Recognizing Deven

Episode 27 - Leadership Team

Episode 27 – The leadership team

Every great company has a deep bench.  Every company needs a group of Lieutenants who are the real driving force behind the company.  In Q1, I formalized this group at Riya and named it the Leadership team.  This is something I’ve done in the past as well. I invite the members of the Leadership into my weekly executive staff meetings.

A Leadership team has three main benefits

a)    Transparency:  I has always surprised me that the conversations that were occurring at an executive level were not the same focus as the ones happening at the managerial level.  After years of running a startup, I realized that this was largely caused by differences in access to information.  At the executive level information on how we were doing to plan was always the focus.  At the managerial level this wasn’t the case.  By having the Leadership team as part of exec staff they got the same level of data and focus.

b)    Mentoring: These were the leaders of the company.  Each was someone who had shown an ability to drive projects and to drive a certain metric or initiative.  Frankly this skill is far more rare than you might think. I love super aggressive and driven people and try and groom them for promotion.  I take a specific interest in the aspirations and careers of these folks and try my hardest to make sure we are always setting them up for the next step. 

c)    Multiplicity of View Points: Having a leadership team gives me more opinions when we are trying to make a decision than just having my five direct reports in the room.  There are times that this has helped me to make the best decision.

So who are these rockstars at Riya?  They include people you’ve already heard about on my blog like:  Vincent – who I think will one day be an awesome VP of Engineering for any company that has strong research component; Baris and Jacquie who together are the quality czars for our Likeness search - Jacquie is just a bulldog for ensuring that we have the best user experience and Baris is insatiable for getting as many features into the core search engine as possible; Danny and Sam who together are building a secret weapon that I can’t tell you about (I know it is corny but it is true); Tanvir, Dan, & Eric our engineering leads without whom very little would get done;  Mehul our “data” guy who I have in a lot of meetings just to make sure we are always making decisions based upon as much information as possible;  and a few more folks who I will talk more about in later posts since I want to highlight them further. 

Once our team from India gets moved over I will also add some of them to the team.

The strength of Riya is not just its executive team.  The real pillars of this company are this Leadership team.  I recommend that every startup formalize a group like this.

26 - India grows up, 25 - Million mice, 24 - Land Invasion, 23 - Nuclear Power Plant,
22 - Fast iteration , 21 - Like.com prognosis , 20 -Launch Video and More , 19 -PR Coverage of Like , 18 - Like.com Launches , 17 -Pre launch , 16 , 15 , 14 , 13 , 12 , 11 , 10 , 9 , 8 , 7 , 6 , 5 , 4 , 3 , 2 , 1 .

Episode 26 - India grows up

Episode 26 – A turning point for Riya India and maybe India

Today, we made a very big decision at Riya.  It was difficult and painful but the right one.  Before I go into it, let me give some background.

In 2002, I came to India while I was CEO of Andale.  I came because like most companies, India provided us with a less expensive pool of talent than Silicon Valley did.  What I was surprised by, however, was the high quality of the talent.

When we setup Riya, Azhar and I knew India would be a big part of our strategy.  We knew that an early stage startup like Riya couldn’t really afford the extra overhead of communication issues of having a remote office unless the cost advantages outweighed the efficiency loss. 

The costs of having two offices, which are twelve time zones apart, is significant.  People in both offices frequently had conference calls at 10pm and midnight every night (as a result the office in the US didn’t get started until noon sometimes or people rolled in tired).  We were all traveling constantly.  Development and communication moved slower due to the distance and teams.  However, all of this was worth it so long as the ROI was there.

Over the next few years, we built up a great team in India by focusing on hiring only the best. I believe that this quality focus led us to build up one of the best teams in Bangalore.

Unlike Silicon Valley, however, the employees in India didn’t value stock options as much as folks do in Silicon valley.  It was understandable, however, given they had never seen a friend hit it big or seen the Google like wealth effects which occur every 5 years in the Valley.  Hence, they argued more for cash compensation.  This combined with the fact that we were going after the best in Bangalore (the most impacted city in India) increased our exposure to wage inflation. 

