How do you become a successful entrepreneur? Though we’re still not totally sure, spending the day at Wharton Startup Un-Convention brought us closer to the answer by hearing about the lessons learned from some of very successful founders (GroupMe, Baby.com.br, Venmo). The theme of this year’s Un-Convention was ‘Idea to Action’ and in addition to keynote speeches, participants were given the opportunity to take part in a selection of workshops focused on helping entrepreneurs navigate key startup challenges.
Below, we’ve highlighted the key messages we took away from Jared Hecht of GroupMe and Fundera and Davis Smith of Baby.com.br.
Jared Hecht, Co-founder of GroupMe and Fundera
Jared Hecht’s closing keynote speech turned out to be the highlight of the Un-Convention. Direct and honest in his advice, he gave no illusions about the journey to building a startup. Potentially reflecting on his own start, his first advice was “The best way to do a startup, is to join a startup.”
Jared Hecht’s career in startups began at Tumblr, where he was one of their early employees working on business development. When his wife complained that there was no reliable way to communicate with her friends at a music festival in Colorado, an idea sparked which led to Jared and co-founder Steve Martocci building the popular messaging app, GroupMe in September 2010. Skype subsequently bought GroupMe for around $80m in August 2011. Jared has since started working on a new venture, Fundera, which aims to connect small business owners with the best lenders.
How do I join a startup?
1) Stand out: Jared published a guidebook ‘Inside New York’ back in Columbia, which was distributed to all Columbia students. He would regularly bring two copies of this book with him for interviews: One for his interviewer and another for his interviewer to give to a friend. It was this kind of distinguishing achievements that help set him apart from the crowd when looking to get hired by a startup.
2) Optimize for luck and have no shame: You can be luckier than other people by doing the right thing at the right time.
3) Read EVERYTHING: Read all related publications and websites religiously daily (TechCrunch, Business Insider).
4) Find a home where you can learn: Don’t get pigeonholed into a role where you’re doing the same thing daily. You want a role with a level of autonomy that scares you because you have no idea what you should be doing.
5) Size matters: Try to find a startup with around 6 – 20 employees. You get to see everything that goes on. Once the size of a startup exceeds 50 people, positions tend to be more specialized.
6) Find your advocate and mentor: Find someone who will take a chance on you. Show them that you have done stuff in the past that proves you can perform in the role you’re looking to fill. Also, convince them to open doors for you.
7) Be humble: Regardless of whether you came from that top consulting firm or bulge bracket investment bank, be humble. No one knows everything about how things work when they join a new startup.
I’m at a startup. Now what?
1) Know that you don’t know: Take the opportunity to uncover what you don’t know.
2) Learn everything: If you’re in business development, go learn about the engineering and product management side. If you’re an engineer, go learn about sales, marketing and business strategy.
3) Bite off more than you can chew: Take on more responsibility than you believe yourself to be capable of. Don’t be afraid to work pet projects on the side and present them to the team.
4) Learn how to speak: Learning to speak the language of Marketing, Sales, Engineering, etc. will earn you credibility when you communicate with other team members and will be extremely useful when you go on to hire employees and manage a startup
5) Network shamelessly: Meet as many people as possible. Leverage where you are to build a network and potentially identify people you may want to work with in the future.
6) Leave a legacy: Be able to point to a project that you worked on and show how it had an impact.
I’m ready to startup
1) Don’t marry your first idea: Jared’s first idea was a location recommendation website Rec.io, similar to Foursquare, which he was obsessed about. It turned out not to be that great of an idea and he was glad that he didn’t pursue it.
2) Find your mate: Starting up can take you to some really dark places. Find someone to share your worries and happiness. A complementary skill set is also useful.
3) Garner support: Be open and honest with the people that you’re current working with that have invested in your growth
4) Don’t hang around too long: And be graceful in your departure.
5) JFDI – Just F*cking Do It: If you’ve done your homework, have a strong team and are passionate about your idea, just go ahead and do it.
Jared rounded off by taking a couple of questions. One participant asked him what he thought about the recent WhatsApp acquisition to which he replied: “I think Facebook is very smart. They now own three of the top 5 most used mobile apps, Facebook, Instagram and WhatsApp. That’s a strong position to be in”
Davis Smith – Founder & CEO of Baby.com.br and Cotopaxi
David Smith WG’10 is a serial entrepreneur. Prior to Wharton, he bootstrapped PoolTables.com, the largest e-commerce retailer of PoolTables in the U.S. before selling it to Billiards.com. At Wharton, he founded the Founders Club and incubated the idea for Baby.com.br, what ultimately has become the largest Brazil’s leading e-commerce retailer of baby products, with over $100m+ in revenue. Currently, he is working to launch Cotopaxi, an e-commerce brand in the outdoor space with a social mission of contributing 10% of profits to a variety of non-profits around the world. From David’s Keynote, we learned that:
1. “Entrepreneurship is about testing ideas without a whole lot of money or time.” David kicked off his talk by sharing an anecdote to illustrate the importance of efficient product testing. After graduating from college, Davis felt that the market for roses was ripe for disruption; roses in the U.S. sold for $70 / dozen and at a fraction of that cost in Latin America (where Davis grew up), suggesting an arbitrage opportunity. With little funding and limited knowledge of running an import business, he and a friend developed cost-effective way to test their concept: on Valentine’s Day they bought 1000 dozen roses at three neighboring Costco’s ($13.99 / dozen) and then sold the roses at a 100% markup at a variety of corporate campuses. At the end of the day, this experiment proved unprofitable and helped him realize the logistical challenges of a flower delivery service. Though initially frustrated, he was glad he tested the concept before launching a full-fledged import business.
2. “Entrepreneurship about finding ways to create value out of nothing.” Value creation is a term that we hear a lot when thinking about Entrepreneurship. Davis made this term very tangible when he shared how one specific partnership – trading a few percentage points of equity in his nascent start-up in exchange for the endorsement of baby.com.br products by Angelica, one of Brazil’s most popular celebrities and host of a popular children’s show, created enormous amounts of value overnight. “Having Angelica come on as Chief Mommy Officer put us on the charts; we went from being a nobody to $40m in 18 months thanks to her support.”
3. “Successful entrepreneurs are those that are prepared, do their research and take all necessary precautions.” Davis attributed much of his success in building Baby.com.br to the extensive ideation and diligence process he and his cousin embarked upon while at business school. In his first year at Wharton, they brainstormed over 60 start-up ideas and spent their entire summer scrutinizing each. They narrowed from 60 to four by mapping the concepts against a few criteria: “Did this have the potential to be a $100m+ business? Was there an incumbent in the space?” And then only after further diligence on the remaining four opportunities, did they selected the idea that they felt had the most potential and pursue it.