Dharmesh Shah

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Sorry. My heart says yes, but my schedule says no.

By Dharmesh Shah on July 21, 2011

The following started out as a late night email I was going to write to someone that reached out for some guidance and advice.  Expanded version posted here in a somewhat desperate attempt at garnering sympathy and understanding.  Thanks for your patience. -Dharmesh

Dear Friend,

Thanks for reaching out and connecting.

It is likely that you, your idea, your company, or your proposition is awesome. Unfortunately, my schedule is totally not awesome.

One of my biggest weaknesses in life is that I too often say yes. I'm passionate about startups. I get excited about new ideas. I love making new friends online. And, it's so much easier to say yes than it is to say no. “Yes” is more fun and carries less guilt (in the short term).

However, I've learned the lesson that every time that I say yes to something new, I am effectively saying no to something else. And, I've already said yes to too many things, and so have to say “no” to you. No, I can't accept a request for a call, a meeting or some time to review your startup or your business opportunity.  Embarrassingly, I'm unlikely to be able to respond to your email (though I do read just about all of them).sorry

Although my heart says yes, I MUST SAY NO.

I know you feel like you're asking for so little (“I just need 15 minutes for a quick call…”), and you are. But, there are just not enough hours in the day, or days in the week (I work all 7) to review or respond to all those that reach out. I confess that I am overwhelmed. My sincere apologies. I wish I could bend the laws of space and time, but unfortunately, my past efforts at doing this have proven futile.

Here's a bit more detail on my professional priorities:

My #1 priority, by a long shot, is my company, HubSpot. I am emotionally, financially and morally committed to HubSpot. I want HubSpot to be successful. By my definition, success is making those who believed in you look brilliant. So, I work very hard to make HubSpot customers, employees, partners and investors look brilliant. If you have your own startup, I think you can likely appreciate what an all-consuming activity it is. There is precious little time for anything else.

What little professional time there is left, I mostly spend on OnStartups.com. I write blog articles. I do some tweeting. I do some public speaking. I make some angel investments. The way I choose how I spend this time is very simple: I'm looking for leverage. I'm looking to positively impact the most number of people with the limited time/energy I have available. This is why, although I have invested in over 60 great startups as an angel investor — I spend very little time with any of them individually (I make this clear before I invest).

And, as it turns out, I have a bit of a personal life too (though some might argue that point). So, when I'm not “working” (I use the term loosely), I like to spend it with my wife Kirsten, and my son, Sohan.

Abandon all hope all ye who enter my inbox. -Dharmesh

If you're not saying HELL YEAH! about something, say no. ~Derek Sivers 

To prevent this entire article from being a self-indulgent pile of poo, I'd like to share some useful resources.

Some Useful Links and Information

1. If you're raising angel money for an early-stage startup, I highly recommend AngelList. It's an easy, efficient way to get in front of some great angel investors. There's nothing like it anywhere else. I do many of my angel investments through there now.

2. Already in negotiations with investors? Have a term sheet? You MUST read Venture Hacks. A super-practical guide to some of the ins and outs of what you should look out for. (Interestingly, Venture Hacks and AngelList are run by the same two awesome guys: Naval and Nivi).

3. If you're a super-awesome developer (and I mean really, really awesome) and looking to join a startup that is equally awesome, you can proceed directly to GO, and just reach out to me via email. I can connect you to HubSpot, or one of the many startups that I am invested in who are almost all looking for great people.

My email (in simple Python code): 'hahsd'[::-1] + 'moc.sputratsno@'[::-1]

4. If you're new to the startup scene (i.e. just getting going), I highly recommend Guy Kawasaki's “Art Of The Start”. It's an easy read and super-helpful.

5. If you're looking for great blogs about startups, you can do no better than the awesome list here: Top Blogs On Startups

7. And, if you're on twitter, here are some of the great startup peeps that I've learned a bunch from: @davemcclure, @hnshah, @danmartell, @ericries, @randfish, @asmartbear, @dcancel, @msuster, @sivers, @jasonfried (and many more…)

Wish you the best in all of your efforts.  Thanks for your support and understanding.



Topics: personal
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Some Heart-felt and Humble Advice For Rand Fishkin of SEOmoz

By Dharmesh Shah on July 7, 2011

Dear Rand,

Really enjoyed the recent article on your personal blog, “Inflection Points: Bravery vs. Foolishness”. Very few entrepreneurs have the courage to be that transparent. On behalf of entrepreneurs everywhere, thank you!

We've known each other for many years now and have had many a late-night conversation, and many dinners. I'm honored to call you a friend.

Though our direct chats are always fun and useful, I thought it might be interesting to have a longer, “in written form” response to your article. I was inspired to write this article a bit by Brian Halligan, my co-founder at HubSpot (who you also know), who left an exceptionally detailed comment on your article. I'll be borrowing liberally from Brian's comment (it won't be the first time I've borrowed from Brian's wisdom and used it to make me look smarter than I actually am).rand fishkin

1. It's great to have options. Raising capital is always a bit of a scary thing for an entrepreneur. And, for right reason. It not only changes a lot about the business, it also changes you. SEOmoz is now at the stage where outside capital is not a “necessity”. That's awesome. It takes away one of my biggest concerns with raising capital: When the entrepreneur doesn't have a choice, she doesn't have any leverage. Having the option to raise capital is a big amount of leverage and dramatically increases the odds of both getting a fair deal and making a rational, thoughtful decision.

