In today’s episode, Steli and Hiten talk about ways you can manage your emotions in a startup. Startups are said to be emotional rollercoasters, but how do we actually deal with these emotions that we go through? Listen as Steli and Hiten explain how you can control your emotions, tips on how to avoid getting angry, and why awareness is the first step to understanding your emotions. Time Stamped Show Notes: 00:03 – Today’s topic is about managing your emotions in a startup 00:35 – A startup is an emotional rollercoaster 01:26 – One of the most intense emotions an entrepreneur experiences in a startup is fear 01:45 – Combat fear by not having fear 02:03 – Will Smith says to have fear of fear 02:20 – Fear is irrational: you focus on things you can’t control 02:56 – Deal with fear by thinking through it 04:20 – Play it through all the way 04:53 – Anger is a negative, but empowering emotion 05:18 – Hiten says to not be pissed off and angry 05:52 – Hangry is the number cause of being angry – don’t take too much coffee without food 06:18 – “Most of the time, your emotions are coming from the same place” 06:35 – Dig deep on what triggers your emotions 07:12 – Think through your emotions and identify them, when they are triggered, and how you can recognize them 07:24 – Write down what makes you angry 07:49 – Don’t judge yourself for feeling what you feel 08:00 – Never write an email or text in anger 08:20 – Find a way to calm down 08:53 – Start being self-aware about the emotional state that you’re in 09:48 – Anger builds up before it explodes 10:26 – Find a productive vessel to put your energy into when you’re angry 11:50 – Confusion is a common and less intense emotion 12:10 – Hiten reminds himself to focus on the big, important things to avoid confusion 12:50 – Don’t get caught up n small things that would not matter in the long run 13:42 – Focus and do the things you CAN control 14:56 – Steli shares about an overwhelming experience he had yesterday 15:32 – Identify what is really going on 16:07 – Deal with one thing at a time – prioritize 16:56 – Being present in the moment is what eliminates overwhelm 17:33 – Dealing with cynical emotions 18:15 – “Get out of your head and go for a walk” 18:50 – Meditate or do something that takes your mind off of the issue 19:13 – Talk to people that make you happy 20:31 – Deal with other people’s emotions the same way you deal with yours 21:36 – Emotional management always starts with awareness 21:55 – We want to hear your opinion on this topic! Email Steli or Hiten 3 Key Points: Deal with your emotions by thinking through it, not by reacting to it. Analyze where you feel triggered and find out why you feel that way – sometimes the cause comes from childhood emotions and memories. Deal with other people’s emotions the way you deal with yours. Steli Efti: Hey everybody, this is Steli Efti. Hiten Shah: And this is Hiten Shah, and today on the startup chat, we’re gonna talk about  how to manage your emotions in a startup. Steli Efti: Yeah, we all know that the rollercoaster example has been used many, many times. The  emotional rollercoaster of starting a startup. It’s a funny image and it’s very truthful for  those that hear it. It does mimic the highs and lows and the intensities of  a startup from an emotional point of view, but it’s very rarely that we talk  about how to deal with that. And how to manage your own emotions. So I  thought that it would be a fun episode for us to just pick a bunch  of challenging emotions that you’re probably gonna have to face and states of mind that  you’re gonna have to face as you’re starting a company and building your business. And  just common from both of us in terms of how we’ve learned to deal with  these emotions, what kind of best practices we’ve utilized, just talk a little bit about  that. I’ve written down a list of emotions I could think of this morning on  the way here. So we can just pick one emotion at a time and just  chit chat about it and go back and forth. Hiten Shah: Sounds great. Steli Efti: Let’s start with probably one of the most intense emotions and one that is the  easiest to think about, and then we can work our way into more nuanced emotions.  Let’s talk with fear. What do you do when you are afraid? How do you  deal with the emotion of fear while building your startup? Hiten Shah: Have not fear. Literally, like the best answer I can give anybody on that, if  they ask me that, just like you did. Have no fear. What is fear? It’s  like, I think Will Smith is the one … I don’t credit him with this,  obviously, but he says, “I have fear. I have fear of fear.” Steli Efti: Hmm. Hiten Shah: That’s straight up where it’s at, you know? I’m a big Will Smith fan. I  really think he is very motivational, to be honest. Watch some videos of his on  YouTube. I like his perspective. At the end of the day, though, fear. What is fear? It’s irrationality. It’s focusing on things you can’t control. And I know this is  a theme across a lot of our non-tactical podcasts, Steli, but when you’re in fear  or you fear something from a business startup standpoint, it’s usually because you don’t have  enough information, you don’t have clarity, and/or you’re focused on things you just can’t control.  A lot of things are not in your control in a startup. You don’t know  what’s gonna happen tomorrow. And that’s okay. That’s the reason you’re doing this. There’s my  motivational speech on fear. Steli Efti: I love it. What I’ll say about fear is that, I think that the best  way to deal with it is actually to just think through it, because fear is  an emotion that historically has its place, in terms of being a utility to survival.  But, in a startup, I won’t say never, but it should be very rare that  you have to fear for your life. Right? That should not be a common occurrence,  but the things that you’re really afraid of are different things. The fear that most  people have is to make a mistake. Is not to accomplish what they want. Is  to be embarrassed. Is to whatever it is. It’s some kind of a psychological irrational  thing that if you actually sit down and you do the exercise of writing down, “Hey, in the worst case scenario, what could really happen? What’s the worst that could  happen here? And then what happens after that? And then what happens after that?” Eventually  you’ll get to a point that you’ll realize that there’s nothing really to fear. Even  in the worst case scenario, if you play it down long enough, you’re gonna arrive  at something that doesn’t matter. Like, what’s gonna happen if we make this … The  worst thing that could happen is we make a bad decision. And then we’re gonna  not be able to raise money. And then? And then we’re gonna run out of  money. And then? Then we’re gonna be out of business. And then? I don’t know,  then I’m gonna have to find a job. Okay, and then? Well, then I’m gonna  have to try again and start a new startup. Okay, how life threatening is that,  really? So, just playing it through all the way to the end of the thing  that you are afraid of, a lot of times gives people enough of a timeline,  and extended timeline to have perspective and to realize, “Yeah, you know, I don’t want  that to happen, but it’s not the worst thing of the world. I definitely don’t have to be afraid of it.” Now, let’s take another … It’s an opposing …  it’s not really an opposing emotion, but it’s kind of an element opposite end of  the spectrum, but it’s still negative. So, I don’t want to go from fear to something super positive. But, let’s gro from fear to anger, alright? Anger is still very  negative, but it’s a much more empowering emotion. It’s a much more high energy emotion  versus fear is an emotion that takes a lot of energy and power away from  you physically speaking. What do you do and how do you deal with the emotion  of anger? What do you do when you are pissed off and you are angry  in a startup? Hiten Shah: Damn, I’ll my answers are just gonna be so blunt. Don’t get- Steli Efti: Don’t be angry. Hiten Shah: Don’t get pissed off and angry. Honestly though, let’s say you’re pissed off and angry.  Why are you pissed off and angry? Why are you really? This whole five whys  exercise of asking yourself why five times. Just do that. And you’ll get to some  root cause that you probably didn’t … Wasn’t on the surface. Right? It could be  as stupid as, I didn’t eat enough today. Steli Efti: Yeah, hangry. For those of us who have children, we’re pretty familiar with that. Hiten Shah: I don’t even need to have children to be familiar with that. Hangry. Hangry is  one of the number one causes of being angry. I think for children as well  as adults, because sometimes you just don’t eat. Too much coffee and not enough food.  So that’s one example I’d give you, but honestly man, why you gotta get angry?  Why you gotta get angry? Figure out what … You know what? Most of the  stuff around how do you manage emotion, has everything to do with understanding where your  emotions come from. And most of the time your emotions are coming from the same  place over and over again. Right? And how many people, like Freudian, or psychological, or  spiritual, things like that. Emotions have root cause. There’s only one of three places emotions  come from. And if you really dig in deep and find the patterns of what  triggers you, that’s good, because there are millions of triggers for your emotions, then the  emotions you feel, most people, they feel the same emotions over and over again, and  they come from the same place. Something with childhood. Something with again, I think honestly, some come from childhood, whether it’s really young all the way to college. And then  post college, most things tend to be very in terms of your patterns. Maybe even  post high school. And if you could just think through, what are my triggers? What  are the common emotions I feel, and when I feel them how can I recognize  them? And I’ll give a quick tip and the angry and the emotion thing. I’ve  given this tip before for stuff, but I write it down. I literally write down,  “She said this, and it made me feel like this, and now, I want to  strangle her.” And literally, if you write that down, you’re like, “Oh that sounds absurd.  Why do I even feel that way?” But, that’s a very aggressive emotion. You probably  wouldn’t share that with the person that makes you feel that way. But, if you feel that way, it’s okay. So the first thing is don’t judge yourself for feeling  that way. Figure out why you feel that way, and that’s how you’ll stop feeling  that way. Steli Efti: I love it. Write it down. But, here’s my tip, don’t write to that person.  So, never write an email. Never write an email in anger. Never write a text  in anger. It will always come off much harsher than even what you meant, and it’s just gonna make things a much bigger problem. When you’re really angry, you need  to figure something out a high level of conflict with another human being, the best  thing to do is to find a way to calm down. Writing things down, thinking  things through might be a good idea, and then when you want to confront that  person, but you want to do it in person whenever possible. You want to be  able to have eye contact. You want to be able to have the context rich  environment of seeing somebody’s body language, having them see how hurt you are or why you’re angry. It’s gonna be a much different scenario. I’m gonna say, regarding angry, often  times, obviously it all comes back to understanding. Actually staring to take much more stock  and being much more in tune and self aware of how you feel and what  emotional stage you’re in, because that’s gonna help you a lot in just being in control in the way you want to engage and how you want to engage in  things. Right? Sometimes, if you notice that you’re really angry, and you’re about to go  into a meeting and you kind of can sense that you are really aggressive in  your reactions to certain things that are being brought up, although your anger has nothing  to do with that meeting, or with the person that you’re interacting with. That alone  can help you to stop and either bring people into it and go, “Hey, I’m  actually in a really bad state right now, so maybe I want to apologize if  I come here across too aggressive.” Or, find some way to create context around that.  But, I would always ask myself, why am I angry? What happened … If it’s  about another person, if it’s not that I’m just in a bad mood, because I have eaten, slept, or had too much coffee, or something else, often times anger is  just things that have built up for way too long and then you explode. There’s  some kind of an emotion, something that was irritating you about a human being or  about a situation, and you didn’t deal with it when it was small, so it  has built up over time and now it feels massive, not because today is that  big of a deal usually, but because it has accumulated over such a long time.  The best way is to find ways to get off steam, so writing things down  is a rational way of doing it. Another thing that I’ll offer is, be just  a physical way to get that energy out of your system. A lot of times  when people are really, really angry, there’s a lot of built up internal emotion and  energy, and it’s just a good idea to find out a vessel for that. That’s  productive. For some people that might be, just go for a run, or go to  the gym, or really do a really hard workout. Really just push as hard as  possible, or just go to a heavy bag and kick the heavy bag’s ass. Do  something that’s physically also exhausting, that allows you to channel all the built up energy  and amped up energy. That alone is gonna make you feel much better. It’s gonna  regulate your internal biochemistry and release some endorphins, and make you feel a little calmer.  And then sitting down and writing down what really happened and why you felt the  way you are. All that should get to a much better place, that then allows you to take the next step and actually deal with the person or situation that  got you into that super intense negative state of mind. Let’s take another one. Let’s  take an emotion that’s a little bit more nuance, and more interesting. Confused. How do  you at times, you might go through confusion, where you’re just like, you don’t know  how to deal with the data you’re seeing, with the situation you’re in. You don’t  know what direction to go. It could be overwhelming, but confusion is distinctly different. It’s  interesting, those two emotions, feeling overwhelmed is different from feeling confused. Maybe talk about that  kind of a state, where it’s not like fearful, anger, those are super intense emotions,  but confusion, or overwhelming might be less intense, but much more common. Day in, day  out, over the years as you’re trying to build your startup. How do you deal  with that? Hiten Shah: Man, I think one thing that I struggle with, but it’s so related to this,  and I just keep having to remind myself, and when I do things just get  better. It’s almost like … Heaton. This is almost self talk, right? Heaton, you should focus on the big important things. Don’t worry about all of these small little things  that bother you. And often I find myself saying that to myself. And it’s been  really helpful. And let me be clear. I don’t mean I shouldn’t worry about that  little pixel that’s off on a design, because that’s my thing. I’m gonna really worry  about that. But, I’m not gonna worry about why someone got it wrong. Or why  that designer isn’t doing a great job of it. I’m gonna show them. Give them  an example. But, what I mean is that sometimes you just get so caught up  in some small shit that just doesn’t matter. Is it gonna matter tomorrow? Is it  gonna matter a week from now? Is it gonna matter a month from now? Is  it gonna matter a year from now? If the answer is no, then just get  it out of your head. Don’t be so emotional about it, and move on. And  that’s … My answer to this is self talk, and that’s exactly the kind of thing that, when I remember, and I say to myself, it helps. The other thing  I said earlier about focusing on what you control? Super related to this. If I’m  really struggling with something in my business, I’m like, “Wait, what do we control here?  What do we actually control? What can we impact? Oh, ourselves. Our execution. What we  do. Okay, great.” Everything else we can’t. We can’t impact the outside world without us  doing something. So, there’s no reaction from anybody unless we don something about it. That  means, you do things you control. And if you can’t control things right now, figure  out how to get control of them. I’m not one to say, “Oh let it  go.” I’m one to say, “Hey, what are the variables? What are the levers? What  are the things that are not in my control and how do I get control  of them?” Or just focus on the things that I can control, and that very  much relates to this big picture, big things versus small things. If it’s not gonna  matter in a very short period of time, and it’s just not an important thing,  then why am I so hung up on it right now? Steli Efti: I love it. I love also the self talk example in the beginning, because a  lot of people don’t realize that a very large portion of emotions and emotional states,  start with the self talk that we have. Right? A lot of times, you’ve talked yourself into an emotion. You started asking yourself, “Why is this not working? Why is  this person not doing this? It’s never working well, I’m just done, I don’t know  what to do.” And after you’ve talked like that to yourself for a few minutes,  all of a sudden the emotion starts growing and you get into a really strong  . Self talk can be the way into emotional states, and often times is the  way out of them as well. I don’t know. The one thing that I’ll say  in terms of how to deal with overhwelmance is that whenever I’m overwhelmed … And  I had this situation yesterday. There was like, there are a lot of things were  going on yesterday in my mind at least, a lot of things that I had  to decide a lot of things I had to figure out, a lot of things  on my plate. I had this moment of overwhelmant. Of just like, “Oh my god,  there’s so much fucking going on, I just can’t deal with all of this. Then, what I often do, what I catch myself in that kind of a state of  mind, is I tell myself, “What is really, honestly, and truly going on right this  second, in this room, right in front of me?” And then I kind of …  it helps me to leave my mind, where a million things are going on and  to get back in touch with reality of the present moment. The present moment, I’m  just sitting here at a desk, there’s a laptop. There’s nothing. There’s not a hundred  people screaming at me, there’s nobody shooting at me. I’m not … There’s nothing, there’s  no craziness going on, I’m just here, it’s actually pretty calm, it’s a desk and  my laptop. I’m like, “Okay, so there might be many things I want to do.  But, I’m just gonna deal with one thing at a time. What’s the most important  thing I need to do? Or the most urgent thing I need to decide today?  Well, I haven’t decided about this thing. Okay, let’s just decide that thing.” And once  I’ve decided it, I go, “See, it’s just one thing, there’s not a hundred things  I have to do at one time, it’s just one thing at a time.” I  don’t know, it just helps me … There’s this meditation thing I once read from somebody that was saying truly take a deep breath in and out and truly ask  yourself what is the problem I have in this very moment. Usually in most moments,  you don’t really have problem. Even if you’re bankrupt, even if financing, even if you  have a big argument with your spouse or your partner, even if there’s big things  going on in your life, in the present moment often times, there’s not much really  going on. It’s in our head. So, for me the way to get out of  the state of overwhelment or confusion often times is to get present in the moment  and realize that the moment is not that overwhelming. This very moment is actually not  that confusing. All I have to do is just focus on the present and deal  with what is right in front of me versus being so stuck in my own  head, thinking about a million things at a time and making myself overwhelmed or confused.  That helps often times for me. Here’s another one. And this is a tricky emotion,  maybe it’s going to be the last one, maybe the second to last. Let’s see.  How do you deal with the emotion of feeling cynical or overly critical? You know,  where you’re just like … You’re in a state of mind that makes you feel  like all of this is bull shit or yeah, these might be good ideas, but we don’t know what we don’t know yet, or there’s a very high chance they’re  not gonna pan out the way we said, or the timeline we said. You know,  when you’re kind of in a … You’ve been burned often enough, or you’ve been experienced enough to really get into a highly cynical state, where you’re just like, you  feel really super critical, you feel like poking holes in everything, and tearing down everything  that’s around you. How do you deal with that state of mind? That’s an interesting  one to me. Hiten Shah: Get out of your head, go for a walk, realize that it’s not productive. Right?  When you want to tear everything down that badly, something is wrong with you. Like  deeply wrong. Not like, “Hey, you have problems.” I’m just saying something is wrong. You  have to realize and recognize that it’s probably not a good thing. People aren’t gonna  be happy around you, right? You just want to break everything or whatever. You might  even be slightly depressed. Take a walk, go outside, talk to a tree. Hug a  tree. I don’t know. Just get out of your head. Right? If you meditate, meditate.  If you love surfing, go surf. Do something that just gets your mind off life,  so to speak. You know, where you can just zen out so to speak. Whatever.  And everyone’s got something they do. Read a fiction book. I always mix that up,  because I only read nonfiction. Anyways, listen … Talk to a parent that makes you  happy or a friend that makes you happy that has nothing to do with your  life, business, or whatever. Call somebody. Do something. That’s just an unproductive mode for us  when we want to just break everything and tear everything down. The way you describe  it, I think it’s very visceral. Everyone knows that feeling I would say. Go do  something that just distracts you from that feeling and you’ll generally come back in a  much better spot. Steli Efti: I love that. I’m on the, “Go hug a tree. I have to hug a  tree today.” Just because I haven’t done that. Hiten Shah: Great idea. Steli Efti: When was the last time I’ve hugged a tree is a question I don’t have  the answer to, which is probably a bad thing, or it’s probably a good idea  for me to hug a tree today, so good answer tomorrow. Hiten Shah: That’s great. That’s great. I love it. Steli Efti: Alright, so let’s wrap this episode up. I think that some people might ask themselves,  “Well, okay, you guys really looked deeply into how do I manage and deal with  having these emotions, myself. But I’m not that emotional of a person. I have these  emotions under control. But a lot of other people are super emotional. My employees are emotional. Some team member or confounder, how do I deal with other human’s emotion?” My  comment on this, I’m curious to hear yours, as kind of the closing statement to  this podcast. My take on this is that, you deal with other people’s emotions the  same way you deal with yours, but if you don’t know how to manage your  own emotional household, and how to deal with your own emotions, you’re not gonna be  able to deal with other people’s. So when people come and they’re overwhelmed, they’re angry,  they’re fearful, be able to recognize that they’re at a very heightened emotional state that  makes them irrational, it makes them act or communicate or think in a way that’s  not their average normal self. Be able to recognize that in yourself will help you  recognize that in others. And when you recognize it in others, it’s much easier for  you to deal with them, because you’re not just like, “Why is this person saying  I’m an asshole?” You’re just saying, “Huh. Why is this person so angry?” That shift  in interpretation of reality of what’s happening makes a big difference. You going, “Why is  this person so pissed at me?” Is different from you going, “Why is this person  so pissed? What happened? Why is this person in such a strong state? How can  I help them get out of it? How can I help them manage it? And  how can I help them make sure that … To prevent it moving forward?” So  I think that the way you manage other people’s emotions is the way you manage  your own, and it all starts with even having the awareness and noticing the states  that people are in, and nut just what they say and do and how they  behave. If you do that it becomes much, much, much easier over time to deal  with other people’s, as well as with your own emotions. Hiten Shah: Yeah. Totally agree. That’s great. Steli Efti: Awesome. I think that’s it from us for today. Go hug a tree, and we’ll  hear you very, very soon. Hiten Shah: If you go hug a tree, let us know. Hnshah@gmail.com, or hit us up on Twitter, hnshah on Twitter, Steli, S-T-E-L-I on Twitter. We’d love to hear from you, especially  if you hugged a tree today. Steli Efti: Especially if you hugged a tree today, so true. Alright, looking forward to hearing from  all of you guys. Bye-bye. Hiten Shah: Bye. The post 249: How to Manage Your Emotions During the Startup Rollercoaster appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten list the ways in which you can use conferences to grow your startups. In the entrepreneurial world today, there are conferences popping up left, right and center—it’s hard to know which ones will benefit you the MOST. Steli and Hiten discuss how you should choose your conference, how to MAXIMIZE the value of that conference and the importance of making in-person connections with those that attend. Tune-in to get the MOST out of your next conference. Time Stamped Show Notes: 00:26 – Today’s topic is about using conferences to grow your business 00:43 – Steli wants to talk about this topic because both him and Hiten always get invited to speak at conferences 01:14 – Steli thinks that the majority of conferences are a waste of time and 10% of them can be worthwhile and valuable 01:52 – Be selective about which conferences to attend 02:20 – Look at the focus of the conference 03:06 – Ask yourself whether the audience attending the conference could be potential customers for your business 04:11 – Reasons NOT to go should include raising a financing round, getting press publicity, and to learn about interesting topics 05:08 – If you’re interested in the content and not in networking, learn from home instead 05:54 – Hiten used to be part-owner of a conference company 06:38 – At some point, conferences turn into money-making events 08:23 – Steli doesn’t know of any conference he’s attended that have actually gotten better 08:48 – Majority of conferences make money from sponsorships 09:17 – The conferences are designed around the sponsors and not the attendees 10:06 – Steli believes that networking makes conferences valuable 10:16 – The reality is 99% of attendees don’t actually network while at the conference 10:38 – Most people go to conferences with people they know and spend the majority of their time with them 11:45 – One of the most powerful things about a conference is get to know people and be in their physical space 12:45 – You don’t need to meet ALL the people at a conference, just make a list of people who are potential customers 13:39 – Steli finds it rare that people are purposeful and make it a point to meet specific people at a conference 14:37 – “A conference is the starting point of a relationship, if you want to network” 15:57 – Steli attended 5 to 10 conferences this past year 16:33 – Steli mentions a story about a listener of the podcast who tweets from his company’s branded account 17:06 – The person emailed Steli asking if he needed a ride from the Dublin airport to his hotel and he accepted 17:37 – In the 3 minutes of driving together, Steli realized he was actually glad he said “yes” to the offer 18:01 – Steli describes this guy to be a genuine and honest person 19:24 – In-person connection really makes a difference 19:41 – If this person keeps in touch, Steli is willing to go out of his way to help him 20:50 – Help those people that you want to connect with 21:42 – End of the podcast 3 Key Points: You have to be selective about the conference you’re attending to gain the most value. Unfortunately, most conferences are planned around the sponsors. At the end of the day, personal connections are still better than connections made online. Steli Efti: Hey, everybody, this is Steli Efti Hiten Shah: This is Hiten Shah. Steli Efti: In today’s episode of the startup chat, we want to talk about startup conferences. You  know, when should you attend conferences, how do you make sure to actually turn a  conference into something that converts into business, growth, or whatever the goal is that you  have versus just having it be a huge distraction, a waste of your time. The  reason why I wanted to talk about that with you, Heaton, is we both speak  a lot of conferences. I just came back from a conference in Europe and saw  a lot of things you should do and things you shouldn’t do, so I thought  it might be fun to go back and forth and enlighten some people on this. Hiten Shah: Awesome. Yeah, I actually have been to less conferences this year than I have ever  been to I guess in the last, I don’t know, five or 10 years. I  think this is a really interesting topic, especially in reference to tech conferences, so I’m  curious what your take is. Steli Efti: Yeah. So let’s just jump right into it. I do think that 90% of the  time … I think the majority of conferences are probably a waste of your time.  