Likes & Launch

We advise all of our portfolio CEOs to hire a management coach. Working to improve leadership skills is vital for management and shouldn’t stop at the CEO. Jerry Colonna, Fred’s Partner from Flatiron Ventures, is a highly regarded leadership coach who works with a number of the top CEOs in tech. Most, if not all, publicly traded company CEOs have a coach, even Jeff Bezos as mentioned in The Everything Store. 

Every executive, no matter how much experience, will always have room for improvement. Especially when they’re leading a fast growing venture-backed startup, where the obstacles are constantly changing.

It can be lonely at the top of the company. Even if you have a great executive team and board, there are still concerns you may not feel comfortable sharing with those members of your team. As Fred and Mark discussed, board members can serve as a coach but the relationship is loaded because they have other chips in the game. Having a neutral third party to discuss decisions, challenges, and personal development areas is essential. Whether it is on a weekly or monthly basis, hiring a coach is a business expense that will empower a CEO to make the leadership decisions that drive the company forward.

The stress of entrepreneurship doesn’t stop at your doorstep. Professional challenges can seep into your personal life. To do your best work, you have to take care of yourself. Finding the time to care for your emotional and physical well being is essential. Running, yoga, biking, walking, spending time with family – whatever the outlet may be, being disciplined to care for your own well being is critical. Even at the fastest growing company, if you’re not taking the time to recharge, you won’t be leading a company well for long.

Although few may talk about their coaches, I think it’s an advantageous choice for any CEO. 

If you’re looking to find a coach or have someone to recommend, drop a note in the comments. 

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I was talking to an entrepreneur this week about fundraising plans for her business. I tried to encourage her, but also set expectations about building in a category that comes with a lot of investor baggage. I know because it’s one I built a business in too: travel. 

The travel industry has all of the makings of a great market. The last major innovation in flight planning planning is 10 years old when OTAs were fighting for eyeballs using tv commercials and SEO. Kayak was a huge success for organizing all of the information transparently in one place, but since being acquired in 2013, not much has changed. Even the mass adoption of mobile phones has had little impact in shaking up the incumbents. 

In 2012, the travel market was sized at $313 billion and has only grown with the addition of millions of new consumers online. There is a lot of potential in the market, so why aren’t more businesses being funded here? 

Trips, far off destinations and photos on beaches makes travel a fun industry to talk about. The product is something people like thinking about, vs say audit software, but it’s hard to grow a mass customer base. The challenges start with high costs for search, infrequency of purchase, large incumbents spending a lot on marketing, gaining customer mindshare, and division of business v. personal travel. It’s a hard industry to crack as scale, which has left many investors burned by investments in this space. 

Even trip-planning companies that have been successful in fundraising, haven’t had break-out growth. Hipmunk emerged as a contender to the traditional OTAs, but hasn’t found it’s breakaway growth even with $40M in investment. Gogobot raised $39M in funding but pales in comparison to TripAdvisor. 

Hipmunk vs. Kayak’s Alexa Ranking:

Gogobot vs. TripAdvisor’s Alexa Ranking: 

Growth for both of these companies is good, but it’s not likely enough to push those companies to a big exit for investors. The early and late money in those companies are still waiting for growth to set them up for an IPO or a large figure acquisition. 

Investors who’ve done travel deals in the past or are currently in one of these companies are likely more skeptical of the category than anyone. 

Yes, the consumer experience for planning a trip is still broken. Yes, there are ways to use data and UI improvements to fix these problems. Yes, there are opportunities in mobile. But no, no I’m not investing in travel. Even the smaller travel companies who have exited, they aren’t the 3x+ investors are looking for. The market is still out on what these companies are worth. 

So what will change investors minds? A good comp in the market helps. Yes, there are photo sharing apps that still get funded, largely because Instagram’s exit at $1B is a good comp. If you’re an investor who places a few small bets and one of them even has the potential to be worth $1B, that sounds like an attractive deal. Is that rational, no. Is that the way to make smart investments, likely not, but the facts add up. There is a market (and an exit strategy) for photo sharing apps. 

Travel doesn’t have that luxury, or at least not yet. 

The big company that may change people’s minds is AirBnB. Now AirBnB fits in the travel category of accommodations, but it’s business model is far from the average travel planning site. Instead of being a superior way to route customers to hotels, AirBnB is the new way to build hotels. They are utilizing real estate and the sharing company to compete with hotels, not just send traffic their way. So if they aren’t exactly a travel company, how does that help the sector? 

