RescueTime

Stepping down as CEO of RescueTime

May 22

Wow, I’ve felt bad about neglecting my blog. Not guilty-bad (though there’s a bit of that too), but bad because I feel like I have a LOT of stuff I want to write about. I literally have 15 or so blog posts that are pretty much just titles and topic sentences that I’m eager to write.

This isn’t one of ‘em.

John Cook just wrote that I was leaving RescueTime, and I feel like it makes sense that I should talk about this a bit to clarify what’s going through my head. Though I have to admit that it’s tempting as hell to do what Alex Payne did– which is pretty much leave it at “I just quit Twitter and I’m doing something new“.

Leaving any job is a personal choice with a lot of factors. Leaving a company that you’ve founded and nurtured from idea to prototype to product to business can be downright agonizing. The product is your baby and the team and investors you built it with are your brothers-in-arms. You think about it so long and so constantly that it gets to be an addiction. Not in a BAD way, mind you. The years I’ve spent on RescueTime have been some of the best of my life.

So Why Leave a Good Thing?

This is the most common question I’m getting right now– “If things are going so well at RescueTime, why leave?”. I’ve asked myself that question a TON over the last few months as I’ve been considering this move. RescueTime is enjoying some pretty awesome growth (51% quarterly revenue growth on average over the last 4 quarters– solid!). Not to say that there aren’t daunting challenges ahead for RescueTime, but all of the graphs are moving up and to the right. So, why the heck would I leave on the cusp of profitability? My reasons are largely internal… I know, I know. “Seriously, Tony? The ‘it’s not you, it’s me’ breakup line?’”. Seriously. Leaving RescueTime is like breaking up with an awesome women who you know you could be happy with, but no longer believe is the right woman for you. I have a mess of specific thoughts, but they all boil down to the fact that I’m more excited about what could be next– and I’ve always been driven by the “Regret Minimization Framework”. Watch this short video below:

Jeff’s boss’s response? “This sounds like a good idea. But it sounds like a BETTER idea for someone who already doesn’t have a good job!” I clearly have a great job at a great/growing company. But there are new things that are happening in technology/business that I find too darn exciting to not dive in. I want to get uncomfortable again, and trade reliable growth for blue sky. Given the stage that RescueTime is in, I think this is a reasonable time to make that leap. We’ve got a growing company that’s providing a livelihood for a great team and that (eventually, I hope) will provide a great return for the investors who made their bet on RescueTime (including myself!).

What’s next for RescueTime?

RescueTime’s focus right now is to scale, get new customers, and grow. We’re pretty convinced the entire team could answer support requests and play checkers and we’d grow every month (a testement to the fact that we focused on scalable marketing). But the team is going to continue to rock on A/B testing, outreach to our growing collection of Fortune 500 customers, back-end scaling so the servers don’t melt (processing hundreds of thousands of man hours of attention data per day isn’t easy, folks!), and (of course) making the product a little bit better every day.

I’m going to keep working with RescueTime on a few initiatives, and I’ll always be a founder (and advisor for as long as the team thinks I’m useful). Don’t be surprised if I answer a support request from time to time or do some writing on the RescueTime blog.

What’s next for Me?

(second most popular question, behind the “Why?”) Short answer, I don’t know– and that’s exciting. Longer answer, I’m looking for early stage opportunities in a few markets that I find particularly interesting. I want an opportunity where I can be strategically involved (hacking on business models) and tactically involved (managing UX, doing PR/outreach, A/B testing, writing copy, slinging pixels and CSS). Upside is a must for me– I’m eager to have skin in the game as opposed to a steady paycheck (though some combination of both could be interesting). I’ve written a bit about how I think stock options for most employees are a bit of a sucker’s bet unless you’re getting in VERY early (it turns out the only way to get meaningful reward is to buy it with risk). But at the end of the day, I’m only partially motivated by upside. I’m more motivated by the opportunity to make a BIG impact, the autonomy to do stuff that I think is important, being in a “fast” environment, and being surrounded by people I respect and like. This seems theoretically possible at a larger company, but seems likelier the earlier stage you go on the spectrum. It might ultimately mean that I have to start something new.

