Join team to solve the VA's tech problems

Stephen Levy recently wrote about a team of YC alumni, Google and others to help fix HealthCare.gov. They've made a huge impact. 

Dan Portillo, from Greylock, is now helping put together a tech team to help the Veteran Administration (VA). My brother is a veteran and he ran into a lot of issues at the VA. It was so frustrating, he ended up buying private insurance instead. If anyone is buying private health insurance instead of using the VA, which would be free for veterans, something is fundamentally wrong with the system. 

Picture of my brother in Afghanistan a few years ago. 

Here’s the details that Dan recently sent out. 
Over the last couple of weeks I've been talking to Todd Park and Jennifer Pahlka, White House CTO, and Deputy CTO respectively, about putting together a team to help address the technical issues around the Veteran's Administration, I'm sure you've read the news about how people have been dying waiting for treatment. Program would look a lot like the healthcare.gov rescue. I was trying to see if I could take 3-4 months off from Greylock to work on it, but it's just not possible right now. There are a couple things I would ask the group to try and help.

1. They need a talent leader who can help bring 20 or so folks, mix of professional services, design, engineering, data scientists and SREs. They'd also be working with companies like Facebook & Google who are looking at donating developer time to. Person should be pretty senior and be able to identify the right ICs and leaders.

2. Helping the come up with the 20 people who will actually be doing the work. Positions are paid, but they're in the 100-150 range, so the right person will probably already have made some money and want to work on something meaningful.

Happy to talk to anyone who's interested in learning more. Dan 

Let me know if I can put you in touch. This is a problem worth solving.

Spooking potential hires

“I refuse to join a club that would have me for a member” - Groucho Marx


We were interviewing for a role and had already talked to 30+ candidates. If we talk to 30 people, you can imagine how many resumes we looked through and phone screens we did to get there. 

We finally found someone who was a great fit. 

Instead of going through the entire process, like we normally do, we skipped one of the final interviews and moved to make an offer. Ironically, we just ended up spooking this great candidate. 

The candidate didn't see our huge filtering process and level of due diligence. They didn’t see how much effort we put into every single hire. They didn’t see how many people we talked to that we didn’t bring on board. 

All they saw was a company that seemed to make quick decisions, without enough reflection. If we had continued our normal interview process, they would have seen our high level of diligence. 

Great candidates want to join great teams. They don’t want to join companies without a strong filter, since they’ll end up with subpar coworkers and a subpar company.

This candidate didn’t end up working out. But, we fixed our process. No matter how good a candidate, we stick to the process, so they can see how much effort we put into making sure every hire is a great fit.

Hire every position at least one month early

HelloSign had a big spike in support needs awhile back. The growth was great, but at the time, we didn’t have enough support people to meet that growth. Since we’re committed to closing out every ticket each day, the support team worked long hours to meet demand.  [1]

People often advise only hiring when you absolutely need to hire. There’s some wisdom here - it helps prevent a bloated team and keeps process efficient. But, I think this this is fundamentally incorrect. We’ve created a new framework for hiring:

Plan to hire every position 1 month earlier than needed

Here’s why I like this approach better:
1. The team will be more effective
When people are at capacity, they can’t think of efficiencies and improvements. They can only solve issues on a case by case basis, instead of having the space and time to think holistically. Holistic thinking, not working until exhaustion, is what produces efficiency.

2. People stay at the company longer
Many of the resumes we see have people staying at companies a transient 1-2 years. Many of them were overwhelmed at their previous positions (see Your company should never be frantic). Finding the right people to join your company is a huge effort. Having a consistent group of people solving an important problem over a long period of time is what produces great companies, not a revolving door of burnt out people.

3. Team morale will be better
If a startup is doing well, it will hit capacity often. Startups are built for growth (see Startups = Growth). Growth creates issues, which is why people join startups - it’s fun and challenging. That doesn’t mean you accept all growth issues. It means it’s important to solve as many growth issues in advance that are under your control. That way, the team can more easily handle capacity moments when they come.