Just to come right out of the bet with my thoughts of this, I think  that 10% of the conferences that could be really worthwhile and could be super valuable  can only be valuable if you approach them in the right way. I think the  majority of participants at conferences aren’t. Let’s talk about that. What conference to go versus  not to go and when you go how to make sure you create value during  that conference versus just wasting time. On the what conferences to attend, I would be  very selective on that. I think there is more conferences today than ever before. I  don’t have any data to back that up, but it definitely feels like that to me. There’s a shit ton of conferences out there, especially tech and startup conferences since  it’s such a hot topic around the world and in business. I do think that  there is a big difference. Many of these conferences, if you actually look at the  people behind the conference, if you look at the how focused the theme or topic  of the conference is, right? Is it super niche, is it very, very specific in  terms of what is the topic, what is the industry, what is the people that  are going to gather there together? The broader the scope of the conference, the broader the audience, usually the less likely it’s going to be really worth your time. I  would look at does this conference have a very strong focus on its audience, its  niche? Does it understand who is the ideal customer profile, or who is their audience?  Bring together an audience that can actually benefit from each other. I think that would  be my first homework assignment to decide which one to attend or not. That question  that I would ask as a startup going to a conference is really asking myself,  “Is the audience that are going to go there, are they likely to be my users or customers?” If the answer is no, I would typically say don’t go, right?  If you can’t turn … If this is not going to be a place where  you’re going to be surrounded and enveloped by people that could be your customers buying  your product, using your product, more likely than not it’s going to be a waste  of time. That would be my number one criteria. Now, there are a few that  are nice to ask, right? “Hey, are there companies there that I can learn from  or people I want to have relationships with because they’re a year or two ahead  of me and I come to just learn from their mistakes, learn from their experiences,”  that’s a nice to have. Could there be some kind of a change maker, either  investor or thought leader or person who’s very prominent, again, to my audience, to my customers, to the people I want to reach, and could I get a chance to  build a relationship with that person? That’s a nice to have, but the most important  one would be are there potential customers at that conference? Are there many of them?  That will be my number one reason to go. Reasons not to go would include  the hope that you’re going to raise a financing round because you’re attending a conference.  Oh, lots of investors are going to be at this conference, so if we go  there we might get our funding round. Not that that has never happened, but it’s usually not a good reason to go. Many really great investors are not going to  tons of conferences, and when they go they’re really just go on stage and they’ll  leave 20 minutes afterwards. They’re not hanging around meeting lots of people. Again, there’s exceptions  to this, but that’s the general rule. Getting press or publicity those are usually not  really good reasons. The worst reason to go is just to say, “Oh, there’s a  lot of interesting topics that are going to be discussed . I just want to  go there to learn.” Today the web is full of information and data. Most likely  all the content that is going to be discussed on stage is going to be  published on blogs and videos, or even going to be live streamed. If you’re just  interested in the content and not in the connections, not in the networking, not in  the people physically that are there, you could just do that from home and pick  and choose the stuff you want versus wasting days and days of time just to  sit there silently in an audience and listening to content on stage. That would be  my rough model on even what conferences to pick to go to before going into strategies, what to do once you’re there. Hiten Shah: Yeah, conferences. There’s a lot of them. Steli Efti: Yes. Hiten Shah: There’s just a lot of them. There’s even, you know, speaker circuits, right, of very  much the same speakers going to them. Hopefully not saying the same things, but sometimes  saying the same things too. I’m going to start by saying I used to be  a part owner in a conference company. Steli Efti: No shit. Hiten Shah: I also know it from the inside. It’s terrible business, you know? This is- Steli Efti: It’s tough. Hiten Shah: -why even companies are doing conferences. Literally it’s funny you were talking about conferences. I’m  going to a conference next week, and I’m the moderator. I’m the moderator on a  panel. It’s in Boston. It’s called Hyper Growth. My favorite conferences, Scully, are like year  one, year two, year three conferences. After that, they get bigger and they turn into  … Usually. There’s exceptions to this. I think business or software, which I’ve never been  to, but what I’ve heard is an exception to my rule that I’m just going  to say, that at some point the conference turns into either some kind of formulaic  thing, a money making machine to some extent, because they add workshops or they add  … I’ve run those. I’ve done workshops at conferences, so this is not to say  any of this is terrible or anything. It’s just like the value changes over time.  For me, in the early stages of a conference I’m really excited to go to  this one. My friends at Price Intelligently have a conference too. They’re in Boston as  well, like Boston Day or something for me I guess. They have one. I’m going  to go to that one later this year, but it’s like their second conference. I  went to MicroCon, which is another conference that’s pretty popular now, for the first five  or six years. Then, this year I didn’t go. My first year I didn’t go.  Maybe even longer than five or six. I don’t remember anymore. It’s not that anything  is wrong. It’s just they split it up into two tracks. They have an early  stage one and a growth one. It just turns into something else over time as  the organizers want to make more money, you know, and the brand is grown. Taking  that lens, which I think many people are probably not thinking about these conferences, it’s  like in the beginning I think the curation of the content in the conferences is  a lot better. You can actually learn by listening to the presenter a lot more  than as conferences start getting older and older. Steli Efti: I love that. That’s actually an unfortunately true … I’ve just be scanning through my  mind all the conferences that I’ve been to repeatedly. I can’t think of a single  example where they’ve gotten better over time. I think the outliers are those that stay  somewhat close to the original years, but I don’t know a single one that’s getting  better. It’s either getting a little worse, which is pretty good, as they grow, or  getting a lot worse over time, and it’s usually because of the pressures of they  want to make more money so they want to grow in attendance. To grow in attendance typically you’ll make the topics more broader. You want to make more money with  sponsorships and stuff like that. To do that … Oh, go ahead. Hiten Shah: I was going to tell everybody a secret that might not be obvious to them.  The majority of conferences make the most money on the sponsorships. Steli Efti: Yeah, not on the tickets. Hiten Shah: The attendees ae just … No, not on the ticket sales. People don’t realize that.  If you just think about it as a conference grows, they want to charge more  and more to sponsors, and this is conferences that are not run by a company,  meaning a sales force’s conference or something like that. Even though they make money on sponsors, but we’re just talking about conferences that are not oriented to a company that  a company’s throwing. In those cases, the conferences are all designed around making the sponsors  happy, right? The attendees over time fall to the wayside. I will say that MicroCon  is definitely one that didn’t do that. It feels a lot more like the content  is quality and all that. Although I agree with you. I don’t think it’s getting  better every year necessarily. It’s probably stayed pretty good since the beginning. Now they split  it up, and that really threw me off to be honest. Not because of anything  wrong. It’s just I realized they’re growing and it might not be a place for  me anymore. It’s interesting that you want to talk about this, but I think the  value in the conferences … I’m curious what you say about this, because I don’t  really have much of an opinion on this one, but what about the idea that  these conferences, like you should be going for networking. How do you view that, Scully? Steli Efti: I think that’s really the one thing that you can turn a conference into something  incredibly valuable, but the reality is that 99% of people that go to a conference  are even not doing that at all but doing a really poor job of that. Here’s why. Networking is hard. Networking is very uncomfortable. It’s a weird thing, like you’re  in a room full of strangers and now your job is to kind of converse  with as many of them as possible. Here’s what most people do. Most people go  to a conference, they don’t go alone, they go with one or two people they  know or from their team or their friends. Then, they attend a bunch of sessions.  They spend the majority of time with the people they know, or they get really  excited when they see somebody at the conference they already had met before. They go  and talk with the people and hang out with the people they already know. They  sit in a few sessions, listen, get inspired, get informed, getting bored, whatever they do.  They grab some drinks. They might do some sightseeing. They might go to an after  party. They’re drunk. Again, with the people they know, and they go back home and  they’ve met zero people or they’ve met a few people randomly that were not really  that useful. That’s what most people do. This is the craziest thing. You go to  a conference and you spent … You’re in a corner with the three people you  already know, you knew before coming to this event. It’s the biggest waste of time  and energy possible. I do think … I’m not a huge networking fan. This might  surprise some people, but I also don’t enjoy being in a room full of strangers  and just randomly walking up to all of them to just hopefully meet somebody interesting.  I do believe that a powerful thing in a conference is you’re bringing a big  group of people to get a physically in space so you can make personal connections  with people and get to know them and let them get to know you. The  people that get the most out of a conference most of the time are the  people that really think of a conference as a big opportunity to make new friends.  They’re a little deliberate about it. They look through the attendee list or they look  through the list of speakers and companies sponsoring and attending. They tweet before the conference  happening to try to establish who is going. Then, they make a list of who  are the people that I want to meet? Who are the people I want to  know better? Who are the people I want to get feedback from about my ideal,  my business, or my MVP? Who are the people that might know a solution to  my problem that I can approach personally? Then, they are very deliberate in trying to  set up meetings and to connect with a list of people that is going to  be physically at a place and a given time. They don’t just randomly walk up  to everybody that’s there, but they’re trying to be deliberate and thoughtful unlike, “I’m going  to meet these x amount of people.” Ideally, and this is what I said earlier,  you’re going to a conference where a lot of the people who are going to  be there could be your customers, could be people that would buy your product, use your product so you can get as much in person feedback and interaction as possible  in the shortest period of time in a way that’s hard to replicate on your  own. You can always create customer meetups. You can always do customer visits and we’ve  talked about the importance of that, but having the big conference full of potential customers  can be a really good opportunity to close deals, make business happen, or connect with  people in the way that will be difficult to replicate, not impossible, but difficult to  replicate purely by cold calling them or sending them an email or a tweet, although  I think a lot of that you could do beyond the conference. Yeah, it’s so  rare that I see somebody really hustling at a conference, really being purposeful, meeting with  you, starting a relationship, investing in them, and then I’ll add this to the networking  piece. It’s useless. All the work, all the energy, all the time you’re going to  put into a conference is almost useless if you don’t have a really strong follow up game and follow up plan in place, right? You know how many people meet  me at a conference? They want to start a relationship, they ask me all kinds  of questions, and I tell them, “Hey, here’s my basic answers to this. Yes, I’m  always happy to help you.” They want whatever me to become a mentor, an advisor  or something like that, and I always tell them the same thing. “Hey, just stay  in touch. Let me know how things go, make me part of the journey, and  over time we’ll see where this goes.” Then, I never hear from them again, or  I’ll get an email from them right after the conference, which is exciting, but that’s  the last time I hear from them, right, until I see them again two, three  years down the line somewhere else. A conference is the starting point of a relationship  if you go there to network. It’s not the end of it. You have to  break through the noise and realize that people will meet with lots of people at  a conference. It’s a fairly noisy place, and they will get a lot of follow  up emails right after it, but if you want to win that race, that relationship  race, a networking race, the way to do that is to stay in touch, be  consistent and persistent, and keep getting in touch with me every month once letting me  know how things go, letting me know what kind of help you need, and two,  three, four, six months down the line now we have a relationship. Now I care  about you. Now I know what your journey has looked like, and that initial meeting in person can grow into something more meaningful versus just you know, that business networking  one night stand thing that’s happening at conferences where we meet and you spend all  this time to meet me at that conference and we’re laughing, getting along and there’s  a personal connection and then I never hear from you again or hear from you  once and never again. Hiten Shah: Yeah, yeah. I think you crushed that feedback. You answered my question. What could I  say. You’re the expert really. How many have you gone to this year? Steli Efti: How many conferences? That’s a good question. I don’t know. If I had to guess  I would guess probably like five to 10. Hiten Shah: Nice. Steli Efti: Yeah, something . Hiten Shah: That’s pretty solid. I’ve probably been to three. It’ll be five by the end of  the year. Steli Efti: I’ve been definitely to more conferences than you, but again, I don’t go consistently every  month. I usually it’s a cluster of things that happen. I’ll be at three conferences  in two weeks or something like that. Hiten Shah: Right. Steli Efti: Yeah, I’m still going to lots more than you, and this is what I realizing,  here’s a recent example maybe to wrap the episode up. There’s been a listener of  our podcast. I’m not going to name the name of the company, but he’s been  tweeting our podcast pretty consistently, but he’s been always tweeting from his company’s branded account,  so I never knew the person behind it, and I knew this person’s just listening  to our podcast, or I knew this person’s tweeting about our podcast. I really didn’t  know if this person’s listening. Then, he pinged me and said, “Hey,” again, I love  all of you for offering me for rides from the airport to the hotel. This  is a consistent theme that’s been going on forever, so he emailed me and said,  “Hey, do you still need a ride from Dublin airport to your hotel,” because I  was in Dublin a few days ago. I told him, “Hey, somebody already has offered  to drive me to the hotel, but I don’t have a ride back to the  airport, so he offered that, and I agreed to it. Honestly, the morning after was  like, “Ugh, why did I agree to it?” I’d rather have a silent taxi ride  to the airport right now than having to give advice to somebody for 20 minutes.  I was pretty spended, exhausted from the conference. Then, I go down and I meet  this person, and within three minutes of driving together I have this realization of thinking I’m actually really glad I said yes, because getting to know him he’s just a  super sweet person. Getting to spend 20 minutes with him in a car, and he  had all his questions written on his hand so he doesn’t forget the questions- Hiten Shah: Oh, cool. Steli Efti: -to ask me. He was just a super genuine, honest, cool, sweet person that’s working  so hard to make his dream come true and has been listening to our podcast.  He was telling me that he’s been listening from the get go, but he’s listening  in spurts where he’ll listen to 20 episodes in a week. Then, he’ll take a  break. Hiten Shah: Oh wow. Steli Efti: He’ll take a break for a month or two and he’ll come back and listen  again in spurts. He was saying funny some of the episodes about hiring and recruiting  and all that were totally relevant because he was a one man band. Now that  he hired a few people he went back and all of this was super relevant  to him in his life. Man, so I gave some advice. We talked, we connected,  but I can’t tell you the difference, like I was always seeing his company’s logo  tweeting things about our podcast, and he meant nothing to me. I didn’t know this  was automated. I didn’t know anything about it. I had very little emotional connection with  that person, although I’ve been seeing this logo for a year now. Driving with him  for 20 minutes, at the end I wanted to hug him, right? I was like,  “You’re an awesome human being. I like you, and I want to help you. I  want to see you succeed. I care now about you,” right? Now what I see  … This morning I saw his logo tweeting something. I was like, “Wow, I feel  totally different about this now.” I’ve met him now. I spent some time with him.  I think that is the difference that in person connections can make if they’re done  right, if they are done smartly. He offered value. He had a chance to spend 20 minutes with me in person. He was also the type of person I like,  so there’s something to that. Some people I don’t connect with and others I connect  more with. If he keeps in touch with me now, if he asks me for  favors I’m much more willing to go and help him and go out of my  way to offer him help because I personally really like him and I feel like  I know him and I feel like this is the type of person I really  want to see succeed versus if he had emailed me a few questions and then  just kept in touch with me seeing his tweets through his company account, I have  no connection to that. I didn’t really care about that. I didn’t know who the  story was behind that. I think that’s somebody who used a conference to his advantage.  He didn’t even pay the money to go to the conference to meet me, right?  He just was smart about knowing that I was there physically available and he offered something of value and he spent the time building a relationship with me. Maybe it’s  going to be useless long term. Maybe I cannot help, but if I can I’m  going to do more than I would do for a usual person because I’m personally  invested now emotionally. Hiten Shah: I like that. That’s smart to do things around conferences when you know people are  going to be in town. Steli Efti: Yeah. Help them with the problems they have. Usually getting to the hotel, to the  airport, coordinating things around the conference are the things that are complex for somebody who’s  new in town or who’s only going to be in town for a few hours.  Offering, “Hey, instead of calling an Uber to the founder’s dinner, to some party, or  to the airport, I’m going to drive you. We could use that 10 minutes to  get to know each other.” I think that can be incredibly valuable. There’s probably other  ideas around it, but just making a personal connection I think can be really powerful,  but you have to make sure you do that. 90% of people that go to  conferences, they don’t really make personal connections, and when they do they make it randomly  with some person that may or may not have anything to offer or they can’t  help or is not relevant at all to what they’re trying to do. It’s really  incredibly wasteful, so please don’t do that. I think with that we’ll wrap this episode  up. We’ll hear you very, very soon. Hiten Shah: Later, happy conferencing. Steli Efti: Bye. The post 248: How to Use Conferences to Grow Your Startup appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten point out the importance of vulnerability in leadership, especially with startups. Now, more than ever before, vulnerability is an important part of building a company’s culture and is also the means to building trust in one’s leadership. Listen to how being vulnerable can show a leader’s honesty and authenticity. You’ll also find out what is equally important to being vulnerable—showing a commitment to NOT giving up. Time Stamped Show Notes: 00:25 – Vulnerability for those running startups is one of those important topics that entrepreneurs should talk about 01:07 – It is the quality or state of being exposed to the possibility of being attacked or harmed, either physically or emotionally 01:49 – It’s an interesting topic because in leadership, people want to communicate and display strength 03:14 – Back then, vulnerability in leadership was not even a topic 03:41 – Hiten believes that vulnerability is a huge part of leadership—now more than ever before 04:00 – Now, people want to understand how you feel 04:26 – Hiten was forced to understand this when their company faced a problem fundraising 05:10 – His vulnerability helped the whole team deal with it together 05:49 – Admitting faults is a strong level of vulnerability 06:08 – If you’re a leader, you own the problem – you’re accountable for it 06:41 – Vulnerability prevents rumors in a company 06:57 – Vulnerability points to authenticity and trust 07:53 – A leader should have a track record of being honest in communication so his team will spend less time trying to figure out what’s really going on 08:40 – Creating mistrust in your team will result to wasted energy 09:31 – “Vulnerability is a crucial part of honesty and trust in a company” 10:25 – Being vulnerable doesn’t mean being weak 11:24 – Don’t spill your emotions around 12:14 – Spilling emotions at other people causes pain 12:52 – “Vulnerability and being genuine are really related” 14:09 – Many people are just stuck 15:04 – Vulnerability can be a massive display of strength 15:35 – Vulnerability means showing people how hard it is WITHOUT giving up 17:05 – Show that the work is challenging, and, just like them, you also have weaknesses—but, show your team how you deal with those weaknesses 17:47 – Be honest! 19:11 – We’d love to hear your opinion on this topic! Email Steli or Hiten 3 Key Points: Vulnerability is allowing yourself to be in a position where you can be physically or emotionally attacked or harmed. Vulnerability plays a huge role in your authenticity and honesty as a leader. Show that you’re vulnerable, but also show that you’re never going to give up. Steli Efti: Hey everybody. This is Steli Efti. Hiten Shah: And this is Hiten Shah. Today, we’re going to talk about vulnerability in startups, especially  when you’re in a leadership role, or a founder role, or a manager role. This  is something where it’s a topic, it’s one of those kinds of Steli and I  like to just jump into. We jump into, actually, all the topics, but this one  especially. I think neither of us know where it’s going to go. There’s a motorcycle  driving by outside, and so I feel vulnerable because of that. Anyways, I think this  is an important topic. This is a very useful topic. Vulnerability is such a big  word. You know what I’m going to do, Steli. I’d love to hear your thoughts. Steli Efti: God damn it. I was just about to do it to beat you, but I  can’t out-Hiten a Hiten, so I’ll let you do it. Hiten Shah: “Vulnerability is the quality or state of being exposed to the possibility of being attacked  or harmed either physically or emotionally.” Wow. Steli Efti: Say that one more time. Hiten Shah: Absolutely. “The quality or state of being exposed to the possibility of being attacked or  harmed either physically or emotionally.” Steli Efti: I think what we’re going to talk about is going to be much more emotionally  than physically . You never know, but you never know. Hiten Shah: Yeah, yeah. Yeah. I think, yeah. Steli Efti: It’s usually more of the emotional type of attack that we’re talking about. But it’s  such an interesting topic, because I do think that, especially in leadership, people want to,  they want to communicate strength. They want to display strength. They want to be strong,  and they want people that are following them to feel like, “This person knows where  they’re going. They’re strong, and they’re knowledgeable. They’re going to lead us to victory, or  to whatever the goal is that we’re all trying get to together.” So, to putting  yourself in a vulnerable position in front of your team and displaying weakness or potential  weakness, or opening yourself up for emotional harm or aggression, is something that people are  not comfortable with. Right? Founders or some kind of manager or leader position in a  startup, you don’t want to expose yourself in a way that shows people that you’re  weak, or you have doubt, or you don’t know what to do. But we know  that there’s true power in vulnerability. I think that today this is more and more  a topic, and we see more and more leaders that are making themselves vulnerable. Maybe  way back 10, 20, 30 years ago, this was not even a topic, and it’s  becoming more and more one, so we definitely want to chat with you about this.  Now that we’ve kind of talked a little bit about what vulnerability is, do we  think it’s valuable? Should leaders in startups, should they be making themselves vulnerable at times?  And why is it valuable? Why should they do it? Then, how? Let’s explore that idea a little bit further. Hiten Shah: I think my take on it today is that vulnerability is a big part of  leadership. It’s something that it’s much different than maybe back in the day when you  could be more of a dictator. You thought telling people what to do was the way to go. These days, people want to understand how you feel, because that helps  them understand how they should feel about the business, about whatever the initiatives are that  you’re trying to do. I think vulnerability is something where like when people think of  leadership, I don’t think they commonly think of vulnerability as something that’s like common. I  mean in my case, I would say that what forced me to understand this is  when the company had real challenges that required the whole team to focus on a  problem and a real big problem. I’ve talked about a bunch of those problems. There’s  been points in my companies where raising money was challenging. So, I could either lie  to team, smile to them, or tell them, “Hey. This is hard, and here’s why.  Here’s what’s going on.” Or we had a big class action lawsuit at one of  my companies, and the vulnerability was like even if I tried to hide it, you’d  see it on my face. In that case, it was more like I didn’t want  to tell anyone and freak them out and say, “I’m scared.” Right? Steli Efti: Yep. Hiten Shah: But, the vulnerability there was like, “Look, this happened on my 30th birthday, so that  sucks. Right then is when we heard about it, and we started dealing with it.  It’s us and our customers that are getting sued, and it’s our fault.” So right  there I just said, “Our fault.” So that’s vulnerability right there. The team could be  like, “What do you mean it’s our fault? What did we do?” You know what  I mean? “No, it’s our fault like we did something, like we actually did something  bad here. We didn’t do it on purpose. We did it accidentally in this case,  but it was bad. It’s our fault. These people are getting sued because of us.”  Right? Steli Efti: Yeah. Hiten Shah: So I think there’s a way you can communicate where you’re actually admitting, one is  admitting fault is a strong level of vulnerability, because nobody wants to admit fault. I  didn’t say I was wrong in that case. I said we were, because that was  the truth. Now, if I were wrong in that case, I would have said, “I  was wrong.” I would have taken the ownership over it. Because ultimately, if you’re a  leader the ownership’s yours. Nobody else owns the problem except you. You know what I  mean? And I don’t mean to say it’s not, you know, they couldn’t do something  about it, or they don’t feel a sense of ownership, but the ultimate buck stops  at somebody is the leader, the manager, the person who heads up the department, the  person who runs the company, or the founders who have the most equity, the most  responsibility, the most at stake if you want to call it that. So, I think I’ll throw that out, and say, to me, that’s how I learned that vulnerability’s the  only way, because otherwise, people just start asking questions and there’s a lot of rumors.  