Live Blog: Momentum Summit

Missed the Momentum Summit? Went, but want a recap? We've got notes from all the Sessions, so check them out below.

 

Session 4:

Scott Griffith, CEO of ZipCar

Laura Fitton, CEO of oneforty

 

Q: How is the IPO Going?

There are many challenges. It's a volatile situation. 

 

Q: What do you wish you had done 7 years ago when ZipCar started?

Trust my intuition around the team I entered into. First impressions are not always right, but directionally correct.  

We had months of burn rate cash left when I joined. Idea was strong, but the timing had to be right. I didn't think we had the right team in place then...and I was slow to make moves to make sure we were "Geared up to win".  (They had to raise capital very soon after he arrived).

 

Q: Yeah, we think it will be that big. Tell me about carsharing 10 years from now

The world is going to be different place. Transportation is ripe for change. The intersection of internet, wireless and transportation is really interesting.

We need smarter developed cities. (Bike lines, public transportation, more parking options).

 

Q: how many people live 10 min away from a Zipcar

10 million.  

 

Q: How do you get people to think about sunk costs of owning a car (maintenance, depreciation, insurance, etc)

People eventually do the math and we try to highlight it. The increase in price of gasoline actually helps us. After Katrina and gas prices went over $3-$4 a gallon. In surveys, we found that at those prices, people start thinking about alternatives.

What motivates people to make change is economics...it's not the sustainability and green stuff.

 

Q: You quoted helicopters: but planes can float down. 

What it feels like to be in a startup as the CEO of a high growth business.

There are inherently vibrations in a helicopter.  In the background there's vibration, but you may not always feel it in the center...but you're always worried what might be falling apart.

The sense of ambiguity you have to lead people through...you have to be ready for that. Be smart about talking about the fear vs. instilling confidence.

 

Q: How do you handle the candor vs. the visionary?

Internally, it's important to have a big vision and mission. We have trifolds of mission, vision and core values in everyone's wallet.  I learned it over time.

It's important to be honest and open in the company. Forward, honest open communications. Occasionally explain issues to everyone in the company and tie it to where our core values and vision are working. Otherwise, you end up looking like the rose colored glasses CEO. Address them up front.

 

Q: ZipCar gets tons of press...how do you ignore the hype and keep going?

Don't believe your own press.  It's not an escalator that you just go up. Lots of up and down.  We realize the power of our PR message to get it out there, but we try to ignore it internally.

 

Q: I became a CEO kicking and screaming, not ready...you had a life changing experience that made you want to be a CEO...

Scott had hodgkin's disease/cancer. Was a consultant at the time and really starting to think what the ultimate goal was in his life. Make a mark. Wanted to get a company to create something shareholder value and have an impact.  

My brother said to me "You should think about the person you want to be when you come through this."

 

Q: What one experience has most affected your leadership style?

As we raised our first round of money. We could have sold a majority of our company to Steve Case or doing a term sheet with Benchmark Capital.  Forced him to think about what he wanted to do with the company. Difference of one person in control or help building a large company. If I stayed, it would be for 5 to 10 years to stay through IPO.

 

We chose to stay and that made us start to focus on the "long ball." 

 

Steve bought a competitor that was smaller and ended up buying it. Bought 100% of FlexCar and now has 23% of ZipCar (largest shareholder).

 

Q: The importance of team: How do you grow a team...best practices as the team grows and roles change?

Go from man to man to zone.  In startups it's man to man. You make quick decisions by yourself.  Operational problems start to evolve if you don't have the team in place. Get ahead of the challenge of what you need. You can't overhire for any position. 

 

If there's one place you don't cut corners, it's on key hires. 

Q: Laura has a notebook to keep track of people she'd like to work with. Do you do anything like that?

The more you know someone before they come, the better it works out.

We fit you against our 5 core values. We score you against those and are slowly getting better at hiring for that.

 

Anyone who is going to have an important job. "I think this company has all kinds of shiny objects...there's all sorts of reasons you could like this company. What's the one thing that's going to bring you back on the worst day?" You can't make that up...watch their body language; you can't BS a questions like that.

 

Q: Laura's game...great article by the No Assholes Rule on HBR...12 beliefs of good bosses...4 today to comment on:

Management: I have a flawed belief of knowing what it's liek to work for me:

- Seek to have a better 360 view of himself

Assertiveness: Hardest thing is balancing being too assertive or not enough:

- I don't think it's the biggest...it's a talent that's hard to develop. Be assertive with your convictions

Mistakes: One of the best tests is what happens after a mistake

- I agree. Don't dwell on mistakes, but look at what happened.

Innovation Process: Innovation is crucial...help my team to bring up ideas and kill the bad and save the good.

- I don't necessarily agree. It's important to funnel to the bottom fast on good ideas.  Stopping worst ideas is always a challenge. You don't want to say no to everything.

- We convene a team once a month to discuss ideas for innovation. I play funnel arbiter on a few things, but if you have a good set of core values and define the experience for your consumers can act as "guard rails".

 

Audience Question: What will drive growth in the future?

