Glenn Kelman: How to Get the Most Out of a Startup
I've been reading more about two things lately: startups and investing. Well, that's not entirely accurate. I've been coming to the slow realization that programming, while fun, makes up less than half of what it takes to be a successful software engineer. The thing is that professional "programmers," from what I've read, end up spending less than half their time programming. The rest of it is spent with wetware ops, interacting with (gasp) actual people, directly or indirectly. So writing, interpersonal skills, luck, and business acumen each contribute at least as much as raw programming skills do in the creation of a "good" coder. Well, I can't do much about luck, and between business and human relations, I find the business side of things more palatable, so I've been looking at how things work from a business perspective.
I've also realized that I don't particularly want to work for a super-large company, nor am I interested (at the moment) in doing fundamental research or teaching. That leaves startups, small businesses, and contracting work as the most-plausible means of gainful employment. And all three of those paths benefit greatly from knowing a bit about the business side of things. So, I've been independently investigating the subset of the business world that seems most directly applicable to my immediate future. That means reading about finance, investing, MBAs, and tech startups, as well as taking Macroeconomics over the winter session. In the last week, I've come across quite a few bits about startups, both purposefully and incidentally. Here's one of the incidental ones: a talk given at the University of Washington by Glenn Kelman. I stumbled across it because UWash's RSS feed got horked and displayed 87 older talks; Glenn's was one of the ones in the list that caught my eye.
As a CS student, the whole general dichotomy of "stable, big, boring" established companies versus "small, dynamic, risky, exciting" startups is ever present. But there's a difference between knowing that something is different, and knowing how to take advantage of that difference. Luckily, Glenn Kelman, the guy who started is now CEO of Redfin, and co-founded Plumtree Software, knows a thing or two about startups. Glenn is a relaxed and funny presenter, a pleasure to listen to and learn from.
I highly recommend checking out UWashington's archive of Glenn's talk. Here's a selection of quotes from Kelman that I found interesting:
"Stanford has this very entrepreneurial environment, they're in Palo Alto, very close to Google and Facebook, they're insufferably bright and very arrogant, and they know all about the world of venture capital and startups. And when you try to hire a Stanford student, you'll give them the offer, of course it will be this ridiculous offer, you'll expect them to be overcome with emotion and instead he'll say "Well, I'm going to talk to my parents, I'll talk to my family attorney, I'll come back to you tomorrow with a counteroffer," and you spend about a week negotiating terms, mostly around the equity..."
"If you can start a company, everyone will tell you that it's too soon. And I'm sure they'll be right. There are so many different things that I didn't know when I started Plumtree, and I erred egregiously, and really suffered for it. But you'll never know everything you'll need to know, and if you have a great idea you should start a company."
"And if you go to Stanford, you tend to have a sense of entitlement that's fairly elaborate..."
"What you get at a large company is exposure to different types of career tracks... And of course the job security is fantastic. And if you work at IBM, you work at Microsoft, you work at Amazon, it's hard to imagine that you'll either get laid off or even fired. I think it's very difficult at a large company to screw up so bad that you'll get fired. Whereas at a small company like Redfin, we fire people all the time, we really do."
"I think there's really a challenge to fill the emotional void that college leaves in you. You know, there's these dorms where you stay up all night arguing about stuff, and playing video games, or doing whatever you do. And when you get out of school, there's nothing quite like that. The closest thing I've ever seen is a startup."
"The thing you've got to remember is that about 80% of startups fail. That's an actual statistic, it's 82% fail. So odds are your startup will fail. [...] Nobody's that good at picking which seed will grow and which won't."
"Focus on one thing when you're interviewing, which is getting an offer. Then they've given all the control to you."
"Most importantly, you have to hate their competition. If you're going to interview at Microsoft, you want to tell Microsoft how you want to destroy Linux. [...] You want to tell them you want to destroy Linux, and that's what gets you out of bed in the morning. Because for whatever reason, they've got this weird emotional allegiance to some competitor you've never heard of, and that competitor's destruction. So you need to make sure you're in line with destroying them."
