54 Screwups as a Startup CEO
We’re having a pretty great year at CB Insights — revenue is up, the team is growing and we’re executing at a high level.
But things weren’t always good.
We’ve had lean times and made many, many mistakes. Most were the result of things I did (or didn’t do) and I’ve been keeping a list of my screwups.
With that in mind, and as the new year approaches, I thought I’d share my list more publicly to serve as as a reminder to myself and as a public way for the team to keep me honest. For other entrepreneurs, I hope this list is useful, provides a laugh, or lets you see that you’re not the only one.
As you’ll see, my screw-ups span all facets of building a company — everything from HR to culture to product to sales to operations to admin. I am what you might call “multi-talented.”
So here they are in no particular order, bucketed by category. You’ll notice that some of these screw-ups sorta contradict each other. Yup — building a company is messy.
Culture
#1 — Thought culture would just happen
This is my biggest learning by far as CB Insights scales. I thought if we just hired smart people, built cool stuff and made customers happy, culture would just happen.
I learned that it would, but it wouldn’t be the culture we want. Building the operating system of the company the way we want is something that must be actively worked on.
As a step one, we’ve created a Culture Code doc. As new teammates join who’ve not seen the leaner times (crappy offices, product woes, etc), the culture code will serve as their guide on what is expected of them and what they can expect from the organization.
#2 — Didn’t do enough 1 on 1′s with folks on the team
Regular feedback (both ways) is important. I didn’t do this enough which results in people not knowing how they are doing or me getting feedback on how I’m doing. This type of feedback loop is important especially in a fast growing company where things can change frequently. This lack of feedback was one of the challenges I saw when I worked in a big company. I’d get an annual performance review, and they’d say “you need to work on X” and I’d think to myself, “why did you wait till year end to tell me this?”
Trying to remedy this.
#3 — No 360 feedback
We never had asystematic way for teammates to give feedback to each other (and to me). It can be hard to deliver tough messages in person, but if we want to really improve we need to facilitate a way to do this.
#4 — Provide more context about company direction
Since we sit in an open floor plan, I kind of assumed everyone knew what was going on because they can hear me and others. The problem with my logic is that everyone too busy *actually working* to sit around and listen to me.
So while people are aware of the tactical week-to-week stuff, the big picture stuff about where we are going, why and how hasn’t been covered as well as it should have been. Looking back, I really underestimated the importance of the big picture stuff in providing context to the team to help them become more successful.
#5 — Keep folks updated on everyone’s work
There would be mornings when the biz dev would be doing a demo and see a whole new feature or improved interface on the product that they had no idea about before. This is not good.
We just weren’t doing a great job of letting everyone know what others were working on. Knowing what others are working on is a good thing as it helps us do our jobs better. If our research team is doing content that our biz dev should know about for customers, that’s a good thing. If the research team is seeing a certain visualization take off, the product and dev teams should know about that. This exchange of information benefits everyone.
#6 — Terrible on-boarding of new teammates
We’d throw new teammates into the deep end. Setup your computer on your own, a nebulous project and ad hoc intros to the team. We’re scrappy, right? That goes with the territory.
Wrong.
Our “onboarding” process (it was generous to call it that) reminded me of this great HR joke I read on First Round Review with a punch line of “Yesterday we were recruiting you. Today you’re staffed.” I think you see where I’m going with this. The type of onboarding we did is so suboptimal, I can only laugh in retrospect that we thought it was ok.
With the hard work of Jeneuse, Forrest and Harrison on the team, we’ve redone the onboarding process from top to bottom. It’s not perfect, but new teammates have a much better experience than folks used to. Thankfully.
#7 — Ring the gong more even to celebrate small wins
Organizations don’t go from being unsuccessful to magically successful over night. It is not binary — there are degrees of success over time. From my point of view as a founder / CEO, we are moderately successful today, but….we could be a lot more successful. With that said, it doesn’t mean we shouldn’t celebrate small wins and accomplishments *today*.
Celebrating these doesn’t mean we’re less hungry or less focused on the end game. It’s just a nice way to recognize that we have momentum and ensure the team knows it.
#8 — Eat together more as a team
We provide a lunch stipend for the team, so everyone orders from Seamless for lunch. While I’ve seen more and more folks grabbing lunch together in the kitchen area, I think getting the team together for lunch more frequently would be a good thing. It becomes logistically challenging as we grow, but there’s value in getting the team all together and doing this while we still can.
