The Trial Close

The Trial Close Separates The Sales Pros From The Amateurs

By: Nick Moreno

Too many salespeople never ask for an order. Obviously, these salespeople never last very long in sales. Others only ask for the order once they are convinced the prospect is ready to be closed. These salespeople are missing out on a very powerful sales tool, the trial close. It’s a key tool that will increase sales performance. Let’s look at why a trial closes work.


Trial Close And The Sales Process

The trial close is about asking for the order when you assume the prospect is probably not ready to be closed. Let me explain why you would ask for the order when you believe the prospect is not ready to hand you the order. Thinking about a trial close yet?
First of all, your assumptions may not be accurate. Some trial closes actually close the deal. You may have thought the prospect wasn’t ready but in reality the prospect was anxious to do business with you. So, congratulations! Your Trial Close resulted in success.

Trial Close Is A Compass

Most of the time, your assumptions will be correct and the prospect is not ready to be closed. The Trial Close is a great way to uncover why the prospect isn’t ready. The Trial Close is like a compass that allows the salesperson to discover where they are in the Sales Process.

Trial Close And Objections

When your prospect balks at handing you the order, you want to know why. At this point, you will surely get some questions, concerns or objections. Thanks to the Trial Close you now know what’s on your prospect’s mind. Your job is to successfully address all those questions, concerns and objections. Once you do, you absolutely must, once again, ask for the order.

When To Trial Close

The trial close should be used right after you’ve presented your product as the answer to your prospect’s problems, wants or needs. You’ve presented all the benefits your prospect will enjoy by using your product or service. You’ve also cost justified the purchasing decision. The only thing left to do at this point is to trial close. That’s when to implement an effective trial close.

Trial Close With Confidence

Since you may feel your prospect isn’t ready to be closed you may be hesitant about confidently asking for the order and that would be a big mistake. Whenever you ask for an order, you must do it with confidence and that confidence must be evident even during a trial-closing attempt.

As you can see, the Trial Close is a powerful sales tool and you now know when and how to implement it. As a sales strategy, you can’t ignore the usefulness of a solid trial-closing attempt. I hope you’ll use it often and I hope that this advice will have you earning more commissions with your Trial Close.
To your sales success!

Objection Handling using LACE

Objections happen. If you perform the sales or persuasion process well, you will succeed in seriously reducing the number of objections, but they may still happen.

Objections can be transformed into an opportunity. For example, you can increase understanding of the other person's circumstance and to get closer to them, building a more trusting relationship.

Listen

Before you can act on the objection, it helps a great deal if you can understand properly not only the objection but also the thought and emotion behind it.

Find the objection

First, listen some more. Ask questions that elicit the background and detail of the objection. Listen not only to the objection but to the emotion behind it. Seek to 'read between the lines'.
The objection as stated may well be a cover for the real objection. Probe for more detail. Ask 'what else' and 'how come'.
Find remaining objections

Find out whether there are any other objections. Ask 'Is there anything else'. Tip the bucket. This can cause you more work now and it may seem that it is better to let sleeping dogs lie. But if you do not do so, then when you get towards what you hope is closure, they may easily pop up to frustrate you once again.

Accept

Once you have discovered the objection, the next stage is to acknowledge not only the objection but the person, too.
Accept the person

First and throughout, accept the person. Accept that they have a right to object. Accept that you have not fully understood them.
You do not do this by saying 'I accept you' or anything like this. The simplest way is through your attitude. Objecting can be a scary act, and people can fear your reaction. By not reacting negatively, by accepting the objection, you also accept the person.
By accepting the person, you build both their trust and their sense of identity with you. You also set up a exchange dynamic where they feel a sense of obligation to repay your acceptance.
Accept the objection

Accepting the objection means understanding how it is reasonable, at least from their current viewpoint for them to object to what you may believe is an excellent offer.
It also means accepting the work that addressing the objection will require of you. Objections can be frustrating and if you object to the objection, you will have a mutual stalemate.

