singular choice

Money is like gasoline during a road trip. You don’t want to run out of gas on your trip, but you’re not doing a tour of gas stations.

Being an entrepreneur is sexy… for those who haven’t done it.  In reality it’s gritty, tough work where you will be filled with self doubt.  Entrepreneurs are survivors.

Usage is like oxygen for ideas. That means every moment you’re working on something without it being in the public it’s actually dying, deprived of the oxygen of the real world.

If we have data, let’s look at data. If all we have are opinions, let’s go with mine.

Nobody said it was easy.

No one ever said it would be so hard.

I’m going back to the start.

I’ve tried to use this betashop blog (and my socialmedian blog before it) as an outlet to provide budding entrepreneurs with transparent insights into lessons of a startup life. The post I’m most proud of, 90 Things I’ve Learned From Founding 4 Technology Companies, has been translated into several languages and read by many  people. It was also turned into a video interview with Kevin Rose. That post was preceded by 57 things learned from starting 3 companies, which was preceded by a shorter piece on the socialmedian blog shortly after I left Jobster in 2008. (The socialmedian blog was unfortunately taken down following the acquisition of socialmedian by XING in 2009 so I can’t link to that post). I love hearing other entrepreneurs tell me that a part of one of those posts influenced their own startup journey.  

In 2012 and 2013 I took the betashop blog in a direction that I’m not proud of. I allowed it to veer from its original mandate around startup transparency and lessons learned to more of a promotion tool for Fab. Sure, I shared more company data and info on betashop than most startup CEO’s would imagine sharing, and I know that a lot of people appreciated the transparency. But to be perfectly honest the sharing was sometimes slanted; more and more betashop was used as a vehicle for pushing out positive data about Fab. That’s not full transparency. Someone once asked me, “will you still share so much data when things aren’t going so well?” At the time I said “Yes.” In reality, I did not. It’s really hard to proactively publish negative data about your company (imagine the post: “Hey, look how crappy our monthly sales were!”)  I don’t know many good examples of companies who do that well, except for the occasional “why we failed” post from early stage startups. Company transparency can only go only goes so far.

2013 was a pivotal year in my professional career and for Fab. In July 2013 Fab raised more than $150M at a $1B valuation. Just a couple of weeks after closing that financing  I decided that the best path forward for Fab was to slow down and significantly cut the burn-rate while we strengthened the foundation vs. pursuing rapid growth. From August to November we cut our workforce by more than half from 700 to around 300 today. I said farewell from Fab to one of my cofounders  and to numerous other highly capable and extremely talented executives, managers, and doers. It was painful.

But, it was necessary. My job as CEO is to make the decisions that will provide the greatest likelihood of future success for the company. The decisions I made in the back-half of 2013 and the changes that resulted from them will enable Fab to be more customer focused, more resource efficient, and more long-term successful as we execute on our 2014-2017 plan. 

On a personal level I took some justifiable hits in 2013. That goes with the territory when you raise money at $1B and then cut headcount and operating expenses as dramatically and swiftly as I did. I freely admit, when you grow revenue 500% year over year and become a media darling overnight, it’s hard to keep perspective. No doubt, we had lost perspective at Fab. We had started to dream in billions when we should have been focused on making one day simply better than the one before it. 

My focus now is squarely on making Fab realize its full potential over time. I know that my near term decisions might not always make sense externally. I believe that over time we will prove it with real results.

“Over time” is the key part of that last statement. One of the biggest lessons I’ve learned the past year is that time is an entrepreneurs most precious asset. With time you can learn, adjust, and figure things out. The cost-cutting measures we enacted at Fab in 2013 bought us a lot of time. Now we’ve got to figure it out. Want to know how Fab is doing? Ask me again in 2017 ;-)

Regarding blogging.

From now on betashop will only feature a once-per-quarter long form blog post by me on recent lessons I’ve learned as an entrepreneur. It will be authentic.  Four times per year I’ll try to come up with something of value to other entrepreneurs based on my own recent experiences. 

I will also publish occasional posts on the Fab Blog. We’ll be evolving that blog as the proper place for disseminating information about Fab.