#9 — Didn’t give people clear enough instructions assuming they’d figure it out
While we continue to prize resourcefulness, it’s not an excuse for providing half-baked directives and say “figure it out.” Getting better at fleshing out requirements for everyone is important as it will ultimately speed us up.
Human Resources & Hiring
#10 — Hired smart folks and said we will figure it out later
This might be an effective strategy if you are Google with lots of big problems and where you can just find a home for smart folks, but at a growing company, this hasn’t worked for us. In the past, we’ve hired really smart people without clear roles for them in the hope of figuring it out as we went along.
We don’t have the organizational structure or time to figure this out, and it’s not fair to these teammates either. Smart people want to actively manage their career and have aspirations for where they want to be. We tried to figure things out on the fly, which may sound appealing and exciting in the beginning, but it never worked for us or them.
#11 — Hired under pressure
Every time I’ve cut corners to fill a role or hired because I felt that “we really need someone in this role” it never has ended well.
#12 — Fired too slow
I have agonized over these decisions — wasting time, getting aggravated and just not taking action. Beyond the time lost, the work we needed done was not getting done. In a big company, having a team of 30 with some folks not holding their own is fine, perhaps. In a young, fast growing tech company, it’s unacceptable. I should have made the hard decision quicker and moved on with life.
#13 — Poor anticipation of where we need to hire
I didn’t always think ahead about staffing needs as I should have. As a result, we ended up hiring too late, which meant that certain key areas weren’t covered as well as they should have been.
#14 — Moved slow on game-changing hires and lost them
I’ve talked to a few candidates over time who I really think might have been game changers. But I moved too slow or got bogged down on details and lost them.
#15 — Believed in the new hire messiah
I tended to “fall in love” with new hires and think they’d come in and magically solve some intractable problem we had. The problem is my expectations/hopes were unrealistic and I often found myself disappointed. Now, I try to have more reasonable expectations. And sometimes, I get surprised which is amazing. But banking on the new hire messiah is something I no longer do.
#16 — Be careful of hiring the annoying or assholes.
Skills change, personality doesn’t.
#17 — Didn’t check references and didn’t know how to do good reference checks
There were times when I actually didn’t check references. What a royal F up. Never again.
Besides not checking references, I didn’t know how to check them. I just used to do them as a formality to rubber stamp a decision we’d already made as a team. Now I ask hard questions during reference checks and have learned to read between the lines. General rule — if the references are not effusive, the person won’t get an offer.
#18 — Experimented with remote workers too early
We hired remote workers before we’d really figured out our workflow and basic processes. It was a colossal failure. We may explore this again in the future, but we just tried it too early.
#19 — Hired customer success earlier
We had a really good retention rate from the beginning, but as we picked up the pace of product development, it hurt us not to have someone actively working to ensure customers were aware of new features to help them be successful with the product.
Assuming customers will figure out new capabilities is not a reasonable expectation of them. It’s not a customer’s job to figure out how we can be valuable to them. It’s our job to do that.
The other powerful aspect to customer success has to do with the idea of negative churn. I highly recommend reading these posts by Lincoln Murphy, Christoph Janz and Tomasz Tunguz if you’re not familiar with the concept.
Pricing
#20 — Thought cheap pricing would help us win
We tried to compete on the price front when we started and in retrospect, it was the wrong dimension to compete on. Now, because we price based on value, our pricing is up more than 10x, which helps us focus on the right types of customers and product capabilities to serve their needs.
#21 — Got too cute with pricing
Below is a screenshot of an early version of our pricing page. Ever heard of a “Limo Plan”? Of course not.
I think part of me thought people would just love this page and it would magically go viral or something like that. Ha ha. That was dumb.
Sales & Marketing
#22 — Didn’t focus on sales enough
We are first and foremost a technology and product-driven company. If I ever had an extra minute in the day, I always gravitated towards doing product “stuff”. As a result, we spent a lot of time on product tinkering in the beginning instead of “getting out of the office” and selling CB Insights. My slowness in getting us selling has had bottom line impacts, in that we should have made a lot more money earlier than we did.
#23 — Tried to use jargon to sound bigger & more “institutional”
I seemed to think that using terms like “best practices” or “synergy” or “socialize” made us sound more institutional and serious. In reality, it isn’t consistent with the tone and brand we want to build and to be honest, it made us sound robotic, douchey and boring.
