In an insightful conversation on "The Twenty Minute VC," Harry Stebbings reconnects with Hiten Shah, the seasoned entrepreneur behind FYI, a platform designed to locate documents swiftly. Shah's entrepreneurial journey began with an internet marketing consultancy, evolving through several SaaS ventures, including Crazy Egg and KISSmetrics. His experience extends to angel investing, with involvement in companies like Buffer and Clearbit. Shah and Stebbings delve into the nuances of remote work, emphasizing the importance of process and documentation. They also discuss the evolving landscape of startup funding, the significance of customer-centric product development, as highlighted by Superhuman's responsive adaptation to privacy concerns, and the shift towards value-oriented pricing models in SaaS, as demonstrated by Drift. Shah's approach to leadership centers on self-awareness, focusing on directing, coordinating, editing, motivating, and co-learning. Reflecting on his investment philosophy, Shah stresses the unpredictability of early-stage investing and the importance of embracing serendipity without harboring regrets over missed opportunities.
"We are back for a very special founders Friday here on the 20 minutes vc with me, Harry Stebbings and I'd love to hear your feedback on how we make the show better for you. And I respond to all messages directly at H. Stebbings 1996 with two b's on Instagram. But to the special episode, and I have to admit it's not 20 minutes, but the discussion was just so great, so enjoyable and just free flowing that it was too special an opportunity not to run with."
This quote explains the nature of the episode and introduces the guest, Hiten Shah. It sets the tone for an engaging and insightful conversation beyond the usual format.
"Before FYI, Hidden cofounded Quicksprout alongside Neil Patel. Together they scaled the platform to over 500,000 readers every month. Before Quicksprout, Hidden was the cofounder and CEO of Kiss Metrics, raising over $19 million in the process of the company from the likes of our friends at True Ventures, uncork Capital and Felicis Ventures, just to name a few. Finally, Hidden is also the co founder at Crazy Egg, the heat mapping tool used by thousands to improve the effectiveness of their websites."
This quote summarizes Hiten Shah's entrepreneurial journey, highlighting his experience in founding and scaling businesses, as well as his success in raising funds from notable venture capital firms.
"So started in 2003 when I started an Internet marketing consultancy with my co founder, who's now my brother in law, and I've known him since he was eleven and I was 15. And so my now wife said, hey, he's got one customer paying him $3,500 a month for SEO. He's just going into college. You're just getting out of college. Why don't you two partner up?"
This quote provides a brief history of Hiten Shah's entry into the world of startups and his early success that set the stage for his future ventures.
"For about four or five years, I decided I was going to meet with one new entrepreneur every weekday. So that was five days a week. I would meet someone new that I didn't know before."
This quote describes Hiten Shah's commitment to networking and mentoring within the entrepreneurial community, highlighting his approach to learning and advising.
"So many lessons. I think the number one lesson there was basically nobody knows what they're doing. And that's not just them, that's also me."
This quote captures the key lesson Hiten Shah learned through his extensive experience advising entrepreneurs, which is the universal uncertainty in the startup world.
"The reason nobody knows is they only know what's right for them. So you could talk to ten board members, you might find a few patterns."
This quote reflects Hiten Shah's perspective on seeking knowledge and learning from others, highlighting the importance of individuality and personal growth.
"So this concept of figureoutability, where you can have faith that someone's going to figure it out."
This quote introduces the idea of "figureoutability," which is central to Shah's philosophy of problem-solving and personal development in the startup world.
"It's been 16 years and probably like 30, 40 different products that I've tried to build and a few things that have worked and some that are still working and others that are early stage and things like that."
This quote reflects Hiten Shah's long history of entrepreneurial efforts and his perspective on the changing nature of business success.
"Honestly hidden, I'm quite concerned that there's this real compression in fundraising timelines. Founders and investors simply don't have the time to build kind of these real human relationships."
This quote expresses concern about the shortened timeframes for fundraising, which may hinder the development of meaningful relationships between investors and founders.
"You have to understand what the incentive is for the investor, what the incentive is for your self, which is obviously building a great business."
This quote highlights the need for alignment of incentives between investors and founders, with the understanding that both parties have different primary goals.
"So seed stage is fascinating because you can go pretty far at a seed stage without having a lead, and you could do what they call, or they used to call a party round."
This quote describes the flexibility in seed stage fundraising where a lead investor is not always necessary.
"You cannot let the friendship get in the way, because this is a business relationship, and you need to make sure that you have incentive alignment with them."
This quote emphasizes the importance of maintaining a business relationship with investors, regardless of any personal rapport, to ensure decisions are made in the best interest of the business.
