In today’s episode of The Startup Chat, Steli and Hiten talk about product/market fit of popular products. Product/Market Fit is a common concept that is used a lot in the startup world. According to Marc Andreessen “Product/market fit means being in a good market with a product that can satisfy that market.” Understanding this concept is hugely important because when your users understand and use your product enough to recognize it’s value, it is a huge win for your startup. In this week’s episode, Steli and Hiten talk about what product/market fit means, what Hiten’s new show is all about, where to check out the new show and much more.  Time Stamped Show Notes: 00:00 About today’s topic. 00:35 Why this topic was chosen. 02:00 What Hiten’s new show is all about. 03:03 One thing that gets Hiten really excited about the new show. 04:57 Steli’s reaction to the new show. 05:05 Where to check out the new show. 06:11 One interesting thing about the research that was done for the show. 07:29 The second interesting thing about the research that was done for the show. 08:26 The importance of differentiating your product. 3 Key Points: If someone is using a document app for less than a year, that company doesn’t have product/market fit.You need to figure out what you need to do to get product/market fit.People don’t get invested until they’re like a year into the product. [0:00:01] Steli Efti: Hey everybody. This is Steli Efti. [0:00:03] Hiten Shah: And this is Hiten Shah. Today on the Startup Chat we’re going to talk about product market fit. And the reason we’re going to talk about it is because I’m doing a video show. So the first time I’m on video on a show. There’s like eight episodes of seeing me talk with my friend Patrick about basically product market fit of popular products. What we did is we took this sort of now very popular question, and a whole bunch of other questions, and asked people these questions about certain popular products, including Netflix and Evernote, and a bunch of others. The website is at producttradeoffs.com and you’ll be able to sign up via email and you’ll get every episode. Now that I got that out of the way, Steli, it’s really fascinating. This is something I’ve been wanting to do for a very long time, since I had first learned about the magic question that Sean Ellis, who is one of the people who coined the term growth hacker, he is the one and popularized the whole idea of growth hacking and all of that. He has this question and he uses this question to help companies like Dropbox and Xobni and Eventbrite and a bunch of other companies when he was sort of interim VP of marketing at those companies. And the question here is how disappointed would you be if this product no longer existed? And it’s a multiple choice question. It’s very disappointed, somewhat disappointed, not disappointed at all, are the three options. He’d asked this question of the customers that use a product. And his idea is that if a company has 40% or greater respondents saying they’d be very disappointed if the product no longer existing, the company essentially has product market fit. It’s just something he came up with, and this was like back in 2009 that he actually shared the methodology, and this was after he had helped some of those companies I mentioned. So we just decided to go survey thousands of people for each of the companies. Hundreds in some cases, but usually thousands of people for each of the companies. And did a whole video show, I think it’s about 20 minutes roughly each, talking about what we learned. So we learned about why people love and hate Evernote. We learned about why people love and hate Netflix. Not that many people hate Netflix. And the value props around it. We also asked Net Promoter Score for these products. I’m not gonna share any of the stats or any of that stuff, but like the one thing that gets me really excited and is that now there will be a whole bunch of content about the value that people can get from asking this question and learning from their customer base. So it isn’t these popular products, in my opinion. Obviously, it is, that’s what we talk about. It’s really about shedding light to product people, founders, CEOs, marketers, whoever cares to understand their own product better, how to actually do it, what you can learn from this process. [0:03:18] Steli Efti: Awesome. Number one, let’s address the elephant in the room. [0:03:21] Hiten Shah: What’s the elephant? [0:03:22] Steli Efti: I am somewhat a jealous person, especially over people that are important to me. So when this show was announced, there was a lot of Twitter talk, a lot of people making comments one way or another. Now Hiten has an even more attractive cohost to do episodes with. Then there’s video. You guys are sitting together and I’m thinking about the old good times when we were sitting in a balcony in Palo Alto and drinking coffee together and recording these episodes. No. [0:03:56] Hiten Shah: Wait, wait, hold on. [0:04:00] Steli Efti: What? [0:04:00] Hiten Shah: Hey. Hey, wait. Hold on. Nobody can replace you, my friend. This is 400 episodes. I only did eight with that guy. Okay? [0:04:07] Steli Efti: I love that. You’re so smart and cute that you use like that guy for Patrick. I appreciate that. No. I mean if there’s one person that I’ll share my amazing podcast cohost with, for even a short period of time, that’s definitely Patrick. You guys have been friends for a long time and he’s an amazing dude. So I was happy about it. I thought I’ll throw some smack into it. [0:04:34] Hiten Shah: I like it. [0:04:35] Steli Efti: There were some Twitter debates about you having another cohost, but I thought it was funny. [0:04:42] Hiten Shah: Too good. [0:04:42] Steli Efti: Now that we’ve got all my relationship issues out of the way. I love everything about the format, kind of having a season, the episodes that you guys have done, the topic is super compelling. So everybody make sure to go to producttradeoffs.com, dope domain, put in your email, you get access to these episodes. Super entertaining, fun, and educational. Now, because our audience is really important and a lot of our audience is going to be and probably already has already watched trade offs and product trade offs, what are maybe just like two nuggets that we can share with people to listen here that came up in the discussion ,as you guys were looking through the super popular products, that were either surprising or counterintuitive or compelling in one way or another? Something that stands even out to you as a product nerd and absolute powerhouse when it comes to knowing about all these products and how people feel about them and how they use them. [0:05:43] Hiten Shah: Yeah. I’m going to share, because we’re on our podcast. So I’m going to share some stuff that I’m not going share any other place. [0:05:50] Steli Efti: Boom. [0:05:50] Hiten Shah: There’s two I found interesting. Some of the apps that we did are document apps. So we did G Suite and Microsoft, and we did Evernote as well. So we did a few of these, because they’re very popular. One of the things we learned is that these document apps have this effect where if someone’s using the document apps for less than a year, they don’t have product market fit. The product market fit score isn’t 40% or higher. When people start using it, basically year one plus the products have product market fit. [0:06:33] Steli Efti: Interesting. [0:06:34] Hiten Shah: If you’re Notion, Coda, Air Table, and any of the other products in the space of a document app, you need to know that. You need to know that you might not have fit until a year into people’s usage of your product. Or you might need to figure out what you can do to have fit faster. There’s a lot of theories around that, but the main theory that I would have is that people don’t get invested until they’re a year end to the product, because not enough of their stuff is in there. [0:07:05] Steli Efti: That is crazy. It makes so much sense, but it is counterintuitive. Yeah. You would never think that you would have to wait for somebody to use a product for a whole year to be like a real committed user and customer. [0:07:19] Hiten Shah: And then another one that was really big in that same space is when we looked at G Suite, aka Google Apps, aka they’re going to come up with a new name at some point soon. Right? But G Suite, when we looked at it, the reason people would be very disappointed if it no longer existed was because of Gmail. And that’s really interesting. [0:07:50] Steli Efti: Interesting. [0:07:50] Hiten Shah: Again, another obvious one, somewhat counterintuitive, but obvious. What that makes me think is, look, G Suite is a lot more than a set of document tools. It’s the email that really makes it really sticky. [0:08:06] Steli Efti: Yeah. [0:08:07] Hiten Shah: Nobody said that about Microsoft. I don’t think they like Microsoft’s email. But Microsoft is also quite a bit older, the Office Suite and things like that. [0:08:17] Steli Efti: Yeah. [0:08:17] Hiten Shah: Another thing is when you do some of these products that are really popular, Microsoft has a lot of different products and stuff like that, and so does Google. At least with Google it’s called G Suite, so it’s a little bit more obvious. That also gave me an appreciation for the fact that Google went from calling it Google Apps to calling it G Suite, because the differentiation of G Suite versus what we know Google as is pretty powerful. I know what G Suite is and I know it’s not google.com. When it was Google Apps, actually it was a lot more confusing, because you still have Google in the name. It’s a whole completely different category of product. It’s not a search product. Right? It’s not something where I type in a box and I search. It’s actually a whole suite of tools for my personal life or my business. [0:09:03] Steli Efti: Love it. All right. [0:09:04] Hiten Shah: Just a couple nuggets for you. [0:09:05] Steli Efti: There you go. These are super compelling, interesting nuggets. There’s a shit ton more of those. I’ve watched, I think, four episodes, so I still have to work through the entire season of the show. But we’ll wrap it up here. Everybody that’s listening, if you want more, if your like, “Well, I want to know more about product market fit. I want to learn more about how to become a great product thinker and product mind, how to do this better, how to survey our users and customers and understand them better,” you know where to go, people. Producttradeoffs.com to sign up for the brand new season. The one and only Hiten Shah and Patrick Campbell, you know, that other guy. Enjoy the show. And enjoy more Hiten in your life, for sure. That’s it for us for this episode. We’ll wrap it up and we’ll hear you very soon. [0:09:53] Hiten Shah: See you. [0:09:55] The post 440: Tradeoffs – A New Show by Hiten Shah & Patrick Campbell appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about the brand new remote work report. Working remotely is on the rise these days, and while being able to work from outside of a company’s office has been possible for a while, working remotely is only now becoming mainstream. In today’s episode, Steli and Hiten talk about the remote work report that was conducted by the FYI team, key lessons that were learned from creating the report, some interesting statistics about remote working and much more.  Time Stamped Show Notes: 00:00 About today’s topic. 00:32 Why this topic was chosen. 01:38 Hiten dives into what the report is. 02:25 How to download the report. 03:46 One of the key lessons learned from creating the report. 03:19 Some interesting stats about remote working. 04:26 Some challenges of remote working. 05:22 How remote working helps you learn to deal with yourself. 06:55 Why discipline is super important when working remotely. 09:06 How a lack of discipline can be detrimental to remote workers and employees. 3 Key Points: Everyone loves remote work.91% of remote workers said working remotely is a good fit for them.We’ve not really figured out how to deal with ourselves. [0:00:01] Steli Efti: Hey everybody. This is Steli Efti [0:00:03] Hiten Shah: This is Hiten Shah. [0:00:06] Steli Efti: Today on The Startup Chat we’re going to talk about the brand new remote work report, brought to you by no other than the OG Hiten Shah, and FYI. You guys, I’ve been following this for a good amount of time Hiten. You’ve been tweeting like a madman asking the interwebs for the cutest dog pictures when they work remotely, their work setup, all kinds of things. Really almost daily there’s been some compelling question that you have had for the workers of companies that work remotely, for the remote work community. I’ve been really impressed with the level of engagement, the level of feedback answers. There’s a lot of stuff going on. I’m sure that you’ve published polls, and surveys, and all kinds of stuff. All of this knowledge has now accumulated into one pretty badass report. Why don’t you tell us a little bit about the report, and then we’ll highlight a few tidbits for people. What can people learn about remote work in 2019, and where can they get the report to learn even more. [0:01:23] Hiten Shah: Yeah. Yes, I did that, and FYI I did that, meaning all those tweets. It was so much fun. I don’t think I’ve ever had more fun creating content in my life because we asked about people’s remote work setups. A lot of people shared their photos of their setups. We asked people about cute pet photos, so we got a hundred plus cute pet photos to put into our report. We also did a survey, and it ended up being about almost 500 people that filled it out. We learned a lot about remote work. We also partnered with a company called Miro, M-I-R-O.com. They do a collaborative whiteboard. That was fun. Before I continue, you can get the report. There’s a Bitly link. It’s bit.ly/remotereport. That easy, and you can check it out. It’s over 30,000 pixels in terms of heighth, so it’s really long. One of the most fantastic things Steli, was that we actually got over 150 tips about remote work, so it’s like a whole directory of tips from people who work remotely. They’re in 13 different categories. One of the key things we learned is that, and this ended up being the title of the report, which is that everyone loves remote work. [0:02:50] Steli Efti: Everyone loves remote work. [0:02:52] Hiten Shah: Yeah, that’s it. That’s it. I mean that’s like the big thing, and obviously there’s challenges to it. It was interesting to learn that everyone loves remote work, yet there are challenges to it. It’s interesting. Right? What we learned, and I’ll get some stats, but basically it’s like 91% of remote workers said working remotely is a good fit for them. Ninety-five percent of remote workers would recommend working remotely to a friend. They said because they get to be close to their families, near their pets, they get to pick up their kids, and many other reasons that are very personal like that. It’s crazy. It’s like this remote work thing, also, even the name “remote work” is kind of weird. I think there’s distributed work, right, that people are doing. Some demographics from our survey are that basically 60% of the people we surveyed said they work remotely 100% of the time, and 70%, this was surprising to me, 70% of remote workers have worked remotely for three or more years. [0:04:04] Steli Efti: Wow. [0:04:06] Hiten Shah: So it’s not a new thing. We’re just paying attention to it now, and it’s got a lot more attention judging by even our tweets and the popularity of some of them. People love doing it. The big one here in my mind that’s worth talking about is that there’s some actual challenges. We learned about what those challenges are, and I’m going to rattle them off. But basically it’s communication, socializing, loneliness and boundaries. Other reports have mentioned these challenges as well. We go into them and explain what we heard and a bunch of quotes from people about them. We have this style of asking a lot of open-ended questions, not just multiple choice, so we get a lot of rich information about what people are actually saying. For all the promise of it, and the fact that people love it, the number one thing here is that we have not really figured out how to deal with ourselves. That’s my conclusion. We haven’t figured out how to deal with ourselves. It’s almost like remote work forces you to know yourself better because you go to an office, you have a lot of structure. Right? [0:05:16] Steli Efti: Yup. [0:05:17] Hiten Shah: When to get there. What meetings to have. When to eat. What to eat a lot of the time. You have ability to go to coffee with coworkers. You have the ability to have lunch with coworkers, or even dinner sometime. You have almost this whole social construct that gets built out for you. Well, if you’re working remotely, there’s probably nobody else in your area that works at the same company, and you don’t get to hang out with them. There is no casual things going on the way you do in an office. Then ultimately, basically if you’re new to it, you step back, and you’re like, “Oh. I have to figure out my own structure, and I’ve never really had to do that before,” because even in school you never had to do that. Right? [0:06:01] Steli Efti: Yeah, that’s absolutely right. This is something that took us a while to understand. To date, it kind of reconfirms our beliefs about remote work. But remember in the beginning when we would interview people that wanted to work for Close, which is a fully distributed team, a lot of times when I asked people why they’re interested in remote work, they would tell me, “Oh. I love the idea of freedom. The freedom to travel, the freedom to move, the freedom to work whenever and wherever I want.” To me, at the very beginning it was like, “Yeah, freedom. That sounds like a good reason to want this.” Today when somebody says “freedom”, I go, “Whoa, whoa, whoa. Slow down. Let’s talk about discipline. How much of an adult,” right? I’m like, “How much of an adult are you? What is your house or apartment looking like? What are your habits? What are your structures? When was the last time you wanted to change something about your life, and how did you do it, and how did you accomplish it?” Because what we realized is that discipline really equals freedom, to steal Jocko Willink’s quote, and that