So to me, vulnerability actually prevents rumors, prevents back channeling inside of a company when  you can literally put yourself out there and say, “Look. What I’m going to say,  many of you might not like, but that’s okay. I have to say it. It’s  the truth.” Steli Efti: I love that. I think that points to another thing, which is authenticity, and with  that, trust. When you make yourself vulnerable, when you show to your team, externally, how  you internally feel about something, it builds trust, which means that people come to understand  that they can rely on whatever you’re saying to being the truth. Then, they have  to spend a lot less time trying to interpret what you’re saying to try to  discover the truth. They know our founder or our CEO, whoever the leaders in this  company, “What this person’s saying, I’m not concerned. I believe that. I’m not going to  even second guess that, because I know that when he or she is concerned, she  came out and said, ‘I’m very concerned. I’m super troubled on, super stressed out on  very, like this is a big problem and it pisses me off.'” So, if a  leader has a track record of honestly communicating what’s going on and being vulnerable at  times, the team will have to spend a lot less energy trying to figure out  what’s really going on, “really going on.” They’re just going to be trusting what they  hear. Hiten Shah: I like that. Steli Efti: Because they know this person is not afraid to show them when they are weak  or when they’re vulnerable. I think that the amount of time teams waste on not  trusting each other and not trusting the leadership, and the leadership not trusting the team  with the truth either, this is a not making yourself vulnerable is also a trust  issue. You’re not trusting your team to be able to handle that. You’re not trusting  your team to be able to be okay with that and still follow you. So,  you’re creating all this mistrust that now is wasting all this energy instead of solving the problem, or doing the work that’s necessary. Now, everybody’s wasting energy trying to uncover  “What is really going on at this company?” I think that’s kind of a big  powerful thing that happens when you as a leader are showing that you’re ready to  make yourself vulnerable. This is going to hopefully translate down to the team being comfortable  being vulnerable back to you. When something went really, really horribly wrong, that person might  be much more willing to step up and make themselves vulnerable in front of the  team or in front of you as the leader, versus if they’ve never seen that’s  an acceptable thing within the company. They also are going to try to hide that.  Now, this is creating all kinds of issues, so I think vulnerabilities are crucial part  of honesty and trust in a company, because nobody always feels amazing, strong, and full  of clarity. No normal human being feels like that during a startup, during the roller  coaster of a startup journey. There’s going to be weak moments, and it’s okay to  be weak and to display that weakness. Now having said that, I think it’s important  and we’ve talked about this many times I think in the past and in other  episodes, it’s important how you’re vulnerable. Because I think that some people might also misunderstand,  you can misunderstand that. We talked about this is episode 128 “Crisis Management for Startups,”  and in episode 214 “How to Communicate with Customers During a Crisis.” I think that  vulnerable doesn’t mean “I’m just going to be weak and put it on my team  to pull me up and to figure out the solution to problems.” It’s not just  like you being a whiny baby saying, “Oh my God, everything is horrible. I don’t  know what to do. Why are we having a class action lawsuit? This is so  terrible. I’m overwhelmed right now, and I just don’t know what to do.” That’s not  the way to be vulnerable in front of your team. Would you agree with this  Hiten? Hiten Shah: Yeah. Of course. Don’t do that. Steli Efti: Don’t do that. Because no, I mean, some people might hear us and go, “Oh,  I’m going to be an amazing leader that’s going to display vulnerability, but just allow  my emotions to run wild whenever I feel like it.” All right. Hiten Shah: That’s like faking it. Steli Efti: Yeah, there you go. Hiten Shah: Right? You’re still a leader, you’re still like having to, you know, people still come  to you with the problems or they should. People still rely on you. They need  to trust you. If you start spilling all your emotions around, they’re going to be  taken on an emotional roller coaster. I could have said, “Hey. We’re fucked.” You know  what I mean? “We’re screwed.” Steli Efti: Yeah, we’re screwed. Hiten Shah: “This is not easy. This is not going to work. We might not make it.  Everything, it’s just bad.” But then everyone would have quit. Steli Efti: Yeah. Hiten Shah: At times during that period where things were really bad, sometimes I was just like,  “Oh, this really sucks. I don’t really know what’s going to happen,” but I’m not  going to tell anyone that. It’s not that I was lying to them by saying  I don’t know what’s going to happen. We definitely commuted, “We don’t know what’s going  to happen,” but you don’t do it in a way where you’re showing all your  emotional baggage. Here’s the funny thing, this gets a little bit into like personal development  if you want to call it that, but if you’re spilling your emotions at other people, you’re actually causing them a lot of pain, even yourself before you actually compose  yourself. This isn’t about being emotional. This is about being vulnerable, being open to criticism  when you speak, you know, being ready for it even, if you’re going to say  something a little like vulnerable. That’s the definition. It isn’t like, “I’m going to go  spill my emotions, and then people are going to be like, “Oh, he’s an emotional  mess.” No, that’s not the kind of criticism that you should even consider. This is  more like you’re telling something, it’s like to me, vulnerability and being genuine are really  related. Everything you said about like, “This builds trust,” and, “The team has to think  less,” those are all so accurate. But if you’re being vulnerable by just spilling your  emotions at them, you’re actually not building trust, and they’re not actually thinking less, they’re  thinking like, “You’re crazy. You’re just crazy.” You don’t want to come across like you’re  crazy. You don’t want to tell them to wake up every morning unhappy, because I  don’t know where this business is going to go tomorrow. You know what I mean?  I don’t know if it’s over. That’s just a thought you had in your head;  that doesn’t mean it’s the truth, that doesn’t mean that that’s vulnerability. That’s just absurdity.  Sorry for the rant, but like, wow. Like no, people should not be spilling their  emotions and yelling at everybody all the time. Although, I will tell you, I will  tell you, there’s an interesting exercise, it’s kind of related to vulnerability where, let’s say  for a day, ideally a week, you just say everything that comes in your head,  when it comes in your head. Steli Efti: A week where you just communicate instantly what you’re thinking to people around you? Hiten Shah: Yeah, yeah, yeah. What would happen? It’s just an exercise. I’m not saying you should  do that forever, but it’s something that might even help you understand vulnerability, because many  of us are just stuck. I’m not saying do this with your team. I’m just  saying if you want to really understand vulnerability viscerally, and the difference between being too  emotional and sharing and it being fake, versus it being genuine, that exercise would teach you that, because as you’re just putting your thoughts out there, there is a vulnerability  to that, naturally. That could help somebody who feels like they don’t know how to  do this actually learn how to do it, because you’re basically just putting yourself out  there, saying exactly what you think whenever you think it. Also, your personality kind of  comes out a lot more, which is a whole nother, for most of us, a  problem. Steli Efti: I love that exercise. And if somebody that’s listening right now, if you have a  strong reaction, like a fear reaction, “My god, I could never do this,” maybe this  is the exercise for you. I usually look for those strong reactions in myself as  a compass for what I need to do next. I’ll say one other thing. The  way that I would think about this, I think that vulnerability could be a massive  display of strength, because it’s not just showing people how you really feel in a  moment where that might include some weakness, but it’s showing people how you deal with  that weakness. So, there’s a difference, to just give you an example, let’s say I’m  in the gym, and I have to do some kind of an exercise where I  have to do 20 repetitions of something. Let’s say after the 15th repetition, it becomes really, really, really difficult for me. I think vulnerability, if you have your team around  you, vulnerability is showing people how freaking hard it is, how fucking painful this is  right now, and showing you emotion. If you want to scream, if you want to  shout, you do that. You show them that it’s hard; you don’t try to pretend  that, “Oh, this is so easy. Look at my . I could do much more.”  No, you show them at the 16th, 17th repetition, that you’re in pain, that this  is tough, but you also show them, that you keep pushing as much as you  can, and you’re going to get to 20 repetitions, and then the team around you  might get inspired to start encouraging you and shouting to you, “Just four more, three,  two,” like, they want to give you energy, they want to help you. They see  that this is tough for you, but they also see that you’re pushing, and that  you’re giving it your all, and that you’re going to make it happen. That’s a  different scenario than you pretending there’s nothing going on, but it’s also a different scenario that after the 15th rep, you’re putting down the weight or whatever it is you’re  doing, and looking at the team and going, “Oh my god, my arms are hurting.  I don’t think I can do this. Oh man, this is tough. Maybe I try  it again tomorrow,” and then you rely on the team to tell you, “No, dude,  please, come on. Don’t give up.” That’s a different dynamic. If I just give up  after 15 reps, now, I’m not vulnerable; I’m weak. If I show the team that  this is very fucking hard and that I’m in pain, but I still push through  it, I’m vulnerable; I’m showing them that this is really challenging for me, right, I’m  really struggling right now. But I’m also showing them that I’m strong, and that I’m okay showing that weakness and that this is tough, but I’m also displaying how I’m  dealing with challenges, how I’m dealing with pain, how I’m dealing with a situation when  I’m in stress, and how I’m dealing with it is that I’m going to push  through it, that I’m going to manage it, that I’m going to toughen through it,  that I’m going to take responsibility, that I’m going to find a way. And I  do think that is a big difference. We’re not telling you please be weak and  let the team handle all the pressure and carry you around, we’re telling you be  honest, and when there’s moments of crisis or moments where you feel shitty or stressed  or when you’re in doubt, it’s okay to show that to communicate that. But it’s  not okay to give up, it’s not okay to put it on the shoulders of  your team. You still have to say, “Okay, we don’t know what’s going to happen  next. We’re in a really tough spot, but here’s what I think we need to  do next. Here’s what we have to do to get through this.” And then being  okay with people giving you negative feedback, or telling you that your plan sucks and  they have another idea of what to do, and being honest in that discourse. But  showing weakness in leadership is not a good idea. Showing vulnerability can be incredibly powerful,  and transformational for the way that a crisis is being managed, but also for the  way that what kind of a culture you foster within your company. Hiten Shah: Yeah, absolutely. I think culture … This really relates a lot to culture, and what  you want to foster. It’s like such a interesting world we live in. I don’t  think vulnerability was as important many, many years ago. Now, just vulnerability creates culture, or  not. And also with so many startups out there that are so risky, I think vulnerability becomes important for people to hang on for as long as it takes for  the business to work. Steli Efti: Absolutely. All right. This is it from us for this episode. We’d love to hear  from you. You guys know already, Hiten and I, we love to hear from you.  If you’re struggling with vulnerability, if you’re at really pivotal moment where you displayed vulnerability  and it made a big positive difference, or negative one for that instance, just get  in tough with us and share your stories, your insights. We’d love to hear from  you. Gmail.com. Steli we always love to hear from you, and we’ll hear you very  soon. Hiten Shah: Later. The post 247: Vulnerability in Startup Leadership appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten talk about creating online courses for your startup business. Creating a course that suits your audience well, requires some upfront work. Steli and Hiten discuss the importance of searching for the BEST topic first and from whom? No one better than your own clientele or target audience. Listen in as Steli and Hiten both share the steps you should take to create your content, and why quantity cannot replace quality when it comes to your online course. Time Stamped Show Notes: 00:27 – Today’s topic is about creating online courses for your startup 00:58 – Opt-ins have become a typical thing for every market 01:43 – #1 You might think quantity wins 01:53 – If you create a lot of ebooks or content; at most, only one of them will get you the best leads 02:42 – Before actually creating the content, first find out what will be the best piece of content to create 03:10 – The danger of creating a LOT of content is that the courses you create may not be very good or attractive 04:14 – Steli has only done 3 courses over 4 years 04:21 – The basic email course that was based on a few of their blog posts was the most successful 04:53 – Steli also experimented with having someone create a course for them on Udemy 05:34 – Udemy does not allow you to capture people’s emails and the quality of people who participate are also questionable for Steli’s course 06:11 – Currently, Steli is releasing ebooks every 2 months where they target different user personas 06:33 – Hiten’s caveat is an ebook strategy that hits more than one user persona 07:50 – Find out what’s a winner and double down on that 08:05 – Instead of creating more ebooks or courses, focus on the ones that really work well 09:04 – Courses can be in the form of simple lessons sent thru email, on platforms like Udemy or Teachable, and via webinar course 09:54 – Hiten strongly believes that following a process can help eliminate mistakes 10:24 – Run a lightweight marketing experiment 11:10 – Once you figure out a topic, then you can figure out the best way to deliver that topic/lesson 11:26 – Hiten shares an example of this 11:31 – He has tens of thousands of people on his email list whom he asked the question, “What is their #1 product challenge?” 11:40 – They found out that product prioritization was their audience’s problem 11:43 – They built a course about product prioritization with 2 workshops 12:42 – As they discover what the problem is, everything Hiten does goes around that problem 13:02 – If they didn’t ask their audience in the first place, they wouldn’t know what their audience needed help with 13:25 – What matters most for Hiten is NOT wasting any time 13:50 – If you have NO email list, use ADS 14:53 – Hiten didn’t have any software when they addressed their audience’s problem with product prioritization 15:20 – They thought about the best way for their audience to consume the content 16:04 – Start with MVPs or minimum viable products 16:32 – Following up is a topic aligned with Steli’s business 17:39 – Courses that provide people a certificate 18:10 – Create courses to offer certification for people; this is a different marketing strategy 18:57 – Mostly big SaaS brands offer this 19:21 – If your company has thousands of paying customers, this is possible 20:17 – Specialist certification works best if you can start a trend of a certain type of expertise 21:57 – We want to hear your opinion on this topic! Email Steli or Hiten 3 Key Points: Before creating any course, research what would be the BEST topic to address. The platform you use to launch a course should be the easiest for your audience to consume. When you find the topic that your audience responds to best, double down on that course and keep improving it. Steli Efti: Hey everybody this is Steli Efti. Hiten Shah: And this is Hiten Shah. Steli Efti: And in today’s episode, we’re gonna talk about how to create online courses, for your  startup. Many companies and many startups and you, Heaton, and your businesses and products and  real clothes … Create … When you do content marketing, one part of your content  marketing strategy might be do not just publish blog post or videos, but to create  courses. Online courses to teach your audience something specific. So we wanted to talk about  how to think about online courses, what’s happening there, how to do the right, how  to do the wrong. And to just share some of the tactics and the best  practices that we’ve seen. Hiten Shah: So what’s become a typical thing in almost every market, is that in order to  market – Market, meaning like a SAS product or E-commerce product or whatever – There’s  some kind of opt-in, like “Give us your email, and we’ll give you something,” whether  it’s a course, an ebook, or something like that. So, I’d say that this is  actually a really important topic because more and more people are doing it. And quite  frankly, like a lot of other marketing tactics that are out there, people are not  doing the best job of it. And they don’t know how, or why, or they  don’t know any better. Steli Efti: So let’s jump right into that. What are people doing wrong? What are start-ups doing  wrong when it comes to the online courses that they are creating? Hiten Shah: I’m gonna share my number one most controversial point, that I learned king of the  hard way, about this. And there’s a caveat too. So number one thing is, you  might think that quantity wins, meaning you create more and more of these things, these  eBooks or these courses. The truth is, if you’ve ever done that, you’ll know that usually, at most, one of them is really popular and gets you the best leads  … Because you’re doing them for lead generation, at the end of the day. So,  when you’re doing these courses or eBooks because they’re kind of muddy today, they’re just  opt-ins? Right? You’re opting into something and you’re delivering value to people for free before  they’re ready to use your product, or during the experience of them using your product,  is oftentimes what also happens. But I think we’re talking more on the marketing side,  right? Steli Efti: Yeah. This is more about marketing, not making money or anything like that. Hiten Shah: Cool, just making sure … Senile … So, because content is very broad now. So,  I would say that like, if you believe what I’m saying, then what you would  want to do is before you even create the content, you would want to find  the best piece of content you can create. The best opt-in, the best ebook, the  best course and all that. So I’ll pause there and try to get an idea  of what’s in your mind about that possibility. Steli Efti: Yeah, so, I agree and disagree with you. I think it really depends, right? So  with … Of course, I do think that you can … That the danger of  doing a lot of quantity is that none of the courses you’re creating are, A)  Any good, or B) Super attractive to creating a lot of leads. Because these two  things don’t necessarily have to be the same, right? You could market a course on  the outside well enough, and it can be presented really strongly to the sort of  people who want to give you their email, but then the course could be not  that great, right? I don’t think that that’s necessarily impossible if like a shitty course  performs really well just as a lead magnet. Conversely, I could imagine you having a  really amazing course, that’s not doing that great as a lead magnet. Now, obviously if  you can find the best of both, like you have … You’ve created a course  that is … Where you have a really easy time to market it effectively, and  people want that course so much, that lots of people convert and give you their  email. And then the course is really brilliant, so that people will talk about it,  they will share it, they will get a lot of value from it and come  back and want more from you. Obviously, that’s what you should be striving for. And  with courses, honestly, we … In like three years we’ve only done two courses –  No, that’s not true, we’ve done three courses for years. One was the very first  piece of content that we’ve ever done that was not a blog post, but it was based on a few of our blog posts. Which was a kind of a  start-up sales basic email course. That has been, definitely the most successful course we’ve ever  put together. Just an email course, like you sign up and you get multiple lessons  over a specific period of time to kinda learn all the basics on how to  do sales in a start-up. And that’s been a very, very successful course, very high  level of engagement, lots and lots of opt-ins as a lead magnet. We’ve experimented with  somebody creating a course based on our content, on a different platform for us. You  know I’m not gonna, well, I could name it, I don’t really care. This was  a course that somebody put on U2Me for us, and it’s all exclusively content that  I created around negotiation. That course, in terms of its structure and all that, is  okay, but it’s not the greatest thing ever. I don’t absolutely love it. It has  a lot of people that have, quote unquote, “Taken the course.” Thousands and Thousands of  people. But, it hasn’t really converted any business to us, or really hasn’t really done  that much for us in the business. I mean, U2Me doesn’t also allow you to  capture people’s email and email them. You can ping them on the platform, but not  really get their email. And the quality of people that participated on these courses is  questionable, at least for our course. So, this was just a short in the dark  that really hasn’t done much. So, in general I agree with you that the quality … If I could only choose high quantity over high quality, I will always go  with high quality, but … The reason why I disagree a little bit, or why  I’m not fully in agreement with you, is that we’ve done something very different with our ebook strategy, which is something we might talk about a different day, where we’re  releasing a new ebook every two months this year. And that has been very successful  for us. Yes, some eBooks have been more successful lead magnets than others, but these  eBooks are very … They are very different in terms of being target towards specific  and different user personas, that we want to attract. Hiten Shah: And that’s where you went after my caveat. My caveat is if you have user  personas that you know are different, and you’re very good at determining those, then the  ebook strategy of more than one works really well. My guess is, and you can  correct me if I’m wrong, there’s a lot of repetition between the eBooks. Meaning like,  it might be one persona but certain percentage of the content is very similar. Steli Efti: It is, I want to say not true … Yeah, it’s not as much as  you would think. Just because of the vastness of our content, and we don’t just  make a persona focus. But it’s very topical so one ebook will be about sales  hiring. The first ebook this year that we released was about sales hiring. Another ebook  that we released together, as the start-up chat ebook – And for people who don’t  have it, if you want it, just let us know. Ping us – Was the easier to a thousand customers. And then the next one was the follow up formula.  These three eBooks and no, zero overlap in terms of content. But you’re right, I  mean if we were targeting everything to one persona this would be much more difficult.  And also, to be fair, I wouldn’t say that every single … There is something  to be said, and this is something we have not done a great job at,  there’s something to be said to go and look at what’s a winner, and really  double down on that. So this is something, that we can do a better job  at, is identifying something that works really well. And instead of just creating more, let’s  say courses or eBooks or whatever. Instead of creating more of that stuff, going back  and saying, “Hey, we have a winner here. Let’s extend it, let’s update it, let’s  market it heavier, let’s promote it more.” Versus just creating more and more stuff. And  I think that we have not done a good job at going back and finding  these winners, and really doubling down on them. We just recently have done this with  blog posts, not even books, or courses, or anything like that. Just starting to go back to some older posts of ours that are performing really well, or older posts  of ours that we think are amazing but are not performing well, and spending real  energy, time, and money to push them up. And we’ve seen some tremendous success with  some of these posts that they were old and good, but we thought they were  outdated, and we just put a little bit more work in it. We updated it,  we did a little bit more promo work and boom. They performed like crazy. So,  doubling down on quality is for sure a big one. Now in terms of courses,  Heaton, there’s many ways to do this, right? You could create … It could be  just an email course, where people get email lessons sent to them. There’s platforms out  there like U2Me, or Teachable, that’s a popular new one. You could have a course  that’s basically, life and webinar based. Where people maybe it’s a course that people take  four or five light webinar kind of sessions with you. Does it matter if you  see one thing being better than another? Have you had great experience? What does …  How much does form factor matter in terms of consumption? And what is the right  type of person to even use a course for? When is a course better than  a book, or better than a video or better than, what is the uniqueness to  a course that makes it, that gives it certain strengths and weaknesses in your overall  marketing strategy? Hiten Shah: So, what we haven’t talked about yet is actually process. And I think you can  avoid a lot of mistakes if you actually follow a process. I know both of  us like process. And so, for example, to answer the questions that you’re proposing, in  my opinion, I would take a very deliberate process. So, what I would do, is  I would learn what topic is the most popular, and how to frame that topic  for my audience. Whether it’s a certain persona in my audience, or all of them.  Generally, when you’re first starting out, you just pick all of them. And the ways  to do that would be, actually to run a lightweight marketing experiment. So, if you  have an email list, ask people what their biggest challenge is. Orient it around the  problem your product solves. That will give you a very good idea of what their  biggest challenge is. Well, guess what your content should be about? Their biggest challenge. Number  2: If you don’t have a big audience, like on email lists, thousands of people,  or whatever, then you can do advertising. Whether it’s Google ads, Facebook ads, retargeting, or  even just landing pages on your own site with ads going to them. That can  help you understand between five options of what you could do, or ten options. You  use advertising to understand what gets the highest rate. And that’s just topic, I’m not  even getting into like video, or a course, or a ebook yet. Because once you  figure out the topic, then you can figure out the best way to deliver that  to your audience. And it might be all those ways, to be honest. And you  might be able to say, so for example, I’ll give a great example that’s been  interesting and working really well for me. Which is, and I wrote about this earlier  this year. So I have an email list, it’s on ProductHabits.com, I have tens of  thousands of people on the email list, and we ask them, “What’s your number 1  product challenge?” And what we got down to was product prioritization. And so we started  building a course around product prioritization, and this year we ran two runs of it,  two workshops, online workshops on it. Now we could do an ebook on product prioritization,  we can do all kinds of things on it. And on that one there’s no  software attached to it yet, but that’s for a different podcast. But, the learning that  we had is that the number one challenge that people have, that we can solve,  is product prioritization. And that actually is the number one challenge when we dug in.  And we did the same process to understand, the process I just described, to understand  what it is for how we should create content, what we should do. So, honestly,  ultimately, we’re going to create a course on product prioritization, and a bunch of software  and stuff like that oriented around that problem, as we sort of discovered it this  year and went after it, and wanted to help people with it. Because that’s what  the audience really gravitated towards. And so, my opinion and my process is very deliberate  so I don’t make mistakes. Yeah, so as we discovered this problem of product prioritization by just asking  people the question, everything we’re doing is all around that problem. Whether it’s an eBook,  which we haven’t done yet, or the courses that we’re working on, or even software  that we end up building, will always be about solving that number one problem that  we learned. And because of that, it is having a major impact on our audience.  If we hadn’t asked that question, just made it up, we actually wouldn’t have picked  product prioritization. We wouldn’t have thought about it. In fact, when you look on the  internet no one’s talking about that. And I mean it, nobody I’ve seen talk about  that. But, we learned that, that’s the number one problem people have when creating a product, iterating a product, and building a business. And so, that’s how we discovered it,  and what really matters to me is not wasting any time. So, we’re not wasting  any time building ideas like “how do you get feedback from customers?” or all these  other topics we could talk about, and focusing on that and then putting it out  there and learning it doesn’t matter. Instead, we actually ask people, we learned first and  then we basically started building this stuff out. So, that’s an example of this process  that I like to use. Again, if you don’t have an email list, go use  ads. And go learn what’s the number one problem based on the different ideas that  you might have. Create an ad, create ten ads. In fact, when we do this,  we create 20 or 30 ads and we target them at specific audiences to understand,  both what ads work the best, what copy and what framing and what idea and what topic, as well as what audience resonates the most with it. Steli Efti: Now, let me ask you … So, I love that, right? But now let me  ask you, when you discovered that product prioritization is a big topic … And I  can’t believe nobody had discovered that before, and it’s even sounding great, product prioritization, it’s  great branding. Why did you make the decision to go down the course lane, versus  the book or video or blog posts or whatever. There’s many forms of content. Hiten Shah: Yeah, we could do any of those, honestly. The reason we specifically chose it, in  our case, and I’ll give another example because ours won’t be necessarily translatable to other  folks, but we didn’t have software at the time, and we wanted to monetize that  business and we knew how painful product prioritization was, based on the responses we got,  so we decided to do a workshop, which is essentially a course. So, we decided  to do that because we wanted to monetize with a certain business model. That was  just a … ‘what’s your product’, ‘what’s your business model’ decision. So that’s what I’m  saying, it might not be as translatable. Now if I’m running a software company right?  