- Continue to deliver a great experience. 40% of new customers come from word of mouth referrals.  

 

Audience Question: RelayRides lets people loan their cars...what do you think?

- We're not worried. It's nice they have no assets, but they have less control on the experience. It's a great idea, but there are unique operational challenges that we don't have.

- It may work well in less dense and suburban populations.

Q: Laura...another company looking to IPO soon: GM.  Comments?

- I think it says a lot about the GM product line. Just having access to the pipelines. There's an extraordinary number of interesting things coming from other auto companies in the coming years. There's too much competition to survive a turnaround and be a big company.

- The Chevy Volt is not going to save the company. Their problem is 3-5 years, not the Volt in 10 years.

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Session 3: 

1) Stephen Kaufer - CEO, TripAdvisor

Q2) Antonio Rodriguez, GP, Matrix Partners (Formerly CEO of Tabblo)

Q2: How much time do I spend thinking about my business model now as I get started?

1) I'm an absolutely huge believer in understanding the path/thesis to make it profitable to get there. Make sure you're on the right path. If not, move quickly to be in line.

 

We thought we'd be the back end, "Powered by TripAdvisor" on other sites like Yahoo Travel.  We tried hard to do that and met with everyone and not a single person wanted to buy the service. So to survive, we went to consumer.

 

Q2: How did you handle the VCs who want products that are for them (white dudes in blue suits)?

1) In early 2000, we'd already seen people crash with millions of users but no revenue model.

"Don't pick a path to success that relies on CPM clicks."

 

Q2: How did you pivot your business and not have people lose faith?

1) I was a very straightforward CEO to our board.  We just weren't getting traction. I asked them "help! Got any ideas?" They didn't have anything, but they did offer encouragement to try something else.

 

We started trying everything from banner ads to cpc ads.  We finally found a mix and finally hit our burn rate.  You have to figure out how to take traffic that was finding us via search and turn someone looking for a night at the Westin Hotel in Waltham to potential book a room at a travelocity.  Contextual links won.

 

"You didn't have a degree in steaks and strippers?" - Antonio Rodriqugez (ie- no sales experience).

 

Q2: How would you tell people to know when it's time to pivot? Gut feel? Advisors? Customers? Time?

1) We were getting absolutely no traction, so continuing on and running out of money didn't make sense. The more important question was "Where to pivot to?"

 

 We looked at it from an opportunity cost, how many things can we try in the next 3 months to see where we get traction.  5 didn't work...1 did.  They didn't go slowly...they tried them all at once and that's why they're still here today.

 

They kept iterating and experimenting.  Make it fast.

 

They've built call to actions that go to dead 404 pages to see if they'll click...only then if it's popular do they build it. We still do it today. 

 

I truly don't understand why people don't do it today. It helps us see where people get confused.

 

Q2: Product development: where are you today and how has it changed as your business has grown and what advice do you have for people getting started today?

1)  Make sure what you're trying is in the direction you need to go to hit your goals/big company vision.

Don't do something "just coz it's cool."

Stay heavily on the "internet is a giant lab full of rats for testing." 

 

Q2: Google was critical for you.  Is Facebook and Twitter today's google search essentialness?

1) We announced TripFriends now. Get advice from your friends. Pick up your travels and share them.

 

We have 16 Million users of their Trip map to show where they've been.  Now we can use the "wisdom of crowds".  Now they're looking to get tips and info from your friends through facebook.

 

We still get much of our traffic from Google. Facebook drives you to them for a very different reason; you don't search Facebook.

 

"I have many followers on Twitter and I don't say anything."  Stephen doesn't understand the value of Twitter. 

 

Q2: Kids about to head to college at home...if you had to put your kids college tuition into the company...what would you say?

Microsoft: no

Apple: yes

NYT: no

Google: yes

TripAdvisor: yes

Yahoo: yes, probably

Facebook: yes

Twitter: no

 

Audience Question: How do you feel about the flash deals?

We got a lot of our traffic from search. The private sale is great, but he doesn't seem overly enthused.

 

Audience Question: The member base is a key value.  How do you improve the product for the customers you have vs. the customers you want?

We bring in folks to try things...like a travel task and watch where they get stuck.  They get stuck way too often.  People are used to doing tasks in a certain way. We run 5 or 6 A/B tests every week in every market.

 

Audience Question: How did you end up on the TV show on The Office?

They called us and said "hey you're going to be featured on a future episode" and showed the script. We had a party the day it aired, but that was it.

 

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Session 2:

1) Tom Leighton - Co-founder  and Chief Scientific Officer of Akamai Technologies

2) Trynka Shineman - Cheif Marketing Officer of VistaPrint

with questions from...

Q3) Eric Paley of Founder Collective

Q4) Scott Kirsner of the Boston Globe

 (format: Numbers line up with who said it, so 1) = Tom Leighton)

Q3: How did you get started?

1) I was proving theorems at MIT... Tim Bierners-Lee who invented the internet came to him with the problem of delivering content on the internet.  This was a perfect problem for Tom's team to solve. Started working on the problems and eventually ended up entering the MIT 50K contest.  A student of Tom's came with the idea and Tom agreed to be the "gray hair"/advisor on the team.

