Author: Andrew Gadson

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What I learned about entrepreneurship at the gym

In February, a few months before beginning full-time work on HeartThis, I decided to get serious about going to the gym. As I entered my mid-twenties, I figured it was a good time to whip myself into shape in the hopes of maintaining a high level of fitness as I get older. I focused primarily on strength training with plans for later emphasis on mobility and cardiovascular capacity. Knowing I respond well to steady tangible progress, I adopted a linear progression strength training program and careful tracked all my workouts. As work on HeartThis started to ramp up, I realized that a lot of the lessons I learned from strength training were directly applicable to starting a company. I’ll share the three lessons I’ve learned that I have been of the greatest assistance for me as an entrepreneur so far:

Beware of information paralysis
There is an enormous amount of information available on how to train for strength – thousands of books, blogs, online communities, etc. I was particularly drawn to subreddits like r/fitness and r/weightroom that provide a constant stream of new information. There are articles examining in minute detail of all aspects of strength training — from the ramifications of different squat stances to the ideal timing of protein consumption. Eventually, I realized that research rapidly hits a point of diminishing returns. There are only a few basic underlying principles for strength training, and after learning those (which you can do in couple of hours) I was much better suited hitting the gym and getting on with the rest of my life rather than researching how to optimize my routine. This is directly applicable to starting a company as well: there is no substitution for action. Completing an appropriate level of research and due-diligence is important, but at some point you have to set the books down and do the work. I also find that I gain greater benefit from both strength training and entrepreneurship research when I take frequent breaks to focus on implementing what I’ve learned rather than continuously acquiring more information.

Routines get you through the bad days
I generally enjoy working out, but there are plenty of times when I don’t want to go do it for one reason or another — I’m tired, it’s late, I’m hungry, and so on. The key turning point for me was to bake gym time into my weekly routine. Eliminating the question of whether or not I “feel” like going on any given day means it just happens, the same way I get up and go to work every day. It was always easy to go when I was well rested and full of energy, but now even on bad days I consistently go because there’s no longer a decision to be made that’s susceptible to mood swings. Routines and processes serve the same purpose when building a new company. They’re your safety net on days when you’re feeling unfocused and unmotivated. I currently use a simple process that I call “Three Per Day” to keep track of what I should be working on at any given moment with minimal mental effort. On days when I’m feeling great, I don’t really need the system because I have no problem spending the extra mental energy required to think through all the tasks at hand and the best order to tackle them in. On bad days, it’s a lifesaver because having to sort through and prioritize a mountain of potential action items would completely derail my productivity.

Environment affects performance
In the past, I always worked out in college gyms or traditional fitness centers like 24hr Fitness or Crunch. Recently, when my lifts started getting heavier I decided to seek tips from an expert and drove out to a professional powerlifting gym. It was like night and day. Many of the people at the gym were monstrously strong. At least 2-3x stronger than anyone I’d encountered at regular gyms (for those of you into lifting numbers, we’re talking as high as 600lbs bench press and 900lbs squat/deadlift). The usual flirting, showboating, and rampant narcissism found in gyms was completely absent. Instead, there was a deep sense of camaraderie and support as everyone was 110% focused on self improvement and putting a brutal amount of effort into every lift. It was even a surprisingly diverse community. Alongside the competitive powerlifters was an older gentleman doing rehab work, a high school athlete training in her off season, and a few beginning lifters not much stronger than myself. My training advanced more in a single session at that gym than it had in the past month training 3x per week on my own. The environment showed me firsthand that I was nowhere near the limit of what could be achieved if I worked hard enough and inspired me to push myself that much harder. I try to apply this lesson to building HeartThis as well. My goal is to surround myself with people who are highly focused and far superior to me in some respect. Right now I’m looking to hire two new software engineers, and one of the criteria I use is that they have to be a substantially better engineer than I am. By creating an environment where greatness combined with mutual support and encouragement is the norm, I am confident that individual performance levels will be far higher than in an average company. Unfortunately, the powerlifting gym is too far away for me to attend regularly. I try to maintain the same level of focus and effort at the local gym, but I can tell that even being aware of the difference can’t quite make up for being in the actual environment.

I’ve also discovered that the benefits of working out on entrepreneurship are not a unidirectional. Starting a company has also improved my workouts! Sometimes when I’m feeling spent and ready to give up at the gym, I ask myself if I’m the type of person who just gives up when I’m tired, and what that would mean for my startup. I ask if I’m going to let down my coworkers, my investors, and myself by giving up just because building the company gets hard. Without fail that gives me the motivation to push through the rest of my workout as a way to prove to myself that I’ll be able to make it through the rough patches of starting a new company.