Commit

Now it is time to get serious. With the increased understanding and trust, you have an ideal opportunity for a trial close.
Get their commitment

Get a commitment from them such that if you can satisfactorily address their objections, they will agree with you and make the purchase.
This is also a good method of identifying further objections. If they say no, then loop back and elicit these. Eventually, they will run out of objections. If you can address these, it's in the bag.
Make your commitment

This is also the point where you may well be making a commitment to them, to resolve their objections. This may be difficult and cost you in various ways, from calling in favors from other people to putting in additional effort.
The decision you have here, is 'Is it worth it?' Persuasion is often an exchange, and you always at liberty to back out.

Explicit action

Now it is time to address the objections, to take explicit action on the commitments made.
There are two types of objection: real ones and accidental ones. Accidental objections are where the objection is due to a misunderstanding. Misunderstandings are usually easy to address, with an apology and an explanation.
Real objections take work, but if they can be resolved, you've got the sale!
Persuade your way through

Persuading your way through an objection means working to change the way they view the objections. You can wear them down such that they no longer view the objection as being worth pursuing. You can also change the way they view them more positively such that they have an 'aha' experience that leads them to perceive the objection as being no longer important.
Concede your way through

You can also concede your way through, giving in and effectively buying their commitment. If they object to the price, you can always lower it. If they don't want it now, you can come back next week.
Concession can be both a useful approach, especially if you are in a hurry, and a threat. If you give them an inch, then they may want to take a mile. But this is not necessarily so, and a prepared concession strategy can pay dividends.

Thanks to Changing Minds for this objections handling techniques!

What a CEO should do...

By Mark Davis

I’m a believer that CEOs shouldn’t own workstreams. If they own a customer relationship, marketing plan or product function they won’t be available to invest time in supporting their team. You should be available to help someone on your team when they urgently needs a question answered in order to do their job.

When companies are first started, however, CEOs wear lots of hats and own workstreams that they should divest as the company scales. Owning legal tasks, HR to-do’s, office space procurement, accounting and others are all inevitable, but are roles that CEOs should work to delegate as resources become available.

But what roles should a CEO keep?

Here’s my list of roles that I plan to maintain as Kohort scales:
Strategic Alignment: Ensuring that everyone on my team is working toward the same macro objectives in lockstep, by facilitating communication.

Culture: Setting the culture of the company through office setup, policies and leading by example.

Talent Optimization: Working to maximize the talent of the overall team through hiring decisions and working to ensure each team members maximizes their potential through mentorship and active support.

Fundraising: Raising money to keep the company growing at the appropriate pace.

It’s worth noting that this doesn’t mean that CEOs shouldn’t do sales calls or engage in customer service. They should as long as those activities help their team succeed in their roles. Moreover, a CEO should do any task, no matter how menial, to help their team succeed. Take out the trash, pickup lunch and clean the office - whatever it takes to help your team win.

Also, all of these tasks that the CEO owns are cerebral except for fundraising – that’s the task you never get to fully delegate...

How Today’s Hottest Startups Got Their Names

By Sarah Kessler

There are no rules to naming a startup. And most entrepreneurs do assume that the name they choose will change before their businesses really start to gain momentum.


Consequently, it doesn’t shock us that some of our favorite startups were sired by picking names out of hats, by throwing out odd proper nouns that might be cheap domain names and by haphazardly removing vowels.

Ever wonder what a “Twitter” is, or who the “Hipmunk” is? We’ve asked nine startups to share the story behind their names.


1. Twitter

The name Twitter was picked out of a hat. A small group of employees from Odeo, the San Francisco podcasting startup where Twitter initially began, had a brainstorming session. They were trying to come up with names that fit with the theme of a mobile phone buzzing an update in your pocket.

After narrowing down the options (which included Jitter and Twitter), they wrote them down, put them in a hat, and let fate decide. Fate decided on Twitter (because clearly asking someone if they saw your latest "jeep" is just weird).


2. Foursquare

Dodgeball, Dennis Crowley’s first attempt at social networking for mobile phones, was acquired by Google in 2005. When Google killed the project, Crowley founded an improved location-based social game he named Foursquare. Does Dennis Crowley have some sort of unresolved childhood issues relating to playground games?

As it turns out, no he doesn’t. “Dennis chose to name both companies after playground games because they were both designed to be fun and playful,” said Foursquare’s PR manager in an email. Apparently, Foursquare was always Crowley’s first choice, but the domain name wasn’t available at the time he founded Dodgeball.