And I need to figure this out, what I would do is really think about  the audience and exactly what’s the best way for them to consume the content. For  example, you wrote a book on follow up right? Or a course? Is it eBook  or a course, it’s an eBook right? Steli Efti: It’s an eBook, yeah. Hiten Shah: Yeah. And that gives people a whole bunch of follow up tactics and stuff like  that. Now you could have done a course and a video but honestly that would  have been higher production value, that would of cost you more to do, I’m just  assuming, than an eBook, because you already had a ton of content on eBook. So  to me, the smartest way, if you’ve done the first step, which is determine the  problem that people have, the biggest challenge, the most likely topic that they’re going to  love that you can write about or create content on, I would just start with  MVP’s, minimum viable products, minimum viable content, to solve that problem and start experimenting. Because  what happens is, in your case, you’ve done a bunch of these eBooks now, I  know your topics are pretty deliberate because you’ve done a bunch of blog post and  probably picked popular ones, I know we did when we did the one together. It  was a popular podcast right? And so you have some idea of what people care  about. Now, out of those, you were saying you would double down. So, which one  of those worked the best? My gut tells me follow ups is probably really aligned  with your business. That’s just my gut. So if that’s true then now you can  double down and spend more effort, a little more effort, a little more money and  then see what the fruits of your labor are. The good news about you, and  how you would do it with software is, there is an ROI, you know how  many leads you’ve got. You also know, you should know, if your systems are right  and you’re using close.io and systems like that, that this is where I got the  customer from, here’s how much ROI I got. So if you got that customer as  a lead from the eBook than you can know the ROI and you can actually  put dollars to it. And then you can figure out whether you want to double  down and start creating courses and stuff, because on follow up, I think there’s a  lot of room to create courses. I think there’s a lot of room to do  a lot of stuff and I think, based on, at least my own opinion, not  validated, most people screw up their follow up. But this is something I learned from  you and this is something where I don’t even think that I’m that good at  it. Steli Efti: Well you’ve definitely gotten better at it. I couldn’t agree with you more. Let’s shift  to wrap this up to one slightly different angle of doing courses, that I see  in the SaaS world, which is when you do courses to certificate, and either you  certificate somebody on your software, being an expert in using your tool or advising other  people or consulting them or integrating things for them, or/and being an expert in a  domain that your product is dominant in. So, HubSpot could be certifying you as an  inbound marketing specialist or … In Close we could maybe do a certification to make  you an inbound sales expert or whatever. So you create these courses to offer a certification because … I assume the goals of these companies, they know that people, that  certifications are something that is appealing to people because it sometimes offers- Hiten Shah: Credibility. Steli Efti: … Credibility and job opportunities, right? And so, people want these certifications and then when  they get them, they’re really proud of them, they use them and that kind of  associates them with the overall brand. So it’s kind of a different strategy to create  branding and market dominance, but it’s distinctly different from these courses as lead magnets to  sell your software, often times. It’s more like ecosystem strategy right? Have you only seen really big brands, in this space, do this? Because I definitely know that Sales Force  and HubSpot and some big brands in the SaaS space are offering certifications. I don’t  know that super young SaaS companies typically do this, so I’m just curious to hear  that, but that’s kind of another angle that I see, the online course strategy that SaaS companies use. Hiten Shah: Yeah, let’s talk about that real quick. I think it’s pretty simple. If you’re large  enough, you have thousands of paying customers, probably usually in the 3,4,5 thousand, maybe a  little bit earlier, a certification makes a ton of sense. You could do it earlier.  Here’s the thing. You talked about two separate types. One is the Sales Force example  of yours, Sales Force expert, you’re a Sales Force certified, you know how to use  their software. Or, another approach is you’re a Sales Specialist and there’s a Sales Specialist  certificate of some kind. So, in the scenario of your software, I think your software  has to be either complicated enough, useful enough, where it requires some certification. Because that’s,  honestly, the software certification’s a much more old school concept when it comes to software  being really complicated, right? Now, there might be other reasons, like your software integrates with  a lot of tools, and there’s an ecosystem of providers around it, which is still  old school, where you might want a software certification, so that’s a good reason for  that. Now, this whole ‘Specialist’ certification, I think it works the best when you can  own that … Or you can start the trend of a certain type of expertise.  Like inbound marketing, HubSpot, not even arguably, they created that trend, right? That’s not arguable.  They found it, they invented it, they doubled down on it, they used to be  the inbound marketing company, now I don’t know what they are. But as they were  the inbound marketing company, they were able to have … They could of, really, and  I think they did to some extent, double down on certifications. What they did though,  is I think their primary certifications are for agencies. So agencies are Inbound Marketing certified  through HubSpot as a proved agency for inbound marketing and they happen to use HubSpot  software and that comes with the deal. So to me, if you were to do  it at Close, I almost feel like the software angle would work better, unless you  could find an angle of certification you can own, that’s for a person. And them  really wanting that and them … Basically, honestly, their identity becoming that. Because identity of  these agencies are now inbound marketing agencies, and that’s because of the way HubSpot did  it. So I think there’s a big difference between the two and that’s something to  really think really strongly and deeply about in your business and figuring out which stage  to do it at. I think at your stage, at Close, it might actually be  a lot of credibility for someone to be a Close expert or a , whatever  way you guys say it. By the way, I’ve never thought about your branding, but  it’s brilliant. Steli Efti: Well, I’ll take that, I’ll take that as a compliment, I can’t believe that we’ve  never talked about it. Hiten Shah: No, we’ll talk about branding like that soon. I think it’s just … It just  came to my mind, I’m like, “Close? Oh yeah, I want to close deals, what’s  up?” Anyway, it’s good shit. Steli Efti: Alright brother. Well I think that’s it from us for this episode. As always we’d  love to hear from you so shoot us an email, hmshah@gmail.com, steli@close.io or  tweet at us if you have feedback, if you have ideas for episodes, if you  have questions and now, I think that’s it for us for this episode. Hiten Shah: Peace out. Steli Efti: Bye bye. The post 246: How to Create Online Courses to Grow Your Startup appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten talk about startup fraud. Unfortunately, even with great hiring processes and systems in place, it’s inevitable for you to come across a lemon. The worst case scenario is coming across someone who is fraudulent and takes advantage of you. Steli and Hiten discuss a very clear, cut and dry story with Close.io of a sales rep who engaged in fraudulent activity. They break down the difference between making a mistake (which may require a second chance) and when somewhat flat-out deceives you and the company (which means letting that person go). Tune-in to hear Steli and Hiten’s advice about how to effectively deal with fraud in your startup. Time Stamped Show Notes: 00:31 – This episode talks about when a person in your startup does shady things 00:58 – One difference in building Close.io was the huge amount of transparency in communications 01:20 – A Close.io customer hired a sales rep who was supposed to set up demos with the head of marketing agencies 02:01 – The founder noticed weird stuff. He found out that the prospects being emailed were not actually prospects at all—their email addresses did not match their actual corporate email addresses 02:30 – The calls sounded weird—it was as if the sales rep was talking to himself 03:28 – In the end, the rep faked activity, calls, and demo schedules and would call his friends (not actual marketing people) and schedule demos with them because that’s how he was paid 04:37 – It’s difficult, in a startup, to trust all the people you hire 05:02 – Your startup, as a founder, is your brand 05:36 – “Trust, but verify” 06:38 – Relationship is a process of building trust 07:03 – Check-in more frequently in the first few weeks 08:23 – Listening to your reps’ calls will help you give more valuable feedback to them 08:53 – Steli was defrauded by a designer they hired years ago 09:37 – Things changed when they hired him 09:44 – The guy needed much more time to upload his work 10:13 – In 2 weeks, they realized the designer was doing something funky 10:29 – It turned out the designer just took design templates available and edited them 11:05 – Do your homework before hiring anyone! 11:55 – There are many shades of fraud 12:15 – One case popular in sales is inflating the numbers – reps would say they made 100 calls but in reality, they dial numbers and hang up 13:13 – Hiten’s first response is to seek to understand 13:57 – It’s unfair to look at situations without understanding the reason “Why” 14:45 – “If you don’t understand why they did it, you’re not going to understand how to prevent it in the future” 15:23 – Don’t instantly react! 17:13 – Usually, you don’t have time for second chances in a startup 17:52 – “Some things are so extreme and not culturally aligned that it doesn’t work”—sometimes there’s no room for second chances 18:46 – When somebody does something fraudulent once, it’s impossible to fully trust them again 19:24 – With dignity, let them go 19:43 – End of today’s episode 3 Key Points: Doing background checks before hiring is a MUST. Try to understand where the person who wronged you is coming from. If you proved the person is guilty, let them go with dignity. Steli Efti: Hey everybody, this is Steli Efti … Hiten Shah: And this is Hiten Shah, and today on the Startup Chat, we’re going to talk  about startup fraud. So Steli, I know you have a story. What’s up? Steli Efti: Yeah. So, specifically, we’re going to talk about what happens if somebody in your startup,  somebody that you hired that works with you, is doing some shady shit. Is doing  things that they’re not supposed to do and stealing money from you or your customers,  or just lying in one way or another. I’d love to hear your thoughts and  what to do to prevent this. How to notice it. What to do when you  notice it. But I have a story that really sparked this. The way that we’ve  built close.io is different in one very specific way to many other CRM’s in which  that we have a huge amount of transparency with our system. So anybody within an  organization that uses Close.io can see transparently all communication that happens with a prospect or  customer. All email communications, all calls, call recordings, everything is in one place. So quite  frequently, we’ll get a customer that tells us that they found a sales rep that  did something that they weren’t supposed to do, and the only way and reason why  they noticed it is because of this level of transparency. And recently, we got one  of the most shocking examples of this. So, a Close.io customer on a startup that  goes through textiles right now in New York City, they had hired a sales rep, and that sales rep’s job was to schedule demo calls for the founder. And the  idea was to call marketing agencies and set up calls with the head of marketing  there or something. So the founder noticed a bunch of weird stuff, and eventually he  looked a little bit deeper and he could see the timeline communication between that sales  rep and the prospect, that the prospect would be whatever Bob at this big agency  company. But the email communication would be some random Bob email at Hotmail or at  Yahoo mail or something. Not the real agency corporate email. And then when he would  start to listen to these calls, these calls sounded really weird. In a sense he  got the suspicion that this sales rep was actually talking to himself on these calls,  like calling a fake number, and then using a voice distorter to talk to himself  and pretend this is a prospecting call to set up a demo. So he started  to listen to a number of different call recordings and the prospect always sounded the  same. Then he noticed that when he … Some of these demos that the sales  rep had set up for him, when he would talk to that quote-unquote Bob from  marketing agency X, the person would sound super young, and would be totally unknowledgeable about  agencies and marketing, and would sound nothing like the person of the recordings that the  sales rep had, pretend to be Bob. So, a lot of weird stuff, and he  was collecting more and more evidence, and eventually he came to the conclusion that this  rep was faking activity, was faking calls, and faking demo schedules, and then would have  friends of his pretend to be these people to do these demo calls with the founder because he was paid on a per-demo scheduled basis, which is pretty wild. He  confronted the sales rep, and it turned out that was accurate, and it kind of  blew his mind. Thankfully, it sucks to have to go through something like this where  you wasted a ton of time doing demos that were fake and paying somebody that wasn’t deserved to be paid money and wasting time training and coaching somebody and all  that. The only good news here is that I think he picked this up pretty  quickly, so this was not going on for months, but just for a few weeks.  Obviously, it still sucks when this happens. I don’t know, I’m just curious to hear  if you have some stories like this. How to prevent these things from happening. Just  chit-chatting with you a little about it, because I have some other stories as well  to share with some thoughts. But I’d love to hear your reaction on this specific  case. Have you ever heard something as crazy as this? With a voice distorter and  all this shit? Yo Hiten, you still there? I don’t hear you. Hiten Shah: Yeah, I’m here. It’s super difficult in a startup to, on one hand, you trust  the people you hire, on the other hand, you want to make sure they’re not  doing anything like this. And you might not even think about it when you hire them, because you hired them, and you have some level of trust because you hired  them. So to me, yeah, I’ve heard lots of weird stuff, this one is pretty  extreme, I would say. It’s funky. In my opinion, your company, your startup, if you’re  a founder, CEO even, it’s your brand. It’s such a big deal to you. It’s  an important aspect of your identity. I’m not saying it is your identity, although we  could argue about that or have a podcast on that. I know you agree with  me on whatever I’m thinking on that. We’ve talked about this a little bit, startups  are not your baby, because they aren’t our babies. So I would say that the  line that comes in my head is trust, but verify. So when you hire someone  to do a core process early-on in your business, you want to make sure that  you can trust them. And you don’t know them most of the time. So if  you don’t know them, you already know you can’t trust them, they’re not like your  best friend, or they’re not highly recommended. Even if they are highly recommended, sometimes they  do weird stuff. You create systems early on, so you can start verifying as you trust them. So in this case, calls should have been recorded, and you might have  sat-in on those calls initially. Really understood what the person was sending. The only reason  is on one hand, some people might think I’m crazy and say “Oh, but you’re  micro-managing”. Well, actually, I just want to learn. I want to make sure that this is an area I don’t have visibility on, and someone new is starting. I don’t  know how it works. Or I’ve been doing it, I want to make sure it’s  done a certain way. Why wouldn’t I want to look at it? Why wouldn’t I  want to hop-in on the calls and understand what’s going on? Then over time, you  can build that trust. I think a lot of the relationship of someone joining your  company and yourself, and the whole company as a whole, is a process of building trust. That comes in different aspects depending on the role. Steli Efti: I totally agree. So I love the trust but verify, right? Because this is exactly  what I had in mind when I heard this story. The way that I would  go about this is I would really think about this in the beginning, you might  want to check-in more frequently, right? The first four weeks that somebody joined your company  is now reaching out, especially if it’s a customer-facing role. You might want to be  a bit more active in the verifying part. It’s not just to verify, it’s also  to just get feedback, to get context, to really understand what’s going on. If you  train somebody to schedule demo calls, I would want to be on some of these  calls that this rep has to schedule demo calls to just listen to how the  conversation goes. Listen to what’s going on. Get feedback. Learn. But the way that you  do it, you do it frequent in the beginning, and less and less frequent over  time. So, if in the first week, I might want to join four calls. The  second week, maybe two. The third, one. Then I might be just joining one call  a month, and then eventually one call a quarter. Maybe just one call a year.  So it’s not about micro-managing somebody forever because that’s not scalable and not feasible. It’s  also not a great experience for the person that’s doing the job. Once I heard  a few of your calls, I don’t need to be in every single call. I  get the idea of what you’re doing. But not joining any of your calls from  Day 1 is just pain stupid, right? It’s also not … Even if the fraud  thing is not even in question, it’s not the greatest onboard experience, because no matter  how much you talk about these calls with your new employee, your new team member.  Listening to them while it’s happening is going to give you so much more context  on giving valuable feedback and helping them do their job better. So trust by verify  is a big one. Here’s one that even happened before trust and verifying. Obviously for  me, the best way to avoid having somebody that frauds you or your customers in  your team is to prevent it from happening in the first place by not hiring  that type of person, right? So having a really good hiring process … Oh, one  thing that we … We got frauded, and I’ve talked about this in a prior  episode. We’ve never had an issue with a sales team, or success team, support team,  or any of that in many many years, because I think we’re doing a really  good of vetting people. But the only time somebody lied to us, and we had  hired him, and we found out two weeks later, he was actually a designer. We  had hired this designer many years ago, four or five years ago. That person had sent in a great record of good companies he had worked for. He sent in  some really good work, and we were excited. We had him fly into San Francisco,  and worked with him during a day. But working with him meant he was on  his laptop, and then he was showing us things, and we were really impressed. Then  when we hired him, all of a sudden things changed. He would tell us he  would upload the Version 1 design. So first of all, he wanted much longer times  to show work, and we pressured him to be more iterative and more collaborative. Then  he was like, “I’m going to upload this on Friday, the first version”. Friday would  come. Monday would come, and he would be like “Oh, I uploaded it, I’ll try  again tomorrow”. Tuesday would pass. Wednesday would pass. He’d be like, “Well, it’s uploaded on  my thing”. Eventually we were just like, “Can you just screen-share what you have, and  we’ll just take pictures since we can’t find it in dropbox?” And he’d be like,  all of a sudden, he’s sick. Within two weeks, we realized something funky is going  on. And then when he showed us what he had, it was totally different in  quality than the stuff he was showing us during the interviewing process. We realized, after  doing some research, that the stuff that he showed us during the interview process was  not his. Actually, he took a bunch of really good design templates that were out  there and just edited them slightly to fit what we wanted him to work on,  but he hadn’t done any of these original designs. So he basically lied to us  the entire time. We let him go really quickly, but it was a painful experience.  That taught us to be better at background checks. So we would never hire anybody  anymore without talking to two, three, four employers, without even asking for direct reference. We’ll  ask you for direct references, but we’ll find indirect references and ask about the quality  of work. We would have found out things about him if we had done it  that way. That would be my tip. Prevent that from happening by doing a bit  more homework before you hire somebody. Because usually when people do fraudulent shit, they have  a track record or history of doing that, so you’ll catch them. Once you hire  them, you want to trust them, but at the earliest, you want to verify and  then go less and less frequent. I agree with that as well. Now, what happens  … There’s different ways of, let’s call it the Shady-shit Bucket, right? So there is  the crass example, which is just pure fraud. Somebody is faking calls or faking signatures,  using fake credit cards, or just plain-out lying and stealing money from either the customers  or you, right? So the most criminal even, the most crass activity possible. That’s one  bucket, but there’s many shades of this, so this is pure fraud. But there’s something  in between as well where somebody might just be lying but not in as crass  of a way. Maybe they’re telling you they’ve done something and they haven’t yet, and  you discover that afterwards. Or maybe, one case that’s popular in sales, again where Close  has been really useful to our customers to detecting this, is inflating the numbers a  little bit. So some reps will show that they’ve made a hundred calls a day,  but then when a founder looks at these calls, the founder realizes that many of  the calls had a duration of one second. So it’s clear that the rep would  dial a number and hang up, and the system would count the calls as a  hundred dials. But you could also see that the minutes on the phone were drastically  too low, and kind of pick up on that versus in some other software or  other some other scenario, you just wouldn’t know. You would just see that a rep reported a hundred calls, but you don’t know that they’re not real calls. Once you  figure any of these scenarios out, what’s the plan to actually moving forward? What do  you do? You find that one person in your company has done something like this.  What do you do next? Hiten Shah: I think the first thing I would like do to in those scenarios, and I  do do, is I seek to understand. I’d go to them and be like, “I  noticed X, Y, and Z. Just curious what your thought process was around doing X,  Y, and Z”. Then from there, it gets pretty obvious. There might be a good  reason, usually there isn’t. Really, for me, that conversation is literally about letting them go,  firing them, whatever extreme you want to use. That being said. There is a five percent chance, let’s say maybe lower, that there’s nothing wrong. But it’s very low. I  always approach it like they didn’t do anything wrong, and I just want to understand.  Even though, I’m 99% sure. I know what I need to do, and I’m prepared.  That being said, I think it’s unfair to look at a situation, look at these  things, and not understand why someone did them. I’m fair to you, not even them.  It’s just unfair situation to make this judgment call. Even if it’s awful, without understanding  someone’s own thought process. One of the reasons is that they’re human, you’re human. None  of us are aliens here, none of us are robots. Let’s talk through it and  really understand each other. I think that their response is what impacts my decision more  than anything else. It’s more of my decision on how I approach letting them go,  because it’s unlikely that if they’re doing something that grossly negligent, or weird, or fraudulent,  or whatever extreme or level of this it is, it’s not cool. If you don’t understand how they did it, you’re not going to understand how to prevent it in  the future from other people either. That’s my take on it. And how to get  better at hiring and whatnot. Steli Efti: I love when we are in disagreement, right? These episodes are fun, and I have  to think about a topic. We haven’t disagreed strongly in a while, but this is  a topic where it’s also just fun to hear you say exactly what I would  want to say. So even using the words that I would use is word-for-word. I’m  asking you the question, I’m thinking something, and you say it exactly the same. Hiten Shah: That’s great. Steli Efti: I love it. So we’re very aligned in many things as well, that’s no secret.  But I would collect a lot, I would do my homework. Don’t instantly react once  you see just one little thing that’s weird, right? Don’t be emotional. Collect, do some  research, do some homework. Then sit down and talk to them. I would do it  exactly the way you suggested. Don’t tell them “I saw these ten things, why are  you stealing money?” Don’t make any claims, don’t make any accusations. Just say, “Hey, recently,  I noticed something that I couldn’t quite understand or explain. I did a little bit  more research. Here’s the four things that I found. Can you explain this to me?”.  Right? Just allow them to tell you what’s going on. Because you’re right, once in  a while you might be wrong, and they might have a really good explanation, and  then you’re going to be very happy you didn’t scream at them or you didn’t  tell them they’re liars and stealing. They’ll be like, “Oh shit, well that explains everything.  Now how could we make sure that there’s more context in our data so it  doesn’t look funky anymore?” But if they can’t explain themselves, or if they explain themselves  in a way or excuse their behavior in a way that you don’t buy and  believe. I will ask you again, what do you do? Do you believe in second  chances? Let’s say somebody goes, “You know, I’m really sorry. Yes, I had a lot  of pressure” or whatever. “My uncle was sick”. “I didn’t have gas in my car”.  “It was raining”. Whatever they have as explanations. “So I did something that’s out of  character, I’ve never done something like this before. I will never do it again. I’m  super sorry.” What do you do with that? Because if somebody just lies to you  and acts like an asshole, it might be very easy to say that you’ll just  let them go. But I’m curious, do you believe in second chances with somebody, that  maybe even you buy into the idea that this is not typical behavior, would you  give them another chance or no? Hiten Shah: Nine times out of ten, no. It just nine times out of ten. You don’t  have time for a second chance in a startup, usually. We’re talking about startups. If  it’s a larger business, there’s very specific ways to handle this. If you’re an enterprise,  corporate, whatever you want to call it, or even past 50 or 100 team members,  there’s very specific ways to handle this if it is not culturally correct, you know?  There’s a whole extreme conversation on this that I don’t think we’ve had around companies  like Zenefits and all the fraud that came out of there. Or if you want  to go to a different kind of extreme, Uber, and the culture, that being the  norm. I think that’s a little different. Outside of that though, I don’t know. It’s  not that people don’t deserve a second chance or I don’t believe in any of  that, some things are just so extreme and not culturally aligned that it doesn’t work.  That’s why I started by saying the company is your brand, as a founder, CEO,  whatever, executive. Even every team member, there’s a brand aspect to it. If you are  okay with the person doing that, then yeah, it’s cool. There’s no even second chance  opportunity because that’s a norm. If you’re not okay with it and it’s not culturally  a good fit, and they were willy-nilly doing it, it’s very rare that they’re going  to change. It’s very rare that a second chance is going to change anything. So  nine times out of ten, I’m not going in thinking they get a second chance.  