Bangalore wages have just been growing like crazy.  To give you an example, there is an employee of ours who took the first 5 years of his career to get from 1% to 10% of his equivalent US counterpart.  He then jumped from 10% to 20% of his US counterpart in the next 1 year.  During his time with us (less than 2 years) he jumped to 55% of the US wage.  In the next few months we would have had to move him to 75% just to “keep him at market.” 

Keep in mind that Riya are at the leading edge of this trend.  We tend to only hire folks from IIT or other top schools.  We tend to only hire the smartest folks from these schools.  We only hire in Bangalore (just too hard to have three offices).  We tend to only hire folks with a lot of experience.  These are all characteristics that are critical for technology startups, but not necessarily for a big company like IBM or a services company like Infosys who can afford to train new graduates.  I do believe that other startups in Bangalore will see the same issue in 12-24 months.

In general this wage inflation is really good for my employees and great for India.  I am so proud of the strides forward that India has made.  While others have chided Intl companies for opportunistically leveraging the cost difference, I am a true capitalist in my belief that all of the employers rushing to India in the last 3 years has increased wages and provided more opportunity than 20 years of a closed socialist leaning economy ever did.  India is a true global powerhouse now.  There is no doubt.

However, this huge run up in the wages has destroyed the ROI I referred to earlier.  So today we decided to consolidate all of our engineering and research efforts back to our HQ in California.  We are relocating many of our key folks back to the US, but there are some that we are not bringing back.  Our goal was to keep the payroll costs the same before and after the move. Because wages are still higher in the US we couldn’t bring everyone. Our revenue is growing as you can see from Episode 23, but it is not the time to increase our costs dramatically until we have grown bigger.

One of the people I will miss is an engineer who I first met almost 2 years ago named Vineet.  I still remember the first time I met him.  He literally drove on his motorcycle in a monsoon rainstorm (the worst I've ever seen in Bangalore) to meet me for his interview.  Most people were stranded by the side of the road and were not even attempting to move.  Others attempted to move and were swept off their feet by the rain in the streets.  After waiting for 10 mins past the designated time, I figured he wasn’t going to show up given the weather. I picked up my phone to call him to reschedule.   Just then he suddenly walked in the door.  He was completely soaked from head to toe.  I told him to dry off or even reschedule the interview if he liked, but he insisted on doing the interview and answering my questions right then and there.  He said, “I was late so lets not make it later.”   We sat and talked for almost an hour.  I enjoyed our conversation a lot.  I saw a conviction and dedication in him that I have not seen in many people.  Despite having wet shoes, socks, and everything else.  He sat comfortably and sipped some hot tea.  He was calm and collected.  I thought, what a determined guy and shortly thereafter we hired him.  I will miss Vineet and all of our colleagues ... very very much.

For me personally this might be the end of an era.  I spent six month a year in 2002 and 2003 in Bangalore.  I loved being here and almost bought a house.  I have some very fond memories of brunch at the Leela Palace on Sundays and partying all night at Spinn.  I dont' know how much I'll continue to be in Banglore now, but it was a great part of my life for the last 4-5 years. 

I was one of the biggest, India advocates you've ever met (I still am) but it is clear the primary business drivers of Bangalore are changing and with it the city must change.

25 - Million mice, 24 - Land Invasion, 23 - Nuclear Power Plant,
22 - Fast iteration , 21 - Like.com prognosis , 20 -Launch Video and More , 19 -PR Coverage of Like , 18 - Like.com Launches , 17 -Pre launch , 16 , 15 , 14 , 13 , 12 , 11 , 10 , 9 , 8 , 7 , 6 , 5 , 4 , 3 , 2 , 1 .

Episode 25 - 1 Million mice or 1 big elephant

Episode 25 – Million Mice or 1 big elephant


One of the largest strategic errors for early stage companies is the belief that one key partnership with a large player is what is needed to “make the company.” This is commonly referred to "hunting elephants." Sometimes Board of Directors drive this and sometimes management hungry for some external win drive it.  While this is true if your business is to OEM your service to others like VideoEgg, in most consumer Internet destinations this is just not true.

Tell me, what big deal made YouTube go from 0 to 10M unique users? What big deal made Myspace or Bebo go from 0 to 10M unique users?  What about Digg, Slide, Mebo, Flickr, Delicious, Technorati, etc.  You get my point.  Partnership rarely make a startup.   Of course Yahoo made Google with that partnership, but that is more the exception than the rule. Go though this <link> list of the top 20 hottest startups and you will see that most grew either organically or through lots and lots of small partnerships.