2. If you're going to raise, raise now. If you're thinking about raising capital, this is a really good time to do it. The markets are nice and frothy, making for a great time to be a seller of equity. The timing question is always hard (both in terms of M&A, which is selling all of your equity or a funding round, which is part of your equity). I've been through this particular calculus before. When things are going really well (as they are for SEOmoz), it's tempting to think: “Hey, the market is valuing us at X times revenue — our revenue is going to go up by Y, so our valuation will be going up by X*Y in the next year.” I've made exactly that argument to myself in the past (not at HubSpot, but my former company). As it turns out, up markets go down and frothy markets get less frothy. So, if the market took a downturn, it could have two potential impacts on your company valuation: 1) your revenue multiple goes down (thereby decreasing valuation). 2) Your actual revenue could be lower than you expected — because people are not buying as readily or cancelling more often. So, it's entirely possible that despite having a “good” year coming up, the company is valued less. So, our advice would be: If you're considering raising at all, don't try to wait until you drive your revenue up further. Raise now.

3. Take some freakin' money off the table! I recognize that you have concerns. And that you lead a modest and happy lifestyle. And that you don't want money to mess things up. I get all that. But, it's not only irrational to have such little diversification of your personal funds, it's outright irresponsible. In terms of how much you should take — that's a personal decision. If it were me (I don't have a particularly lavish life either), I'd shoot for several million. Enough to where you didn't have to worry (or think about) money at all for the next 10 years.

Bonus argument: Even if you kept your lifestyle exactly the same, here's one more phenomenal reason to take some cash off the table: You could become an angel investor and help other up-and-coming entrepreneurs get started. Trust me, you'd have a blast! Though this doesn't completely solve the “lack of diversification” problem (you'd still have your money tied up in startups), at least it's not all the same startup.

Oh, and by the way, I know you kids these days like living on the edge and all, but having just $25k in savings is unwise — especially if it's unnecessary.

It is not about the money. It's about having options.

Finally, as Brian said: Just because you have millions in the bank doesn't mean you have to stop working crazy, ungodly hours. My suspicion is that you have the startup gene that means you're going to work crazy hours regardless.  (Besides, who wants to work godly hours, anyways?)

4. VC will definitely change things. I'll just take Brian's words directly on this one: My personal sense of the thing that will be most uncomfortable for you is if a good quality VC joins your board is the scrutiny she will give your team and other board members. She will constantly be testing your conviction about team members and constantly looking to hire one of her crony outside overpriced headhunters to replace the folks that you rely on and who built your business with you. I have no idea whether you think your team is the right team that will scale or not, but if you do think they are the right team that will scale, be prepared to defend that position for a long time. VCs can never know your business that deeply and chapter 1 of their playbook where they think they can add the most value is on the “team.” It is low risk for them and their network is where they perceive their biggest value is. Sometimes they are right here and bring in just the right person, other times they don’t.

5. Its about the people. Also from Brian: Your hierarchy of investor priorities is right. I have gotten to know a lot of VCs over the last few years and many of them are not as good as I expected. There are some of the really top dogs that I’m convinced are far more lucky than good, so don’t be dazzled by their investment record. In my mind, there are two “types” of VCs, ones that are more like Wall Street equity analysts that are great with spreadsheets and picking trends and others that are former CEOs. Like you, I’m a first-time CEO, so part of my criteria was to find the ex-CEO type who I could turn to for advice and this turned out to be a really good decisions for me. When an equity analyst type or an ex-CEO type, I’ll give you my VC test: When I meet with them to talk about the business, do I take any notes or any action items? About 80% of the time when meeting VCs, I don’t take any notes or any action items — once in a awhile I meet someone that is sharp and changes my thinking or gives me great advice. Go with one of those ones, even if the terms are much worse.

6. Protect the culture. One thing Brian and I have learned in building HubSpot is that culture counts. Industries change, markets change and products change — but amidst it all, great cultures endure. You've built a great culture at SEOmoz and you should fight to defend it. But, raising a round of capital doesn't necessarily mean you'll screw your culture up. I like to believe we do a pretty good job at HubSpot when it comes to culture (many would argue that it's one of our biggest advantages). We've raised over $50 million across four rounds of capital and 6 investors and have managed to maintain the core of our culture. Brian notes: The act of raising money and having a new board member is not what will screw up your culture. It is when you bring in new team members that things can go awry. Every time you bring in a new exec, the exec team sort of needs to re-form itself and re-gel. If you bring in a crony of the VCs that doesn’t fit and who isn't TAGFEE, that’s where the culture blows up. [This last point is something I haven't personally experienced, but saw through other CEOs I know through a CEO group I joined]

We both are super-impressed with what you've done and that you've done it without being (or becoming) a jackass — quite the opposite. We look forward forward to watching your continued success.

Warm regards,

Brian Halligan and Dharmesh Shah (the HubSpot guys)

Topics: strategy culture
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