When AirBnB goes public, it creates a new player in the “travel industry acquisition” game. A Himpunk with a large valuation may be a small cost for AirBnB to better compete with OTAs earlier in the booking process. The tours, activities, and things to do component of Gogobot may fit into their extended hospitality services, and they could buy instead of build. If the largest players get acquired at large numbers, there will be a resurgence of interest from investors to find the next thing to disrupt the travel industry or sell to the incumbents who now feel threatened by AirBnB. 

AirBnB is not far from Kayak’s traffic:

The size of the travel industry will continue to attract entrepreneurs and investors, but it may take a few big exits to help former travel-investors to get back into the game. 

My advice for travel entrepreneurs, is to think about ways to serve specific markets, like the breakouts in the Indian and Brazilian markets; monetize early to rely less on investors; and serve a market need so well that people are willing to pay a lot of money for the service (not just affiliate fees). I’ll save my ideas on open opportunities for another post. 

Something to share?

I want to hear from you! Please share your thoughts in the comments below or on Twitter.

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This post is the second in our “Lessons from the USV Diversity Summit” series. In December, USV hosted our first Diversity Summit. Below are some of the most helpful insights we gathered about how to take action. If you are just joining the conversation, you can read the first post here.

Start somewhere

Who starts the conversation around diversity? Who will be the first one to say something, out loud, to your team? How do you start that conversation?

Talking about diversity can feel awkward. Many of our attendees found themselves  leading the charge at their companies simply because they were the first person to speak up about it. Others had their leadership role bestowed upon them because they happened to be the first person on their team to represent diversity.

A lot of our attendees told stories about how their company first “discovered” they had a diversity problem. Sometimes the team’s lack of diversity was pointed out by an outsider: “So how does it feel to be the only female engineer in your company?” Other times it was something people realized for themselves: I noticed I was the only black person  at our all-hands meeting of 100 people.” Occasionally, diversity came up because employees realized there was a mismatch between the team and its customers: “As a team of  ten white male engineers, we don’t represent the market or our customers.”

Most of the time, it was up to the diverse member of a team— whether they were a minority with regard to gender, race, or background—to take up the diversity initiative themselves. This can create the impression that diversity is important to that person simply because they want more representation for people “like them.”

We asked our attendees to tell us about their fears and concerns. Here are some of the sentiments that emerged:

• “I’m a woman and I’ve never been discriminated against, but I know others have, so I’m making sure that behavior doesn’t continue for others.”
• “I’m Latino, and I know a number of talented engineers of all backgrounds. I don’t want them to feel like an outsider like I did when I joined.”
• “I’m the only male on my team, and I don’t want my opinion to be perceived as, ‘this is what all men think.’”
• “I was the first female engineer, and I wanted to show other female engineers that they would not feel alone here, the way I felt alone when I was the only one.”

Waiting for minority team members to start the conversation themselves is dangerous, because if there is no diversity in your team, how will you ever start? So don’t wait. Start the conversation now.

If your goal is to be the best place for top talent to work, it should be the best place for anyone—even if they don’t work there yet.

We’re all in this together

No matter who or “what” you are, diversity belongs to all of us. To frame the discussion about diversity at our summit, we discussed unconscious bias early in the day.

We are all different from the next person. We all have biases that we use in our decision making, biases that come from  our upbringing, our life experiences, and our interactions with the culture and the world.

Leaving it to the professionals, we played a portion of Google’s video on unconscious bias. The video explains the importance of bias awareness in how a tech company successfully makes decisions. The video is worth watching in its entirety.

The concept of unconscious bias gives us a shared language to frame our personal experiences. Instead of saying “we,’” “them,” or “us,”—or using general statements like “men like to…” or “as Hispanics, we…”—we instead each framed our own thoughts around bias, conscious and unconscious.

Here are some examples: “I’m biased in favor of  iPhone users, since I’ve always used an iPhone and never an Android.” “I’m biased in favor of  NYU grads, people who grew up in North Carolina, and middle children.” It’s okay to have these biases, but letting them go unnoticed is where we get into trouble. If I only want to interview candidates who come from NYU, I’m letting my personal bias affect decisions for my company. If I believe that people who have been entrepreneurs just “fit the culture better,” I may not realize that I’m biasing a hiring decision. The idea might sound logical, but that doesn’t mean it’s true.