4. Customers will be happier
Imagine: you build a product, spend money on growth and when new customers email you -  their first interaction with a person at your company is a negative one. The team doesn’t have time to properly think through a customer question or replies several days later. Phenomenal, expedient support is a startup’s major advantage - an advantage that should never be ceded to competitors. We have an incredible team, but even the most dedicated people can only do so much over long periods of time.

Lastly, it takes a lot longer to find great candidates than you imagine. Even if you want to wait until the very last possible moment to hire someone, it’ll take at least 1 month from the beginning of your search to their start date. Then, it’s important to account for the ramp up period as well.

There’s an image of startups being in a constant state of hitting capacity; since that’s what startups are supposed to be like, it’s not worth problem solving in advance. I think that’s wrong. It’s because startups will often grow fast that you absolutely need to remove as many of the full capacity moments before they happen that are under your control. We still have a lot to learn, but, as one solution, we’re going to start hiring people one month early.



[1] The support team kicks ass, btw. We’ve since made additional hires and we’re still hiring. If you’re interested in joining, feel free to apply:

Collect your naysayers

I remember showing HelloSign to a family member. He barely took a look before getting distracted and walking away. Of all people, you’d imagine that family would be the easiest sell. Yet, working on a company comes with a lot of rejection, whether it’s apathy, passing on an investment, or a user not signing up (The rejection book). I see a lot of founders resent these people. 

I’ve grown to think of rejection differently: I collect my naysayers.  For some reason, I love these people. The bigger the group, the more I’m energized to prove them wrong.

I treat them well, stay in touch and often become friends (Treat investors well when fundraising). Over the years, some of them have even become investors or signed up as HelloSign users. My favorite naysayers are the ones that articulate why they don't believe. They take the time to call or write an email with their feedback. I often learn the most from these people. Then, if we raise, they’re often the first we talk to. 

The risk of the charismatic founder

I remember hearing about a company with an extremely charismatic CEO. The company wasn't doing well, but he was a compelling individual. He'd give a talk and the team couldn't help but believe in the vision. Investors believed too. Everyone got a jolt of energy. 

But, as soon as everyone got back in the trenches, people realized that none of the things the CEO said mattered. The company wasn't doing well. The tactics weren't working. And, the energy from his talk would fade quickly, like a crashing sugar high, because the content wasn't based in reality.  Everyone became demoralized.

I'm sure we've all heard, or experienced, that kind of story. 

The Spartans had a word for this kind of mental state, where a speaker or a moment can inspire a departure from reality. It creates “katelpsis,"  possession [1]. It may sound like a motivating force and for a moment, even a crashing company can feel great. 

The Spartans saw katelsis as a "derangement of senses," which is a dangerous mental state. It's was something to be avoided, since possessed, knee jerk decisions without reflections could be dangerous, especially in a battlefield. Calm minds and solid fundamentals would prevail, not a thoughtless frenzy.  (Your company should never be frantic)  


It’s not the charisma that’s unhelpful, it’s the motivation without enduring substance. It asks an audience for trust, since the substance isn’t there to back it up. That approach only works a few times, until that trust is lost and people become demoralized.  

I imagine two companies with the same progress. Maybe both have been struggling, building a product without traction. Yet, one team is driven by possession, the other is driven by a honesty, energy and a plan. The first one will energize momentarily and crash - the second team will problem solve and make progress. When I hear people pitch, I always think about what category they fall under.

[1] Great book, called Gates of Fire, about the battle of Thermopylae. It’s hard to evaluate the historical accuracy of these things, but I think the sentiment is something we can learn from. 

Don’t be the startup that accidentally runs out of money

A few years ago, I met a founder with only two months of runway left. In two months, his company would shut down because he didn’t have any cash to support it. He wanted to discuss whether he should start fundraising for his second round. That’s some scary shit. We should have had that talk when he had 6 months of runway left.

Here are the two scenarios you should never run into:
  • You don’t know how much runway you have left (i.e., you could run out of money in 1 month, 3 months or 9 months. Your startup death day is unclear)
  • You know your runway, have less than 6 months of cash and you’re not executing a plan to fix the situation.  

When you have less than 6 months of cash in the bank, what do you do? The options are pretty simple:

  1. Get profitable (increase revenue, decrease burn or do both)
  2. Raise more money
  3. Get acquired
  4. Get blindsided when you run out of money because you didn’t have enough time to execute on 1, 2, or 3.

