It’s over and we did it. A full-on day of talks, knowledge bombs and networking at HustleCon 2016.
HustleCon is an event for non-technical startup founders. It’s an event with 12 to 15 speakers delivering 10 to 20 minute talks focused on sales, marketing, supply chain and that all important hustle.
It’s not an engineering geek-out event, there’s no mobX, PostgreSQL, MongoDB or Heroku talk. These are all terms I’ve heard around our office. The links are what I looked at to figure out what they mean. Shoulda done computer science instead of banking…
I convinced friends & colleagues Rachael Skinner and Garrett Ely to join me at the growth-focused event to learn how other founders have pulled it off. While the event was focused at product companies who are pre- or early-revenue, we all still took some great lessons away from the conference.
Sam Parr started with little intro to the conference and some growth numbers:
- 2014 – 300 attendees
- 2015 – 600
- 2016 – 1800
Outstanding growth! Congrats to the whole HustleCon team. Here’s my detailed notes from each of the talks I attended.
How did this startup founder save his company?
David Bladow from BloomThat was the first speaker at HustleCon 2016 with his talk “Scaling with Simplicity”.
He talked about it being easier to add complexity than it is to take away complexity. Adding a process might seem like a great idea to manage operations, but we need to constantly think in the reverse and reduce complexity.
“You all need to be the guardians of simplicity in your companies.”
– David Bladow
His lessons were that expansion is hard. Damn hard. There were 3 barriers to BloomThat’s expansion:
- Over complication
- Processes that didn’t scale
- Running multiple companies
David was running 3 separate companies to deliver flowers:
- Marketing & merchandising
- Flower manufacturing
BloomThat is default dead
9 months after starting, David’s company was in the “Trough of sorrow” with a $550,000 a month burn rate and only a 4-month runway left ($2m in the bank).
Ultimately, the company was default dead at a $550k burn rate.
David used 2 questions to get back to basics:
- How do we scale our original idea (of making flower delivery awesome)?
- How do we streamline our operations
Cutting back the burn rate
Step 1 in saving the company was cutting back the burn rate (monthly negative cashflow). David needed to cut costs to lower the burn rate and extend that 4-month runway. The team took some drastic action and lowered the burn rate from $550,000 a month to just $15,000 a month.
To scale the original idea, David’s team decided to introduce a delivery fee. They’d been resisting a delivery fee since day one but realized it was necessary to keep the dream alive.
The company was delivering flowers within 60 minutes in San Francisco which jacked up delivery costs – they weren’t making any money on deliveries. To fix this they increased the delivery window from 1 hour to 2 hours – decreasing delivery costs by 25%.
David’s message throughout all of these changes was to be transparent with customers. He communicated directly with customers multiple times throughout the changes and was always transparent about why he made changes.
The end results of the drastic simplifying of operations and changing the pricing structure bought the burn rate back to a manageable $15,000.
David’s two takeaways were:
- Gross margins matter!
- There are compounding effects to complexity – be the guardians of simplicity!
A quick tip on how to find great suppliers by @jefenate at Hustlecon 2016
Jeff Chapin from Casper gave an awesome talk for founders of product companies. A great tip: when you’re choosing a supplier, ask for a list of their clients.
“Pay attention to how the floor workers dress. In our experience there’s a strong correlation between how neat the floor workers are and the quality of the work they produce.” – Jeff Chapin
How Soylent’s weird history gives the company an edge
Dave Renteln, cofounder and CMO of Soylent – a meal replacement drink – gave a talk at HustleCon 2016 that centered around embracing your weirdness and sticking to your principles.
A bottle of ready-to-drink Soylent contains 20% of all the carbohydrate, fat, protein and nutrients your body needs to thrive. 5 bottles a day would give you a 2000-calorie perfect diet – although Dave mentioned many people use Soylent as a percentage of their diet, not a complete replacement.
Soylent’s fat component is produced by microbes in a fermentation tank. Dave commented on this unconventional method of production:
“Don’t be afraid to disagree with conventional wisdom if you know you’re right.”
The team at Soylent embraced their weirdness with polarizing advertising – generating controversy that attracted attention. They followed the principle of, “If you’re trying to sell glue, glue a car to a wall”!