to do remote my conclusion is that to be successful while working remotely in a company you have to have a high level of self-discipline. The discipline to design your work life yourself in a way that is successful, which is the tough thing. Just like you said, like offices for all their downsides, the upside is that it’s a work environment that is designed for you. All you have to do is show up there. Right? Everything is reminding you of work. You know where to go, where to sit, what machine to use, you know when the breaks are, you know who your coworkers … A lot of things just happen because somebody else, the company, has rented an office, furnished it, and created a work culture within that office that you just have to just walk into. Versus when you work remotely, nobody’s doing any of this for you. You have to do this for you. That takes work, and that takes discipline. It’s not just like, “Oh, I could do anything I want.” Anything you want, if you like discipline, is a recipe for disaster, and an ocean to drown in, right, because you have so many options. When you want to work. If you’re going to wear your pajamas, or work from your bed, or on the floor, or at a desk, or in a coffee shop. Many, many options are only good if you have the discipline to make good choices, right, and to follow through on those choices. I think that that’s still a really big challenge for a lot of people. [0:08:41] Hiten Shah: Yeah. I love how you think about it. I love the idea of discipline, and reframing it when you interview people to be about discipline, because what I learned is that people do want their freedom. They really highly value the freedom of remote work. But if they don’t have the discipline, they’re screwed. You’re screwed too as a person who’s hiring remote workers, because what ends up happening is you have a whole bunch of people who are basically they’re going to have emotional problems doing remote work if they don’t figure out their own stuff. This isn’t about company retreats, and things like that. I know you folks love to do them, and we don’t actually. That’s probably a whole nother conversation, but if you don’t have discipline, you cannot do remote work successfully is what it really boils down to. [0:09:33] Steli Efti: Yes. All right. There’s a ton more tips, insights, numbers, trends. If you work remotely, or if you’re interested in remote work, Hiten, hit them up again with the Bitly link where they can get it and download it. [0:09:48] Hiten Shah: Yeah, I mean it’s really ridiculous. We put a lot of effort into it, and it is a very informative report, especially with all the tips. You go to bit.ly, B-I-T.L-Y/remotework. Sorry. That’s wrong. It’s bit.ly/remotereport. It’s R-E-M-O-T-E-R-E-P-O-R-T. It’s biy.ly/remotereport. You’ll be able to check out the whole report. You’ll click in, and you’ll be able to get to the tip section. There’s tons of tips to browse through. Again, had a lot of fun writing it up, and learned a lot. In fact, my co-founder, Marie, was taking point on a lot of content, and reading the tips has actually made her even more conscious about certain habits and certain things that she wanted to change about her own remote work, and how she’s doing remote work. It was pretty awesome to see that as well because change is hard but if we can influence people to have better remote work habits and learn from this, that’s what we want. [crosstalk]. [0:10:51] Steli Efti: That’s amazing. Amazing. Highly recommend you go and get that report, and download that today, right now. Quick inside baseball. Some of these answers definitely also Close teammates that have responded to your tweet. I know that we had a few times somebody on the team sharing a Twitter link, and I know that a bunch of people definitely uploaded their dog pictures, and their office setup to you that are Close team members. [0:11:23] Hiten Shah: Awesome. [0:11:23] Steli Efti: So you might see a pic from one of us, and the stats include the Close family. Make sure to get the report. This is it for us for this episode. We’ll see you very soon. [0:11:35] Hiten Shah: See you. [0:11:37] The post 439: The Remote Work Report 2019 appeared first on The Startup Chat with Steli & Hiten.

Today on The Startup Chat, Steli and Hiten talk about how to hire service providers for your startup. Choosing the right service provider to work with for your startup can be quite challenging, especially if you haven’t worked with one in the past. You may be lucky and get it right the first time, but it’s highly likely that you’ll go through a couple before finding the perfect match.  In today’s episode of the show, what it’s like working with service providers, tips to help you choose the right service provider, why you should do background checks when choosing a service provider and much more. Time Stamped Show Notes: 00:00 About today’s topic 00:38 Why this topic was chosen. 03:30 Steli previous experience with working with service providers. 05:12 How you never know what you’re going to get with a service provider. 07:08 Why a service provider should always know more about their specialty than you do. 07:35 Tips to help you choose the right service provider. 08:02 A case when hiring a service provider went bad. 08:26 How you can negotiate your bill with a service provider. 09:38 Why you should do background checks when choosing a service provider. 3 Key Points: Most firms will do the minimum required work for your startup.You never know what you’re going to get with a service provider.A service provider should always know more about their specialty than you do. [0:00:01] Steli Efti: Hello everybody, this is Steli Efti. [0:00:03] Hiten Shah: And this is Hiten Shah. [0:00:04] Steli Efti: And today on the Startup Chat we’re going to talk about hiring service providers for startups. And when Hiten Shah proposed this as a subject to me, Steli Efti, I was like, get out of my way, Hiten, I need to introduce this topic. [0:00:19] Hiten Shah: That’s right. [0:00:20] Steli Efti: Right. Because it’s not often that I actually get angry or pissed at things, but this is one of those topics. I think just a couple of days ago we had. I was on a sailing boat with a bunch of entrepreneurs through the beautiful Spanish Mediterranean Sea, and this topic came up. [0:00:36] Hiten Shah: Wow. [0:00:36] Steli Efti: The topic of the value of a great lawyer, accountant, bookkeeper, to you, as an entrepreneur. And it was a big disparity between kind of super early founders, that are doing their first thing ever and started a year ago, and founders that sold their, I don’t know, sixth company and have been doing this for 20 years. There was a big kind of range of experience on the sailing trip. And so, it was so fun to see kind of the differences in responses. When you first start out, I don’t know if it was different for you, Hiten, because you’re way, way ahead of your time, in terms of wisdom and good looks. But for me, when I started my first business, and when I think about the kind of my friends that were starting their businesses, I always thought, oh, I’m going to be a business owner, and then, I’m going to go and find a lawyer. And if the lawyer works in a large law firm, reputable, I’m going to pay that person a lot of money, and then that person’s going to be kind of my genius side kick ninja of the law, and be constantly supplying me with tips and tricks and hacks and the best way to optimize the law to put myself and my business in the best position possible. And if I go to an accountant or bookkeeper, that person is going to give me all these pieces of advice on how to manage my cashflow and money and how to create expenses or add expenses and how to optimize to pay the least amount of taxes legally required for my business, to use that money in ways that fuel growth, rather. I thought that these people would be incredibly smart, incredibly experienced, but on top of all of that, really working hard, constantly creatively thinking of solutions and opportunities for me and my business. And the reality couldn’t be further from that truth. The reality is, in my mind and from my experience, nothing like that. So I’ll share what my reality has been, and then I’m dying to share your reality, but in my experience and the experienced that I’ve witnessed with other founders and companies, most service firms, and let’s just take three common examples, law firms, accountants, tax bookkeepers, that kind of stuff. Most firms, they will do the minimum required work, the minimum required thinking, and they will do only the safest, most boiler plate, most typical average things, to provide your service with as little risk for them, as little time for them, at least time from the kind of the most experienced, most creative people, because a lot of services firms, they’re are built like these pyramid schemes, where the senior partners, they bring in the clients, but they really don’t do any of the work, and they push all the work down to the super junior new employees that do a lot of boiler plate work to make the kind of margin and the business model work for these types of businesses. But you almost never get somebody that is creative. You almost never get like proactivity, where somebody pings you and tells you here’s opportunities to save money or to make more money or things to think ahead of. It’s always you have to ping them and go, what about this, or what about that? They always go, well, let me look into it. And then they come back to you with the most boilerplate thing you could have figured out on your own. And when you find the one in a million super creative, super proactive person in this space, these people are probably very hard to get to. But if you find somebody like that, you want to hold onto them for dear life. But they are more rare than a unicorn, like they almost never exist. And it’s something that inexperienced founders don’t know, so they rely way too much on these service providers. They’re too naive when it comes to these service providers, and they think, well, now that I have an accountant, I can just lean back and never worry about this, because I’m always fully optimized and I always in very good hands. And that may be true, but more often than not, it’s actually not the truth. Slash, end of rant. [0:04:51] Hiten Shah: Love the rant. I think it’s a very legit, relevant rant. Here’s the thing, you never know what you’re going to get with a service provider. And usually the best way to know is if someone you know recommends them. And that’s been my experience with service providers, in general. That being said, the folks I work with on legal, I’ve been working with them for about, I want to say 13 years, or some number like that, some really high amount of years. A dozen years. And I won’t work with anyone else on legal. We have other firms we work with every now and then, but the core firm we work with is one, and we’ve built up a trust over that amount of time. We’ve recommended lots of people to them as well because of that. And it’s something where I actually called, I think, 10 or 20 law firms, and I met this person at a law firm, who actually took my call. So a lot of these law firms wouldn’t take my call, because I was down in LA, and they didn’t really care for me I guess. And this lady took my call and she is no longer a lawyer. Or a practicing lawyer. She’s still a lawyer. And because of her, I went over… I mean, it was like a big law firm she worked at, worked with them, then she moved to a smaller law firm, stuck with them, and stuck with her and then she left the firm and I stayed with the firm, because I kind of built a relationship and that’s the firm I’ve been with. And they’ve changed names a couple times and things like that. But I stayed with them. And that is rare, like you said, and I can’t tell you, hey, this is my process for finding great service providers of any kind, legal, accounting, bookkeeping, taxes, any of those kinds of service providers where there’s an information asymmetry as they call it, which basically means they’re always going to know more or they should always know more about their specialty than you do. And usually anyone on your team, until you’re at a scale where you hire those people internally, for example, or you want to hire them internally. So this service provider thing is really interesting because we usually are going to go buy recommendations, and it’s like one of those where I wish I could tell you, hey one process is go talk to 10 people, which I think you should do anyway. Go talk to at least three to five if not 10 people, when you’re looking to hire service providers, and go figure out who you want to use, and who you like, and whether their answers to your questions are good, in terms of your business, their pricing is your right pricing that you think. But always go for recommendations. That’s what people say. That’s like what usually leads to success when it comes to service providers, because you know if someone else is having good experience, it’s more likely that you will as well. So that’s really important. I actually had a recent story on legal, where it went bad. This person thought that the person that they were using was great until they saw the bill. Because a lot of startups get deferred payment for legal bills. And then they saw the bill, and they’re calling me, this is a company I’ve invested in, they’re like, hey, what do I do about this? I’m like, you don’t have much of a choice, because you agreed to this. You can definitely negotiate it. That’s the other thing about some of these professionals, like legal, where you can negotiate it, you really can. And so, he negotiated, but he’s probably not going to use this firm again. And I knew it, because some of the paperwork they were sending to me when we were raising the money, I’m like, hey, that’s extra paperwork. That doesn’t need to be sent. I haven’t signed one of these papers, this kind of paper, in years, and I already knew that was a red flag in my mind. It wasn’t a yellow flag. It was a red flag. I was like, these folks aren’t professional when it comes to… They don’t know what they’re doing when they’re helping you raise money. This is an easy thing to do. This is boilerplate paperwork. They’re making it more complicated. Right? [0:08:55] Steli Efti: Yeah. [0:08:56] Hiten Shah: And the founder has always had excuses of why. Oh, our raise is a little complicated, and this. And I’m like, yeah, yeah, dude, just listen, this is not right. Right? And still, he got a referral. And he just went with the first referral he got. So, that’s a couple examples from my experience and even recently, this literally happened weeks ago, a couple of weeks ago. And I can’t believe it’s still happening. It’s 2019. [0:09:23] Steli Efti: Yeah. Ask for referrals. Go and get background checks or backdoor referrals. Try to find any kind of company that has worked with this service provider, even if they don’t put you in touch with them directly, and just ping them and say, hey, I’ve seen, or I heard that you work with X, Y, Z. We’re considering working with that person. I actually just did this yesterday, funny enough. [0:09:44] Hiten Shah: Nice. [0:09:44] Steli Efti: I just went on somebody, some consultant, I went on his website, I saw a logo I recognized, I know the fonder. So I picked the phone up. I’m like, hey, I just saw on the site that you work with this person. Any experience, good, bad or ugly? Can you tell me anything about it? And I’ve had this once before where somebody didn’t even answer me, and then I just followed up and said, hey, you’re probably busy. I’ll make it easy for you. It’s either choice one, two or three, just respond with a number. And one was like, this person’s so great. I would work with them all the time. Second one was like, it was fine for some people this is going to be great. For some it won’t. And number three’s I’d rather not say. And then the person replied with three, and that was it. That’s all I needed to hear. [0:10:24] Hiten Shah: That’s all it takes. [0:10:25] Steli Efti: That’s all I needed to hear. So make sure that you do your homework before you start engaging with the service provider. And in some cases, like when it comes to a service provider in the kind of accounting and bookkeeping space, we actually have a recommendation for you. We can give you a direct recommendation, and this is the recommendation to our first sponsor ever. We’ve been doing this podcast for over four years. We’ve had hundreds of companies reach out and want to partner with us, want to sponsor the Startup Chat. And we have said no hundreds and hundreds of times, four and a half years into this podcast. This is the first company we’ve said yes to. So just to give you a sense of how much we stand behind this company. The company’s called Pilot. So if you go to pilot.com/startup chat, you can get 20% off of Pilot Core for six months. And pilot does bookkeeping in the background, so you can focus 100% on making your business succeed, making your startup grow. You don’t have to worry about any of that. So if you don’t have a good bookkeeper that’s already recommended to you that you’ve already established a relationship with, Hiten and I have a bookkeeping company that we want to refer you to, that we want to recommend you to, and we want to, on top of it, give you a good deal so you save some money on top of that. 20% off if you go to pilot.com/startupchat. Make sure to check it out for sure. [0:11:50] Hiten Shah: Before we go, I want to say why this matters. Even all these tips about service providers. Why it matters is they’ve taken care of this problem for you. It’s their job, not as an individual bookkeeping service or a bookkeeper. It’s their job as a organization, as a business, as a company to specialize in providing the best bookkeeping services for you, and make it so you don’t even have to worry about who’s doing the bookkeeping. Pilot is doing the bookkeeping. And their job is to find the best bookkeepers for you. They don’t outsource the work. They do use a computer, so automation, to do the kinds of work computers should do on that stuff. And then they use actual bookkeepers to verify, look and make the changes that need to happen that a human needs to do. And they do it all for you. And so that’s basically your bookkeeping and accounting. It’s a service. And they also even have the tax add on that you can get as well, to help with your taxes. So you’re going to one place and taking care of it. And the final thing I’ll say is, my favorite think about it is, they just work with your existing QuickBooks online account and they’re doing all the work in there and getting it done for you. So despite all our feedback, if you want bookkeeping and accounting solved for you, go to pilot.com/startupchat and you’re going to get that solved for you, plus it’s backed by our reputation. So if you have any issues with them, or even any praise, please let us know. [0:13:18] Steli Efti: There you go, steli@close.com, hnshah@gmail.com, pilot.com/startupchat. That’s it from us for this episode. We will hear you very soon. [0:13:28] Hiten Shah: See you. [0:13:28] The post 438: Hiring Service Providers appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about why hacks are not enough for growth anymore. Growth hacking is a term that is used a lot in the startup world, but what does it really mean and what should you really care about when it comes to measuring it? In this episode, Steli and Hiten talk about what growth hacking means, how the term growth hacking came about, things to avoid when it comes to growth hacking and much more. Time Stamped Show Notes: 00:00 About the topic of today’s episode 01:56 Why this topic was chosen. 