CEO

You Are Never “Too Good To Step Aside” As CEO

Sometimes your ego will write checks your body can’t cash.

This is so true for the startup founder who chooses the role of CEO in his own company.

I thought of it recently as I read a great post by Jonathan Strauss, former CEO and founder of awe.sm, about stepping down from the founder/CEO role after 4 years.  In it, he very honestly describes his feelings on the decision and what ultimately brought him to remove himself from the leadership role.

Jonathan aptly describes entrepreneurship:

To be an entrepreneur I believe one must have a somewhat irrational belief in your own capabilities, otherwise you’d never be dumb enough to start a company. Regardless of any perceived glamor, most entrepreneurs I know will tell you that starting and running a company is fucking hard and there’s often more misery than joy.

He. Nails. It. On. The. Head.

If you are a frequent reader you will know this description of entrepreneurship can be found here on this blog as well.  No doubt, founding a company is one of the most difficult and emotionally taxing things in the world.  It’s a wonder company creation is actually on the rise when you read statements like these.

Jonathan goes further on why it was so hard to remove himself:

I put hiring a CEO in the same category as taking an acqui-hire or just closing up shop and moving on — things I would think about at 4am in the office on those darkest nights when I’d have a bout of sobriety about the insanity I’d turned my life into. And ultimately, things that represented the one unacceptable option motivating me to push even further beyond my limits I’d long surpassed: failure. In the early days, the only way for me to keep awe.sm from failing was to tie my fate with the company’s. If awe.sm failed, I failed. But as we switched from lean startup to growth company, I didn’t fully realize how making my ego a shareholder went from being necessary for survival to being a limitation on what we could achieve.

One of the toughest “checks” to cash as a founder is to think you are the sole reason for company success or failure.  Notice how Jonathan admits he attached himself and his fate with the fate of the company.  It is indeed one of the inherent flaws of us founders.

I commend Jonathan for his decision but I am also not letting the lesson pass me by, and you shouldn’t either.  The ego issue is very dangerous for both of you and your company.

Founders need to have a healthy balance of ego.  On one side you need to have an almost superhuman confidence about yourself and your vision because that is the only way you can get thorough the really tough times of starting the journey.  But – and THIS IS A BIG BUT – you also need to understand you are not Superman and the company can actually succeed with someone else at the helm.  You aren’t the only person on earth who can identify a market, describe a vision, build a team, sell customers and increase monthly revenue.  Other people can do that too.  And even with you still on the team.

More importantly, others might be able to do it all better than you.

So, take Jonathan’s example and learn from it.  Sometimes removing yourself from the most scrutinized and stressful position in the company is the best decision for everyone involved.

Even you.

The Best Example Of Leadership I Have Ever Heard Comes From Bill Campbell

This is one of the best examples of leadership I have ever heard, given from Bill Campbell.  He was/is an executive coach to individuals such as Steve Jobs, the Google Founders (and many more) as well as Chairman of the board at Intuit.

A man asks a question late in the interview around how leaders should traverse the unstable landscape between political issues within their company.  Bill’s answer is spot on.

“As a CEO, your job is to break ties within the company, and if you cannot see where the ties are within your organization – then you shouldn’t be there.  You need to get to the bottom of it ASAP.”

Watch the clip at the 56:00 mark and if you have time watch the entire hour long interview.

How A Biz Dev CEO Is Learning Design And UX On His Own

Biz dev founders get a bad rap in the startup community.  We are looked down upon by our more technical brethren, brushed off as amateurs and mostly considered non-essential to starting a company.

How do I know?  Because I am one and definitely sense the slightly negative vibes coming from my own community.

I guess they may have a point, besides the fact that someone on the team has to organize the legal formations, talk to investors, man the PR station, create the business and marketing plan (and execute those plans) at some point get customers/users/investors/advisors on board and generally keep the ship pointed in the right direction.  But I digress….

As a non-technical/biz dev founder, I do not possess any of the technical chops engineers see as essential to building a product.  Yet this has not affected me one bit.  Outside of handling all the responsibilities listed above, I noticed myself wanting to be hands on with the products I build from day one.

So if I can’t code, what I am doing?

ui-paradeI am focusing on the user experience and the look and feel of the app, more often referred to as Design and UX.  I tend to have a lot of the ideas about what our products do and how they should function from the end user’s point of view, so that is where I stay when we are building it.  I make sure I keep at least one foot planted in the average-Joe-end-consumer’s-shoes to make sure the final product will make sense and appeal to those people.  (This is due to the fact our target market is consumer oriented and we are building consumer products).  The lesson here is make sure at least someone on the team is entirely focused on how the target market will see and experience the product.

If you are the non-technical founder I feel it is your responsibility to holistically own the product from start to finish.

Most likely you are the CEO, or the leader of the team, and with that responsibility comes knowledge and understanding of all sides of the project.  Knowing you cannot get your hands dirty in code, you need to be on top of other areas of building the app, namely design and user experience.  You will not be laser focused on one thing in the project like front-end or back-end developers, but will be focusing on the entire process and how all areas of the application are coming together from the outside-in.

How does the interface look and feel?  What happens when I tap this button?  Would this action make sense to the average user as opposed to a technical engineer?   Does the interface emote a positive or negative feeling when someone glances at it for the first time?  What about when something goes wrong, what do the error messages say?  What about the emails I receive from the service?  Do they make sense?  Are they human?  Do they come from “your company name” 0r does it say “DO NOT REPLY”?

I have come to realize those questions are not usually asked by highly technical people but the answers greatly affect how users respond to the earliest versions of your product.  The beauty of being a non-technical person is the natural ability to see things in more human and emotional ways, as opposed to highly technical and non-emotional ways.  I am sure you can guess which ones have a greater positive influence on how regular people interact with your apps.

The answers to those questions can also be identified as early as the beginning of the design/development process with wireframes, mock-ups and prototypes.  It turns out, non-technical people with adequate design and UX understanding can greatly enhance the team by owning the wire framing and mock-up stages, opening up the dev team to hack together other areas of the project.

