Seth Priebatsch: Get a life

Over the past several weeks, I've seen a number of high-profile press articles about a fellow CEO in Boston named Seth Priebatsch. He's the CEO of a VC-backed start-up named SCVNGR. In each of these articles, the reporter quotes Seth taking pride that he has no friends or social life outside of his work. Consider these quotes from recent articles:

On having friends: "It feels very ephemeral," he said of spending casual time with friends. "You go to see a movie with a friend and it's awesome for like two hours, but then it's over with -- that's it. Nothing has been produced from that." (CNN.com)

On personal relationships: "I find business relationships are easier. You have to sign a piece of paper.” (NY Times)

On work/life balance: "I reserve the right to sleep right here on the couch. I don't have a social life here in Boston. Everyone is dedicated to and working incredibly long hours. It's almost as busy here on Saturday as it is on Tuesday." (Mass High Tech)

Are you disturbed by these comments from a leader in our tech community? I am. I'm not impressed by the bravado, and I don't think the work ethic is impressive. In fact, I think Seth is setting a poor example for the tech community. In my opinion, the greatest challenge of a start-up is to find work/life balance: he just hasn't figured that out yet.

Some of Seth's employees might buy into this manic behavior, but I'm guessing the majority of them wish that he would get a life. It's one thing to ask people to work hard, but it's another thing to set an example of having no social life and working every weekend. How can SCVNGR provide a healthy workplace environment if Seth sets an example by sleeping at the office? At Punchbowl, hard work ebbs and flows -- we work towards very aggressive deadlines, while we maintain a healthy perspective. In fact, one of our best employees spends the majority of his weekends skiing. And everyday, I leave the office at 6pm to make sure I'm home to have dinner with my family and put my 1 year old daughter to bed.

I'm embarrassed that the press (and some VC's) have glorified Seth's behavior. I don't believe that this is the right example to set for employees or for the tech community. Believe me, I'm all for working hard, but there is a time and a place to take care of your body and soul and to feed your mind with other things outside of work.  There are lots of young people in our community that are looking up to Boston start-up CEO's. It's our job to show them that you can have a successful start-up without having to sacrifice everything in your life. How many would-be CEO's are we scaring off with the message that you have to work non-stop and give up your life in order to have a successful start-up?

Perhaps Seth is purposefully exaggerating to generate press for his company. In fact, in a recent Mass High Tech article, he claimed that "We interview 100 to 120 people for every person that we hire." Either this is a mis-quote or just a bunch of bullshit. If they only spend 15 minutes per interview, with 100 people per position, that's 25 hours just for the first round interviews. The company has roughly 60 employees at this point. I seriously doubt they've spent a total of 187.5 days interviewing 6000 people. So we can only hope that this example of Seth's exaggeration has carried over into how he speaks about his work/life balance. Maybe he does relax with friends and enjoy life outside of work once in a while.

I hope this post generates a lot of conversation among Boston-area start-up CEO's. I believe it's our responsibility to demonstrate that a healthy work/life balance is achievable even as we build the next great companies in Boston.

SWAMI SAYS: Hey, Seth Priebatsch: get a life. Demonstrate that you can start a company and achieve work/life balance. That what it takes to be a great leader.

P.S. Seth: let me know when you'd like to catch a movie together. I'm buying.

What's the budget?

When you work at a large company, every year the middle managers go through an arduous budgeting process. It's a very important component of managing at a big company -- you need to justify your future quarterly expenditures and try to predict all of the things that you want to do in the coming year. My boss at Adobe was brilliant at the budgeting process. His creative brain and analytical thinking always enabled us to have big budgets to do lots of different projects. He was great at getting the money, and we always found a way to spend whatever was allocated to us for the year. Often, we would have to spend a lot of money at the end of the year. That way, we could justify asking for the same amount (or more) for the coming fiscal year.

At a start-up, it's a lot different. Rather than think about what we trying to accomplish in the next year, we focus on what we're trying to accomplish in the next quarter. We don't have to "ask" anyone for budget money because I control all of the spending in the company. And while we have broad pro forma spreadsheets, we can quickly make decisions to re-allocate funding to a new project.

Let me provide you with an example of how this plays out at a start-up. You may have heard that Punchbowl is hosting an big event this week called "Punchbowl Mixer" (quick aside: there are a few spots left, so RSVP now if you want to attend). Our Marketing Manager is handling all logistics and purchasing for the event. Before Punchbowl, she worked at a university. Like most big businesses, this university has annual budgets and each department is allocated a percentage of the funds. As she's been planning for Punchbowl Mixer, she's wondered aloud a few times, "what's the budget?" She logically wants to know how much money she can spend for the event.

My response to her has always been "spend as little as you can." I've asked her to think in "start-up mode" and look for creative ways to put on this event for as little as possible. She's done a great job -- not only do we have co-sponsors for the event, but we are borrowing tables and screens for free. We're hosting a huge event and it's going to appear that we spent a lot more money that we actually did.

While it's true that the event expenses will come from a line item in our pro forma budget called "Brand Marketing," in a start-up we don't think about how much money we have that we could spend. Instead, we think creatively about the most cost-effective ways to spend the least amount of money. We continually make judgement calls about whether or not the expenditure is "worth it." We think about every dollar we spend, and assume that we may not have the money in the future. We act like it's our own money that we're spending, and are thoughtful about each expenditure. And you know what? We're still able to host an awesome event. 

SWAMI SAYS: Big companies have line-item budgets, and managers often optimize their spending to meet the budget. Start-ups don't need these kinds of budgets. Instead, be thoughtful about each expenditure and handle the money like it's your own. You'll spend a lot less money.

Stupid Pricing

As an entrepreneur, one of the things that bothers me is when I see another business using stupid pricing.

Let's start with a simple example. Most pizza shops charge additional for each topping you want on your pizza. But many times, I'll order a pizza that is half one topping and half a different topping. For simplicity, let's say that I want a 1/2 mushrooms and 1/2 green peppers pizza. There are far too many pizza shops that will price this pizza as two toppings. But isn't it really just one topping? If the cost of goods is (roughly) the same to the pizza shop, then why am I being charged for two toppings? Are mushrooms really 2x as as expensive as green peppers? I don't think so. It's just stupid pricing.

Sometimes stupid pricing comes in the form of a credit on your bill. DirectTV is an abuser of this kind of stupid pricing. They make it very difficult to see the actual price you're paying for the service. Instead, there are a bunch of charges, and a bunch of credits. Just tell me the price Direct TV. It's ok.

Contractors are notorious for stupid pricing. A few years ago, I went through the process of getting a quote for a major project to be done on my house. The quotes were all over the place -- it was as if each one of the contractors had an initial price in mind and simply used the quote as a way of justifying the original number. There was one quote that was literally 5x higher than any other quote, and it was full of mistakes and errors. It's too bad, since we liked the person. Stupid pricing.

For contrast, have you ever thought that Apple's pricing was stupid? You might not like the price, but at least it's clear. I know exactly how much it costs to buy a song on iTunes, and the pricing for computers, iPods, and iPads is clear. Each price increase gives you additional capabilities. It's this simple pricing that helps make Apple a consumer-friendly company.

One more note about simple pricing. It's too bad that Saturn made such inferior cars, because their pricing scheme was really a breath of fresh air for the auto industry. The first car I ever purchased was a Saturn SC2, in part because I liked the no-haggle, no-bullshit approach of Saturn.

Pricing is something I think about a lot for Punchbowl. Even if you don't like the pricing, I hope you'll agree that it's clear, and not at all stupid.

Can you think of other examples of stupid pricing? Please share your thoughts in the comments.