So, here goes (and it’s long so thanks in advance for reading it…)

16 Lessons I Learned in 2013

1. Startups are hard. There’s no way around it, startups are hard. And it’s supposed to be that way. You are trying to do things that no one has ever done before. You are trying to disrupt markets and incumbents. You are trying to change consumer behavior. You are  trying to move your employees out of their comfort zone. 

You are going to make mistakes. You are going to fail. That’s all part of the startup life.

The critical bit is to make sure that your entire team knows and internalizes that startups are supposed to be hard. This is especially difficult when your company is flush with cash and in growth mode. How do you explain to your team that you’ve got $xx millions (or $xxx millions) in the bank but their job is supposed to be hard every day? How do you get your team to spend every dollar like it’s their last and to be obsessively paranoid of complacency?

By no means have I fully figured this one out yet. The natural default for me and for many CEO’s is to try to inspire the team each day and focus on the wins, not the losses.

Here are some ways I’ve been trying to keep our team at Fab focused on the “it’s supposed to be hard” bit:

Say it. Say it again. And again and again. In talk after talk I keep reiterating the phrase, “Startups are hard; they are supposed to be hard.” The point is to acknowledge and keep hammering home this thought as a tone-setter.

Celebrate challenges as much as successes. In 2014 I’m instituting a monthly “what sucked this month” review. The point is not to get people down on the business rather to make sure we stop regularly and really talk through the weaknesses in the business and then make sure we have proper resources focused on improvement.  

Make uncomfortable the new comfortable. Push people out of their comfort zone. Don’t allow group think to get in the way of pushing forward. Inertia is a company’s biggest enemy. 

Measure vs. plan — using the right metrics. It’s too easy when you are growing to just ignore the plan in the name of growth or to focus on the top line instead of the bottom line. It is critical to measure regularly vs. plan and to make sure you are keeping score on the metrics most critical to long-term viability and value creation.

2. Control Your Own Destiny — Cash Is King. I noted above that the entrepreneur’s most valuable asset is time. With time you can figure all sorts of things out. But, in order to have time, you need to have money to pay for salaries, rent, and operations. Never ever let yourself get into a position where you are desperate for cash. When I made the difficult decision to cut expenses at Fab in mid-2013 I had essentially two options in front of me: keep growing at the pace we were growing and hope I could raise even more money down the road, or scale back and control our own destiny. I chose the latter. Yes, it is my fault for getting us in such a position in the first place, but the go forward decision was rather simple. I didn’t want to ever get in a position where we were desperate for cash. With a $1B valuation we have a lot to prove. We now have the money and ample time to prove it.

3. Don’t Abdicate, Challenge & Delegate. You know that saying, “Hire people who are better than you at what they do and then step back, get out of their way, and let them to do their jobs?” — it’s wrong. The more correct way is: Hire people who are better than you at what they do and then roll up your sleeves and work with them and challenge them everyday. The point is that the CEO can’t abdicate responsibility for any facet of the business. Only the CEO is uniquely positioned to ensure that there is cohesion across the business. Only the CEO is uniquely positioned to ensure that everyone is marching towards the same vision. Only the CEO is uniquely positioned to challenge even the smartest execs to reach out of their comfort zone and think differently. Only the CEO is uniquely positioned to make every facet of the business important. This last point is especially salient. In the past, at times when I spent less time asking about and talking about certain departments at Fab, those functions perceived it as a lack of interest and understanding on my part as to the importance of those facets of the business. “Jason doesn’t care about ops.” “Jason doesn’t care what we sell as long as we sell it.” As CEO, you can’t let that happen. You have to take an equal and keen interest in all facets of the company.

4. As the CEO, it’s all your fault because you set the tone for the entire business. 

You know that Harry Truman saying, “The buck stops here?” Own it. If you ever, ever find yourself in the position where you are pointing at one of your executives and managers and saying to yourself, “If only they made better decisions we wouldn’t be in this situation,” STOP. Point that finger right back at yourself.

Likewise, when you reflect on decisions and say to yourself, “If only I had insisted that they do it my way,” STOP. Point that finger right back at yourself.

The reason it’s all your fault is because you set the tone for the business. 

At Fab in 2012 and into the first half of 2013, for instance, the tone I set was to grow grow grow and create a billion dollar company. All decisions flowed from that. 