Once you decide to build a product, form a company and get all the initial stuff (listed above) out of the way, the main focus is building and launching the product.  PR, press, customers, investors, and all the other stuff doesn’t matter if you don’t have a world class product.  Suffice it to say you – as the CEO/non-technical cofounder – must orient yourself as the Chief Experience Officer.

Through recent studies, I have started to gain a better understanding regarding design.  It’s not just the colors of your site and the placement of buttons on your app, it’s how the user experiences all aspects of your application.  There’s too many considerations to list here but having a holistic view of what you are building and the quality of experience a user will have is paramount to your app’s success.

So as the non-technical person, you can’t code but you still need to make yourself valuable during the initial stages.  You don’t want the rest of your team  sitting around without you and wondering why are you actually still around and a major shareholder when you aren’t really doing anything productive…

I spend time each day reading articles to gain a better Design perspective, also working through workflows of design features we are focusing on right now.  It’s not perfect stuff but it’s a start.  And it’s actually quite fun.  Below are some of the ways have I been learning Design and UX recently:

52 weeks of UX – This is a year long blog (2010) broken up into 52 sections, each one sent out once a week and covering all aspects of Design and User Experience.    It is a tremendous resource to not only provide a solid understanding of these topics but the more you read the more you start to think like a designer.  (I guess that’s true about anything but I definitely noticed it here).

Hack Design – “An easy to follow design course for hackers who do amazing things.”   Hack Design is also a weekly series of emails sent chock full of design lessons, articles and unique topics.  I would suggest starting from the beginning and making it a habit to do one a day or week.

UI Parade – I stumbled upon UI Parade a while ago and it has really helped me with ideas and perspectives on the appropriate interfaces to use.  They provide a huge list of examples, anything from Nav Bars, to buttons, to drop downs, to sign in forms.  Sometimes it helps to just skim through and get ideas on various looks and feels.  (Tip: pick on, open your favorite design tool and commit to making your own copy of the visual you just picked out.  It’s fun!)

Inspired UI – Here you will find an exhaustive list of all the mobile designs you can imagine.  It’s a great place to go when you are evaluating in the early stages what you want your mobile interface to look like and how it should function.  Trust me, you will definitely be inspired.

3 Reasons Why Non-Technical CEO’s Need To Go To Hackathons

SHDI am not the typical person you would find at a hackathon.  I don’t code and would be described in the industry as a “non-technical” cofounder.

As a non-technical CEO I tend to focus on things like marketing, branding, positioning, investors, and customers.  I do it because it’s my job and during the early stages of a startup no one else on the team is responsible for those things.

This is all nice and good but it doesn’t build a product.  And if you don’t have a product you can’t actually have marketing, branding, positioning, investors, and customers.

So if you are a non-technical CEO what you need is a techie bootcamp of sorts, short but intense periods of learning and doing so you can start to understand what its like to be a developer.  And trust me, if your devs don’t feel like you understand the hows and why’s of their work you will soon find yourself standing alone at the alter.

So what is a Hackathon?  It’s a room full of developers focused on building the coolest product they can in a 54 hour period.  It’s a self-inflicted bootcamp, challenging you and your team to execute on a new idea with little time, resources or sleep.

Crazy huh?

My team and I participated in the recent Sports Hack Day at the Hub over SuperBowl weekend in Seattle.  It was a great experience.  Obviously, the focus was building something oriented around technology and sports – two of my favorite topics.  While we didn’t take home any of the prizes, we did take home a kernel of an idea we think might actually be something substantial.  More on that later.

I want to review some lessons learned over the weekend and possibly help other non-techical CEO’s who are serious about building a startup realize how important the time spent at a Hackathon can be.

Lessons 1. Become part of the community

There is a strange brotherhood between technical people – developers, hackers, coders, designers – anyone who considers themselves one with the terminal.   It’s like they just have look at each other, head nod without saying anything and instantly know each is in the club.  I have to admit this was quite foreign to me as I began my entrepreneurial journey (uh, what’s that say on your screen?)   I credit the few CTO’s I have worked with for their patience and understanding with me being a non-technical person.  Yet weekends like the last one spent at a hackathon do A LOT to not only further educate me on technical aspects of software/web development but also include me into the community.

The quote “showing up is half of the battle” comes to mind here.  By simply showing up and intuitively saying to others “What’s up?  I’m right here on the front lines with you!” goes a long way to gain respect and inclusion from the community.  Also, asking questions – lots of questions – about various languages, platforms and API’s tells your fellow technical team-members you are interested in learning about their world.  THIS IS HUGE.  You will learn a lot and gain respect from them just based on the fact you are taking the time to know what’s going on.

And the coolest thing is I am actually starting to retain this stuff!

Lesson 2. Execute under pressure

A weekend is barely enough time to take an idea and deploy a working product around.  In fact, it’s not really much time at all since our code deadline was at noon Sunday and Demos started about 12:30pm.  This means you learn to make quick decisions.  There is no time to battle back and forth about a specific feature or naming structure.  You must decide and JFDI.  With less than 54 hours available, Hackathons are all about execution and swift decision making.

You know what?  Swift decision making is incredibly valuable in the real startup world as well.  Hackathons help you to become agile, testing what works and what doesn’t and quickly make corrections if needed.  This is arguably the top advantage of being a startup so being able to polish the diamond during the weekend has tremendous benefits in the long run.  Also, it can be crazy stressful as you get down to the deadline.  The team learns to work in a “crucible” where intense pressure hangs over you as people work tirelessly to get something “respectable” completed and deployed.

Hackathons are not for the faint of heart.

Lesson 3. Find the value proposition

I’ve written previously about the value of pitch competitions, so I will talk more about the process of how you get there than the actual pitch.  During the weekend as you are building out your product you still have to keep in mind what value your product brings to the world.  Remember, after the deadline you will be standing in front of the group and a field of judges describing your product and why it should be used.  There really is not much use for a product that doesn’t solve a problem or pique someones interest in one way or another.  Don’t be the guy/gal who doesn’t even understand how or why their product would be used.