That being said, if there’s something I don’t understand about the situation, I’m open. Steli Efti: I absolutely agree with you. I think that I do believe in second chances, but  that doesn’t mean that I need to give you a second chance, at this startup,  at this time. There’s just so much baggage, so much work and friction. When somebody  has done something like this once, you will never ever fully trust them again, I  think. It’s very hard, not never, but it’s very hard to fully trust them. Even  if they behave perfectly for a few months, it’s going to stick in the back  of your mind that maybe in another day where it’s rainy or they feel pressured  or something, they’re going to go back to doing things that are going to be  bad for you, or your brand, or your company, or your customers. So, along that,  a doubt that I will have to second-guess this person is too much, and I  think it’s not going to be good for them and me. If somebody does something  that’s clearly absolutely wrong-lined to our customers lying to us, I don’t believe in second  chances. I believe that you need to, with dignity, let them go and let them  learn from their experience and do it better somewhere else, and start with a clean  slate. But not at my company. Alright, so I think that’s it from us on  this topic. This is a funky topic, but I thought it would be fun to  talk about. Hiten Shah: Oh, I love it. Yeah, it’s great. I think it’ll be useful. It’s something that  I haven’t really thought about in a while. Steli Efti: Alright, this is it from us, people. We’ll talk soon. Hiten Shah: Later. The post 245: Startup Fraud – What to Do When an Employee Is Stealing From You appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten discuss the importance of arriving at accurate engineering estimates while doing product development. Typically, larger organizations that have a set process tend to be better at giving out estimates than smaller ones. Having experienced, engineering managers take care of this business function leaves the business owners free to handle what they need to—such as sales and/or marketing. Tune-in to learn how to give out accurate estimates and why knowing the value of your dollar will result in quicker, smarter and more cost effective product development. Time Stamped Show Notes: 00:35 – Today’s Startup Chat is about accurately doing engineering estimates for product development 00:44 – Today’s focus is on software, as hardware is another ball game altogether 01:16 – Information on engineering estimates does not exist on the internet 01:26 – Hiten sent out an email to his entire mailing list quizzing them on how they go about doing engineering estimates 01:43 – There is no single way of doing engineering estimates, and some people do not get them at all 01:56 – Subscribe and be a part of the Product Habits mailing list 02:21 – Steli is constantly thinking of ways to better product development 02:37 – Larger organizations seem to be better at product development than smaller ones 03:15 – Analyzing all the responses, Hiten concludes that people who are doing product development the best have a process around it 03:41 – No generic process can be applied to all products; people figure out their own process as they develop their product 04:26 – For all of Hiten’s organizations, a simple process is in place for making engineering estimates 04:50 – It’s critical that engineers on the team understand the value of why estimates are run; cannot do prioritization of initiatives unless you understand how long the process will take 05:26 – Intent is not to hold engineers accountable for the estimate; main reason is to figure out what you can work on and how long it is going to take 06:17 – Waste of resources and rise in hourly costs if there is no estimate 06:53 – Go into the minute details to prepare an accurate estimate 07:28 – Companies like BaseCamp do not prefer to work on projects in excess of 6 weeks since larger projects tend to spiral out of control 07:50 – In early days, product development is generally on track if you are working with experienced engineers and using small, iterative work cycles 08:14 – As your customer base and your team grows, more variables kick in, and product development becomes more difficult 09:33 – Steli’s team is careful to not give out estimates if the project is really complex; break the project into smaller cycles if there are unanswered questions 10:21 – Steli’s team has gotten better at giving estimates, but they still have yet to perfect it 10:40 – Hiten has 3 engineering managers for each of his companies whose main responsibility is to make sure they ship on time—this allows Hiten to concentrate on the product, marketing and sales 11:47 – Sometimes you can be pleasantly surprised as development time will be really quick 12:30 – As companies scale up, there is a cultural shift and people try to better the process 13:00 – Sit down with the engineering team in order to remove objections about providing estimates 13:20 – Once you conduct some high level research and determine the probable future of the product, go to engineering and define a time which will let you determine how fast you can move 13:49 – Create smarter opportunities by bringing engineering into the product development prioritization process 14:58 – In Hiten’s organizations, any task that takes more than a day is torn apart in an attempt to make it quicker 15:09 – Quantifying a dollar value for the engineering cost that goes into product development will help you realize the importance of getting things done quicker 16:12 – Sign up on ProductHabits to learn more on this topic 16:38 – End of today’s episode 3 Key Points: The intent of engineering estimates is to NOT hold engineers accountable for the estimate; main reason is to figure out what you can work on, when you can do the work, and how long it is going to take. Create a culture of planning your engineering around time; as companies scale, there is a cultural shift and people try to better the process. QUANTIFYING a dollar value for the engineering cost that goes into product development will help you realize the importance of getting things done quicker. Steli Efti: Hey everybody, this is Steli Efti. Hiten Shah: And this is Hiten Shah. Today as Steli does very often, since I’m actually putting  a lot of content out there. I know you are to Steli, it’s usually about  sales, mines usually about product. There’s this one thing that I’m really stuck on because  I found it has one of the biggest challenges people have in product development, which  is getting engineering estimates and really understanding how long things will take to build. And  all of us that build software or even create hardware products have this problem and  hardware is even more complicated, so we’re going to leave that for some other time  maybe. Not many people I’m sure that are listening are creating hardware. If you are  creating hardware please tweet at us and what not, we’d love to hear from you  because that another fascinating challenge. So we wanted to do a discussion on this because  I think Steli you might have some thoughts and I’d love to hear your thoughts.  High level, I’m digging into this in my newsletter “Product Habits” and I’m learning a  lot about how people do engineering estimates and what I find the most interesting is that this content doesn’t exist on the internet about how to do engineering estimates how  to incorporate it into your product development processes and so I got very curious. I  emailed my whole email list and asked them “How do you do it?” I’ve gotten  dozens and dozens, almost a hundred responses so far and I just did this very recently, as per the record US podcast. So I’ve been getting a lot of responses  and the short of it is there doesn’t seem to be one way that people  get engineering estimates and some people don’t get them at all. Steli Efti: Yeah, I’m not surprised by that but I’m still fascinated by that. So, I saw  the email, I’m a subscriber to products habits, if you’re not good go to producthabits.com  and subscribe, you’re crazy if you’re not. And I saw that you put out that  question, “Hey, how does your company do engineering estimates? Do you struggle with this I  want to learn.” Anytime you do that type of thing, I know there’s going to  be insights and things you’ll learn that I think are going to be valuable to  our listeners and this is selfishly something I like. There hasn’t been a day in  my life as an entrepreneur doing software products that I’ve not been wondering if I’m  doing this right or if I’m not doing this right. It’s a struggle, I don’t  know anybody who feels they have it perfectly down, it seems from a far that some of the large organizations have a pretty strong process in place that are really  good on the product side of things but smaller teams, I don’t know man. Let  me pull back before I ask you any questions, out of the hundred responses you  said that it seems like there’s not one answer to this, which isn’t surprising, a  lot of people struggle with it. Did anyone surprise you in terms of their process  on how they do engineering estimates, anything new you heard or anything pattern that makes  you go “oh, shit it seems like a lot of people are doing this?” Any  kind of insight you could gain from these hundred responses? Hiten Shah: Yeah, I mean the number one insight that I gained that was surprising to me  and it might sound obvious but its really surprising is that the people that do  it the best seem to have some kind of process around it. And what was even more surprising to your point about large companies having a process etc, the ones  that are successful that are even really small, they all have a process. And the  thing about that process is that its not a generic process. Like I can’t tell  you “Hey the people that are successful with it always use this one process”. Its  actually very, very much something they’ve developed on their own. That doesn’t man I think  that there is no process everyone can use, it just means that today people are  not doing anything with any structure they’re just making it up as they go and  the best come up with a process that works really well for them. Steli Efti: So, let me ask you. You build multiple products, you work with different engineers or  product teams, do you have a process in place and if so what is your  process to do engineering estimates? Hiten Shah: Our process is absurdly simple in terms of just how we think about it because  I think that’s super relevant because at the different companies there are different stages, there  are different engineering teams but the one thing that we spent a lot of time  on a long time ago but even recently is literally making sure that the …  there’s a couple of things … But really making sure that engineers on our teams  understand the value of why we want to know estimates from them. Steli Efti: Hmm. Hiten Shah: That’s the number one thing. The number one thing is the engineering team understanding that  we cannot actually prioritization of our initiatives unless we understand how long they are going  to take. So selling that idea, helping them understand that idea, pulling them into at  least understanding your prioritization process on product development is the reasoning behind why we want  estimates. It’s not that we want estimates to hold you the engineer accountable, although that  is side effect and a core benefit but it isn’t the main reason. The main reason is how could we determine as a team what we’re going to work on  and when we’re going to work on it without knowing how long it’s going to  take. Its like saying I’m going on a road trip, Steli, I don’t know how  long it’s going to take. Steli Efti: Yup. Hiten Shah: Well how do you decided where the stops are? How do you decide when you  sleep? How do you decide anything if you’re going to go on a long road  trip. If I say I’m going to go from here to New York, don’t I  need to know how long it’s going to take? Don’t I need to know where  and when I’m going to sleep? When I’m going to drive? That’s the most absurd  thing to go on a road trip right … Unless you’re just out there and  have enough free time where you can just do it, that’s totally different but that’s  not how business works. Here we’re talking about product development, we’re talking about business, we’re  talking about limited resources, hourly costs and all these things that waste time if we  don’t get an estimate. I would hate for something and this happens every day in  a company. You planned on shipping today but you didn’t, why didn’t you? It’s because  someone didn’t plan ahead. Someone didn’t think about how long it would take and all  these things came up once you started. Well imagine if all those things that came  up once you started never came up. Well then you’d ship on time, okay, how  do we prevent that from happening? Well, we get estimates, we do whatever it takes  to get the estimate. And I’m not talking about estimates like, oh it’s going to  take a week. I’m talking about detailed estimates, whatever that means for your organization. I’m  going to share a lot more on my email list about this but like that’s the high level of it, that’s how we do it at our companies, which is  we don’t actually build anything without having an idea of how long it going to  take. Again, it sound absurd to a lot of people because they’re used to doing  it not like that. There used to missing dates, they’re used to not having dates. Steli Efti: I remember even, I’m not sure if I remember this correctly so take it with  a grain of salt but I remember even companies saying we’re not going to work  on anything that would take longer than lets say something like six weeks or so,  like three-two week cycles. Hiten Shah: Yeah. Steli Efti: Because anything that’s a bigger project than that I so hard to manage and can  easily grow out of control. Now obviously my experience has been that in the earlier  stages if you work with really good engineers, really good experiences engineers, and you’re at  the beginning of something building a product from scratch, I’ve hadn’t had a lot of  issue with engineering estimates because people are experiencing good can fairly accurately say how long  something is going to take especially if you take very small innovative development cycles in  the early days. As things grow, as your product grows in complexity, as your customer  base grows in complexity, as your product team grows; I have found then that it  is harder to be very accurate because obviously there’s a lot more variables that are  outside your control. AWS goes down or some other thing happens that unexpected, there’s more  unexpected things that happen. There’s more technology you use, your stack is bigger, you’ve gotten  more customers, which means more bug issues, more things, maybe some customer pounds your API  in a way that was unexpected and now all of a sudden you have all  these issues. A constant big list of things that need to be fixed and addressed  with a complex large customer base and within a larger ecosystem versus when you start when you have nothing, no customers, no users, no nothing, you have two or three  engineers and you want to build a simple version one of something. Estimating that is  not as complex as estimating a big moving thing that has to respond to all  kinds of outside factors as well. Not to say that at that time you have  more resources you should be able to do that, still fairly well but at our  company we do have a process of doing estimates but our engineering team is very  careful on not giving estimates, not giving a timeline when they’re not very confident they  can keep it and be very transparent and bring up hey this project we need  to break it down in two cycles where we do some exploration because we have  all these questions we need to figure out first before we can tell how long  certain things ar going to take. So when they give an estimate they are pretty  good at keeping it but a lot of time they drag their feet a little  before they give an estimate right? They’ll want to buy more and more time until  they figure out a lot of things to do that and we’ve gotten better at  that. We’ve gotten better at breaking down bigger projects in multiple milestones so you have  better ways to track progress there but I still feel like its something we’re tackling  right now as a team and getting better at that. As we’ve grown the engineering  team our company as grown a lot, we’ve definitely gone through phases where we have  struggled with this and now we adding more and more to getting better at hitting  our estimates but we’re still far from being perfect on this. Hiten Shah: Yeah, that sound like most teams. In my case, today I have three engineering managers  at three different businesses and some of them have more than one product and at  all three the engineering manager understands how we do things and that has made the  biggest difference for me being a non engineer, my co founders being non engineers and  being able to actually speak with someone who understands why we want that because at  the end of the day we’re the product people who are mostly having to figure  out, doing the customer development, the interviewing, talking to customers, we’re also doing the sales  and marketing between the co founders. Then the engineering manager his main responsibility, he is  in three of those today. Their main responsibility it to make sure we ship on  time and so then they work with the engineers and sometimes even the front end  designers to figure out when we can ship and how long things will take. So  we always have this one point of contact that we’re always bugging and asking about  what’s the estimate? How long is it going to take? Sometimes it’s as quick as  a conversation. We had recent one where it’s we dint know how long something was going to take and we knew we still don’t have any details on how we  want to build it or whether we want to build it but in a quick  conversation we ask the engineering manager “Hey is this hard? Is this easy? How long  will it take?” He’s like “oh it’s easier than you think” because we thought it  would be hard and he’s like “It’ll take less than a few hours to actually  do because we’re already set up to do that based on how we’re doing x,  y and z.” So sometimes we just have all these casual conversations just because we’re  thinking about stuff and we want to be able to prioritize, even pre or having  some kind of interface or some kind of conversation with a customer. We want to  know beforehand how long it’s going to take so if you can create a culture  on your product development, product engineering, engineering teams and design teams around this idea of  time, things will just go much better. What I’ve noticed is that there’s a cultural  shift that happens as a company scales beyond a few people of some kind of  process and people wanting to make it better. In your case Steli, again in being  the advisor here for a quick second, I might actually sit down with a team  and be like “why don’t we do this? What are people objections about giving a  concrete estimate before we start work? What are peoples objections about giving a concrete estimate  before we even decide what to work on. A lot of things honestly aren’t about engineering, it’s about the product team knowing these are the 10 things we could do,  or these are the high level ideas based on our research, the product landscape across  all the products in the market; us talking to customers, our interviews, our sales process,  wherever the future of this product goes, these are the 10 things we can do  next. How do we determining, which ones we do and that’s the big question. So  then going to engineering and making time and estimate a big component of that will  actually dictate how fast we could move. It also creates much smarter opportunities that you  might not be thinking of and what I mean by that is when you start  talking to engineering this way you’re bringing them into the product development prioritization process, you’re  bringing them into the process of creation in a different way than they’re used to  and that helps a lot. Every I’ve had this conversation with my teams we always  come up with a faster way to do something and that what we want. We  also come up with an easier way because on product we’re like heres the dream,  we need all this shit. Then engineers are like I can build it, it’ll take  me two months but we’re like wait, wait, wait hold on fuck that how do  we do it faster? Again the people I work with they understand what I mean  when “how do I do it faster?” I dot mean they stay up 24 hours  a day, I mean help us make the trade-offs, help us be smarter about what  we build, when we build it and how small it is. I love the example  you said about six weeks on base camp. One of the things that we had  on our teams was, if something takes more than a day and someone scoping so that it’s a day, we’re literally tearing it apart how do we chunk it our  more and it means we haven’t really thought about it because a day is a  long time, a day is a solid four to eight hours of engineering time. That’s  a lot, just think about the math. Let’s say on average an engineer is $50,  which is low typically but just on average across the board I’d say lower but  typically in the U.S. Lets say it’s $50 an hour right? Wow that 8×50, that’s  $400 you wasted, if you’re saying that things costs $400. Another trick you can use,  which is uncommon is can you quantify the dollar value of it? Dollar value I’m  sorry no on the ROI but on the costs of it because then you can say “They’re giving me estimates that are $400 in time, I don’t know, that’s a  lot of money.” I can buy a lot of things with $400. Steli Efti: I love that. Alright so there’s a lot more to unpack here and I’m sure  there’s a lot of people that are listening that are working with engineering teams or  outsourcing development and they’re like “Oh, I hate how my engineering team give me estimates,  I want to learn more about it.” I know you’re going to be sharing more  learnings, more processes, more stuff on this on producthabits.com; so for everybody who wants to  know, more learn more sign up if you haven’t already and make sure to look  out for that. I think for us for this episode this is it, we’re going  to hear you very, very soon. Hiten Shah: Yeah, as a quick side note. Out of the replies we’ve gotten on this survey  there are few people who have written over 1,000 words so we’re going to analyze  all that and actually share it on the list. Steli Efti: Holy shit. Hiten Shah: Yeah, that’s what’s up. It’s a very hot topic. Alright good luck . Steli Efti: Bye, bye. The post 244: How Do You Do Engineering Estimates appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli recounts last week’s experience of losing his 3 year old son for a brief amount of time. While at a playground with his two sons, Steli lost sight of his younger son. Steli shares how he carried himself in that incredibly stressful situation and how he found himself going into problem solving mode. You’ll hear the value of being able to compartmentalize your emotions and why enlisting the help of other people can have both positive and negative implications in your dilemma. Tune-in to discover some key insights that will help you better manage the crises that come along your way.   Time Stamped Show Notes: 00:03 – In today’s Startup Chat, Steli talks about how he lost his kid at a playground last week 00:36 – In the past, Hiten and Steli have talked about some personal topics such as religion in startups and the death of their parents 01:20 – Steli shares his frightening experience 01:20 – Steli has two boys aged 5 and 3; he took his kids to a huge playground with multiple play areas, a school and a pond 02:02 – He lost sight of his younger son while attending to his older son for a short span of 20 seconds 02:28 – Started screaming out the younger son’s name but to no avail 03:21 – Realizing that he had lost his brother, Steli’s older son begins to cry 03:54 – Stationed his older son on a bench and went looking for his younger son 04:40 – Requests another parent to look after his older son so that he can continue looking for his younger son 05:02 – Another parent informs Steli that he has seen a kid of his son’s age walk towards the street 05:38 – Still unable to find his son, Steli starts involving more and more parents in his search 06:21 – Twenty minutes into the search, Steli decides to call the police; provides the description, address and other details 06:56 – While still on the call, a parent informs Steli that they found him! 07:12 – Steli runs back to find his 3 year old looking incredulously at the group of people around him 07:55 – Steli’s son was actually in the direction opposite to where Steli was looking for him; eyewitnesses can be totally off in moments of stress 08:25 – When Steli finally told his kids it was time to leave, his youngest son started running back towards the car—he gave him a flower and was completely chill 09:14 – Steli was incredibly calm while searching frantically for his younger son; was wondering if he was compartmentalizing his emotions or if he could sense that there was no danger 09:54 – Finally felt a rush of emotions while driving back; went on a long walk to regain control of his emotions 10:41 – Hiten shares that he has never experienced anything like this with his kids; he has two kids aged 7 and 3 11:02 – Makes sure that his older kid helps him out when he is out alone with them 11:21 – Hiten’s 3 year old daughter is more adventurous compared to his son 11:48 – Since they are always telling on each other, they are easier to manage 12:20 – When faced with an emergency such as Steli’s, human beings are built to get into a problem solving mode rather than get overwhelmed by the situation 13:10 – The fact that Steli enlisted so many people proves that he realized how critical the situation was 13:33 – Dealing with business issues is way easier than dealing with emergency situations that involve your child 14:00 – Involving people brings down the possibility of anything untoward happening 14:40 – Looking back, Steli feels he should have asked for help earlier; he would have found his son earlier had he started asking for help immediately 16:02 – Asking for data points from people in a panicky situation is not a very good idea 17:12 – Share your unique experience with Steli and Hiten 3 Key Points: Human beings tend to go into a problem solving mode when faced with a crisis—the ability to compartmentalize emotions enables you to stay calm and focused on the problem at hand. Immediately enlist the help of people around you in a moment of crisis. Asking for data points from people in a moment of crisis may not be a good idea; you might end up getting totally wrong information. Steli Efti: All right everybody, this is Steli Efti. Hiten Shah: And this is Hiten Shah. Steli Efti: And in today’s episode of Startup Chat we’re gonna do an out there episode which  is … I’m going to share how I lost one of my children on a  playground and why that’s a bad idea and what to do about it. We might  even find a learning or two in there for you in your startup. We’re not  sure yet. You know I realized Hiten, one of the more polarizing episodes that we  did in the past were the ones where we did some crazy shit, like when  we talked about religion and its role in startup, even some more sad ones or  kind of intimate ones on how the death of our parents affected us as entrepreneurs. Hiten Shah: Yeah. Steli Efti: So I was thinking lately, shit we’ve done a lot of like tactical shit but  we haven’t talk about that side of things as much. Then, just last week I  had something very personal happen to me. I’m still digesting it and kind of trying  to work through it emotionally so I thought who better to talk to this about  than with you and share it with the whole world. Hiten Shah: Let’s do it. Steli Efti: I’m not sure what we’re gonna learn … Hiten Shah: All good. Steli Efti: … But I’m sure something is gonna come out of it. Here’s the deal, right,  I have two boys a five year old and a three year old. Five years  into being a parent, I never lost a child. I didn’t know that you should  be proud of that but for now I’m trying to tell myself that that was  a good thing. Last week that winning streak of not losing my children ended when  I was on the playground with my kids. It was very large playground that went  to for the first time. There’s a school there. There’s multiple playgrounds for kids. There’s  a big pond. There’s all kinds of stuff going on. It’s a pretty big area  and I decided to go there with my kids. They were playing in one of  those playgrounds. We were having a good time. I was chilling. At some point I  told both of them, “Hey guys, we’re about to leave. Five minutes and we’re leaving.  We’re going back home.” My older son captured my attention and wanted help with something  and then I put on his shoes. Basically, got all of my attention for like  20 seconds or so and then when I was looking for my younger son to  grab him for us to leave I couldn’t find him. At first, I had this  like, I’m looking around this playground. It’s a fairly small one on this bigger estate.  I’m like, you know, screaming his name and can’t find him, can’t find him. I  had this like, “Where is he? Huh?” It’s not usually hard to find … My  children have never run away. I’ve never had any issue looking for them so it  was kind of like, “This is odd.” I’m looking at the playground but he’s not  here and I’m looking around and I don’t see him but he must be here.  Eventually my older son joins the search. He screams and calls his name and tried  to find him, can’t find him. So now I’m a little concerned. I’m going further  away from the playground to the better overall like kind of view, can’t see him  anywhere. Now I’m like, “What is this? How is this possible? I should be able  to see him but I can’t see him.” So at this point, here’s what’s happening,  now my older son is starting to cry, right? He’s getting into a panic because  he thinks he lost his brother. Hiten Shah: Aw. Steli Efti: And he’s right. He’s right. We lost his brother. Hiten Shah: But he’s right, dammit. He’s right. Steli Efti: He is actually right, right? Hiten Shah: He lost him. Steli Efti: We fucking lost him. Hiten Shah: Okay, I get it. Steli Efti: I still can’t believe it, like I’m still like super in doubt and in shock  like, “What? This is not possible.” Hiten Shah: Totally get it, yeah. You’re like, “Yeah, he’s here. He’s here. I got him. He’s  here.” Steli Efti: He must be here, just my eyes cannot locate him but I’m sure he’s here. Hiten Shah: I know the feeling. He’s here, he’s here. Yeah. Steli Efti: So I’m trying to calm down my oldest one and eventually I take him, I  put him on a bench on that playground. So, I tell my oldest son, sitting on this bench, “Look for your  brother. I’m going to run around and look for him. Don’t move and I need  your help. We’re going to look both for … You look here. I’ll look everywhere  else, but sit, stay here.” I start running around, running further away to try to  find him and I realize this was a big mistake. This is a bad idea.  