I’d recommend hustling like crazy to do 1, 2, or 3. If you run out of money, at least you’ll have done everything under your control.

Running out of money should never happen because you didn’t leave yourself enough time to execute. When that happens to companies, it’s unnecessary and tragic. Who knows what would have happened if you had given yourself enough time?

The sense of startup self-preservation is an amazing thing. When runway is low, founders often execute better and focus more. But, the only way to trigger that self-preservation is to know well in advance that the end is coming and to put a plan in motion. That’s why it’s always important to track your runway and think of 6 months as a red line.

Don't let yourself be blindsided. And, if you have less than 6 months of runway, no plan and want to meet - please don’t mention it until I’m at least one beer in.

Validating potential investors

I remember meeting up with a new founder who was stressed about the fundraising process. Fundraising can certainly feel stressful, but I realized that most of the issues could have been solved by asking the right questions. When you’re less confused about the process, it makes the process more predictable.

Here are some questions I found helpful to ask when meeting investors:

1. What kind of companies do you invest in? 

If the investor focuses on biotech, it's unlikely she'll invest in your SaaS company. If you get a pass, you'll now know that it had nothing to do with you. 

2. Who else have you invested in? 

If she hasn't invested before, she may not be well suited to the ups and downs of startups.  The stress may make them want to become extremely involved; instead of being helpful, the investor may be harmful. There are few things I avoid more than having the wrong people permanently involved in the company.

3. How much do you normally invest? Is there a range? 

It helps you mentally map out your round. If everyone invests $10,000, it’ll take a long time to fill your $1m round. This also helps you determine if you are talking to enough investors.

If there is a range, you can always the take smaller amount if there is not enough room left in your round. 

4. How does your decision process work? 

If you understand the process, it’s less likely to feel like a jarring experience, since the investor will be doing what she said she would do. Even if she deviates, you will still know the general path. 

Angel investors often decide on the spot or will want to sleep on it. For VCs, it depends on the firm. Seed investments can be fast and often close in one meeting. Larger rounds are slower and often involve multiple partners. 

5. How much time do you spend with your portfolio companies?

It's helpful to know their expected involvement in advance, to see if an investor will be in the crowd, the ringside, or your corner.

You want to be careful of people who could distract you without adding value. 

6. How many boards are you on? (for VCs) 

This is important to know, because if the investor is currently sitting on a lot of boards, she may not be able to invest a lot of time in your company or may be unlikely to make an investment at all. It’s not necessarily a deal breaker, but just good to know.

7. Now that you know more about what we're doing, are there any other investors I should be talking to?

The investor might provide an intro or might not. Regardless, some great investors keep a low profile. Just knowing a name helps, since you can ask for an intro from someone else. 

These questions reframe the conversation from trying to get someone to part with their money (hard and potentially bad for your company) to finding out whether there is a fit (less hard, more helpful and more long term). Plus, by getting to know each other, this sets you up for a longer term relationship. So, it always perplexes me when I hear founders not ask questions. 

Let me know if I'm missing any. 

Investors and advisors: the crowd, the ringside, and your corner

I hear about investors or advisers as either 'helpful' or 'unhelpful'. I think that misses the nuance of the kind of people you need involved.

To get the support you need, it’s important to be deliberate about how you pull together this key group of people; the right individuals can have a significant impact on your outcome of your company.

Here are the categories, as I see them:

1. There's the crowd. These people will invest in your round. Some of them are incredibly accomplished people and it's an honor to have them involved. But, aside from the investor updates, you'll rarely stay in touch. That's completely normal; they might have even said they would be busy before they made the investment. Every financing round has investors that won't be very involved.

2. There's the ringside. These people have been in the game before. They have expertise - whether in user acquisition, product, sales or something else. They are helpful and you can reach out to them on a case by case basis. But, you don't want to ask too much or too often. They are busy people and not completely up to date on the nuance of what you're doing.