So in addition to building really cool tech you are challenged to figure out the value proposition – both are required to winning a Demo competition.   The condensed timeframe places increased pressure on you to figure out what problem you are actually solving.   Quickly evaluating the market, determining if there are existing players and what problem they are solving.  Finding holes in the market and quickly determining how to meet them.  Evaluating potential business models, although not fully required during a hackath0n, will stretch the creative mind farther than anticipated and lead to interesting business developments.

The benefits can be compared to exercise:  the more ‘reps’ you accomplish at a higher stress level the better (stronger) you become at that particular activity.   Especially for non-technical founders, hackathons provide a great training ground to hone value proposition skills.

Whew, what a weekend!

For all the non-technical founder/CEO’s out there: Don’t shy away from hackathons.  Trust me, you need them more than they need you.

Like NFL Coaches, CEO’s Must Make Tough Decisions. Period.

I recently had a conversation with a fellow CEO dealing with a personnel issue on his team.  The issue at hand is not as important as the fact that the CEO had been putting off the decision for some time.  He seemed to be second-guessing himself and not trusting his gut.  He felt the specific individual in question, who had been with the young company for about a year, was “just not a good fit” and the CEO was having some challenges with the individual, saying things like  “there’s always some issue with him every time we meet…”

My feedback oriented around the fact that being CEO meant being a leader.  And in being leaders we have to be strong enough to make tough decisions, to do what is in the best interest for the long-term health of the company first, and only secondly what is best for any one individual on the team.

This is not an easy thing to do.

A CEO must protect their organization, especially from itself.  It is up to the CEO – and all executive management as the organization grows larger – to place and remove individuals as they see fit.  Most importantly a leader must be able to determine if an individual is adding more value to the organization than it is taking away.  If not, that person must be removed or placed in a more appropriate role immediately.  This includes the CEO himself when he is skirting from his responsibilities.

In this specific instance, the CEO felt the individual in question was a net negative on the team and was a growing concern, even starting to split the team during meetings, discussions, etc…  He was obviously very concerned.

Most decisions a CEO will face won’t feel good or be easy to make.  It gets even more difficult when we involve highly talented individuals.  Sometimes it might seem counterintuitive to actually remove a highly talented individual from a team, yet if the value they bring to the table is being overshadowed by the value they are taking away (or could potentially take away) with their detrimental behavior, something must be done.  That or the entire team will fall as a result.

It’s the leader’s responsibility to make these decisions before its too late.  This is why I argue it is never too early for a startup to have a CEO/Leader in place.

I dovetailed the conversation a bit to illustrate my point.  Just last week the Seattle Seahawks (I live in Seattle and I’m finally proud to be a fan again) played the Washington Redskins in the NFC wild card playoff game.

RG3If you were watching the game you know exactly what happened. And a crystal clear lesson in leadership played out in front of the entire country on national television.   I sure hope others took note.

Robert Griffin III (or RG3 as many know him) won the Heisman trophy last year with Baylor and was drafted 2nd overall by the Washington Redskins and is believed to be their franchise quarterback for many years to come.  They signed him to a 4-year, $21 million salary with the entire deal guaranteed, meaning he gets ALL $21 million no matter if he plays or not.  Obviously, this is a huge investment for the Redskins.  You would think they would have treated him as such during his first season with the club.

RG3 strained a ligament in his knee on Dec 9th and sat out a few games but came back early to play the last game of the season and the playoff game against the Seahawks.   During the playoff game, it was quite obvious RG3 was not 100% and his leg was definitely in pain.  He was “playing hurt, not injured” as they say.

What happened next was all things fascinating (from a leadership perspective), lucky (for us Seahawks fans) and excruciating (as I feel bad for Griffin) to watch.

Early in the game Sunday RG3 tweaked his right hurt knee again, to the point of limping, wincing and running with an impaired gait.  It was obvious he was injured and should not have continued playing.  Even the announcers were wondering when the Redskins will pull him out for the betterment of his health.  Numerous times, the television cameras showed RG with assistance from trainers and medical personnel, walking into a “small room” for who knows what, but my guess is examination and possibly a cortisone shot (pain reliever) so he could drag himself back onto the playing field to continue playing.

And that he did.  According to sources, it was his decision and he absolutely wanted to play the rest of the game even though he was a shell of his previous self.

OF COURSE THE YOUNG STAR WANTED TO PLAY. Anyone high performance individual is going to want to continue, especially when we are down or struggling.  We all want to prove we can overcome obstacles and be champions in the face of adversity.

So what happened next?

As the game continued, the Seahawks eventually took the lead. It was then, as the Redskins were doing all they could to win, RG3 awkwardly bent down to grab a bad snap only to fatally injure his knee; looking as to have seriously torn some ligaments in the process.  Injuring a previously weakened knee on a play where no one touches you, referred to as non-contact, is an obvious sign you shouldn’t have been playing.

RG3 went down, and the future of the franchise lay on the ground to the disappointment of the silent stadium full of Redskins fans.  Although the injury is not career threatening at this point, it’s arguable if RG3 will actually be able to play at the level he was before the injury.

So whose fault is it?

Not RG3’s.  The problem is the person involved is not thinking clearly or wisely at the moment.  They are focused on themselves, considering only the moment and the short term, not the long term.  They do not understand the long-term ramifications of their actions.  Even though RG3 said he could still play the responsibility to make the right decision ultimately falls on the coach, the leader of the team.  He should be realistic enough to make the right decision.

In the case of RG3, his head coach and somewhat the CEO of the organization, Mike Shanahan, is the person who should have been thinking about the long-term consequences of what was transpiring in front of him.  But for some reason he wasn’t thinking clearly either, perhaps wanting to roll the dice and gamble to win the game. His prize procession, the guy they gave up so much to draft and the one they touted as the future of the organization – their $21 million investment – placed himself directly in front of a Mack truck and no one did anything to stop him.

What’s the point of having leaders if they are not looking out for their team?