Because now I’m worried about two children. Right? I’m worried about the- Hiten Shah: I was going to say. Steli Efti: Yeah. That was dumb, right? But just in the moment I didn’t think it through.  So, I’m running around looking for my younger son, but now I’m worried that the  older son is going to walk away and now I’m going to lose both of them. So, I do this for a few minutes and then I realize, “All right.  I need to run back to the playground and I need to ask for help.”  And so I find another parent and I’m like, “All right. Can you do me  a favor and look for my oldest kid. I need to find my younger child.”  And she’s like, “Yeah. No problem.” So, she sits with him and now at least  I’m not worried that I going to lose both kids. So, I’m running further and  further away to try to find him. I’m screaming his name everywhere. I can’t fucking  find my kid, right? It’s crazy. And eventually some parents started … Some dad starts  asking me, “Hey, have you lost your child?” I’m like, “No, I’m just running around  and I start screaming for fun.” I’m like, “Yes, absolutely. I have.” And he’s, “Well,  describe him to me.” And I described him and he tells me, “I think I  saw him and he was walking into the right direction towards the street.” He’s like, I’m going to look in the opposite direction. You go there and look for him.  I’m like, “All right.” Thanking the dad and I’m running in that direction and looking  for him. And I can’t find him anywhere in that direction. Eventually, I come back  and now I’m starting to actually involve more and more parents in my search. And  honestly, this was a bright bottom on this episode. But humans are sometimes really awesome.  Within a five to ten minute span, I had like 20 parents searching with me. Hiten Shah: Yeah. Saying, “What does your kid look like? What’s he wearing? Let’s go!” Steli Efti: Yeah. I mean and people Hiten Shah: Nobody wants to deal with that. They can feel your pain. Steli Efti: People were organizing. They’re like, “All right. Give me your number. We’re going to be  texting if we find him.” Hiten Shah: Aww. That’s awesome. Steli Efti: And like different directions. Humans can be awesome, right? That was an awesome moment. Hiten Shah: Absolutely. Yeah. Steli Efti: A lot of people and I was asking two, three people for help and like  10, 15 more just joined. Hiten Shah: Yeah. Steli Efti: They could see something happening, “All right. Let’s organize. Let’s find him.” So, we’re all  running around. We’re all looking for the kid. Eventually, like 20 minutes into this, I  am like pouring in sweat. I’m running. I’m screaming and I’m like, “All right. I  need to call the police now.” I don’t know what the right time is to  call, but I feel like now is the right moment to call. So, as I’m  running around, I’m on the phone and I’m giving them all the answers, the name,  the loc, the where the park and all this and we’re discussing this and here’s  the deal. I’m constantly running back and forth but mainly focused on the area that  one parent thought he say my child is, right? I took that information. Hiten Shah: Yeah. Steli Efti: That was kind of main data point that I was going off on. Eventually, one  parent runs to me as I’m talking to the 9-1-1 lady and says, “Hey, we  found him.” So, I’m like, “All right. I’m going to stay on the phone with  you. Let me run back to the playground and confirm that it’s my kid.” So  the 9-1-1 lady stays with me. I run all the way back and there he  is. There’s a huge group of parents. Everybody’s super emotional about it. And my, Leo,  my 3-year-old is like … And I was thinking, “Is he scared? Is he alone?  Where is he?” He was like, you could tell he had no idea what the  fuck was going on. Hiten Shah: He’s just playing. Steli Efti: He was looking at people going like, “What is going … Why is everybody so- Hiten Shah: What’s up? Steli Efti: What’s up here?” Hiten Shah: I’m right here. Steli Efti: I tell the 9-1-1 lady, “All right. Confirmed. It’s my child. Thank you.” I hang  up. I thank all the parents profusely. I pick him up. I kiss him. I’m  like, all right, I’m not going to make a big fuss out of it right  now. I’m like, “Buddy, where were you? I was looking for you.” Turns out, he  was all the way in the other direction. So, this one parent that told me  he saw him didn’t see him, which is a big lesson learned for me in  like eye witnesses in a moment of stress. Hiten Shah: Yeah. Steli Efti: He doesn’t know my child. He saw some other blonde child and he thought that’s  probably him. People will tell you they saw things and it’s not that reliable of  an information. So, it was not that great- Hiten Shah: Yeah. Steli Efti: That I was going the opposite direction the entire time. But he, Leo, when I  said basically what happened was when I said, “Hey, kids. In five minutes we’ll go.”  And I turned around and I gave my oldest son the attention. My youngest son  started running to be the first back at the car. Hiten Shah: Oh. Steli Efti: And the car was parked fairly far away. Right? Hiten Shah: Yeah. Steli Efti: So, I didn’t think of going all the way back to the car at that  point. Especially because it was the opposite direction of where the guy told me he  saw my son. Hiten Shah: Yeah. Steli Efti: So and then he was just sticking around the car. And he picked up some  flowers. So when I found him, he gave me a flower. Hiten Shah: Aww. Steli Efti: He was just chilling, right? Not a worry in the world. My oldest son was  super upset with him, scolding him- Hiten Shah: Of course. Steli Efti: For scaring us. Hiten Shah: Yeah. Steli Efti: The crazy thing was we went all the way back to the car. I didn’t  make a big deal of it, because I wanted to first collect my emotion, my  energy before I said something. But here’s the trick, the entire 25 minutes where I  was searching for him, I emotionally, I was incredibly calm and I was actually at  times had an inner dialogue, “Why don’t I feel anything right now?” I didn’t feel  panic or fear. I was running and I had a high level of intensity, but  I was not totally panicked or afraid. And I was wondering, “Is this me, just  compartmentalizing?” While I was running, I was wondering why I don’t feel anything. And I  was wondering, “Am I compartmentalizing? Or can I sense intuitively that there’s no danger here?”  Now, having said all this, the moment we walked back in the car, the moment  I started driving back home, I started feeling a lot of emotions coming out, right?  And it actually took me … I brought the kids back. We talked to mom.  I talked to my son when I was calm. And then I went on a  four hour walk to calm down, right? It was a lot of amped up emotions.  So in hind sight, it seems like I compartmentalized, pushed all the emotions out just  to be able to focus on the task at hand. But, holy shit, that suck,  right? So, losing your kid sucks. Now I know. It’s not a good thing. Don’t  do it. And it was a super intense episode. Now, I’m wondering, have you ever  had anything like this? I assume no, but I’m wondering. Have you ever lost a  kid? Hiten Shah: Not for more than a few minutes, right? Steli Efti: Yeah. Yeah. Yeah. Hiten Shah: Where I was like … And usually, if I’m alone I just am very prescriptive  with the kids. Like, “Hey.” I have two kids. One’s seven and one’s three. My  son’s seven. My daughter’s three. I make my older son, “Hey, when we go out and it’s just daddy, you’re helping daddy. Got it?” You know? Steli Efti: Yeah. Hiten Shah: “Let’s make sure she’s cool. Obviously, I got you, but let’s make sure she’s cool.  “Because she’s three, just like your younger son and they tend to be three, right? Steli Efti: Yep. Hiten Shah: And she’s definitely more open to the world and not as conservative as my son.  So I use that to my advantage. And, obviously, he’s much older compared to your  older son, so I think there’s a little more responsibility in his mind about things,  right? Steli Efti: Yeah. Hiten Shah: As we get a little bit older. Steli Efti: Yeah. Hiten Shah: And so I just do that and that’s helped me a lot because then, just  like your older son started helping, he’d start helping too. And then they’re always tattle  telling on each other, just like kids do. So that’s always great too. So, yeah,  I’ve had a moment where I’m like, “I can’t find one of them.” Right? And  I tend to worry a lot more about the younger one than the older one,  because the older one is also, again, a lot more conservative. He never was one  to go far and not go somewhere where he can’t see us. Well, my daughter  doesn’t care. She’ll just go wherever. If she sees something and she wants it, she’ll  go after it. Steli Efti: Yep. Hiten Shah: Yeah, I’ve had moments like that, so I can imagine. I totally get the four  hour walk. My theory on this is I think you get into this whole mode  when you have a problem. And you just want to solve it. And you won’t  stop until you solve it. And that’s how a lot of … That’s how human  beings are, especially when there’s a crisis. I think you were in your body, your  mind … I think the intuition’s a separate topic. We probably have a longer set  of episodes on that. So, let’s save that one. But my theory would be that  you just got into problem solving mode. Steli Efti: Yeah. Hiten Shah: Because you had this big problem, right? You can’t find one of your kids. And  you, being who you are, a little different than me, you enlisted people around you  because they could feel it like that. For me, I’m usually not one to enlist  people, in that same way unless it gets really far for me, which is probably  a bad thing or whatever. It’s a different personality. If you enlisted people, I know  how important and how scared you were. I think you let the whole problem solving  nature of yourself come out, the critical thinking side and you just had a problem  to solve. And it’s the number one thing that you have to solve. But I  think you in … It sounded like a good 20, 30 minute episode, right? Steli Efti: Yep. Hiten Shah: And so, obviously, you needed time because I don’t know, as a parent, it’s all  you … It’s much harder than business to me. Where like, when you have a  problem and it’s one of these, there’s too many what ifs, right? And you need  to get … I think you went for the lot to get all of those  what ifs out of your head, right? To get that just like peacefulness again. Like,  “I’m okay. I’m a good parent. It’s okay. Nothing happened. It’s cool. Thank, God. Nothing  happened.” Kind of thing. Here you are and also focusing on the good parts of  it, of people wanted to help and lots of them. Steli Efti: Yeah. Hiten Shah: And they’re the ones that found your kid and is actually really smart because if  you get a whole bunch of people involved like that, it’s obviously less likely that  anything bad’s going to happen, right? As a result. Because now everyone’s looking and there’s  more eyes on it, which is cool. And I love that about you, that you  would just go do that naturally kind of thing. So, I don’t know. I get  it. I think you were just in problem solving mode. That’s my theory. Crisis mode. Steli Efti: Yep. Hiten Shah: And you know what to do in that mode, solve the fucking problem. Right. Yeah. Steli Efti: Problem. Yeah. I think so too. In hind sight, that’s what I think happened there.  The thing with the helping people … The lessons that I took out of this,  that are more universal- Hiten Shah: Yeah. Steli Efti: Are I should have actually, in hind sight, I should have asked for helped earlier,  right? Hiten Shah: Right. Steli Efti: It’s one lesson that I … Because for like good 10 minutes, I didn’t enlist  any other parents because I was in this denial of “It can’t be.” Hiten Shah: Right. Steli Efti: “This just cannot be.” I never … My kids have never run away or anything  like that, so I’ve never experienced anything of that nature, so it was like, “This  just does not seem like what’s really happening. I can’t believe, to some degree, what’s  happening.” So, I was just trying to fix the problem on my own. Hiten Shah: That’s a good point. Steli Efti: I feel like that was the right mode for first few minutes, but once I  took a big round around run and I covered a good amount of distance and  I hadn’t seen him or found him yet, I think that’s the time where asking  for help, somebody take care of the little one, that was a good step, but  it came a little late. And then enlisting people and we probably would have found  him earlier if I’d asked for help earlier. Hiten Shah: That’s true. Steli Efti: It’s just not something that I would … To me, it’s like when there’s a  real crisis, not just when something … I’m not asking for help for every little  thing, but when there’s a crisis, I need help. You need help. You need to  ask for help. Hiten Shah: Yeah. Sure. Steli Efti: You need to ask for help early. And the other thing is, I don’t know  if it’s applicable in all areas, but maybe if you jump up high enough is  that, again, when there’s a crisis, maybe you can’t fully rely on humans giving you  data points. Of course, you need to get help, but when you’re in a panic  and you’re asking for somebody to tell you if they saw something or if they  know something, maybe the information they give you is not totally reliable, not because they  don’t or they’re not well meaning, it’s just because the situation is such a panic  situation that they might think they saw something or know something and it may or  may not be true. So you can’t fully rely on that data, even if it’s  well meant, right? And then, I don’t know, this is one of those weird episodes.  Maybe somebody’s going to take a lesson learned from it or find it interesting or  at least appreciate- Hiten Shah: Of course. Steli Efti: Appreciate the transparency here. But I thought it’d be interesting to share that experience, because  it’s such a stand out thing for me. And somebody else out there has experienced  anything similar or different or can relate it to business or start up experience and  wants to share any of that with us, we always love hearing from you. So just shoot us an email @gmail.com and share these experiences. Because we learn from each  and every one of you. Hiten Shah: Absolutely. Steli Efti: All right. Don’t lose your kids, people. That’s the lesson here. We’ll hear from you- Hiten Shah: Now you know what to do if you do. Steli Efti: Hopefully you don’t have to use it, but if you do might take some lessons  learned from me. All right. We’ll hear you very soon. Hiten Shah: Bye. Steli Efti: Bye-bye. The post 243: Losing Your Child at the Playground Is a Bad Idea appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten discuss some tips and tricks for competitive marketing you can use right away. In today’s market, no product is unique—therefore, it’s important to highlight how your product is superior and different from the rest. Knowing which alternative products are being used by your client can also help you specify the ways in which you compete. Tune-in to discover if you should consider setting up an “us versus them” page and why being on review sites helps you influence those potential prospects. Time Stamped Show Notes: 00:04 – Today’s Startup Chat is about doing marketing against your competition 00:50 – A SEO-optimized landing page with a spreadsheet or matrix that shows your tool’s strengths and/or adopting counter PR strategies are some examples of competitive marketing 02:00 – Since there are no unique products in this intensely competitive market, it is imperative to explain to the customer why your product is better 02:23 – Any alternative to your product is competition; so, a SAAS tool can have competing products such as a spreadsheet or business intelligence product 03:08 – A spreadsheet is a generic tool that is competing with many different products 03:38 – Providing a FREE downloadable spreadsheet template enables companies to market products like accounting software 04:33 – The objective of a CRM is to have organized customer data, something that is still being done with spreadsheets on a basic level 05:20 – Understand which alternative products your client was using to determine your product’s DIFFERENTIATION and VALUE PROPOSITION 06:18 – Not uncommon to have a bigger SAAS company as your competitor 06:38 – Not unheard of to mention your competitors in your marketing material, especially if you know your customer loves you for a specific reason 07:30 – Knowing early on in the sales process which product your customer is using right now gives you a framework of what they are used to 08:02 – Knowing your client’s current preference will affect how you speak to them, the copy you use and the features that you suggest 08:11 – Common practice to customize chats depending on search terms; companies like Intercom, Drift and Zendesk customize their chat and landing pages to people looking for a product comparison 09:00 – Using customer ratings from a third party site is a powerful tool to convince prospects; Hubspot uses this strategy to convince visitors that they are better than Marketo 10:34 – Drive people to your site either through SEO strategies or paid ads 11:28 – Market your solution on social media; target fans of your product on Facebook, or look for product mentions on Twitter to zero in on your target audience 12:05 – Being over aggressive in a competitive market might upset your prospects 13:05 – If your competitor is bad mouthing your product, you can consider retorting back; however, it is better to take the high ground 14:54 – Study and determine your market before setting up an “us versus them” page 14:54 – If there are not a lot of versus pages AND your customer is using them, an “us versus them” page will be advantageous to you 15:07 – If you are in a market with a lot of alternatives but no competition, highlight your strategy around the alternatives and how your product is better 16:02 – Do it if the market is newer and there are not a lot of competitors out there 16:30 – Steli lays out two contrasting experiences where he used competitive marketing 16:35 – Ran a SUCCESSFUL campaign when a competitor decided to close shop in North America; contacted the client of the competitor on social media, sympathized with them, and a lot of them switched to Steli’s product 17:36 – Was UNSUCCESSFUL in having people switch over when a competitor was facing an uncertain future due to management issues 18:30 – Comparison tools like G2 crowd and Capterra permit comparison of competing tools, especially SAAS ones 19:22 – In spite of a great reputation, a lot of tools with great reviews do not show up in their reports; companies need to pay up if they want to be mentioned in a positive light 20:35 – Ask your customers to post an honest review on these platforms 21:23 – While review sites might not directly drive people to your website, they do INFLUENCE the viewer into checking out your product at a later stage 22:48 – See your competitors as another way of understanding your customers better, what they do, and current market trends 23:19 – End of today’s episode 3 Key Points: Being over-aggressive with your competition might upset your prospects and hurt your company image; it is better to take the high ground instead of bad-mouthing your competitors. Study the market to determine if you should be setting up an “us versus them” page; highlight how your product is better than the market alternatives. Building up a presence on review sites is an effective way to influence potential prospects. Steli Efti: Hey everybody, this is Steli Efti. Hiten Shah: And this is Hiten Shah. Steli Efti: And in today’s episode of The Startup Chat, we’re going to talk about how to  do marketing against your competition. Or how to do, whatever, I don’t know how to  even call it. I don’t know if there’s a real name for it. Competitive marketing?  It basically- Hiten Shah: Yeah- Steli Efti: Oh, go ahead. Maybe there is a name, and you know it. Hiten Shah: Yeah, I’d probably collect competitive marketing, more than anything else. Steli Efti: So the idea of doing marketing that relates directly with your competition. So two examples  would be, creating SEO pages where you show your tool, or your company, versus your  other. So if somebody types in your company name, versus this other company name that  you’re competing with, your SEO page would show up, and you would have some kind  of comparative metrics, or a spreadsheet that shows that your tool is better than theirs,  or whatever it is. Or, if there’s a big PR thing that’s going that breaks  some news, you do counter PR, that type of stuff. I don’t even know how  many more tactics there are, but yeah, competitive marketing. What is it? What tactics are  there? What’s good? What’s bad? What has changed? I’d love to explore all of this  with you. Hiten Shah: Yeah. I like your definition of just, basically it’s something where you’re doing marketing, and  it’s very related and relevant to your competition. Meaning, there’s so many ways to think  about this. I love your idea of those landing pages that are SEO optimized. The  reason that, that exist though and the reason that this tactic even make sense to  talk about, in my opinion, would be because today, and even in the past, but  more so today the customer matters more than ever. Your product is likely not that  unique on the surface. So you have to do whatever you can to be able  to explain to the market, the customer, how it’s different and better for them. Better meaning better than any alternatives. So one way that I think about competition a lot,  is competition is any alternative to your product. It doesn’t have to be just a  direct competitor. So if you’re a SAS tool that does analytics, it doesn’t have to  be another analytics tool, it can be a spreadsheet. It can be a database product.  It can be a business intelligence product, that’s competing for the attention of your customer,  and their patronage as a customer of yours. So to me, any alternative is considered  a competitor in my mind. Any alternative to what you do for customers today. That  can broaden how we think about marketing- Steli Efti: I love that- Hiten Shah: You’re marketing against alternatives, to help the customer understand how you’re different. Steli Efti: I love that, and the first example that popped up in my mind, and take  you for broadening the scope of this, is the spreadsheet example. Right? Hiten Shah: Yeah. Steli Efti: Spreadsheets are basically a competitions almost every SAS tool out there, and there aren’t many  companies, successful product companies that either have these landing, SEO pages that are, “Better alternative  to bookkeeping than a spreadsheet.” So they’ll compare their tool with a spreadsheet. Or even,  mostly they’ll come up with spreadsheet templates that people in business today will want, that  use spreadsheets do a certain thing. That would then try to market to switch them  from the spreadsheets to their software tool. So we’ll give you a free spreadsheet template  for accounting or whatever, for restaurants, and in the restaurant will find this spreadsheet, downloaded  to do their accounting, but now that company has their email, and they’re start marketing  to them, “Hey, if you’re using a spreadsheet to do your accounting, we have built  accounting software that specifically for restaurant owners. It’s better than a spreadsheet because XYZ.” I’ve  seen the spreadsheet type of a thing a lot, because Whiteboards and spreadsheets are still  very high up in the list, as Competitors almost every software tool that exist. Hiten Shah: Yeah, so we’re all competing against the spreadsheet. If you even talk to … It’s  just bring up an example of the business you’re in. If you look at CRM,  it’s so easy to build the CRM’s, at least some sort of, “These are my customers. Or these are my users. Or these are people I want to talk to,  and here’s more characteristics about them.” If you think about that, it’s still being done  in spreadsheets for so many use cases. All CRM is, is taking that spreadsheet, that  concept, and turning it into software that’s supposedly easier to use. I’m sure yours is,  but other ones aren’t. Not to mention any really large SAS company names, and you  wouldn’t exist if they were doing a good job. Right? Steli Efti: Right. Hiten Shah: So I would say I love that you mentioned that, because if you just think  about that, and you actually talk to your customers, you will learn what kind of  alternatives there are to you. So to me, that points to, I think a big strategy. I think We can just bounce back and forth on this, but for me,  one big strategy of knowing when you should do competitive marketing, is if you’re talking  to your customers, and you just asked them, “What did you do before you started  using us? What would you use as an alternative to us?” And questions along those  lines, you will understand who or what they are doing, instead of you. Who they’re  using, or what they’re using, what they’re doing, instead of you. Or would use instead  of you. That will help you really define when you should do competitive marketing, and  how you should think about. So they say, “We’re using spreadsheets.” Then your alternatives, and  some of the ways, if most of your customers say that, “We were using spreadsheets  before you. We would use spreadsheets if you didn’t exist, and here’s why you’re better  than spreadsheets.” If you hear that kind of thing, then you know that you can  do competitive marketing against a spreadsheet. Now, the common scenario today, because there is so  much [F’n 00:06:08] SAS out there, is that there is a likely SAS competitor that  they are going to mention. So ideally, not ideally, but usually, this is not ideal,  but usually something larger than you, some company larger than you, or even some alternative  they know of, you’re looking for the popular alternatives. Then you’re looking to create these  landing pages, or mention these folks, these companies in your marketing if necessary. It’s not  unheard of now, to mention competitors in your marketing, especially if you know your customers  love you for specific reasons that go sort of against, or is differentiated from what  your competitor does. Steli Efti: I love that, so let’s take a for a second. Let’s take the example of  you hear What customers were doing before they find you, and the reasons why they  thought your solution was much better, and much more valuable than the alternative they were  using before. Let’s say it’s a specific competitor, another SAS tool or another product, and  you go, “Okay, we’ve identified our competition where the customer is leaving them to come  to us, and there’s good reasons for that.” What are all your options to do  now? Competitive marketing against that very specific, targeted competitor? Hiten Shah: Yeah, I think it’s really understanding, very specifically if you can, when somebody signs up  for your product, and not enough people do this, is to actually start asking them,  whether it’s on the sign-up forms, or even in your sales process, “What are you  using today?” So I know this sounds like, “Oh, this is not marketing,” but really,  if you can figure that out early on in your sales process, or even if  it’s a self service product, you’ll at least have a framework of knowing what they’re  used to. So I think to me, a lot of the alternatives is more about  what are they used to, and how does that impact how you speak to them.  How you talk to them, the copy you use, the features you suggest to them,  and what you say about yourself. Right now the way it works, if you look  around the web, is that you can type in, for example, Intercom versus Zendesk in  Google. You will see an Intercom ad. You might even see a Zendesk ad. You  will also see, Intercom’s landing page on that first page. Well guess what, when you click on that page, they already know you’re comparing Zendesk and Intercom. So then they  start really customizing their chat, and pointing you to the right places as a result  of where you came from. The same goes for Drift, as an example. They have  some pages, because they’re an Intercom competitor. If you type in Intercom versus Drift, you’ll  start seeing a Drift page, and it’s all about the difference between Intercom and Drift.  