 

Knew it was getting big when...

- A man flew from San Fran who wanted to join the team.   (Turns out he was clueless)

- A student from Harvard came asking to join.

- They made the final 6 for the 50k, but did not play; they recognized they were clueless.

- VCs were still interested but thought it was another chance to build a company and sell it in 6 months.  (They said no to this.)

 

But....they were still interested in making the business plan work.

- Got some students to work on it all summer. Finally started coding too (was just mathematics at the time).

- At the end of the summer, they had 2 prototypes.

- August 1998 they launched....with 30 people.  

   *** Divided the equity in many levels (Danny and Tom were primary owners).  Students could work for 1 year, but then they wanted them to go back to finish their degrees. Only 1 or 2 didn't join, and they all went back to get their degrees.

 

Problem: Company IPO'd and they were all rich 19 year olds...then broke when the bubble burst; some were really broke due to tax laws of previous value (tax at value of $350 a share, but now the stock is worth $0.50).

 

Q3) How did you know this started to work...that this could really be big? 

 1) During March Madness in 1998.  We had one object built in Disney's site (one hit every few minutes). Turns out, it was harder to get them to actually use it even when big companies said they were interested.  

 

They suddenly came and asked if they could handle 2,000 hits per second at ESPN for March Madness.  Soon after they went up, they were doing 3,000 hits/second.  They suddenly found that Akamai made them 5 times faster than they'd ever been. 

 

Soon thereafter...a brand new Star Wars trailer was coming out.  Big Deal.  They were helping entertainment tonight keep the site up during the trailer when all other sources were down. Led to a big report on Akamai keeping the site up.

 

On April 1, Steve Jobs calls looking to buy the company, but they thought it was a prank. After hanging up...they called back and while they didn't sell, they did become a key strategic partner and investor.

 

Q4) Talk about free...and how that's worked for VistaPrint...and as a customer acquisition strategy?

2) How does VistaPrint go to market?

Being a small business is hard with printing; the higher the quantity the lower the cost.

Goal: Make low quantity have low cost.

Need: Must drive high volume to cover it.

The Hook: Free business cards (but you pay for order and shipping processes) 

They upsell people on the Free cards:

- Remove the "Get free cards at VistaPrint from the back"

* Over 5 Billion people are seeing that "Free cards at VistaPrint" message through their free cards.

- Access to more designs

Customer Insight:  Know a lot about their buyers

- Where are they searching from?

- Did advertising pull them in?

- When did the company start? (likely free cards are your first)

- Watch people slowly move up the selling process buying things. They show people other things they might want to try (FREE is a very low barrier to trying stuff out).

 

Satisfaction: "67% of our revenue comes from returning customers"

- Need to keep people happy and drive them up the sales chain.

 

Q4) Don't you have that "Cheapskate" free business card category?

2) "No, we don't call any of our customers CheapSkates." - Trynka Shineman

The more customers we have, the more they increase our volumes which helps drive our costs down for higher value customers.

 

Q4) Did you start outsourcing your business or did you have a facility to start?

2) We started with outsourced printing to prove the model and get the volume in.  After we started getting the volume, we reinvested in technology to build the company. 

They launched right at the bubble, so they had to self fund a lot of their growth.

 

Audience Q: A lot of people think PHDs can't start a business, because they look for simplest solution rather than the best.

1) Talk to your customers! See what they say about your solution.  Listen to if you're doing the right thing for them.

 

Audience Q: What will be the drivers to get you over the Billion dollar mark?

2) We have 8 Million customers today. Our awareness is only 25% in our market, so we need to reach more.

Need to get better at remarketing new solutions.

Companies spend $500/yr on marketing, so VistaPrint needs to capture more of that.

We're pretty big in the US and Europe so we're also looking at geographic, world wide expansion.

 

Q3: What are your barriers to entry at VistaPrint since you don't have the high tech of Akamai?

2) We're not standing still. We have 20 patents on some of our back end solutions.  Our knowledge on customers and organization are a big advantage.

 

Audience Q:  How do you segment your customers and all the data you have?

2) We segment customers and treat them different by cross selling, what emails they get, etc.  Technology is an important foundation; we need to know when they buy, what they buy, how they respond, etc.

 

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Session 1:

 

Gail Goodman, CEO Constant Contact

 

Notes courtesy Dan Croak (@Croaky)

  • 4% free-to-paid-plans conversion not a profitable business for them. Laid out the math in a spreadsheet that said 20% would work. They're above that now.
  •  
  • Made phone calls welcoming free trials on recommendation of her CEO breakfast group. After three months, it looked like they weren't working, but after six months they knew they did. Didn't pivot too soon. Requirement to have control group when experimenting like this.
  •  
  • Small businesses hate to be sold to. They want to be coached how to improve their business using your product. In Constant Contact, it meant coaching how to do email marketing.
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  • Small businesses are immensely referring when they love your product.
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  • Set their prices by looking at what else customers were buying. Didn't want to charge them more than they paid for website hosting.
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  • Sales & marketing gets better with scale.
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