• About Jeff Richards

    - Venture Capitalist @ GGV Capital
    - Dad
    - Entrepreneur

  • Subscribe with Feedburner

  • Enter your email address to subscribe and receive notifications of new posts by email.

    Join 60 other followers

  • Top Posts & Pages

  • Recently on 13 hrs to think

  • Join 60 other followers

  • Admin

Why Twitter Is an Important Weapon for Startup CEOs

I admit it, I am a Twitter junkie.

As a venture capitalist, the breaking news, opinions and insights I get from Twitter are invaluable.  But there are only a few thousand VCs in the world (cue joke about that being a few thousand too many), so what are the other 200 million people doing?

They’re engaging in the dialogue.  What dialogue, you ask?  Dialogue on topics that are meaningful to them. And therein lies the opportunity for startup CEOs.  Being engaged in the dialogue around your company, your industry, your competition, your people – is really, really important.  Especially as you scale.

Below are four reasons why I think Twitter is an absolutely critical weapon in the arsenal of today’s great startup CEOs.

To provide a few anecdotes, I tapped into the wisdom of three very successful Silicon Valley execs: Brian Grey, CEO of Bleacher Report;  Narinder Singh, Co-Founder of Appirio; and Tom Bedecarre, CEO of well-known media agency AQKA. Brian and Narinder are running really successful companies with hundreds of employees, and Tom is both a frequent user of Twitter and the CEO of a firm that provides advice to major brands on how to leverage social media.

1) Recognition.  Trust me, a short tweet saying “Engineering team is rocking it today with our new release!!!” means a hell of a lot more than the old, tired 500 word email with too many bullet points.  Twitter is meant for short, broad messages.  If you make a typo, it’s ok!  As Narinder points out, “Connecting to talent is more important than ever.  It’s incredibly competitive out there.  With Twitter, I can stay connected in a scalable and personal way with both current and future employees in a way I just can’t with any other medium.”

2) Personality.  People want to work for companies that have a personality, that have a soul.  This often starts with the CEO.  The best CEOs I know who tweet don’t just tweet about their companies.  They tweet about interesting articles they’ve read.  Or funny stuff their kids did.  Or goofups by their competition.  Or their favorite sports teams.  The bottom line – they’re letting the people in their company and in their ecosystem know they have a personality, that they care about certain topics, and that they’re active.  If you want an example, check out Marc Benioff’s Twitter feed.  He’s active, and oh by the way he’s also running a $20B market cap company.  If he has time to tweet, you have time.

3) Influence.  Twitter is a free medium to engage with more than 100 million active users.  You can’t abuse it (don’t just keep tweeting links to press releases) or people will tune you out.  Done well, however, you can be an influencer – in your company, in your industry, etc.  Brian says it well: “I use Twitter to listen.  See what the conversation is, the sentiment with respect to our brand.”  By listening, you’ll find opportunities to add to the conversation or even influence the conversation – whether it’s that one employee who needs to know you care or the 100’s of customers who rely on your service every day.  They’re tweeting, and they’ll know when you’re listening.

4) Engagement.  It’s about being part of the conversation – whether it be among employees, your industry, your investors, the media, etc.  “It’s free, it’s widely used, and it enables you to tap into the zeitgeist of your industry on a real-time basis,” says Tom.  For more on this subject, read Gary Vaynerchuk’s terrific book The Thank You Economy.  I can’t do it justice here, but Gary describes how everyone – from global brands to the local dentist – are using Twitter and social media to engage and getting MASSIVE benefits from it.

CEOs must be good at a lot of things to succeed.  Communication has traditionally been considered one of them.  With Twitter and social media at large, I’d argue that communication is more important than ever.  If you’re a startup CEO and you’re not using Twitter, GET STARTED NOW.

It takes time to earn the benefits, but they’ll be there over time.  #promise!

(No, GGV is not an investor in Twitter.  Kinda wish we were, though…)

Always Be Recruiting

Sales veterans and movie buffs know the “Always Be Closing” scene with Alec Baldwin from Glengarry Glen Ross well.  It’s where the classic phrase “Coffee is for closers!!!” comes from.

For technology CEOs, there’s a concept that’s just as important – “Always Be Recruiting.”

The best CEOs I know are ALWAYS recruiting.  They know that at any point in time – at the gym, on a plane, at their kids’ birthday party – they may meet someone who knows someone who could make a major impact on their organization.  They are constantly and actively looking for great people – whether or not they have an open position.  It’s amazing.  I rarely get out of a conversation with one of these CEOs without him/her saying “Hey – by the way – we’re looking for a VP ____ – let me know if you have any ideas.”  I’ll often get a follow up note saying “You know this guy on LinkedIn – can you ping him?”