If you type in HubSpot versus Marketo, you’ll start seeing this page. Actually, the HubSpot  versus Marketo one, the HubSpot page for it is some of my favorite ones, because  what they do, is they have higher ratings in some of the SAS review sites,  so they start inserting those rating into that landing page. They say, “Look, we’re better than Marketo. Look at their ratings. Look at ours. Look what customers are saying. Don’t  believe us, here’s what customers say.” So to me, when you can always get quotes  and testimonials from customers about how much they love you better than what they were  using before, that’s some of the best marketing, especially if it’s off of a third-party  site. Or even your own quotes, and you can name the customer, their name, their  title, and who they are. That’s the most powerful thing, because essential people want to  know that there’s people out there like them, including people that are used to use  alternatives, that are now using you. Steli Efti: I love that. So you want to know what tools, and what alternatives people used  before they come to you. You want to understand what they were doing, and why  they were switching, what the value proposition, the differentiation is from a customer point of  view. Then you want to put together a page that compares the two solutions, and  ideally uses third-party validation, testimonials, people stories, but also especially if there’s rankings, awards, whatever  else of credibility you can generate. Articles that compare the two solutions, and favor you,  obviously, you do that. I have the Marketo versus HubSpot site open, so I love  that. You can get people there through SEO, in trying to create these pages that  will organically rank, and slash, you can do paid ads. So when people type in,  even just the competitor name, or that alternative name, or the actual keyword of your  solution versus the alternative solution, you can force yourself up. I just saw this. The  HubSpot article actually is organically ranking number one, but Marketo is actually … Marketo’s ad  is the number one spot. I think they even have the first and the second  or something. So they are spending a ton of money to kind of counteract the  fact that HubSpot has a very high, organic ranking article on this. So you can  do paid ads for it, and send them to the pages. You can do organic  SEO, if you can, to send them to those pages. What other things can companies  do? Obviously, one potential today is to use social media. Look for people, if you  go to Facebook, people that are fans of that alternative. If there’s pages and groups  that are associated with it, and try to advertise to those people. On twitter, you  might look for mentions off that company name, and then interact individually with people that  are talking about that alternative, and pitch yours. So try to be helpful. What have you seen work well within social media, being competitive? Versus maybe not so well, because  you can always … And this is maybe a more general question, but you do  direct competitive marketing, this opportunity, but there’s also risk. The risk seems to me to  be that if you don’t do it right, you might piss people off. I’m not speaking about your competitor. I speak about your potential customers. If you’re too aggressive, if  somebody is let’s say, just tweeting, “I love whatever, Marketo,” and HubSpot’s Twitter account just  responds, “Yeah, but we’re much better. Just sign up for us.” That’s actually gonna be  much worse than just a general marketing tweet. That might piss off some people. So  I think two questions. One is social media use in competitive marketing, but then also  just risks on what not to do, when you do direct competitive marketing. Hiten Shah: Don’t be an asshole. Don’t use language where you’re talking shit. I see that happen  and it’s like, “Hey, don’t talk shit.” Now, the bigger, interesting question is what if  your competitor is talking shit. Steli Efti: Yep. Hiten Shah: Right? Then I think if you’re not a shit talker … Obviously, some cultures are,  some people are, go ahead and talk shit back. That’s great. But I think the  better way is taking the high ground, and even communicating that. They will tell you  lies, we won’t. That some of the most effective ways to counteract that, just as  a quick thought. Yeah, to me, I think a lot of it has to do  with what … This is what really got me, and convinced me about competition, because  I used to just hate it, and not want to talk about it, or think  about it. It would give me a lot of stress, in terms of their marketing,  or their this or that. What really got me though, is this simple thing, which  is you have to look at your market. What market are you in? Are there  competitors, and what is the norm in that market? Right now, in the help desk,  customer support category, there are versus pages all over the place. Us versus them, and  a lot of them are us versus Zendesk, to be honest, because they’re a public  company. They’ve proven the market out for this. I remember being in their office back  in the day, and talking to them about SEO and stuff like that. That was  many years ago, when they first moved to the US, because they started out in another country. Wow, that company to me has really proven that there is a market  here. So now everybody is coming in and saying, “Us versus them.” I almost think  I see more customer support, help desk versus pages, then I do CRM ones, for  some reason, because it’s just us versus Salesforce in most cases. Right? That people put  up, and that’s not very powerful. That’s not very effective, because Salesforce does everything. So  I think I really look at the market and say, “What are competitors doing? What  is it?” Then decide, “Hey, if there aren’t a lot of versus page, but your  customer is using something else, you can be one of the first to put those  pages up.” That’s actually an advantage to you. If though, your market isn’t full of  competitors, it’s more full of alternatives like spreadsheets and manual work, then put up pages  that speak to them, that say, “Today you’re doing it like this. Guess what? You  don’t have to do it like this anymore?” Honestly, those were the first pages Intercom  put up. Even today, their homepage still says, “Stop using all these tools, you can  just use one, ours.” Right? So I think there’s a lot of strategies like that,  that I would suggest. But all of it has to do with the market. So  to me now, when we enter a market, or when we’re thinking about our own  business and product, we start putting up these pages, one, if they already exist in  the market, because we have no choice. We need to have those pages. Two, because  it’s likely our brand is mentioned on a competitor’s site. Right? That’s not cool, if we’re not mentioning them too, because then we’re losing out on that business, those people  that are reaching and comparing, which is ending up being a big, core demographic of  customers today. Right? Then too, we do it in a market, if the market is  newer, and we want to be the first to do it, because there’s enough competitors  out there. Three, if there are no competitors out there, but there are alternatives, we  wood frame our whole business around the alternative, and how we’re better. Steli Efti: I love that. I’ll give one example on the social media thing. So we’re not  super big on using social media. We’re definitely not big on doing competitive marketing on  social media, but there were two examples of where we did it. One successful, one  not so successful. The successful one was when one of our direct competitors, kind of  a newer startup in the early days of our existence, was purchased by a bigger  competitor, and they decided to stop servicing clients outside of North America. There were a  lot of these North American companies that were using that competitor, that were complaining on  social media. We were just pinging them and going, “Hey, it sucks. Sorry to hear  that you have trouble. We have a lot of customers that are switching from them  to us, and we wanted to let you know. If you need any help with  transitioning, let us know if we can do anything.” We were winning a bunch of  business that way, because again, we weren’t assholes. We were like, “Hey, I get that  this sucks. You have a tool. It’s working, and now you can’t use it anymore.  You need to look for an alternative. We think we’re a good alternative, and we’re  here for you. We’re happy to help if we can.” We got a lot of  business that way. That was kind of successful, a successful campaign. The not so successful  campaign was a similar, but different case where a competitor, although it was not as  direct, and maybe that was the issue, not a lot of our customers were coming  from them, but they were still kind of in our space, they switched management. It  was not clear if the company would still exist, or how much. There was some  press, and some about the future of that business. We just put together, I think  a landing page, that was talking about people switching to us. We promoted a little  bit, but there was not a lot of social media discussions around that, funny enough.  So we never got a lot of traction, a lot of traffic on that thing.  It never really converted much. So those are kind of two examples of when we  used social media to do competitive marketing. But this is two examples in four five  years, so we don’t do it a lot, but once we saw these two opportunities,  we jumped in there. Let me ask you about the comparison tools, because that’s a  big thing in SAS now, where competitive marketing is playing an interesting role. There’s all  these sites that allow customers, that rank really highly, and allow customers to compare tools  in certain categories, especially in SAS. Right? What’s the big one? I missing the names  right now, but there’s two or three really big ones, where it’s – Hiten Shah: Oh, Capterra, or G2Crowd? All those? Steli Efti: Yes, all those. Right? Hiten Shah: Yeah. Steli Efti: They do rank really highly in a lot of keyword searches, like CRM comparisons, CRM  best, whatever. Then they have these … We have all the customer reviews, and we  have these landing pages where we, as a third-party provider, show you which tool is  better for what kind of use case. What they incentivize you to is to send  a lot of your customers their way, to write reviews on their site, but once  you do that for a while, you realize, “Huh, shit. Why are we still not  ranking, or being mentioned aggressively enough in a lot of these reports that rank really highly?” The reason for that is, they want you to pay money. They want you  to basically advertise, so all the reviews you’ve gotten are actually seen by people that  search, and you show up in their reports. Now, you can decide if you want  to play that game or not, but if you’re not, a lot … I know  for the CRM space for sure, a lot of our competitors are in those reports,  are ranking really highly, although they have less five star reviews than we have even  from people, because they pay a lot of advertising dollars to rank high. Have you  seen a lot of SAS tools use that? I’ve gotten mixed reviews. Some founders have  told me that it was a total waste of money and time. Some investors actually  told me, that they don’t do anything in SAS space, if they don’t spend a  lot of money in there, because there’s a lot of leads, and a lot of  opportunities coming that way. Do you have any opinion on these kind of sites? Is  it worth it or not? Or how to play the game on these comparison websites, review websites basically? Hiten Shah: Yeah, get your best customers to put reviews in. You know your best customers are,  and it’s not cheating. If a customer loves you, they’ll write a review for you.  You don’t have to do anything, except ask them. Right? Start incorporating that into your  process. “Hey, we know you’re getting a lot of value from our product. You mentioned that to us. We’d love if you could review us on G2Crowd. Please be honest.”  And just be ready to deal with whatever that honesty is. Steli Efti: Fair enough, and I know in our case what we do is, I think once  a customer has been around for two months, and has given us a certain NPS  score, we’ll ask for referrals, and for ask for a review on one of the  sites. We get a good number of it. The funny thing is, a lot of  times, you don’t … For instance, we were doing this, I don’t even know if  we still do, but we have a fair amount of good reviews. Good meaning high  quality, authentic reviews on Quora for . I know that for a while we were  looking at the traffic, and we were like, “Huh, this doesn’t really do anything traffic  wise. This doesn’t really bring lots of people.” But then when we were talking to  our trial users, and we were asking them, “How did you hear about us?” One  part of their search was seeing a positive review of us somewhere. It was not  the thing that brought them to us, but it was a part of their search  that convinced them later on to come and sign up. So it’s an interesting observation  that these review sites, they might not even directly bring you, or these reviews might  not directly bring you traffic, so you can super easily attribute it to them bring  you a trial, but people still see these reviews. It influences them trusting you, and  wanting to come and check out your software later. All right, I think we covered  a bunch in terms of the competitive marketing space, how to think about it, what  tactics to use. It’s an interesting space, and I feel very similar to you Hiten,  just to share this with the listeners. Four years ago, I didn’t want to do  anything that was competitive marketing. I didn’t want to think about the competition. I just  wanted to think about my customer, do the marketing I want, build the product I  want. Today, that still the majority of what I do, but we’ve talked about this  before, and you’ve helped me see the light on this, on seeing my competitors as  another way to understand my customers better. Also, seeing some trends in the market, and  what our customers do, in terms of how we make decisions, where it’s just dumb  to ignore those out of stubbornness. We’re like, “Okay, if a lot of our customers  are comparing, if a lot of these alternatives we see a lot of success with,  we should exploit these. We should play in certain areas, because it’s what’s going to  help us acquire more of the right type of customers.” All right, I think that’s  it from us for this episode. Hiten Shah: Later. Steli Efti: Bye-bye. The post 242: How to Do Marketing AGAINST Your Competition appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten discuss the various ways startups can remain cashflow positive. You can manage your cash flow by generating more revenue or by simply controlling your expenses. Steli and Hiten stress the value of tracking expenses, deciding what’s worth your money, and how negotiating for those larger expenses can go a long way in staying cashflow positive. They also explain  why long term contracts should be avoided by a startup and how the right mix of common sense and planning can prevent your costs from spiraling out of control. Time Stamped Show Notes: 00:05 – Today’s Startup Chat discusses how you can manage to stay cash flow positive 00:30 – So far, Steli and Hiten have concentrated on how to generate cash 00:51 – Today, we are going to talk about managing cash flow via generating more revenue as well as controlling expenses 01:16 – Two simple steps to save money and improve your cash flow: 01:25 – The first step: know where you are spending it, second step is to determine where this money should be spent or not 01:46 – Ask yourself whether there are any cheaper alternatives 01:56 – Have a set evaluation process in place which can help you determine if the money is worth spending 02:23 – Most startups do not have a defined process for making purchase decisions 02:45 – In all of Hiten’s businesses, expenditures are entered into a spreadsheet and checked regularly 03:08 – In smaller setups, the responsibility of entering this data is with the cofounder or someone reporting directly to the cofounder; In larger setups, a finance professional looks after this functions 04:00 – Centralized purchase decisions are quite uncommon in the startup world; smaller purchases can be made by numerous individuals which leads to expenses spinning out of control 04:56 – Spending is a subjective thing and different people tend to react differently to different expenses 05:32 – Steli does not put too much thought behind expenses less than $100, whereas he is really conservative when it comes to big purchases; his cofounder is aggressive with the larger purchases and careful with the smaller ones 06:43 – Smaller purchases tend to add up to a significant amount in larger organizations 07:15 – Spending habits can be traced back to a person’s upbringing 08:00 – Not wanting the weight of monitoring cash flow, Hiten prefers to let his cofounders handle this business function 09:53 – Always spend less than you make to be cashflow positive 10:11 – Keep a close watch over your cash flow, especially if you have yet to raise money 10:25 – Monitoring your bank account and credit card statements is a simple hack which will help you be cashflow positive 11:05 – Negotiate really hard; the higher the expense, the more you should negotiate 11:28 – Particularly applicable to technology infrastructure providers; you can save a significant amount by renegotiating, entering promotional codes, discount coupons and establishing relationships 15:20 – Quite common for founders to lose track of their expenses and run out of money 15:58 – Even implementing standard, basic checks will go a long way in ensuring that a startup does not run out of money 16:15 – Be cautious while signing long-term contracts like office leases; if you hit a rough path and need to downsize, your office lease will be like a noose around your neck 17:18 – In your greed to save money, do not end up defaulting on a contract 17:56 – Do NOT sign a long-term contract unless you can accurately forecast what your tomorrow will look like 18:30 – Not impossible to renegotiate or even get out a long term contract; for instance, you can find a sublease for your office space 19:20 – Delaying renegotiation might leave you with no wiggle room at all 20:02 – Cash flow: Watch it, manage it or lose it 20:08 – End of today’s episode 3 Key Points: The first step to saving money is knowing where you are spending it, and the second step is to determine where this money should be spent or not. Sometimes even a spreadsheet is an adequate way to keep tabs on your expenses. Negotiate really hard; the higher the expense, more you should negotiate. Do NOT sign a long term contract unless you can accurately forecast what your tomorrow will look like. Steli Efti: Boom! Hey! This is Steli Efti. Hiten Shah: And this is Hiten Shah. And today, on the Startup Chat, we’re going to talk  about cash flow. Right, Steli? Steli Efti: That is correct. You know, cash was one of my favorite topics, but I think  so far on the podcast, we’ve mostly covered it from the “how to make more  money” side of things. How to generate more cash.  But you know, a very smart friend of mine and a very good entrepreneur once  said, “a dollar saved is a dollar made.” So today we’re going to talk about  the other side of things, which is like, cutting costs, saving money, managing the cash  flow from both sides, not just from how much money you generate but also how  much money is leaving your company. I thought that would be fascinating and we could  probably drop some knowledge bombs here on people. So yeah, let’s jump right in. What  should start ups do to improve their cash flow, to cut costs, to save money? Hiten Shah: I mean, first you’ve got to know where you’re spending money, right? Steli Efti: That seems like a good start. Hiten Shah: Right? Steli Efti: Seems like a good place to start. Hiten Shah: I would say that … I know it sounds ridiculous but a lot of startups  don’t know where they’re spending money. And I think there’s like… We can break this  up into two super simple things, which is where are you spending money and then  when you spend money, what’s your process of determining whether you should spend said money  or not? Because that’s it. It’s sounds stupid, but you’re spending money. Can you save  any of it? Can you spend less money? Are there alternatives that are cheaper to  that expenditure? Right? Steli Efti: Right. Hiten Shah: And then, the more important one, to not get yourself in the position to even  have to evaluate this all the time is to make sure that when you decide  to spend money, you have a process of evaluating if that’s the best way to spend the money or not. Steli Efti: That right there … Everybody who was listening, I want you to stop the podcast  for a second and ask yourself, “what is my process for spending money?” I’d be  surprised if people know exactly, I would assume that the vast majority would have to  think through a few times they’ve made purchasing decisions, or spending decisions, and then write  down reactively what that could look like if they called it a process. But my  assumption is that most people and most startups, they just don’t have a process, or  they’re totally unaware of how they made those decisions. Hiten Shah: Yeah. In all my businesses there’s somebody owns a spreadsheet and the spreadsheet has all  the expenditures and it’s being checked very regularly, and that’s an easy way to manage.  And every time there’s a cost added to it, somebody is adding it to the  spreadsheet. That’s one very brute force way, where even if you don’t have a finance  person, or somebody like that, usually that somebody should be a co-founder, somebody who’s very responsible for it. Or, somebody who the co-founder manages directly and is able to do  a check in regularly, or as you get larger, somebody in finance that a co-founder,  or CEO if you’re in that situation, is able to basically talk to regularly. Because  the thing is it won’t get managed. It really will not get managed. Your expenses,  your money, if you don’t watch it. With cashflow, we’re just talking about management of  money. We’re talking about something very basic you learned when you had a piggy bank. Steli Efti: So, I love the idea of the spreadsheet and of just even creating that level  of transparency. It sounds so simple, but again I’ve never seen a startup do this.  I’ve talked to so many, I know so many founders but I think that most of these companies, there’s a number of people in the company that can make purchasing  decisions, they have a credit card or whatever, and if it’s a massive purchase, they  might consult others but if it’s kind of a quote on quote “smaller”, whatever their  definition is, for that specific startup, if it’s a smaller expense, people just decide, yes,  let’s purchase this piece of software, yes, let’s just purchase this or that. This brings  me to an interesting point. So putting everything on a spreadsheet and creating that level  of transparency and also creating the simple process of, if you want to add an  expense to this company, you have to submit it in the spreadsheet so that it’s  transparent for everybody to see, question, ask and that alone, I think, can make a  dramatic difference. Which brings up another point, which is the big expense and small expenses.  I don’t know about you, but in my experience, different people tend to react differently  to a certain type of expenses, you know some people care about all expenses and  manage the cash flow really, really well and have learned that from a young age,  maybe doing good piggy bank management as a young kid. But most people, as they  grow up, they tend to have a very subjective interpretation of what kind of spending  is too much, or wasteful and what isn’t. And these opinions can vary very widely  between different people. One thing that I noticed early on between me and one of  my co-founders was that I’m somebody that’s fairly careless when it comes to small expenses.  If it’s less than $100, I don’t tend to really research and try to find  a cheaper solution, I don’t tend to spend too much time in my mind, for  whatever reason it seems like this is not an expense that’s important enough for me  to spend a lot of time questioning it, or trying to save money on it  and my co-founder is the exact opposite. He really pays detailed attention to the tiniest  of expenses, but vice-versa when it comes to really big expenses, whenever we have to make a really big bet, he seemed to be very easy on making those decisions,  and going you know what, let’s go all in, let’s buy this, let’s lease this  massive office space and let’s go for it. And I’d be super conservative. I’m getting  very nervous. The expenses of multiple thousands of dollars, I get very conservative, I get  very, very careful about it. So we were always able to kind of balance each  other out on that front, but I’m just wondering if you make any distinction between  small and big ones. The bigger your company becomes, the more every little line item  will matter and if you sum them all up, even if it’s tiny expenses, I’ve  learned this painfully, they can make up significant amount of money. Have you noticed mistakes  being done more on these big, bad expenses as startups, more of the small ones,  or just equally on all fronts? Hiten Shah: I see it both ways. I think your description was really good of mentioning that  people think of money in different ways. A lot of it is based on their  upbringing. I was joking about the piggy bank thing, but it’s kind of real. Everyone  has gotten some kind of piggy bank, some kind of allowance, something to help manage  money when they’re kids, somehow. Maybe even if it was 5 bucks for lunch, every  day at elementary school, or whatever it is. There’s some management you’re doing, you just  don’t know it. To me though, in a startup, in a business, I think the  small ones and the big ones matter. Because like you said, the small ones add  up, especially as the company grows, especially as more people can buy stuff. I was  going to ask you about the $100, be like is that recurring $100, Steli, or  is that like a one time $100? Because that’s an important distinction, right? Because $100  a month for a year is $1200. Again, I have a similar situation where …  not similar but it’s similar in the sense of, we have a partnership. And for  me there’s been somebody who actually is much more critical of the expenses than I  am. So that’s been always great for me to have, because it’s very easy for  me to either not care about any expense regardless of size or care too much  about every little expense and I’m like a on and off switch on that. And  so it’s nice to have someone who just always cares. I can flip-flop more than  most people around most things, especially that, and so for me it’s, I don’t know,  one day if it’s $10,000 I might be like, that’s cool because I personally can  see the ROI of it, or if it’s $100, I’ll be like, why are we  spending that $100? And I don’t like that about myself. I’d rather have a way  better objective way to make a decision. And what I mean by “like that” is  I don’t want to have that weight of having to figure that out all the  time and having to adjust, so I tend to have somebody who can help with  that. Usually it’s a co-founder. And they are so much stricter about that spreadsheet and  managing it and asking me the questions of “our spending on this, is that good  or bad?” In the beginning it was frustrating because I’m like, oh they don’t trust  me. But what I realized they just care about the cash flow, so much as  if my switch was on but my switch is now off and they’re the ones  caring about that and that works out for me. So I think a lot of  it has to do with the relationships and how different people react to spending money.  That’s a lot, like I said, I really love what you said. A lot of  it is upbringing and what your relationship with money is. I don’t think people realize  that. Whenever you had to manage your money, usually never, I know that sounds weird  but you make money, you spend money. Just basically spend less than you make. Oh  yeah, don’t forget about taxes. It’s like, shit, the stuff adds up when you start  thinking about all that and when you have a business you have to pay taxes,  when you have a business you have to manage the money. When you raise money,  you have to manage the money. If you haven’t raised money, you have to manage  cash flow a lot more strictly, because otherwise you will run out of money. You  might wake up one day and have a very little amount of money in your  bank account if you’re not watching it. So to me, it’s like, log in to your bank account every few days, would be a good hack if we want to  get into that. Log in to your bank account, look at it. Log in to  your credit cards, look at them. Put it on your calendar to do that. Sounds  so stupid, right, but if you’re wanting to not care about money force yourself to  look at it. And then you’ll just start getting a habit of understanding what the  ins and outs of your business are. Steli Efti: I love that. Since we’re on the side of giving some practical tips, let’s maybe  think about some of the ways that we’ve been able to save a lot of  money, or manage our cashflow better and see if there’s some general tips that we  can give to companies. I’ll give one right off the bat that I think too  many people are not doing this aggressively enough, which is, you need to negotiate really  hard. The higher the expense the more you should negotiate. Just because you’ve negotiated in  the past does not mean you can’t renegotiate again as your expenses go up. Especially  when you work with infrastructure providers, if you use certain third party platforms that, as  you scale your business, as you do more stuff, it gets more and more expensive.  And this could be things like, infrastructure with AWS or whatever you’re hosting your service.  And this can be a number of things that you use as technology infrastructure, where  cost as your business grows can go up significantly, can be a shit ton of  money and you don’t want to just take whatever the pricing is and be okay  with it. No, you want to try to see if there is discount codes, if  they do certain promotional things you could participate in to save some money. You want  to establish a relationship there, go to their events. You want to engage with them  on social media, you want to save any buck you can and you’d be surprised,  especially with these infrastructure place when you start paying thousands of dollars a month, often  times you can renegotiate and go back and you can get another discount or some  kind of a bonus thing, and it can add up. We have saved tens and  tens and tens of thousands of dollars with some of the service providers we’ve worked  with just because we never stopped looking for ways to save money because we could  see that every month, and year by year, we were spending more and more huge  amounts of money. If you can save over an entire year, $10,000, $20,000 that’s significant money. That’s another $1500 to $2K a month that you could spend on something else,  on ads, you could spend on giving somebody a raise, or hiring somebody or whatever  else. Or just being profitable if that’s what separates you from profit and loss, but  just negotiating much harder on these contracts is, especially the ones that could amount to  a lot of money, and even if you have and it’s been like 6 months,  9 months or a year, and you’re not happy about the amount of money you’re  spending, just send them another email. Give them a call and go, we’re not happy,  we’re about to leave, although we’re becoming a bigger and bigger customer, these prices just  don’t work anymore for us. And oftentimes when you say that, magically they’ll go, “Oh,  you just slipped to this new range of customer that we can give another discount  because of the volume you’re paying us now.” And magically, they find ways to save  you some money to keep you happy and keep you around and that mostly will be insignificant to them, or not that significant, but to your company this can be  … A ton of money can make all the difference in the world. So negotiate  hard, and renegotiate. Don’t be afraid to go back 6, 9, 12 months later and  say, this doesn’t work anymore, we’re paying more, more, more, we need to find a  way to save money. You would be surprised how many times these companies are going  to be open to doing that. Hey, you there Hiten? Hiten Shah: Hello? Steli Efti: Hello, are you still there? Hey buddy, you still there? Hiten Shah: Yeah, I’m here. Steli Efti: There you go, sorry about that. I think I lost the connection for a second.  