3. Aardvark

Aardvark has been a sleek website where users can type or email their questions, to then be answered by the appropriate people in their own social networks. But co-founder Max Ventilla’s idea began as a chat buddy that could intermediate conversations with people you know online.

There were advantages to having this name at the top of the buddy list, a spot which was occupied on Ventilla’s buddy roster by his friend Aaron. Alphabetically speaking, there aren’t many options that trump Aaron. “Aardvark” is one of the few names that could shoulder him out.

Other factors the name had going for it were its ability to conjugate the invented active verb “vark,” and being an animal that people recognized but typically didn’t have strong associations with.

“We also felt that an animal had the right positioning as helpful but not perfect,” said Ventilla in an email. “If we chose a human or a robot mascot people would spend their time trying to make it look stupid, but they’d cut an animal more slack.”

Google recently announced it would soon shutter Aardvark. Users have until Sept. 30 to retrieve their data.


4. Spotify

Spotify founders Daniel Ek and Martin Lorentzon crossed “spot” and “identify” when they named their digital music service.


5. Twilio

“In the early days of the company, the name doesn’t really matter for anything. You always assume you’ll change it later...You should be able to own a word for your company. You should not have any baggage associated with the name.

“What we started doing is saying, we want to invent a word, we know that, so let’s just start making syllables without faces and when we have something that sounds good, check and see if the domain name is available ... We’d just make these weird sounds and then run to the computer and see if it was available. We bought the domain name for $7.”


6. Zynga

Zynga is named after CEO Mark Pincus’s late American Bulldog, Zinga. The name means African warrior princess.


7. Etsy

From a spokesperson:
The origin of the word "Etsy" is shrouded in mystery. Only our founder Rob Kalin knows for sure, and he often throws out red herrings. Some widely-publicized (and certainly fabricated) versions of the story include: a reference to a magic word in a Fellini film, the name of his grandmother's favorite childhood pet, and something about a Unix directory, I think it's "/etc," pronounced “et-C.”

Other fun facts (some of which may actually be factual): Phonetically, Etsy has many homonyms too. It can mean:

"and if" in Latin

"horny" in Japanese

A slur for "loose woman" in Russian-speaking parts of Bay Ridge / Brighton Beach. Oh, and it rhymes with "Betsy."


8. Scribd

Scribd CEO Trip Adler says the company picked Scribd (pronounced "skribbed") beause of its ties to writing and publishing.

More interesting is how the coppany decided on the name of its mobile reader app, Float. “We wanted something to highlight the floating reading experience,” Adler says. “Namely, the idea of reading without boundaries.”


9. Hipmunk

After discarding names like “BouncePounce” (if there were a good travel deal, you’d pounce, right?) and Truvel (travel, but true), Hipmunk co-founder Adam Goldstein was discussing the naming roadblock with his girlfriend.

She suggested they go with a cute animal so that they could have a cool logo. Hipmunk.com was auctioning for about $70 at a time, and so the name -- and admittedly adorable logo -- were born.

The Job Of A CEO At A 200 Person Company

By Seth Sternberg

The job of CEO at a 200 person company is pretty different from the life I had 6 years ago—just before Meebo launched. It’s a lot less about what I do and a lot more about how I enable others. In today’s world, if you zoom out to a very macro-level view, there are three things I do. 1. Strategy. 2. People. 3. Resource allocation.

Strategy

You always hear that part of a CEO’s job is to come up with the “strategy”. But what does that really mean? In my world it’s listen, synthesize and communicate.

Listening means listening to everyone. Blogs, your employees, the press, other entrepreneurs, venture capitalists, customers and users—anyone who might have an interesting or informative point of view on what your company does. Bandied together, those constituencies form your market.

Synthesizing means taking all those things you’ve been listening to, deciphering signal (10% of it) from noise (90% of it), and adjusting course based on new points of view or new information. It’s rare that you’ll gather the exact strategy you should follow from the signal, but put it together and apply your own secret sauce and you have your winner.