So when I looked back in the second half of 2013 and asked why did we do x, y, z, the easy thing to do would be to blame managers for making poor decisions. But that would be wrong. The absolute truth is that the CEO — me — set the tone and all decisions flowed from that.

This is a tough lesson for any leader to internalize, but it’s so important.

It’s also easy to fall into the trap of believing that things would have been better if you had just insisted it being done your way vs. listening to someone else. I can think of countless times over the past couple of years where I knew the right answer but allowed the team to pursue a different direction. For instance, I recall vividly meeting after meeting when we were planning Fab’s European operations and while everyone was calculating the headcount ratios we had in the U.S. and extrapolating the same ratios for Europe, I was the guy in the room saying, “Hang on, if this thing is going to scale we can’t just hire the same size army everywhere.” But, fault for us doing it anyway is not because I didn’t put my foot down and insist the team do it my way, rather it’s because I had already set the tone that growth mattered more than efficiency in the near term. By championing growth on the one hand while questioning efficiency on the other, all I was doing was confusing the team, not leading them. And, everyone — including myself — was too busy focusing on growth to even take the proper time to figure out the tough problems in front of us.

Leadership is all about setting the right tone.

5. Never lose sight of your core mission. And, if you do, acknowledge it and fix it fast.

The Fab mission is to brighten people’s lives with design. 

In our pursuit of growth though we lost sight of that mission and the Fab mission became just selling a lot of stuff. 

It reminds me of the bit in Howard Schultz’ autobiography when he walked into a Starbucks one day and said to himself: “This doesn’t smell like a Starbucks, it smells like food. A Starbucks is supposed to smell like coffee.” He vowed to return Starbucks to its core mission and smell the coffee again. (The analogy to Fab is not all that off. I should have known we were headed down the wrong path when we had a weekly butcher shop selling steaks on Fab. Brighten lives with design = steaks? Doh!)

“We need to smell the design coffee again.” 

That’s kinda how I felt in October 2013. I had already decided that we needed to make drastic cuts to our expense base but when I looked around and talked to our team, I realized that we were no longer smelling the design coffee at Fab. I asked our team to take a count of all of the products we were selling on Fab that they were not proud of. The count came to more than $1M in inventory value. Imagine that — we had allowed ourselves to take on more than $1M of inventory that we were not proud of. 

From then on we have established some basic principles:

We are a startup. Fueled with the lessons of our first 2.5 years. Smarter for it.

We are obsessed with building Fab up one great design product at a time and one smiling customer at a time. 

We would rather take it slower and get it right than go too fast.  We want to be the best, not necessarily the biggest.

We only sell designs we are proud of.  If we don’t love it, we don’t sell it.

We only do things as a company that we are proud of.

6. Be Present. 

One of the biggest changes I made to the way I work over the past six months has been to stop traveling so much. I went from spending two weeks per month on the road in the first half of 2013 to actually fully grounding myself from August through November.

It makes a huge difference. 

You might think that having the CEO around every day fosters more micromanagement. I have found it’s actually the opposite. When the CEO is around every day it fosters collaboration.

When you’re flying in and out, conversations and debates are shorter. Emails become missives. Fewer people are involved in decision making and they wonder how decisions are made. That causes dissonance and leads to frustration.

When you’re present, you talk. You’re more thoughtful. You don’t make decisions in minutes, rather over days. You go deeper. Your team also gets to see you in action. They work with you vs. being told what to do by you. The process and the journey of getting to a decision is as important as the decision itself.

It’s amazing how much this matters. 

As I’ve started to travel a bit again (albeit purposely not as much), a related lesson I’m learning is how to continue being the CEO even when you travel. Being out of the office is no excuse for not doing your full job every day, including just taking time to listen to people. And if that means I have to work 18 hour days to do video calls with the folks in different time zones, that’s on me. It’s my job to be there for them. 

7. Being a private company has lots of advantages. Don’t blow them.

The biggest advantage of being a private company is that you are allowed to be private. You don’t have to share information externally.

Your competitors don’t need to know what you’re up to.

The business press doesn’t need to know what you’re up to.

You don’t need to share anything.