"You need to understand what you care about, and then show the passion. So many people put the suit on, and try to be all square, and professional, and grownup. But really you'll be better of if you let the beast out, and show how enthusiastic you are. I was just interviewing a bunch of people yesterday in Berkeley, and it was the ones who were really trying to seem adult that did the worst, and it's the ones who were almost childishly enthusiastic about some CS project that they worked on, or a robot that one guy built, that really totally won me over. And I think that all human beings are the same way in that respect. If you screw up, and you will, just say you screwed up! So many times in an interview, I've said something that wasn't quite right, and they've moved on, but I'm still thinking about it for twenty minutes, I'm sitting there thinking about the one question I screwed up at the beginning. And it's totally cool to just say "Hey, before I go, there's just one thing that I screwed up and I wished I'd done it right" [...] Go back and fix it, you'll feel better about yourself and then you can move on. Oh yeah, and don't ramble. When they ask a question, if you don't understand the question, you need to stop and make sure you understand it, then answer it directly. The best answers are "Yes", "No", or a number. Just think about that."
"An offer is never revoked. [...] Once it's on the table, [...] you can ask for crazy things and see what happens."
"You need to understand every single thing in that offer before you begin negotiating. So just ask as many questions as you can, and then instead of trying to respond on the spot -- there's a tremendous impulse to do that, people are going to say "Well what do you think, does it look good?" -- you can just say "Hey, you know, this is my first time through, I don't know if it looks good or not, lemme just think about it and I'll give you an answer tomorrow.""
"At some level, if you can say, "I wanna work here, but this is want I need to make. If you offer me this, it closes the deal." -- best negotiating tactic ever."
"Some people do this acceleration deal [...] where as soon as there's an acquisition, everything they owe you they give you all at once, and you can wash your hands of that place, and you're done. And that's what all the big shots try to get when they negotiate a deal, it's hard to get if you're a little shot."
"Generally, the reason you should work at a startup isn't so you can [cash out], it's so you can get a ton of responsibility and you can have the emotional rewards of working on a small team to build something really great."
"Oh, the sweet thing about stock, by the way, not that you care at this point in your career, is that the regressive American tax code doesn't really tax you on it the way that it should. One reason to vote Republican, I guess."
"Oh, one other little trick, by the way, that I think is really useful. If you can't figure out what the options are worth, just make them do it. Say "If I were willing to take a $5000 pay cut, how many more options would you give me?" And if they cut the pay by $5k and give you 1 million more options, they must not think those options are worth much."
"I'd take a crappy job at a good startup over a good job at a bad startup. Because basically you're trapped on a spaceship, you're in this little enclosed world. If that spaceship is headed towards the sun, and going to incinerate you, it doesn't matter if you're the grand king of that spaceship or you're the guy cleaning the toilets: you're gonna fry."
There are oodles more quotes in the video. Watch & enjoy!
Edit 1: Corrected factual error re: Glenn's role at Redfin, plus assorted typos.
I've also realized that I don't particularly want to work for a super-large company, nor am I interested (at the moment) in doing fundamental research or teaching. That leaves startups, small businesses, and contracting work as the most-plausible means of gainful employment. And all three of those paths benefit greatly from knowing a bit about the business side of things. So, I've been independently investigating the subset of the business world that seems most directly applicable to my immediate future. That means reading about finance, investing, MBAs, and tech startups, as well as taking Macroeconomics over the winter session. In the last week, I've come across quite a few bits about startups, both purposefully and incidentally. Here's one of the incidental ones: a talk given at the University of Washington by Glenn Kelman. I stumbled across it because UWash's RSS feed got horked and displayed 87 older talks; Glenn's was one of the ones in the list that caught my eye.
As a CS student, the whole general dichotomy of "stable, big, boring" established companies versus "small, dynamic, risky, exciting" startups is ever present. But there's a difference between knowing that something is different, and knowing how to take advantage of that difference. Luckily, Glenn Kelman, the guy who started is now CEO of Redfin, and co-founded Plumtree Software, knows a thing or two about startups. Glenn is a relaxed and funny presenter, a pleasure to listen to and learn from.
I highly recommend checking out UWashington's archive of Glenn's talk. Here's a selection of quotes from Kelman that I found interesting:
"Stanford has this very entrepreneurial environment, they're in Palo Alto, very close to Google and Facebook, they're insufferably bright and very arrogant, and they know all about the world of venture capital and startups. And when you try to hire a Stanford student, you'll give them the offer, of course it will be this ridiculous offer, you'll expect them to be overcome with emotion and instead he'll say "Well, I'm going to talk to my parents, I'll talk to my family attorney, I'll come back to you tomorrow with a counteroffer," and you spend about a week negotiating terms, mostly around the equity..."