In your conversations, you may find it easier to talk to your peers about diversity if you have thelanguage to talk about differences, rather than generalizing. Instead of saying, “I only hire SVA grads,” you might try substituting, “In the past, I’ve had a bias toward hiring SVA grads.” Modifying the language you use in your mind can make the difference between weighing a decision and having your mind already made up.. It’s the difference between being open to discussion vs. being closed.

We found that establishing a shared vocabulary empowered us to speak up, be empathetic, and encourage without turning the conversation into an “us vs. them” type argument. Unconscious bias training is a great way to kick off diversity discussions, but it is only the foundation of a larger conversation. There are more unconscious bias resources listed here. 

Allies and open conversations

The most cringeworthy stories we heard about at our summit came from people’s efforts to try to “get people talking about diversity.”

One company had held an all-hands meeting to discuss diversity. Anyone could weigh in, share ideas, and speak up about what they wanted changed. To ensure that employees were building off each other instead of battling, the facilitators required everyone to say “yes, and…” instead of “yes, but…” The conversation generated a lot of ideas but left everyone exhausted. At the end, everyone had to come up with one word to describe how they were feeling. Most people chose words like “uncomfortable,” “tense,” or “stressed.”

In hindsight, brainstorming sessions that have more than 50 people are rarely productive. Extroverts excel, introverts hang back. Leaders speak up while newer employees proceed with caution. It’s not the right forum for most topics, and it;s not a great forum for diversity discussions either. The meeting generated conversation, but nothing moved forward until a smaller group took the lead and started to make changes.

Starting with a small group proved to be a successful strategy for several other companies as well. Two different companies set up lunches to try to bring women in engineering together and ask: “What can we be doing better?” One company found that just creating a space to discuss the question already helped the attendees feel supported and heard. At the first meeting, only women were invited. Once the safe space had been established, the second lunch was open to anyone. Ultimately, the meetings led to several positive outcomes: (1) women in the company were encouraged to attend the Grace Hopper Conference, the leading conference for women in engineering (2) the company started requesting a Code of Conduct from conferences attended, and (3) the company pledged to have more diverse hiring panels.

Several companies advocated starting the process by assembling a small group of people to brainstorm about objectives, then bringing in more people only after the small group had a handle on what they wanted to accomplish. The small groups don’t need to be limited to one type of diversity. It’s enough to start with a small, diverse group of individuals who all share the same mission: to increase diversity on their teams.

Defining Diversity

Once you’ve gathered your small team of allies, the next step is to define what diversity means to your company.

The Equal Employment Opportunity Commission (EEOC) has an extensive (and evolving) list of classes who are protected from discrimination. Since discriminating against members of these classes is against the law , it’s probably a good place to start. But you don’t have to stop there.

Here’s Stack Exchange’s philosophy on diversity in the workforce. This statement can be found on all of their job listings:

Diverse teams build better products

Legally, we need you to know this:
Stack Exchange, Inc. does not discriminate in employment matters on the basis of race, color, religion, gender, national origin, age, military service eligibility, veteran status, sexual orientation, marital status, disability, or any other protected class. We support workplace diversity.

But we want to add this:
We strongly believe that diversity of experience contributes to a broader collective perspective that will consistently lead to a better company and better products. We are working hard to increase the diversity of our team wherever we can and we actively encourage everyone to consider becoming a part of it.

Another company defines it as “Diversity of Thought.” They built off the EEOC guidelines, but expanded it to include diversity of skillsets, education, and interests. They took what was required legally and added to it to make sure it felt authentic to their company culture and their existing team. Diversity belongs to everyone at the company, not just a subset of employees.

Start small, start today

One of the break-out sessions from our summit was “Talking about Diversity without Tension.” There were a few takeaways from that discussion. There will be always be tension, even in a small group. Trying to avoid tension may actually be counterproductive. It’s more important to have the conversation than to try to avoid it.

The best way forward is to start small. Assemble a small group of people to start the discussion in a safe space. Invite a professional trained in diversity or unconscious bias to join you. Or bootstrap early conversations with online resources. We’ve collected a few recommendations in the Diversity Hackpad here: Unconscious Bias Resources. Whatever the size your company, start your small group conversations today.

The next post in this series will explain how to take the small group conversations and extend them to the wider company culture.

Something to share?

We want to hear from you! If you or your team have something to add, please share in the comments below or on Twitter.

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