This time five years ago, I founded StackSocial, what is now StackCommerce. Each year for the past four years I’ve shared a few lessons (Year 1, Year 2, Year 3, Year 4) for other founders who are on the same arduous path. It’s been humbling, it’s been exhilarating, and I’ve grown in ways that I couldn’t have imagined. This year I’m back with 4 more leadership lessons I’ve learned over the past 12 months … perhaps the most important ones thus far.
Before I get to that, I want to give you a few highlights (#humblebrag) of my team over the past year.
5th Year Highlights:
- Grew the team to 60+ people while remaining profitable (on just $800k of capital raised in 2012)
- Built out an incredible management team with experience from companies including Google, Gilt, Fab, Headspace, and Pivotal Labs
- Expanded into our 4th Vertical: 1. Tech, 2. Men’s Lifestyle, 3. Education, 4. Women’s Lifestyle … with plans for 5th.
- Grew our user community by nearly 50% to over 3.5 million registered members
- Adopted five insanely rad office dogs: Bill Murray, Kiley, Cowboy, Zooey, and Uni
But, beyond all of that, the biggest highlight over the past five years is that we’ve not only created a successful company, but also a culture, a family, and a movement. I couldn’t be more proud of the blood, sweat, and tears that this team has put forth to help better the lives of our vendors, publishers, and customers.
Now, as promised, here are 4 lessons learned over the past year:
1. Empathy is the most underrated virtue of leadership
Like many entrepreneurs, growing up in my 20’s I revered Steve Jobs. I admired his take no bullshit, take no excuses, accept nothing but the best, and demand perfection, slant on life. I expect it of myself and so, why shouldn’t I expect it of my team? Shoot for the moon and worst case you end up in the clouds, right? But, with people, that’s not always the case.
Perfection is a tough standard to meet.
Putting that standard on yourself is your right. It’s probably not a smart one in the long run, but if you want to live with high bouts of anxiety, tension, and stress in pursuit of your ultimate satisfaction — that’s your right. But to project that onto others in pursuit of perfection often times causes us to remove all sense of “understanding” of someone else’s circumstances. That lack of empathy can hurt. It can really alienate people in a way that you may not foresee.
I’ve had some major setbacks in my life and as painful as they were — they have been a great asset to me. They taught me how fragile the human spirit is and in those moments how much we all need comfort, understanding, and encouragement … not a hard-ass with unreasonable expectations. Finding an acceptable balance in the pursuit of greatness and empathy with yourself and your team will help you endure because, frankly, you are nowhere near as good as Steve Jobs, so stop trying to mimic something you are not.
2. Communication is the antidote to almost every problem
Setting up formal feedback loops should be a top priority. When you are smaller, informal 1:1’s, happy hours, and one-off meetings can be enough to get a sense of people’s thoughts and give them the opportunities to let you know their thoughts. As you grow, implementing consistent channels for frank and/or anonymous feedback is vital to staying aligned with your team. Some of the things we have done this year include:
- Management OKR Process — Quarterly Objectives and Key Results help align the entire organization behind the top metrics and KPIs. You’d be surprised how misaligned folks are until you get everyone in the same room. This also allows lower level managers to gather feedback from the bottom-up to help build consensus on what’s important to them.
- 360 Degree Reviews — Everyone in our org gets anonymous 360 degree reviews from peers, their direct reports, and the layer above them. We’ve found that this can surface incredibly insightful feedback that helps the individual to understand how their actions are helping or hurting not only those that they report to, but everyone in the org.
- Team Off-sites — Last November, we took the entire team on a 3-day cruise to Mexico. (WTF…I know, right?!) But, the investment paid for itself and then some. There’s something magical that happens when you get everyone out of the office. People relax…they let their hair down a bit and they get honest. And there is gold in those moments of honest, direct feedback. I’ve probably learned more about what my team thinks about the leadership of our company in those few moments then all my 1:1’s combined. Do not underestimate the importance of spending time away from the office as a team.
3. Have a non-business mentor
I have a team of awesome advisors and investors who are phenomenal when it comes to startups and tech. And when I have a business question….they are who I turn to. But, often times, the issues I have as a founder can’t be resolved in an excel spreadsheet. They are matters of the soul.
This job will rip you apart. It will bring you to your knees. I don’t care if you are Elon Musk or Marissa Mayer or Mark Zuckerberg … you feel pain… you have low days, low weeks, and, yes, even low months. The highs are higher than you can imagine and the lows are pretty low.
If you don’t have a personal, non-tech confident you can turn to — make it a priority to get one. Today, my wife and my dad are the two people I turn to when I’m at my lowest. And, everytime, without fail, they are there for me with doses of reality, empathy, and love.
Before I was married, when we were first starting launching Stack, I was really up and down based on the momentum of each day.I took every single day personally, and when you’re in that state, you need someone to vent and to let go. In those early days, I saw a therapist and it was the best thing I could have ever done. It helped so much that the therapist knew nothing about tech, because at the end of the day, my problems weren’t about tech, they were about emotions and feelings. Many of our problems are internal and not external as we might think. I encourage you to find someone, anyone, outside your tech circle to talk to and just let go.
4. Cash is King
Every startup has a different track. Ours is what I’ve coined as being “Seed-Strapped”. We raised a small Seed round of $800k back in 2012, but we’ve been profitable ever since so we haven’t needed to raise more funding. We’re not a completely “bootstrapped” startup, yet we also haven’t raised large rounds of institutional capital. Those two facts make a very unique creature in the startup world, but it’s a path that I would personally recommend.
Raising a Seed round gave us access to new potential partners, press, hires, and social capital that we needed to grow the business and it was well worth the dilution. But, instead of going the traditional route of raising more capital and further diluting my ownership and that of my team’s, we focused on staying cash flow positive.
Some may say it was a mistake and we could have grown much faster with capital, but I also know many hooks that come with that money. Hooks that I didn’t believe were a worthwhile trade-off. Easy capital does not equate to success and, in fact, can lead you to your demise by allowing you to go too fast too early before you figure out product-market fit. We’ve seen this all too often. Founders think that raising capital is like putting training wheels on a bicycle, but It’s akin to slapping a rocket on a tricycle.
Raising some capital gave us the connections and PR without the baggage and dilution that comes with raising large rounds of institutional money. The downside of this is that you have to be more disciplined in your spending. While your competition is moving into that shiny new office at $6.50 sqft/mo…you may find yourself subletting from their neighbor.
Regardless, the ability to stay independent, make your own decisions, and have your own path is invaluable. Take on capital wisely, even if you can raise more. I would advise you to take what you need and, if you can, get to profitability ahead of growing a few percentage points faster. Maybe that’s heresy in the startup world, but I’m a bit cynical after seeing too many startups grow quickly and fade even faster.
Here’s to the next 5 years. Good luck and Godspeed.