And finally you communicate the newly formed strategy (to the extent you’ve decided to adjust course) to the market – the same people you’ve been listening to. At the end of day, you are your company’s chief sales person. To investors, the press, recruits, customers and users. You need to convince all of these people you’ve been listening to that you heard them, you internalized it all, and you came up with the winning strategy.

Together, I call these three pieces The Strategy Funnel. You listen, you synthesize and communicate and then you start all over again, listening to the feedback after you’ve communicated.


People

So many things are happening on a daily basis that it becomes very hard to stay on top of it all. In fact, you really can’t. Rather, you rely on your team to truly own the pieces of the overall puzzle that they are responsible for. This requires lots of things, top among them is trust.

First, you need to make sure you have the right folks in the right positions. Beyond ensuring that their skills (both hard and soft) are right for the role, you need to make sure that they continue to scale into that role as it inevitably becomes more complex with the growth of the company. Someone who was great at 100 people may hit a wall at 160 people.

Second, you need to make sure that these people are empowered to run their parts of the show. A lot of this empowerment comes through information, which of course needs to be communicated in some way. Counterintuitive as it may seem, ensuring that communication lines are very high bandwidth within the company is one of the top things you can do to empower people. Well…that, and not be a micromanager.

Third, you need to make sure you’ve clearly communicated the mission to your folks. If your leadership team doesn’t understand the mission or strategy, then neither will their respective teams. Watch how quickly progress will grind to a halt without a clearly articulated strategy in place—it won’t be pretty.

Fourth, you are your company’s chief recruiter. If one of our teams needs me to sell a candidate, I’ll get on the phone day or night, weekday or weekend. Heck, I’ve even flown out to see a candidate or two if they’re someone super special. Your company lives or dies by its team, regardless of whether you’re 2 people or 200. Attract the absolute best and brightest to work with your team and you’re already winning.

Resource Allocation

As your company grows and leaders at your company come to run specific functions, each function will vie for the company’s resources to best achieve its goals. Let’s unpack that for a minute. Since you can’t know everything that’s happening within the company, and therefore rely on your leadership team to run their respective functions, how do you make sure everyone’s on the right track? You provide clear goals for them to achieve. You measure these goals through a set of mutually agreed upon metrics that they are working to attain. Often, they will have a bonus tied to the achievement of these goals. So not only is there a sense of professional pride with meeting goals, but a bonus is often on the line too. And since you’re already hiring fantastic people who are intrinsically motivated, these people will work very hard to achieve their own team goals and thusly, the company’s goals.

One of the ways folks work to achieve their goals is to draw resources from the company. Some services are often shared at the corporate level—recruiting, HR, facilities and financial analysis would be an example. Other services are often shared between teams. For example, the ads team is as dependent on our engineering team to provide them with enough engineers to build new ad products as is our consumer products team to build the (very cool) checkins service we’re working on at Meebo. The leaders of these teams, at some level, compete for these shared resources—the more they get—the more likely they are to meet their goals.

You, as the CEO, are the ultimate “disinterested third party” between each of these teams. You, more than anyone, are tasked to make certain that the overall company meets its goals—not just its revenue goals or product goals, but all of them! As such, you make the call on how resources are allocated between competing priorities within the company.

That’s the end of the formal programming. Strategy, People and Resource Allocation are the three things I really spend my time on. But before we part, just one more thing. You are human. You make mistakes. You get stressed. But at all times, be real! Your people and your market want to hear from you—they want to know you and know what you stand for. They can sniff bullshit a mile away. Don’t disengage with reality behind the CEO’s magic curtain—it’s all too easy. Keep it real.

Notes From the MIT Startup Bootcamp 2011

By Jason Morrison

September 24 2011, I had the pleasure of attending MIT’s 2011 Startup Bootcamp. In its third year, Startup Bootcamp brought an inspiring and thoughful collection of speakers who have had a variety of startup successes.

The event hashtag #sb2011 is a stream of reactions and pull-quotes from the event - mixed here and there with excited anticipation for a dance festival in Goa.

Ten speakers presented a variety of viewpoints, insight, and food for thought.

It was a mixed bag - yes, there was unnecessary focus on vanity metrics and the rah-rah of startup theater. Breathless celebration of hockeysticking uniques and of flying around to court VCs makes for good TechCrunch articles. Like it or not, that’s an inculcated part of startup culture.

