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…



It’s Not If (But When) Your Startup Slides Sideways You’ll Find Your True Potential

Boy has it been a challenging couple of months.  The title of the post might be a bit misleading, suggesting my company is indeed going nowhere fast.  This is a wrong assumption.  It’s definitely going somewhere, we are growing 50% month over month and just posted record numbers again, but just as a car can slip and slide when it hits a patch of black ice so can a young startup.

It’s not if (but when) the sliding occurs the true leader will emerge.  Let me just tell you what happens in a typical startup.

A. People sit around and think about cool new ideas

B. Those people start prototyping and building a product

C. Once they realize they want to jump into this more intently, they find a few more people and form a team

D. At some point the group formally incorporates and makes the company official

E.  The people associated are listed as founders and as such, receive incentive to stick around via stock

F.  (Most founders) think they are the next Facebook and think their product will magically spread virally to millions of people

G. Then it doesn’t

H.  Then shit hits the fan and everyone finds out it’s actually tough to grow a business

I.  Only then will you finally find out what people are made of.

J.  Only then, when it’s actually work and things don’t come as easy, the pretenders will leave

K.  And only at this time the leader will emerge and help the company find it’s true path

Look, life is tough.  Things don’t always work out as planned.  But does that mean you just up and quit, to simply move on to the next thing that you think might magically make your dreams come true?

I don’t believe so.  I believe it takes Blood, Sweat, and Tears for anything materially positive and truly great to be created.  This has always been true but it’s even more so today.  Why?  Because it’s too damn easy to build a product and start a company today.   There has to be a distinction between the minor leagues and the major leagues; jumping straight to the majors just doesn’t happen often enough to be a believable story for your life.

What’s the minor leagues?  Hacking, dinking around and building crazy products.

What’s the major leagues?  Building a business and an organization around the product which adds value to our world.

If you ever wonder who’s the leader in a group, just light a bomb (figuratively) and throw it directly into the center of the team. Watch someone run and they are the weak link.  They are not the leader.  Whoever stays has leadership qualities within them.  And whoever stands up, starts taking hold of the situation and determines the path forward – well they are the true leader.

It’s funny, when everything is great and everyone’s slapping backs and high-fiving there’s almost no need for leaders.  Everything seems to move forward with little direction or effort.  But just wait till something happens.  Leaders find their calling and establish their potential when things start going sideways.

I think it’s amazing that leaders emerge during crisis.  I also think it’s fitting and believe it’s how the world should work.

But please do yourselves and your co-founders a favor next time you want to start a company.  Look each other in the eye and ask yourselves what kind of player you are?  Minor or major?  Weak link or leader type?  It will save quite a bit of time and grief on the others.


Holy Crap! One Year Ago Today My Life Was Completely Different

One year ago today – May 1st 2011 – I officially walked away from my previous career and made the leap into entrepreneurship.  These last 365 days have been some of the most exciting, rewarding and scary times of my life.  Back then, I was sitting at a desk in a fitness facility at the Boeing Company, working as a physiologist.  Today, I sit here as the CEO of a tech company making waves in the mobile payments space, talking to investors and multi-billion dollar companies.  Oh, how things can change in a year…

Some experiences of the past year:

  • Quit my full-time job and gave up a steady paycheck
  • Had no idea how I was going to pay my bills…
  • Watched the gig I thought I was transitioning to disappear
  • Launched this blog and started reaching people around the world
  • Started contributing the
  • Was basically a free agent over the summer, just focusing on writing on here
  • Had no idea how I was going to pay my bills…
  • Was one-day away from taking a COO role at a startup in New York, when…
  • My soon to be co-founder reached out to me through a random email in August
  • I sat down and over coffee determined we should start a company
  • We formed Seconds in early September
  • We released our beta product late fall, early winter
  • At first, we focused on text messaging between customers and local merchants
  • At the beginning of January we started gaining attention and media
  • Ran out of money
  • Had no idea how I was going to pay my bills…
  • Through February and March we kept expanding our vision and writing about it
  • We made the change to focus on mobile payments driven through text messages
  • We now field inquiries and interest from around the world and look to expand Seconds
  • I now write guest posts on the most popular tech blogs around
  • and people now look at me as a though leader and actually listen to what I have to say

So much more happened over the course of the last year but I will stop there.  I want to make something very clear: your life is what you make of it.  I have completely transformed my life in the last 365 days and I sit here today in awe of what I have been able to do.  We are (close) to being finalists in national recognition for being one of the top innovative companies of 2012.  I could’t have dreamed of this just one short year ago.  This transition has not been easy – actually the most difficult thing I have ever done in my life – but it’s not impossible.

