone’s trying to kick you out of the company, or there’s someone better for the job, maybe, or you think so. There’s an unlimited amount of reasons you might consider replacing yourself or someone else, like your board or your investors, but at the end of the day, it’s not one of the hardest things to do. It’s the thing that you want to actually actively avoid. And the way to avoid this is actually, as you become a founder, go talk to founders, founder CEOs, that are a few steps ahead of you. I know you love that, Steli, in a bunch of cases. I think that it’s a great strategy in this case, especially. And go really figure out what you’re going to need to turn into. And really think through do you want to be that person or not?   [0:07:39] Steli: I love it. Such good advice. I don’t really want to ruin by adding anything more. It’s like-   [0:07:45] Hiten: You’ll never ruin it.   [0:07:48] Steli: One thing that I’ll touch on, to just wrap up this episode is that I think sometimes founders, especially when they’ve been running their company maybe for a while, especially if it’s not exploding from success to success but maybe has tapered off a little bit, eventually some founders, I’ll find, get into this phase where they’re like, “Oh, this is not a stable business, I’m not sure I’m the right person to run it.” Or a lot of their job has become something they don’t like doing anymore. So then they start fantasizing about, “What if I just brought in amazing leadership. They take over, I’m just on the board, and I can just go and start something new that’s small and in the beginning stages.” That’s kind of I think a very common entrepreneurial fantasy. Like, “Oh, my god, it would be cool if I can bring in a new dad into this family. Go start a new … Start dating again and find a new family to start.” But there’s a lot of risk and a lot of this is more fantasy and more fiction than reality, in terms of how smooth and how beautiful all this will be. But also one thing that’ll come up is that sometimes you can just sit down and ask yourself, what do you not like anymore about running the company? And is this massive radical shift really the only solution? Maybe bring in a COO to help with a lot of the things that you don’t like doing anymore as the CEO, is the right and perfect solution to make you happier, more productive, more successful, the company better, and everything. It’s a much easier thing to add leadership and share responsibilities and give somebody responsibilities you’re not that great at and you don’t enjoy versus basically leaving the position and leaving the company as an operational leader or manager and trying to replace leadership at the highest level in the company. That’s such an incredibly hard thing to pull off that most people, most companies, won’t survive that procedure. So that’s it from us for this episode. That level of change is hard. You know, I might actually want to hear from people that are thinking about this, or have gone through this, or are going through this. If you’re listening to the Startup TED, you’re thinking about bringing in somebody to run the company, or you’ve done it or you’re doing it, please reach out. Steli@close.io, hnshah@Gmail.com. Let us know how things are going with thoughts you have. I want to learn more about this but I want to hear from people that are going through this and see if we can be even more helpful in specific cases. And, with that being said, we’ll hear you very soon.   [0:10:20] Hiten: See you. [0:10:21] The post 365: Replacing Yourself as CEO or Founder appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about how to help your customers through change. When you’re building a product, it is common to make changes to it. This could be a UI change, a pricing change, a Logo change and so on. These changes will affect the customer so it is important to consider them before making any changes. Tune in to this week’s episode to hear Steli and Hiten thoughts on how to properly make changes to your product, how to communicate those changes to your customers and much more. Time Stamped Show Notes: 00:00 About today’s topic. 00:23 Why this topic was chosen. 00:51 Why it’s important to consider the customer before making any changes to your product. 01:54 Examples of how not to make changes. 05:13 How even lowering the prices can create friction with your customers. 05:51 Why you have to think through why you’re doing the change. 06:52 How to be more thoughtful about communicating a change. 08:40 Why the changes you make should be relevant to the customer. 09:25 How to use FAQs to address customers concerns. 10:20 How to make changes the right way. 3 Key Points: Put yourself in the shoes of your customers. You have to think through why you’re making a change to your product. Even lowering the prices will create friction with your customers.   [0:00:01] Steli Efti: Hey, this is Steli Efti .   [0:00:02] Hiten Shah: And this is Hiten Shah. Today, we’re going to talk about a very important topic. The topic is how to help your customers through change. I think any kind of change is what we’re referring to. It could be a pricing change. It could be a branding logo change. It could be a UIUX change. It’s something that when you’re building a product, you tend to do, right? You tend to make changes.   [0:00:28] Steli Efti: Yep.   [0:00:29] Hiten Shah: And some of them you might think are more severe than others in terms of the impact on the customer. So I’m going to throw the first thing out on this one and just say that before you make the change, when you’re thinking about making the change, I would think first, “Is this good for the customer or not?” Because that totally would change the way that I would communicate it.   [0:00:52] Steli Efti: Well, this is something that’s recurring a theme on our episodes, which is like take … Ask yourself, put yourself in the shoes of your customers and prospects and ask yourself, “Does this make sense? What questions do they have and is this good for me or not?” Which is a tough perspective to take because most companies, the way they think about things is very much from their own perspective, right? Which is the easiest one to have.   [0:01:15] Hiten Shah: Yeah.   [0:01:15] Steli Efti: Which goes, “We need more growth. What could be an issue with our current growth? Although, our branding sucks. Let’s just have a totally new name and new website and that’s going to help us with growth. So we just change everything and then ta-da we’re going to announce with some kind of PR or blog post, we have a new name now. We’re awesome. And we’re never going to ask ourselves the question, what about our existing customers? How will this make sense to them? Will this confuse any of them? What if they type in our old URL and they pop in a new one? Like, how do we communicate this with the greater world and what do they need? How do they feel? Is this really good for them or not?” Most companies will just never ask that question. That fundamental question that really changes everything that comes after that.   [0:02:00] Hiten Shah: They won’t. They really won’t. So, yeah … Go ahead.   [0:02:04] Steli Efti: No, I was just about to say … If you get into the habit of doing it, that’s going to be a massive competitive advantage because your competitors more likely than not, are not thinking about their customers as obsessively as they should or could. You do it, you’ll win. Now, let’s say … Let’s take … Well, there’s some easy examples, right? Let’s just say I lower my price. I want to challenge this, right? There might be an example where people think, “This is obviously good for my customers.” But let’s challenge that a little-bit. Then let’s go to the obvious bad ones for your customer. So let’s say we decided, Hiten , to lower our prices. That seems like a good idea, good news, right? Shouldn’t that be naturally something all of our customers will like and be excited about? So we send an email. We go, “Ta-Da! You’re all welcome. New prices are lowered. Now be excited about it.” Then, let’s say that some customers don’t like that and get upset about that. What could be a potential reason? I’ll throw one out and I’ll see what you can throw out and then let’s think about how to communicate even something you think is bulletproof, positive news. But change is always tough, right? So number one, you have to ask yourself, people bought your current product at your old prices. The pricing is really part of branding, not just the cost. They might have bought it because of the variety of reasons at that price. Maybe they just saw the value and if they can get it for a little-bit less, they’ll be happy. But maybe your sales rep or your marketing team did a really fantastic job on hard selling them on why it’s more expensive or why it’s priced exactly this way. It makes perfect sense for the company to be profitable and why the value it provides is so much higher. If you get some perspective from me that the price is too high and then you really sold me that the price is perfect, then two months later you tell me you’re lowering the price. Now, I’m confused. So I might be like, “Wait a second. I had like 10 conversations with the sales rep. He gave me all these reasons. Convinced me to change my mind and now two months later, it seems like I was right. This sucks. Why didn’t I get the better price two months ago? Did they already know and just lie to me?” You might think that this is an unreasonable way of thinking, but I guarantee you some customers will think this way. Even worse case, is the customer bought it exactly because your product was more expensive than some competitor, right? Maybe they were in a position where they felt they needed to buy a more stable solution. They looked at the market and your competitors and they felt like these products were too cheap. So they chose your product, because they felt like, “Oh finally a company that has an adult professional prices. Higher prices probably means better company. More professional company. More stable company.” So they bought because they felt better about buying a more expensive solution. So now you’re lowering the solution and that shakes up their confidence that like, “Well, is this still the right tool for us? Maybe this company’s focused on smaller customers and clients.” You’d be surprised. Even lowering the prices will create friction with your existing customers. They’re not going to all just love it, totally get it, and see your prices.   [0:05:23] Hiten Shah: Oh yeah. So in a way, that situation, they’ve gotten used to the higher price.   [0:05:29] Steli Efti: Yep.   [0:05:31] Hiten Shah: For whatever reason. Right? So the reason I’ll give is a little simpler. Which is like, the reaction could be, “Oh, are you going out of business?” Will you go out of business if you do this? Right? Because if I really value your service and I’m paying a certain price and I feel like I’m paying a fair price, then you’re lowering it, I might think something’s wrong.   [0:05:51] Steli Efti: Yeah. “Are you guys in trouble?”   [0:05:52] Hiten Shah: Because you’re doing something that’s not good for you.   [0:05:53] Steli Efti: Yeah, yeah.   [0:05:58] Hiten Shah: When you want to explain the change, you have to think through, “Why are we doing the change?” Honestly, what’s in it for the customer. What I like to do about change and this is way too crazy sometimes, but it’s totally worth it, is I actually would write down an FAQ. Not for the customer yet, but an FAQ or hypothetical questions that I think a customer might ask and I make sure I have answers. In doing that, you can discover what the exact story and framing and messaging can be. So what are customers going to ask you if you tell them you’re going to do this in the most basic straightforward way possible? So if you just had a subject line to use and off of that subject, you come up with questions, what would it be? In this case, it would be like we’re lowering our prices for you. Or the cost of our service is lower from now on. Or something like that. What’s the subject? What’s the title? And then from there think through what kind of questions the customer might have and write down all the questions and answer them. Then usually you’ll be able to find your story in that. This goes for UX changes, pricing changes, personnel changes. It can go for any kind of change. Here’s what you’re then doing. It’s like your hack, right? It’s your way of getting in the customer’s head. You might be wrong about the questions, but that doesn’t matter. And by answering the questions, you’ll find the story. You’ll find the benefit for the customer and the way to frame it for them. Instead of framing it for you. I see so much of this. Today, I got an email from a company. They have four or five different changes that they mentioned in their product and it’s all positive stuff. But you know how they started in the beginning? We’re growing really fast. Here’s five open roles.   [0:07:55] Steli Efti: Interesting.   [0:07:56] Hiten Shah: And then it’s like, “Check out all the cool stuff we do. You’ll love it.” I respect the company. They are growing fast, but I’m not really sure how I feel about that email. That’s positive change. I should be super happy that you made these feature changes, right? I should be excited. Instead, you’re telling me how you’re growing so fast and these are five open roles in your company and then you’re telling me all the things you’ve done for me. What do I care about your growing fast or your five open roles? What’s in it for me? Nothing. Then you tell me about your changes. Yeah, you know, to their credit they did talk about how they’re growing fast and they’re improving the product. But that was very little and then they decided to tell me all their open roles. I don’t know how I feel, right? To me, it’s like you didn’t answer any of the questions for me that you would have if you had this question thing. And none of the questions would have been, “Oh, can I work there?” Or, “Oh, how many open roles do you have?” Or “Oh, are you growing fast?” The changes you made should imply the benefit that I have from you. It should tell me exactly what I’m getting from you. And if you want to do a P.S. At the end and say, “Hey, we’re growing really fast. We have a bunch of open roles.” I bet they would have gotten more play on what they wanted if they did it like that.   [0:09:22] Steli Efti: I love it. Such good advice. This is such an important topic, but I want to maybe fire through a few more quick questions to give a few tips before we wrap up the episode. So we already, I think, touched on three core things. Number one, if you change anything, change is hard. So when you change things no matter if they’re good or they’re bad, if you change anything that impacts your customers or prospects. It’s probably going to create some friction so you have to anticipate that and put yourself in the shoes of your customers or prospects and address that. I love the FAQ tool as a way for you to try to emphasize and ask yourself what kind of concerns and questions will people have and try to address them. I mean, obviously, people could … Once they’ve done that. They could reach out to a handful of customers or prospects and talk through some of these changes to see what kind of reaction or instant responses or questions they’ll have if they have one-on-one conversations with some of them. There’s two more things that I want to quickly touch on or ask to touch on. One, is this question that I’ve heard which is it better to group all changes at once or is it better to spread them out over time? So let’s say a company wants to change their price, change their brand, and their UIUX of their product. Should they do all three big changes at once? Is that better for the customers and better for the company or should they spread them out? So they first announce a price change then a few months later they announce the new brand, then a few months later they introduce the new UIUX, right? The change is hard. So should you bundle it so people have to go through all of the change at once or should you spread it? I’m just curious to hear your preview on this.   [0:11:17] Hiten Shah: What’s the most important change? And what’s the one that the customer’s going to be most happy about? That’s the way I look at this. When you have multiple changes and you’re debating what to do and how to announce them, I think that, that’s what comes to mind. What’s in it for them? I think the thing that people keep thinking about is they think about themselves and they’re thinking about, “Oh, we did all this awesome stuff. Wait, wait. Hold on.” One, is it awesome to your customer? Are they going to think it’s awesome? Then two, why do they care? Even if it is awesome to them. Our emphasis is so much on the stuff we’re doing. This is one big problem with companies in general in terms of how they think about their customer. It’s even more important than ever because there’s so many companies out there that customers are using. That people in general are using. They’re thinking so much … We are inside our companies. We know how everything’s … We know everything that’s happening. It’s so hard to have an outside perspective and think about the people on the outside. Because our customers are on the outside of the company. They are working with our company. They are using the products we build, hopefully. They are talking to our customer support. They are talking to sales. They are outside our company. And so this idea that we have a bunch of stuff we want to share. How do we decide? It’s like, what’s going to make the customer feel like you’re awesome to them? Right? Not that you’re awesome to yourself.   [0:12:46] Steli Efti: Yeah.   [0:12:48] Hiten Shah: I think that’s my reaction, right?   [0:12:52] Steli Efti: Sweet. I love it. I think that there’s a ton of good stuff in here. Just remember, change is hard for people. So when you change things, even if you think they’re awesome, think about your customers and prospects first. Make sure you communicate well to them. Make sure that they understand what’s going on and they feel good about it. Don’t just announce these changes to the world expecting everybody will always love everything you do. And intrinsically immediately understand why you’re doing this and how it benefits them. I think we all can do a better job in helping our customers through change. All right, that’s it for us for this episode.   [0:13:32] Hiten Shah: See ya. [0:13:32] The post 364: How to Help Your Customers Through Change appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about a new pricing trend in the startup world. There’s a new trend in the startup world when it comes to pricing. Some companies are beginning to offer custom prices to customers who meet certain criteria. This is in particularly common with larger companies like HubSpot or Intercom. In this episode, Steli and Hiten share their thoughts on these new pricing trends, why some companies started offering them if you should implement it in your startup and much more. Time Stamped Show Notes: 00:00 About the topic of today’s episode 00:46 Why this topic was chosen. 01:49 Some examples of these new pricing trend being used today. 02:34 For the longest time, startups and servicing other startups wasn’t really a markets 02:43 Why this trend started. 03:22 Examples of why this trend started. 05:29 How larger startups started this trend. 05:50 If smaller startups copy this trend. 06:32 Why you should should go directly after the type of customer you want. 05:23 Why you should ask yourself why companies do something before implementing the same for your company. 3 Key Points: Some of these companies I think are trying to attract the smaller customers without cannibalizing their core business. I think you should think through whether or not you want a customer and what pricing structure will work for them right now. If you want that type of customer, just go get them directly.   [0:00:01]Steli Efti: Hey, everybody. This is Steli Efti.   [0:00:03] Hiten Shah: And this is Hiten Shah. Today on the Startup Chat, we’re going to talk about a new trend that Steli mentioned and I’ve noticed as well when it comes to pricing. You want to break it down, Steli?   [0:00:15] Steli Efti: Yeah, I don’t even know what to call this. Let’s just call it, you know, let’s maybe say customized packages or startup packages. So in pricing tiers there’s been this idea for a long time that’s been around, which was like kind of a startup plan or a super low entry plan, either a very cheap plan, or very limited plan for people that are individual users maybe. Or very, very early on, so very small budget, but you want to kind of get them into using your product in the early days. That’s been around for a long time, but something that I’ve seen trending up, especially in SAS lately, has been these kind of startup packages or startup packages where a company will create a specific landing page for this. Sometimes it’s not even on their pricing page. Sometimes it’s kind of hidden, but they’ll have a full fledged kind of landing page around that and as a good example, they’ll have like the startup package and it’s like this massive discount for a number of seeds, maybe five seeds, you know, 60 percent discounted, but they’ll have a bunch of kind of criteria to qualify for it. You’ll have to apply, which is a new thing, right? You’ll have to like fill out a form and full fledge apply to qualify for the starter or the startup package. And some of them will have criteria like you have to be part of an incubator or you have to raise VC funding. You’ll have to have revenue less than a million. You have to have less than 20 employees. And then if you hit all these criteria, we’ll give you this massive discounted package, but you have to prepay for a whole year. So you have to pay like whatever, $400 bucks and you get like five seeds for a whole year that would have cost you whatever, two k or something. And I found this super interesting, like this is kind of a very customized package that customers or prospects have to fill out a form and apply for and qualify for.   [0:02:13] Hiten Shah: They have to earn it.   [0:02:14] Steli Efti: They have to earn it and it’s very manual, it seems like, right. It’s not like self serve or anything like that. And so I’m wondering about that trend and I thought that it might make sense for us to unpack that.   [0:02:26] Hiten Shah: Yeah, I think that there’s companies out there that, okay, first of all, I think for the longest time startups and servicing other startups wasn’t really a market, and it was just like something you did in the early days of your business just because it’s the easiest type of customer to get or that’s what it used to be. And so there’s a lot of these companies that have grown up, so scaled and essentially got less and less friendly from a pricing standpoint and maybe even a product standpoint to these smaller companies. And so I think the trend started with companies realizing that and then wanting to sort of get that startup, get those startups again. And so there’s two examples that come to mind when you say this. One is Intercom. They have this kind of package and they introduced it like within the last year or two, but in the early days startups loved Intercom. I don’t think startups loved Intercom after like the first, second, the second year because Intercom really went upmarket and the way, one of the ways they went upmarket, one of the key ways that Intercom makes more and more money over time from a customer is the way they shift around their plans and give you more features, whether you want them or not and call you up and say, our prices are going up in the next two or three months. This is what it’s going to be for you in after two months or three months. And it’s the kind of churn where, you know, they might not have cared for the longest time because they were making more and more money. It’s one of those products where once you start using it and start using it for more than one thing, let’s say customer support and website chat for example, you don’t stop really using it. You’re kind of hooked on it. So it makes it harder for you to leave. But if you’re a younger startup and you can’t afford those price hikes, what do you do? So that’s one problem that happens with companies and Intercom’s a good example. And so then they put out a pricing plan like you just said. Then another one is actually HubSpot. They have a free plan for some of their products and then they have a whole number of products, but they also have a plan, I believe, where they’ve partnered with accelerators. And if you are an accelerator, you can apply or, I’m not sure it’s accelerator if you’re a small company, and then you can get heavily discounted pricing for like the first year. So these companies I think are just trying to attract the smaller customers without cannibalizing their core business and changing the pricing that they know works for the kind of average customer that they get. And so, you know, obviously what happens is companies, larger companies, HubSpot and Intercom, they’re larger, do that, and then smaller companies that are SAS or whatever are like, oh, that’s a good idea. I should do that too.   [0:05:36] Steli Efti: And do you think smaller startups, which is going to be many of our listeners, right? It doesn’t make sense for them to copy this specific strategy from kind of companies that have outgrown a lower tier price, and outgrown focusing on startup customers. Or do you think that smaller companies should focus on having kind of a native plan pricing structure if a lot of their customers aren’t for this example, startups that just fit that versus doing a separate package for it?   [0:06:10] Hiten Shah: It’s probably a waste of time to think of your customer the way these large companies think of that small customer. I think you should think through whether you want this customer or not, and think through what the pricing should be for that customer right now. Knowing that in the next three months or six months or a year, your pricing will be changed as you learn. So it’s more about deciding whether that customer segment of the small company of like one to 10 team members is something that actually is good for your business or that you want that type of customer for some reason. And then if you want that type of customer, just go get them directly. Like you don’t need to play these games because they’re not, the reason those other companies do them is much different than why you should sort of go after that segment of the customer.   [0:06:58] Steli Efti: Love it. All right, let’s wrap this episode up at this point. I think super actionable, insightful, and highlights one really important thing, which is don’t just look at what everybody else does that seems successful and way ahead of you and copy that. Ask yourself why, why are they doing it? What kind of problem or opportunity for their size and their current life cycle are they trying to address with this and does that fit your current set of problems and challenges or opportunities, right? Because it’s just blindly copying and pasting everything some popular or high profile company does. All right, that’s it from us for this episode.   [0:07:37] Hiten Shah: Later. [0:07:37] The post 363: SaaS Pricing: Using Starter Packages to Attract Smaller Customers appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about affiliate programs and how to use it for your business when you want to acquire more customers. Affiliate programs can be an effective way to get new customers and scale your startup. For it to be successful, it is important to know how to create a program that helps your customers and advocates do your marketing for you. In this episode, Steli and Hiten talk about what an affiliate program is, why they don’t work for some startups, why some programs have failed in the past and much more. Time Stamped Show Notes: 00:00 About today’s topic. 00:46 What are affiliate programs? 01:09 Why it’s a channel that works really well. 01:20 A key metric that you can use to determine if this is for you. 01:53 A mistake startups who want to use this channel make. 02:12 An interesting thing about affiliate programs. 03:52 Two reasons why affiliate programs work. 04:04 What a referral program is. 05:03 The reason affiliate programs don’t work. 05:59 Another reason why affiliate programs don’t work. 07:35 Examples of affiliate programs gone wrong 3 Key Points: If my product already has a high word of mouth, it’s more likely an affiliate program will work for you. When you sell to b2b companies, just offering them some amount of money might not work as well. You having an affiliate program doesn’t really scale your business if a bunch of these factors are not in place. [0:00:00] Steli Efti: Hey, everybody, this is Steli Efti. [0:00:03] Hiten Shah: And this is Hiten Shah. And today on The Startup Chat, we’re going to talk about affiliate programs, and how to use it for your business when you want to acquire more customers. I’m going to shoot this first, real quick, and then we’ll get into it, Steli, ’cause this is one of those more rapid-fire ones, because it’s just a topic and we haven’t talked about it, but it’s a super-important one, because it’s affiliate partners, referrals, there’s this whole category of, somebody is bringing me leads and/or sales for my business and I’m giving them some kind of commission. That’s essentially what an affiliate is. Right? [0:00:38] Steli Efti: Right. Right. [0:00:40] Hiten Shah: I love the idea of having affiliates, or even partners that are bringing you customers for a commission. I think it’s one of the key channels that, especially in B to B and SaaS, that works really well. It also works really well in e-commerce, and for me it has everything to do with one key metric, if this is going to work for you. And it’s going to sound crazy, but it’s pretty standard, but the key metric that I actually go for is, if my product already has high word-of-mouth, it is more likely that an affiliate program, or a referral in partnerships are going to work really well. [0:01:19] Steli Efti: Yeah, that makes so much sense it hurts. But I’m still sure that a lot of people- [0:01:23] Hiten Shah: Yeah, exactly, because not every product has that. [0:01:24] Steli Efti: Yeah, and I’m sure a lot of the startups that are considering or have chosen … Let’s invest in affiliate programs or referral programs to fuel our growth, have never stepped back to ask this very simple question, “Hmm. Do we get any word of mouth right now? Are our customers or people who know about us talking about us at all?” It seems like a very fundamental first step to answer before you go, “Let’s pay them money, or give them incentives to do it.” But- [0:01:50] Hiten Shah: Exactly. [0:01:51] Steli Efti: … But I’m still, I would be surprised if a lot of people thought about that first. So one thing, one interesting thing about affiliate programs is that, or referral programs, is that I do think, my sense is that within the startup community, there’s kind of a belief that this can work really, really well for end consumer products, right, kind of recommend-a-friend, this type of thing, but in B to B, in SMB or even worse, in Enterprise, when you sell to more corporate, serious customers, just offering them some amount of money or a gift card or this or that might not work as well. And so … There are some exceptions that I can think of, Dropbox being a really big and popular one that was kind of … Was kind of a pr- … End-consumers used it, but professionals and businesses also used it, but I remember their affiliate, their referral program of, if you share it on Twitter you get another X amount of free space, and if you post it on LinkedIn you get free space, and if you invite ten people you get more free space. That model really worked brilliantly, and I actually know the guy that did that for Dropbox. But not every product has that unique value proposition or feature set where that would make sense. But I’m curious, would you, do you agree, and have you seen this being true, or not true, that B to B, SMB startups have less success with their affiliate programs or referral programs than end consumer startups? And if so, does an affiliate program or a referral program, does it always have to be money, like a gift card, or you get fifty bucks if you refer a friend, or if you get a click or something, or have you seen other models that work well? [0:03:40] Hiten Shah: Well, I mean, at the end of the day affiliate programs work for two reasons. One, because there is somebody out there that has an audience that wants to refer your product to their audience. That’s an affiliate program, right? A referral program is more like your own customers bringing in more customers by referring each other. And so I think there’s a nuance between the two. Because typically affiliate programs are designed around somebody making money. Actual money, not credits, or not anything like that, but money, while Dropbox’s referral