If you’re interested in what strength training program I use, I started with StrongLifts 5×5, and then advanced to my own modified version of Madcow 5×5. I highly recommend them for building raw strength, but if you’re going for aesthetics or cardiovascular fitness there are better alternatives.

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Finding Funding: Fundraising will kill your productivity

Over the past month, I’ve had to cope with the fact that fundraising for HeartThis has wreaked havoc on the team’s overall productivity. Instead of cranking out code and hiring new recruits, my time has been spent tweaking decks and pitching investors. When initial meetings go well, my co-founders also have to take time out of their duties to join the next round of meetings. Fundraising is an important (and necessary) process for many startups because capital is the lifeblood of a new business. However, I strongly recommend that you prepare yourself for the massive productivity disruption it can cause.

If you’re the point-person for fundraising (most likely the CEO), then assume that while fundraising you’re not going to have time for anything else. Make sure your team knows this and has the resources they need to keep moving forward with minimal input from you. Prior to starting fundraising in earnest, the HeartThis team had an intense hacking week where I was able to crank out a lot of code and see our product move forward in a tangible way. Over the last 3-4 weeks I’ve barely done any coding, and I have found myself frustrated with the lack of progress. I have to constantly remind myself that by raising funds I’ll have the resources necessary to bring on more developers and we’ll more than make up for any “lost” time. It can be particularly disheartening when meetings end in rejection because it feels like the epitome of wasted time. In reality, even meetings that don’t lead to checks can be extremely fruitful. Whenever an investor decides to pass, I push them to be specific about their reasoning. Sometimes it’s not anything actionable (ex. you don’t fit into their portfolio’s investment thesis), but occasionally I’ve gained insight into an underlying weakness in product or vision (or more often a weakness in how I convey the product or vision). In addition, the multitude of investor meetings has yielded valuable contacts for later funding rounds or even later companies.

There are some steps you can take to try to minimize the reduction in your own personal productivity while fundraising. Because of the multitude of meetings, it’s hard to find large contiguous chunks of time to tackle tasks. Instead, I have to be ready to get things done whenever I have a few spare minutes. This is far from my ideal work style. I strongly prefer getting in the zone and working nonstop with minimal distractions. In order to still be effective in the short blocks of time between investor meetings, I try to keep 3-5 small, high-priority tasks in my work queue at all times. As soon as I find myself with a few spare minutes I immediately start working on something of importance without wasting time wondering what to do. Even with this process in place I’m still not getting a huge amount of work done outside of fundraising, but it’s better than nothing.

There’s really no way around it: fundraising will kill your productivity. Just remember that it’s vital to the growth of your company, commit yourself to it fully, and when the cash is in the bank you can get back to building an awesome product. Good luck!

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Focus on strengths, protect against weaknesses

Perhaps the most important skill that every entrepreneur needs to learn is focus. A lack of of product focus leads to feature creep, a lack of design focus leads to weak user experiences, and a lack of personal focus leads to poor execution. Taking careful stock of your personal strengths and weaknesses and then zeroing in on how to leverage your strengths and mitigate your weaknesses will help determine your role in tackling the endless stream of challenges that you face when building a startup.

Focus on your strengths because that’s where you have the potential to be great, and winning at scale as a startup requires greatness. To identify your strengths consider what things are either inherently good at (ex. if you’re a naturally engaging public speaker) or things that you have built up expertise in through experience (ex. if you spent 10 years working in advertising and know the business inside and out). Next, aggressively develop these strengths, ideally to the point where you are materially better than your peers at them. Finally, ensure that a large part of your role in the company is centered around these unique strengths. This laser focus on identifying, growing, and leveraging your strengths will insure you’re making the greatest impact possible at your company.

In addition to strengths, we all have weaknesses. In the time and cash-constrained environment of a startup, time and effort spent trying to improve personal weaknesses should be minimized. Self-improvement is a long and difficult process, and chances are that even with significant effort you will not be able to turn your weakness into great enough strengths to be considered a competitive advantage. Instead, try to protect against your weaknesses. The easiest way to do this is by allying yourself with people whose strengths complement your own. It sounds simple, but you would be shocked at how many people, particularly in leadership positions, try to handle everything themselves. I’ve been guilty of it myself in the past, and I can tell you from personal experience that it does not end well! It should be noted that identifying your own weaknesses is fairly difficult, so I highly recommend enlisting the help of trusted peers to generate an honest assessment.

