This week began in the best way possible with a tour of some amazing startups all clustered around Kendall Square (my backyard!).
First stop was at CustomMade.where we met with their CEO Mike Salguero. Mike is a Real Estate Professional turned artisan curator. They had a great story of finding a under-used website that enabled makers (people that create furniture/jewelry etc.) to post their work and attract business. After some furious fundraising they bought the company, built up the user base, and moved into a transaction mode (where they take a commission on the maker’s transaction). This transformed the business from an small online bulletin board into the leading marketplace for custom goods worldwide. Some key takeaways from this conversation:
- Transactions > Fees. While certainly not universally true, the transition from charging a monthly subscription to taking a commission was an infection point. This makes sense to me since with the former – the makers take on all the risk. In the latter model the risk is aligned to the makers’ success. If they don’t gain any value from the site it’s free. And, if they do make some sales I’m sure they are happy to give a small piece to CustomMade.
- Customer is all about the inflection point. You do thousands of little updates every single day, and one of them will hit. For Linkedin this was the big button to connect address books. For Hotmail this was the ‘sent from Hotmail’ tag. It will be trivial and you won’t know before hand what it is, so just keep the ‘innovation flywheel’ spinning!
- TopGrading – test people in situation to find the best employees. Need to find someone versatile? Move their interview room 2-3 times and see how they react. Mike loved getting this insight early on.
- Culture first – Mike liked people with passion and without ego. He was a proponent of protecting this no matter what.
- Motivate your team with customer stories – Mike loved telling stories of how much makes loved CustomMade and customer loved the products they received. Especially hiring folks passionate about the mission this was the core motivator.
- SF>Boston. Sorry Beantown, but the talent/funding pool in SF is just so much bigger its hard to compare.
- Be super aggressive about asking for help. Certainly something I took to heart. There are a ton of amazing folks with experience in Boston who can and want to help. Go find them and get helped!