What was the last thing you heard me say? Hiten Shah: You were at the end of the description of getting people to lower the costs,  and you had just finished the line about, you call them and then they tell  you, hey, you’re in this new tier now. Steli Efti: There you go, okay. Yeah, so, the point is, negotiate and renegotiate contracts frequently if  you’re spending more and more money with these service providers, you’d be surprised how many  times they’re going to be open to coming up with some kind of a deal  and bring down your costs significantly. And to them, it might not matter but to  you it might be the biggest savings you can generate for your business. Hiten Shah: Awesome. Yeah, I really like that one, I think … I mean, to me I  think it’s like … I love what you said earlier, and this is why this  episode is so important to anybody. Some people who are really finance geeks, so to  speak, and financially minded are probably going to think everything we’re saying is absurd but  that’s the minority of you out there, I know this. This idea that you haven’t  seen any startup have a spreadsheet like that and all that, is super important. This  is why we get so many calls, so many emails, you know, you and I  or so many founders asking for advice because they’re about to run out of money.  I think it’s absurd. No offense to anyone that’s ever been about to run out  of money, that’s some serious shit, you’re running out of money. But it’s likely because  you’ve been overspending in areas that you shouldn’t be. Steli Efti: Yeah. The one thing that I was thinking now, as you were saying that, is  the … One thing that I want to bring up besides … Most of the  things that we’ve covered so far have been, I think, very kind of fundamentals, basic things that are not that difficult to do but most people still don’t do it.  And I think if you do these things, if people do these basic things when  it comes to managing their cash flow and their finances in their startup, they’re going to have a much higher chance of not getting into trouble. There’s one thing that  just popped up in my head as we were talking that I thought we should  mention real quickly, which is long term contracts. It’s not that often that a start  up will … You will be forced to sign something that’s more of a long  term contract, but it can be something that gets you in trouble later on, obviously  because of the long term structure of it. An office lease comes to mind immediately,  but other things can come to mind as well where you are forced, you don’t  have an option, you’re forced to sign two year or three year lease and everything  looks good today but a year from now things are not looking great. Maybe you’re  pivoting, maybe you have to shrink the size of your team significantly but now you still have this big office space, so you have this office space that you just  don’t need anymore but you have this, kind of, signed contract. I wanted to touch  on that a little bit, do you have any experience on these long term commitments  financially, should startups just avoid them? Hiten Shah: Don’t … Yeah. General rule is avoid them at all costs, except when you can’t  afford to avoid them. What I mean by that is sometimes there’s just such tremendous  savings and that is an impactful savings for your startup. That being said, what I  see founders do is commit to a long term contract and then they don’t realize  that they shouldn’t be committing to it because they’re going to run out of money  and they’re still going to owe the money for the contract. So do some math.  Because it’s a long term contract, you don’t want to deal with defaulting on a contract. That’s just stupid. Right? So, I see that because they’re just running so fast,  and they’re like, “yeah, I’ll sign whatever, I need this service, or I need this  or that or whatever.” Steli Efti: Yeah, so I agree with Hiten from today’s perspective and from the experience that I’ve  had in the past. If you can avoid it, absolutely avoid signing any longer term  commitments until you can forecast with accuracy, you know, long term what your business is  going to be generating. Until you get to the point where your start up has  a lot of stability and some scale and some predictability, makes no sense to lock  yourself in to the future when you don’t even know what your tomorrow will look  like. Try to avoid these at any cost. If you have already committed to them,  again, coming back to the renegotiation part, just because you have a long term contract  if you absolutely need to get out of it, it doesn’t mean you can’t. Often  times, the type of businesses that do these long term contracts with others, they have  to face fairly frequently that these people, these entities, these companies, can’t uphold themselves to  these long term contracts so they’ve been in the situation before, they might have ways  to help you either renegotiate the contract or get out of it or get somebody  else into it, like if you have an office you could just find a sub-leaser,  if you want to get out of the lease, or give you, like, a two  month break on paying on the contract. There’s many, many ways to renegotiate when you  are in a situation where you have to and unfortunately, too many times startups when  they have these long terms contracts, they’ll wait until the very last second when they  have no more wiggles room, and that’s when they go and approach the companies they  have these long term contracts with. And usually that’s way too late. If you have  a long term contract and you can see in the next few months, we might  get into trouble cash flow wise, you need to aggressively approach every single one of  them, today, and try to save money, get out of the contract, to find some  kind of other way that’s positive for both sides and finding a compromise. But yeah,  if you can, just don’t get into long term contracts if you are a startup,  in general. It’s not a good idea, typically. All right, I think this is it  from us for this episode, Hiten. Hiten Shah: Yeah, cash flow. Watch it. Or lose it. Steli Efti: Watch it, manage it or lose it. That’s it from us for this episode, bye  bye. Hiten Shah: You got it. Later. The post 241: How to Save Money as a Startup (Improve Cashflow) appeared first on The Startup Chat with Steli & Hiten.

In today’s episode, Steli and Hiten discuss the KPIs (key performance indicators) a company should be tracking—from startup phase to the more established. Most emerging companies are clueless about which metrics to track while others are trying TOO many metrics measuring the numbers incorrectly. While it is common to make such mistakes, Steli and Hiten wish to SAVE YOU TIME and give you the rundown of where your focus needs to be. Tune-in as Steli and Hiten discuss everything metrics and emphasize the importance of goal-setting when it comes to improving your numbers. Time Stamped Show Notes: 00:03 – Today’s Startup Chat is about what KPIs to track as a startup 00:55 – Most emerging startups are asking which key metrics to track and how to measure success 01:42 – As a startup grows, the struggle is there’s too much data to track or they’re tracking the wrong information 02:46 – Most startups don’t have many performance indicators in the early stages that are trackable 02:57 – For Hiten, there are several lenses that he flips on a business to determine the KPI 03:05 – First, is the stage of the company 03:24 – Second, is the type of business 04:08 – If a new company doesn’t know its initial product market fit and the product is working: 04:17 – The metrics will be around the product 04:25 – The key performance indicator will be on customer satisfaction 04:43 – As a business moves on to a later stage and the business model is more defined; the metrics will be determined by the business model 05:00 – Hiten’s Crazy Egg had only one feature called Heat Map for the last 12 years 05:14 – Recently, they’ve added 3 new features 05:32 – Their metrics have changed because of this 05:50 – The only metric that they’re focused on now is the MRR (monthly recurring revenue) for every new paying customer 06:02 – They want existing customers to become used to the new features 06:41 – Content specific KPIs are what Hiten is after more than anything else 06:51 – Steli shares the most impactful thing for them during their first week with Y Combinator 07:00 – They had a chat with Paul Grant and they described to him how their business was doing 07:14 – The conversation was around the measure of success and how people are getting value from the business 07:35 – Paul asks them if they can promise him a 10% weekly growth until the end of YC 07:58 – Steli was confident and he agreed 08:18 – Steli then asked Paul if he has his credit card with him so he can sign up on their website 08:29 – Paul wanted Steli to focus on one number 08:45 – Steli’s team were able to focus in on that one goal 09:15 – Prioritizing is important 09:50 – Challenge yourself to pick a number for your goal that is the most meaningful and closest to reality 10:58 – Tracking the wrong numbers won’t be helpful for your business 12:35 – Hiten shares the common mistakes he’s seen with tracking KPIs 12:42 – If you pick the wrong metric to improve, you’re going to improve the wrong metric 14:18 – One of the mistakes is not measuring the metric properly 15:32 – Compounding growth is what you’re going after 16:04 – MRR is naturally a compounding metric 16:36 – Third mistake is people having TOO many metrics 17:28 – A lagging indicator tells you where your goals should be 17:35 – A leading indicator helps you understand if you’re moving in the right direction or not 18:02 – You don’t want to focus your KPIs on a leading indicator 18:46 – KPIs are fluid—don’t change them unless you’re learning why you should change it 19:03 – If you keep changing your KPIs, you keep changing your goals which isn’t good 19:08 – Some would also change KPIs because they started wrong which isn’t good as well 19:15 – Others have too many advisors so they constantly change KPIs 20:12 – If you don’t have any measurement system or KPIs, you’re not going anywhere 20:45 – For any questions or feedback, shoot Steli and Hiten an email at hnshah@gmail.com and steli@close.io 20:53 – End of today’s episode 3 Key Points: Have a goal and stick with it so you’re not constantly changing your key metrics. Know which numbers to prioritize and focus on that number that is your achievable goal. Choose a number that is attainable and will improve your company’s growth. Steli Efti: Hey everybody, this is Steli Efti. Hiten Shah: This is Hiten Shah. Steli Efti: In today’s episode we’re going to talk about what KPIs to track as a startup,  how to do it right, and what mistakes to avoid when it comes to the  key performance indicators that you’re tracking, the key metrics, the reports you’re generating as a  startup, the data you’re looking into. You’re one of the most prolific farmers when it  comes to tracking data, right? You’ve had multiple companies that are in the analytics space  itself, and you’re a fairly analytical guy, Hiten, so I wanted to talk to you  about this. Because I see almost every startup if not every startup that’s starting very  early on has to ask themselves the question, what are the numbers that I need  to keep track of? How do I measure success? What I see is that startups  in all phases are struggling with this for one reason or another. In the early  stages they might struggle because they’re either tracking too many things that don’t matter, or  they haven’t found, or they track the wrong one metric. They pick the vanity metric,  they’ll pick the “bad” metric versus a good one to have as their key performance  indicator, the one number that they’re keeping the most track of. Also, as startups grow  and in the later phases, there’s always this struggle of tracking too much data, not  tracking enough, not having the right data internally, not having the right reports, having doubt about the accuracy of some numbers. It seems like there’s always a struggle. It’s very  rare that I meet a startup or a company that has perfect control over their  numbers and is very confident, and calm, and collected, and focused on it. Most startups,  they track a lot but they’re kind of flustered, and they don’t know what to  track and what not to track. I thought that talking about that would make a  lot of sense. We’re probably going to focus most of the attention on the earlier  side of things. You start a new project, and you’ve started a few new companies just recently. How do you decide what are the numbers, what are the KPIs we  are going to be tracking? What’s the framework that you use to arrive at the  right KPIs? Hiten Shah: KPIs. This terminology came from back in the day in some MBA management books and  stuff like that, right? It’s not exactly startup friendly, because honestly startups don’t really have  many performance indicators in the earliest stages that are trackable and you could set goals  on. The first thing I would say is to me, there’s a couple lenses I  put on a business, especially a startup, and that would determine how you think about  KPIs. The first lens is what’s the stage of the company? Is it super early  stage, pre-product or early product, or is it kind of later stage? I’m just going  to bucket everything later stage overall, where it’s post product with some amount of customers  and/or users depending on the type of business. That leads me to my second lens,  which is type of business. Every single type of business has a different set of  KPIs, and by type of business I mean is it a subscription business? Is it  a SaaS subscription business? Is it an ecommerce subscription business? Is it a B2B business?  Are there people who are selling? Is there a sales team? Is it a consumer  product? How does that consumer product make money? On advertising or through one time payments  like the ecommerce shop or even like somebody who just sells ebooks and courses versus  software? All these things, those two lenses are what’s really important to me when determining  the KPIs in the business. For example, if you’re early stage, and you don’t know  if you have product market fit, initial product market fit, and the product is working,  then your metrics and your KPIs are all around, is the product working? For me,  those metrics include, the key performance indicator there is mostly around customer satisfaction and/or a  specific engagement metric such as retention or number of certain actions people are taking every  day, every month, on average, per individual. That’s early stage where I like to focus.  As a business gets later stage and the business model gets defined, that points to another point, which is, is the business model defined? Is it working or not? Because  if it’s defined, then all your metrics go towards the business model, right? For example,  right now I have a business called Crazy Egg, over the last until literally yesterday  we’ve had one feature. It’s a heat map. Today, because yesterday this changed, we actually  have more than one feature, we have three now. Steli Efti: Holy shit. Hiten Shah: Yeah, we 3X’ed the product, and as a result, and this is a business model  that’s been going since 2005. This business has been one feature for 12 years. Steli Efti: Holy shit. Hiten Shah: Yeah, all of a sudden we’re like, “Holy crap!” Our metrics changed now. We were  focused on different metrics before, like churn and things like that. Now we just have  one metric, and that metric that we care about, our key performance indicator today, because  we went from one feature to three and it’s still a business model thing we’re  looking to improve. Because we already have a business model, we charge a subscription fee,  is the average new monthly recurring revenue, MRR, for every customer that comes in that’s  a new first time payment customer. The reason for that is it’s get older users,  older customers used to new features. It’s much easier to introduce new customers that are  just learning about your product and using it for the first time or the first  few times, for the first trial or whatever, to start using all these features. We  decided deliberately not to spend so much effort on a metric that’s based on existing  users, because we know how that’s going to be. We’ve run tests for this, we  know that’s going to be a little bit of a slog. Instead, all of our  metrics are focused on these new people coming in, and is our MRR for these  new people going up on average compared to what it’s been? Steli Efti: That’s all. Hiten Shah: Contact specific KPIs is probably what I’m advocating for more than anything else. Steli Efti: I love it. I remember, and I’ve told this story before in other places, but  I remember one of the most impactful things in our very first week going through  Y Combinator and talking to Paul Graham, PG, was we went on our first office  hour walk with him, and we described to him what our business, the startup that  we were running back then, was doing. The entire conversation was revolving around, “What’s the  measure of success here? How do we know if this is working? What’s the core  thing we want people to be doing that shows us that they’re getting value and  this is working?” Once we arrived at what that core number what, what that core  thing was that people needed to do to show us that it’s really working, he  turned around and he said, “Can you promise me 10% growth off that number every  single week from now until the end of YC?” I think at the point where  he asked, we had like 10. The number was literally 10. I was thinking, “Well,  if I get one more person to do this next quick, that’s 10%, that seems  pretty easy.” I’m like, “Sure, no problem!” He’s like, “All right.” Shake hands, and as I was shaking his hand I’m like, back then it was like the core number  was fully enrolled members. Enrolled members back then meant people that signed up with a  credit card to make donations that was based on a totally different business that we  were running today. As I was shaking his hand, I’m like, “Do you have your credit card with you?” He started laughing and was like, “Yeah, I do.” I cried,  “Let’s enroll you right now to our site.” He was like, “See? That’s why I  wanted you guys to focus on one thing.” Besides just me that day walking through  YC and getting everybody who had a credit card to sign up, what it did  is it allowed us, because we had this laser focus on one number we wanted  to improve on, it allowed us to make every decision based on answering the question,  “Will this help us growing at least 10% next week?” That’s how we prioritized every single decision in the first three-four-five months of the company. It was a beautiful way.  Now you can’t do that forever, and as the company grows, as the business grows  it becomes a little bit more complex than that, but for the early days I  thought that it was a beautiful way to prioritize, because you have so many things  you could do, so many ideas. How do you prioritize? How do you make sure  that you progress in a certain way? Also, and this has gotten old by now,  but back then in 2011, I think we ended up having 25% week over week  growth for the first three months. If you have like 10 or 20% week over  week growth in a metric that truly matters, that’s not total BS, it makes a  beautiful nice up and to the right curve. It creates the right kind of picture,  the right kind of momentum. That was incredibly helpful to us, to really zero in  on one thing and what matters. Also really challenging, and we’ve talked about this before,  challenging yourself to not pick the number that looks the best or that’s the easiest  to improve on, but to really take the number that is the most meaningful number,  the closest to reality on what it means if what you are trying to accomplish,  you’re truly accomplishing. I love this example with Crazy Egg, where it’s like right now  the most important metric is new net MRR by new customers. We’ve tripled the product,  we did it because we’re XYZ goals, and the best way for us to measure  this is working is to focus on this one group of customers, which is new  customers, and see how much MRR they are generating now when we offer them so  much more product than the past customers. I love that. What are some common mistakes  that startups make beyond the maybe not tracking anything? I don’t even know that that  still happens today. I can’t remember a single case where I met a startup where  they just don’t track numbers or don’t track any KPIs. Tracking the wrong ones is  definitely something I see frequently. Just giving me bullshit numbers, and then when I challenge  them on that, they just all fall apart. “Oh, we have over a million users  on Facebook,” or, “Over a million users for our chat bot related mobile app.” Then  I go, “Can you define what a user is? Is it somebody who downloaded your  mobile app, and is logging in every day, and is doing XYZ access? How did you define a user?” Then they tell me, “No, user is somebody that has replied  to a Facebook message or chat bot message that was initiated by our mobile app.”  I’m like, “Okay, so if I get a chat bot thing on Facebook and I reply, and I’ve never downloaded your app, I know nothing about you, I don’t know  what your app is called, I’m counted as a user because it’s some kind of  a growth hack you’re trying to use?” They’re like, “Yeah.” I’m like, “Okay, how many  people have downloaded your mobile app?” “4,000.” I’m like, “All right, mother fuckers, you can’t  be walking around telling me you have a million users with your mobile app company  when you really have just generated a million people to just reply to some chat  bot.” There’s a lot of these BS metrics that people focus on, and I think  that that’s a huge mistake people make. It’s kind of tricking themselves and others into  them having more success than they truly have, but what other mistakes? You’ve seen so  much on the KPI and tracking numbers side. What are the common mistakes you see  again and again on like companies struggle with this or making mistakes with how they  track KPIs? Hiten Shah: Yeah, yeah. Number one, as much as I love Y Combinator, and Paul Graham’s advice  to you, there’s one big word of caution I would have, which you already mentioned.  If you pick the wrong metric to improve, you’re going to improve the wrong metric.  The context in your business was like, look, these are people actively signing up with  a credit card. Steli Efti: Yeah. Hiten Shah: That’s generally a great metric to use regardless of what business you’re in, especially if  your business is at a stage where it’s ready to accept a credit card. Right? Steli Efti: Right. Hiten Shah: I’ll say something kind of interesting which is that methodology, that thinking is exactly why  Facebook came out and said, “We have millions of advertisers using our advertising system.” They  kept touting that metric, and the reason is because they had this attitude that, “Wait,  our business doesn’t make sense unless our ad system is actually getting people to pay  money and use it.” That’s not how Google thought about it, to be honest with  you. They thought about it like, “We want the largest advertisers.” It’s not like Facebook  doesn’t want to largest advertisers. They want to go out there and say to the  market for their optics, even for their business, that “We have millions of people advertising,  it doesn’t matter what size business they are.” I think that you have to pick the right metric. It’s really important, like that’s the number one thing. When you pick  a goal like we’re going to increase 10% every week, make sure that it’s the  right metric or you’re going to have a million chat bot conversations and 4,000 app  downloads, and no one’s going to find your business, or you’re not going to be able to build a business. Number two, I’ll give a few. Number two is like  they don’t measure it properly. When Paul Graham says 10% every week, let me just  do math. If you have 10 right now, and you add 10%, you’re adding one,  right? Steli Efti: Yeah. Hiten Shah: Now you have 11, right? Steli Efti: Yep, yep. Hiten Shah: Every week that number goes up, you have to add 1.1 in order for that  to increase. Your 10% week over week goal isn’t week over week as much as  it is compounded based on where you started. Steli Efti: Yep. Hiten Shah: Which is something people get so wrong, it really infuriates me, because what they think  is, okay, let’s start with a little bit higher numbers. I have 100 sign ups,  I want to grow 10% week over week, I got 10 next week, so now I’m at 110. I made it. It isn’t your goal to get like one more  on top of the 10, even though in the beginning that sounds about right. It’s  actually to get 10% of the total. Steli Efti: Yep. Hiten Shah: Right? It’s the 10% of the total. Not 10% of what you did last week.  I can’t tell you how often this is overlooked and mistaken for the wrong thing,  because compounding growth is what you’re going for. Honestly, I haven’t heard YC really explain  this very well, and yet people tout it, and then they get confused. That’s my  number two, and it’s not just YC, it’s a growth rate you’re going for. An  increasing growth rate, just like your interest compounds every year, every month when you have  money in the bank, and there’s an interest rate. That’s what you’re going for. That’s  such an important thing that I’ve seen so many people miss, and the reason they  miss it is if you have a subscription SaaS business, monthly recurring revenue is naturally  a compounding metric. It’s hacked, like you just focus on that. That makes it really  easy to calculate, and everybody knows what that means if they’re in a subscription business.  If they don’t know, within a few minutes of launching their subscription business, they realize  what that means, because the money compounds. I got 10 bucks, as long as I  don’t lose those 10 bucks from that user, I get to keep having that every  month. That’s compounding, that’s what I’m talking about. That’s number two. I think number three  is like, I’m going to come back to this, and come back to something from  earlier. I just see people having too many metrics. They have tons of KPIs, and  I’m always saying I’m coming back to it because you already mentioned this, but I  think it’s underscored in your story. Even at Crazy Egg, there’s a million metrics we  could focus on. There’s so many metrics even that are sort of indicators of our  average new MRR, such as people using these features during their trial, which will lead  to an increase to average new MRR for us, obviously. We don’t count those as  the main metric we’re trying to improve, and there’s a framework you can use called  leading indicators and lagging indicators. A leading indicator is one that tells you you’re going  in the right direction. I’m sorry, a lagging indicator is one that tells you on  a high level that you’re actually, that’s where your goal should be. Usually it’s like  revenue or churn or something like that. A leading indicator is an indicator, a metric,  a KPI that helps you understand whether you’re moving in the right direction or not.  For us, if people are using more than one feature in our product, that’s a  leading indicator to them paying more money than our existing users, as an example. There’s  this idea of leading and lagging indicators that gets really important as you get more  advanced around understanding KPIs, because you don’t want to focus your main KPI on a  leading indicator. You actually want to focus it, in an ideal world, on a lagging indicator initially. Then all these leading indicators are what you discover, and then you might  flip the switch and say, “Oh, if we can get everyone using three features, average  new MRR goes up, let’s just change our KPI that we focus on to getting  feature adoption, and getting every single user.” Right now, let’s say on average, out of our whole user base, people are using 1.5 features. We want to increase that to  three in the first seven days of using our product. That’s the kind of thinking  you can use once you start learning more. I think, and this probably goes to  my last point about this, which is these things are fluid, but don’t change them  unless you’re actually learning why you need to change them and learning what the better  KPI should be. It’s not like you should change them often. If I see someone  changing their KPI every two-three weeks, that’s bad. It’s bad for two reasons. One, they  keep changing it, they’re changing their goal, which is bad in a lot of cases,  or two, they didn’t start in the right way by thinking of context when they  determined it early, or number three actually, they’re listening to too many advisors. That’s common,  unfortunately. Come talk to Steli or I, because we’re definitely better at cutting through crap  like that, but in general you don’t want to change them, but if you learn  something new about your business, you’d be stupid to be so rigid that you’re not  going to change it. It’s likely even in our business, as we move and learn  about this one metric, and what the leading indicators are that are going to increase  our average new MRR, we might change it. We are not likely to because we’ve  done a bunch of work to determine this one. That being said, I could imagine  three or four months from now, once we get to a good place there or  have a new learning, we might change it because that leading indicator is actually the  key thing for us that we learn about. That’s kind of four or five tips  that I have around metrics. These are really core. I did run an analytics company  for a while, and still probably run one depending on how you look at it.  This is not much more complicated than that, that’s why the KPI topic’s really interesting  to me, because if you don’t know where you want to go or you don’t  have a metric, you don’t have some measurement system and are focused on one metric  ideally, then you’re not going to get anywhere. This is by team if you have  a larger company, but usually a company has one metric they focus on, and the  teams are focused on metrics that relate to that one. Steli Efti: Sweet. I think this was both powerful and beautifully put. All right, there’s not much  more than that. If you need more help or feedback, you can always reach out  to us, HNShah@gmail.com, Steli@Close.io. This is it for this set, so we’ll hear you very  soon. Hiten Shah: Yeah, bring us the math. See you. Steli Efti: Bye bye. The post 240: What KPIs to Track as a Startup appeared first on The Startup Chat with Steli & Hiten.