02:24 How the term growth hacking came about. 03:41 Things to avoid when it comes to growth hacking. 04:00 The biggest mistake I think people make. 04:47 The best subject line hack. 06:01 How lying is a very bad idea when creating subject lines. 06:44 Why the open rate is not the end goal. 08:39 Hiten’s number one growth hack. 08:58 The real question to be asking about growth hacking. 3 Key Points: The biggest mistake I think people make is not looking at the entire customer journey and the relationship you’re creating with your customer.When you lie to me to get you to do something, I don’t want more of you in my life. The open rate is not the end goal. [0:00:00] Speaker 1: Come on in, from the startup chat, Steli Efti and Hiten Shah. [0:00:06] Hiten Shah: Here we like talking about more than just sales and marketing. [0:00:08] Steli Efti: We just want to bullshit and chat about business and life. And hopefully while we’re doing that we’ll provide a lot of value to people. [0:00:13] Hiten Shah: The world’s best business podcast. [0:00:14] Steli Efti: Oh shit, we got it. [0:00:17] Hiten Shah: For people trying to get shit done. [0:00:19] Steli Efti: Done, yeah. We don’t want to give you feedback that’s bullshit. [0:00:22] Hiten Shah: We want you to do your best. Hi, I’m Hiten Shah. [0:00:25] Steli Efti: And I’m Steli Efti. [0:00:43] Hiten Shah: What are we doing here? [0:00:44] Steli Efti: I don’t know. Apparently, we’re talking about why hacks are not enough for growth anymore. [0:00:49] Hiten Shah: That wasn’t the topic we suggested. [0:00:51] Steli Efti: What was the original topic? [0:00:54] Hiten Shah: Why growth hacks don’t work anymore. [0:00:57] Steli Efti: Don’t exist anymore. [0:00:58] Hiten Shah: Oh yeah, don’t exist, right. [0:00:59] Steli Efti: Yeah. [0:00:59] Hiten Shah: Yeah. It was a little aggressive. First of all, how many of you listen to our podcast already? [0:01:04] Steli Efti: Raise your hand. [0:01:06] Audience: Woo. [0:01:07] Steli Efti: Woo. We appreciate you, wooing person. You are awesome, great taste in podcast. Who here has no fucking idea who we are? Just raise your hand real high. [0:01:15] Audience: Woo. [0:01:15] Steli Efti: Ouch. [0:01:17] Hiten Shah: Perfect. [0:01:18] Steli Efti: Ouch. [0:01:18] Hiten Shah: You can Google us. Our names are so original, you can just Google us. So Google us, but pay attention to us right now because we’re going to say all kinds of dumb shit. I can cuss, right? [0:01:29] Steli Efti: Yes, [inaudible 00:01:30]. [0:01:30] Hiten Shah: Kind of, sort of? [0:01:31] Steli Efti: It’s not my conference, but you can cuss. [0:01:33] Hiten Shah: Okay, thanks. I need people’s approval. [crosstalk 00:01:35]. [0:01:35] Steli Efti: There you go. You got my approval. [0:01:37] Hiten Shah: All right, so where do you want to start with this thing? [0:01:40] Steli Efti: Well, let’s start at the beginning. Oh, let’s actually start at the end. Let’s get the short cut. [0:01:46] Hiten Shah: How about in the middle? [0:01:47] Steli Efti: The middle? What was the original idea of saying growth hacks don’t exist anymore? [0:01:55] Hiten Shah: Yeah. So, they asked us to come up with a topic. So we came up with a topic. We say they don’t exist anymore. We think they’re not relevant. And the reason for that, and I say we, but it’s really I, and I think Steli agrees because we tend to agree on a lot of things, especially stuff like this. And so I think the world has moved on. I think that’s a good way to think about it. And when growth hacking was first coined, it was actually about growth hackers, not even about growth hacking. And then it took on a whole new kind of thing with growth hacks and people talking about growth hacks and things like that. Even the talk we just had, I don’t think she mentioned growth hacks or hacking or any real tactics like that, because they’re all out there. These are all just like case studies now of things you could do. These are all ideas. They’re not necessarily like they used to be, where you used to be able to apply one of those to your business and it would just instantly magically work. Even though it was never like that, it was definitely a little more easier to take something that someone else has done, copy it, and maybe it works. And again, a lot of growth has been about getting more customers, getting them to sign up for your product and things like that. And now the world has kind of evolved because it’s been, I don’t know, quite a few years. [0:03:09] Steli Efti: Almost 10 years. [0:03:10] Hiten Shah: Almost 10? [0:03:10] Steli Efti: Yeah, I think so. So maybe we cover the first half of this. Let’s talk about things people shouldn’t be doing. Right? Things people should avoid doing. And then we can, the second half, we can focus on a few tactical and practical tips on what we think people should do that want growth. Right? Because that’s the main reason we are all here today, I would assume, is because we all are interested in one thing, which is growing the things we care about. It doesn’t matter if it’s your product, your startup, whatever it is, your client’s business, you want to grow and you want to be able to grow things, grow companies, grow products. So we’ll talk about that. So, first, let’s cover the stuff that people shouldn’t be doing. And I’ll go first, and then you can chime in. So a lot of times when people think about moving certain KPIs up or making certain numbers explode or grow or look better. The biggest mistake that I think people make is not looking at the entire journey, the entire customer journey and the relationship that you’re creating with your customers. So here’s an example. All the time people email me and ask, “Steli, how can I improve the open rates of my emails?” I give a lot of advice when it comes to sales emails, specifically. So people come to me all the time, they’re like, “Well, our open rate is this percentage. How do we double it? How do we increase it?” And here’s my favorite question that I get, which relates to the conference and our topic today, which is, “What is the best subject line hack you’ve ever seen?” And always tell the same story. You know, the best subject line I’ve ever seen, or have received in my inbox, was this. I was actually on vacation for two weeks and when I came back to check my inbox, which was flooded, my eyes instantly zoomed into this one email that said, “Very disappointed.” All right? And I was like, “What did I do wrong? What the fuck did we do wrong.” So I instantly opened that email. And it continued, dot dot dot. So it’s, “Very disappointed, dot dot dot, that we haven’t been able to connect yet. I’ve left you three voicemails. This is the third email, but my web development shop could really help you with PHP.” And I was like, “Mother fucker.” [0:05:31] Hiten Shah: You didn’t care, but they got you. [0:05:32] Steli Efti: They got me. I actually gave that person a slow clap. I’m like, “Yeah, mother fucker. You got me. All right. All right. Fair game. Fair game.” Delete. [0:05:44] Hiten Shah: You didn’t spam it? [0:05:46] Steli Efti: I just deleted that shit. [0:05:47] Hiten Shah: Okay. [0:05:48] Steli Efti: Right. And so, just because somebody gets me to open an email, it’s not the end. Right? And it’s definitely not the beginning of a good relationship. When you lie to me to get me to do something, I don’t want more of you in my life. Right? I don’t want more people lying and tricking me into behavior that I don’t really want voluntarily. I always tell people, “You want the best open rate in a subject line ever? Just write, ‘I have your parents in my basement with a gun at their head.'” You’ll get an amazing open rate, even with people that have no parents anymore. I would open, I’m like, “Whose parents does this person have in their basement? And why do they think it’s mine?” Right? You’ll get a lot of people to open. But then what? Is that really a way to start a conversation that will turn into a true conversion and a longterm relationship? I doubt it. So whenever you try to improve a number or increase a number, think about it holistically. Is this really going to aid all the other steps in the journey, the relationship you’ll want to build with this human, with this company? Or is this just going to make the number go up so you can write a blog post that says, “How I increased the open rate by 4000%.” But who cares? Just open the email… The open rate is not the end goal. Growing your business in a way that’s sustainable longterm, that’s the end goal. That’s what we’re all working on, and what we should be working on. So that’s my biggest pet peeve when it comes to hacks when it relates to growth, is being too similarly and too short term minded. [0:07:25] Hiten Shah: So, I’m going to give the equivalent on the marketing side. Because, for me, I get a lot of people asking me, “How do I get more customers? How do I get more signups from my website?” And so, my answer when they ask me that is, first of all you’re asking the wrong question, but let me start with my response to them. My response to them these days is basically take your homepage, remove everything on it, so give me a white page, and then put your sign up button and make it a third of the page and test that and see what happens. Because if you do that, you’re going to get more signups. Right? Because the only thing they can do is click on that button or leave. So you want to increase your signup rate. That’s my growth hack today. Make the button the only thing on the page, no logo, no nothing, just the button. Put it right in the center of the page and make it a third of the page. And you want to go double down? Go to duolingo.com, look at how they make you feel like you’re pushing a button, and add that, and make it so it feels like you’re pushing a button. And so, when people click it they’re pushing a button, they pushed a button, and then they sign up. I shit you not today, if you go do that to your homepage, you will get more signups. So, this is the problem. Right? We’re used to this world where things are that simple. You give a suggestion, someone like me does that. If any of you decide to do this, let me know. It’ll work. I guarantee it. This is guaranteed 100%. It’ll get you more signups. The real question though is, is you should be asking yourselves, “How do I get more engaged, retained, high paying customers?” That’s what you should care about. It doesn’t matter whether you want more signups, because if you get a whole shit ton of signups and they don’t become engaged, active, high paying customers, they don’t matter to you. So, you can have a really low signup rate for the right customer and make a ton of money from it. Or you could have a really high sign up rate, which is very likely from customers you don’t care about, people you don’t want. So your efforts should be put on getting the right type of customers and making sure that you’re able to do that. Your effort should not be focused on just getting more signups or getting more leads. It’s not going to work. It’s not going to do what you need it to do. And so this is my pet peeve. People ask me how do I get more signups. And my answer is, it’s actually how do you get more of the right customers? And then you figure out, you work backwards from there, and then you figure out what that looks like for you and your customer journey. If you look at my principle of just putting a button on the page, and I’ll give you an example. You go to my website of my new business, FYI, usefyi.com. Yes, this is a commercial for it. [0:10:05] Steli Efti: Usefyi.com [0:10:05] Hiten Shah: Thank you, Steli. You’ll notice our website, our homepage, is not too far off from what I just said about a button and it covering a third of the page. That being said, when you think about what we’ve written, the diagram we have on the homepage, how simple that homepage is, you’ll notice we’ve really thought about the customer journey and that’s why I want to give you that example, because it’s mine. It’s not something where I’m going to point you somewhere else. That being said, duolingo.com, I really love their homepage as well. It’s one of the crispest homepages. And so here’s the thing. I gave you a growth hack. I gave you two examples that are as close to that growth hack as possible, but yet they’re focused on getting retained customers, when you really start digging into the work that’s been done on those pages. That stuff isn’t easy. That takes a lot of effort. It’s not a growth hack. It’s something that you have to align with. Like, “Hey, I want to create the simplest page possible that gets me the highest retaining, most valuable customers.” And that’s how you think about it. Again, it’s a button on the page and it takes up a third of the page. So I want all of you to try that. That’s my growth hack and that’s my pet peeve. [0:11:09] Steli Efti: Tomorrow, it’s going to be the entire web is going to be full of these buttons. And people are going to be, “What is this phenomena that changed all these companies to just have buttons?” [0:11:19] Hiten Shah: I kind of want to test it myself. [0:11:21] Steli Efti: Magically, the internet has doubled its conversion rate to signups by this magical hack. [0:11:27] Hiten Shah: It would happen. [0:11:28] Steli Efti: Yeah. I love it. All right, so there’s a million things that I would love to share in terms of things not to do, but I’ll summarize. I think a big part of our philosophy and a lot of the advice that we give to founders, to marketers, to salespeople, is the thing that I would advise most people to do is to fight excitement. What I mean by that is that oftentimes what we’re looking for, when you look for advice and when you look for ideas on what to do to grow whatever you’re involved with, you’re looking for something that’s an exciting idea, something you’ve never heard before, something that seems easy or fun, and you’re like, “Oh my God, this brilliant thing that I read or heard on this stage, if we do this, it’s going to explode and everything’s going to be amazing.” And the problem with that is that instead of asking ourselves, “What is the most fundamental way to solve this problem? What is a way that’s been proven over a long period of time? This was a true tactic 10 years ago, 20, 30 years ago. Will it still be true 30 years from now?” We’re looking for somebody that excites us into action. And the problem with excitement is it’s short lived, especially whatever you start, it doesn’t matter how crazy of an idea it is, it most likely won’t work in its first version. Most likely, you won’t implement this, you won’t work on something for like two, three, four weeks and then it just works, and you lean back and just, boom, growth, magic. You’re going to have to probably fuck around, iterate, fail, try again, adjust, get more advice, get more data, do another round of this. You’re probably going to be committed to figuring it out for much longer than you thought when you originally heard that idea. And that’s the number one reason why a lot of growth hacks, “don’t work,” is that the implementation is just too short term. Like they implement a version one and then they run out of steam and it never gets to a version two, three, four, five, six, seven, eight, nine until it really works, and works sustainably and for the longterm. And so, one of the things that I always say is that if somebody came to us and asked for advice on losing weight, not that we’re experts by any means, we would tell people, “Just eat broccoli and work out, motherfucker. Just move your body and put green stuff into it.” Right? It’s like- [0:13:54] Hiten Shah: Don’t eat sugar. [crosstalk] no sugar. [0:13:57] Steli Efti: Just simple stuff. Just simple stuff. But the reason why there is a million books out there and every year there’s five new disciplines and working out and losing weight and all that, and why it’s huge in just pills, surgeries. There’s a huge, massive industry helping people lose weight. Is that the move your body and eat healthy stuff is the piece of advice that I don’t want to do. It’s like, “Yeah, I know, but I don’t like broccoli.” Right? My sister-in-law, I went to the gym with her and she wants to lose weight and after five minutes on the elliptical, she stopped. She’s like, “All right, this was fun. Going home.” And I’m like, “What are you doing?” She literally said, “I’m starting to sweat. I hate sweating.” Think about that. That’s how we approach most of our problems, it’s like, “I want to accomplish this, but I hate what I need to go through to accomplish it, so I’m looking for a more convenient way to accomplish it, a simple way, a shortcut, a pill, something magical, something I’m excited and inspired about.” And more often than not, that’s not really any… Most shortcuts really never lead to a place you want to go to in the first place. So try to avoid the exciting shit and try to double down on the timeless shit. The things you know you need to do, but you just don’t want to do. That’s where I would… That will be my internal compass. Just whatever