This has had a direct impact on our newsletter subscriptions. One of the reasons our newsletter has been growing so quickly is that we’ve adopted a more conversational tone and talk to people like people. In February 2013, it stood at 10k subscribers. By May 2014, we were at 27,400 and as of today (6.5 months later), it has grown to 50,000+ subscribers.
Of course, dropping jargon isn’t the only or primary reason for the growth of the newsletter (the data-driven content by our data science team is the main reason).
#24 — Thought partnerships would solve distribution
I thought our initial inability to sell could be solved by signing up partners who’d sell and market for us. These deals took time to strike and never worked. If we can’t sell the product ourselves, thinking someone else could sell it was the epitome of stupid.
#25 — Wasted time on poor quality leads
We get between 100–200 trial signups per day on average. Many of them are in our target market and we used to waste time on every lead. This sounds so elementary in retrospect, but initially, we wanted to get everyone. The result of this with a small team was that we wasted time on bad leads and good leads sometimes went ignored.
#26 — Tried to have pricing that worked for all people
When we launched 4.5 years ago, we tried to have institutional pricing as well as pricing for startups. I was afraid to pick a market because “having options” seemed like a good idea. We quickly realized that picking a market gives us clarity in our messaging and approach, helping us to narrow our market a bit.
#27 — Didn’t meet customers in real life enough
For a long time, I actually thought in-person meetings and sales were a relic of a bygone era. What I’ve learned is that providing a glimpse into where we are going provides us with fantastic insights into what we should be doing more of with our product and what we’re doing poorly. They also are great for providing us competitive intelligence and general market insights and often, they also lead to new business by virtue of referrals.
These interactions take various forms. Sometimes, it’s a dinner like the one we hosted with 10 corporate M&A and strategy clients in San Francisco. Sometimes, it’s having customers come into the office to meet our product team to highlight what they’d like to see our product do more of / less of. With these customer meetings, we occasionally see common trends emerge which helps tell us what we should be prioritizing. For example, Steve Schlafman of RRE and Amish Jani of FirstMark Capital both came by the office and in our conversations, both independently mentioned the CB Insights Chrome Plugin as something they use frequently. We were not doing a lot to enhance the plugin in all honesty, but their feedback made us see that we should be doing more with the plugin to make it more valuable.
#28 — Took rejection too personally
If we signed on 5 new customers in a week but lost 1, I fixated on the loss. While churn is obviously an important lever in the growth of a SaaS company, my focus on the loss was counterproductive. I should have figured out with the team what we can do better in those cases and then move on. I should have also celebrated the victories we’d just had. Not getting excited about the wins is just not a good motivator for the team.
#29 — Tried to be a “salesy” sales guy
I had never done sales before CB Insights. In the beginning, I thought sales had to be done in a certain sales-y, “sell ice to an eskimo” sort of way. That is not me. I’m an introverted guy by nature and trying to do this was a big giant fail. When I started “selling” by just highlighting my understanding of the client’s needs and challenging them to think of ways to do things better using us, things started to click.
#30 — Didn’t ask enough questions in sales conversations
I’m not a natural salesperson nor had I ever really observed what really good salespeople do. So my view of sales was I give my pitch and the customer will or will not buy. What this meant was that in sales calls, I’d drone on and on oblivious to the client as my goal was to hit on my checklist of features.
The results of this robotic, talking at sales process weren’t great.
Then, I started talking to people who’d done sales before who shared a lot of insights with me. The biggest was about asking questions and making it a dialogue or conversation. When I started asking questions that helped me understand their pain points, the conversations were much better and the results improved.
#31 — Poor post demo follow up
I’d have a great demo but would not follow up appropriately to ensure they were getting value out of their trial. This is a surefire way to have a sub-optimal close rate.
#32 — Didn’t ask for sale
I used to be hesitant to ask for the sale thinking it was somehow uncouth to do that. Again, this was foolish. By not asking for the sale, I dragged out eventual sales and also spent too much time on folks who had no chance of actually converting. Getting to no quickly is only 2nd best to getting a yes quickly. Dragging things on with a client is never useful or a good idea. Asking for the sale prevents this.
#33 — Would spoon feed objections to prospects
Don’t give prospects a reason not to buy your product. I used to do this, and there is no good reason for it. Here’s an example from when I used to do this.