So, don’t.

Unless you are certain that your company is going to grow up and to the right forever and ever without ever hitting a stumble or roadblock, don’t ever put forth or even allude to a revenue projection or a profitability projection or a traffic projection or anything. 

This, from the guy who managed to turn year/year growth from $18M to $115M into a failure because I had publicly forecasted $140M.

If I had just kept my mouth shut and talked about our customers instead of the business, that $115M from $18M year (a 539% increase!) would have been viewed as a great outcome. 

Shhhh.

8. Get advice.

Over the last few months I’ve been fortunate to have regular chats with 3 mentors and twice monthly sessions with a CEO coach. 

One of my mentors has known me and been involved with my companies for nearly 10 years now. He’s seen all facets of the evolution of Jason Goldberg. He’s fantastic at helping me navigate the toughest of situations. 

One of my mentors is an investor who has bet a large part of his firm’s current fund on Fab. He’s an entrepreneur himself at heart, not an investor. Having been through his own ups and downs as a startup founder, he’s the best at helping me focus on the long term and not get dejected by the near term challenges. 

One of my mentors is an investor whose last name is one of two on one of the most prestigious tech-savvy VC firms in the world. He’s also uniquely been at the helm of a startup that was once valued at $1B then suffered through a series of layoffs and rebuilding years, and then rebounded to eventually be sold for more than $1.5B. His advice to me (which I’ve been following):  Cash is king. Preserve cash. Get cash flow positive. Control your own destiny.

My fourth and most recent mentor is my CEO Coach. A couple of colleagues suggested that I see a CEO coach during Fab’s recent changes. A couple of months later, I could not advocate more for the importance of having one. The CEO Coach is sort of like a special psychologist cum advisor for CEO’s. My coach is awesome at calling bullshit on me, getting me to own my challenges, and helping me focus on doing the right work.

It’s true what they say: The CEO’s job can be the loneliest in the world. (Ok, Obama’s got it worse, but the point is still valid. There are many days that you feel like your team doesn’t get you, your investors don’t get you, the media doesn’t get you, your customers don’t get you, etc.). Get a coach. If they’re good at what they do, they’ll always get you. And they’ll help you work through it.

9. Stay in shape. No matter how stressed.

10. Eat healthy. No matter how stressed.

11. Take vacations. Decompress.

Spend time with your partner w/o distractions. My husband is my rock and my recharge.

And, if you don’t take vacations your team wont either. There’s no glory in tired overworked grumpy colleagues. Take vacation! I recommend my team to take one full week per quarter. It’s also a great forcing function for training people to have backup plans for while they are away.

12. Don’t toot your own horn.

Super hard especially when your achievements are shared with others and you so want to shout the success from the rooftops. Stop.Think.  Be thoughtful. That success will still be there and in context three to six to 12 months from now. Wait. Let others discover your success in a time-appropriate manner. There’s no rush. Oh, and btw, today’s hero is tomorrow’s goat. Build success over time and let others recognize it for you.

13. Shut up. Despite what you may tell yourself, not many consumers actually want to get to know the CEO of the companies they interact with. 

It’s not about you. It’s all about the product.

14. Coach. One of my biggest goals for 2014 is to coach more.  I’m lucky to have people who give me great feedback and returning the favor and watching them grow and succeed is one of the best feelings in the world as a CEO. Coaching is not just supporting though; a critical part of coaching as CEO is pushing your people out of their comfort zone and making them own up to measurable accountable goals and objectives. 

15. Stop doing the stuff you do instead of doing the work. We all have things we do when we’re avoiding doing the work we should be doing. For me it’s reading HackerNews, planning travel, and writing blog posts. The latter is the worst. Writing a blog post touting some new development at your company is not the CEO’s job, and it’s not doing the real work it takes to make the company successful. When you find yourself doing the stuff that you do instead of doing the work, stop. 

16. Don’t ever, ever give up. Ignore the naysayers. Focus. Lead. With resources, time, and smart motivated people you can do amazing things. Time is the entrepreneurs most precious asset. With time you can learn, adjust, and figure things out — if you have the courage to do so.

In a word: Resilience. 

This post is long enough. Stop.

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I’ll write something again next quarter.