It’s easy to understand why Shanahan chose to leave RG3 in the game, he’s a good player when healthy.  It was reported he repeatedly told his coach he could play.  He said “I’m hurt, not injured”.  RG3, being a rookie, could be passed for naïve and maybe didn’t fully understand his actions had such drastic consequences.

But Shanahan, a veteran coach and the leader of the organization, should have known this and put his fist down.  It is his responsibility to make the tough decisions and do what is right for the entire team.  The truth is his lack of judgment in the heat of competition has not only cost the Washington Redskins a playoff win, it jeopardized the future of the organization since the resulting knee injury will lead to months of recovery time and RG3’s promising future now looks a bit more unclear.

Like it or not, the fault always goes to the leader.

To win one playoff game (short term) Shanahan could possibly have just given up the entire next season (long term) with his gamble.  But more importantly, Shanahan’s lack of leadership has now altered the life of one of the most promising young athletes to enter the NFL in a long time.  There is a strong possibility RG3 will never be able to perform at the level he was previously, in the end maybe even costing him millions of dollars and lost opportunities.

All because he did not have the courage to grab Robert Griffin III by the shoulder pads and say, “Robert, you are finished for the season.  I want to protect you for the long term so rest the knee and start preparing for next year and going back to the playoffs.”

Leaders must have the courage to do what is right not only for the organization but each individual within it, even if it’s the most difficult thing they have ever done.

I asked my fellow CEO if he thought Coach Shanahan would like to have that game back and possibly make a different decision?  We both agreed and believe he would.

As for his situation, I told him he needs to let the individual go, as soon as possible if he wants the rest of his team to stay intact.  I told him the responsibility of his organization rests on his shoulders and he should strongly consider what happens if he doesn’t make this tough decision.  “Everyone else on the team is watching how you handle this situation”, I told him.  I also suggested he owes it to the individual to be upfront and honest so they know what is happening as well as to free them up to go pursue their goals as soon as possible.

CEO’s must protect their organizations, the people within them as well as themselves by making tough decisions.   Problems are solved by tackling them head on, not by running away from them.

Valuable Lessons Learned In The First Year As A Startup CEO

About a year ago I was approached by a stranger and was asked to join a Seattle startup.  This stranger, my soon-to-be-cofounder, asked me to take the CEO role in the startup, which unfortunately was named Order SM but eventually became Seconds.

I remember it clear as day.  We met at a coffee shop in the Greenlake neighborhood in Seattle and chatted about our similar ideas on local and mobile commerce.  We both believed all the current options on the market were missing the boat, releasing bloated products and not making the mobile ordering/payment experience any easier than it was online or over voice on the phone.

I was much obliged and we immediately got to work, paving the way to release our first product.  It has now been more than a year since this fateful day and I feel it’s as good of time as any to review some lessons I have gathered through my first year as CEO of a fledging startup.

You will be underestimated

First thing to understand as a rookie – your peers, the media, investors and the rest of the industry will underestimate you.  This is a fact of life and was nothing new to me.  “He’s just a guy who was a personal trainer for god sakes.  What does he know about technology?”  Better get used to these types of reactions if you are trying to do anything out of the ordinary.  I don’t fit the traditional mold of a tech startup’r.  I look different than the rest.  I my degree doesn’t align with what we are doing.  To them, I a lost bet.  Although it’s frustrating at times to hear this, I have no problem being the underdog.  I would rather be doubted and exceed expectations than be heralded and ultimately disappoint.

It’s tougher than they say

Starting a company is definitely one of the most challenging things you will ever do in your life.  It’s especially difficult if you did not study at an IVY league or Stanford university, graduate with a CS degree, come from a family of great wealth, get hired early on by Google, Facebook or Microsoft, have a sizable exit from a previous company or any other notable event investors look for when evaluating startups.  No, my team and I have none of the above.  Yet here we are a year later, still creating great products and building an exciting company.

Be prepared to be challenged more than you ever have in your life.   You will be challenged physically.  You will be challenged mentally.  You will also be challenged psychologically more than you ever thought possible.  You will ask yourself why you are doing this and to what cost is it worth.  Challenges technically, socially, professionally and financially will string you out way past what you ever thought you can deal with.

You will also give up more than you ever thought.  Going without pay for pretty much the entire year has been humbling, to say the least.  You might even come face to face with the very things you take for granted each day – the roof over your head, the car you own, public transportation just to get to the office, enough food in your stomach so you don’t starve.  imagine what I think when I walk past beggars and the homeless nowadays.  Not only do I not have $1 in my pocket to give them but also, why would I give them a dollar when they are just sitting there asking for a handout?  Maybe if they were offering a service or working towards something positive for society I might think differently.  I understand the harshness of my thoughts but it’s the same standard I hold for myself.  Add value to get value back.

This is the road less traveled and indeed it’s much tougher than they say.

VC’s and Investors will lie to you

Unfortunately, investors will lie to you.  They will tell you straight to your face they are interested, want to learn more and actually want to invest.  This, most likely, is a lie.  Why?  Investors want access to the most information possible for the least expense, and will lead you on for months before they let you down with a “you’re just a little early for us but stay in touch.”   This is bullshit and you don’t have to take it.  Just cut to the chase as early as possible, tell them what you are looking for and that you are not going to put up with any BS.  Let them know you call the shots in these conversations, and it’s a privilege they are talking with you.  Ask them to get on the train or risk being left behind.  In fact, not cutting to the chase as early as possible shows investors you are naïve, at which point they will exploit the fact for all its worth.  Trust me, I did this too much and now regret wasting my time and energy on something that was not going to happen at the time.

Remember – if you are the one approaching your odds are slim to none.

Leadership is required from day one

The day I agreed to cofound this company and become CEO of Seconds I told my then cofounder:

“If I am CEO than the buck stops at me.  There will be no power struggles, disagreements and other crap that breaks up promising startups.  The CEO is the ultimate decision maker and will have final say, no matter if I hold the position or anybody else.  Agreed?”