you’re like, “This is really inconvenient. I know we should do this, but I really don’t want to.” That’s what you need to do next, most likely. [0:15:31] Hiten Shah: Yeah. And that comes with a lot of failure. So trying things is all you really have. I’m going to throw some benchmarks out. You probably have some too. [0:15:39] Steli Efti: Beautiful. [0:15:39] Hiten Shah: Because people like benchmarks as much as, you know, they’re okay. How many of you have a 20 to 30% sign up rate on your website? None of you. Right? All right. So that’s your benchmark. You’re aiming to get 20 to 30% of the people that visit a landing page or a homepage to sign up. That’s not going to happen overnight. You’re not going to come up with that. Although my trick I think would work, you know that third of the page, third of the size, big button, make it possible. It’ll work, it’ll get you 20 to 30%. But it won’t get you the right type of customers. So what I’m talking about is the benchmark is get a 20 to 30% signup rate from all your landing pages, all your homepages, and make it so that it’s getting you the retain people that you want. Again, that’s not going to happen overnight. That’s not easy. And many of you probably think I’m crazy because you have a 2%, 5%, maybe 10, 12% signup rate. And a lot of times this takes one to two years to get to those kinds of numbers, especially with smaller scale and the amount of testing you might need to do. But that’s the benchmark. And when you think about it like that, I think your whole perspective changes. You realize that there is no growth hack that’s going to save you or anything like that. So all the growth hacks that are out there or all the ways that people think about that are just ideas, and they are ideas that you can test if you want to, but you have to make sure that you know why you’re testing it. And so, the thing I’ll say related to these benchmarks is go study it, go think about it. Go look at all the examples that are out there. Go look at all the growth hacks. It’s not about not looking at them or not paying attention to them, but then realize what matters to your customer, what’s the value you need to drive for them? And how do you do that? How do you explain it in the simplest terms possible? Another thing I’ll say around these benchmarks is one of the reasons people don’t get 20 to 30% rates on their landing pages is one simple reason. They don’t think about what the one next step the person needs to do. What they think about is all the wonderful things your product can do for your customers. They lay it out on their sites and then all of a sudden the customer is confused and wants to read this and they want videos and you show them videos and all this stuff. When all you really wanted them to do is take that one next step and convince them to take it. When you think about it like that, you can achieve 20 to 30% signup rates. [0:17:53] Steli Efti: Yeah. I’m not going to do benchmarks, just because I like to do the opposite of what Hiten wants me to do. [0:17:58] Hiten Shah: Do it. [0:17:58] Steli Efti: No. [0:17:58] Hiten Shah: Do whatever you’re going to do. [0:17:58] Steli Efti: All right. I want to actually share a piece of advice that I think rounds up our little episode today, which is that at the end of the day I truly believe that, and we both, I think, are on the same page on this, that whoever understands the customer best ultimately will win their business. So if you have a competitor that understands the psyche, the life, the challenges, everything around your customer, your desired customer- [0:18:26] Hiten Shah: What they ate for breakfast? [0:18:26] Steli Efti: What they eat for breakfast, how they sleep, what TV shows they watch, what their biggest fears are. If there’s a competitor out there that understands your customer better than you do, sooner or later it will be their customer, and deservedly so. And so, we all love to go and read about successful stories. We all love to imitate success. And that’s a valid strategy and tactic. And we all love to go to experts and ask for advice. And the two of us get a ton of these requests everyday and we help as much as we can. But the one source of true wisdom and insight are your customers. And that’s the biggest resource for knowledge that we’re not tapping into as frequently, as consistently, as we should. So instead of pinging me, this is something I tell people all the time, like sales emails is a big thing that a lot of people ask me for advice. And so they send me their emails to get feedback and I always tell them, “How about you ask your customers for feedback about this email.” Call a bunch of your customers that you have a good relationship with, send them that email and get feedback. Send a bunch of people emails and then just wait for those that open the email but don’t reply and call them, and say, “Hey, I sent you an email a few days ago. I realize I cannot sell, you’re not interested in my product, I just need two minutes advice of yours.” Everybody loves to give advice. And then just go, “I sent you the email. It obviously wasn’t interesting. Can you help me out here? Why? If you were my co-founder, how would you change my approach in getting in touch with you to improve the results I’m getting?” Ask people for advice that love what you do. The people that respond to your email and say, “Yes, let’s jump on a demo,” instead of instantly jumping on a demo and being trigger happy of like, “Let me show you the product and let’s try to close this deal.” Why don’t you take 10 seconds and ask them, “Hey, you’re a busy person. Before we jump into the demo, what made my emails stand out? Why did you read it and decide to respond and take the time to talk to me today.” Let your customers enlighten you. Let them give you ideas. Let them give you insights that will then help you grow your business and your company a lot further. [0:20:40] Hiten Shah: I’m going to turn it into a benchmark real quick, because what you said is a benchmark. [0:20:44] Steli Efti: Beautiful. [0:20:44] Hiten Shah: What Steli said is basically the companies that win the market are the ones that understand more about the customer than anybody else in the market. That’s it. Sounding about right? [0:20:57] Steli Efti: That sounds about right. [0:20:59] Hiten Shah: That’s the benchmark. [0:20:59] Steli Efti: That the best way to wrap up this episode of the startup chat. Thank you so much. [0:21:05] Hiten Shah: Thank you. Bye. [0:21:05] The post 437: Why Hacks Are Not Enough for Growth Anymore (Live from Growthhackers 2019) appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about due diligence during fundraising. The fact is, no investor in their right mind is going to invest money in a startup that has sketchy numbers. Investors will want to know everything about how your business is doing and if you can give them the answers they need then that can kill the deal.  In this episode, Steli and Hiten talk about what due diligence is, how it can happen, what fundraising is about and much more. Time Stamped Show Notes: 00:00 About today’s topic. 00:36 Why this topic was chosen. 01:41 How due diligence can happen. 02:10 The problem with due diligence. 03:00 What fundraising is about. 04:07 How due scrambling during the due diligence process can ruin your confidence. 05:06 Why your emotional state is the most important thing to manage during the process. 05:44 Why trust is super important. 06:19 How problems can arise when you scale. 06:55 The number one thing that founders tend to neglect. 3 Key Points: This is a place where, if you’re looking to raise funds, things can go wrong.If at any time you scramble during the due diligence process, it ruins your confidenceThe most important thing to manage during that time is your emotional state. [0:00:00] Steli Efti: Hey everybody, this is Steli Efti. [0:00:03] Hiten Shah: And this is Hiten Shah, and today on The Startup Chat, we’re going to talk about due diligence during fundraising. One of the reasons we’re talking about this, the main reason, is because this is a place where your fundraising, if you’re looking to fundraise, can go wrong. It goes wrong because what happens is, you get into your fundraise, and it could be any stage, it could be a pre-seed round, a seed round, series A round, later on. You’ve got you know your term sheet and now you’re like, okay, I’m going to sign this thing. You sign this thing, and then what everybody calls due diligence starts. That typically happens for most rounds. I think pre-seed, seed round, sometimes it doesn’t happen unless you have a lead investor. During this period, basically your company is getting assessed almost in a different way. Again around everything that’s going on in the business, whether it’s some of the metrics that you have, if you have those, the money and how you’ve been managing it, and the cash flow and what’s going on there, and whether the numbers that they heard from you a pre-diligence, or not even pre-diligence, but during the fundraise process, is actually true. Are those things actually what’s going on in the business? Now, another aspect of due diligence is oftentimes, you have a data room, and you have a bunch of your financials there, you have a bunch of your case studies from customers, and you have a lot of your data there about your business, whether it’s your retention or your growth or your engagement. That is already being shared with folks during the fundraising process even before term sheet sign. So there’s a bunch of different ways due diligence can happen. Now, the problem… And then, Steli, I want to hear your take on some of this, because I think there’s a lot of problems with diligence and where things can go wrong. One of the biggest problems is you just don’t have that material all together. You’re not ready. You’re not actually ready to raise money if you’re not ready for due diligence. [0:02:11] Steli Efti: Yeah, that’s probably what’s probably a really big problem, because what happens is, focus all your energy on fundraising. You focus all your energy on the story, on relationship. You start the process, and then when due diligence starts, you scramble. One of the things that needs to be kept in mind here is that fundraising, to a big degree, is about communicating confidently the story of your company, outlining the future of it, and getting people excited to want to be part of that bright future. So for you, in order to tell that story confidently, you need to have a good grasp over the numbers, and you cannot get into a scramble where they ask you things you don’t have answers to or you. Or even worse, they ask you things, you think you have the answers, you give those answers confidently, and then they discover or you discover in the process of putting the material together and financials together that you were wrong. That the numbers aren’t what you remembered your buddy saying in an email 18 months ago, or whatever. The numbers that you thought were correct because somebody on the team was putting together the accounting numbers in a spreadsheet or QuickBooks, and all of a sudden you realize some of these numbers don’t add up, or your accounting practices were wrong, or the way that you did the financial numbers, run your metrics, was not industry standard or wrong. If at any point during the due diligence process, you panic or you scramble, it’s not just about finding that number, it’s that it ruins your confidence. It instills lack of confidence for the investors as well. Now what you want to do is, you want to create an upward spiral of confidence and excitement between you and the investor. What is happening is, very quickly, that can turn into a downward spiral where they look at something, they get confused and ask you, which then confuses you, and you go try to figure out what really is going on, which then you go back to them all confused and apologetic that the thing that you told them wasn’t really true, which then makes them even more critical, so they want to dig into more numbers and ask you for even more stuff. And then all of the sudden, the whole thing collapses on into itself. You make a presentation, all of a sudden your voice cracks a little bit and you’re a bit more sweaty than usual and you’re just a little bit more giving people ranges versus specific numbers and direction. I think people forget that the most important thing to manage during that entire time is your emotional state, is the excitement and the confidence that you communicate through direct verbal communication, non-direct verbal communication. If during the due diligence process, you or they or both sides figure out that something wasn’t prepared, something isn’t right, it’s going to kill the mood in the room, and therefore it’s going to kill the deal. [0:05:21] Hiten Shah: That’s exactly right. That’s the reason you need to get this right. Diligence is something that if you don’t get it right and you don’t have your ducks in a row about the business, how can you expect the investors to trust you? It does boil down to trust, and it can be easily lost during this phase. The prep you do to make sure that all your ducks are in a row are really important. It’s the one thing that I think founders don’t realize. One of the reasons is, at the earliest of earliest stages, there’s not much diligence There’s a little bit here and there, but there’s not much, because you might not have any revenue, you might be pre-product even, or you might be really early stages of a product. There’s not much data or anything like that. But what ends up happening is that the more you grow, the more you scale. There will be information that’s really critical that you want to share with investors during diligence. That’s information like your financials, data about your company and your business, your team members, how much each person is getting paid, all those kinds of things. Revenue that you’re making, how it’s coming in, who’s paying you. All these things can be part of the diligence process depending on how much your investors want to scrutinize you. But also, this is just good practices as a business, to be able to have easy access to this information. It’s the number one thing that I see founders just not paying any attention to because they feel like it’s not important, they don’t think about it. But at the end of the day, good management of the information about your company is really what I’m talking about. Organized, structured. I see so many companies with a whole bunch of folders in Google Drive or Dropbox organized and set up correctly, and then at some point, someone’s not maintaining it, because the founder gets busy or the person who’s maintaining it gets busy, and then it goes crazy. Then they’re scrambling to get it all together again, if they ever did it in the first place, right before a fundraise. [0:07:25] Steli Efti: One quick thing before we wrap up the episode. I know I need to have grasp over my numbers. I know I need to be prepared for due diligence if my startup and I want to raise money. Now, as you said, when you have been around for six weeks and you have a landing page with no users and a team that just started, there’s not a lot that you have to prep. That’s the beauty of doing seed rounds, they are very simple. But eventually, hopefully, as you succeed, you might want to raise a series A, series B. You now have a bunch of employees, you have customers, you have revenue, you have taxes, you have tons of metrics, different revenue streams, different products. There’s complexity, there’s a real business there. Now if we go out to raise money, you need to realize that there’s going to be due diligence, there’s some prep work you should do. What are some simple preemptive things that founders should know about or founders should do in order to be in a better position when they do fundraising? And when they have to go, inevitably, through some due diligence from investors? What are some sure-fire quick tips that are easy to implement, but lots of founders forget and then they pay a big price on that? [0:08:45] Hiten Shah: Love that, as always. One of the tips that I have around this is really basic, and I know we can go back and forth for a bit, but one of them is have an org chart. Even if there’s only three or four of you, just have an org chart. Have some structure and save that, put it somewhere. That should also include your hiring plan of the people who you want to hire next. [0:09:10] Steli Efti: I love that. The next tip that I’ll give is a more generic one, but I think it’s an important one, is don’t ignore your finances. Don’t ignore the areas that are not exciting to you. Embrace it. It’s not rocket science. Lots and lots of other people have figured this out. Don’t allow yourself the excuse, this isn’t my thing. I’m not paying attention because it’s not fun, I don’t have a finance background, I don’t have a degree, I’m not very data-driven, I’m more creative, I’m more responsible for sales or I’m more responsible for engineering and technology. It doesn’t fucking matter. If you are one of the founders, you’re responsible for the business. And being responsible for the business means being responsible for the data, being responsible for your finances, being responsible for your documentations, being responsible for the household of this business to be in good order. Don’t allow yourself these little excuses that then empower laziness, which then create panic, scramble- induced moments when you realize, shit, my in-laws are showing up this morning and the house is a dumpster and I want to impress them and I have to run around and I have 10 minutes to make this not look as terrible. You’re not a teenager, you’re somebody that’s a founder that has taken a lot of responsibility, and you are asking for people to give you a ton of money. So you better show that you can responsibly deal with it. So one part of it is to change your attitude around money, change your attitude around the legal side of things, the tax side of things, the metrics and numbers side of things. Even if it’s not your favorite thing, tell yourself that you should at least get proficient at it, and that you will spend some time, the time necessary, to have some level of competence and control over these things. If you can overcome some of the emotional barriers that you might have, everything else that we said today is going to be much easier to deal with. [0:11:06] Hiten Shah: All right, that’s two tips so far. [0:11:08] Steli Efti: Yes. [0:11:08] Hiten Shah: So tip number three is a final tip. And this final tip is from our first sponsor. [0:11:17] Steli Efti: Ooh, look at that. [0:11:18] Hiten Shah: And their tip would be, use their product. So go to pilot.com/startupchat and check out our first sponsor. They’re basically a bookkeeping service that includes professional bookkeepers who look over your finances and set you up for success. During due diligence, financials, because you’re dealing with investors, is a key part of the diligence. Making sure all those things are right and your ducks in a row is really important. When we’ve talked to Pilot about this, they came to us and we talked to them about it, one of the biggest things we heard is that folks use Pilot before a fundraise in order to get their ducks in a row. This fits really well with something that we both believe, which is you should have your ducks in a row if you’re fundraising, and due diligence is such a big aspect of it. Why would you go manage your finances yourself and risk screwing that whole process up and screwing your fundraise up, just because you can’t get that right? So go to pilot.com/startupchat and check out the offer they have for you, which is a 20% discount for six months on Pilot Corp for the first 100 Startup Chat subscribers. [0:12:38] Steli Efti: There you go. And Ask yourself, has Hiten Shah and Steli Efti ever recommended something to me in 450 episodes, four years of podcasting, that wasn’t good for me? [0:12:49] Hiten Shah: There you go. [0:12:49] Steli Efti: There you go, ask yourself that question. If the answer is no and you don’t have your accounting bookkeeping already in stellar position, pilot.com/startupchat, check it out, take advantage of it, and we will hear you very soon. [0:13:03] The post 436: Due Diligence During Fundraising appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about how to deal with bullies as a founder.  