Wednesday, September 23, 2009

Paul English @ MIT

Our speaker at Founder's journey this week is Paul English, one of the co-founders of Kayak. He started out with a brief biographical sketch.

Kayak is the 4th company founded by Paul. He was introduced to his co-founder Steve Hafner of Orbitz by Joel Cutler at General Catalyst. Steve pitched Paul over a couple of beers. Steve knew the travel business and Paul knew technology, and neither were experts in the other's domain. Paul used this to make the point that when you meet someone, if you have instincts that this would be a fun person to work with or has the skills you don't, learn to listen to that instinct and act on it!

Paul then touched upon the topic of hiring people. He mentioned that his strategy is to *always* be recruiting. He is always tuned to "who has that thing I am looking for?", and keeps an eye open always. This sounded like excellent advice to me. Self-awareness is a must, especially for entrepreneurs who need to hire to complement their strengths, and I have long since learned never to underestimate the role of serendipity in entrepreneurship. So this piece of advice really spoke to me.

When Paul hires people, he looks for 4 things:

1. Bandwidth - people who get things the first time, can handle curve balls and are intellectually intense.

2. Attitude - people who are focussed on winning, with the focus tempered by humility, a hunger for excellence and genuine curiosity.

3. Experience - people with expertise he doesn't have. They don't necessarily need to have experience with the task they are being hired for, but as long as they have the bandwidth, attitude and a complementary skill set, they will be considered.

4. LODB - Lack of Dysfunctional Behavior. When employees start at Kayak, they need to promise Paul 2 things (a) be the best in the role they sign-up for, and (b) be an energy amplifier. I loved this, and this is the second time in my life I've heard this advice.

The other person who gave me this advice 9 years ago is someone I revere as a technology guru who personifies both virtues. These people bring out the very best in the people they're around, and inspire others to try and mirror their excellence and energy amplification. Brady Keays, thank you for your excellent advice to a young engineer nearly a decade ago. It has served me very well. Thank you Paul, for reinforcing the message!

When an employee promises Paul these 2 things, Paul in return promises:
(a) he will make the person more productive than they have ever been before and (b), When they look back in 20 years, Kayak will be the best job they've ever had in terms of fun, work environment and job satisfaction.

Paul succinctly summarized the importance of LODB (Lack of Dysfunctional Behavior) when hiring: Better to make a mistake and lose a good person than make a mistake and hire a dysfunctional person. The dysfunctional person will pull down the team.

On the topic of integrating a new employee into the company, Paul shared his philosophy: "If you have a really strong group of employees, a new hire maybe shy. So for the first 30 days, our team focuses on what they can learn from the new hire first before the new employee becomes used to the group's ways".

He then talked about the red phone in Kayak's office. Per Paul's description, this is a big ugly red phone with a loud and annoying ringtone. When a customer calls kayak, one of the engineers has to answer it and is forced to directly connect with the customer. If there's a bug, it's a great incentive to fix the bug before one more customer calls with a complaint! There's nothing like connecting an engineer with his customer to produce a quality product.

Paul's final piece of advice was this: founders can fall in love with their ideas and ears can become deaf to criticism. Therefore, it's good to put out an early prototype and have it trashed, rather than trying to build a perfect product and getting it out to customers. Mark it clearly as beta, and your reputation will be intact. Do not sell a final product you are not proud to stand behind.

That capped an evening filled with multiple nuggets of wisdom.

Thursday, September 17, 2009

Chris Hughes @ MIT

Chris Hughes was at MIT on Monday, 09/15 addressing the "Founder's journey" class. He is the co-founder of Facebook and the brain behind the Barack Obama campaign. His visit was a hit among the students, many of whom related to him and the pressures he experienced building Facebook out of a Harvard dorm room. He was very engaging and had these great nuggets of wisdom to share:

When Chris, Dustin and Mark created Facebook, their goal was not to build the biggest website in the world. They started with brainstorming for a product they would all use themselves. He reiterated that it's about passion, a desire to build a great product, and not about the metrics or the money. He offered this advice to aspiring entrepreneurs:

- First, know what you are doing/working on. Second, make sure there's a need for it. Then, focus on it. Per Chris, the conversation inside Facebook was "How do we make sure the product is the best it can be for first, our end users, next, people who want to use our platform for marketing and advertising?"