I would demo Investor Search on CB Insights and at the end of demo’ing, I’d say something like
While this search tells you all the active investors in the Internet of Things, it won’t tell you who has been most active.
We now have Rankings search on CB Insights to do this, but before we did, you couldn’t do it. That said, there was no point in me saying the above. Our investor search is a great tool, and I’d just shown the prospective customer something that only CB Insights can do. But I negated all that by telling them about something it couldn’t do. They might not have even cared about that capability, but I now planted a seed of doubt in their mind and probably made them wonder “What other things can’t CB Insights do?”
There was no good reason to do this. Prospective customers are going to ask questions about whether the product will meet their needs. When they do, we should answer honestly about what is possible or not possible. But giving customers reasons to not buy the product was a very bad sales strategy.
#34 — Wasted time trying to find new customer acquisitions channels. Didn’t exploit what worked.
I spent a lot of time thinking about new channels to acquire customers without exploiting what we were already good at. Our data-driven research content was inconsistently published, as was our newsletter’s cadence (though when we did it, it worked). This was driven by a lack of understanding our metrics as well as my desire to find the next new thing. As a result, we wasted time on new channels rather than sticking to content.
Once we realized this, we course corrected and now have a killer content / data science team of 6, which we’ll expand to 10–12 in 2015.
If you think you could head up the group, we’re looking for an editor-in-chief.
#35 — Gotten our sweet t-shirts earlier and send them to customers
Customers love getting cool swag. And our t-shirts are very cool, as modeled by the sexiest team in banking.
#36 — Wasted time with people who wanted to “integrate with CB Insights”
We get a lot of inbound messages from folks who want to integrate our data into their products or who want to white-label our product. 98% of the time these have been giant wastes of time. Generally, I’ve found that people who propose convoluted business relationship structures often (1) don’t have money and (2) don’t know what they want or are doing.
I know now to pre-qualify these quickly and move on.
#37 — Have been too modest about our technology
This one sounds like a humble brag I know. But hear me out:
We take a lot of pride in making hard things look easy because I wrongly thought the customers didn’t care how the sausage was made. But I’ve learned that they do. I’ve seen companies drop marketing buzzwords around Machine Learning and Big Data into their pitch and watched customers really get excited about those things.
So while we don’t lead with the buzzwords, we’ve started talking more about our data mining technology to get our financing and acquisition data or about the science behind our content marketing efforts.
In addition, by not emphasizing our technology, we also were probably hurting our recruitment efforts.
#38 — More proactive outreach to journalists
We get a fair amount of press, but there are lots of interesting trends and insights about companies and investors we see pretty early. We should be proactively reaching out to the media with ideas, rather than waiting until they inquire.
Product
#39 — Took advice from non-customers (who would never be customers)
Not all feedback is created equal. Feedback from existing customers or credible prospective customers is worth a lot. As is advice from people who’ve done something similar to us, i.e. entrepreneurs who built or scaled SaaS or data companies. But taking advice from folks outside of those camps has generally proven to be a waste of time.
I think Mark Cuban’s thoughts on this are sound:
Never take advice from someone who doesn’t have to live with the consequences.
#40 — Chased fads
Chasing the flavor-of-the-month has always proven to be a waste of time. Remember when gamification and badges were the shit? I thought people wanted badges and gamification, so we worked on that. Wow, was I wrong.
I read a line that startups fail more often of indigestion than starvation. There have been times when I’ve been distracted by new opportunities which were not worthwhile or just too small to be interesting. Eventually, when we’re massive, we’ll target all of those. But when we were a team of 10 or 15 or even 25, we needed to pick our battles and avoid the distractions.
#41 — Should have shipped a “rawer” product
I’ve always been afraid of negative feedback. As a result, we spent too much time perfecting some key pieces of the product when we should have just shipped it. Reid Hoffman’s comment seems appropriate here:
If you are not embarrassed by the first version of your product, you’ve launched too late.
#42 — Cared about competitors too much.
In the past 4.5 years we’ve had several companies, big and small, enter our space. They’re always more well-funded than us and usually they’ve had a lot more fanfare. I used to get fixated on what they were doing, but over time, I’ve seen nearly all ultimately die. What I’ve realized in all of these instances is that my “fascination” with these startups is driven by ego.
Money doesn’t buy execution. We’ve gotten this far by focusing on customers — the people who pay us. I’ve stupidly forgotten this at times.
