People have a deep, intrinsic need to feel heard.  I’ve found the best way to charm anyone is to ask for advice.  This is especially effective with old men, who generally control the most resources.  Hence the old adage “Ask for money, get advice.  Ask for advice, get money.”

Paul Buchheit describes the fundamental problem with advice well, “Limited Life Experience + Overgeneralization = ADVICE”. 

As a first time founder, I was inundated with unsolicited advice.  Now I’m inundated with people pretending to ask for advice when they really want my money or introductions to people with more money.

My angel investor/mentor Travis gave me the most memorable advice I ever got: ask for stories, not advice.  Stories are much more fun to listen to and more fun to tell.  The listener can draw their own conclusions.

Why do we overpay for speaker cables, cheese, watches and virtually every luxury good?  It used to be a hobby of mine to see if people can tell the difference in blind comparisons between cheap A/V equipment versus expensive A/V equipment or cheap beer versus expensive beer and I will tell you from doing this many times that every single one of us massively overestimates our ability to tell the difference between cheap stuff and expensive stuff.  I’ve made a ton of money betting against people whether or not they can tell the difference between things like aerated and non-aerated wine.  It always goes the same way: when you tell people which is which they’re sure that they can tell the difference, and then the second you take away the labels they have no idea.

In college I saw an art history major who should have known better earnestly asked if a slide was a gesture drawing done by the previous beginner drawing class.  She was mortified to hear that it was actually one of Rodins famous sketches.  As a pretentious undergrad and a big Rodin fan I laughed at her but honestly I can see how anyone could make that mistake.

If you think that there’s something intrinsically and objectively better about fancy wine or fine art, you’re empirically wrong, but I wont try to persuade you of that anymore.  Experiments show over and over that people can’t tell the difference between cheap and expensive wine, but this study that showed that people enjoy wines  far more when told that they are expensive made me decide to shut up and try to enjoy luxury goods.

Why do we enjoy scarcer stuff more?  I’m convinced that it’s because it pushes us to be present, which is really the best feeling in the world.  We eat the local, organic vegetables slower and actually look at the fancy furniture we bought.  These days, I’ve stopped engaging my contrarian instinct to prove people wrong and started enjoying what I’m paying for: the pleasure of actually experiencing what I’m paying for.

Over and over I heard how much our customers loved it – and not just the startups of the world.  Multiple VPs from major financial services companies have said it was the cutting edge feel of our blog that ultimately convinced them to work with CrowdFlower.  That crazy blog, by itself, drove millions of dollars in revenue and was crucial in landing our first customers.

 Making everyone sort of like you is death for a startup.  You need to make a small number of people fall in love with you – those people are your first customers.  The best way to be compelling is to be authentic.  But the world is going to aggressively push you towards inauthenticity. Your parents will complain that your copy is unprofessional, famous angel investors will tell you that your logo sucks, well-meaning customers will call you up and suggest changes to your messaging.   This feedback is valuable, but you should ignore most of it.  Ask yourself: do I think my logo sucks?  If so change it.  Otherwise, leave it alone.  Remember: strong negative reactions are usually a sign that you’re on to something.

Good, authentic marketing will only get harder from here on out.

Shout out to Demian Rosenblatt, who designed our logo and planted all of these ideas in my head, although I wonder if he will agree with what I wrote :).

Do public markets sufficiently price the quality of a company’s employees?

When I was in school, I watched most of my smartest computer science friends go to Google.  Then I watched them go to Facebook.  I watched my smartest mechanical engineering friends go to Tesla.  It’s easy to make predictions retroactively, but all of these companies did really well significantly after lots of smart people started joining them.

VCs put a huge amount of weight on team quality.  This makes sense for small companies, but could it also make sense for large ones?  I’ve watched Marissa Mayer hire a lot of my smart friends at Yahoo – I wonder how it will do.

Where do the smart CS grads go today?  Ycombinator?

My friend Philip Rosedale made a fascinating observation about boxing.  It takes around 200 milliseconds to respond physically to a stimulus.  A jab takes under 100 milliseconds from first movement to landing on your face.  Yet among professional boxers, landing over 40 percent of the punches thrown is considered an exceptionally good performance.  Boxers can predict that their opponent will throw a punch before their opponent has even decided to do it.

This is different than the also incredible vision and intuitive physics of baseball players and volleyball players who can extrapolate from a 16 millisecond video clip where a ball is headed.  This is literally deciding to slip a punch before your adversary has thrown a punch.

I’ve experienced this myself and it’s an incredible feeling – you can see it at 55 seconds in this video http://www.youtube.com/watch?v=PfYh6dPMXoI – I duck G’s hook a split second before he throws it.  I’m slow enough that slipping at the same time G. throws would probably result in me getting hit.  (If you want see better boxing, here’s a video of pros slipping each other slowed down http://www.youtube.com/watch?v=ui-7QZLuDD0.)