But if you get past the Hollywooding and the Silicon Valley adulation, there were gems of solid advice, grounded in experience, on hiring (Paul English of Kayak), data-driven product development (Naveen Selvadurai of foursquare), optimizing your life for personal growth (Drew Houston of Dropbox), identifying underlying social and technological shifts that enable new products (Charlie Cheever of Quora, Patrick Collison of Stripe), negotiation (Alex Polvi of Cloudkick), the importance of on-the-ground and unscalable product development tactics early on (Nathan Blecharczyk of Airbnb), earning and answering to the responsibility of finding your own way in the world (Anthony Volodkin of Hype Machine) and how important it is to empower yourself in perhaps the largest disruptive theme of our time by learning to code (Patrick Collison of Stripe).

Paul English, CTO and co-founder of Kayak.

Recruit a diversity of success.

Paul spoke on three kinds of recruiting: companies recruiting new hires, companies recruiting investors, and job-seekers recruiting companies.

When you’re recruiting, look for success, regardless of the kind. In fact, look for a diversity of success. Paul once hired an olympic rower, and a chess grandmaster, and couldn’t be happier with these decisions. Find people who operate at the top levels of excellence.

Some companies have a “no assholes” rule - at Kayak, they have a policy of “no neutrals”. Like Charlie Cheever, who later discussed the importance of hiring people you have high-bandwidth communication with, Paul encouraged building a team of people who are fully engaged: “intense and in-your-face - in a good way.”

Leah Culver, CEO and co-founder of Convore

Show up, say yes.

Leah told an lighthearted and likeable story of her journey from big state school CS major to Silicon Valley startup founder. Full of serendipity and luck, she shared stories of driving a UHaul from her native Minnesota out to the Bay Area (picked not primarily for its burgeoning tech scene, but for how much better the weather is), getting started with Instructables, and bumping into Pownce co-founders Kevin Rose and Daniel Burka at a party.

Have a good story to tell the press - you don’t have to tell people the ugly, dirty truth.

Another of Leah’s pieces of advice was a common thread through the talks - that of consistent applied effort. “Show up,” she said - in places with a critical mass of startup people, such as Silicon Valley - and “say yes” to opporunities that come your way.


Andrew Sutherland, founder of Quizlet

I didn’t just rush it on my parents that I was leaving MIT. It took two whole weeks.

Andrew shared his story of inspiration for an online learning tool. When he hacked together a prototype to help study for a French III class in high school and subsequently aced the test, he knew he was onto something.

Andrew discouraged market research - “If I had googled for online flash cards, I would have found other sites, that were not as good, and I wouldn’t have made Quizlet. Now, we’re 10x the [volume] of our next competitor.”

This phrasing raised some contention. I would reframe his advice as: focus on your own products rather than on the competition, and don’t be discouraged by incumbent players; rather, recognize them as a validation of the market space, and proceed to out-execute them.

Naveen Selvadurai co-founder of foursquare

At first, go with your hunch. Later, with data.

Naveen worked for Lucent and Sun in college. This was important - it was real-world learning. Seeing engineering culture, doing code reviews, shipping real products. Sun had an open culture of learning where you can dive into other products. “How’d they build Solaris? File systems?” Just sign up for the mailing list.

Naveen shared seven pieces of distilled advice:

Keep good company.

Make something that people want.

Build around an atomic action.

Seek mentors early.

At first, go with your hunch. Later, with data.

Balance unknowns with knowns.

Always be recruiting.

On the last point Naveen shared the four stages of foursquare’s hiring strategy:

Hire friends

Hire friends of friends

Use an external agency (but they didn’t find this valuable)

Hire an internal fulltime recruiter.

It needs to be someone’s job to think about recruiting, seven days a week. Additionally, as a founder, you must always be recruiting.


Charlie Cheever, founder of Quora

Work with people you have really high-bandwidth communication with. Understand how the other person is thinking.

Charlie shared great advice on early-stage tactics. Start with few users (Quora started with fewer than fifty) and a low-cost MVP. Foster the community by hand, be high-touch and, if your business builds on user-generated content, be prepared at the beginning to build a lot of it by yourself. See how the experiment goes, and then take the learning from that experience and apply it to your MVP.