If you’re in sales, you’re going run into a prospect that is unreasonably aggressive. This typically tends to overwhelm most sales people and can lead to submission and overreaction by the sales person.  In today’s episode, Steli and Hiten talk about how most people see bullies, the main reason why bullies are over-aggressive, how people’s childhood affects how they act and much more.  Time Stamped Show Notes: 00:00 About today’s topic. 00:40 Why this topic was created. 01:37 How most people see bullies. 03:04 How are bullies are just afraid themselves. 03:46 The main reason why bullies are over-aggressive. 04:03 How to deal with bullies. 05:59 How Steli deals with bullies. 10:00 Hitens thoughts on bullies. 10:45 A tip that can help you deal with bullies. 11:41 How people’s childhood affects how they act. 3 Key Points: Once in a while you’ll run into a prospect that is unreasonably aggressive. I’ve learned that bullies are just afraid themselves. The best reaction to a bully is to stay cool calm and collected. [0:00:01] Steli Efti: Hey everybody, this is Steli Efti. [0:00:03] Hiten Shah: And this is Hiten Shah and today on The Startup Chat we’re gonna talk about bullies and we’re also getting to talk about how bullies relate to sales, so Steli you’re gonna lead the way on this cause it’s a topic that I think is on your mind for a bunch of reasons. [0:00:19] Steli Efti: Yeah, so I think teaching sales people for a long time, had to deal with bully prospects. So, if you’re in sales, you know, once in a while you will run into a prospect that is going to be unreasonably aggressive. Right? Kinda of a bully personality and typically sales people they all have a, they all feel overwhelmed by this, which is normal, as a human being, if I call somebody and they start screaming at me, my first reaction is overwhelmed and say “ Wow. What the hell is going on here?”, right? This is signal like overwhelm/intimidation that’s the natural first response if you’re not somebody that is dealing with bullies all day long and is prepared for this. But then more sales reps, most humans, most people, they look at a bully or somebody that is intimidatingly strong and they will put fear in them and then usually they will either submit to that person’s demand or requests or in some rare cases they’ve learnt to kind of overreact in response to the overreaction of the bully, right? So, the bully screams and then the sales person screams back, right? But the interpretations that somebody that’s super dominant, super pushy, super aggressive is probably a strong human. I’ve learnt over a long period of time, in sales and with that in life in general that bullies are just afraid themselves, right? There’s no reason, they call you hidden and they try to sell you something. There’s no reason for you to have to scream at me. You have the power to just hang up. I cannot force you to buy anything, I’m on the phone with you, there’s really no reason for you to go nuts and start screaming profanity said anything, there’s no reason for that. The reason that most people or why the bullies will be overly aggressive is because they are afraid. There is a certain level of insecurity that the sales person is gonna sell them something they don’t want and order two because they are so insecure and so afraid of being sold something they don’t want, they overreact in like attacking mode. Right? Or sometimes people they are bullies in negotiations, they are so afraid of being taken advantage of, that they’re unreasonable in how aggressive they are and asking for what they want. If you’re truly confident, there is a certain comment cuneus that comes with real confidence, that bullies don’t have because they don’t have real confidence, and you know, once you really realize that, once you realize that when somebody screams it’s not that they are that confident and that strong is that they’re that insecure or overwhelm themselves, then you can deal with it better and that’s how sales people for long time now that the best reaction to somebody that’s a bully or screams or goes all nuts is to stay cool, calm and collected and that cool and calmness is actually gonna make them submit, because usually when they scream, they’re used to people submitting to them so, when you smile them you go “WOW, WOW, WOW, this is totally unreasonable. I understand that you feel overwhelmed and I understand that this something you are not interested in right now. This is no way to talk, here’s how we can move forward and leave this past us.” You can talk to them totally cool, totally calm, totally collected but they’re losing their mind, they’re gonna submit. Something in their subconscious is gonna tell them, “Shit, this guy seems so dominant that I cannot intimidate that person, probably that person is really successful, maybe I should listen. Same thing with like bullies in their school yard, when somebody screams at you and tells you that they’re gonna hit you. If you don’t show fear, it’s gonna actually intimidate them, make you much less of a, of the interesting target for their bullying and their attacking. The reason I thought about this and not, you know I’m sure there’s a story that I’m dying to hear, your experience with this because I’d like to expand it away from just prospects in sales to you know board members that are bullies, co-founders that are bullies. You know we talked a little bit about customers but I’d like to talk a little bit about like investors or board members that are bullies, that’s just kind of another perspective for a founder or startup. How do you deal with this kind of people, but the reason I’ve thought about this recently is that is Muay Thai class, I do a lot of martial arts, as people know that have been listening to that podcast for a long time, I am very passionate about it, so recently I went to a new school again and any time you go to a new school, you meet a bunch of new people, you do sparring with them and typically sparring is this idea that we are pretending to be in a fight with all this patting but we go a lot lighter than in a fight, we go more technical and its about skill development in realistic scenarios, it’s not about hurting each other. But in every martial arts schools on earth probably there’s always one or two bullies, there’s always some people that show up in that class that didn’t get the memo and they really wanna fight, right when you do sparring with them. Usually what happens if you tell these people “Hey, please go lighter” they actually go harder, right? The more you tell them “Hey go easy, this is too hard for me” the harder they go. And I was in sales nutrition recently where I had a guy in sparring that goes like this monster of a muscle bound, aggressive looking dude and when we started light and technical sparring he went bazooka on me, bizzerk one me and just like was swinging from the fences as he would wanna knock my head off, and again first I got overwhelmed that I just control the situation, defended myself and then you constantly switch partners in sparring so I was kinda done with it. But then the second time we sparred he was even more aggressive and then I had to think about like, “ How do I deal with this guy? Because I don’t wanna have to like feel overwhelmed every time I do the training, I don’t want this to lower the fun I have when I go to training. So, how do I deal with him? I cannot avoid him, he’s just there, I can’t do anything about that. I cannot run to the trainer and tell him, this is not school and even in school it’s a bad idea to rug the trainer in, try to let them know that somebody is bullying you, is not gonna make people respect you. I cannot tell him to go easy, cause he’s only gonna go harder. I am very nice to people in training, I was overly nice to him and I feel like he misinterpreted that niceness for weakness. So, the only way for me, so I’ve thought about it for a day or so and then I thought the only way to deal with this is to escalate. If he goes really hard, I will go really hard back and I’ll go easy again and then I’ll basically tell him through actions, not though words, we can go hard or we can go easy, it’s your choice, dude, but if you wanna go hard it’s gonna come with consequences, you’re not just gonna hit me hard, I’m gonna hit hard back, you’re not gonna like it. So, I’ve though about that, he wasn’t around for a couple of weeks so I was just like every time I went to training I was waiting for him to show up and I’m like “ No, he’s not here. Cannot try this.” And just recently, a couple of days ago he showed up at training, we I sought him out for sparring so I was like, “ yeah, I was waiting for it. Let’s go, let’s spar” and then as always I sparred like technical, he go super hard and I will go hard back. And I was hitting him a lot more than he was hitting me and eventually I hit him quite hard with the head in the liver and he kinda collapsed in all force and that was the end of our sparring. I apologized, I really didn’t mean to be there and hit him at the right spot at the right time because we weren’t going easy, it hurt him a lot and that was that. It was the end of sparring, I was like “ All right, let’s see how the next sparring will go. This went well for me this time.” And when training was over and we wet to the locker room it was the most cliché scenario ever. It was like almost like in a movie. I had to really concentrate not to laugh, cause the moment I went into the changing rooms, locker rooms, he looks at me and he starts going, “ Hey dude and I’m like “ Hey”. He’s like “ How long have you been doing Muay Thai?”. In my head I was like this guy never spoken to me before and now here he is and this is like one on one, now he wants to be friends. I’m like ” Well, you know I’ve been doing [inaudible] for a while and this and that.” And then he’s ” How old are you?” I’m like ” I don’t know, 37?” and he said” You’re super fit for 37″ and he started to have the nicest conversation ever with me, trying to become my friend. I was like “This is so dum”, like why did we have to go through this. Why did I have to hit him this hard and like hurt him this much for him to be like” What? Don’t wanna bully this guy, I wanna be friends with him”. Started to laugh a lot and you know I had to tell my kids about this because my oldest son [inaudible] with a bully right now at school. He’s lime made me think a bit more about bullies, so I though it’d be fun to bring it up on the podcast, share my little victorious moment. Oh, of course this whole story is just about me and then you go telling everybody that I looked good in sparring for one session. But no, but I felt like there’s something, there’s a bunch of lessons here to be learnt and how to deal with people that are bullying, because you can’t run away from them and once in a while in life you might have to deal with one and so I shared this one in martial arts context, I talked a little bit about the sales and customer context. I’d love [inaudible] and hear your response on everything you’ve heard, and then maybe we’ll wrap this episode up with, I don’t know, maybe there’s some other scenario that you’ve experienced and you’ve helped the founder in how to get through and dealing with a bully within a [inaudible] that might be useful and helpful to people. Will Newton, I think you are mute. [0:10:05] Hiten Shah: Oh sorry. I think that a bully is just somebody who’s being really pushy with you. He could be physical right? Pushing you around or could be just like verbally they’re like sort of trying to mess with you in some way whether it’s like a board member investor somebody like that you know really a bully is, you know that big thing about bullies is that it’s just abut them. It’s just something about them that causes them to react to you in a certain way. And I think once you realize that, you start really figuring out how to deal with a bully. Cause there isn’t like a simple strategy as you described right? Like can, you tell that bully that you’re dealing with at Muay Thai, like “Hey, chill out”, he’ll go harder, right? [0:10:57] Steli Efti: Yeah. [0:10:58] Hiten Shah: But, instead you just had to show him, that you had the strength, right? You literally had the strength to like, kinda kick his butt, right? Sort of speak and that got him to respect you. So, there is something about, you know if I were to go all the way back, something that happened where he believes that the way to gain peoples’ respect is to basically get your butt kicked better. [0:11:23] Steli Efti: Hmm. [0:11:24] Hiten Shah: For you know, for that, for you, basically there’s something that that person learned, probably during childhood, that made the person the way they are, so in my mind I try to have empathy for the bullies and I try to really try to figure out like what’s, what’s going on here?, “Where are they coming from?” So really like, if you’re talking about like an industrial for example or somebody who you think is just trying to get you to do what they want you to do, even though you might not wanna do it or you might not agree, the the it can feel like a bully but really it’s not something to deal with them, it’s something to do with either the way they were raised, the way that the things they’ve dealt with or the things that they believe they need to do to get what they want or make other people do what they want. Cause a bully is really just trying to get you to do, what they want you to do. And so yeah, you know when I deal with this, I’m not always dealing with it in the context of ” Oh, this person is bullying me” but I’m usually dealing with it in the context of “I don’t get along with this person, and I don’t know what to do about that”. [0:12:29] Steli Efti: Right. [0:12:30] Hiten Shah: And I’m usually, I’m just giving people a perspective on the person that helps give them a frame of mind, a way to think about that other person that enables them to be like “Oh! So, that’s where they’re coming from”, like yeah that’s where they’re coming from. So, based on knowing where they’re coming from, how are you gonna deal with them now? Well, you’re more empowered to deal with them if you have some kind of context or at least in your head have some way of thinking about them and where they’re coming from. So this person that was bullying you is just coming from a place of like anger and a place where like you needed to show them essentially that you were able to keep up with them and even beat them. And then they somehow got respect for you as a result of that and I think that their actions are just about basically them feeling like you need to show them that you are better than them or you need to show them that you are as good as them in order for them to respect you. It’s respect based on the interaction you have after and these kinda things are what I’m trying to figure out, ” Where is this person coming from?”, ” Why are they acting the way they are?”. And I’m not trying to spend a lot of time on it but enough time when I’m like okay, ” Now, I know how to deal with them”. So often time when like a board member or an industrious is coming at you in a way that you feel like you’re being bullied, you just have to think, ” Yeah, where is this person coming from?”