Found+READ: Stories by Wil Schroter

Stop hiring people to do YOUR job!

Wil Schroter — Tue, 03 Jul 2007 14:13:12 GMT

When I started my first company, “Blue Diesel”:http://bluediesel.com/, we were a Web development company at the dawn of the Internet age. (Remember 1994?) Not only was the company young, so was I—just 19. As the Internet matured, so did our Blue Diesel, from a scrappy kid in a college dorm room to a company that was banging out code to over 100 professionals at companies such as “Best Buy”:http://www.bestbuy.com/, “BMW”:http://www.bmw.com/, and “Chase Bank”:http://www.jpmorganchase.com/cm/cs?pagename=Chase/Href&urlname=jpmc/about.

Along the way I learned a painful lesson as a founder.

Being so young, I assumed the path to success would need to be paved with a long line of executive managers brought in from the outside to improve upon the work I’d done on my own. Over time we brought in the “best and the brightest” to do design work, outside sales, client management, marketing strategy, and, of course, technological development. Such seasoned professionals would have to have more experience, more talent, and more capacity than a 20-something kid possibly could offer, right?

I was wrong. In the end I relied too heavily on these people to do what was inherently my job – leading the company.

Let me pause to say that the growth of any great company is not a single-person effort. It’s the work of many great people who propel the company forward. There are, however, aspects of the business that no one can do quite as well as the founder can.

Leadership

I never got this one right. In my eight-year tenure at Blue Diesel we went through four presidents in an effort to disconnect myself from the day-to-day operations. Every time this failed.

It wasn’t because we hired the wrong people – they were all good candidates. The strategy failed because we ignored the reason why my leadership worked where others could not. My leadership worked better simply because I cared more about the company than anyone from the outside possibly could. I couldn’t replace that qualification no matter whom I hired.

Leading the company was my job, and I made the continual mistake of trying to force someone else to perform a role cut out for only one person, me. This isn’t the case for every company, but if you look at a company like Apple, before and after Steve Jobs, you can see why at point, a founder is irreplaceable.

Sales

We also hired more than a dozen salespeople to find new business and reel in the big fish. Time after time we were disappointed with the results of our hires. Again this was not because we hired the wrong people, but because they couldn’t sell with the passion of a founder.

In the process I probably slowed my company’s growth down by about two years, hoping like hell someone else would be able to hop on a plane every week and bring home more deals. I was wrong. I’m not the world’s greatest salesperson, but in the end, no one else could sell my vision like I could.

Product Development

I lump product development into a general category to mean every other working aspect of our business, from our technological innovation to the creative output of our design.

I ran out and hired creative directors, technology directors, directors of client services, and the like. They were all smart, talented, and motivated professionals. The technologists wanted to build cutting edge technology. The creatives wanted to craft award-winning design. Client services wanted to cultivate overjoyed customers. But none of them cared as much I did about how all of those elements, together, would produce an amazing interactive design agency.

What I learned is that the complete evolution of your product is something so close to your vision as the founder that it’s nearly impossible to divide and distribute among a team of people—no matter how talented they are. Someone has to pull all of those elements into one cohesive vision. At least at Blue Diesel, that someone had to be me.

‘I’ at the Center, if not Alone

The point here is that in my haste to divide my vision and responsibility among many people I ended up diluting my responsibility to all of them. A founder’s job is to convert his/her vision into a working organization that is capable of realizing that vision.

When you take the founder out of the equation, the formula breaks.

These days I work differently. I stay very engaged in every aspect of the business, not because I can’t figure out a better way to spend 80 hours per week, but because I know it’s my job to pull all of those pieces together.
If you’re growing your own startup, by all means look for great people. Just don’t lose sight of your true responsibility within the organization to knit it all together and keep the vision alive. It’s not an outsourceable job!

The Value of Friend-Raising

Wil Schroter — Wed, 25 Jul 2007 14:43:16 GMT

During my last trip to the Bay Area, I visited with FoundRead’s “Carleen Hawn”:http://www.foundread.com/person/3291-carleen. When Carleen asked me what I was up to, I explained that I was buried in back-to-back meetings with folks around town discussing my current project, “Go BIG Network”:http://www.gobignetwork.com/. “Are you fund-raising?” she asked, to which I responded: “No, I’m friend-raising!” I wasn’t kidding. I was on a mission to make as many new friends as possible.