Mark Zuckerberg is a great example of someone who successfully focuses on strengths and protects against his weaknesses. I don’t know him personally, but my understanding through mutual connections is that Mark truly excels at product and engineering. However, prior to Facebook ,he had no real large-scale operations/management experience and doesn’t have a natural inclination for either. Rather than spend time trying to master all skills necessary to run a multi-billion dollar behemoth, he mitigated his shortcomings by establishing an excellent team of advisors with experience growing successful companies. Most importantly, he hired Sheryl Sandberg as Facebook’s COO. This was a brilliant move. Sandberg knows business and ops inside and out, and by letting her guide those functions at Facebook Mark is able to fully leverage his product and technology strengths. One tell-tale sign of a great leader is if they are strategic about surrounding themselves with complementary talent.

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My 5 favorite tech blogs

I’m keeping it simple this week with my top 5 picks for blogs everyone in tech should read.

1. First Round Review
Hands-down the best resource for actionable tactics and practical advice straight from industry leaders. My first recommendation to founders and product team members looking for fast effective learning resources.

2. @AndrewChen
I have a high bar for bloggers write about growth (most are a waste of time), and I consider Andrew Chen the gold standard. A must-read for anyone working on growth.

3. AVC
Fred Wilson of Union Square Ventures’s blog gives a fantastic look into how investors think. Make sure to check out the MBA Mondays posts for practical advice on everything from employee equity to revenue models.

4. Elad Blog
Insightful, honest, and practical posts from serial entrepreneur Elad Gil. Very helpful in the early days of a new startup.

5. Paul Graham Essays
Not as directly practical as some of the previous resources, but Paul Graham’s essays always provide excellent food for thought.

 

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Finding Funding: A/B test your pitch

As the founder of a startup, a large portion of your time is spent pitching — to investors, to potential employees, to your friends and family when they start wondering if you’re really just unemployed — you’re constantly tasked with explaining and validating your business idea to others. There are numerous articles written on best practices for pitching (I strongly suggest all entrepreneurs read everything by Naval and Nivi over on Venturehacks), but in this post I will focus on one specific process for perfecting your pitch: A/B Testing.

A/B testing has become a favorite tool for iterating on consumer web products, but I’ve found it incredibly useful for improving how I convey my business idea. When HeartThis was still at the ideation stage, I was often reluctant to discuss the idea. Not because I didn’t believe in its potential, but because I knew that I wasn’t able to convey the full concept in a concise and engaging way. If you find yourself in a similar situation, don’t fall into the trap of trying to independently come up with “the perfect pitch.” Do the exact opposite. Discuss your ideas openly and as frequently as possible while having a process for systematically improving your pitch. Here’s how to do it:

1. Write down an exhaustive description of your business. Feel free to go into as much detail as you like.

2. Based on your description, identify the key 2 or 3 components that make your business unique.

3. Come up with 3 elevator pitches for describing your business that touch upon the points identified in step 2. These should be no longer than 2 to 3 sentences and should be as different from each other as possible. For example, one could draw a parallel between a company in another industry, one could focus on your team, and one could position you against direct competitors.

4. Start using your new elevator pitches. Talk to as many people as possible and rotate through your different versions making note of how people respond.

Typically, you will quickly find that one version of your story clicks with people much more so than the others and starts to be your go-to pitch. Based on that learning, repeat steps 3 and 4 until you end up with an impactful pitch that immediately captures your audience’s interest. You may also find that different versions of your pitch resonate with different groups (ex. investors vs potential customers), so you can begin developing a specific pitch for each audience. This strategy is also helpful because in order to get enough data points you’ll be forced to do a lot of pitching, and like most things in life, when it comes to pitching practice makes perfect.

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5 tips for building your network

1. Be great at what you do.
If you only remember one point from this post, make it this one. If you are great at what you do, a powerful network will form around you with surprisingly little effort. People that work with you will refer others to you for everything from expert advice to employment opportunities. By taking the time and effort to continuously hone your craft, your skills and accomplishments will eventually reach a point where they speak for themselves and people will actively be trying to network with you rather than the other way around.

2. Treat others with genuine kindness and respect
People naturally form stronger bonds with those they enjoy spending time with. Imagine you have two acquaintances who are starting new companies. One is a kind and thoughtful person who treats others respect, the other is a self-centered egomaniac who is often rude to others. Assuming both startups are equally promising, which one are you more likely to introduce to a potential investor? Time and time again I’ve seen people go out of their way to help others when they feel like they are a “good” person, and drag their feet when called on to help people they consider mean or disrespectful.

3. Socialize without ulterior motives
Nobody likes the overly schmoozy person at the party who is clearly just there to add contacts to their LinkedIn profile. I’ve personally found that the most effective way to network at social events is not to try networking at all. Stop seeking out the “power players” and “influencers” and try talking to whoever happens to be around you. More importantly, actually listen to what they have to say. Examples of times when I made some of my most valuable contacts: A party bus, a casual dinner party, and an E-mail intro to someone recruiting for a position I wasn’t interested in. In all three instances, I had no idea they would blossom into valuable relationships. They were just interesting people that I had fun chatting with over a bottle of whiskey, a tasty meal, and a cup of coffee.