. And often times they’re like trying to preserve the capital they put in your money, or they’ve seen the scenario before and just don’t wanna repeat it and so they’re stuck in their heads that it’s gonna repeat, so you know typically what I do these days especially, not just bullies but in general, is when someone is dealing with something and they’re coming at me with a negativity, I don’t react. I know this like advice that everyone is gonna tell you but I literally just don’t react, and I just shut down, not in a bad way, but shut my self off and just think through and also just try to be there for them. You almost treat it like a trauma situation where like I need to be there for the person when they’re feeling like that. And when I do that I tend to come to the right solutions. I’ve had to do this a few times recently, where I said something or did something and other people reacted in a very like I would say reactive way and they tried to ca, come at me, almost like they were trying to bully me after like you know I did something or said something that was very direct, lets say I was very direct and honest. And one time I just said that my perspective is different, and I explained my perspective, and that seemed to disarm them. Other times I just literally sit there and just don’t react to their negativity and instead think through and respond in the most compassionate way that I can and the most accepting way I can, whatever their behavior is. I don’t even like try to talk to them if that makes sense. Like this gentleman you’re talking about. If you told him, ” Hey, when I tell you like, you know, chill out, you don’t chill out”. What’s the person gonna say? “I don’t care”. Exactly. Ha ha, you got nothing to say, so instead you found your way out by basically going through and just be like okay, “Let me just see what I can do and actually spar with this person they way they want me to”. Which is probably not the way you normally would. [0:15:50] Steli Efti: Yeah I love that. Well, either way I think no matter what is going on, don’t let anybody bully you, I think the recipe of trying understand where is this person coming from, what is their perspective. I realize that often times or most times it is not this person is evil and its not this person is getting some sick pleasure from crushing you or hurting you or pushing you to do something you don’t want to, there’s something else going on. And when you understand that, it much easier to deal with, but at the end of the day you will have to deal with it and most likely in most scenarios, no matter what you, even knowing somebody, requires a certain level of strength. The strength to believe you can, the strength to believe there is not gonna be any consequences, like they’re so unimportant nothing is gonna happen, even if they scream that they’re gonna let the whole world know about how terrible you are and blog about it and tweet about it, in knowing them means you don’t believe they can do anything to you, like they can’t really hurt you or harm you. So, it doesn’t matter if you know them, if you have a heart to heart conversation, if you, you know, have to kick their butt physically speaking and like in my context you will have to first try to understand where they are coming from and then you will have to meager with them, meet them at some level of strength. You can’t just collapse because somebody is pushing you, cause life is full of people that are pushing, right? And you should not be pushed in the direction you don’t want to. Think of that, that’s our PSA for today’s episode. We hope this was useful and helpful and please if there’s somebody in your life, especially business life, that’s kind or our expertise, if somebody in the business context is bullying you, doesn’t matter if it is an employee or coworker or co founder, an investor, a customer, a competitor you don’t know how to deal with it, send us an email, atrioncharge@gmail.com, [inaudible]no matter what is going on we’ll try our best to be your advisors, to be your corner, be your coaches and help you deal with that and get rid of that. [0:18:03] Hiten Shah: Yeap, happy to help. Let us [0:18:05] The post 435: How to Deal with Bullies as a Founder? appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about startup money management. In the startup world, it’s very common for founders to overlook the significance of how their money is managed. Properly managing your startup’s financing is super important and not doing so can have serious consequences for your startup. In this week’s episode, Steli and Hiten talk about what money management means, why you should take money management seriously, how to deal with upfront revenue and much more.  Time Stamped Show Notes: 00:00 About today’s topic. 00:32 What money management means. 01:40 What money management is all about. 02:43 How to deal with upfront revenue. 04:11 The best money management advice for new startups. 05:53 Why you should take money management seriously. 07:15 How founders run into money management issues. 10:31 Our first sponsor. 10:46 Why you shouldn’t do your own accounting. 11:30 About Pilot.com. 3 Key Points: If someone pays you upfront for a year, how do you recognize that revenue?I will find a way to make it someone else’s problem.You can’t afford to completely ignore it. [0:00:01] Steli Efti: Hello everybody. This is Steli Efti. [0:00:03] Hiten Shah: And this is Hiten Shah. [0:00:06] Steli Efti: Today on the Startup Chat, we’re going to talk about startup money management. Ooh, what does that mean? [0:00:13] Hiten Shah: Yeah, this is the one we’ve been wanting to do for awhile. And this is one of those where like, “Ah, what’s this money management thing? That’s not the fun part of startups?” You know, and it’s like, well it’s what startups in business is all about. You make money, or maybe you don’t make any money yet, but you’re still managing money because it’s likely you’re spending money somewhere, right? Even if it’s with a bunch of software that you buy. So we wanted to talk about money management and why it’s important as a founder, and why it’s a skill that you need no matter what. [0:00:44] Steli Efti: So you said not sexy. So this is not about how do we take the money in the bank and invest it in other startups to get a faster ROI or higher ROI that we can. This not about any of that shit, right? This is about money’s coming in, money’s going out. You have to keep track of all of this. There’s taxes to be paid. We’ve heard many stories of founders and startups getting into real trouble. Maybe we should do a whole episode on how not to get in trouble with your taxes, because- [0:01:15] Hiten Shah: Oh that’s great. [0:01:16] Steli Efti: Right. Because this is such a big topic. It’s not sexy, but you know how many founders get in real trouble, because they mess up the bookkeeping, or the mess up their taxes, and boom, all of a sudden surprising big bill that comes from the government and there no money in the bank. And what the hell do we do? Like scramble, scramble, scramble, or you’re the case that’s like you get audited. Congratulations. Ever gotten audited before? It’s not a lot of fun. [0:01:45] Hiten Shah: Yeah we have. Yeah. It’s not a lot of fun. Another one is revenue recognition. [0:01:50] Steli Efti: What is that? Do I just look at my revenue and try to recognize it? Or what exactly did you mean? [0:01:58] Hiten Shah: If someone pays you upfront for a year, how do you recognize that revenue? [crosstalk] All at once? Or is it for the month that … Do you spread it out across the month that you actually are supposed to get it for, because they paid up front for a year. Which means that you’re supposed to amortize it as they say across the 12 months. You’re supposed to split it up by 12, and provide basically accounting in a way where you know that that’s how it impacted let’s say your MRR. Right? Because that’s monthly recurring revenue. [0:02:37] Steli Efti: Yeah, and you’re generating revenue for something you [inaudible] in the future, which is you have to service them the software and anything else that comes along with that. But at this point, I guarantee you this point, if we’re not already lost a good amount of listeners, people are probably pondering, “Oh God, this is a really adult episode. I’m not sure if I want to hear all this. This seems like you know the type of stuff I should know, but I really don’t, and it may or may not make me uncomfortable.” So I could already… I could sense some listeners getting nervous at this point of the episode. How do you learn all this stuff? How do you deal with this? Especially when you’re kind of early. Let’s say you don’t have a ton of experience when it comes to kind of money management, bookkeeping, taxes, accounting. So you’re not an expert yourself. You’ve never hired people before or not many. So you don’t have a ton of experience, you’ve never been audited before. It’s kind of, this all is new to you. If you had started kind of brand new at this point, and you would have to give your new, fresh, young entrepreneurial self advice on how to master the one on one of startup money management, how to approach it, how to think of it, what’s the advice? What is the guidance that we want to give people? [0:03:59] Hiten Shah: Well, what I did was I ignored it. [0:04:03] Steli Efti: What- [0:04:04] Hiten Shah: I just ignored it. [0:04:04] Steli Efti: Okay. [0:04:05] Hiten Shah: I didn’t think about it. I was so focused on the business, the product, the customer, making money. I didn’t really think about accounting, I didn’t think about bookkeeping. I didn’t think about taxes. Right. That’s what I did. And then at some point it hit me, and I had to worry about it, and then I had to scramble and figure out how I was gonna get taken care of. In my specific case I have, and by then I had, a wife who was willing to take care of it, because her mindset is on finances. She likes that stuff. She’s very detail oriented. And so we trust her with all the finances across many different companies, and she heads that up, and that’s one of the few things she does, but it’s one of the most important things to me, and that’s how I solved it. I found somebody who I trusted to solve it. That was part of the business in one way or another, and very close to me, my wife. And today though, if I were starting, regardless of her or anything like that, I would find a way just like I did back then to make it someone else’s problem. [0:05:12] Steli Efti: Yeah. Don’t buy a hundred books and try to get certified as an accountant, and do all this yourself. That’s not your core expertise. That shouldn’t be the majority of your focus and energy. But what it doesn’t mean is that you can afford to completely ignore it, because it is your responsibility. [0:05:30] Hiten Shah: You know, this is the thing. [0:05:30] Steli Efti: All Right. [0:05:30] Hiten Shah: Yeah, it’s cashflow. Like if you don’t do this right, you don’t know how much cash you have available to you to use. That’s a fundamental problem I see most companies get into, which is like they’re not managing their money. They don’t know how much money they have in the bank. And I’ve even seen countless folks like painstakingly try to figure this out. You know, they try to learn QuickBooks, and they try to figure out like how to get, you know, advice on this, and all that kind of stuff. But at the end of the day, it’s your money coming in, and you have to figure out kind of like how you want to, as easily as possible, know what’s happening with it. I mean this is money, right? Like, I mean, think about how many folks are like, not even great at personal finance. Business Finance is a whole nother game, right? Like there’s all these other rules, and all these things going on like that thing with like, you know, if you get money in for a year upfront, how do you account for it, and what do you do? There’s like, you know, so many complications like that. Especially when you get into taxes. [0:06:35] Steli Efti: Yeah. Maybe this episode, we could call it how not to run out of money, because then- [0:06:41] Hiten Shah: I like that. [0:06:42] Steli Efti: … You know how to always have lots of money. How not to run out of it. [0:06:46] Hiten Shah: Or know how much you have. Right? [0:06:47] Steli Efti: Yeah. If you don’t know how much you have, chances are very high you’re going to run out of it at some point, surprisingly. And- [0:06:55] Hiten Shah: That’s right. [0:06:55] Steli Efti: … The crazy thing about, like any company and any founder who has ever run into cashflow issues, they’re always surprised. It’s always a surprising thing. So it was like, “Everything is fine. Everything fine. Everything is fine. Oh God, everything is terrible. We don’t have any money, we’re going to be dead in a week.” Like it’s always that kind of a surprising quote unquote panic moment of like, “We have three more weeks to operate. How do we get cash? We have to scramble. We need to raise more money. We need to bridge financing. We’re…” And it’s like, wait a sec how did this happen so surprisingly? It happens so surprising because people that keep a good eye on their cashflow, they didn’t have a good sense for money management, and then you know, only a few knobs have to be turned and all of a sudden you are in a deep waters. We did an episode a while ago. I want to shout that out for people that want to go even deeper in this topic, and we’re going to talk about related subjects in a couple of episodes coming up, but in episode number 241 we talked about how to save money as a startup, so how to improve your cashflow just from a money going out point of view. 241 if you type into Google the Startup Chat, and 241 it’ll pop up as the first episode. Check that out if you want to find some simple ways to save money, but today what we really wanted to talk about, and have been, is more holistically how do you make sure you keep tabs on money in, money out, taxes? How do you keep a good sense for accounting? Now Hiten you have an amazing wife. She is very special in many, many ways, and I would not advice most founders out there to try to find a significant other that is an accounting tax and finance wizard that can work. [0:08:41] Hiten Shah: Yeah. [0:08:41] Steli Efti: It’s not a solid plan- [0:08:43] Hiten Shah: No. [0:08:43] Steli Efti: … To be like, “Oh, I’m going to go out this week and try to find myself a husband or wife that’s good at this.” So if I lack a significant other that’s already a ninja at this stuff, and you know, I don’t a ton of experience, now today there’s two things you can do. We’ll cover one of them in a future episode, which is like finding service provider probably, right? [0:09:02] Hiten Shah: Yes. [0:09:04] Steli Efti: An accountant, somebody that can do your bookkeeping, a bookkeeper, somebody that can advise you on tax matters, somebody that can advise you on cashflow matters. But the other side of the equation is it is 2019, this is a Startup Chat. Most of our listeners, many, many of our listeners are in the SAS or software business in one way or another. So what kind of software can we use today to make this happen? Here’s a big premiere for the Startup Chat. For those of you who have listened to us for almost 500 episodes. Now you know this is the only and first time you’ve ever heard us actually, you know, shout out a sponsor, and promote a company or product out there that we think, if you haven’t been listening for a long time and if you don’t have this topic already figured out, we’ve made a deal with a company with a software, with a product that we endorse and we want you to go and check it out, and sign up for it, and have them help you solve this problem. So big drum roll. All right. Silent, but big drum roll. Are you ready? [0:10:04] Hiten Shah: Yes. [0:10:05] Steli Efti: All right. Hiten hit them up with the company, and product, and what we have an offer for them. [0:10:10] Hiten Shah: The company is called Pilot, and the offer you will see if you go to pilot.com/startupchat, and it’s basically for the first hundred Startup Chat listeners, you’ll get 20% off of what their pilot core product is for six months. And you’re probably wondering by now what is Pilot? Well what Pilot does is they do your bookkeeping, and they do it with professional accountants, not folks that are outsourced. So these are in house bookkeepers. And one of my favorite parts about it is they do it right in QuickBooks online. So you’re not using a unknown tool or anything like that, and they make it extremely easy. And a lot of the problems that we just described, they solve, and that’s the whole point. If we were starting today, we both would look at options like this, and since we know them, and we’ve spent time with them, and they’re a sponsor, we would go use them. But you should check them out too, because they are the perfect fit for your early stage company, and they can grow with you, and they have all kinds of customers that are large and small and that they’ve grown with. And at the end of the day, this is the way, this is one way, this is a great way to solve that headache of bookkeeping, accounting, so you don’t have to worry about it. [0:11:29] Steli Efti: Yeah. So it make sure to go to pilot.com/startupchat. As we said, the first hundred Startup Chat listeners are going to get 20% discount off of their pilot core for six months. And Hiten and I are standing behind this offer. So if at any point, you know, if in the unlikely scenario that you didn’t get out of it what you wanted, or you weren’t happy, or you at any kind of challenge that they couldn’t help you? Hiten and I, you know, you can always get in touch with us. We’ll always, you know, put in our reputation on the line when we promote something. We know it’s great, and if you’re not sure about it, I wanted to underline that Hiten and I are personally going to step in help, with anything, any challenges, any questions, and make sure that you get tremendous amount of value out of the offer that we put forth. So if you are not planning to get married to an amazing accountant, bookkeeper. The next best option is to go to pilot.com/startupchat. You’ll see a ton of amazing companies that are using them. The team behind it is killer. We love the team. We love the product. We highly advise you, don’t do this yourself. [0:12:39] Hiten Shah: No. [0:12:39] Steli Efti: Don’t try to use a spreadsheet. Don’t go online and read three articles on how to do accounting, bookkeeping for your startup. Don’t waste your time and energy. Just use a killer software product and a killer company to take care of this so you never run into a problem. You never run into money management issues, and you can focus all your energy on what you want, and what you need to focus your energy on, which is growing your business. [0:13:04] Hiten Shah: There you go. [0:13:05] Steli Efti: That’s it from us for this episode of the Startup Chat. We’re looking forward to hear from you soon. [0:13:10] Hiten Shah: Later. [0:13:11] The post 434: Money Management for Startups appeared first on The Startup Chat with Steli & Hiten.