High Five, RescueTeam

The team of hackers that work at RescueTime are breathtakingly good. With a small team, we’ve built and maintained a windows app, a mac app, a web app, and a monster data warehouse that processes hundreds of thousands of man hours of attention data per day, all with a hosting bill that any startup would envy. We’re adding 600-1000 new users and 15-30 new paying customers per day without a single marketing dollar and without any marketing effort. We’ve built a machine that we’re really damn proud of.

I read the other day that 85% of venture-backed companies are dead inside 3 years– I’m damn proud of the fact that our business and team are going to be in the 15% minority. High-five guys, and godspeed!

PR for Startups

Mar 02

My startup (RescueTime) has enjoyed some pretty ridiculously good PR (online, print, and video). It’s not a surprise that the most common questions that we get from other founders are about PR. How do you get press and the blogosphere talking about your product?

When you research this topic, you’ll see lots of technical and how-to articles that talk about how to build relationships with writers, how to use services like PRweb, how to format a press release, and more. In a lot of ways, this reminds me of SEO (search engine optimization). Research SEO and you’ll find a bunch of articles about page markup, link sculpting, meta descriptions, and all sorts of other mechanical processes. But what you won’t find much of is information that teaches you how to write great content and how to build your startup and features (from the ground up) with “linkworthiness” in mind.

Just like fabulous content solves 75% of your SEO problems, fabulous storytelling solves 75% of your PR problems.

I think there’s a lot of built-in contempt for PR and marketing among entrepreneurs (especially hacker-flavored entrepreneurs). We’ve all been in companies with fat communications budgets wasted by blow-hard marketeers, so many of us have dismissed the profession altogether. We’re so entranced by the concept that just building something people want will win the day. I remember cheering the first time I read the quote, “marketing is a tax you pay for being unremarkable“. I remember reading a statement on Hacker News that said, “my code speaks for itself“. Two years ago, I would’ve said, “Right on, brother! Preach it!”

But my mindset has shifted about 180 degrees over the past few years. I now believe that how you say something is at least as important as what you’ve built. The A/B testing and design/copywriting iteration that we’ve done over the past year (which has, over time, resulted in a 400% increase in conversion rate on our site) really has driven home this belief. What’s A/B testing if not a bunch of microscopic marketing/PR tests?

What you need to send to reporters and bloggers

If you’re reaching out to reporters and bloggers, you put yourself in the shoes of that person. They are looking to write a headline that causes readers to buy a magazine/paper or click on a link. They are looking to write a story to support that headline that causes readers to consume that content and (ideally) find the content so provocative (note that “provocative” can be VERY different from “valuable”) that they send the link to their friends and relatives, post it to Twitter, and write a supportive (or critical) write-up on their blog.

If you can truly empathize with a writer, you fairly quickly realize why your new social bookmarking app, web annotation service, or small business accounting app isn’t particularly newsworthy. You aren’t click-bait. You aren’t link bait. You aren’t going to sell a paper.

Which is why your most important problem from a PR point of view is this: How can you make your uninteresting (to a broad audience) company interesting?

The good news is that it’s quite do-able. If at all possible, read Made to Stick by the Brothers’ Heath. If you can’t read it, read this summary. If you can’t do that, just try to craft a story that succeeds in as many of these areas as possible:

Surprising
Funny
Personal
Has a story arc
Useful

(notice how low “useful” is on the list? That’s not an accident. You have to be REALLY useful to be worth talking about.)

A boring company with good storytelling skills can do some amazing things on this front. Off hand, I can name a company that sells shoes online that did pretty well on the PR front, a personal finance app that a lot of people talked about, and a creator of small-business project management software that people can’t stop linking to. If you want to see smaller/earlier successes, check out Balsamiq or UntitledStartup (both are doing some clever things out of the gates).

