Those following the Kohort story know that I stepped out of day-to-day operations of the company last October. I have stayed on the board and the company has continued to operate, quietly under-going a reboot with the aim of releasing a new product later this year.
As a bit of context, we made a big bet. We raised a lot of money before we had much of a team or even a site, to go after a huge market – with a bigger than average product. It was audacious to say the least.
Unfortunately, while the future story has yet to be written, when I stepped out – by nearly every measure – the company had been a failure. We simply didn’t make the progress that we needed to; we were resource inefficient.
What transpired over the two years while I was at the company was difficult to understand while in the heart of the battle. The fog of war can sometimes shroud the North Star and disorient the soldiers on the battlefield. Having since stepped out of the fray and moved the sidelines, I’ve had the opportunity to reflect on the mistakes that encumbered our progress. I wanted to share those insights here with the hope that others will avoid repeating history.
To be clear, the Kohort story (to-date) isn’t one of malicious behavior; there were no bad actors. Instead we suffered from a litany of well-intentioned operational mistakes that compounded one atop of the next collectively preventing us from maintaining the velocity required to be successful.
7 Lessons Learned
- Don’t build an oil tanker: (I blogged about this before here.) We over built our backend, making it hard to iterate and adapt to the market need. The biggest learning for me, a non-engineer, is that code complexity comes from both the number of features and the level of scalability. At Kohort, we were too ambitious in both dimensions.
- Hire after the pain: I hired some really awesome people at Kohort. The problem was I hired them right before I thought I would need them. When the launch date kept getting pushed back my killer business team was sitting idle, draining resources and getting bored. A better approach would have been to hire them after we had launched and desperately needed them. Better to lose some customers than to have your whole offensive team sitting on the bench.
- Get a better lens: Hiring the good people in your field is very difficult. What’s even more difficult is hiring people from other disciplines. If you’re a non-engineer hiring an engineering team, get help and take your time. Whether friends or advisors, I recommend leveraging domain experts as advisors for hiring.
- Fire fast: There were a number of times that I found myself debating whether to keep someone on the team. So, what I did was I observed them, got feedback and mulled the pros & cons of their involvement for months. That was the wrong move. When you start debating, it’s already time to let someone go. When there’s doubt, there’s no doubt.
- Everyone can give bad advice: One of the best-known investors in the US (who didn’t end up investing) gave me the advice that in addition to CEO, I should take the role as Kohort’s product person. In hindsight this was well-intentioned, but horrific advice. The company centered around it’s product experience and needed an experienced hand at UX and design leading that side of the business. In other situations, I’m sure that investor would have shared invaluable perspective. The moral of the story is you have to take *everyone’s* advice with a grain of salt. Nobody knows it all. Make sure you get your advice on any given topic from the person who really understands that particular aspect of the business.
- Partner with veterans (if you can): There are dozens of things that can kill your business. It’s a good idea to minimize the death traps in any way you can. One of the ways to do that is to hire people who have traveled these roads before. They’ll know how to avoid a few issues along the way. If you can, surround yourself with people who have done it before.
- Don’t take too many *lead* investors: When I did my seed round for Kohort I was massively oversubscribed for a big round. I had $7 million dollars chasing a $3 million round. My strategy at the time was to cram, not cut. I invited everyone to participate in the round, but for smaller amounts. We ended up with 20 investors, which at the time I was excited about. I believed that these investors would be able to help out in many different ways – after all it does take a village.In order to make this large syndicate operationally viable, I tried to be clear up front that most of the investors would have to be relatively passive and we wouldn’t be actively updating all of them with great frequency. This seemed pretty important as I wanted to ensure that investor relations wouldn’t distract me from running the company.
That didn’t work.
Many of the investors wanted to be in the flow and have a similar communication experience to deals that they lead. That ended up creating a bad dynamic. And I didn’t have time to keep a half dozen investors up to speed in a way that was satisfactory for them.
In the end it was my fault. I had unknowingly set up a bad dynamic.
You can have as many investors as you need in a deal, but the right path is to only get 1-3 investors that think of themselves as leaders.
I hope these insights help other founders traverse the startup path.
Kohort was a challenging period of my career, but because of that it was also a phenomenal experience. Much of my current success and perspective today stems from those sleepless nights. If I could do it over again, I would have done it differently – I would have avoided many of the mistakes that I made. But that said, I don’t regret the time, the effort, the learnings and friendships that came from my Kohort journey.