#43 — Product development driven by competitors — not customers
I’ve made the mistake of fixating on what a competitor does and thought “oh, we should do that”. That has always gone poorly. Two things I’ve learned from these mishaps:
1) When we’ve done stuff in response to competitors and not customers, it has never gone well. Customers pay us. I need to listen to them and remember the rest is noise.
2) Our team has a much better view of where the market needs to go than our competitors. We should trust our instincts.
Admin & Infrastructure
#44 — Stayed in a crappy office too long
We started in 125 sq ft and I think there is a weird part of me that likes the austerity of living humbly, but this went too far.
Before we moved recently, our last office for a time had 18 people in 900 sq ft. The smells from everyone’s lunch were enough to drive you crazy. Being in such close quarters made collaboration among the team impossible, not to mention it was definitely not a great first impression for new hires.
#45 — Didn’t outsource payroll soon enough
I manually wrote checks and did the withholdings and filings on my own for way too long. What a pain in the ass. We’ve moved over to ZenPayroll which has been great.
#46 — Didn’t fire bad advisors quickly
Obvious sounding, but sometimes it’s harder to do than expected. Advisors of any kind (lawyers, accountants, PR, etc) often have a lot of knowledge about how things work and so when starting the business with one advisor, transitioning it to someone new may seem daunting.
Because it is.
What I’ve realized over time is that waiting to fire a bad advisor to avoid this transition pain is a bad idea. The problems that come from having a bad advisor pile up quickly and will cause you more headaches down the road than the short-term transition pain. Some of our goto advisors are mentioned here.
Miscellaneous
#47 — Dressed poorly
For a long time, I literally had 1 blazer. So if I was going to buttoned-up event or doing a TV appearance, I was always rocking the same blazer. It was kind of absurd. I’ve since added a few more to my closet, but I suppose I should dress better to “look the part”. One day.
#48 — Bought stuff from customers
I did this a couple of times with the idea that we should support those that support us, and while it’s mostly worked fine, it does occasionally get messy when things don’t go well. In these instances, I should have done my diligence on them as a vendor as if they were not a customer and made my decision based on facts instead of just assuming they’d be a better vendor to us because of our pre-existing relationship with them.
#49 — Got involved in sales to friends
I have friends who are in our target customer demographic and have made the mistake of becoming directly involved in the sales process. As a result, I’ve found it better to have someone else on the team sell these subscriptions as it depersonalizes things and forces smarter, more business-like decisions for both them and us.
#50 — Responded to trolls on the internet
As satisfying as you might think it may be, I’m here to tell you that responding to trolls is just never worth it. I now keep in mind the following adage:
I learned long ago, never to wrestle with a pig. You get dirty, and besides, the pig likes it.
#51 — Our initial name was not very institutional friendly
We started off with the name ChubbyBrain. Not an easy name to get Goldman Sachs to buy a subscription to. Only thing that might have been worse was this logo we considered for a bit.
#52 — Wasted time “networking”
I get emails from folks to have coffee semi-regularly. I wasted a fair amount of time on these in the name of “networking”. I now push to have an agenda & objectives for the meeting so that it’s clear there is a reason to meet. While there is perhaps some “serendipity” lost by doing this, I’ve found that conversations with people who have a clear reason to meet are more productive for both of us.
#53 — Introduced people via the single opt-in
I quickly wised up on this after realizing these types of introductions are evil. I now only introduce people with a double opt-in introduction email. Trust me on this one.
#54 — Half-assed VC meetings
I took meetings with VCs who called us to talk about “how they can be helpful.” In the beginning, I thought when someone with money calls, you should take the conversation. The problem was that I wasn’t interested in raising money and as a result, I was not prepared for these meeting like I should have been. Unsurprisingly, I looked dumb and didn’t present CB Insights and our team the way they deserved.
No matter how informal the conversation is, talking to investors requires putting on your game face. Not being into it, I shouldn’t have taken the conversation. It was a waste of time for both parties and took me away from what I needed to focus on — the product and our customers.
If you’ve made it this far, congrats. We’re hiring and our onboarding is pretty good now
I’ll be updating this post over time. Many more screw-ups to come I’m sure, but hopefully I’m learning and making new mistakes, and I hope the team will keep me honest.
If there are other screw-ups you’ve seen in an emerging, fast-growing company that you’d like to share, leave them in the comments. Thanks for reading.