The flip side of this – and it often is first time CEOs – are executives who think that recruiting is something for HR to do.  Or a recruiter.  Or that recruiting is a specific, standalone event.  It’s not.  It’s a 24/7 job for great CEOs.  I could easily make the argument that recruiting is the most important thing you do as a CEO.

There is almost a 100% correlation between the best companies we see and the importance the CEO and his/her executive team places on recruiting – and the active role that he/she PERSONALLY plays in recruiting.

But don’t take it just from me.  Take it from one of the best in the business of recruiting: Bruce Brown of Daversa Partners.  Bruce has recruited executives and teams for many of today’s top tech companies – including Zynga, Eventbrite and Zuora.  The guy is laser focused on recruiting the best talent to the best companies.

I chatted with Bruce recently to get his take on the subject:

JR: At a high level, how would you describe the recruiting mindset of top CEOs?

BB: They are recruiting 24/7.  Period.  They know that talent wins in Silicon Valley.  Even when they don’t have an open position, they’re recruiting.  In basketball, if you have an opportunity to get a Michael Jordan, you don’t say “No, we’re good – already full at the off guard position.”  It sounds like a cliché, but great CEOs really do spend 50-75% of their time on recruiting.  They’ve got great people around them to focus on the day-to-day tactical activities within the company.

JR: What specific actions are these top CEOs taking.  What are they doing that is different, other than bringing a different mindset to recruiting?

BB: At a basic level, a few things:

– They have an open environment.  They communicate with their team about searches.  They encourage their people to relentlessly work their networks for top candidates.  They are transparent.  People see name brand talent coming in for interviews and say “wow.”

– They’re proactive.  They move people around within the company.  They create room for new players.  They promote their stars.  They don’t let the organization get stale.

– They are deeply personally involved, and they’re committed.  They’ll meet a candidate at 8:00 am on a Saturday morning before their kid’s soccer game.  Candidates see this, and they want to work for a CEO like that.

– When they find candidates they want, they move aggressively.  They text.  They send wine.  They forward an article.  They let the candidate know they’re thinking about them.  They make candidates feel the love.  It goes a long way.

– They are decisive.  The best CEOs see top talent and they move.  They don’t spend weeks looking for comparison points.  They move.

JR: What role does HR play in hiring?

BB: HR plays a key role in helping the CEO run a company, and it’s a key function.  But HR does not own recruiting at the top.  The CEO owns it.

JR: What do you look for when you’re evaluating a new client / company?

BB: I always want to meet the heads of Sales, Marketing and Engineering.  Get a calibration for the team around the CEO.  Great people want to work with other great people.  If I can feel it, the candidates will feel it.  Is the Sales team creating an engine that can win in its market?  Is Marketing describing and executing on a big vision?  Can Engineering build something great that will scale?  These are the kinds of things that top candidates care about, so I need to care about them when I’m first meeting with a potential new client.

JR: What about companies and CEOs that don’t do this well?

BB: They don’t have buzz.  They don’t get that they have to create an impression in the market that they’re a hot company, a company that people really want to work for.  Silicon Valley is competitive.  The top companies orient a large part of their PR, Twitter, Facebook, etc. efforts towards being known as a great company to work for.

Other red flags – the CEO is not engaged.  It’s being driven by the Board.  An A player candidate is not going to want to work for a CEO who doesn’t think he’s in charge.  Urgency.  If right out of the gate, I can’t get time for the CEO to meet candidates, it’s a huge red flag.

JR: Any other tips?

BB: The more educated and focused on what you want, the better.  The best CEOs can point me to individuals at other companies and say “That’s who I want!”  Google’s a great company, but every guy coming out of Google is not a great fit for your company.  Focus on the individual.  Know what you are looking for.

Most importantly – as we talked about before – great CEOs are recruiting 24/7.  If you’re not, you’re probably losing ground to a competitor.

“Companies rarely die from moving too fast…”

My favorite quote from Netflix CEO Reed Hastings’ letter today:

“Companies rarely die from moving too fast, and they frequently die from moving too slowly…”

Words to live by for CEOs and entrepreneurs.

CEO Insights: Will Price, Flite

One of the goals I have had with this blog is to provide more than just surface level insights into the venture capital and entrepreneurial worlds.  To this end, I will occasionally “interview” some of the more interesting and insightful people I come across in Silicon Valley and elsewhere in the tech community.  Hopefully these interviews can provide a bit of insight / wisdom or at least some discussion points for other entrepreneurs, CEOs and VCs.

Will Price is a former venture capitalist (at Hummer Winblad and Pequot Ventures, now FirstMark Capital) turned entrepreneur and CEO at Flite, an emerging leader in the Internet advertising space (Flite recently raised $12M in a third round of financing from General Catalyst, Sequoia Capital and others).  Will is a longtime friend, and I recently had the chance to sit down and ask him a few questions which I thought might reveal a bit about what has made him successful as a venture-backed CEO.