So if you tell your product’s story at a party (which you should, over and over!), watch the listeners eyes. Do they glaze over? Or do they light up? Do they laugh? Do they argue with you? Do they ask questions? If a you’ve never had a listener at a party say, “wait a minute– John over there would LOVE to hear about this… Let me grab him!”, then you probably aren’t ready to work on the mechanics of outbound PR. If at the end of your story, the listener doesn’t often say, “Can you tell me that URL one more time?” as they reach for their smartphone, then you need to keep working on your story. Because charging forward on outbound PR with a shitty story is pretty much the equivelant of working on your SEO mechanics when you know you have crappy content. Your’e ignoring the most important part in favor of the least.

Post Scriptum – On the Value of PR

Having enjoyed pretty great PR success, I wanted to throw out a final thought. Like a lot of accelerants (marketing and funding being two other examples), PR can be like throwing gasoline onto a fire. Or it can be like throwing gasoline on a pile of wet wood. It can be especially exciting if your business is enjoying growth already. But PR (and, more broadly, your startup) is a marathon, not a sprint. The first couple times you get a PR hit, you’ll quite likely be flummoxed by the fact that your traffic and usage doesn’t really change that much as a result. TechCrunch might get you 5-10k uniques. Being in the print version of the New York Times might get you a few thousand uniques. PR is not going to result in a viral/word-of-mouth explosion, but it’ll speed things up nicely if you’ve already got one happening.

As Andrew Chen says in one of his many fabulous posts (why bloggers and press don’t matter for user acquisition), if you’re going to spent time on marketing and PR, spend it on things that will pay ongoing dividends rather than 1-time dividends. Andrew was talking about stuff like viral loops and SEO, but in my opinion he missed the most important marketing “gift that keeps on giving” – crafting and tweaking a story that makes you worth talking about.

Startups with Something to Believe In

Jan 07

I went to an informal Seattle startup CEO dinner a while back and it was an awesome opportunity to talk candidly about the problems that early stage products face. Someone remarked to me afterwards that a lot of people in that room had already “made it” (financially speaking). That’s one of the cool things about being a startup founder. There were plenty of folks in the room who put on their pants one leg at a time. There were some other folks who sip Pinot Noir while they have two pant-assistants dress them. But (with a few runaway exceptions) many of them were facing the same challenges.

I had a lot of takeaways from the dinner, but the biggest came from two comments by CEOs in two unrelated conversations (these are paraphrased with a bit of hyperbole tossed in).

Comment #1: “My biggest concern is that we’re on a long road. And it’s going to be a tough slog. We’re going to be dragging our asses uphill for years with a still uncertain future. With that to look forward to, how can I hold on to my best-and-brightest stars when they could take an offer from [insert megacorp] and double their salary overnight? Or they could hop onto another startup that isn’t at the ‘slog’ stage yet?”

Comment #2: “Sure, the downturn has effected our startup. But we’re all working together on stuff that we want to work on and we’re working with people that we really want to work with. If we end up making less money, it really doesn’t matter much.”

The huge challenge is that we are constantly telling ourselves, our teams, and our customers that great stuff is in on the horizon. But the reality is, bad shit is coming. There are going to be huge and gutwrenching bumps in the road and times where the company feels like it’s going to auger in. The thing that can pull a team through these rough spots is belief in SOMETHING.

Something amazing happens, I think, if you can cross the chasm from people getting paid to work for you company and people getting paid SO THEY CAN work at your company (I think that concept came from Tandy way back when– can anyone confirm?). As founders, I think it’s easy to dismiss this possibility. “That might work for people who ooze charisma,” we say, “but it won’t work for me.” Or: “You can only pull off that kind of passion if you have a world-changing product with a runaway growth rate– not for something so mundane as what we’re working on.” Bullshit. Look at companies that actually inspire the founders, employees, and customers– there’s WAY more variety than you might suspect.

