Make Your Customers Successful
By Shripriya Mahesh, Partner at Omidyar Network
Some founders have been entrepreneurial since childhood, but Sean Behr didn’t realize he wanted to start a company until relatively later in life. After several years as an executive at Shopping.com which was acquired by eBay, Sean became the first employee at Adap.tv and helped build its video advertising platform and grow the company which led to a successful acquisition by AOL. Along the way, Sean discovered that he wanted to create something that had never been created before, which led him to found Zirx, an on-demand consumer valet parking service which grew and scaled rapidly. After realizing the consumer business would not become self-sustaining, Sean shifted the focus of the company from consumer to enterprise and rebranded the company to STRATIM.
Building a company is an enormously difficult feat. There’s no guidebook to help you through your unique journey as a founder. But as Sean says, it’s an awesome privilege to build something that wouldn’t otherwise exist, and he counts himself lucky to have the opportunity to transform lots of people’s lives for the better.
Here’s what we learned when we spoke with Sean.
Great companies are built through constant experimentation, learning & iteration
“With both of my last startups, I learned it’s really difficult to get the right product or the right product-market fit on the first try. You learn something along the way, and you tweak a little bit more, and you keep tweaking. Many times, you think, ‘Well, once we get to product-market fit, we’ll stop.’ The truth is that you’re always going to keep experimenting.
Even when you think you have product-market fit, you’re still always looking for what’s next. What’s the next thing we need to build for our customers? What’s the next iteration of our product? How can we expand? The trying never ends. Being an entrepreneur means you always have to keep innovating, pivoting, experimenting, and learning. You’re bringing something into the world that wasn’t going to happen anyway, so it’s okay if your first iteration doesn’t work. It’s okay to always be asking questions and tweaking things.
The two questions I ask myself when thinking about product-market fit are: ‘1. Will this product or service make a big impact in the world or in an industry? 2. Will this product or service allow me to return capital and make money?’
It’s easy to have product-market fit for something that services only a small number of customers, but in that scenario, are you driving any real change? It’s also easy to have product-market fit and ignore the economics, or conversely, worry about economics and not product-market fit. The key is to blend these considerations together and focus on building companies that have the power to actually change an industry, a country, or even the world.”
Learn as much as you can, as quickly as you can
“STRATIM started out as an on-demand valet parking service called Zirx. When we first launched, we thought we had product-market fit. Our customers loved us, our parking garage vendors loved us, it was wonderful. But we didn’t make any money.
What I learned in pivoting the company is that to be successful, you need to seek out opportunities to learn. Rather than avoiding bad news or harsh realities, figure out what the problems are, and fast. It was painful, really painful, when I realized that on-demand consumer valet parking wasn’t going to be a successful business that could be profitable or self-sustaining. But then I took a step back and told myself, ‘It’s okay. We’ve built some great tech here. We have a great team. Let’s leverage those assets to do something new that will create a self-sustaining business, one that will create lots of jobs and change an industry.’ And that’s when we decided to pivot to enterprise.
If I could go back now, I wish I had learned faster. That’s a core theme that I would say throughout my career and throughout the companies I’ve worked at. Learn as much as you can as quickly as you can. That is one of the key things that I rely on in order to have success.”
Scaling doesn’t mean following a basic playbook
“Especially when you’re scaling a company, it’s important to always question your assumptions. I remember with Zirx, we assumed all cities would be the same. We thought we could just build a playbook and expand city-by-city following that same outline. That doesn’t work. No two cities were the same. Things that worked well from a customer acquisition or operational standpoint in one city failed miserably in another city.
The other thing that we learned around scaling was when you scale something that doesn’t have the unit economic strength of it, what you set yourself up for is scaling of money loss rather than scaling of customers. The thing I would say around scaling now is we only scale when the economics work. Economics that work enable you to scale into a new city, into a new geography, or into a new product market environment. Before the economics work, scaling is a fool’s errand.”
Authenticity and transparency are critical aspects of leadership
“People don’t often tell you how important authenticity is in order to be a good leader, but it’s obvious when it’s there and when it’s not. When you’re authentic with people, they’ll rally for you. When you’re not authentic, things are much more difficult.