When I spar, I literally try to surprise myself when I throw a punch.  But my opponent still usually manages to block it or get out of the way.

We are so much more predictable than we think.

When I look back five years later, I can see that the most important breakthrough during CrowdFlower’s first year wasn’t finding a first customer, finding a lead investor, or having some kind of product breakthrough.  The most important thing was finding irrationally supportive mentors.

In my case, I found two, Travis Kalanick and Gary Kremen.  Gary Kremen was just starting Clean Power Finance in a grimy alley between SOMA and the Mission when he emailed me out of the blue asking to be a customer of our new service.  I had mentioned in my bio on our corporate website that I loved the TV show The Wire and Gary liked it too. We met in person and hit it off immediately.  His use case never really made sense for us so he never actually became a customer, but it didn’t matter.  He loved our business model and started meeting with me regularly.

Travis had recently sold his company to Akamai when he found CrowdFlower’s blog.  Desperate for customers, I put my cell phone number on our blog and he literally called out of the blue.  We met up along with my business partner later that day.  At the time I was single and living off a diet of ramen and burritos.  Travis would invite me over regularly to eat his girlfriend’s amazing cooking while he told me crazy stories about his experiences with VCs.

After I started CrowdFlower it took me months to get our first customer and over a year to raise an angel round.  I was totally unprepared for the amount of rejection I would face.  I was terrible at explaining my business.  I remember Aydin Senkut cutting me off right in the middle of my pitch to tell me he would save us all time by giving me a quick no (he later invested).

One of hardest things for me was becoming comfortable with the bigness of my idea.  Elements that were crucial to my business strategy, such as our crowdsourcing channel strategy where we post tasks on offerwalls and other sites, seemed too big and crazy so I would often omit them from my pitch altogether.

Another major challenge was the amount of criticism I faced daily.  I walked away from most meetings feeling terrible.  Every smart person I met with poked holes in my idea, because my idea had a lot of holes in it.  And I felt the criticism a lot more strongly than I felt the praise.  I was surprised when, after I raised my angel round, a number of investors who I had assumed hated my idea after meeting with them asked why I hadn’t offered to bring them into the deal.

I didn’t need Travis and Gary to teach me how to make a pitch deck and how to structure a Series A – even back then anyone could figure out the basics from Venture Hacks – but I desperately needed them to push me to tell my story with confidence and really believe that I had a billion dollar idea in my hands.  I think nearly every first time founder needs this push and when I ask successful founders they almost always had their own irrationally supportive mentor early on.

So how do you find an irrationally supportive mentor?  My old boss Barney Pell says that the most important thing is to tell the world loudly what you are trying to do and then people that can help come out of the woodwork.  I think it’s telling that Travis and Gary didn’t reach me from a startup networking event or a friend of a friend.  They came from my website, which violated every marketing principle in the world but spoke with an authentic voice.

Equally importantly, how can you tell if you’ve found an irrationally supportive mentor?  When I started CrowdFlower, I had a lot of smart, experienced friends who wanted to help me.  But I walked out of every meeting with them feeling drained.  They helpfully pointed out all the issues with my business – some of which are issues even today.  An irrationally supportive mentor is irrational, ideally even more irrational than you.  Travis and Gary definitely were.  After a year of failing to fundraise Travis pushed me to go into a meeting with a prominent investor and tell him the deal was closing fast and he needed to make his mind up within two days.  Gary pushed me to hire experienced people on zero salary for the opportunity to get into CrowdFlower on the ground floor.  When a crucial sale fell through, Travis got me drunk and told me stories of all the insane things that had happened at his last company.

How do you keep an irrationally supportive mentor?  One easy, overlooked strategy is simple appreciation.  I’ve helped a ton of friends, acquaintances and people who have cold-emailed me to find investors, customers and startups to invest in.  I feel a responsibility to pay forward all the help that I got in the early days of CrowdFlower and one of the awesome things about living in San Francisco is how many early stage startups there are.  But after all this time, I’m still struck by how nice it is when people write back to tell me they’ve closed a round or a deal and acknowledge my help.  So thanks, Gary and Travis.

I loved Daniel Kahneman’s book Thinking Fast and Slow.  For those who haven’t read it, he postulates that there are two types of thinking: Type 1 which is the instinctual thought process that we use to effortlessly drive a car or recognize a face and Type 2 which is the logical thought process that we hear in our brain.  He argues very persuasively that, because we hear Type 2 thinking in our heads, we identify more with it.  But though we view Type 2 thinking as who we are, in reality, more of our decisions are controlled by Type 1 thinking.  He goes on to study how Type 1 thinking seems to work and how good it is at doing things like associations or generating possible answers to a problem that can then be checked by type 2.

