The Startup Swami

This is the kind of post that I want have on this blog; brutal, honest, and raw. These are my stream of consciousness thoughts after a bad day.

I was a crappy CEO today. I was a bad leader, ineffective at my job, and a jerk to those around me. I pride myself on being a great leader and a great boss. Today I failed. Why? It pretty much comes down to one thing: I was exhausted. I needed a break. So I finally left work at around 5:00pm, and I came home and slept until 9:00pm. I feel better. I'm more rational, and calmer.

So what happened? I'm a new dad, and while I love my little daughter, it's overwhelming to be a new dad. I don't have nearly enough time in the day anymore. It's not that it's particularly hard to be a dad -- it's just time-consuming. I used to be able to "catch-up" on work in the evenings and weekends. I don't have time to do that anymore. Yes, it's hard to be a CEO of a start-up and a new dad.

When I'm tired (exhausted), everything becomes overwhelming. Small tasks become big, and I become very inefficient. I spend just as much time thinking about how overwhelmed I feel as I do actually trying to accomplish tasks. I know that I'm being ineffective, but that doesn't make it easier. My inbox piles up, and my attitude stinks. That's how I feel when I am really tired.

As the CEO, I set the tone for the company. I try to do my best everyday, but sometimes I fail. Today was one of those days. Case in point: I had a meeting today about a difficult problem, and I was an asshole the entire meeting. Instead of taking a productive approach that could have led to progress, I spent the entire meeting being defensive and ineffective. To those of you in that meeting today, I'm sorry. You deserve better.

When I'm tired and burnt out, everyone in the office feels my stress. I'm aware of this, and I try to keep to myself. But that's not how people are used to seeing me act. I know I impact the tone in the office when I feel this way. To everyone in the office who felt the bad vibe today, I'm sorry. You deserve better.

If you're reading this and feel exhausted, do everyone around you a favor: go to sleep. Sometimes the only solution is sleep. And that's ok. I'm going to go to bed now so I really get refreshed. Tomorrow is a new day.

Talk to any great entrepreneur in any business, and you'll find that behind the business is a personal story that relates to the business. In my case, my fascination with Groundhog Day was somewhat of an inspiration for MyPunchbowl. Allow me to explain...

For as long as I can remember, my favorite holiday has been Groundhog Day. I think it all began because I wanted to be a weatherman. I studied weather during a daytime summer camp at Garvies Point in Long Island when I was about 7 or 8 years old. I loved the idea that meteorologists stood in front of a green screen and didn't even see the weather maps! But I've never been strong in math, so my interest waned as I learned how many computations are involved in predicting the weather. My interest in weather was piqued again when I learned that there was a furry rodent who predicted the weather (without math!) each year who lived in a town called Punxsutawney. I was hooked.

My love for Groundhog Day reached new heights when the movie Groundhog Day came out in 1993. As a student at the University of Rochester, I had a new way to share the revelry with my classmates. So I dressed up in a suit, and wished everybody a happy Groundhog Day.

Fast forward to 1997, and I made my (infamous) solo trip to Punxsutawney, PA to meet the Seer of Seers. The night before I left for the twelve hour trip, we had a small party with a few friends. That was the first annual party, and this year will be party #14. Each year has been more elaborate than the last, and fun has been had by many. I've written about Groundhog Day on the Punchbowl company in years past. Here's my Groundhog Day post from 2007, my preparations from our 12th annual party in 2008, and another blog post after the party from 2008.

For 2010, I wanted to do something special for Groundhog Day-- so on a whim, I picked up the phone and called the folks who developed Groundhog.org. I told them that I wanted to partner with the Punxsutawney Groundhog Club and create an eCards site. After a little negotiation, we signed an agreement with Groundhog.org to become the exclusive provider of Groundhog Day eCards. This morning, we made the official Groundhog Day press announcement.

When I started Punchbowl, I had a few dreams that I wanted to fulfill. Today I can cross one of them off of the list. Punchbowl is an official partner of the Groundhog Day festivities and close partners with the Punxsutawney Groundhog Club. Awesome. Happy Groundhog Day!

When people ask what I do for a living, I typically say that I run my own company. Depending on the audience, I'll mention that the company is VC-backed, or that I'm the CEO of a consumer-internet startup. Unless I'm asked, I usually don't get into the details.

In the same conversation, I'm invariably asked, "how many employees work for you?" It's the kind of question in which the answer is supposed to be an indicator of how successful your company has become. And I'm here to tell you now that it's not a good indicator.