4. Don’t be afraid to reach out
I learned this lesson from my friend Josh Schwarzapel. He’s the type of person who decides he needs to talk to someone and then makes it happen no matter what. Case in point, we were bouncing startup ideas back and forth and thought it would be awesome if we could get Reid Hoffman’s opinion. One week later we were sitting in Reid’s office running our idea by him (for the record, Reid is someone who actually lives up to the hype, he is just as brilliant as all the stories suggest). I was dumbfounded that Josh was able to make that happen, and since then I’ve made it a point to never assume that anyone is out of reach. I’ve done things like sending direct E-mails to CEOs asking questions about their business, and more often than not I’ve received a thoughtful response.

5. Stay involved with your communities.
People often underestimate the number of communities they belong to — family, classmates (not just college and grad school, but K-12 too), neighborhood, teams, work colleagues, and so on. Don’t let those connections die. I’ve had old friends reach out to me that I haven’t spoken to in almost a decade, and in some cases, I’ve been able to help them via feedback and introductions. Often times fruitful connections come from unexpected places. The high school slacker might have finally gotten her act together and work at a VC firm that’s the perfect fit for your new startup! Plus it’s always nice to reconnect with old friends. I’ve found that the passage of time has a lot less significance on relationships than we think.

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Pay employees what they’re worth not what they’ll accept

This week I was faced with a situation where a potential hire felt burned by their past compensation experience. They found out they were being substantially underpaid compared to their peers even though they were acknowledged as one of the highest performing employees. When they joined the previous company, this individual had accepted an offer that was much lower than what others were willing to accept, and that set them on a substantially lower compensation trajectory.

This raises an important question that all companies must wrestle with: how should you compensate your employees? At one extreme, you can pay employees the lowest possible amount they are willing to accept. On the other, you can pay employees the maximum amount you are able to pay someone with their skills. Let’s consider the pros and cons of these two approaches.

At first, paying employees the minimum they’re willing to accept appears to be the clear winner from an economic standpoint. However, that doesn’t hold up under closer scrutiny. In order to work, it relies on employee compensation remaining strictly confidential. Compensation will likely vary widely between employees with similar skill sets because they will each have different minimum acceptable amounts. If this disparity becomes widespread knowledge you risk a team crisis, particularly among top performers who discover that they’re paid less than their peers. Anyone who has worked in industry for more than a few of years knows that compensation is anything but confidential. People talk, and with resources like glassdoor.com becoming more popular it’s easier than ever to get a sense for what your peers are being paid. In addition, your best employees usually receive a steady stream of recruiting offers from other companies. If you undervalue them by only paying what they’re willing to accept you run a higher risk of losing them to someone who is willing to compensate them at a level commensurate with their abilities. Aside from risking employee morale and heightened attrition, I believe this style of compensation also speaks negatively to the type of company culture you’re trying to build. It makes it crystal clear that you value the bottom line far more than any individual, and that’s a great way to discourage loyalty and create a cut-throat self-centered organization.

Alternatively, paying employees the maximum amount you’re willing to offer someone of their skills is costly from a cash flow perspective. It is highly likely that many of your employees would have accepted more conservative offers. However, this has the potential to create a company culture that affords a level of productivity and loyalty great enough to offset the increased compensation costs. Instead of worrying about keeping everyone’s compensation under wraps, you can more openly discuss compensation and what it will take to move up to the next pay band. When making an offer, you can be clear about what you consider market rate for the position and how you’re adjusting it up or down by some amount due to the applicant’s specific skills and experiences. Employees will feel like their compensation is fair, they are properly valued, and there is a clear path to increased compensation. It is also less likely that outside recruiters will be able to offer dramatically higher compensation. This level of transparency and fairness does an excellent job of fostering employee loyalty and making them feel like they work for a company that cares about them as an individual. One thing to note is that this style of compensation is still viable in an early-stage startup that does not have the cash to pay market-rate salaries. In these cases, everyone should understand that salaries across the board are lower than market rate, but the lower cash compensation is offset by greater equity and potential for rapid career development. It should also be made clear that salaries will be adjusted towards market standards upon reaching profitability or taking in significant additional funding.

As I’m sure you’ve gleaned by now, I lean heavily towards the later style of compensation. I do not believe in overcompensating employees (that leads to its own unique set of problems), but I have seen first-hand that undervaluing employees is short-sighted and leads to serious long-term issues. Furthermore, if you don’t think someone is valuable enough to compensate fairly, then you probably shouldn’t bother hiring them in the first place.