"If you can start a company, everyone will tell you that it's too soon. And I'm sure they'll be right. There are so many different things that I didn't know when I started Plumtree, and I erred egregiously, and really suffered for it. But you'll never know everything you'll need to know, and if you have a great idea you should start a company."
"And if you go to Stanford, you tend to have a sense of entitlement that's fairly elaborate..."
"What you get at a large company is exposure to different types of career tracks... And of course the job security is fantastic. And if you work at IBM, you work at Microsoft, you work at Amazon, it's hard to imagine that you'll either get laid off or even fired. I think it's very difficult at a large company to screw up so bad that you'll get fired. Whereas at a small company like Redfin, we fire people all the time, we really do."
"I think there's really a challenge to fill the emotional void that college leaves in you. You know, there's these dorms where you stay up all night arguing about stuff, and playing video games, or doing whatever you do. And when you get out of school, there's nothing quite like that. The closest thing I've ever seen is a startup."
"The thing you've got to remember is that about 80% of startups fail. That's an actual statistic, it's 82% fail. So odds are your startup will fail. [...] Nobody's that good at picking which seed will grow and which won't."
"Focus on one thing when you're interviewing, which is getting an offer. Then they've given all the control to you."
"Most importantly, you have to hate their competition. If you're going to interview at Microsoft, you want to tell Microsoft how you want to destroy Linux. [...] You want to tell them you want to destroy Linux, and that's what gets you out of bed in the morning. Because for whatever reason, they've got this weird emotional allegiance to some competitor you've never heard of, and that competitor's destruction. So you need to make sure you're in line with destroying them."
"You need to understand what you care about, and then show the passion. So many people put the suit on, and try to be all square, and professional, and grownup. But really you'll be better of if you let the beast out, and show how enthusiastic you are. I was just interviewing a bunch of people yesterday in Berkeley, and it was the ones who were really trying to seem adult that did the worst, and it's the ones who were almost childishly enthusiastic about some CS project that they worked on, or a robot that one guy built, that really totally won me over. And I think that all human beings are the same way in that respect. If you screw up, and you will, just say you screwed up! So many times in an interview, I've said something that wasn't quite right, and they've moved on, but I'm still thinking about it for twenty minutes, I'm sitting there thinking about the one question I screwed up at the beginning. And it's totally cool to just say "Hey, before I go, there's just one thing that I screwed up and I wished I'd done it right" [...] Go back and fix it, you'll feel better about yourself and then you can move on. Oh yeah, and don't ramble. When they ask a question, if you don't understand the question, you need to stop and make sure you understand it, then answer it directly. The best answers are "Yes", "No", or a number. Just think about that."
"An offer is never revoked. [...] Once it's on the table, [...] you can ask for crazy things and see what happens."
"You need to understand every single thing in that offer before you begin negotiating. So just ask as many questions as you can, and then instead of trying to respond on the spot -- there's a tremendous impulse to do that, people are going to say "Well what do you think, does it look good?" -- you can just say "Hey, you know, this is my first time through, I don't know if it looks good or not, lemme just think about it and I'll give you an answer tomorrow.""
"At some level, if you can say, "I wanna work here, but this is want I need to make. If you offer me this, it closes the deal." -- best negotiating tactic ever."
"Some people do this acceleration deal [...] where as soon as there's an acquisition, everything they owe you they give you all at once, and you can wash your hands of that place, and you're done. And that's what all the big shots try to get when they negotiate a deal, it's hard to get if you're a little shot."
"Generally, the reason you should work at a startup isn't so you can [cash out], it's so you can get a ton of responsibility and you can have the emotional rewards of working on a small team to build something really great."
"Oh, the sweet thing about stock, by the way, not that you care at this point in your career, is that the regressive American tax code doesn't really tax you on it the way that it should. One reason to vote Republican, I guess."
"Oh, one other little trick, by the way, that I think is really useful. If you can't figure out what the options are worth, just make them do it. Say "If I were willing to take a $5000 pay cut, how many more options would you give me?" And if they cut the pay by $5k and give you 1 million more options, they must not think those options are worth much."
"I'd take a crappy job at a good startup over a good job at a bad startup. Because basically you're trapped on a spaceship, you're in this little enclosed world. If that spaceship is headed towards the sun, and going to incinerate you, it doesn't matter if you're the grand king of that spaceship or you're the guy cleaning the toilets: you're gonna fry."
There are oodles more quotes in the video. Watch & enjoy!
Edit 1: Corrected factual error re: Glenn's role at Redfin, plus assorted typos.