Today on The Startup Chat, Steli and Hiten talk about how to listen & learn from those with less success than you. Getting advice from people is taking that feedback is a key part of growing both personally and professionally. Being receptive to people’s opinions helps strengthen the relationships we have with them and gives us a different perspective on that topic.  In today’s episode of the show, Steli and Hiten talk about how you can learn from anybody and everybody, what Hiten cares about when he asks for advice from people, examples of people not to listen to and much more. Time Stamped Show Notes: 00:00 About today’s topic 00:41 Why this topic was chosen. 02:30 How you can learn from anybody and everybody. 05:15 What Hiten cares about when he asks for advice from people. 05:38 Worst thing that can happen when you listen to people opinion. 06:59 People that Hiten doesn’t listen to. 07:17 Examples of people not to listen to. 07:55 A weakness of Steli. 09:33 People Steli loves listening to. 3 Key Points: You can learn from anybody and everybody.Everyone can teach you somethingWhat is their perspective [0:00:00] Steli Efti: Hey, everybody, this is Steli Efti. [0:00:05] Hiten Shah: And this is Hiten Shah. [0:00:06] Steli Efti: Today on the Startup Chat, we’re going to talk about how to learn and listen to people that are much less successful than you. So here’s why I want to talk to you about this, Hiten. I had a conversation with a friend the other day and I don’t know how we got to that topic, but we talked about my brothers. I have two older brothers, they’re both entrepreneurs. We might have talked about me manipulating them many years ago into entrepreneurship and thinking maybe that wasn’t the best idea I’ve ever had because they had some good success but they had a lot of failures as well afterwards, but anyways, that besides the point. My friend and I were talking about my brothers being entrepreneurs and all that. At some point he asked me, how much do they know about your business, and do you guys talk shop? He was admiring us, like, “I wish I had brothers that I could talk about business entrepreneurship all the time.” And I was thinking about it and I was telling him it’s not like that. My brothers’ businesses are very different from mine. They have two small almost like a local AT&T shop or something that they’re managing as kind of franchise partners of sorts, and so their business is kind of very small, local consumer shop type business, very little to do with mine. The way they think about business, their experience, honestly, and their success is very different from mine. So oftentimes when I talk to my brothers, when they ask me about my company, I tell them very honestly kind of the good, the bad, what’s going on right now, and then oftentimes, especially my oldest brother, will feel the need to give advice or give his two cents and he’ll tell me something, “Oh, if I had this problem, this is the way you need to approach this,” and I barely ever listen. I kind of just sit there, nod and smile, but I’m not taking anything in. And that’s mainly because, honestly, I’m like, “You don’t fucking know anything.” Like I love my older brother, but when it comes to business I don’t have that high of an opinion of him. I don’t think that he’s super knowledgeable. So, as I was telling this to my friend, I’m like, “Yeah, to be honest, I’m a little bit of a shitty human. I’m not really listening to him when he tries to give me business advice.” As I was telling him that, I was like, you know what, that’s probably a mistake, because there might be truths in what he wants to share with me that have nothing to do with his success or failure. I just need to be more open to it. I just shut down with certain people when they try to give me advice if I don’t admire and respect them or if I don’t think they know a lot more about something than me. I’m actually pretty bad at this. That triggered a number of thoughts since that conversation which has made me think about this topic a lot more. “Huh, why do I not pay that much attention when I talk to somebody that I don’t think highly of, or when I don’t think is much more successful than me talk about business now?” And I feel my thinking is that that’s most likely a weakness of mine. Like, you can learn from anybody and everybody. They don’t have to have a tremendous amount of success. And besides that, if they’re telling you their advice or their opinion, you’re there, you’re listening, you might as well open your mind just for a second to take it all in. That’s not going to cost you much more than sitting there and actively closing your mind and not paying attention and not letting any of these ideas permeate. So, I don’t know, I’ve been mulling this topic over. It’s kind of been on my mind. I’m like, “Why am I this way?” Like I start observing myself more in these situations and I thought who better to philosophize, to have a conversation about this type of topic than you? First of all, because this might be something not everybody that listens to us agrees with, would you agree that people don’t have to be more successful than you for you to listen and learn from them even if it’s in a business context? [0:04:14] Hiten Shah: Yeah, I actually 100% agree that everyone can teach you something and someone doesn’t have to be more successful than you or more knowledgeable than you or even an expert in something for you to be able to get a perspective from them. I think that’s the way I would reference this in the sense of, like, what is their perspective, and that’s what I care about. I don’t necessarily care about exactly what they’re going to say. What I do care about is what their specific perspective is and how they came to it, because those are the kinds of things that are going to change my perspective or have a potential to change mine in a way that I might not be thinking of. Because oftentimes when we think about someone who knows what they’re doing or are successful in something, we might just want to associate with them or think that we, ourselves, are them or are aspirationally going towards them, but that doesn’t necessarily give you a variation and a variety of perspectives. It doesn’t give you a multiplicity of views that enables you to actually come to the right answer or come to the right answer for you. So, to me, yeah, if your brothers have an opinion, I’d want to hear it, and I’d probably ask a lot more questions to understand where their opinion comes from and what their logic is, because I think there’s value in that. It’s almost like worst case scenario you learn what not to do and how what not to do, how to think about not what to do in case you’re worried about, oh, their opinion doesn’t matter or something like that. So in my mind, I think their opinion is absolutely relevant and should be something highly considered no matter who it is. [0:06:03] Steli Efti: Is there any type of person in your life that you actively don’t listen to, where when you’re direct with them and they want to share something with you you just shut down your mind to it? Do you have any kind of context or situation where you behave this way? [0:06:21] Hiten Shah: Yeah, it’s a good question. I think that that’s a very good question. I think that, to me, the way that my mind works, it has more to do with do I value their opinion on the topic more than do I value the person or the person’s opinion generically? Because I’m sure there’s topics, and correct me if I’m wrong, where you feel like your brothers have lots of expertise, right? [0:06:48] Steli Efti: Yeah, absolutely. [0:06:48] Hiten Shah: So, to me, it’s almost topic-based where you can shut down, at least in my experience, than just based simply on, hey, this person doesn’t know what they’re talking about. [0:07:10] Steli Efti: I mean, there’s definitely people that people shouldn’t be listening to, so there’s certain situations where you might have to interact with either somebody that is very destructive in their criticism or feedback or just a negative person or just an idiot or whatever, a stranger that offers advice that wasn’t solicited and isn’t welcome. It’s not like you should always listen to everybody. Like, listening maybe even so we’re just not saying you have to accept everything you hear. You don’t have to agree. But listening is something that, I don’t know, I just find that when I’m in a situation where I am not leaving the conversation, I’m staying there and somebody’s talking to me, I’m wondering if actively not listening’s just a dumb habit that I have when I don’t believe that this person has expertise to offer to me that I don’t already have. And there’s other areas as well. It’s funny, since I’ve been thinking about this, I’ve discovered that when people talk to me about, I don’t know, like life coaches, right? They’ve met a life coach, or kind of a personal growth coach, and they talk to me about them and they’re like, “Oh, he has this or she has this great system, and they follow this psychogram thing, and then they evaluate you and this, and it’s super interesting,” I zone out. I instantly go, “This is all bullshit. Not interested in this.” But because it’s more of a habit than a in the moment decision, because I do it just instinctively, immediately, I find it probably to be a bad idea. It means that there’s some bias that I have that I’ve developed over time that it can’t serve me. [inaudible] I do something without free choice and it’s like with zero flexibility, I always do the same thing. I always shut down my mind and don’t listen when somebody talks about a certain topic or in a certain way with a certain person talking to me. I think that that’s can’t be serving me well, because anytime I’ve learned to become more open-minded, that has always served me, so I think even if a person doesn’t have that … I think the other thing is also, so we have sidelined to this topic, but sometimes I find that if you’re one or the other end of the spectrum, it’s actually quite fascinating. So, talking to my children about business, I’m actually super fascinated, because they know so little but there’s some purity. Or talking to my grandmother when she was still alive about certain topics. Even if it’s somebody that doesn’t have a lot of experience, education, if they have a complete beginners mind to a problem, I find that these people oftentimes have something really insightful to share. So I’m actually very open-minded to talking with a total beginner about something and listen to them. And then there’s the experts, people that are really proven that they know a lot about something. I love listening to these people. It’s the people that have some expertise that is lower than yours. Maybe it’s also the style. My brother offers expertise as if he was a billionaire, so he offers his expertise with a level of confidence that is a mismatch with his true success and his true knowledge, in my evaluation. It’s when it’s that kind of a mismatch that maybe because I have a dislike for that, I then just shut down. I still don’t believe that’s a good strategy because I’m sure that if I just listen, sometimes he could have something really valuable to share, or maybe listening to him and ask him for how he came up with this idea, or what he has experienced that led him to this strategy or this tactic or this advice maybe then will trigger a new thought in me that then will be really creative or interesting or valuable instead of just shutting down my mind, and with that really there’s no chance for learning, there’s no chance for growing, there’s no chance for him to learn because I’m not offering anything in return. I’m just sitting there and pretending to be listening, and then when he’s done I go and change the topic and just move on. [0:11:25] Hiten Shah: Right. [0:11:26] Steli Efti: Which is kind of a waste of life for both of us in that moment. [0:11:31] Hiten Shah: True. Yeah, I think the lesson and the most interesting part of this discussion for me is it’s not necessarily about people, it’s not even about topic, it’s just about how you’re evaluating the time you spend and how you’re learning from other people no matter who they are. And I think that open-mindedness can be really helpful in anyone’s life. So, valuing your time is important. You should value your time. Just like you said, it might not be good for either of you if you’re ignoring the person’s thoughts and feedback, and instead you can just be open-minded and be like, oh, that’s how that person thinks. This is what I can learn from that, which is either how not to think about it for yourself, or how to think about it, or just a different perspective. I find perspectives really valuable, and I find it important to also value our time and make the most of every moment that we have, if you want me to get a little sappy about it. [0:12:31] Steli Efti: Beautiful. No, couldn’t have said it any better. Right, this is it for us for this episode. This actually is such a funky episode that I’m curious to hear our listeners’ thoughts, stories, response. So, if you have certain situations where you’ve learned to listen and learned from people that before you were having a harder time with, if you have anything that reset that triggered you in a way, share a story, share a strategy or an experience, we’d love to hear from you. Just send us the emails: stali@close.com, hitenshah@gmail.com, and with that we’ll wrap up this episode and [inaudible] you very soon. [0:13:06] Hiten Shah: See ya. [0:13:07] The post 433: How to Listen & Learn from Those with Less Success Than You appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about comparing yourself with other founders & startups. It’s common for some founders to compare themselves and their startups with other founders and startups. ,and doing so is never a good thing. The moment we start comparing ourselves to other people’s apparent success, most of the time, we all lose. In this episode, Steli and Hiten talk about why comparing yourself to others is never a good thing, why you need self-awareness and self-acceptance to get to self-improvement, how a lot of founders are so insecure about who they are and much more. Time Stamped Show Notes: 00:00 About the topic of today’s episode 00:45 Why this topic was chosen. 02:02 Hiten’s point of view about founders comparing themselves. 03:23 The importance of self-awareness. 04:00 Steli trying to emulate Steve Jobs. 05:24 Why you need self-awareness and self – acceptance to get to self-improvement. 05:47 How a lot of founders are so insecure about who they are. 06:26 How lack of self-awareness leads to unhappiness. 07:00 How we’re always looking at others. 08:37 How you never know what someone else is going through. 3 Key Points: I think in one word we want to say stop!It’s easy to compare oneself on social mediaWhat’s important is your journey. [0:00:01] Steli Efti: Hey, everybody, this is Steli Efti. [0:00:02] Hiten Shah: And this is Hiten Shah. And today on The Startup Chat, we’re going to talk about, I think, something that it seems like people get prone to off and on. Which is comparing yourself to other founders, other companies, other businesses. Other people, even. And I think this is just a topic that we haven’t talked about that we wanted to talk about. So Steli, take it away. What’s the thesis here? What are we trying to say? [0:00:28] Steli Efti: Well, I think in one word, we want to say stop. Stop comparing yourself to others. There’s some beautiful quote, I tried to look it up real quickly, but I couldn’t, but somebody can tweet that at me. There’s probably a bunch of great quotes around the evils of comparing yourself to others. But this one particularly eloquent one around the source of all unhappiness or the source of a lot of unhappiness is really to find us, as humans, comparing ourselves to others and with others. And that goes for founders, and that goes for startups in general. Like startups just going, oh, this other startup is much harder than the company that we are working for, or whatever. So maybe we’ll break down why. At least my thesis or my opinion is that it’s not helpful to constantly be comparing yourself with others. And why it’s not helpful and what to do instead. But I’d love to hear… I don’t think you disagree, but I’d be shocked if you did, but I’m curious, would you agree with that? Did you give advice to others not to compare themselves with other founders of the startups? Is that even a problem? Or do you feel like most founders and startups are very… It’s a hypothetical question, a rhetorical one, but have you gotten the sense that founders don’t have this problem? Because I for sure haven’t. [0:01:52] Hiten Shah: I think founders do have this problem. I think it’s easy to go out there on social media or read Tech Crunch or any other news site and be like, oh, they’re doing great, I’m not. Right? Or I’m doing great, they’re not. And what we forget is, we’re individuals, we have our own journey. And that’s what’s important, which is, what’s your journey like? How are you doing on your journey? Not like, how are you doing compared to somebody else? So I think it is true that the greatest source of pain is when you start looking at other people and things outside yourself, outside your business, outside of your control, and start comparing to them. I think that that’s definitely something that I would recommend people really look into themselves and find out, well, are you actually doing something that’s related to what you should be doing? Or are you just doing things because it started with the comparison of what other people are doing? [0:03:01] Steli Efti: Yeah. I think that comes back to the theme that we’ve talked about many, many times on the podcast of founder self-awareness, right? Really, truly knowing who you are, so that you know who you might want to become. But in the process… I know that I for sure, when I started as an entrepreneur, all I did was, I seeked out stories of successful entrepreneurs. I’d try to have these… I was drawn towards having these idols, and then I wanted to be like them. Right? I remember one particularly bad idea of mine, which is one that during those years, I saw countless other founders do. When I moved to the Bay Area from Europe in 2007, Steve Jobs was as a height of his hype, and being admired as the best founder, most amazing CEO, and all that. I remember I would just consume any and every information about him, and there was a certain sense that I needed to be more like that. So the first startup that I did in the Bay Area, I tried to be a product visionary, and I tried to be… I didn’t go as far as dressing like him. That was too dorky, even for me, that seemed like a really bad idea. Although a lot of people, or a good amount of people, in