So here’s a stab at how startup founders can get creative and (hopefully) inspire.

a dragonslaying startup (killing inefficient incumbants, like Redfin is trying to do)
“business religion” startup (like Zappos, FogCreek software or 37signals– where the products isn’t something the team gets THAT excited about building, but the “business religion” and/or lifestyle of working there is magical)
The “we’re going to change the world” startup. Steve Jobs once said to John Scully (then CEO of PepsiCo), “Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?”
“we’re going to get filthy rich” startup (this feels scary to me– seems like people will jump once there’s a bump in the road… and there is almost always a bump in the road).
A “family” startup. My first company had this– just about everyone in the company was really close to everyone else. We had regular gaming night, fun social events (that everyone WANTED to come to), etc. Loyalty can definitely help folks through the aforementioned “bad shit”. This is the biggest reason why solo founders quit more often. It’s always easier to quit when the only person you’re letting down is yourself.
Succeed, loudly and publicly. Nothing inspires more than setting tangible business goals (that everyone buys into) and actually knocking them out of the park. Want to see a role model here? Check out Balsamiq’s Blog.

The math of working at a startup rarely works out– people get paid less to do more. You have merely adequate benefits and lousy job security. With VERY few exceptions, the journey to liquidity is long and is by no means a sure thing. So you have to offer piles of intangibles that make your best people say, “Yeah, I could get paid another $50k across the street– but it wouldn’t be worth it.”

Did I miss any motivations? Why do you work at a startup when you could be making way more money elsewhere? Or, if you work at BigCo, what would it take for you to take a 30% pay cut?

Startup Postcard from Corvallis, Oregon!

Jan 26

On Friday I spoke at a “Business Bootcamp” in Corvallis, Oregon. The event was fabulous (big thanks to John Sechrest) and I was pretty impressed to see that kind of passion for startups in Corvallis.

I wanted to follow up with that community with a few thoughts (that might be interesting to a broader audience, so I’ll post it here).

Thought #1: The Valley is a Unique Animal

After the Y Combinator experience, we dove into fundraising in the Valley as well as Seattle (where we ended up settling). It didn’t take long to give focus our efforts largely on Silicon Valley. Don’t get me wrong– there are some great Seattle investors. But there just aren’t many of them, and as Paul Graham points out, investors outside of the Valley just aren’t very bold. At the Business Bootcamp, a local angel investor spoke for a bit after I did about what he looks for in a company and he seemed even less “Valley-like” than Seattle investors. The big differences that stuck out to me were:

A strong emphasis on patents/IP (in 20+ meetings with VCs and angels before we were funded, not a single one asked us for our thoughts on this).
A strong emphasis on written business plans and financial forecasting (we never were asked for anything beyond an executive summary and never were asked for any financial projections except by a single angel group in Seattle).
A desire for a big equity stake. The Corvallis angel had a an equity floor that was a third more than the premium “household name” angels in the Valley. Presumably, this is because the Corvallis angels aren’t too plentiful and have a captive audience.
A desire for a more fully formed team. He wanted a 4-7 person team before he invested.

For the record, I don’t think ANY of this is bad. I just think it’s SAFE. I imagine a methodology likes this results in far fewer failures, but also results in fewer hits and disqualifies all sorts of non-traditional teams. I think many of the startup home-runs in the last decade or two would’ve been shown the door rather quickly in Corvallis. Boldness might not be a virtue from an investor’s perspective (the landscape is littered with the financial corpses of bold early stage investors, I’m sure), but it certainly is from an entrepreneur’s perspective.

Thought #2: Audience Questions

The third presenter gave a fabulous presentation called “Do you have what it takes to be a Startup CEO?”. It was chock full of info and I certainly learned a lot. Unfortunately, there were two questions from the audience that I felt weren’t answered very well, so I’m going to take a shot at ‘em.

“I’m hearing that we need a team of 5-7 people, paying customers, provision patent applications, and mess of other things before we can even begin to ask for money. That seems inherently contradictory with the idea of angel investment.”