He shared the importance of collecting metrics early on. With Quora, they actually stored the entire webpage for every visit for every customer, so that they could go back later, having identified trends or formulated hypotheses, and see the site as their users saw it.

They noticed a set of high-engagement users, looked at these users’ expereinces, and found that they had all used Facebook connect. Running with this, the team spent time focusing on improving their social experience.

Charlie also left the audience with good food for though:

What wave enables your product? Why is now the right time to build it?

For foursquare, it was GPS-enabled mobile phones. For Quora, it was that “normal” people were comfortable sharing things online, and that the web was turning into a mess; with Google turning up more content farm results, people were moving onto safe harbors of organized information like IMDB and Wikipedia. The timing was right.


Drew Houston, co-founder of Dropbox

Get out of your comfort zone. Learn a little about a lot.

“Everything big starts small” - Drew’s original perception of startups was that of Tolkien’s Mount Doom. His original strategy to build a successful startup was to be overwhelmingly prepared - nab an MIT CS degree, get a few years’ exerpience working for small companies and big companies alike, come back for a PhD, maybe an MBA.

He then related a story from Dropbox’s origins: Drew had just settled into his seat on a Chinatown bus from Boston, in which he could usually get in several hours of undisturbed work. He popped open his laptop, and searched his pockets for his ever-present USB thumb drive. “Shit.” Realization set in just as he visualized, in his mind’s eye, the thumb drive sitting on his desk at home. “Like any good engineer with a problem to solve, I opened my editor.” Drew then wrote the first lines of what would eventually become Dropbox. Today, his company has a multi-billion dollar valuation and “stores more files than Twitter stores tweets.”

Drew exhorted the audience to learn about a broad variety of topics: sales, marketing, finance, accounting, product design, psychology, influence, negotiation, organizational design, management and leadership, business strategy. Buy books (“today we have this amazing thing, Amazon”), dip in, find mentors, and surround yourself with smart people.

Wrapping up, Drew shared his advice for success:

Take on more than you’re “ready for.”

Maximize how much you learn per unit time.

Stack the odds in your favor. Surround yourself with great people; you are the average of your five closest friends.

The fastest way to learn about startups is to join one.

Starting a company is one of the best ways for engingeers to change the world.


Alex Polvi, founder of Cloudkick

No matter what number they offer, pause, count to 10 in your head, and then act as disappointed as possible.

Alex spoke on negotiation, specifically about his experience of his company Cloudkick being acquired by Rackspace.

If a VP of Corp Dev says “strategic” to you, they are talking about acquisition.

Acquisitions are a bit like romantic relationships: you often get the most attention when you’re looking for it the least. Once you are involved with one party, others can sense it. You somehow become more desirable.

Once you have a term sheet from one prospective buyer, you have great leverage. When others call you up, you can very quickly get to hard numbers.

The best negotiation position is one of truth. Build something of value that people want, and your position is irrefutable.

Alex also discussed the importance of taking care of your team, and the people around you. Upon acquisition, he fully accelerated all employees’ options - whether they had been with Cloudkick for four years or four weeks, they were all fully vested and could share in the company’s success. It was important that the acquiring party, Rackspace was on board with this - and they were. Rackspace wanted the new team members to stick around not because they were waiting to vest, but because they wanted to be there.


Anthony Volodkin, founder of Hype Machine

Venture Capital? You do not need anyone’s permission to make stuff.

Anthony shared the perspective that VC or angel investment can be very important, but it’s not for everyone. “I don’t want to shut something off because the math doesn’t work. For people to not remember it. That would make me sad.”

Anthony’s vision was a question: while people with cool friends can get interesting music recommendations from that network, what about people without cool friends? He knew that there was great taste and insight being shared by music bloggers online, and sought to aggregate and distill it. “I didn’t want to miss anything.”

(If music startups are your thing, Anthony couldn’t recommend highly enough Dalton Caldwell’s talk from Startup School 3 on music startups.)

Find your own way.

He started Hype Machine from his dorm room. He didn’t take investor money. This gave Anthony and his team the freedom to run the company as they pleased.

