In my first experience as a full-time founder, it was really tough to be upfront about challenges.
Shortly after launching Circle of Moms, we were growing quite quickly. Moms weren’t using our product as much as we’d hoped, but things were otherwise going well and we thought we were in good position to raise capital. Ephraim and I went to pitch Kevin Hartz, the understated and straightforward founder of Eventbrite.
We went through our numbers with Kevin, highlighting our user growth and barely mentioning our mediocre stats on user engagement. I’m embarrassed to say that I probably hoped that investors would be too dumb to ask about how frequently our users were using the product.
Kevin’s not dumb, and when he asked, I flailed. I knew the engagement stats, but I tried to dodge the question. After a bit of back and forth, I finally gave him the real numbers. To his credit, Kevin called me out, saying gently that I needed to be “more fluent” with our stats.
My evasiveness stood in sharp contrast to Kevin’s own behavior. Kevin, who’d founded payments company Xoom and invested in PayPal and YouTube, was not afraid to own up to defeats. At that same meeting, he revealed in passing that Eventbrite had been turned away by investors in a recent attempt to raise a large round of capital. I was shocked by Kevin’s candor: that didn’t seem like something a founder would freely admit.
Figuring things out as you go along
Later on at Circle of Moms, our team had an internal meeting about messaging, to discuss how to frame the product we were building for mothers.
“Being a mom is all about figuring things out as you go along,” my colleague Lisa stated.
“Haha,” said the voice in my head. “Just like being an entrepreneur!”
I thought that, but I didn’t dare say it. Who was I to own up to any sort of weakness to my team? I had to show that I knew everything: I couldn’t be seen as figuring things out as I went along.
The next time around
Several years after that, we sold the company. Circle of Moms went from being a startup that wasn’t terribly interesting to investors to one that was perceived as innovative and successful. I spent a bunch of time writing about our successes and our failures and got my head around a few things I’m not very good at and a few others I probably do better than most. Some people started calling me a serial entrepreneur (not my favorite term).
In the process, something clicked and I became at least a tiny bit more like Kevin. One of the investors in my current startup remarked how surprised he was when I admitted that there were certain problems I had no idea how to tackle: he said most entrepreneurs would feign a deeper understanding than they actually have. I told my current team the “figuring things out as you go along” story with a smile on my face and no misgivings whatsoever.
The second time around, it’s easier to not take everything personally and so far, it’s a whole lot easier to own up to challenges.
Oh, and in that spirit: Circle of Moms was fortunate to have had many excellent investors, but we pitched Kevin two different times, and in both cases he turned us down.