THE STARTUP CHAT

[0:00:01]

Hiten: Hey everybody this is Steli Efti…

 

[0:00:04]

Steli: …and this is Hiten Shah and today on The Startup Chat, we’re gonna talk about company updates and this idea that you should be updating people outside your company, about your company, on a regular basis. And we’ll talk really quickly about different levels of this because I think this is becoming more and more popular and obvious. Something to point out is, this isn’t just for investors, and if you have investors, this is also for self funded companies and we’ll talk through that. One of the reasons this is an important topic to me is, two things. One, I used to listen to Ernie’s calls and read the transcripts and learn a lot about companies and public companies. Also, S1’s, at one point in my life … Just to learn about how they thought about themselves and also learn how to communicate about your company to the outside world. I just find a lot of curiosity. The second way I learned it is, when I got funded for my company, I needed to figure out how to do good company updates, and all that. And what I’m realizing now, in today’s world, meet, to talk to, or hang out with that could give you feedback on your company. And so putting them … Obviously with their permission, or knowing that they’d be cool with it on a list, so that you are updating on a monthly . Even if they aren’t official equity holders or advisors to you, can be very valuable. So, I just wanted to talk about that cause I’m seeing this trend and I think it’s good for all of us.

 

[0:01:37]

Hiten: It’s interesting, I think that when you think about investor updates with sending regular company updates, it can feel like a chore, from a founders perspective. Like, “Oh my God, I have to write this update and tell everybody how things are going.” When you have investors, your kind of forced to it. And often times companies will do-

 

[0:02:00]

Steli: I mean there’s probably still ranges from terrible job to exceptionally good job at it. And we will digest a little bit … We’ll go into the detail of what makes a good update, a good update and how to think about that. Companies that don’t have investors and don’t have kind of, a forcing function for giving regular updates to stakeholders, usually they don’t, right? Because there’s no external pressure to do so. What I’ve seen is that it takes a high degree of discipline to do it when you’re not forced to, right? That discipline is really, really healthy. I remember for us, we never had to send updates to investors. We never did regular updates to investors, even when we raised money from investors. . But we had one person, Paul Graham PG, from WhyCommunitor, that we would send an update every week with our growth number. We had the most important KPI, we would just send every week, an email updating him on that one KPI and we did this for … I don’t know, I wanna say nine months or something … Six to nine months, a really fucking long time. And once in a while, when the number was consistently good, he would write back and give a little comment and once in a while when the numbers were consistently bad, he would write a little comment and ask some questions like, “What’s going on dudes, what is this? Why is this going bad the last four months? Or the last four weeks? Or guys, you’re crushing it, this is the last three months I just calculated you had this amount of growth. Awesome, just keep doing this and you’ll crush it.” He was just give a little bit of comments and once in a while would have the number and the question to him or something we’re struggling with. It was probably the shortest investor updates of all times, which is like a number … This week we grew X-percent and then once in a while, one more sentence, like a question. We had this problem, how do we deal with this? We did this very consistently, on a weekly basis though. That’s the crazy thing, not on a monthly basis, which is probably the usual cadence. After that, after the company became more established and outgrew the early, pre-product market fit stage in the first six to nine months … We stopped sending those updates eventually. You know what I mean? And today … This is something I’ve been thinking about for the last few weeks, it’s always fascinating to see you suggest this topic today. Because it’s been on my mind a little bit, in the background, is thinking about doing this again … Starting this again, voluntarily, with a few people that we trust and that we admire, that can give us really great advice. Just to have the discipline of reporting to somebody else what’s going on and learning and getting feedback and getting advice and getting somebody to point to the blind spots we might have. Right now, for the past few years, the only updates we do is within the company and within the founding team. But we don’t send any updates to anybody else, externally.

 

[0:05:12]

Hiten: Yeah, it’s funny. I think it might be an end of the year thing too, how it’s better or how you want to change and Marie and I actually came up with the idea, for ourselves, a few weeks ago and we were thinking, “Well there’s a lot of people we know, including yourself Steli, that we’d like to share updates for at least one of our five businesses or more products and we’d love their input on a regular basis”. I used to do company updates. I also get a lot of company updates from people who I don’t have any equity, ownership, or any relationship with on a professional level. And they send me their company investor updates just cause I’m always open to it. One, obviously, seeing how other businesses work and two, they tend to find my advice valuable when I do give it. I think we were both talking about the same thing, maybe end of the year just thinking how to improve but for me, it’s about really how do we improve? How do we get what we’re doing? And one thing we haven’t been doing ourselves either, for this year, besides internal company updates, is we haven’t really been deliberately on a regular time base cadence, letting our friends know what we’re up to or letting people who we want their opinion on the stuff, know what we’re up to. Even if we don’t engage with it, we’d like them to know and see if that helps us out in any way. I’ve seen it help the people that , I think it’s valuable and it’s something.

 

Hiten: I think this is just a end of the year thing, that’s probably why it’s on your mind and my mind. I think we’re the type of people that tend to wanna improve every year. And end of the year is good time to reflect and think about it. So, for us, we have friends, we have multiple products, and we know that at least the friends would be willing to read whatever we write and possibly give their input. So, we wanted to start doing these updates for ourselves too. I think that’s why we were thinking about it. But you’re right, it is something where if you’re not forced to do it, you have to find a really good reason and see the value in doing it. Otherwise, it’s yet another thing that’s like a chore.

 

[0:09:22]

Steli: Yeah, so let’s maybe do this. Let’s go through the list of different types of updates you can send or different types of people that you could send updates to. And then, what makes a good update, a good update? But I will say before we even jump to any of these two kinda tactical, more practical ways of thinking about it … I’ve been on updates of either individuals or startups for a variety of reasons and one thing that they almost all have in common is that nobody survives the six month mark. So, meaning most of the company updates that I was included in, either as an advisor or a friend or in any other capacity, they started sending updates and they did it like 3, 4, 5, 6 times max and then they just stop. It makes me realize that being consistent with these updates is probably a really challenging thing, especially if there is no external force that is pressing or forcing the company to do send those updates. And then the second thing is that probably the way that most companies send out these updates, is not structured in a way where they get enough help or feedback from them, in a way that reinforces them to see the value in it and wants to continue doing it, if that makes sense. So, let’s talk about those two things but I … One of the reasons why we haven’t started sending updates to groups of people yet is because … My thinking is before I start doing it, I need to commit that at least I’ll do it for a year. Cause I don’t wanna get started on it when … If I do it, I need to think about the types of people I wanna include, the way I’m gonna structure it in a way where me and the group can get some value out of it, and in a way where I can be very consistent with it. So, I think consistency is the top thing that comes to my mind when I think about updates. But real quick, let’s run through the different list of people that you could be updating as a startup or as a company, right? We have investors, that’s the obvious one. If you have an advisory board, that’s an obvious one. Friends … Your community, friends and family … I’m not sure if that’s the right circle but there is a … For us, we started a Facebook group recently that’s like the clothes’ aisle mafia. It’s all kinds of people that worked in the company, that are friends of our company. And so over the years, there’s a network of people that have either worked with us as contractors or full-time employees, that are now doing other interesting, cool shit. And we wanna keep all these people up to date, with what’s going on with us and we wanna hear what’s going on with them. How do you do that? So one person on the team took it upon themselves to be like, “I’m gonna start a little Facebook group and be posting updates in there and try to create a little community of alumni for the business.” People that have worked for your company or are friends of your company in one way or another. And then mentors, advisors, people that, you know, operators. People that can give tactical advice or strategic advice because they’ve run companies, they’re subject matter experts or something along those lines. People that you update to get feedback on the progress of the overall company or get strategic feedback or tactical help with introductions of anything else. Those are the groups that I can think of that want to be sending regular updates to.

 

[0:13:02]

Hiten: Yeah, I think all those groups make sense. One I’d add is, if you meet someone and they’re helpful to you, you can always ask them if they should be added to the list. I meet a lot of people and some people will just ask me, “Hey, I like what you have to say and your feedback on your business was great. Do you wanna get our updates, no obligation to respond or anything, but I’d just like to keep you posted.” That’s a little on the casual side but I’ve found those to be valuable. And a source where I know that, the people who I talk to, who I ask, when they ask me that like, “Oh do you do this often or?” He’s like, “Yeah, when I meet someone. Once a month I do this and I get someone new on the list cause they are useful to me and had a perspective that I valued.”

 

[0:13:49]

Steli: I love that. And this is also the feedback to people that are seeking advice from mentors or people they look up to or they think could be valuable to them. I always tell people when I chat with founders and I give some advice, I always tell them, “The worst thing that could happen now”, at the end of the conversation, “is I never hear from you again.” Right? That would be the most heartbreaking thing. We spent like 30 minutes, 20 minutes talking to each other, I got to know you a little bit better, I heard about your challenges, I offered some solutions. We’re not this very positive place where you’re like, “Yes. Oh my God, this is an awesome approach, I’ll try this. This is exciting.” Worst thing that could happen is I never hear from you again. Please keep me up to date, keep me in the loop. Most people don’t do that. But the few people that do, they really stand out. Half a year, year, two years into the relationship … I have a guy that’s been updating me for the past three years. I love that guy and I feel like I really know him. And I would do a lot to help him because I he’s taking me on a ride through all the highs and all the lows and he’s always kept me up to date and in the loop on his journey as an entrepreneur. That makes me a lot more invested in him and his story than … There’s thousands of people I met three years ago that I’ve never heard of again and I don’t know who these people are. If they sent me an email today, and they go, “Hey Steli, it’s been a while and can you help me with X-Y-Z?” I won’t even remember who this person is. Keeping people up to date and in the loop is such a powerful relationship building tool that I love that idea that when you meet people that are valuable just asking if you can keep them up to date and add them to the list. That’s killer. And then one other thing, before I forget it, before we go into what makes an update really great … I actually even have a friend, who’s doing this for personal reasons. I just realized this. This guy, Max, shout out to Max. Max once a year, in December … This is the month … Sends an email to all his friends and whoever else is on the email. But it’s like, it’s a personal email. It’s basically like, “Hey, to all my friends out there in the world, here’s what Max’s year was like. Here’s the cool shit that happened this year, we got another little baby, we moved, we have a new house, here’s some pictures. Here’s some stuff, I changed mt job, I’m not in this department working on these projects.” And gives a life update and then quirky enough he’s like, “Here’s the top three products I bought this year that I really love and I can recommend. Here’s the top four movies I watched that I really loved” … With a little description, here’s the summary of this movie, why it was incredible. “Here’s my favorite music albums of the year. I’d love to hear from you guys just hit reply and let me know what has been new in your life if we haven’t met or talked recently.” It’s such a powerful thing. Its such an awesome thing because he there’s many years … Now he’s living in the Bay Area, but there were many years where, a three year period, where I didn’t see him almost at all. Because he was in Germany, I was in the Bay Area. But sending a personal update and here’s what happened in my life last year, the things I appreciate, I wanna hear from you, with a large, global group of friends. It’s a really cool idea, I think. Just throwing that out there as another venue for doing updates. Not just for startups but also for your life.

 

[0:17:11]

Hiten: I love that. That’s amazing.

 

[0:17:13]

Steli: Yeah, it’s an awesome idea. With that being said, let’s maybe dive a little bit … It’s the end of the episode, give people some tips on what makes a good update, a good update besides being consistent with it. What distinguishes the great upgrades from the good ones and the bad ones, in your eyes? You’ve been part of many of them, what comes to your mind?

 

[0:17:36]

Hiten: I think data transparency and learnings. So, data is talk about the metrics. Just like you were saying with the Paul Graham update that you had, you told him what the growth update was or how many … Number of customers or whatever it was that you were sharing, that you got every week, right? New customers or whatever. Then the transparency is just if something went wrong, tell people. If something was bad, tell people. IF something was good, tell people. And then the learnings are more like, what did you do and what did you learn? Those are the three things, to me, that matter the most. Data, transparency, and learnings. A thing I’ll add on top of that is keeping it the right length is also super important. So don’t make it super long but give enough context and if you have the … If you’re the type of person that likes to make things super long, put it into bullets and structure it more. A long email is okay, a long update is okay, as long as it’s structured. That way the people that are reading it can decide what they look at or not. Also, I’ve seen more and more of these updates include a TLDR, or too long, didn’t read, sort of section at the top that summarizes essentially what happened. I’m not saying do an update and write it in five minutes and call it a day. I’m saying do an update and spend like 20 minutes, an hour on it, and actually make it thoughtful. Honestly, make it the same thing you send your team, if you’re in to that. That way you’re not just doing it for people outside the company. You’re also sending the same thing to the company, if that’s helpful in getting you to do it.

 

[0:19:15]

Steli: Yeah, I love the summary tip at the top. I always love that because sometimes I won’t have time to go through everything, even if it’s well structured … Which is another thing you said it right … An email can be really long if it has headers and sub headers and bullet points, it allows them to scan through and zoom in to the areas they want to read more. That makes it easy to digest. But sometimes I don’t even have the time for that and all I wanna know is everything going well. Or what’s a big problem? What’s the summary of what’s going on? Having a little sentence that just says “Hey” … Because sometimes you can read … The worst updates to me are the ones that have lots and lots of data but the data is structured and communicated in a way that at the end of all this, I still don’t know how to feel about this or what kind of advice to give. Because there’s context missing, because it’s too broad, in terms of the type of data that is shared. Now I know these random things and have all these random data points but I don’t know what the interpretation of that data is. I don’t have enough context, day to day, to know what to say, think, or do, advise about this. Sometimes it’s very powerful to summarize at the top, hey things are going well, here’s our problem. Or here’s the one area in our funnel that we are most concerned with, here’s why. Here’s what we’ve tried to do, if you have any ideas let us know. You can dig more in to that data in the update in the third subhead or something. Now I can go, “Oh, they’re really struggling with converting or getting people engaged in the trial.” And we look at the trial funnel numbers down here and ask some questions or make some suggestions. I think that’s really crucial. Having a summary, having the information of the data really well structured, learnings is a really powerful thing. Not just talking about it like, “Here are the things we’re struggling with, but also here are the things that we have recently learned. Here’s how we’re putting those learnings into practice.” And then sometimes I’ve seen this, again, some companies do this really well, others don’t … A call to action, or an ask. Oftentimes at the end of the email it’s like a one ask to everybody and sometimes companies are too broad with their ask or they have too many asks. They’re like, “Here are the things we need”, and it’s like seven bullet points. It’s like, “I don’t even want to read all of this. Can’t you just ask for one thing?” And sometimes companies are really focused and really smart about how they ask for help. They go, “We need this one thing and what we want from you is one simple action, we’d highly appreciate it.” That’s one thing and then the other thing that I’ll say about updates is, when people give you feedback on the updates, right? It doesn’t matter if they ask you questions or if they give suggestions or if they give you some kind of an advice, the most valuable thing to me is to give some feedback or close the feedback loop eventually on if the company tried that advice and it did work or it didn’t work. Or if they tried something else that did work or didn’t work. So, the worst thing that can happen is, I’m getting these updates, I’m replying to you and telling you … Giving you some ideas or suggestions on some stuff and then I never hear from you about that. Then I keep getting generic updates. Right? If you want people to keep engaging with the update, you wanna be communicating really well back with them on how valuable or not valuable their feedback was. Even if it’s like you never tried any of the stuff that they told you to do or you always go the opposite way, that’s actually good feedback. Being like, “Hey, here’s the three reasons why we never do what you tell us, Steli. And here’s why things are still going really awesome.” That’s valuable. That’s exciting to me. So, making sure that you keep people in the feedback loop … Or when they help you if you ask, “Hey we’re trying to hire somebody, can you make introductions?” I now send you three introductions to people. Awesome, right? This update thing works really well. Well, it doesn’t if I never hear back from you about these three people.

 

[0:23:19]

Hiten: Right.

 

[0:23:19]

Steli: Because last time you asked for more … Like now, we’re hiring this other person, I’m not gonna make interest anymore because I don’t really know what happened. So, keep me in the loop. If I make intros, send me an email a few weeks later and say, “Hey, these three people are great, we made one person an offer. The other two people weren’t the right fit because of X-Y-Z.” Educate me, share learnings with me. So the next time you ask for hiring recommendations, I know now, a little bit better, who you’re looking for culturally or whatever you’re looking for. And I also feel good about making recommendations because I know that you actually talked to these people and try to hire them. There was like a productive exercise. So keep people in the loop with the feedback they give you or the responses they give you to your updates so they keep being engaged. They see the value in engaging with your updates, reading them, responding and trying to help you.

 

[0:24:06]

Hiten: Yep, that’s a wrap.

 

[0:24:08]

Steli: That’s a wrap from us. Before we go, this is a very unusual episode … So typically, just to give you a behind the scenes look … Hiten and I, most of all 300 episodes that we’ve done so far are one take, no editing whatsoever. And it’s funny, this week I was interviewed on a bunch of podcasts and it’s such an interesting, weird feeling when I’m on a podcast and it’s constantly stop and go because the host or the hosts … Well let’s say this again. Let’s go back, note to the editor, let’s cut this out. They have these multiple takes, its such an unnatural thing for me. But I think that’s probably what’s the industry standard. But Hiten and I, we do one take, we don’t do a lot of-

 

[0:24:50]

Hiten: Editing.

 

[0:24:52]

Steli: But today we had issues with the mic and the wifi and the cutting in and out and we had to do three starts. Both of us were suicidal, we’re like, “Oh my God, this is such a painful experience”. One shout out that I want to give to the team that helps us upload the podcast, helps us edit the intro, has now just launched a new product. It is the podcast motor guys, big shout out to them and to Craig from Podcast Motors. They just launched a brand new podcast hosting service called Castos, C-A-S-T-O-S, castos.com. Check it out, the team over there is stellar. These guys are killer and we couldn’t have made it to two years of the Standup Chat without them. So, if you’re thinking about doing a podcast, if you need people to edit, to upload, to work with you on the podcast, or to host your podcast, check out castos.com. A big shout out to them. And that’s a wrap from us.

 

[0:25:53]

Hiten: Yep, couldn’t do it without them, so please check them out.

[0:25:56]