“We wanted to travel,” he said - so they packed their bags and hung out in Berlin for a month. It was cheaper than they would have thought, “about six thousand dollars,” and incredibly fun. But if they’d had VC money? “No way,” Anthony imagined an advisor’s response, “we thought you were, you know, going to be working sixteen hour days. Now you want to go to Berlin and maybe work?”

YCombinator? TechStars? Just fucking make something.

Anthony exhorted: it’s okay to have a different process. Don’t discount investment and the accompanying advisors, but don’t go blindly down that most celebrated path. With a different process, it’s easier to stand out, to be differentiated. You can always get money if you are making something great.


Nathan Blecharczyk of Airbnb

You have to have a vision, you have to be able to execute that vision.

Nathan shared a 2008 pitch deck for Airbnb (then AirBed&Breakfast) - the first time this deck had ever seen the light of day. Tiffany Kosolcharoen posted photos of the slides on her blog.


He highlighted its strengths - it had a problem statement, and had a bottom-up business projection by analogy to CouchSurfing and Craigslist. He was also quick to point out its weaknesses - it involved hand-wavy notions of unlikely major player partnerships, and touted top down projections (“If we can capture 2% of the $1.9B travel booking market… imagine!”) that are quick to raise doubt from savvy adviors or investors.

The company was accepted into Y Combinator’s Winter 2009 class. YC companies are supposed to be heads-down; but at Paul Graham’s behest, the cofounders zeroed in their market focus to just New York and hopped redeyes back and forth every few weeks. They met with their initial supply-side renteres in bars, and chatted about how things were going. As the team refined the product and identified sticking points, they could be on the ground to help optimize listings. They’d go with people into their homes and take high-quality photos. They found that the initial asking rates were a little too high, so they asked their listers (after a few drinks) to lower their prices. Things clicked, and soon they had handled $250,000 in bookings of which they collected 10%.

Fast-forward to the YC W09 Demo Day, and although at that point Airbnb has already accepted Sequoia investment, they had prepared a Demo Day deck. Gone was the hand-wavy top-down projection and partnership hopefulness, replaced with a quarter million dollars of demonstrable traction, a tight initial market focus, and a tight, clear problem statement.

Like many of the speakers, Nathan stressed the importance of finding quality mentors.


Patrick Collison co-founder of Stripe

It is impossible to motivate great people by something that is merely going to be profitable.

Ptrick’s talk was an excellent finish to the day. He delivered an essay full of engaging stories - I sincerely hope it will be posted online in full.

Patrick’s story was of his trip from hardcore Lisp academic to startup founder. Along the way, he developed one of the first iPhone apps, an offline Wikipedia, before the SDK and App Store, by debugging ARM assmebly. He shared the touching experience of getting emails form users whose lives he had changed; from bringing the world’s knowledge to villages in rural Peru and Ghana to delivering the freedom to browse Wikipedia without overisght to people behind the Great Firewall of China. At nineteen, he co-founded and sold an online action tool, and is currently working on a new payment startup, Stripe.

The anthropological story of the last twenty years is that software is taking over the world. Even if you’re a traveling violinist, you should learn how to program. Do all you can to ensure code is not a foreign language.

Posted by Jason Morrison Sep 25th, 2011

5 ways to keep your rockstar employees happy

The Googleplex, Google’s corporate headquarters in Mountain View California, is legendary for its perks. Employees have access to unlimited free meals, haircuts, dry cleaning, massages, and even onsite medical care.


Yet earlier this year, when Google interviewed its employees about what they valued most at work, none of these extravagant benefits made the top of the list. Neither did salary. Instead, employees cited access to “even-keeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers.”

Tangibles like salary and benefits aren’t enough to guarantee that your best and brightest creatives will remain engaged. Indeed, a recent landmark study by Arnold Worldwide of 3,000 employees and 500 executive leaders across a range of communication and advertising firms found that 30 percent of the advertising workforce say they’ll be gone from their job within 12 months.