In the early years of Punchbowl, I hated answering the "how many employees do you have" question. For a really long time, there was only three people associated with Punchbowl. None of us were employees -- and we only worked on the start-up part time. A few years later, after we had taken our second round of funding, the team had grown to 12 people. I remember meeting people during this time who were impressed by the number of employees. "Wow, you're really successful," they would say. Since it feels great to be recognized as a CEO of a successful startup, I would readily agree.

Here's the problem with this line of thinking: the number of employees says nothing about how well you are achieving your goals as a company. In fact, the number of employees you have may be holding you back. If you have profitability metrics, then the number of employees adds costs when you may be trying to reduce spending. And the number of employees doesn't really say anything about your revenue or traffic metrics either.

The truth is that the number of employees says nothing about your success. It only tells you how much time you spend during your day managing other people and dealing with the inevitable issues that come up as a manager. My happiest times as a CEO have been the days after laying off an employee that was problematic or an employee that was not achieving their goals. It's a great sense of relief when the team is back to the core group of people who commit themselves to excellence and integrity.

Some of the best products and companies were built by a very small group of people. And some of the worst failures in the business world are from companies that have too many employees (to the point where they can't innovate and change direction easily). So why do some people measure success by the number of employees?

The next time you meet someone who has started a company, resist the urge to ask "how many employees do you have?" Instead, ask them "how do you measure success?" You're sure to get a much more thoughtful and relevant answer.

Today I had a meeting about the MyPunchbowl numbers so far this month. As you would expect, one of the metrics that we keep a close eye on is the number of events planned on the site each month. During the meeting, we were discussing ways we can increase the total number of events planned on the site. After discussing a variety of possibilities, I blurted out something that I think is relevant about a lot of businesses: "Our job is to sell umbrellas on every street corner when it is raining. We can't make it rain."

Allow me to explain. A few months ago, I was in New York City when it began to drizzle. Although I was wearing a nice suit,  the drizzle didn't bother me much. However, by the time I had walked a few more blocks, it was pouring. As I waited on the street corner for the walk sign,  I spotted a man selling umbrellas on the opposite side of the street. I made a beeline across the street to purchase an umbrella. I didn't care how much the umbrella cost -- he had my solution, and I needed it bad.

As I continued my walk now with an umbrella in hand, I noticed that there were umbrella salespeople on almost every corner. And almost every single seller was surrounded by people who were waving their cash around to try to get one of those precious umbrellas. A few blocks later, most of the umbrella sellers were sold out.

Every time I come across a new startup, I ask myself a fundamental question: are there lots of people in the world that are looking for this solution or is the startup trying to create demand? It is very hard for marketing folks to create demand (that's the job of salespeople) -- and it's almost impossible in consumer markets.

Let's use MyPunchbowl as an example: if you were in charge of marketing for MyPunchbowl, what would you do to cause people to throw a party? In my opinion, people throw parties when they have a need -- for example a birthday in the family, a holiday, or a yearly tradition. I believe that our job is to be the solution for people who have the need to plan a party. We want to be the folks that are standing on the street corner when it starts to rain. Is it possible that we can create demand where there was none before? Sure, I suppose it is possible. But there are thousands (hundreds of thousands?) of people everyday who have the need to plan a party. We can't make it rain. It's not our job to try to convince someone to throw a party. Our job is to make sure that people know we exist, and to explain why our product is superior to any other product that they might choose.

SWAMI SAYS: Is your startup trying to make it rain? That's a pretty tough uphill battle. Instead of trying to make it rain, sell umbrellas. Be the best solution to a market demand, and you'll start to see money pouring from the sky.

The job of a start-up CEO seems pretty glamorous, doesn't it? You set your own schedule, you have a team of people that work for you, and you can set the rules and culture of your company (did you know that Groundhog Day is an official holiday at my company?) I admit that these are some of the things that I love about being the CEO of MyPunchbowl.com. But there are other things that aren't so glamorous.

