MindShare Board Member Steve Balistreri from Deloitte and MindShare Co-Founder and Board Member Gene Riechers at the July Class for 2015
Last night the DC-based MindShare organization heard from its co-founder, board member and a man who really doesn't need an introduction: Gene Riechers--an entrepreneur, venture capitalist and currently the vice-chairman of EdTech company EverFi. He shared some insightful tips from his years in this industry, which I tried to capture here as best as I could!
If I made any misstatements in my recap, the error is all mine!
What is MindShare? Launched in 1997, the organization handpicks 50 to 60 CEOs every year from the area’s hottest emerging growth companies to come together in a private, intimate setting. Its mission is to help CEOs build long-term, sustainable companies by creating opportunities for growth, building a sense of community, and fostering teamwork in a professional environment.
In other words, MindShare is an amazing group of new entrepreneurs who come together to learn, engage and network.
Each meeting features a different speaker or panel of experts, with topics including: raising capital, hiring the best talent, sales, marketing, and finance among others. CEOs who attend at least five of the eight sessions will graduate, and join the 900+ alumni from the organization that continue to foster discussions and provide support for one another.
I have recapped several MindShare programs over the years, which you can see here.
Some key takeaways from Gene's remarks last night:
- Think about entrepreneurship as theater acts; Act I, Scene I: get your product launched, gain traction with sales and marketing. But know that eventually, someone, possibly even you, will obsolete your product. Be sure to think about how you are going to obsolete your product, so that someone else doesn't do it to you.
Act 2, Scene 1: What’s your second act? Can you be smarter about the 2nd market as well as the 1st? He's seen people be very successful in their second act because they weren't content with their first.
- It's important to talk to your customers, but still have a vision for what the broader market may need, rather than being reactive to a finite set of customers. While it sounds counterintuitive, he can cite many companies who died because they listened too much to customers, and kept tweaking and modifying their delivery for a small part of the market, missing out on the greater opportunity.
- Great companies are bought, not sold. The best time to sell is when the market thinks you're hot, not necessarily when you are ready. The best deals are when companies come to you. The way software companies get bought with a 15X multiple versus a 5X multiple is because the buyer sees a great trajectory for themselves.
- What tends to keep you up at night should not always be the competition necessarily--the companies that might release their next version before you release yours--it's the companies that come out of left field and disintermediate the space. Board member April Young used the example of the introduction of Google Maps and how it destroyed TomTom GPS and the car dashboard GPS systems that were all the rage. You could use the same anology with Uber and AirBnB and other similar disruptive companies...that's who you have to anticipate entering your space.
- Think about your actual addressable market. He's seen too many people do a poor job of analyzing the true addressable market for their product, and then they assume theirs will continue to grow. Then, after they eat all of the low hanging fruit, they wither and die.
- Start establishing a culture where if people don’t grow with the company, they need to leave. Set the tone early and often. When it becomes apparent to everyone that someone might not make the cut at the next stage of the company, it's better understood why.
- Understand that sometimes as the CEO, you may have to fire yourself! It happens. As a VC, he counseled CEOs early on that there may come a time when they are not the best to serve as CEOs, and maybe they need to go. There is usually one of three reactions: 1) yes, you get it, and know it's best for the company, 2) yes, you say you get it but you really don't believe it will ever be true, and 3) you react with, "who me? Really?!?!"
- Don’t tolerate mediocrity Keep hiring As. As hire As, Bs hire Cs. Look at a bell curve, keep pushing the curve up. You'll be a stronger company.
- Really do your homework and due diligence on reference checks. Get really specific and drill down, so you get better answers from the people providing a referral. Make the questions specific, and drill down to get better answers and examples.
- When hiring a VP of marketing, ask different questions than might seem intuitive. Learn about the process they follow, how they evaluate a market and what processes do they use for determining the answers to very specific questions. A good VP of marketing will ask more questions than provide answers in an interview.
- When hiring a VP of Sales, seek someone who has a process for making people successful. Learn how they train their people, what tools do they use? What have they done before, and how did it get done?
- Look to engage a board, consider just one board, a Board of Directors or Advisory board. Smaller boards are better. Don’t select people for who they know, that could be short sighted; look for someone who can provide strategic advice. Also a tip: look for someone you can have a meal or a drink with, who you like and respect, who can be a good sounding board.
- From his perspective as a VC, he looks for companies when they are early and onto something big. He quotes: "once you have a good amount of market research on a product or market, it's probably too late start!"
- A mediocre plan executed with "great violence" will be more effective than a great plan with no buy in or passion. He calls it the “Violence of Execution:” engage your team in developing a plan and it will be stronger than if you develop the plan and hand it down.
I know I've missed other relevant and valuable points, but this should whet your appetite as far as helping provide advice and thoughts to growing your business as an entrepreneur. Thank you to Gene for his time!
Gene has been involved in building great technology companies in the DC area as both an operating executive and as a venture capitalist. As the Vice Chairman of EverFi, a leading education technology company. Gene is also a director of Opower (NYSE:OPWR), the global leader in cloud-based software for the utility industry. Gene was a General Partner of Valhalla Partners, one of the leading venture capital firms in the mid-Atlantic region.
Prior to co-founding Valhalla Partners in 2002, he was co-founder and Managing Director of FBR Technology Venture Partners. He was named to the first annual AlwaysOn "Venture Capital 100" list in 2010. Gene is also a co-founder of the MindShare program, the leading mentoring organization for technology entrepreneurs in the greater Washington area. Prior to his venture capital life, he joined four early-stage ventures, all of which went public.
Gene has a B.S. degree from Penn State and an MBA from Loyola College. He has served as a guest lecturer at the Harvard Business School, University of Chicago, and Georgetown University. Gene and his wife have 4 kids (and 1 grandson!) and live in McLean, VA.