I believe this initial conversation set the tone for the company, a tone that has remained solid to this day.  Clear leadership, from the CEO onto others in different roles within the company (technical, design, product lead) has been established and follows a predictable path.  If an issue or disagreement forms, we talk it out as a team and determine what feels like the right decision.  Ultimately, when all perspectives have been heard heads then turn to the CEO where everyone believes the right decision will be made.

Building a great team takes time

I wrote about building teams previously, focusing on filling complimentary roles within the team.  The way things tend to happen in a startup could be summarized by the words “controlled chaos”.  People come and go.  If your vision is intoxicating enough, you will attract people that want to help out.  Problems arise when people realize it will be harder work than originally thought, so some will split.  At that moment, you will find out who is serious and who isn’t.

It takes time and energy to find the right talent for the right job.  The initial founding team helped prototype the concept and get an initial product into the market.  A full year into existence, Seconds now has a whole new team (besides myself and Brent) working on the next phase of Seconds, which requires slightly different skills and talents.  I have never been more confident about our team – as well as more proud of the work we have done in the last month.  It’s okay to have a fluid team if the product is moving forward.  At some point stability will be found.

Building a great product takes time

Just as building a great team takes time, building a great product takes time.   You must be comfortable with timely, constant iteration and waiting patiently as your tests reveal valuable results.  Recently I commented on our evolution of Seconds:

“We launched the earliest version of Seconds about a year ago, under a different name and clearly aimed at a different customer segment.  The product was buggy as hell and to be honest, a bit embarrassing.  But that’s the point of an early release, isn’t it?  It does you no good to have an idea without a product others can touch, taste and see.  We knew we needed to get something into end-customers hands ASAP if we were going to receive any feedback – feedback that actually led to our next iteration.  I consider it lucky we were able to have a team willing to quickly put out a buggy product and gain much needed feedback.  In fact, we created that luck by committing to releasing immediately and listen to the feedback.

We refused to be boxed too narrow in the beginning, and it has paid off tremendously.  A year ago, we were a text ordering system for local restaurants, struggling to fit our solution to their non-obvious problems.  This winter, possibly millions of people will be using Seconds to make donations to an important cause with a few quick swipes of their finger.

It’s more fun than they say

I am sure you are thinking to yourself about how crazy and interesting of picture the above paints.  All in all, I am having the time of my life and I believe any startup founder needs to be doing the same.  Why on earth would put yourself through such madness if you didn’t enjoy the process?

I though I was just working hard on starting a cool payments company, yet I have learned more about myself in the last year than in the past 30 years of my life.  Deep down in the founding core of any company you will find a root motivation within every founder called personal discovery.  Of course they want to make worldwide impact and maybe even create great wealth for themselves and their shareholders.  But what they don’t talk about is the journey of personal discovery the are currently on, the one that takes them deeper into their psyche and will only make sense decades later.  I find my current journey fascinating simply because most people don’t have the courage to dive this deep.  I consider myself one of the lucky ones.

Are we a little crazy?  Yes.  But as a classic Apple commercial so adamantly starts:

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes…

 

Hey Coach, What Is A Startup CEO Supposed To Be Anyway?

As I was chatting with another CEO friend of mine tonight he said something that caught me off guard.

He said:

“I was talking with another person and we determined as a CEO you push your people in just the right way to get things done… you’re like a coach.  We realized that is a good thing and need to do more of that type of leading in our startups”

Some of you may be familiar with my history so being referred to as a coach might not be much of a surprise.  But in light of the context in which this conversation took place it was a surprise to me.  My CEO friend is farther down the startup path than I am and I tend look to him as a mento-friend.  I appreciated the kind words and thanked him accordingly.

Yet this begged the question: what is a startup CEO anyway?

My take is my friend was exactly right: a coach.

Okay Nick, then what is a coach?  A coach is a Leader.  A coach is someone who is responsible for the outcome of the team – win or lose.  The coach determines who plays on the team and who gets cut. Coaches push players to the brink and guide them in achieving levels of success previously thought impossible.  Coaches know the most about each opponent and dictate the playbook accordingly.  And most important, the coach evaluates each and every player, helping them identify where they are weak and exploiting where they are strong.

Ladies and gentleman – that’s a leader.

Given I am still at the beginnings of the exciting growth of Seconds and my personal journey as a CEO I will not take any credit of success – history will be the judge on that one.  But I couldn’t help but notice myself in the exact moment of this conversation grasping a few lessons regarding leadership I think are important for CEO’s at the startup level.

Face it, you ARE a coach

Like it or not, as the CEO you are the coach.  This should not be taken lightly and in the wrong hands it could lead to disaster.  One of my favorite quotes from author John C. Maxwell is “everything rises and falls on Leadership.”  The statement could be viewed as general toss-grass-in-the-wind pontification.  I tend to just take it at face value – life happens because leaders make things happen.  Or they don’t.

Leaders (CEO’s) determine the pace, structure and culture of a young startup company.  Understanding this should weigh heavily on a CEO’s heart and mind as they relentlessly plow forward.  What you say and what you do will hang like London fog within your small company.  You should think twice about each and every word, positively and negatively directed toward cofounders or customers.

And whether you know it or not, your team is looking  right at you to make decisions.  These decisions can be as mundane as the color of text on your site and as crucial as choosing to relocate the company or adding a co-founder.  Great leaders consistently make the right decision, and even better, teach and empower others to make the “right” decisions for them.

You are also a player

One of the toughest things about being CEO is the fact that you are a player – equal with other team members – at the same time being the coach with added intangible responsibilities.   Highly self-aware CEO’s intuitively understand this dynamic and can navigate the waters accordingly.  Some days you need to get your hands dirty with specs, feature fixes and other product oriented tasks – things you are probably drawn to more naturally as you flex your engineer or designer muscles.  Other days you need to put your coach hat on to lead your team by dictating the vision, talking to investors, evaluating opponents, interviewing new hires, connecting with media or visiting customers.

These things may not come natural to you but believe me they are essential.  I am convinced the drastically high level of failure experienced at startups is due to a failure of leadership.  Delineation too far in any direction from a leader for too long spells doom for a fragile company being built on a hope and a prayer.  If “everything rises and falls on leadership“, startup success must surely follow the same principles.