Silicon Valley were not too good for that, and just walking around obviously looking like Steve Jobs. But I remember I tried to emulate him in the way that I was communicating, whether it was giving demos or presenting. I remember distinctly that I was putting this massive pressure on myself to be this technology visionary or something, product visionary. Which I’m not, it’s not my strength. And not my personality. It took a long time for me to find out who I truly am, and to accept… You know, self awareness only only works if you also then have a certain level of self acceptance. I find that you need self awareness and self acceptance to get to self-improvement, right? If you don’t have step one and step two, you can’t get to step three. It took me a while to really understand who I was, and to be okay with it, to then be able to evolve and improve in a way that was natural to me and good for me. When I look at many, many founders… And, I mean, this is a human problem, but if we scale it down to founders, many founders are just so insecure about who they truly are, and are clinging for certainty and confidence outside of themselves. So the most natural thing to do is to just look at who seems to be the most successful founder and just try to copy what they do, try to be like them. The hope that that’s going to, A, make you successful, and B, make you happy. And that way, most people will live a life where they accomplish neither of those two things. Neither are they going to become that successful. And even if they are, they’re not going to find their happiness. Because if you don’t know who you truly are, you don’t know what makes you happy. So you’re chasing these things based on the external world that, in most cases, people find out afterwards that, shit, now I’ve accomplished this thing that other people thought was amazing. Now that I have it, I realize I hate it. I don’t like it and it doesn’t make me happy. That’s even more depressing than not getting there in the first place, is getting to where you wanted to be and realizing you don’t want to be there. Right? So I think that that’s a strategy that leads founders to optimizing for all the wrong things in the way they build their companies. And with that, bringing a lot of failure with it, because it’s not authentic to them. And then the ones that succeed despite it not being authentic to them, with just copying what other people do, they seem to, you never know, but they do seem to live pretty unhappy lives and unfulfilled lives, even with some monetary success or something like that. [0:07:17] Hiten Shah: I think it’s fascinating, right? We’re always constantly looking at other people, looking at the outside world. I think it’s really important to understand what you’re getting inspired by versus what you’re imitating, and what you’re taking from other people’s experiences. Or at least your perception of them. Because I think another point here that I would make is that you don’t really know what someone else was going through, no matter who that is. Oftentimes, you don’t even know what your significant other is going through, really. You’re not them, you’re not in their heads. You don’t know. I think a big thing in this is really just about thinking through, what are the things that you are basically using to make decisions in your own life? And act and take action in your own life? And are those things from you? Something you actually truly care about or matters to you? Are they just imitations? Pure imitation of just what you think is right based on what someone else is doing, or someone else did, or your perception of how someone else was doing or what they did. This is something that I see a lot of folks spend too much energy worrying about. Other people and other people’s stuff, other people’s successes, other people’s failures, other people’s anything, instead of your own. I think that the big point here, which is, go find a way to focus on yourself, find way to focus on what you’re doing, your own needs, your own business. And don’t worry so much about someone else’s anything. Because it’s not going to help you as much as you might think so in the moment. In fact, you’re probably getting distracted when you start thinking too much about other people versus yourself. [0:09:16] Steli Efti: Beautiful. Couldn’t be said any better. So we’ll wrap this episode up with this. Don’t compare yourself to others. Compare yourself with your former self. You should always be in competition with your former self and try to get better every day. But really looking at others and what they project externally as their life and their success. Comparing other people’s external impressions with your internal world is just a recipe for disaster. Inspiration is good. Getting some drive, feeling inspired when you read a beautiful story about somebody’s success, that’s a nice thing, it’s a really beautiful human thing to do. But getting obsessed about what this founder is doing all day long and then wearing the same socks and hat, that’s not fucking going to make your company successful or your customer successful. Or constantly worrying about, oh, this company in our space was acquired, this company raised this amount of money. Why don’t we have more money? Why don’t we raise more money? This other company has raised a ton of money, we should raise even more, is not a strategy that leads to success. You need to have intrinsic drive of, what do you want to do with the money? And why you need this amount of money, and why this is the right time to raise it. Versus just looking at what everybody else is doing and going, well, they should know what they’re doing, so let’s just do what they do. They don’t fucking know what they’re doing either. Nobody really does. So yeah, stop comparing yourself with others. It’s not going to lead you neither to success or happiness, unfortunately. That’s it from us for this episode. We’ll hear you very, very soon. [0:10:53] Hiten Shah: Later. [0:10:53] The post 432: Comparing Yourself with Other Founders & Startups appeared first on The Startup Chat with Steli & Hiten.

In today’s episode of The Startup Chat, Steli and Hiten talk about how to run marketing experiments when you’re just starting out. As a founder, you need to run experiments in order to find out what will work for your startup. However, most marketing experiments are done wrong, and this can lead to failures, demotivation or can cost you a lot of money. In this episode, Steli and Hiten talk about how to run marketing experiments the right way, why having a goal super important when you run experiments, why comparing a startup to a big company is not helpful and much more. Time Stamped Show Notes: 00:00 About today’s topic. 00:35 Why this topic was chosen. 02:20 What marketing means to Hiten. 02:46 Why having a goal super important. 03:01 Why comparing a startup to a big company is not helpful. 03:42 Why trying complicated strategies too early is a bad idea. 06:20 Why you should try doing things that are easier to pick up. 06:50 How Hiten approaches marketing. 08:10 Why you should listen to episode 30 of the podcast. 09:11 Why learning from your competition is a good idea. 3 Key Points: I think the killer here in terms of comparison is the mentality.To me, marketing is just about driving traffic with a goal in mind.Figure out how you’re gonna get the right visitors that will sign up for your product [0:00:01] Steli Efti: Hey everybody, this is Steli Efti. [0:00:03] Hiten Shah: And this is Hiten Shah. [0:00:05] Steli Efti: And today on The Startup Chat, we’re going to talk about how to run marketing experiments, especially when you are at the very beginning or super small. So here’s the reason why I want to talk about this with you, Hiten Shah. I was emailing back and forth with a single founder that is just building NBP, and he’s trying to start his start-up, and one challenge that he described to me was the challenge that he was trying to be super data-driven, and super kind of experimentation-driven, and was saying that he was trying all these different experiments, but it would take like a week or two to collect enough data. And then a lot of these experiments that he’s tried haven’t yet worked, and he was asking me if… He was basically getting to a point where he was doubting that this will work well, and saying to me, “Is it the case that maybe just really well-funded start-ups with lots of people can afford to run all kinds of crazy AB tests and all kinds of different growth experiments, because most experiments won’t work, and when you are a one-person team, with very little money, you don’t have infinite time to just keep experimenting with great, crazy ideas that most of them don’t work. You might just have to do bread and butter things that are easier to succeed with, even if they are not necessarily as data-driven or as experimental in nature.” So, basically asking, are experiments only for big companies, or for start-ups with more resources, or can a single person be super experiment-driven and try to grow their start-up from day one, based on running different tests, and driving different experiments? And I could not think of anybody better than to state this problem to and get probably a funny reaction that’s like, “This is the totally wrong way of thinking about life”. That’s the problem that he brought up to me, and I was super curious to hear your kind of first reaction on that. [0:02:22] Hiten Shah: Yeah, I think the killer here, in terms of mentality, is comparison. I think that’s part of the problem. To me, marketing is just about driving traffic with a goal in mind. [0:02:41] Steli Efti: Right. [0:02:43] Hiten Shah: Well, what’s your goal? Well, your goal is to get traffic. Figure out how you’re going to find the right visitors that are going to sign up for your product, right? I don’t think it’s more complicated than that. But yet I think people tend to make it more complicated than that. And the comparison isn’t helpful. It’s not helpful to be like, “Yo, these big companies can spend all this money I can’t.” That’s, I think, where the problem starts and ends, is when people start thinking like that. And that tends to be where I see a lot of people get in a lot of trouble. Because they start really comparing themselves to larger companies instead of just worrying about, “Well, how do I get traffic, what do I need to do?” [0:03:28] Steli Efti: Yeah. [0:03:28] Hiten Shah: Because that’s what matters. Nothing else matters. [0:03:31] Steli Efti: The other thing though is, I think in this particular case, like I asked him what experiments he’s actually done, and it’s like… I think it might be more of an issue not of the experimentation, but of the trying way too complicated and sophisticated things way too early. [0:03:51] Hiten Shah: Mm-hmm (affirmative). [0:03:51] Steli Efti: Right so, he was describing to me, “Oh, I thought I’ll try an email campaign,” an outbound email campaign, so I came up with this super, to me, over-engineered, over-complex way of scraping some email addresses, and then he wrote four totally different emails, with completely different subject lines, and he set up this email sequence and he spent like two weeks setting all this stuff up, and then he started sending these emails, and realized that most people didn’t open any of his subject lines. Right? So, now you have a case of you spend, I don’t know, four or five weeks of this outbound email experiment and he has like, not many results to show for, so he’s at a loss of what to do now. He’s, “Well, I ran this experiment, I thought would generate a clear winner and a clear loser and based on that data I would know what to do next to scale this campaign and improve and optimize it. But I’ve done all this work and none of these emails really have worked, so now I sit here. I have five weeks of work and have nothing to show for it. And nothing I have learned.” That was one of his complaints, “I did all this.” And to me when I briefly looked over that outbound email campaign is one experiment that he did. He did some Facebook ad stuff that I didn’t have a chance to really look into, but it felt to me that he over engineered and made something way to complex and already had four different versions of things but didn’t get that basics right, so it was sending emails to people who didn’t want to hear about it or sending emails to people that don’t open emails, or just had really bad subject lines to begin with. So if you have five different subject lines that are all bad, it doesn’t really matter. You’re not gonna learn or gain any real insights by sending to five different ones. I had the feeling that, he bought into this idea of being analytical as a founder and using data and running experiments until you uncover, like, every time you run an experiment you’ll learn something and you learn what’s better than before and I think that constantly pushes you forward with great momentum. He’s been doing this for two or three months and working really, really hard, and feels like he’s not really getting anywhere. And to me it seemed like that was kind of a big part of his challenge and problem. [0:06:25] Hiten Shah: Yeah, I mean, look, if you’re gonna be really involved, complicated things early on, and maybe you don’t have experience doing those things, maybe you shouldn’t do those things. Try doing things that are much simpler, easier to pick up. Not because you’re a small company but because it just makes your life easier and it’s like [inaudible]. So early on you don’t necessarily know what’s gonna get you traffic, but you can look at what other people have done in your space to get traffic, and figure out what things you can do. And then start doing them. My process is always about… Okay this is my space, this is the customer I’m targeting. How do other people get traffic in this space? How have they done their marketing? And then I build from there. The reason I build from there and the reason I start there is because if other folks are getting traffic in this space then it’s likely that those are the kinds of channels and experiments that I can also run myself. That’s it. [0:07:25] Steli Efti: Yeah. [0:07:26] Hiten Shah: I mean, it sounds pretty bland and boring but at the end of the day, if you are looking at getting traffic, your best bet is to start with what exist and what’s out there and what you can kind of dissect and go from there. And what you can dissect is how other people are doing things. And so I don’t have an answer like, “Oh go and try these channels or these other channels,” but my biggest answer is just literally see what’s working for other people, make a comprehensive list of it. Do some homework, and then go figure out what you should do. Otherwise, you might be stuck like the person you were talking to is stuck in doing things that he thinks are right, but doesn’t really know if they’re gonna work. [0:08:05] Steli Efti: Yeah and we’ve talked about this, many, many times. You need to really take it one step at a time. This is actually impressive, I was surprised myself. In episode 30, so this was a while back, but still as relevant as ever, in episode 30 Hiten Shah and I talked about how to get your first 10 customers, right? I would suggest listening to that episode. I think it goes back to the basics of like not over complicating, not over engineering. It’s a small way of how we’ve taught ourselves as a start up community not to build the perfect and final product before we ship the very first product we’ve ever shipped. But to build minimal and viable products, right? And to learn and iterate. So same thing when it comes to customer acquisition. You don’t run 400 different experiments, if you are this massive acquisition team, with this incredible experience, and all this data and all this traffic and all that. If you approach it like that when you’re a single founder you’re just overwhelming yourself. You’re setting yourself up for failure. You can run experiments, but an experiment doesn’t have to 400 different variations. It doesn’t have to be that complex. And so trying to learn from the companies and start ups and founders and people that acquire and market to your customer base, or the type of customer you wanna acquire and trying to go slow and one step at a time and start with things that might not scale immediately, and then experiment with a few of these things but don’t over do it with just insane variations and variables, and setting up these super complicated systems, when you’re not even sure yet who your real customers are, when you’re not even sure you’re what your real product is. I think that really is that thing that a lot of founders stumble upon and stumble on. And so it’s back to the keep it simple stupid, mind frame hey? It’s not about experiments or not experiments? [0:10:10] Hiten Shah: Absolutely. [0:10:10] Steli Efti: Experiments are not just good or bad, it’s just about in the phase that you are in, the very beginning of your company, you need to keep it simple. You need to do very few things and you need to move very fast and learn based on these things. And we’ve talked so many times about like, customer intimacy, instead of just sending… Setting up some landing pages and paid ad campaigns and outbound emails, you know, maybe you just need to try to figure out a way to visit somebody that could be a customer, or meet up with a bunch of people and invite them for coffee, that could be customers. Or that are founders that have experience with acquiring the type of customers you want or, or building the type of product you want to build. And ask them some questions, show them your NBP. Get feedback and gain insights and in person even if it’s slow versus just setting up these scalable beautiful ad campaigns and outbound email campaigns and try to run all these crazy experiments and then find yourself weeks and weeks and weeks into all of this work with nothing to show for it. I think that that’s really at the core of what we been teaching for a long time now. [0:11:18] Hiten Shah: Yeah, you’ve got to be deliberate. Make sure that you’re doing things that actually matter. [0:11:22] Steli Efti: Boom, that’s it from us this episode. We will hear you very soon. [0:11:25] Hiten Shah: Happy- [0:11:26] The post 431: Should You Run a Ton of Experiments Early on as a Founder? appeared first on The Startup Chat with Steli & Hiten.