Q: I know you made the transition from VC to entrepreneur/CEO a few years ago (3.5 to be exact).  Kind of a unique scenario.  At a high level, what have been some of the more interesting insights you’ve learned now that you’ve been on “both sides of the table?”

A: I think there are two things I’d highlight.   First, why I did it (left venture for Flite), and second, what I’ve learned.

Why I did it.  I had been in the venture space for a few years and had the opportunity to work with some amazing people and back some amazing companies.  But there was a part of me I felt I wasn’t tapping into – a part of my brain focused around working with people, building teams, being a leader.  I wanted to challenge myself a bit.  I felt I had the skill set inside of me, but I would never know until I made the leap.  I spent some time evaluating a number of different opportunities, and really loved what Flite was doing (called Widgetbox at the time).  It’s been all the challenge I hoped it would be and more (laughs).

What I’ve learned.  I’d say the biggest thing is how little I really knew about the entrepreneurial process.  There is a certain element to it where you have to sort of suspend disbelief.  What I mean by that is you have to let the journey lead you to the destination.  There is no “right answer” out of the gate.  It’s a lot of trial and error.  A lot of the reason I loved Peter Sims’ book Little Bets.  It’s less about the weekly management team meeting, quarterly reporting, etc. than it is about trusting the vision, the team and the market.  You have to have a very high tolerance for ambiguity to be an entrepreneur – as does your spouse (laughs).

Q: I know on your blog and in person we’ve talked about the uncertainty that comes along with the territory of being an entrepreneur or startup CEO, and it’s one of the things I found most challenging in my first two companies – especially after I got married and had kids.  Uncertainty not just related to the company but to family, career, etc.  Can you talk a bit about that?

A: How much time do you have (laughs)?!?!  My wife is so good on this front.  She always is there reminding me to trust in the process and not focus on the outcome.  I’m on the ledge and she pulls me back.  It would be very hard to do if your spouse was not supportive and understanding, and really in the boat with you.  I think it’s also really important to have a Board and investors that have a high tolerance for risk and ambiguity.  You can’t have guys coming to each board meeting with a different set of questions focused on short-term results.  Startups don’t mark to market like a hedge fund or a public company.  You also need individual investors who have pull in their firm, and have the ability to provide runway within the firm – that’s important.  You need your investors to be with you in good times and bad – and there will be both.

Q: You’ve shared a few funny scenarios with me over the years with respect to fundraising and working with VC’s, etc.  Can you share a few of those?

A: Well, for starters, Jim (Goetz, from Sequoia Capital) was unbelievably patient as we were struggling to figure out the business model for Flite.  Every time I’d come to him with a laundry list of questions, he’d say “you’ll figure it out.”  To the point where it was funny.  I’m stressed and he’s calmly repeating – “you’ll figure it out.”  And he was right – we did.

There are others that might get me in trouble, so I’ll stop there (laughs).

Q: What advice would you have for entrepreneurs who are looking to raise their first round of venture capital?

A: A few things.

– Focus on the Partner, not the firm.  It’s the individual that matters.  You want someone who is at a brand name firm, but the person really matters.

– Create a syndicate.  It’s good to have a few different perspectives around the table.  I think 2 is a good number.  Get some balance.

– Keep the Board small.  Especially when the company is small.  It always amazes me to see $10M companies with 7 board members.

– Communicate outside of board meetings.  Keep a running dialogue with your board members.  The board meeting should be a checkpoint, not a long dissertation on “here’s how we’re doing.”

– Don’t focus on valuation.  I see guys spending tons of time walking around Sand Hill Rd trying to get a “better deal.” If you have a firm or two that are offering you a fair deal, take it.  Move on and focus on building the business.

Q: Let’s talk about growth.  Once you’ve grown a bit – out of startup mode and into scaling mode – what changes in your role as CEO?  What elements of the company change?

A: A few things come to mind.

– In the early days, people are playing a lot of different roles.  I was putting together a financial model one minute and writing a press release the next.  As the company grows, you really have to focus on hiring and delegating.  More focus on building the organization and leaders within the organization.

– You have to think like a chiropractor.  Spend time tweaking, massaging, running interference and removing roadblocks.  Making sure people have a green light to make things happen.

– Communication is key.  Clear and consistent communication.  We love Yammer.  It’s the first thing I look at in the morning (after Twitter).  Great communication tool between teams and between offices.  Media coverage can also help here – it reinforces the key messages, reminds people we are doing well, etc.  I think a lot of CEOs in Silicon Valley have figured that out.

Q: Here’s a curveball – how about advice for VC’s who are working with entrepreneurs and CEOs?  You’ve got a unique vantage point having played both roles.

A: (Laughs…Thinks….)