Leadership is in short supply

My friend mentioned something interesting as we were talking.  He said “I just don’t feel I can push them very hard… I guess I have that Seattle passive thing going.

I said, “look, people actually want to be led.”  And it’s true, (most) people naturally want to be told what to do.  Quite frankly, they are scared to make any important decisions so they naturally default to having someone else tell them what to do, in case it doesn’t work out and they have someone else to blame.  That’s the harsh reality view.  The more positive view is people want to be led and inspired, hoping that the time they are taking away from other important areas and people in their life is actually going to turn out to be something positive.

Unfortunately we have too many people more concerned with not pissing people off then accomplishing the current mission.  Appropriate and authentic leadership is definitely in short supply.  I am not advocating being a jerk or other unmentionable words.  I am calling for people to get more in-tune with the dynamics of human nature and motivation.  This is not rocket science, it’s all right there at the intersection of psychology, sociology and biology.  Notice how I didn’t mention technology…

I also noted to my friend the most common reaction from anyone who worked for Steve Jobs.  I said “dude, most people have said Steve Jobs was a jerk, an asshole, and generally not enjoyable to be around.  They also follow that statement up with the fact that he actually inspired the best out of them and they were somehow able to perform and deliver well above levels they ever thought possible.”  

That’s leadership.  Steve Jobs might not have been best friends with most people he worked with but boy did he get the best out of them.  Indeed, he was their coach.

To All The Doubters Out There: My Past Does Not Determine My Future

Today I was informed by one of my advisors someone I previously spoke with in the investment community thought less of me, or looked down upon me and my business mainly because of my background and my previous career as a personal trainer.

This is after the individual had been very forthright in the meeting about how unique our concept was and how impressive we are currently positioned.

Let me be perfectly clear: my past does not determine my future.

Whatever someone studied or whomever they previously worked for has little effect on what they will do going forward.  Does it influence them, yes.  But does mean they are not capable of achieving other things outside of the specific industry?  No.

It’s what we have determined we will do in the future that has the greatest influence on what happens in the future.

For all the doubters out there, let’s go ahead and get it all on the table.

No, I am not a CS major or a Stanford grad with an MBA.   Yes I studied exercise physiology in college, and became a strength coach working all levels of the industry – from professional sports teams to athletic clubs and on to corporate fitness centers.

No, I didn’t come directly out of college and join a fast growing technology company.  Yes, I bumped along as a trainer only to use any and all spare time (ask any of my past girlfriends) reading and studying the latest developments in technology and the web.

No, I didn’t succeed at my first attempt at a startup.  I didn’t sell my first company to Google or Microsoft and I did not make F-you money in my early 20’s.  Yes, my first startup failed.  We failed miserably.  We had no idea what we were doing and naively thought we could actually launch a company when we were all still working full time.  Boy were we wrong.

No, I was not raised in wealthy family so I would be close to seed capital and afforded the luxury of launching my company with my grandfathers/fathers/uncles/stepfathers/father-in-laws/bothers/cousins money.  Yes, I am now learning the “intangible” game of raising money by networking, connecting with people, illustrating our unique value in the marketplace and proving we are actually a great business opportunity.  And heads are starting to turn.

No, we are not launching a social site that within the first few weeks is amazingly spreading throughout the Harvard campus without any of our help… and magically is a hit with all the college kids.  And one where you have no idea the business value for the first few years of existence.  Yes, we have built a platform so valuable we see small mom and pop shops as well as large corporations wanting to be a part of it.  One in which we figured out how to make enough noise in just 3 short months after launching our product that we already find ourselves sitting across the table from NOT ONE BUT TWO multinational, multibillion dollar corporations – in different industries – wanting to somehow work together.  The one I talked with today is probably in the back pocket of most of my doubters.

For all the doubters out there who are still reading but think I might still be missing something I will put you at ease and let you know that even though I studied exercise physiology in school, all is not lost.  Here is my take away and how I see it in the business world.

Business, like the Human Body, is all about efficiency

Inefficiency will kill any living organism and it’s also true with any business organization.  It’s the bane of any corporations existence and it’s also why you hear about six sigma, downsizing and social collaboration tools.  Finding ways to make internal processes less laborious and easier to navigate will make employees more efficient.  Fixing bugs and reworking the user experience of a website will streamline transactions and generate more revenue.  Anyway you look at it, the human body always seeks to carry out processes with the least amount of energy possible.  So does a business.

You must keep working or you will fade away

We all understand the concept of strengthening muscles – you must break them down to build them up.  Exercise is vital to the human body and you must keep placing stress on the cardiac system to experience health benefits.  Well, that’s true for the business as well.  Name any business where it’s acceptable to coast along with no input and expecting to get something out of it.  Even a piece of Real Estate needs upkeep if it is going to bring a return to the investor.  You must keep working on a business, on yourself and your team if you are to experience continued success.

Sometimes Pain is good

We all know the feeling… the first mile of the run after a long hiatus, the last two reps of the exercise we though would be way to heavy, or the morning after soreness from a kick-butt workout.  Yea, it hurts all right.  But most of the time its damn good pain because your body is replenishing itself and growing stronger.

Well if you think starting a business is all sun and roses you are in for a little treat.  It sucks.  It hurts.  You get tuned down more times than you can remember.  You have people questioning you, your product, positioning, vision, funding status, your team and everything else under the sun.  It takes twice as long as you think it will to achieve certain milestones.  But the pain is good for you.  See, you learn from all that doubt and questioning and through all of the crappy stuff you get stronger and become a better entrepreneur.  Trust me, I am one strong individual.

I may not be the most “polished” “tie wearing” “Stanford MBA” or “Y-combinator grad” CEO you find strutting around Silicon Valley.  And quite frankly I know I have a lot more to learn.  But I am glad I am not the above described.  I am quite happy with my past, because as I have just illustrated it provided me with a unique perspective I can successfully transition into my new life as an tech entrepreneur.