I’ve recently been noticing how much these two types of thinking map exactly to the two schools of AI.  In the seventies and eighties, AI researchers mostly came from a logic background.  They tried to build rule based systems to do things like reasoning, planning and translation.  There was even a project Cyc, which hypothesized that if we could just encode all the rules into a system it would eventually become more intelligent than a human.

In the late nineties and when I was in school, researchers started to realize that, in practice, ostensibly dumber statistical systems worked much better for many every-day applications.  The best automated translation systems don’t work by diagramming sentences and then using rules to change English grammar into French grammar. They look at millions of pairs of sentences and use statistics to see which English phrases commonly occur with French phrases.  Document classifiers don’t try to reason out whether or not some instance of the word “cabinet” means a president’s cabinet or a closet, instead they look over millions of documents to see which associated words tend to occur with which topics.  Sometimes the predictive words are surprising and clearly would not have been defined through rule based logic.

Just like Kahneman’s types of thinking, each of these two types of AI has things its good at and things its not good at. Type 1 style AI systems may be proving better at a lot of tasks, but sometimes it makes silly mistakes.  Amazon recommends prenatal vitamins to someone buying diapers because customers who purchase one also tend to purchase the other.  Facebook’s facial detection algorithm misses an easily identifiable face because its partly covered.

With all these parallels, maybe AI should work like our brains – with a type 1 system generating ideas and a type 2 system checking them when they seem suspicious.

When I started CrowdFlower, I really, really sucked at sales.  Most people said I shouldn’t even try – that I should find a VP of Sales right away.  Five years later I have an awesome VP of Sales that might be able to outsell me.  I’m not sure.  But I am damn sure that if I brought in a new CEO and picked up a quota as a sales rep, I could easily outsell any of the other VPs of Sales that we’ve had – guys with successful track-records.

How did I get good?  I read a lot of sales books and practiced a lot.  A lot of best practices and gimmicky closing techniques don’t work for me, and frankly I haven’t seem them work my sales guys either.  Here’s some specific advice for people like me with an engineering background selling a technical product.

Honesty

I aspire to be 100% honest with people when I sell to them.  When I’m late for a stupid reason (and I’m often late) I don’t make an excuse, I tell them that stupid reason.  When a customer is trying something new with some risk, I tell them exactly what their in for.  I generally don’t think customers can tell when they’re being lied to, but they definitely can tell when someone is being honest with them.  Instead of exaggerating the size of your business, tell the customer that you have two employees, that you desperately need them, and that they are the first company in their space to use you.  For those reasons, you’re about to give them a huge advantage over their competitors.

Urgency

Someone once told me that for every day that goes by, a deal is ten percent less likely to close.  I am totally disorganized, so I am obsessive about following up with a customer immediately after I meet with them.  I try to get the next meeting on the calendar as quickly as possible.  I keep relearning the importance of this.

Cadence

People walk out of a meeting remember your cadence much more than what you actually said.  I think it’s more important to look excited about your product than to make any particular point.  If you sell with more than one person, it’s most important that you look like you are in sync and like each other. It’s almost never worth it to contradict or interrupt someone that you’re selling with.

Persistence

It used to be really hard for me to email people more than once.  In fact, sometimes it was hard for me to email people the first time.  But it’s so important.  Keep following up if you don’t hear back right away.

Qualification

When I ask my best sales guys what makes them excellent, they always say that they are really good at qualifying customers out.  This runs counter to many founder’s instincts to be aggressive and persistent and pursue every possible lead.  But it’s so important.  I have no idea why but many potential customers will drag you on and on and waste endless amounts of your time when they are never going to buy.  Learn to identify these guys and hand them off to your competitors.

Negotiation

Like most nerds, conflict makes me uncomfortable.  I am not a natural negotiator.  I love my customers and I want them to get a great deal, sometimes such a great deal that it’s actually bad for my company.  So I make someone else the bad guy.  Sometimes it’s my board.  Sometimes it’s my cofounder.  As in, I want to give you a lower price but my cofounder would freak out – luckily in my case I can do this honestly, because my cofounder freaks out all the time.  Even when someone recognizes the tactic, it sets up a nice dynamic where you are working together to find a mutually beneficial solution rather than an adversarial negotiation.

As another nice non-confrontational negotiation hack, remind a potential customer that, when customers have negotiated too aggressively in the past, they ended up getting bad service.  Fortunately, it also turns out to be true.  The more a customer pays the more they get taken care of.