3. There are those in your corner. You can call them up a dozen times during your financing rounds. They reply to a Saturday night email in five minutes to talk about a time sensitive deal. They are up to date on where you are as a company; there is no background ramp up when you talk to them. That means they'll know what you've tried, what worked and what hasn't - so they can give up to date advice.

If it's not immediately obvious who's in your corner, it means you don't have someone there. Not every investor or adviser can be in your corner. That’s not even something you’d necessarily want; not everyone would fit.

A few years ago, I remember a late night, debating an investment offer. If we took it, it would close the round, but we had another offer coming in soon. Do we risk losing the first offer and wait for the second offer? I emailed our adviser and got an immediate reply. We talked it over and decided on an approach. We ended up raising twice as much money. That money allowed us to build HelloSign. He was in our corner. 

--

Thanks to Arram Sabeti and Abby Walla for reading versions of this.

Your company should never be frantic

A few years ago, I remember talking to someone on the team and saying that we had to grow faster; the status quo wasn’t working. He mentioned that to another person on the team. When I ran into that second person on the bus, he was really stressed. I inadvertently created stress about a problem, but didn't communicate a solution. Everyone could feel it, even though I only talked to one person. In retrospect, I was setting us up for frantic effort; we were about to approach the problem in an unstructured, un-prioritized way. That’s no way to solve a problem.

I've seen companies with determined effort and companies with frantic effort. There’s a huge difference.

Frantic effort is when you have so much to do, you are not sure why you're doing it or why it’s better than other things you could potentially do. You haven't taken the time to prioritize. Instead of focusing, you jump from one thing to the next, like you're chasing a trail of shiny objects. It's a nervous energy that starts at the top of the company and works it's way down. People are confused about the right path, so their solution is to just work more and harder toward goals and for reasons that are hard to articulate. The team works hard without understanding, reflection or vision. It's scary to be part of a frantic company. It's also exhausting and demoralizing.

Determined effort is when you know what you're doing and why you're doing it. You know exactly what you are building and its trade-offs. Even the things that you're not sure of are calculated bets. Everything you do produces more data towards the vision of the company. If you notice something isn’t working and need to change paths, it’s a conscious change. Determined effort doesn’t mean you’re locked in - it just means you make decisions with purpose and not out of anxiety.

Ironically, determined effort and frantic effort can take the exact same amount of time and effort, but not produce the same results. Determined effort lasts longer, is more focused, is less prone to burnout.

How do I know when someone has been at a frantic company? You can see it in their eyes when you interview them. They have the glossy, unfocused look that we all associate with burn out. There's also a kind of discontent about how their effort has been used. That company used up all their willpower going in many directions that no one fully understood.

As HelloSign is growing faster, we're hitting natural stress points. We don't always have enough people for what we're doing. Even when we decide to hire for a new role, it’s realistically a month or more before that person starts. Plus, every new person is another person to coordinate. Yet, whenever we feel any frantic energy building, it’s an indication we have to communicate more, prioritize more and have a clearer vision. That’s how we get determined effort.

Meeting with busy people

Soon after moving to San Francisco, I got a meeting with a great investor. I was new to the tech world and he was nice enough to make time to meet. He asked me a few times:

“How could I help?”
I started noticing a theme. A lot of other people that I met would ask that question as well.  Considering how high profile some of these people are, the generosity of time was really surprising. But, when I think about it more, while it’s true that they were willing to help, they were also asking: 
"Why did you ask me to meet?"
The why is important. These are extremely busy people. Many run their own companies or are investors, busy with their funds. They’re happy to meet, but want to meet for a specific reason. They don't have time to just hang out with everyone that reaches out. Here are some things to think about when you're getting a meeting:
1. Think about why you want to meet before getting an introduction.

2. Explain why you want to meet in the introduction. 

3. Create a list of questions you’d like to ask before the meeting. 

4. When you start the meeting, reaffirm why you asked to meet. 

5. Stay focused. There's an infinite number of things you could talk about; if you try to discuss it all, you'll both come away confused.

6. Know that building a good relationship is more important than any question you might ask. 

7. When you hit the allotted time, which is usually a half hour or an hour, say you want to be sensitive of their time and bring the meeting to a close. 
There's a great upside to using their time well: they’ll be willing to meet with you again.