You see, our company’s growth isn’t only dependent on finding more cash; but it is dependent on us meeting more people. And frankly, I’ve always found “raising friends” is far more valuable than raising money.

The Monetary Value of a Friend
For the sake of this argument, let’s set aside the fact that true friendships aren’t really about money. But in a business context we’re probably not talking about true friendships at all. We’re talking about building relationships with people who can help grow your business; put another way, people whom you would otherwise have to pay money to meet.

For example, you could take some of your VC funding and hire a business development executive to go out and build new partnerships on behalf of your company, and to extend to your operations with his or her existing rolodex of “friends.” But, you’d be “purchasing” those relationships and deals—to the tune of about $100,000 in annual salary for the biz dev executive.

Now imagine that this same biz dev exec is a friend of yours. Instead of shelling out six figures in cash, he or she simply would make the same introductions for you as a favor. In this case, the value received is exactly the same, but the cost to you is zero.

So while many entrepreneurs spend most of their time ingratiating themselves with VCs in order to collaterally gain access to useful people, I figure out who those useful people are first, and then spend all my time trying to meet them myself.

This is what I mean when I say I swap fund-raising for friend-raising.

Wait a Minute! Isn’t that just “Networking?”
Okay, sure it is. It’s networking. It’s business development. Sometimes it means pretending that the people I meet at a cocktail party aren’t as important to my business as they are, and so forth. It’s all of those things, but more importantly, it’s recognizing that money typically buys relationships in an indirect way. It’s also recognizing that the more relationships I build, the less money I need.

My Friendship-Development Plan
You’ve heard of a “Business Development Plan”. It’s a series of targets and milestones that execs use to grow their sales efforts. I’ve worked on BD Plans for ten different companies, and in every case, it was ultimately about creating relationships.

When I realized this, I shifted my focus to the Friendship Development Plan. I laid out all of the relationships that I would need to have—everyone from investors and advisors to bloggers and customers. Then I created milestones or targets, focused on a few people whom I would try to build a relationship with along a specific timeline.

I divided the list of friend prospects into strategic categories. For example, I knew Go BIG would need a voice in the blogging community, so I set out to build relationships with the folks at “GigaOM”:http://gigaom.com/ (parent of Found|Read), “VentureBeat”:http://www.venturebeat.com/, and “TechCrunch”:http://www.techcrunch.com/. I’ve now written for all four of these sites!

By simply picking up the phone and forging relationships with “Om”:http://www.foundread.com/person/3008-gigaom, “Matt”:http://www.venturebeat.com/about and “Mike”:http://www.techcrunch.com/about-michael-arrington/ directly, I avoided needing to pay some PR agency a $10,000-a-month retainer for the same benefit.

Getting Serious About Friend-Raising
Most founders know that they need to network more, but they still don’t do it. Yet inexplicably, entrepreneurs happily devote countless hours to courting the gods of venture capital.

If you could take all the time and energy you’ve spent courting capital and express it in terms of “useful resources purchased,” I think you’d find that getting serious about “friend-raising” is the more economical proposition.

Your plan to build friends won’t ever be as quantitative as a tradtional sales plan—in which it is possible to tie new customer relationships directly to receivables. Don’t be so callous as to try to equate every new friend to a dollar figure (which is just weird). Quantify it this way: as the total value of time and energy you save in terms of the fund-raising you no longer need to do_.

In Go BIG’s case, by taking all the time and energy that might have gone into fund-raising and refocusing it on building relationships ourselves with the media, customers, partners, and talent, we avoided taking a first round of capital. I can’t say how much any one of these friend-relationships is worth in simple dollars, but I do know that we skipped raising what otherwise would have been a $2 million A-Round. And Go BIG did just fine.

Of course, now that I’ve said all this, I’m probably get a bill from Carleen. But it still will have been worth it.