You can do anything you set your mind to, never forget that.

How To Deal With The Agony and Ecstasy Of A Startup

Every startup founder is probably nodding their head right now as they read the title of this post.  It’s like being part of a club or a gang where you were initiated and were forced to endure the pain.  Then afterwards you have a sense of relief – a thought of  “wow,   I’m glad I got through in one piece!”   Well, it’s safe to say I’m right in the middle of it and here I am thinking out loud on how to deal with it.

The Agony

The agony can be described as an immense downward pressure, something akin to gasping for air when lacking oxygen.  When you start a company, everything has to be created out of thin air and requires extraordinary feats to pull it off.  Things like the legal entity, the team, the product, the customer base and the cash reserves are not there in the beginning and have to be created somehow.  In the beginning it’s all chaos and panic.

And it’s an agonizing experience.  Anything that can go wrong will go wrong.  Your progress will take twice as long as you expect and if you are an impatient person like myself this is extremely difficult.  If entrepreneurship can be described as a roller-coaster ride, the agonizing times are the extreme lows you will face as a startup founder.   Seth Godin calls this The Dip.  Some don’t quite make it out of the dip and become statistics (half of businesses fail in the first 5 years, 1 out of 1,000 ever receive venture funding, etc..)

The Ecstasy

The ones who do make it out of the lows shoot right up to the highs and experience periods of ecstasy and bliss.  Similar to a chemical induced euphoria these natural created feelings are what keep you going through the entrepreneurial journey.  A great first meeting with a high profile investor, media coverage on a highly visited blog or website, the cold call out of the blue requesting a new partnership that could land a potentially lucrative new customer, or the hundreds of new twitter followers after a new blog post goes live are all exciting and exhilarating experiences.

These are what you live for as an entrepreneur.  And they are addictive.  They are additive because these types of experiences release dopamine and other neurotransmitters in the brain that result in a heightened state of emotion.  Interestingly, that same process happens as we experiment with recreational drugs.  It’s funny how entrepreneurship and mental disorders are so close in relation yet are looked upon from society in the extremely opposite light.

How To Deal with The Agony and the Ecstasy

If you are an entrepreneur, you will have to deal with this type of life.  Here’s a few ways I deal with the ups and downs of startup life.

1) Exercise – Expending energy helps release pent up stress so I can relax and  breathe a little easier.  It also allows me to stay healthy since I am less active these days.  This is the single most important (and simple) way to handle stress in your life.

2) Get Advice – I lean on my Board of Advisors to help me to understand things I may not see just yet.  They are all older than me and have been through similar situations (or see others go through them), which affords them a perspective I can use to help me make better decisions.  I tend to think I am smart enough to realize I don’t know very much.

3) Come To Grips With Reality – The reality is you are on the roller-coaster of life and it constantly goes up AND down.  When in the dip, it’s healthy to understand the dip won’t last too long and not too far down the path things will go up.  The only thing you must figure out is how to minimize your time in the dip and how to maximize your time above water.

Preparing yourself and understanding how to handle the ups and downs is the smartest (and healthiest) way to get through the rough patches.  It’s your responsibility to learn as you go… I know I am.


5 Startup Founder Rules To Live By

Apparently, Twitter co-founder Biz Stone makes all Twitter employees adopt seven rules when they join the company.  I though these were quite interesting, especially Leave space for the unknown. When I read these rules it made me sit back and think about what might be my rules.

1.  Be Original – Originality is rare today, being truly unique sets you apart from all the rest and makes you attractive to others.

2.  Don’t Ever Quit, Just Refocus – Obstacles and frustration are part of the game.  Refocusing after a setback will help you find meaning and your next milestone.

3.  High Risk-High Reward – We only have so much time on earth to make a difference, why not opt to make the most out of it.  Unfortunately high rewards require high risk.  Fortunately, most choose to risk very little leaving you with a lot of opportunity.

4.  Live Authentically –  Things have a way of coming back around so living authentically alleviates lots of future problems.

5.  Turn Complexity Into Simplicity – Successful products and technical innovation is all about simplifying the complex.  Do that and everything else takes care of itself.


Like It Or Not, Here’s How Your Startup Proves Evolution (Controversial)

It’s crazy to think a simple idea of starting a company can prove the controversial concept of evolution.  Yet, like it or not here’s how it does.