In any given week, I find myself confronted with a myriad of tasks that no one really likes doing. Here's a partial list of things that I've had to do over the past couple of weeks:

1. We ran out of toilet paper at the office. I had to stop what I was doing to run out and get more
   
2. Met with broker to renew our property & liability insurance
3. Filled out power of attorney forms for states where we have employees
4. Completed our 2009 Delaware Franchise Tax Form  
   
5. Handled the Verizon guy at our office when he came to deal with our router issues
6. Collected signatures for our Board resolutions and annual report
7. Completed the forms for the renewal of our D&O insurance
   
8. Took out the garbage, and wiped down the tables

With all of the other responsibilities on my plate on any given day it can be a bummer when I also have to do tasks that pretty much anyone can do. I never imagined that after three years of being the CEO I would still have to worry about whether or not we have enough toilet paper in the office.

Should I ask someone else in the office to go to the store when we run out of toilet paper? Who should I ask? The lead engineer? The marketing manager? Although I'm sure that anyone in the office would be willing to do these tasks, I don't feel right about asking one of the employees. If they worked at a larger company, they wouldn't have to worry about these kinds of things. So I don't ask.

With my first child on the way, I recently reached the conclusion that I needed help. So just this past week, I hired a new person at Punchbowl who will not only help us with marketing tasks but will also have office manager responsibilities. After three years, it's great having someone in the office who will be able to help me out with some of the paperwork and less glamorous tasks.

Before you think about starting a company, keep in mind that a significant part of the CEO job is doing the tasks that don't fall under anyone's umbrella. If it's not a specific engineering, marketing, customer support, or business development task, chances are that you are going to have to handle it. That's not something I really understood before starting MyPunchbowl.com.

So, do you still want to be a start-up CEO?

Chalk this up as another pet peeve of mine in this day and age -- but a few times a week I get asked "Where are you located?" in an email. This question comes from all kinds of people: partner companies, visiting press folks, prospective employees, student interns... you get the idea.

Here's my problem with this (inane) question: please don't waste my time with something that is widely available with a few simple clicks of a mouse. On most company websites, you can easily find an "About Us" page. Simply navigate to the home page of the website, and scroll all of the way to the bottom of the page. 9 times out of 10 you will find a "About Us" page on the footer. From there, you can almost always find a "Contact" page.

Some of you reading this blog post might be thinking "but what if the address on the website is wrong?" Great question. For the record, I have no problem with someone emailing me and writing "I noticed that your website lists the address as 123 Main St, Suite 500 in Boston. Is that still the correct address?"

Please note that this advice does not apply if you are visiting a very large company or a company with multiple locations. If you can't find the address in less than two minutes online, then go ahead and ask over email.

This post was inspired by the most recent person who emailed me this question -- but don't feel bad Robert. You're just in a long line of others. And I'm guessing you won't be the last.

I've noticed a troubling trend the more I've been interviewing candidates recently. About 50% of the time, candidates are showing up early for their interview. For a startup in a small office (usually without a reception area), this is very inconvenient. Yet the candidates seem to think that they have somehow made a good first impression by showing up early. Wrong, wrong, wrong. I'm here to tell you that being early to an interview is worse than being late.

As an interviewer we want candidates to be on-time -- not late, but certainly not early. When you're early, you create a series of problems. Let me provide you an example, using a case from this past week. In this case, the candidate was scheduled for an interview at 2:00pm. That day, one of our Board members was visiting the office. My meeting with the Board member ran over (no surprise) and that pushed lunch with the team back as well. It was important to me and the rest of the team to have our Board member spend some quality time with us as a group. I was hoping for a lively discussion during lunch with a question/answer session to follow. We started lunch around 1:15pm, and we gathered together in the front area of the office (in the same area as the front door of the office) where we typically eat lunch.

At around 1:35pm (20 minutes later), the front door of the office swung open, and in walked our interviewee. She was 25 minutes EARLY to her interview, and we had to interrupt our meeting to say hello. She was cordial and nice, but I was annoyed. There was nowhere for her to sit and wait. She was now standing over our meeting -- as an un-welcome guest. I almost asked her to leave and come back at 2:00pm, but I didn't want to be that rude. Instead, we tried to continue our meeting. The next natural pause in the conversation could have been the start of a question/answer session. Instead, with our candidate standing idly by, we ended our meeting so we could start the interview.

If it sounds like I'm ranting about a small issue, I'll say two things. First, that's part of why this blog exists. And second, this is a bigger deal than you might think when you are trying to run a start-up in a small office. It's such a simple thing that can easily be fixed.

SWAMI SAYS: What should a candidate do if they are early to an interview? It's pretty simple: Stay in your car! Wait until one minute before your appointed interview time, and then impress the heck out of us by showing up at the door EXACTLY on time. Simple, stress-free, and easy. Oh, and don't be late.