And for the doubters…. keep on.  I dare you.

@jnickhughes

Would You Rather Be Undervalued Or Underestimated?

Being a first time CEO can be confusing, intimidating and downright scary.  You have a hundred things to do and no idea which way to look.  You feel the need to talk to a lot of people but it’s difficult to determine the ones you really need to spend time with.   You need to deal with legal, financial, organizational, strategic and other parts of the company on a daily basis yet might not be fully comfortable with each area just yet.

Everything rides on your shoulders.

Although this is not my first startup founder experience, it is my first as a CEO in, shall we say, the “big leagues”.  It has been brought to my attention this will be a significant challenge to me since my background lacks “normal tech startup experiences” and don’t fit the typical CEO path.  They say I will be underestimated.

Well, I say perfect.  Bring it!  I love challenges and believe the great ones are created through immense crucibles, where pressure either polishes them into greatness or crushes them into pieces.

As I ponder the reality I face, a question arose in my head:  Would you rather be undervalued or underestimated?

Undervalued means they have already sized you up and determine you don’t add much value to the ecosystem.

Underestimated means they are ignorantly judging you, still don’t know your potential and will be shocked when you reach it.

I have a hunch where I fall in respect to those two.  Do you know where you stand?

@jnickhughes

How To Stop The Insanity, CEO Style

Being a first time CEO can be confusing, intimidating and downright scary.

You have a hundred things to do and no idea which way to look.  Email this person…. talk to that person.  Introduce yourself to another potential investor or partner.    There are so many different people to connect with but it’s difficult to determine the ones you really should to spend your precious and limited time with.

You also need to deal with legal, financial, organizational, strategic and other parts of the company on a daily basis yet might not be fully comfortable with each area of the business.

You look in the mirror , shake your head and whisper “ha, I’m the CEO?”  Yes, you are and everything now rides on your shoulders.

The crazy thing with being a first time CEO is you really don’t know what you don’t know.  This is a blessing and a curse.  Blessing because if you were able to get a glimpse all the things you don’t understand you would probably turn and run for the door.  It’s a curse since there are quite a few important aspects of building a business which require keen awareness and solid judgment, which by definition rookies just don’t have.   It is at this stage where we lean on others who have gone before us to help give perspective and a nudge in the right direction.   I don’t pretend to know these things since I too am “technically” a first time CEO and on the constant lookout for helpful mentors.  [I say technically because my first startup was a failed attempted at a bootstrapped startup.  We didn't even get to seed stage so although I grew through it, it really wasn't much more than a warm-up.  It's safe to say I am now entering the open seas with only my compass in my hand.]

So how do you keep your sanity amongst all this madness?  I reached out polled a few fellow young founders and asked them to give some thoughts on the matter.

Phillip Estrada Reichen, CEO of LocalUncle.

Maintaining focus is all about saying “NO”. Sounds easy in theory, but in practice it’s harder than most people think. Saying NO means leaving out product features that you’ve been dreaming about because you have to hit a certain deadline. It means saying NO to reading everything that is being written/said about your industry and accepting the fact that you’ll have to maneuver the best you can with the limited information that you have. Saying NO also means not working on your other five great ideas and keep executing just this one thing that you chose to do at this point in time. Even when you hit your lowest lows (oh, and you will hit them) and you’ll want to throw everything away, saying NO means not giving up and stick to your initial idea.

In order to stay sane and not be overwhelmed and burn out you need to get off the grid regularly. Exit the Matrix. Don’t do anything work related. This is especially hard if you work in mobile/web because you can work from anywhere at anytime. Go running in the park without iPod or iPhone (no music allowed! just listen to the “real”, offline world for a couple of minutes). Get home after work and do not go online till the next day. Read a book, cook a meal or draw a painting. No matter how much work there needs to be done, you have to have non-electronic, non-work related hobbies or activities like that to stay healthy and balanced. 

Chris Lynch, CEO of Thoughtful.co

A friend of mine said it best: a startup is a marathon, not a sprint. Know where you’re going, and then tell yourself it’s going to be hard. But even then, know it will be more difficult than you imagined. That being said, I’ve noticed that people deal with stress in a number of ways, but there is a common trait among CEOs in startups that always is true: they can take a lot of stress and keep pushing forward. In some ways it doesn’t surprise me, because a startup is a Herculean task.

Great advice from emerging leaders in their respective industries.  I will provide four strong points to consider and add my perspective for trying to stop the insanity.

Movement

Philip alluded to this one and I strongly concur – getting off the grid and back into the physical world is probably the best way to stay sane.  Get outside [or on the treadmill] and get some movement.  Expending energy is the best way to decompress and release all the pent up tightness within your body.  Basically, when we sit at a desk in front of our screens all day long our bodies are placed under continual stress.  This stress, if not released in a healthy manner, constantly builds up and will cause us to crack under pressure.

If you are feel like you have “had it up to here” and just need a break, you are burned out and need to start moving more often.  I mean every day.  Go on walks, hikes, run, play a recreation sport, unplug… whatever you do, get away from the office and just do it.  Your body and mind will be so much clearer when you return.

Prioritize

As I stated before, most CEO’s just feel overwhelmed.  It helps if you can list out the top 3 things you need to get done each day, and only focus on those things.  I mean don’t think about any other task.  Only when you accomplish those top 3 things should you move on to doing anything else.  How do you determine the top 3?  Look at the overall direction of your company, determine what is mission critical and what YOU, THE LEADER, can only do and go do it.  Then delegate the rest.  Try this for a week and see what happens.  I guarantee you will feel like you are doing less yet more seems to be getting done.  Amazing.

Socialize

Getting out and connecting with people [should be] a CEO’s main objective.  Why?  Since they generally are the face of the company and it is up to the leader to fill out the team, socializing connect you with more people quite frankly, it just comes with the CEO territory.  The side effect of socializing is you will start to learn more about how people work, how they think, and whom you would like to eventually join your team.

