Hypergrowth at any cost doesn’t make much sense, but being overly cautious can be a recipe for failure, too, agreed numerous high-profile Web entrepreneurs who’d gathered today for a panel at Fortune’s Brainstorm Tech conference in Aspen.
In the words of Keith Krach, the chairman and CEO of electronic signature provider DocuSign: “If we’re not making a few mistakes along the way, we’re not moving fast enough.”
So how does a startup grow fast without blowing up? A key factor lies in the hiring of people who are “better” than the managing team, said Krach, recalling a time when he was running the software giant Ariba and one of its seven cofounders, Bobby Lent, stepped aside to make room for a “world class VP of marketing.” Krach said the decision made it “noble” for others to do the same later on in the company’s life. (Ahem, okay.)
Joe Fernandez, whose social media site Klout brought aboard a new COO last week, echoed the sentiment. “Just knowing your weaknesses and being aggressive about hiring better than yourself” is crucial, he said.
What else is important? Krach, sounding like someone who has managed a very large company, offered up “mission,” “values,” and “team rules” — along with ensuring that everyone at a company is hearing about all of them on a “regular drumbeat basis.” Constant communication, said Krach, “gives everyone crystal clear direction.”
Focus is also critical, offered Cyrus Massoumi, the founder and CEO of ZocDoc, the popular online service that helps consumers book and manage doctor appointments. Looking back, said Massoumi, he’s glad ZocDoc spent “two years in one market” before expanding elsewhere. It proved “superimportant, because if we were in 10 markets from day one,” he said, the company’s mistakes “would have been 10 times as costly,” possibly fatally so, he added.
Massoumi went on to say that it’s better to focus on three critical initiatives and do them right, rather than focus on dozens of initiatives that produce mediocre results. “You can have A type players with B type results,” he observed.
As for Dave Morin, the founder of the social network Path, staying focused on a company’s original vision is paramount, in his view. He said he hopes that in 10 years, “hundreds of millions” of people will be using the network “if not a billion.” But he added that Path has adopted a “slower growth strategy” in order to stay true to its vision of itself as a “deeply personal network” that helps people “be closer to the people” they “love the most.”
As “new divisions come on board and new VPs” appear on the scene and problems emerge, it becomes a tall order, noted Morin. But “every time you sacrifice what you’re trying to do, you’re “losing trust with your community, and you’re losing trust with your employees.”
Indeed, Morin went on to acknowledge Path’s high-profile debacle over privacy concerns last year, using the experience as yet another example of how carefully Web entrepreneurs have to tread these days if they want to stay on top, without falling off the cliff.
“Whenever you’re dealing with an information sharing business, you end up running into social norms that you didn’t even know existed” and you “end up having to engage in public conversation” about those missteps, Morin said. “You can’t sort of hide behind a PR response. You to have to go out personally, usually, as the CEO, and engage with the community,” to say, “We know we did something wrong here” and “here’s how we’re following up” to fix it.
Put simply, he said: “You have to walk into the fire.”
Photo: Image courtesy of Shutterstock.