Dave cracked the audience up with the comment, “We have supercomputers but we’re still shoveling leaves into our mouths like cavemen.”
Soylent made the unconventional decision of selling online-only, leaving distributors, wholesalers and retailers completely out of the equation. Soylent increased their margins and delivered a cheaper product to the customer by cutting out the middleman.
The most interesting part of this talk for me was the idea of iteration. Soylent’s formula came out in a number of different versions over time, 1.0, 1.1… just like we do at ZUUS Workforce with software. Soylent iterated, introducing better ways of delivering the same great product each time they release a new version. Iteration means the product gets better and better with each release. Iteration is very rare in food, and Dave admitted that in his talk. Putting your work out there as a version 1.0 and improving it over time is the best path to polished work.
At HustleCon the team at Soylent gave out a full 400-calorie, 20% RTD sample. I smashed it down with a protein bar at lunch and felt full for the next 2 hours. Tasty and very drinkable, I’m a big fan. I’ll be ordering some for the quick meals where I can’t get to eat a full meal.
Rachael, Garrett and myself had a conversation after Dave’s talk analysing why the company has had so much success. We thought that it might be because they make no claims about “losing 10 pounds with Soylent” or “gain muscle with Soylent”. Every other supplement or meal replacement on the market makes claims like this, while Soylent claims to be nothing other than a nutritional way to replace meals when you’re too busy to prepare food.
How to operate in the grey areas with Jason Calacanis
Jason Calacanis is the most straight-talking, no-bullshit guy I’ve ever seen on stage. At HustleCon 2016 he remarked to a question about why no-one likes PR people, “Because 98% of them SUCK!” Love that authenticity!
Jason is a hugely successful investor and was in early on Uber, thumbtack and Wealthfront, Jason tries to be the first or second investor on unicorn companies.
On 10x breakthroughs
Jason looks for a 10x breakthrough in efficiency with any task. As an investor in Uber he could see the 10x lift from optimizing the process of getting a cab. He gave Amazon’s Alexa (available with the Amazon Tap or Echo) a big shout out by demonstrating how it takes 4 seconds to play a song vs 40 seconds with any other method.
The tourist season in Silicon Valley is over, according to Jason. The bubble we’ve seen in recent years is deflating, which is good news for investors and founders. Great talent will be cheaper, there will be less competitors in the market and only the truly hungry founders will get funded.
“Don’t disrupt, don’t hustle in areas that affect people’s lives deeply.” Jason talked about avoiding operating in the grey areas in industries that have a deep effect on people like insurance or medicine. Don’t cheat in these areas – the government is humorless when it comes to grey areas in these industries.
Regarding disrupting and hustling – if you’re going to operate in a grey area, make sure you’re on the side of the people. Jason gave examples of Uber and Airbnb where customer demand is pulling them to expand because the experience is a breakthrough, “10x lift” customer experience.
Jason, I salute you. Keep being your authentic self mate – you’re inspiring all of us to be more authentically ‘us’.
The top 3 attributes startup founders must develop
Andy Dunn, CEO and cofounder of Bonobos – an online clothing brand – put a name to the 3 top attributes for founders at Hustlecon 2016:
- Ability to evolve
Digitally native brands like Harry’s, Bonobos, Trunk Club and Airbnb have a huge advantage in delivering an awesome customer experience online.
As a Harry’s customer, I know how awesome their digitally native customer experience is. I signed up from an ad on The Art of Charm podcast, ordered and in less than 5 minutes I’m on a shave plan that delivers a handle and 2 razors for $3 – yes three dollars – with a $14 delivery of razors every 5 months. Boom – my shaving supplies are completely automated. Bravo Harry’s!
Online unlocks a retail experience with unlimited choice. When you’re in a Bonobos guide shop, you’re not limited to the stock on the racks. They can order literally any of 40 sizes, 4 fit types and many different colors. You walk out with EXACTLY what you want delivered to you a few days later. What an awesome experience!
On cofounder divorce
Andy went through what he called a cofounder divorce, where he stayed on as CEO of Bonobos and his cofounder Brian Spaly left to found Trunk Club, another men’s fashion startup. There’s precious little detail online about what went wrong, but “differences” will have to do as an explanation for now.