Before I go in depth on the idea of evolution in the business world, my disclaimer:

This may be controversial so let’s put aside our beliefs and perspectives on faith or religion and speak only on the concept of evolution, as in the Darwin perspective as we know it.  Ya know, natural selection and all associated phenomena.  I am not an expert on the subject and will not pretend to be here.  I only want to bring  upthe concept of evolution into the context of entrepreneurship and building successful companies.  

An interesting observation is how most world changing technologies or ideas actually start as thoughts and go through a transformation into ideas, onto sketches on napkins, to prototypes, to working models, and onto businesses.  Although almost too obvious to note, all things must start with a thought.  A spark of genius.  An idea.


That idea, brilliant or stupid, is just the beginning of a (un)predictable path towards life and eventual death.  If in the right place at the right time, and the right decisions are made to take advantage of opportunities, the idea will transform into something more visceral and experience an extended life.  If not, most likely the idea will die a quick death into obscurity.

This is why you hear “ideas are everywhere” and “execution is everything”.  I can just hear Darwin whisper similar words in the same vein.  In his context, execution would have referred to “the strong” or “genetically enhanced”.  Not to get sexual, but if a highly attractive and sexually active member of a species “executed” properly, they would have passed on their genes to influence the gene pool and the evolution of their species.

Your startup must mirror the same as the highly attractive and sexually active member to survive.  What do I mean?  You need to be attractive to customers, users, investors, media and potential employees to succeed.  If not, you will never be discovered and will eventually die.  Attractiveness can come in many forms but the most obvious one is your unique idea.  Does it make sense?  Is it something most people would be attracted to and want to use?  Does it elicit emotions of excitement or intrigue?  Is it unique enough to not be lost in the clutter of all the other same “species”.

Also required to be attractive is the core members of the founding team.  Is there expertise on the market subject?  Are there proven individuals who get results, or more referred to as JFDI?  Are they fun to be around?  Do they attract people to them or do they drive others away?  This is huge, since any successful startup finds ways to attract employees, investors, users and media attention.

That is why you hear investors say “we invest in people, not ideas.”

Your start up must aggressively mate as well.  Wha??  Yes, I said your company must be promiscuous and interact with other companies if it wants to be successful.  This is how you integrate within the larger framework of the ecosystem and spread your gene pool for future generations.  Facebook is the best example of this with their open graph and the like buttons found all over millions of websites.  Their tentacles are everywhere and indeed they have solidified their gene pool in our world for decades to come.  Do other companies find your startup attractive enough to mate?

How do I know all this and why the heck am I thinking about evolution and your startup having sex with another startup?

We once were the ugly duckling but quickly evolved into a better suited mammal geared to mate with the royalty of the land.  My company Seconds, was originally named Order SM and intended to be a mobile ordering startup for the food industry.  (All S & M jokes aside, the name was supposed to be meant for SMS ordering).   It became clear the name and the basic concept needed to evolve if we were going to continue.  Yet this was not our intention initially, it naturally happened as others started to interact on the platform and suggest use cases outside of our original plan.

Last fall we released out beta product and our initial customers provided enough feedback to realize we were onto something A LOT BIGGER than we originally planned.  We realized ordering was a form of communication – just one aspect of the iteration between merchant and customer.  Questions were another part of the relationship.  Requests and thank you follow ups from merchants were also a part of natural communications.  And the biggie – transactions – are at the very core of the relationship between customers and merchants.

It was at this point we decided to change the name and the fundamental value proposition.  Seconds – quick communications and mobile commerce.  Helping merchants and customers more easily interact and transact.  We are providing consumers a unique mobile commerce identity that will span the entire globe.  And we are giving merchants the ability to identify those most important to their business.

We realized the world was mutating right before our eyes, but one “species” was going to be left behind unless we did something about it.  More than 8 trillion text messages were sent around the world last year, yet none to local businesses or merchants.  It’s crazy to think we can text our friends and family with the widely popular communication medium, yet you or I cannot communicate via text with our favorite local coffee shop or the 5 star resort we intend to visit next week.  We are changing that, and  have quickly found ourselves in talks with everything from emerging startups to multinational, multibillion companies.

Just as Darwin found “one species does change into another” as he looked at Galápagos mockingbirds from different islands, startups must go through phases of transformation if they are to succeed.

The idea that your initial idea – in it’s most basic genetic form – will be required to mutate into a different species for survival has to be understood by founders and investors.  This is more generally called the Pivot, and Lean Startup proponents such as Eric Ries have graciously helped our community unearth one of the most powerful phenomenons to hit the business culture to date.

I think that is enough talk on companies having sex for today.