Why can’t a big deal make a company?  First big companies take too long to get a deal done and implemented.  Second, most big companies have too much leverage and force the startup to give up so much in the negotiation that the deal becomes unprofitable.  Third, most big deals are for distribution and there is always an assumption that consumers on the big company’s site will take to the offer.  Frequently this assumption proves wrong.  I remember in 1999 when I was running my last company Andale, we did a deal with Intuit’s Quickbooks group.  It had us paying a lot of money in return for distribution in Quickbooks to help reach small businesses.  It was a total disaster.  I will never do deals like that again.

The most powerful deals are the ones that you can get done with hundreds, thousands, or millions of partners in a mere matter of weeks.  I call this the million mice strategy.  Yes it has no sex appeal and no press release, but over time it slowly builds up and up until you have a tidal wave of relevant and cost effective traffic.

I have seen sites successfully gain distribution with the million mice strategy.  Effectively Slide has “partnered” with millions of myspace users who distribute its widgets.  Google has done this with Adsense.

When we hired Mark Moran to be our VP of Business Development it was exactly this kind of mice hunting that we had in mind.  He has done exactly this with a new program that we will announce shortly…

24 - Land Invasion, 23 - Nuclear Power Plant,
22 - Fast iteration , 21 - Like.com prognosis , 20 -Launch Video and More , 19 -PR Coverage of Like , 18 - Like.com Launches , 17 -Pre launch , 16 , 15 , 14 , 13 , 12 , 11 , 10 , 9 , 8 , 7 , 6 , 5 , 4 , 3 , 2 , 1 .

Episode 24 - Land Invasion

When we launched Like.com we only launched about 13 sub-categories under 4 tabs (categories).  Shoes, Handbags, Watches, and Jewelry

This was our beach-head.  After spending 6 months just to get 13 sub-categories working, Burak led the charge to get us up to almost 65 sub-categories in less than 3 months.  We rolled out:

Women’s, Men’s, Boys, & Girls: tee-shirts, blazer’s, coats & jackets, pants and slacks, shorts, sweaters, sweatshirts, vests, socks, sleep-wear, swim-wear. 

Women’s maternity, socks, skirts, dresses, hosiery & stockings, intimate, bras, panties.  Men’s suits.  Boy’s shoes, Girl’s shoes.

Sunglasses, Hats, Belts, Scarves, Gloves, and Neckties.

Rugs, Posters, Art, Lighting

We rolled out one sub-category every other day for 90 days.  It was quite an achievement.  Baris, Drago, Xiofan, Diem, and others worked flat out to make this happen.   They even invented a new technology that allowed them to train the system on a new category faster than before.

The first phase of launching your service is about focus to nth degree.  Your goal is to capture make sure something sticks.  You ensure everything is optimized for success. 

The 2nd phase of the launch of a site is typically a mad rush land invasion like this.  After spending months and months analyzing the beach-head, you have to move quickly to secure the rest of the country before someone else has a chance to counter attack.  This requires more of a breadth-first approach than a depth-first.  This typically requires more operational efficiency of stamping more of the same rather than doing completely novel things.  Sometimes you find the people who like to capture beach-heads, but don’t like to replicate their work over and over again.

Nonetheless this is what you have to do.  For Digg this was about not just being tech news but quickly adding lost of new categories.  For Slide this was not about just optimizing their slideshow but rather adding hundreds of themes and features.

For Like.com this was about adding enough categories to test the efficacy of our technology on lots of different product categories.

23 - Nuclear Power Plant
22 - Fast iteration , 21 - Like.com prognosis , 20 -Launch Video and More , 19 -PR Coverage of Like , 18 - Like.com Launches , 17 -Pre launch , 16 , 15 , 14 , 13 , 12 , 11 , 10 , 9 , 8 , 7 , 6 , 5 , 4 , 3 , 2 , 1 .

Episode 23: My New Nuclear Power Plant

Below is the graph of how many clicks we were sending to merchants (again Y axis removed for competitive reasons).  It seems rosy and positive.  However for most of Q1, I felt anything but rosy.