program is all about people getting credit, or getting extra … Specifically getting extra storage, so give 250 megabytes, get 250 megabytes. So for everyone you invite you get extra 250 megabytes. And that’s really what worked for them, in fact they’ve de-emphasized that whole program now, compared to how popular they made it back in the day. It was a double referral program, which means that both sides are getting an incentive for signing up, or inviting, or whatever. And I think it really helped grow the business to where it is today. It would be nowhere near where it is today without that. And that incentive wasn’t a money incentive, really. It was a storage incentive. It was when storage was a currency. These days storage isn’t as big of a currency, I mean we have a terabyte on our hard drives. Back then we had, you know, gigabytes on our hard drives, it was like 20 gigabyte hard drives, when they started, and I think that made a big difference. And then, in terms of affiliate programs, again, I’ll repeat this, the reason affiliate programs don’t work is because nobody, they’re … You can’t figure out who should promote it, you can’t incentivize them, and when they, when people come to your site and they sign up, they don’t stay. Or they don’t pay. So you having an affiliate program doesn’t really scale your business if a bunch of these factors are not working. So you need a great onboarding experience, you need a great path to monetization of your own user, so that the affiliate is happy when they get paid out, when your customer pays, and it happens in a reasonable amount of time. Another factor is, a lot of times you’ll do math on your end, and look at your funnel, and figure out what your customer acquisition cost is, and then be able to give an affiliate for every signup a certain amount of money. So then they’re no worried about the customer paying, right, they’re just worried about getting you the signup. And if you have your metrics in place, and you have your numbers in mind, and all that, you can come up with a good number that an affiliate would get. The thing is, then, that’s really important, knowing what your own customer acquisition cost is, there are hypothetical costs, if you are doing paid acquisition, and being able to figure out what you’re willing to pay for a new signup. This way you can give affiliates money for every signup instead of having to wait, in B to B, until your customer pays you, ’cause oftentimes that can be 14 days, 30 days or even longer. So I think that’s a key reason these programs fail. Another reason they fail is, you can’t find affiliates. There aren’t, there isn’t a natural audience out there, and a lot of them, that is really … a lot of them or a few of them with a lot of, a big audience themselves, that want to promote services like yours. [0:07:04] Steli Efti: Beautiful. Yeah, that makes a lot of sense. And I remember even talking to Anthony, one of my co-phoners at Close, who used to work at eBay a long time ago, and they had all kinds of problems with affiliates that would hack the system and create either … Create these fake automated accounts that would click on something and sign up for something to get their money but there were no real humans behind it, or it was like just a, whatever you call it, crowdsourcing farm somewhere in the world, that would, like, real humans being paid a penny to do it, and then they would get thirty cents from eBay for that human action, and there was a constant fight between eBay’s affiliate program and people trying to take advantage of it, right, to make money. And so, there’s a … If you don’t think it through, if you don’t understand who your customer base is, who your users are, what the incentives are that are aligned for both sides, it can seem like an easy thing, why don’t we just pay people to be our extended sales force and go out there and promote our product and get us a lot of new customers? That seems like a super-appealing idea, but if you don’t think it through carefully and if you don’t make sure that the fundamentals are there for your business, it could be a thing that doesn’t do anything or a thing that might do harm. You’d be surprised how many people out there, and we talked about this in a prior episode, that, even for a small startup if what you offer is like some kind of a crazy, attractive affiliate program that doesn’t have a lot of safeguards in place, some scammer will find you. And then they will put it on some scammer forum, and all of a sudden a shit-ton of these people will attack your system. It is surprising, but it does happen a lot. So you have to think this through very carefully. But if it works it can be a great driver for growth. [0:08:56] Hiten Shah: I agree. [0:08:57] Steli Efti: Awesome. That’s it from us for this episode. We’ll hear you very soon. [0:09:01] Hiten Shah: See ya. [0:09:01] The post 361: How to Use Affiliate Programs to Fuel Growth appeared first on The Startup Chat with Steli & Hiten.

Today on The Startup Chat, Steli and Hiten talk about becoming cynical or jaded as a founder. One of the beautiful things about being an entrepreneur for the first time is that you have this youthful and blissful mind. You feel like everything is possible and everything you learn is mind blowing to you. But, this state of bliss wears off as time goes by and you get more experienced. In this week’s episode, Steli and Hiten share their thoughts on why new founders are less cynical than experienced founders, how to approach new ideas and much more. Time Stamped Show Notes: 00:00 About today’s topic 00:36 The beautiful thing about being a first-time entrepreneur. 01:15 When new entrepreneurs typically start to become jaded. 01:55 How Hiten views cynicism in entrepreneurs. 02:16 How ideas can be fragile. 02:58 How Hiten reacts to new ideas. 04:20 Why you need to think through ideas versus shutting them down. 05:36 A quote from Jeff Bezos. 06:03 A hack that Steli has helped Steli in his entrepreneurial journey. 3 Key Points: The more experienced the founder, the more cynical they are to new ideas. People start leaning towards “why this CAN’T be done” versus “why this CAN be done”. Ideas are fragile. [0:00:01] Steli Efti: Boom. Hey.   [0:00:02] Hiten Shah: Cool.   [0:00:02] Steli Efti: This is Steli Efti.   [0:00:03] Hiten Shah: This is Hiten Shah.   [0:00:04] Steli Efti: In today’s episode of The Startup Chat, here’s a quick episode I wanna … A topic I want to discuss with you Hiten and that is the topic of becoming cynical or jaded as a founder. Right? In the beginning, one of the most beautiful things about being a founder and entrepreneur, especially when it’s your first time is that you have this … The bliss of ignorance, right? You have this youthful beginner’s mind. Everything is possible. Everything you learn is like a mind blown new fact and it’s an exciting thing to start a company from scratch, you come up with a name, a logo, a landing page, the first birth of your product, you start talking to people. It’s super exciting. But if you’ve been doing startups and you’ve been a founder and entrepreneur for a minute, for years and you’ve done as many companies as you and I have done, right? As time goes by-   [0:00:59] Hiten Shah: Yeah.   [0:00:59] Steli Efti: We have more and more entrepreneurs that have been around the block and have done a few things already. It is hard not to become a little jaded, a little cynical. The more experienced the founders are that I talked to, the more I detect in them, and I’ve detected this in me as well, I’m not above this, a certain cynicism when new ideas are being discussed, new things are being discussed. People start leaning more towards why can’t this be done than on the why could this be done. I wanted to talk to you about this. How do you think about cynicism in startups and entrepreneurship and being jaded? Is this a good thing? Is this a problem? Is it not a problem? How do you think about it in general? What have you observed? Let’s just unpack this a little bit for the two of us.   [0:01:44] Hiten Shah: I know you like quotes.   [0:01:47] Steli Efti: Yes, I do.   [0:01:49] Hiten Shah: I do too. It’s not necessarily a quote but it’s a line that somehow I picked up and apparently Steve Jobs said and it’s just this idea that ideas are fragile. I have this with some people around me. Not a lot, where their first impulse of an idea is to think through risk. I call it just thinking through risk. They’re not trying to shoot it down. They’re just like, why would this not work. Their, basically, way of processing the idea has to do with an immediate impulse of assessing risk of that idea instead of imagining what it could be. Those are two very different mental ways of thinking. I hear an idea and all I can think of is how do we make this work, how can it work. I imagine what it could be, what it can do for the business. All that is my first impulse. My last impulse is, “What’s the risk?” Which is not always a good thing and I think balance in this is really good. While I know other people who, I will mention an idea to, and immediately, the idea is taken into this systematic process of how’s it going to work, how are we going to do it, why can’t we do it, what about this other thing that we’re already doing and how does this relate to that and all these things that typically, when I have an idea, I didn’t even think about. I just had an idea. It’s just a damn idea. “Ideas are fragile,” is from Steve Jobs. He said that somewhere or Jonathan Ive, Jony Ive, basically, I think said that about him is I think really what it was. I think Jony Ive even said, often times, Steve Jobs would come in and say, “Hey Jony. I have this dopey idea.” He’s already coming in saying, “Yeah, I dunno.” That concept has been really helpful when I talk to certain people on my team in helping all of us think in more systematic and positive ways and more thoughtful about the idea. Not trying to beat it up at first and really thinking through, “Is this a good idea? Is it not a good idea? How do we evaluate whether it’s a good idea? Ideas are fragile. It’s just an idea. It’s like a thought. It doesn’t mean anything yet.” Right? It’s just something you need to communicate with someone else, especially when it comes to business ideas or new ideas and this idea that you get jaded over time is probably because you’ve heard a lot of ideas or you’ve tried a lot of things and they didn’t work. They just didn’t work.   [0:04:31] Steli Efti: Right.   [0:04:32] Hiten Shah: But don’t let that stop you from having a brilliant idea. That’s my kind of throw down and I’ll say one other thing before I let you respond and also tell me what you’re thinking about here and where this comes from. But one other thing that I really love again is Steve Jobs’ thing is he focused … Whenever they launched something or whenever something was done, all he would think about and say, I think I’ve said this before is, “What’s next?” A good friend of mine that worked at Apple told me that that was the mantra and that’s pretty impressive. At their scale, at their size, they do great things but all Steve Jobs cares about is what’s next. I think that, that relates to this because you can’t come up with what’s next unless we have ideas.   [0:05:18] Steli Efti: Beautiful. All right, so I here your quote and I bring my own quote, my friend. Right?   [0:05:22] Hiten Shah: Yeah. Let’s do it.   [0:05:23] Steli Efti: If this is a quote show down, I’m not empty-handed here.   [0:05:32] Hiten Shah: No shit. Okay.   [0:05:34] Steli Efti: My quote is from another Founder, CEO that I know we both admire, which is Jeff Bezos, which is the quote of like, “It’s good to ask why but it’s equally good to ask why not.” Right? I think that goes to this asking why should we do this, why is this a good idea, why is the competition not going to be doing it, why is this useful to our customers but at the flip side of it, which is why not? Taking an approach of, “Maybe this is cool and why should we do this.” I think that I’m weird in the sense that very early on in my entrepreneur career, one of the things that I’ve kind of, a hack that I’ve established in the very early days of my many, many ideas was that I found a guy, shout out to Ramin, who’s a mastermind of The Startup Chat and who’ve helped us with the podcast for a long time. Ramin, from a very early stage on become my sounding board for new ideas and the process that we had and still have to this day in some ways is that I would go to him first with an idea that was very fragile and very early, but I would go with the intent for him to crush it. Right? I would offer very little resistance. I’ll be like, “Oh, I think this is a brilliant idea. It could be this, this and that, what do you think?” Ramin would think about it and be like, “Ah.” I’m like, “But think about it. Da, da, da, da, da, these are all the benefits,” and then, he’d go, “Yeah, but why about … How do you do this and what do you do about that?” I’m like, “Ha, I don’t really know.” I would have a very nonchalant way about it, where I would go … Well, I would just let him shoot them down and not even fight it too much and then, I would just let this slide and just take a day or two and see if I can let the idea go. If I can’t