Being social also releases chemicals called endorphins, which are required to carry out natural processes within your metabolic system.  Interestingly, if you lack adequate amount of social interaction your body will start shutting down.  That might sound a bit drastic, but the premise is still true – we all need social interactions to maintain our sanity.  Get out and have some fun every once in a while.

Mentorship

First time CEO’s have it tough: we lack the foresight to understand what is in front of us at the same time lacking the hindsight of lessons learned from a previous experience to help us make better decisions.  Amazingly, there are individuals who have gone and done it before and look to pay it forward by mentoring young leaders in their field.  If you are a first time CEO and serious about moving forward in your life, you must go find someone willing to give you some of their time.  Ask them questions, detailed and specific questions related to your unique situation and then shut up.  Just sit and listen.  Record the conversation if possible.  Then check in with them every few weeks or month and provide them some context of how you are using their lessons to positively influence your life.

Oh, and one last thing: if you respect someone’s time, they will give you more… if you disrespect their time, they will never give you another minute.

Now, stop the insanity.

@jnickhughes

Image courtesy of Flickr user My Melting Bryan.

One Leader Steps Down, This Leader Steps Up

Today I learned the hard news Steve Jobs was stepping down as CEO of Apple, the worlds most valuable company and the envy of any honest person in the business of technology.  Like most people, I looked at Jobs as more a Saint, Monk, or Prophet; less of a businessperson.  Is this fair or even right?  Who knows… but he is truly one of a kind and I really don’t know what to say at this point.  What I do know is he set a damn high bar for me and all other leaders.  Thanks Steve.

So much is being written regarding the amazing performance of Steve Jobs I think I will leave it to them to tell you his story.

Instead, I will tell you mine.

You have no idea how many sleepless nights (in Seattle no less) have been spent tossing and turning, just wishing a great engineering team was standing behind my vision.  I have known for some time now a grand and transformational “something” is stuck deep down in my soul and needs others to help pull it out.  For so long I felt I just needed the right pieces to fall into the right place.  For so long it felt like a hope, a dream or a far off story only found true reading through Inc. magazine or TechCrunch or Silicon Alley Insider.

Well that dream has finally come true.

I have chosen to accept an offer to become CEO and co-founder of a promising startup here in Seattle, one just about to hit the public radar.  It really is like a dream come true and the vision we are setting forth is nothing short of transformational.  Keep an eye on this one.

A little Background – Loyaltize

Years ago something hit me like a ton of bricks and I had a vision:  The local economy was one of the one the last holy grail industries of the internet, not fully transformed by the consumer web as we know it today and ripe for change.  I also realized businesses function by and large through customer loyalty.  Most people intuitively understand 80% (or a majority) of a businesses revenue comes from 20% (or a minority) of their customer base.  This is natural and it will never change, you can ask Vilfredo Pareto on that one.

I also noticed local consumers have distinct relationships with specific businesses, and come-hell-or-high-water they will do business with them.  People have favorite restaurants, coffee shops, wine stores, clothing retailers, gyms, etc…  Why not reorganize the local economy around the consumer and their ability to dictate relationships and interactions with their favorite entities.  Allow them to choose who/what to follow and who/what to stay connected to and receive information from.  Ya know, around the loyal customers and their view of the local economy.   Why not Loyaltize?

Understanding that fact, it baffles me why the hell new “advertising” and “group coupons” and other crazy schemes keep popping up every day claiming to increase revenues, profits, customer bases and all other things push media in an effort to bring MORE customers in the door.  It ain’t about “offers” people.  To me, that is just ass backwards to how it actually works.

Businesses don’t want more flaky one-night stands, they want more long term relationships.

When I looked at the current technologies, business practices and the state of the local economy I saw inefficiency, ineffectiveness and little change from 20 or even 30 years ago.   I am sure I was not the only person who saw an opening, but I am positive no one has my exact vision.

Except This Guy

I was recently approached by a talented local engineer here in Seattle who wondered if I would be willing to talk about my ideas on Loyaltize.  He thought we had the same vision.  What he didn’t know was I had as so much given up on my dream of Loyaltize as the summer had progressed.  You see, I did have a startup at one time – a bootstrapped company we threw together called Loyaltize – but after failed attempt on version 1 we backed off and the team dispersed early this year.  Trying to build a startup while being employed full time is not the path for success (at least not for me).   Trust me, after almost 5 years of blood, sweat and tears, it’s a little tempting to throw in the towel and walk on home.

As some of you may know, in May I said “F-it“, kicked my full time job to the curb and doubled down on myself as an entrepreneur.  I figured one thing out – if I don’t fully believe in myself and do whatever it takes to succeed – why would anyone else believe in me?  Why would they believe enough to join or invest?  I also figured I would rather die knowing I tried everything possible to make my vision come true rather than feel regret as the years went by.

Side note: I also started writing on here, Business Insider and other publications, proving to be the smartest decision of my life.  No joke.

Throughout this summer I entertained different business ideas, different roles, different industries and even different approaches to business.  Nothing felt right.

Well, as we spoke that day something woke up in me and it felt as if an old friend had just come back into my life.  I am sure it was obvious to him as well.   The blood started rushing to my head and the vision started to come back to life.  I said to myself “I am home and it is time“.

Since timing is everything I will refrain from naming the company or any others involved.  But keep your eyes open, you will soon start seeing and hearing about it.  Our vision is eerily similar to what you read above and mark my words: your local consumer experience will drastically change in the next five years. 

Today I enter the next phase of my life.  As CEO of a new company, with a new life and a world of potential in front of it. I am set to make the best of it, whatever that means… be it lessons learned, acquisition, IPO or lifelong employment/retirement.

As I step up to be the leader of this company – and a leader in the technology industry as a whole – I cannot let go of the irony this day holds with the greatest leader the business world has ever witnessed stepping down.  But I must since life always has it’s way of moving forward.

It seems fitting that Steve Jobs said it so eloquently: “We believe that people with passion can change the world… for the better.  And it’s those people who are crazy enough to believe they can change the world, actually do.”  

Will do, Steve.

@jnickhughes