As a product company, Andy sets the bar at $50,000 in revenue. If you can make it to $50k in revenue before raising any money you have a good product that will sell. As for raising the $20k needed to product $50k of product? “Surely you have a rich aunt that you can raise that money from.” Thanks, Andy.
On the ability to evolve
As your product and your business mature, you’ll need to evolve and improve based on customer feedback. As a business leader you need to keep working on yourself too. Andy mentioned two abilities of great leaders:
- The ability to make great analogies (pretty sure he was joking here!)
- Self awareness – or the ability to be non-defensive about your weaknesses and know your strengths.
Your mission of your company should drive your hiring. As you’re hiring, find people who truly believe in your mission. To find out if they believe present them with two offers:
- Higher stock options, lower cash
- Lower stock options, higher cash offer
If anyone takes the lower-stock option, talk them out of a job with you. They don’t believe in your mission.
Andy, your talk was fantastic. Your passion for the mission behind Bonobos really shone through and all of us attendees at HustleCon sincerely appreciate the time you spent preparing your talk. Bravo mate.
Words of wisdom from a former monk
Andy Puddicombe, cofounder of HeadSpace, dropped a knowledge bomb that stuck with me:
“Unless you know where it is you want to go, it’s unlikely that you’ll ever get there.”
– Andy Puddicombe, cofounder HeadSpace
The first question all businesses should ask
Otis Chandler, CEO and cofounder of Goodreads, gave a fantastic talk at HustleCon2016. Goodreads has 50 million members with 400m page views a day. Over 70% of their members are women, which mirrors the proportion of women to men in book purchases.
The number one question is:
What problem are you solving?
Otis asserted that businesses that have a clear, crisp answer to this question are businesses he’s interested in working with. The first question bears repeating, and there’s second part to that question.
What problem are you solving?
And for whom?
Find a crisp, clear answer to that question and you have put together your mission. The mission at Goodreads is to help people find and share books they love. Simple, crisp and clean. The problem and the who are both stated clearly in these 8 words.
Having a clear mission helps you find great people and helps you focus.
Finding a problem
To find a problem worth solving, look for these filters:
- lots of people have the problem
- small groups of people fix the problem with hacked-together tools
Then ask – can you polish and productize the solution?
At Goodreads, Otis uses a rough 80/20 split of time to grow the business. 80% of their time is spent making the product better, while 20% of the time is spent tuning growth channels.
By tuning growth channels, Otis means improving the way people can share and invite new users. The key metrics in network growth are:
- Invites per acquisition or how many friends a new user invites
- Conversion rate or how many invited people sign up
- Time to acquisition or how long it takes people to sign up after being invited.
Goodreads started to look at an exit and chose Amazon as a possible acquirer. At this point the mission of Goodreads evolved to ‘being able to easily what you are reading’. This mission meant Amazon could use Goodreads as a source of traffic to their purchase pages – an ideal fit for the Amazon engine.
On getting acquired
Reflecting on his experience of selling his company to Amazon – Otis stayed on as CEO throughout – Otis asserted that companies are bought, not sold. If the buying company is looking to solve the problem that the selling company solves then there’s a natural fit. There are three places to look for agreement in a acquisition:
- Alignment of people – can you work with the people at the acquirer’s company?
- Strategy – are the strategies of the two businesses aligned?
- Price – can you reach an agreement on a fair price?
All 3 of these elements must be agreed and aligned or there is little chance of the acquisition going smoothly.
Of all the talks at HustleCon, I got the most out of Otis’ talk. It’s worth repeating his key messages (I wrote them in big bold letters in the back of my notebook)
- Solve a problem
- Then listen and keep solving your customer’s problems
- Look for how the problem is being solved manually and productize it
- Be mission-driven
HustleCon 2016 to HustleCon 2017
Would I do it again? Absolutely. The speakers were excellent, the takeaways were incredibly valuable, and the time spent was totally worth it. All in it was about $1000 with flights from Denver, and Airbnb and the conference ticket. I’ll let you know the ROI in a future post….
Share these knowledge bombs with your friends and get them to come to HustleCon 2017 with you!