let it go, most of the times, the next day or two days, I’d be like, “I actually don’t think it’s a good idea either.” In that moment, I felt strongly about it, but now, I think it’s dumb.” But some ideas, even two days later, I’d still feel strongly, so I would go and try again. I would just take a second attempt and a third attempt and him giving me pushback was not something that would really crush my morale or make me think that I’m stupid, I should have more ideas which is a way for me to go about it, but then, what I used to do is I used to be the Ramin for many other people and I, at some point, realized not everybody is thinking about their ideas being crushed the same way that I was thinking about this. This formula might work really well for me and Ramin but it doesn’t work for most people. I had to adjust and be a better sparring partner, a brainstorming partner for people in the early days, the way you said it. It’s funny, for many years, I think I was hypercritical in the very early stages of ideas that people brought to me, would share, probably made me somebody that people didn’t want to discuss ideas with very frequently. I love the question framework that you offer with first, let’s ask ourselves, “How can we make this happen? How could this become a success? How could this work?” Maybe later, we’ll ask ourselves, “How could it not work or what could work about it?” One thing that I’ll throw out there that I experienced recently which was really such a simple thing and still was surprising to me, I had a friend that visited me for a week in New York recently and he is in the process of thinking about starting something new. We spent a lot of time during that week just talking for hours and hours. Just brainstorming ideas, thinking through things, talking big themes, the future. It was a really fun week. I really loved the guy. There was one idea that he-   [0:09:26] Hiten Shah: I-   [0:09:26] Steli Efti: Oh, go ahead.   [0:09:29] Hiten Shah: I didn’t say anything.   [0:09:29] Steli Efti: Oh. I don’t know. It was the ghost in the Skype universe. I thought I heard something. Anyways, to wrap this up, one of the ideas that he had, we kind of brainstormed and we both said, “Yeah, you should just work on this and you should do step one, two and three and gather a little bit more intel and a bit more data,” but there was one big glaring problem about how to execute this, how to scale this idea. The beginning of the week, we discussed that how could we solve the scalability issue, how could we address this. Eventually, he actually stopped me as I was ranting on different things and thinking really critically about it. He stopped me and he said, “You know what? Since we don’t have an obvious solution to this, who cares? I truly believe, if I start working on this and if we start seeing more data, more information, we’ll gather more insights that will then lead us to an answer to this problem. This scalability problem is not big enough for this idea not to be potentially, incredibly valuable, so let’s not worry about solving this now.” I was like, “Oh my God, he’s so right.” I wouldn’t have stopped though. I was in the framework of trying to solve this right now and I couldn’t, so I was stuck on that. Then, within four days of him doing some research, talking to some customers, interviewing some people and I was just observing this on the side while I was doing my own work, we had another discussion at a late dinner that then, boom, we instantly had a brilliant and simple solution to the scalability issue. I was like, “He was right.” Sometimes, you find the right solutions for the problem as you invest more and more time in it and as you learn more about it and you don’t have to solve all potential problems of an idea on day one or in the very early stages. That was kind of really beautiful for me to observe and be part of because I was kind of stuck on the different mind frame.   [0:11:27] Hiten Shah: That’s pretty interesting. That’s very interesting. I think that this is just a super important topic for anybody listening because we’re either stuck because we don’t have any ideas and usually that’s because we’re stressed out and not great at feeling great or we’re ready to go and we have lots of ideas and when we communicate them to other people, I think there’s two important things here, we have to understand the person we’re communicating them to and we also have to understand ourselves to understand how should we be communicating this idea. Because often times, we can be really excited about a new idea and that excitement doesn’t always wear off on the other person to take it on by the other person and if you don’t know how that other person thinks, it’s much harder to communicate. For example, for me, I like communicating verbally. I think you do too.   [0:12:24] Steli Efti: Yup.   [0:12:24] Hiten Shah: With some people on my team, if I communicate the idea verbally, it’s not the most effective way to communicate the idea. The best way to communicate the idea is actually write it down or some kind of pictures of some kind of example. My worst fear is when I say an idea and someone asks me, “Who’s done it before? Show me.” The reason that’s my worst fear is I don’t know most of the time. These ideas aren’t something where I look somewhere else and came up with it. I was just thinking and I came up with an idea. I don’t know if someone else has done it.   [0:12:58] Steli Efti: Yeah.   [0:12:58] Hiten Shah: Quite frankly, I don’t care. Right? If it’s the right idea for us, it shouldn’t matter whether someone else has done it. In fact, if someone else has done it, it’s likely I might not want to do it anymore but that’s just my own impulse, right? I think it’s important to know how do you communicate, what’s your best way and also, what’s the best way to communicate an idea to the other person and force yourself to do it their way if you really need them to be onboard.   [0:13:25] Steli Efti: Beautiful. All right. I think we’re going to wrap this episode up at this point. As always, if you want to get feedback from us, if you’re in the early days of ideas and you want to have two ears and eyes that are going to be friendly and brainstorm with you, just shoot us an email. If you’ve been super jaded and super cynical lately and you’ve kind of become a grumpy founder and want to talk about that, we always love to hear from you, steli@close.io, hnshah@gmail.com. Until next time, we’ll hear you very soon.   [0:13:54] Hiten Shah: See ya. [0:13:54]   The post 360: Being Cynical in a Startup – Good or Bad? appeared first on The Startup Chat with Steli & Hiten.