Well one analogy I’d give is – you know when you’re at a dinner party and afterwards there’s someone doing the dishes and every once in a while someone walks by and says “Hey – can I help?”  And the person doing the dishes is like “Yeah – do the f’ing dishes!”

I think a lot of times VC’s don’t realize how helpful they can be if they really commit to things and get them done.  Follow through.  Make that extra executive intro.  Send that extra email to make a client intro.  There’s a reason certain VC’s have great reputations – they are the ones who go that extra mile.

– Avoid the temptation to replace people quickly.  It’s not always the sales guy’s fault.  Don’t tolerate bad people, but there are no quick fixes in building a company.  Very often there are product, strategy, financing issues that are at play as well.  Firing someone is not usually a silver bullet.

– Encourage frequent communication.  If you’re only talking to your entrepreneurs and CEOs at board meetings, you’re not doing your job.  Try to meet off cycle.  Read the emails the CEO sends out highlighting customer wins.  Be informed.

– Really leverage your network.  General Catalyst has a great program – a one day Entrepreneur Forum – where they bring in senior execs from larger companies to meet with their companies.  It’s terrific.  You get 1-1 access with customers, decision makers.  A lot of times VC’s don’t realize that a friend of a friend is a decision maker at Company X, which would be a great customer.  Work LinkedIn where possible.  This is sort of VC 101 but I think many VC’s can do better.

– Work to find one or more coach/mentor types for your CEOs.  Jim introduced me to a very successful CEO who has been invaluable as a coach to me for the last few years.  I think it’s one of the most valuable things a VC can do.  Surround your CEO with people who can be a sounding board, who have been there before.

PE Hub Article: Replacing a Management Team Spells Trouble

Mark Boslet put up a nice post today on PEHub with commentary from a panel I was on this week at the AlwaysOn Venture Summit in Half Moon Bay.  The main thrust of his post reflects comments I made during the panel about two core tenets of GGV’s investing model:

1) The CEO.  We strongly believe in backing great CEO’s.  By the time a company gets to growth stage financing (usually a second or third round of venture funding), we expect to see not only a good/great CEO, but also a strong management team around him/her.  This may not sound too different from the way other venture firms approach their investments, but the primary point here is we are highly unlikely to fund a deal if we don’t see a strong CEO in place.  In short, if you’re a CEO raising money from GGV, we no doubt love the company/team/market, but the majority of our bet is on YOU.

2) The Relationship.  We tend to have known the companies and the teams we are investing in for an average of 9 months prior to our investment (and as Mark points out, in the case of Internet music leader Pandora, 4 years).  Getting to know entrepreneurs and CEO’s early in the company’s lifecycle enables us to watch them in action, become highly knowledgeable about their business and often helpful in building out the team, making customer introductions, etc. long before we invest.  Having spent the last 10 years as an entrepreneur/CEO, I’d advise anyone in that position to do the same.  Getting to know your investing partners on a personal and professional level long before they wire the money is a (very) good thing.  NOTE: This doesn’t mean we move slowly.  Although I had known Chris Barbin, CEO at Appirio for about 8 months before we invested, we moved from first presentation to term sheet in just 4 days when the opportunity arose to lead the company’s C round and join Salesforce.com and Sequoia as investors.

Glad to see Mark at PEHub giving a little love to the pro-entrepreneur mindset that I know many of us in the VC world have (despite what you might read elsewhere!).

GGV Mobile Commerce Dinner

We held our quarterly CEO dinner on Tuesday night in Menlo Park, CA.  This quarter’s dinner was focused on mobile commerce + mobile payments.  Terrific group of companies/CEOs in attendance (see below).  A few takeaways:

1) Belief that NFC is going to “be for real” in 2011, with notes of caution.  “Embedded in phones doesn’t mean widespread user adoption.”  “Will take time for users and retailers to embrace.”  “Most likely will see things other than payment as first wave of feature adoption for NFC – think of what Bump does for communication/collaboration.”  This last point was reinforced this week with Google’s rollout of NFC-enabled Places check-in kits.

2) Widespread discussion of how to create value for consumers and retailers.  This crew gets it, IMHO.  “Taking pain out of the transaction for retailers and credit card companies does nothing for consumers.”  “Winners will focus on how to create new transaction value for retailers and ease of use functions for consumers.”  Think – in-store advertisements, offers, prioritized payment options, etc.

3) Our straw poll of “hot company, not your own” revealed a number of really cool companies in the mobile space.  After several years of hope, it feels like we may start to see some scalable businesses built in the mobile business (by startups).  My bet’s on one or more of the companies at our dinner!

4) Like it or not, the “elephants” of the industry will play a key role – banks, carriers, Visa, Mastercard, etc.

Companies attending the GGV Dinner included:

Billing Revolution


Lookout Mobile
















%d bloggers like this: