Today on The Startup Chat, Steli and Hiten talk about Hiten’s Billion Dollar Mistake.
This episode comes after a blog post that Hiten wrote a couple weeks ago that blew up on the internet. It’s about a billion dollar mistake he made at his company KISSmetrics.
In today’s episode of the show, Steli and Hiten talk about the reaction to the blog post, the big revelation he made, lessons he learned from it and much more.
Time Stamped Show Notes:
00:00 About today’s topic
00:55 Why this topic was chosen.
02:15 One reason why his blog post blew up.
02:34 The second reason why it blew up.
03:31 Some statements about the Hiten bomb.
05:16 The reason Hiten believes this post resonated with people.
05:32 An experience you’ve probably had at your team.
06:56 The reaction to the blog post.
08:00 Why Hiten is no longer feels bad about the situation.
3 Key Points:
- We were ahead of the market by 3 years.
- Product development and building products is hard.
- If you are a team member in a company, you’ve had this experience.
Steli Efti: Hello everybody. This is Steli Efti.
Hiten Shah: And this is Hiten Shah.
Steli Efti: Today on The Startup Chat, we’re going to talk about, drum roll, the billion-dollar …
Hiten Shah: Mistake.
Steli Efti: Boom. Whose billion-dollar mistake, Hiten?
Hiten Shah: I guess it was mine because I wrote about it.
Steli Efti: It was your billion-dollar mistake. Now, before I let you talk, because this is going to be mainly a Hiten Shah-
Hiten Shah: No, I don’t think so. I’m going to make you talk. What do you mean?
Steli Efti: What? No, don’t do that. Don’t do that with me. Let me set it up first for the audience that don’t know what we’re talking about. It’s hard for me to believe that if you’re listening to this podcast that you don’t know what we’re already talking about, but just in case. A couple of weeks ago, Hiten wrote a pretty impactful blog post about his billion-dollar mistake, and it blew up like a bomb. My Twitter feed and my Facebook feed was full of people sharing that article and sharing it not just like … They didn’t just click the To Tweet This button or something. People would write really, really long responses about why this was impactful to them, how vulnerable and powerful this blog post was. People were praising you. People felt … They felt something. It really had an impact with them, and so this thing blew up. It’s been everywhere. Everybody responded to it. It’s been a really, really big thing. I think that you shared some incredible lessons that you learned with Kissmetrics, which was your billion-dollar mistake. So, I wanted us to talk about this a little bit on the podcast as well as make people aware of the fantastic blog post that they should read that’s going very in-depth and in detail. You’ll give people the URL in a second, and we’ll have it in the show notes as well. But let’s talk about … Maybe summarize it in a sentence or two. What was the big mistake that you made? What was the big revelation that you shared with the SaaS world, and why do you think people responded so strongly to it?
Hiten Shah: Yeah. Well, first of all, a lot of people know the Kissmetrics brand because we hit about a million page views a month on our blog. So, even if you don’t use the product or didn’t even know what it was, you knew the brand. That’s one reason. What I talked about was how we had two product failures early on. Then, we had a product success, which was our original version of Kissmetrics, and we really nailed it in a few key areas. I’ll save the technicals for the blog post because I want to give more than what’s on the blog post on this because you all are listening. What I said was we were ahead of the market by about three years, and I know that’s accurate for a number of reasons. But either way, it’s three years ahead of the market because we finally got it right by doing a whole bunch of research and things that … I think Steli and I talk about a bunch when we talk about product and stuff like that. Then, what happened was what I call the Hiten bomb. I didn’t call it that, actually. It was the head of product and engineering that called it that. He wrote a 1300-word, I think, memo. We called it a memo because it was in Confluence, and he just wrote it. It was just basically saying, “Hey, I finally figured out what these things are that Hiten does to people on the team,” and he called them Hiten bombs. These are a couple of the statements, I’ll read these off because these are pretty good, that people would say about me behind my back, basically. “Hiten’s got yet another great idea that’ll save the company. I’m going to wait till I hear from him three times before I do anything about it. I just had another Hiten bomb dropped on me. I ignored it.” So, I think this is … Oh, yeah. This is what the head of product and engineering said. He said, “Hopefully I can help everyone understand where those things that might seem like left field are coming from.” He talked about all the different competing forces that I have to deal with, or any CEO, founder, leadership team has to deal with, which is, like, existing customer sales, ourselves, board of directors, future investors, competition, and there’s a bunch of others. Those are the ones that I include in the post. The reason that I believe this post resonated so well with so many people is because, one, product development and building products is hard, and you kind of are trying to capture lightning in a bottle. Once you do, you take it, and you run with it. We took it, and we ran with it for a little bit. But then we lost sight of it, and it was my fault. I admitted it was my fault. Well, one, someone wrote something about me that made me see it as my fault, and he didn’t write it in a negative way, like, “Hiten’s all wrong,” or anything. He actually wrote it in an extremely positive way to help people understand, but that gave me recognition I didn’t have before about what I was doing. Then, I dug in deeper, and I talked about how that made us lose the market because other folks just took it and ran. They ran faster than us and better than us after we had nailed it. A lot of those principles that we created early on are exactly the type of principles that made everything after us successful in the market, the core principles. Right? We figured those out. Yeah, my thesis on why this resonated … I’ll talk a little bit more about all the things that have happened since, but the why it resonated was because if you are a team member in a company, you’ve had this experience. If you are leadership in a company, you’ve probably done this. When you have something that people are reading, anybody that works in a company is reading, and they can relate to it, and it’s written in a way where even things like all the crazy analytic stuff I talk about is sort of boiled down to basics, and it’s described in a way that’s easy to understand, not technical, I think people tend to read it, and they read it. I spent a lot of time on this with my co-founder as well as folks who help us write, and just getting it so that it feels right so that people got the message. But the message is basically a Hiten bomb. So now, I’ll get on calls with people, whether it’s team members or whatever, just to help them out or to talk about my product or whatever it is, and they’ll tell me about their co-founders’ names’ bombs. They’ll be like, “Oh, John bomb. We have John bombs all the time,” right? I’ve gotten countless text messages. Some of them were really interesting and just telling me about their stories. I’ve met with founders as a result of this. My email box is still not empty, and will not be for a while. I still have to keep running through it, and I still keep getting it. Facebook blew up with it. LinkedIn blew up with it. Twitter, as you said, blew up with it. One interesting thing … My dad is at home at night. I posted it on Facebook in the evening the same day that we posted it on the blog and kind of emailed it to the Product Habits email list, which is a blog it sits on. My stepmother is talking to him and is like, “Honey, honey.” She’s like, “Honey, honey, have you seen this? Have you seen this?” That’s what he told me. Then, he texted me in the morning. He’s like, “Hey, can you talk?” This is like 7:30 in the morning. Okay, cool. I’m like, “Yeah, I can talk.” So, he called me in, like, 15 minutes, and he’s like, “I read that post.” I’m like, “Okay.” He’s like, “How are you doing?” I’m like, “Wait, hold on. How did it make you feel?” He said it made him sad.
Steli Efti: Ooh.
Hiten Shah: Then, I’m like, “Oh, Dad. I’m okay. This was years ago.”
Steli Efti: This is years ago.
Hiten Shah: I was a tough-ass years ago. I’m good now. I’m okay now. I mean, I’m really grateful for Steve, who wrote the memo. My only line there about that is I’m grateful. I’m not sad about it. The reason is because I still get to work with Steve, so I must’ve changed. Right?
Steli Efti: That’s so interesting. When you publish something … I feel like there’s a tendency that it takes us a while when a failure, especially something that was negative in our life … When that happens, it takes a little while to have the proper amount of distance of perspective and be able to talk about it in some useful and valuable way. Then, then we do, it’s hard for people to realize that it didn’t happen right now. Right?
Hiten Shah: Yeah.
Steli Efti: I remember I had this blog post once where I talked about when I had to let go of half my company team at one point. I had people emailing me that were like, “Wow. I heard what just recently happened. I’m really sorry for you.” That was like two years ago or something, so it’s funny that people … For them, it’s a new story. They didn’t know you went through this. They didn’t know about the situation. So, because they read it right now, that’s when they’re going through the … Your dad went through the emotions reading it that day, so he was like, “Is my son all right? How do you feel?”
Hiten Shah: He has never in his life told me, “I’m sad.”
Steli Efti: Really?
Hiten Shah: Yeah.
Steli Efti: Wow. That’s kind of cool.
Hiten Shah: Like, ever. So, it was shocking. I’m like, “What are you sad about, dude? [inaudible] What are you sad about?”
Steli Efti: I like that, though. I like that here’s a new moment. Here’s a new moment for him to also share an emotion with you that he hadn’t had a chance to share before.
Hiten Shah: [inaudible]
Steli Efti: I wanted to ask you, so a lot of the things in that story were not talking to me because we had talked about them a long time ago. Some of these things, like the Hiten bomb, and kind of the founder drive-by, and a bunch of other things that you shared in that blog post, we have mentioned or discussed in one way or another on the podcast. But I was wondering, and I’m wondering, now that you wrote the piece, and you published it, and you got a response, did that in any way bring up any new thoughts, any new feelings, any new perspective to all this? Or are you like, “I’ve digested it so well, and I’ve now shared it with the world for the world to get it and to help others, but there was nothing there still for me. Writing this piece didn’t really affect me at all, or didn’t really add anything to it”?
Hiten Shah: I think it solidified my fortitude on how I’m managing myself. Because it reminded me of how I wasn’t at the time and didn’t realize it. So, I have a lot of things I do now. If I have a meeting, I take notes. If I have a meeting in my company with somebody, I take notes. Then, I go share the notes with several folks on the team right away. Then, sometimes I get some questions right away before I’m even able to do a summary and next steps. So, I will always, if it’s an important meeting, I’ll go write notes on it. Because I’m doing a lot of work outside the company, so I’m talking to people outside the company, that’s why this Hiten bomb kind of thing would happen to me. Outside the company could even mean stakeholders in the company, like, investors, board of directors, whoever it is, advisors. Now I’m taking notes, lots of notes, sharing the raw notes, then, within 24 to 48 hours depending on timing, writing a summary and next steps. If there’s no next steps, cool. It’s still next steps. No next steps, right, and a summary. Some of those next steps would happen by the time I write all the stuff, but it basically makes it so that whatever’s in my head is not just in my head. If I go talk to someone about it at some point, there’s a lot of context, and I’ll even … Steve actually gets this a lot. I did this yesterday to him. Had a meeting, wrote the notes, shared it with Steve and a couple other people. Haven’t written the summary or next steps yet. I’m going to do it later today. Then, I call Steve right away. I’m like, “Yo, Steve. I had this call. I just needed to talk to you about it.” Now, it’s not like he’s sitting there, like, “Hiten said some random stuff. I have to take notes, or I have to take note of it.” Right? But the key there for me is I documented it. So, it solidified this idea that I need to keep doing that in order to keep everyone informed of what I’m learning. That way, we can all have the same information and make really good decisions. Because at the end of the day, the reason the Hiten bombs come is because you want people to make really great decisions in the company like you would, I mean, in your mind. Right? Not just like you would, but with the information you have as well. I think I got more fortitude on that, especially as I heard all kinds of other people coming at me. I’ve talked to a lot of people who have these bombs, founders, and team members. Yeah. Definitely, that’s my way of solving for this, and it definitely gave me the fortitude to keep doing that.
Steli Efti: That’s beautiful. For people that want to hear us talk about this in much more detail, for those of you that are like, “Bombs? What bombs? What exactly are they talking about?” you definitely want to listen to The Startup Chat episode number 43, four, three. We need to give this a better title. I think back in the day, we called this impulse-driven communication. We talked about founder drive-bys and Hiten bombs, but I think we need to officially rename this episode the Hiten Bomb or something. Then, so listen to episode number 43 to learn more about this. The blog post, where can they find it? What’s the URL to get to it?
Hiten Shah: Yeah. It’s producthabits.com/my-billion-dollar-mistake.
Steli Efti: Boom. Go and read it today. I guarantee you’ll learn a lot. Hiten, I’ll do something unusual. In the name of the entire Startup community … I mean, you’ve gotten a million thanks, but I’ll say one more thanks from my side. I love that you published that story. I love that you shared these stories and you shared some of these lessons that I think would really benefit a lot of people. I know they have benefited me. They’ve benefited the Close team. Still working with some people on the bomb track record, not being as impulse-driven and jumping into teams and asking critical questions that leave you havoc when they run away. That’s a real big challenge between people and leadership, and I think that making people aware of it and helping so many people out there to get better at this is so valuable and will have a huge impact. So, thank you for that, and thank you for all of you for listening. I think this is it for us for this episode. We’ll wrap it up, and we’ll hear you soon.
Hiten Shah: Thanks, Steli.