Take Jill, an outstanding, experienced copy editor whom Agency X recently recruited at considerable expense from one of its chief rivals. Despite her outward success, she’s unsure how she’s performing, where she stands in the company, and how she fits into the overall goals of the agency. Her pay is great, she loves the Friday office happy hour, but over time, she finds herself feeling demotivated by the lack of communication, and checks out.

The loss of star performers like Jill doesn’t just leave a talent vacuum to fill; it also leaves a gaping hole in the bottom line. Indeed, a recent article in the Wall Street Journal calculated that it typically costs a company about half a position’s annual salary to recruit for that job ¾ and several times that if the position requires rare skills.

So how can your company keep its stars engaged? It comes down to creating a culture of communication — one in which employees know where the organization is headed, how they fit into these plans, and what’s expected of them. Here are a few key strategies your agency can employ to make this happen.

1. Create a culture of education

The average Starbucks barista gets more training in a year than the average employee in a communications company, according to the Arnold Worldwide study.

For employees, the single most important motivational factor was the ability to learn. Yet the study found a huge disconnect when it comes to perceptions about company training. While 90 percent of employees say they learn by figuring things out on their own, only 25 percent of executives think that employees learn independently.

To keep employees motivated, agencies need to build a culture of learning, where employees leave more enriched at the end of each day.

2. Provide regular, consistent feedback

Employee feedback is a critical part of the education process, and shouldn’t just be relegated to the annual review. To be effective, feedback needs to be specific and actionable. But that’s not always how it works.

In a study by Leadership IQ, 53 percent of employees said that when their boss praises excellent performance, the feedback does not provide enough useful information to help them repeat it. And 65 percent responded that when their boss criticizes poor performance, it doesn’t provide enough useful information to help them correct the issue.

Feedback, both positive and constructive, is most effective when given right away. Negative feedback given a month after the fact can lead to a passive-aggressive environment in which an employee feels powerless to act on the advice.

Think of it this way: no one wants to go a full day knowing their price tag was hanging from the back of their shirt, or the remnants of the salad they had for lunch were still stuck in their teeth. If an employee does something well, that activity should be encouraged. And if there’s room for improvement, they should be given the opportunity to learn for their next task.

3. Set time aside for weekly 1:1 meetings

At first, most employees and managers will cringe at the idea of yet another meeting. But instituting weekly 1:1 meetings can be the most important step you take to retaining your top performers.

In its quest to build a better boss, Google discovered that its worst managers weren’t consistent in their 1:1 meetings; some focused on meeting with people who were underperforming, while others met primarily with the top performers.

Consequently, Google implemented the best practice of 1:1 meetings with all team members.

These meetings can cover anything and everything from upcoming projects to the latest client news. With each week, discussions about goals, feedback, and concerns become a lot more natural unlike the awkward, starchy conversations during annual reviews. Over time, it becomes easier for both sides to raise potential problems and deal with them early on, before they fester into something destructive.

4. Manage the grunt work properly

Not every project is going to be awesome. That’s just the way business works. And chances are your employees understand this.

However, managers need to handle such projects responsibly and that means a few things. Boring projects should always be balanced with more stimulating work. Employees should always be told how any grunt works fits into the overall needs of the company (“If we do a good job on x, we’re hoping the client will give us their cool launch next year”). And specific parameters should always be set for the boring stuff ¾ meaning employees should always see light at the end of the tunnel.

5. Publicly acknowledge good work

All too often, managers see motivation in terms of financial compensation, but money is far from the only way to effectively reward talented employees. A 2009 survey by McKinsey Quarterly asked which incentives were the most effective in motivating employees. The top two responses were: “Praise and commendation from immediate manager” (67 percent), and “Attention from leaders” (62 percent).

Praise and commendation go a long way in making employees feel noticed and valued. And the impact of a pat on the back is multiplied when it’s done publicly. Through public commendations, employees not only feel the support and respect of their manager, but the entire organization as well (including top-level executives). Creating a framework for “social recognition” will encourage a culture of appreciation throughout your firm.

Keeping your rockstar employees on board has always been important, and don’t think that economic uncertainty will keep your employees around. Your company has worked hard to recruit some bright people and great talent; make sure an opaque work environment doesn’t drive them into the arms of your competition.

Daniel Debow is co-founder and co-CEO of Rypple, a social performance management platform.