- Don't get caught up in the formalities. He made it clear that he's not advising people to ignore the formalities (company incorporation, legal paperwork etc), but instead to understand that you will get caught up in it, and to be conscious of the fact that other, potentially more pressing matters, demand your attention.

- Value iteration and analytics. Chris provided an example from the Obama campaign: His first step was to understand what it was they were building. He was a newcomer to politics and like most of us with no political backgrounds, thought of TV related advertising when he heard "GEO TV" (it actually stands for "Get Out the Vote!"). He then set out to educate himself and started by clearing the slate and brainstorming. When he was short-staffed in the early days, he reacted by breaking up a big task (building the technology for the Obama campaign!) into the smallest possible pieces and tackling them one at a time.

For instance, the team first built the technology to publicize individual events, then the technology to publicize the events to different groups, and scaled from there. The focus was always on who's buying the product, who's using it, and how they are using it. On the donation page, the team tried several design changes such as the wording, the shape and color of the donate button etc. The iterations were rapid and repeated, until the team settled upon a version that increased the donation amount by 8%!

- Hire smartly. Chris advised hiring people who are smart, whose work and style you respect, are interested in your product, and are available to hire. He recommended going with the gut feeling whether or not a person is right for the job. If the feeling is one of indifference, his suggestion is to not hire them unless one's desperate!

- Don't let money distract you. Enough said.

Wednesday, September 16, 2009

Brad Feld and Shawn Broderick @ MIT

Brad Feld and Shawn Broderick visited us on 09/16 Wednesday, at 6.078 Founder's Journey. Brad gave us a brief autobiographical sketch which had refreshing content - he talked also about the companies he founded, that did not succeed. Here are some highlights from his talk:

Brad is a MIT alum. who decided on Course 15 (management) pretty early. He founded his first company in 1983-84 when he, along with 4 classmates at MIT, decided to write software for Macs. They managed to raise $10,000, bought a Lisa and got a consulting contract for a company that did speech recognition. The contract was worth ~$10,000. The team spent a year on the project without making much progress. When they realized this, they shut the company down, sold the computer for $7000, and returned $7000 to their investors. This was company #0.

Through college, Brad continued to consult on the side and undertook projects such as writing software for a dentist who happened to be his fraternity brother's stepfather for $25/hour. When he was approached to write imaging software for Cephalographic analysis, he hired a fraternity brother to work for him for the summer, raised money from another friend's FIL and was in business! This was company #1.

In Spring of 1987, Brad took a business plan class and ended up writing the business plan for "Feld Technologies". Feld Technologies created semi-custom software for networked PCs. In 1988, Shawn joined Brad at this company, and they have known each other ever since. The company grew to over 20 people, was sold in 1993 and eventually became a public company. Brad worked for the acquiring company for 18 months, the first 9 running the consulting group that was built around the acquisition of Feld Technologies, then as CTO of the overall company. He eventually got bored as CTO, and realized that he wasn’t really doing that much that was substantive or important to the future of the company. At this point, he decided to move on.

In 1994, he became an angel investor. Raj Bhargava, then a student at MIT Sloan, approached him after his talk there, invited him out to lunch and impressed him with his idea. Raj showed Brad the world wide web in its avatar, back then. Brad ended up investing $25,000 for 10% of the company. The company was NetGenesis, and eventually went public in 1999. Brad went on to found 4 more companies with Raj. The rest is history.

TechStars was pitched to Brad by David Cohen, an entrepreneur who had sold a his company in Boulder, CO a couple of years ago. Both of them shared a common passion - they wanted to help companies at the pre-seed stage and go beyond the traditional angel investor role by mentoring these pre-seed start-ups. Together, they reached out to the community and got a great response. The first class graduated in 2007 and 3 of the companies have been acquired since. These acquisitions more than paid for the cost of the program. Of the 10 companies from the class of 2008, 7 companies became self-funded or raised money. In 2009, TechStars decided to launch the Boston program in addition to the Colorado program with Shawn as its head. Techstars Boston graduated its first class last week to rave reviews.

What would be awesome is to see a couple of teams from Founder's Journey graduate from TechStars class of 2010.