Every Friday afternoon, I hold an all-hands meeting. I give everyone on the team the good news and the bad news. I share all our numbers, like how much profit we made yesterday or how much revenue we made today. I also take anonymous questions during the all-hands. Being authentic is the best ROI for leaders, entrepreneurs, and founders.”
Your role as CEO and founder is to lead by fostering the culture, hiring great people, and setting goals
“The hardest thing about being a founder is that no one tells you how to do it. There is no book called ‘Here’s How to Be a Founder’. So you get to work. And the next day you show up, and there’s still no book, so you keep going.
In the beginning, as a founder, you’re doing everything. You build models. You build slide decks. You send lots of emails. You go to lots of customer meetings. Eventually, you hire great people, and a lot of the doing happens by other people. For a while, you sit there, and you’re like, ‘OK, well, what should I do?’ Eventually, you learn that your role as CEO and founder is about building culture. It’s about hiring people. It’s about setting goals and giving people room to achieve those goals. You need to be involved, but not so involved that people don’t feel like they have enough freedom.”
Put in place core values to codify your culture, not invent it
“By establishing a set of core values, you’re creating an environment where people know what’s expected of them and what’s going to make them successful. I’ve always spent a lot of time on them. They’re a critical part of the company building process.
But don’t set your core values too early. Establish them somewhere between 18–24 months of starting a company which is when you have a culture already established, and a group of people that are around a shared mission and a shared set of values. If you let the culture develop, you walk the walk, your leadership team walks the walk, you may get to a point where you say, ‘You know, now is the time to tell everybody what they probably already know in the back of their head is important. Now we’re going to print it out so that everyone can see it and agree on it.’
To figure out what your core values are, look at what’s already present. What are the values that are already being shared amongst employees about your customers and/or your industry? These are the shared values and experiences that you have as a team, as a culture, and as a company. I don’t think you can set them in a room by yourself and then walk out and say, ‘OK everybody, here are our core values.’ That wouldn’t be authentic. It probably would fall flat and wind up being posters in a conference room that nobody reads.”
It’s important to hire people who can quickly adapt, have taken personal risks, and are self-reflective
“You’re going to face challenges throughout your startup. The question is — do you have the right people on the bus to solve these challenges, even the ones that we can’t foresee yet?
The three things I always think about when interviewing potential new hires are:
- Is this person capable of succeeding in the organization regardless of any challenges that might come up? Often you think you’re hiring someone for one specific role, but then it turns out to be something totally different or something much more complex. If this happens — and let’s be honest, it probably will in an early-stage company — can this person be successful in that new role?
- Has this person ever taken a leap? I look for people who’ve gone out on a limb for something, because that’s usually a good indicator of success in a startup. The leap they’ve taken can be anything. It can be, ‘I moved across the country,’ or, ‘I quit my job and went back to school.’
- Can this person look back at the choices they’ve made and honestly say they’d do something differently? I’m interested in how the person answers the question. I don’t want people who are going to give some fabricated answer that just makes them look good. I’m looking for people who can self-evaluate themselves in an honest way. Because the point here is to determine their authenticity.”
Make your customers successful, not happy
“My team and I always strive to make our customers successful. Notice I’m saying ‘successful,’ and not ‘happy.’ I honestly don’t care how happy our customers are. It’s not my job to make them happy. My job is to make customers successful. I want customers to use STRATIM and get promoted, get a great review, or get a great raise. And the reason why is because they brought in STRATIM that made their company more efficient, lowered their costs, or gave their organization better transparency.
I want my customers to grow their revenue or have more profit or get acquired by bigger, successful companies, because at the end of the day, their success is our success.”
The best way to grow your customer base is to build great products
“You can probably sell somebody on using an inferior product, but eventually they’re going to figure out that it’s an inferior product and not return. What really grows your customer base is that if you solve a really big problem for your customers, they will become your salespeople for you.
What I’m always afraid of is buying customers. Certainly, in the world of valet parking, if I just lowered the price, and spent more money on Facebook and Google, I certainly could grow. That wouldn’t be the same as building a business that’s going to be around for the long term, and really change something.
For me, real successful companies use marketing and advertising as an accelerator for a great product, not, ‘Let’s throw more money into advertising, and the product is OK.’ I’d rather see the reverse.”
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