"It depends more on that than anything else. If you have a business that is like a train and it's leaving the station, and with or without the investor, your business will be successful."
This quote suggests that the attractiveness of a business to investors is often based on its momentum and perceived inevitability of success, which can transcend fundraising timelines.
"I think this trend is going to permeate everywhere. That's just what it's going to boil down to."
This quote predicts the global adoption of professional pre-seed investing practices, reflecting changes observed in the Bay Area.
"The business is what matters. The business is what people are investing in."
This quote emphasizes that the core elements of the business itself are the primary concern for investors, rather than peripheral aspects like founder stories.
"I feel like investing is something that you have to be pretty dedicated to in order to do an amazing job at it beyond like precede or seed rounds."
This quote reflects the commitment required to be successful in investing, particularly beyond the earliest funding stages.
"Markets are all pretty big now, and I don't really care about market size as much as if this business has a natural path or some, not even natural. But the founders and the team are thinking about how it expands over time and where they see it going."
This quote suggests that a business's potential for growth and the team's strategic thinking are more important factors than the current size of the market.
"Growing a business is all about putting your customers first and making your product awesome."
This quote underscores the principle that customer satisfaction and product quality are fundamental to business growth.
"Rahul from superhuman had an extremely thoughtful and conscious response to it of basically, literally describing the changes that they're going to make as a result, where they get to turn this feature off by default for every new customer that comes in, and the customer would have to deliberately turn it on."
The quote explains Rahul's immediate and considerate reaction to privacy concerns, highlighting the proactive steps Superhuman took to address the issue. It also emphasizes the customer's choice in using the tracking feature.
"What the folks at drift did was as far as I know, they were the first company in the space to basically get rid of the contact. So they make it so that not get rid of it, but they basically make it so that they're not charging you per contact, so you have unlimited contact in all of their plants."
The quote describes Drift's disruptive pricing model which deviated from the industry standard. This decision was aimed at better serving customers and challenging existing market practices.
"It's really about your value metric. And in this case, this value metric had just worn out and it was really causing fatigue in the market."
Hiten Shah emphasizes the importance of a pricing model that reflects the true value to customers, suggesting that traditional models may become obsolete and cause market fatigue.
"I think I've increased my self awareness about how I impact the team in ways that are negative or ways that are hurting the business."
This quote reflects Hiten's growth in understanding his influence on the team and the business, highlighting the evolution of his leadership skills toward a more holistic approach.
"I think coordinating is the challenge and the one I spend not necessarily more time on, but the one where I like being more thoughtful about that one than some of the other ones."
Hiten acknowledges the difficulty of coordination within leadership, stressing the need for careful thought in aligning team efforts with business objectives.
"I spend so much less energy worrying about time and so much more of my time worrying about, do I have the energy for that?"
The emphasis on energy over time management suggests that passion and interest are more critical for productivity and success than strict time allocation.
"The biggest problem with that for me is sometimes I don't know that I'm trying to get control of things I don't control."
Hiten's introspection on stress and burnout highlights the challenge of recognizing when one is attempting to exert control over uncontrollable circumstances, which can lead to unnecessary stress.
"My current book is called the courage to be disliked. And it's about psychology and it's amazing. And the reason the book is amazing is because it focuses on making you comfortable with literally being disliked." "It's by a japanese author, and he is essentially sharing this psychologist's theory, this psychologist, Alfred Adler." "It's probably been one of the most impactful books I've read recently."
"And the one weakness that I always have that people say is I'm always looking for other people's recognition and appreciation in a bad way." "The courage to be happy also includes a courage to be disliked. When you have gained that courage, that courage to be disliked, your interpersonal relationship will all at once change into things of likeness."
"I think it's difficult to me to think through what I'm the best in the world at, mainly because I just always want to get better." "One is someone asked me at a dinner, or they were going through, it was a dinner with a bunch of founders and folks and investors, and that they wanted you to share your hobby. So the hobby I shared is my hobby is thinking about other people's businesses."
"I think it's going to make sense to build an SF for the foreseeable future simply because there is a really large pool of talent here." "My companies have all been remote since 2003." "We're all going to have to start embracing it at some point, sooner than later."
"Extreme amounts of process documentation and process improvement. Boring stuff." "We have tons of documents. I mean, we are a product that helps you find your documents."
"I don't think about my misses, Harry, and I don't have any." "I definitely have an Uber story where I could have invest at one point because Ryan Graves and I, we were having tea at samovar right before, I think he joined the company when Wright, he was going to and he was telling me about it."
"Right now, we're focused on, basically, we've built a great single player product where people can find their documents in three clicks or less." "The thing that we've been aggressively working on internally and determined about is building a product that teams love."