It does, doesn’t it? Smart angels seek to mitigate/minimize risk and most angels are pretty smart. There’s nothing more wonderful than a startup with 5-7 great team members, growing revenue numbers, a pile of great patent apps, etc. Unfortunately, angels who are looking for this kind of company are really “later stage” angel investors. Unless you, as an entrepreneur, have a million bucks to get to that point, you have two options. One, find a bolder seed-stage investor (in Corvallis or move the the Valley where bolder investors are more plentiful). Two, get some freakin’ traction. Seriously, dial back your idea to the most basic offering you can manage that people will use/buy and build it with a co-founder or two (in your off-hours if you have to). If you can launch SOMETHING that people really love (and if the TAM is big enough), investors will listen. You’ve reduced two of the main risks that they are worried about; That you are a screw-up who can’t launch a product and that what you build ends up not being particularly interesting to your target audience. The better your traction and the steeper your growth curve (in terms of usage or dollars), the easier fundraising is.

If you don’t have a gold-plated team (read: previously made an investor lots of money), a pre-existing relationship with an investor, or TRACTION, I seriously advise not trying to raise money from anyone but friends and family. Given that most entrepreneurs aren’t gold-plated (I sure as hell wasn’t) and building relationships with investors is a hard to do from scratch, your only option is launching and building traction.

“I’m a college student here. What advice would you give to an aspiring entrepreneur with a notebook full of ideas?”

The speaker quite literally responded with a long answer that amounted to, “Not everyone is CEO material. You should consider that you likely aren’t CEO material.” Really? Is that what we want to tell aspiring entrepreneurs?

The right answer (IMO) is this.

First, pick the idea that you’re going to attack. I’d say, focus on tractability with a strong bias to the ideas you are most passionate about as well as the ideas that have some built in marketing (SEO or viral– relying on word-of-mouth and salespeople is difficult and expensive).

Second, figure out what you’re good at that a startup needs. Hopefully, you can code things, design things, or sell things because the vast majority of the first months of a startup is comprised of that kind of work and precious little else.

Third, read everything here: http://ycombinator.com/lib.html

Fourth, save money or borrow a few bucks from family/friends so you can work on it full-time for 3 months. If you can’t do that, do it half-assed (it can be done!).

And finally, don’t listen to people who tell you that you might not be CEO/startup material until you’ve taken a stab at it. The world is full of unlikely CEOs from Steve Jobs to Bill Gates to Mark Zuckerberg. Roll the dice and dive in– when you’re on your deathbed, I’m betting you won’t be saying, “Gosh, I wish I could go back and take fewer risks.”

Startup Programming Jobs: C++, C#, and Java Reign Supreme?

Sep 15

This will be a small post, but I stumbled onto some interesting data that I thought I’d share. As a background, we’re currently searching for a great C++ dev to work at our startup here in Seattle. I decided to do a bit of research to see other job postings, compensation packages, etc.

I was startled to find that (in Seattle) C#, C++, and Java jobs are hotter than everything. Period. By a monstrous margin. Take a look (numbers in parentheses are the results counts as I write this):

Jobs with C# in the title (759)
Jobs with C++ in the title (537)
Jobs with Java in the title (307)
Jobs with ASP in the title (209)
Jobs with Ruby in the title (85)
Jobs with PERL in the title (50)
Jobs with PHP in the title (46)
Jobs with Python in the title (26)

Wow. C++ jobs almost end up being more plentiful than all of the major scripting languages combined. C# jobs are even more plentiful. Toss the word “startup” into your search query and it reduces all of the results, but the big-iron languages still win by a wide margin. Really interesting to contrast these numbers with San Francisco, where you see fewer C++ and C# jobs (predictably as you move away from Microsoft-country), more Java jobs as well as a few more Rails and PHP jobs (but Java wins in SF by a landslide).

So if you could snap your fingers in Seattle and be a rockstar/ninja programmer in one of these languages, which would you pick (from a career perspective)?

(nota bene: recruiters who use the word “rockstar” or “ninja” in a job posting deserve to be flogged. While we’re at it, anyone using the phrase “FAIL” or “EPIC FAIL” deserves a healthy thrashing as well.)