Each evening I’d come home and my wife would try and guess from my frown or my smile if it had been a good revenue day at Like.com.  She would say, “Had a good revenue day?”  I’d say, “Yes”.  She would say, “What caused it.”  I would respond, “I don’t know.”  On a bad day the whole conversation was the same with only one twist.  “Had a good revenue day?”  “No”.  “What caused it.” “I don’t know.” “How are you going to fix it?”  “I don’t know because I don’t know the cause.” “Grrrrrr.”

Launching a new site is like becoming the owner of a brand Russian nuclear power plant.  You have a ton of dials with labels you can’t read.  The only dial you can read is the amount of electricity (in our case revenue) and the core temperature of the nuclear core (in our case number of clicks you are sending to merchants). 

We spent the quarter trying lots of different dials trying to understand the relationships between them.  What happens it we move the filter on the left up.  What happens if we add more price comparison?  What happens if we add more categories?

Some of the changes resulted in what you might expect but frankly more often than not the results were inconclusive.  Why?  One reason was that it was hard to tell which of the three features we had released caused the revenue to move upward or downward.  The second reason was that some changes where not immediate and hence very hard to correlate in time (never mind that correlation doesn’t imply causation).

I hate feeling out of control.  Like everyone else, feeling out of control makes me feel vulnerable and small.  It brings out superstition and dread in all of us.  There was a week in February where we had record numbers and during that week two babies were born at the company.  Someone joked that we should have more babies, quickly.  Someone else joked that released would take at least 9 months to develop…;-)  We all laughed (yes I know we have a nerdy sense of humor... but we like it).  Deep down though,  I had a sense of dread.  As an entrepreneur, I know well that there are things beyond my control, but I still hate it.

Sam our online marketing manager and Beth of Dir of Marketing came to the rescue.  I learned so much from the two of them during this period.  Actually we all did.  Azhar, Burak, and I all were skeptical that some simple UI tweaks could really make such a difference.  Beth proved us wrong and almost overnight we joined the cult of the A/B tester.  Every night Beth would dig into the numbers trying to find correlations.  She knew the numbers cold and helped us to build not just a data dashboard as Peter refers to here but to isolate and double click on each number until we found the cause.  It didn’t always work, but week on week she knew the numbers better than the rest of us on the exec team.  Beth is a very unique marketer, she is literally a poet quant.  She is smart, super aggressive, and never let anything stand in her way.  She was definitely a meat eating dinosaur (vs a vegatarian).  Her insights leds us through this period of uncertainity.

Sam was like a Roman legion, he just kept marching along and building infrastructure.  He used to come to our weekly marketing meeting and want to tell us about this great data warehouse he, Danny, Nikhil, and Pallavi were building.  At first I could have cared less, I would say,  “Sam how were sales this week and what is the plan for next week.”  Overtime I realized that it was his infrastructure that was allowing us to figure out exactly what was and was not working.

After three months we still don’t understand more than about 10% of the dials but with the help of Sam and Beth we are all slowly learning Russian...;-)

Previous Posts in this series

22 - Fast iteration , 21 - Like.com prognosis , 20 -Launch Video and More , 19 -PR Coverage of Like , 18 - Like.com Launches , 17 -Pre launch , 16 , 15 , 14 , 13 , 12 , 11 , 10 , 9 , 8 , 7 , 6 , 5 , 4 , 3 , 2 , 1 .

Welcome to Nick Seth & Eric Webb

Welcome two new members to our team. Nick Seth who is our new Dir of Sales and Eric Webb who will head up our front end development efforts.  Nick just started last week but Eric has been here for about a month and has already done some amazing things with the speed of our site.

Polar Rose?

Anyone know what is going on with Polar Rose?  Back in December a few friends of mine received an email from one of their investors saying they were going to launch by mid- December.  Then when I met their CTO in late December he said early January.  It is now April an no word.  The blog has been updated since January (which doesn't mean much).  I raise this not as a competitive point (as our focus on Like takes us quite far away from their focus) but I am curious to use their product and just wondering on the timing.

Episode 23 coming soon...

Happy Easter!  We took Deven to the Birthday party today where they had an Easter Egg Hunt.  He loved it!  It was a nice day with lots of sunshine.

As is my style I will being retelling the events of the last four months since the launch of Like.com shortly.  Some folks ask me why I tell them after that fact rather than more real-time.  The answer is simple

a) I'm often just swamped running Riya and finding time to blog is hard
b) I think blogging months after the fact is a nice balance between transparency and competitive impact of that transparency
c) While allowing time to pass blunts from of the details it also lets me focus on the details that mattered the most (in retrospect).

Anyways below are the links to my prior episodes from the launch of Riya almost a year go ... until the launch of Like

22 - Fast iteration , 21 - Like.com prognosis , 20 -Launch Video and More , 19 -PR Coverage of Like , 18 - Like.com Launches , 17 -Pre launch , 16 , 15 , 14 , 13 , 12 , 11 , 10 , 9 , 8 , 7 , 6 , 5 , 4 , 3 , 2 , 1 .

Old Keys and Valleywag...

Valleywag recently commented about Riya and Like... here and here .

I don't know if the folks at Valleywag understand that we wear the business failure of Riya (on a user level Riya got 14MM photos uploaded - which is decent) as a badge of honor. A story of a close friend of mine explains our philosophy best (this is a true story).

My friend was a guy who grew up rich here in silicon valley. He lived in one of the largest houses in Hillsborough (a very upscale neighborhood just south of S.F). His father was a very successful startup CEO from the semiconductor generation. As part of a reinvestment strategy his father diversified into real estate. When the valley hit a recession and vacanies climbed, he defaulted and lost everything. His son (my friend) went from having everything to having nothing. If you meet him today he still has the old key to that Hillsborough mansion on his key chain. He keeps it as a reminder of how ephemeral success can be.

If you ever wonder why I talk so openly about what works and what doesn't... it is because I use it as a tool to remember of just the fleeting nature of success. I talk about our failures publicly as much as we talk about our successes. I do this more for me and the employees of Riya than for the outside world. Every article like the last two about being cheap (in the Chronicle) and about the business failure of Riya) is more for us inside the company than for others. It simply reminds me not to get too cocky or to get too arrogant as things go up.

If you would have met me in 1999 you would have met an incredibly arrogant 26 year old CEO. Now that Riya is growing because of the growth of Like.com (see Peter Rips blog for an update here ) these reminders are even more important.

So ValleyWag thinks that we are bragging about our cash our about being cheap to the rest of the world ... or even that the scepters of Riya are haughting Like, but actually ... in the end they are our "key" to remember all of this can evaporate at any time.

Many of you might not know why we named Riya as the name of the company (and it still is btw - Like.com is our name for the product - not the company). Riya is the name of my co-founders daughter. She was born with a small hole in her heart and had to have an operation at six months of age. She is a little fighter and has survived and grown. Her story is a parable of the life of a startup. There is no startup (even Youtube of Google) that doesn't have adversity. Some just choose to forget it and some use it to remind them of what happened in the past.

Now since we hit our February revenue target the entire Riya team is going skiing for the day tomorrow... join us at Kirkwood if you can take the day off...

VP Finance & US Controller

Friends - We are hiring and growing and have a number of open positions. Below is the first (VP of Finance and Controller for the US), but we also have an opening for a Dir of Sales (merchant sales), and two open position in front end AJAX development.  I will post the other job descriptions soon, but below is the one for the VP of Finance.   Email me at blog3 at munjal.com

Now that we have growing revenues we need a seasoned person to help us count the money.  We are looking for a VP of Finance/controller.  The ideal candidate has

•    10+ years of experience as a controller
•    3+ years of experience as a corporate controller for a technology startup
•    Experience with equity based accounting (FAS 123R)
•    B.S. in Accounting, Masters or MBA from a top 10 University is preferred
•    Successful completion of at least 3 years of audits by outside auditors
•    Micro-revenue experience and ecommerce revenue experience preferred.
•    Experience with CPC or CPA Internet revenue systems a plus.
•    Experience in managing a subsidiary in India and consolidation of books ideal.

This position reports to the CEO and comes with a generous compensation and equity package.  Riya hires only the top 1% of candidates, compensates them generously, gives them lots of responsibility, and expects nothing but the best from them.