Every entrepreneur knows that quick decision-making is a vital part of success. When you find yourself at a difficult crossroads, the right choice may not always be obvious. In those moments, a push in the right direction can be just what you need to get moving again.
During the 1,000 maddening days he spent in Silicon Valley, our next author, Brian Friedman, found himself facing difficult decisions every day in the first few months of his startup. He was in uncharted waters and didn’t always know what direction to swim.
Thankfully, he had access to some of the most successful entrepreneurs, investors, and advisors in the world. He’s now the author of Takeaways: Secret Truths from Leading a Startup. He’s here to share with us the tools to make right decisions quickly in your business. Take a listen to our chat.
Brian Friedman: Right now when I look at just the amount of people starting companies, the expectation is that everyone is a college dropout. They’re 19, 20, 21-years-old, they’re going to Silicon Valley, they’re getting funding. And that’s really not the case.
Most founders are I’d say in their 30s. I’m very close with a lot of friends who are younger or mentees, and I don’t see actually as many Gen Zs wanting to start companies. A lot of it is because they’re not sure where to start.
For myself, I really saw an opportunity where I was 19, 20 years old. I was in Silicon Valley. I got this really good opportunity to run a company, and I didn’t know what I was doing. Every obstacle that came my way was like whack-a-mole. From there, I was able to collect this really good, I’d say playbook for myself that I was able to replicate and work for the next three to five years.
I wish I had this when I started my company. That’s really the opportunity. I decided that I wanted to share my top 50 scenarios and style for running a business, where anyone—for someone that’s Gen Z, all the way up to someone who let’s say is 40, 50, 60 years old—and they want to get their first business off the ground.
They don’t have to be afraid, because they can now use my best practices to do so.
Follow Your Passion
Rae Williams: Why does it matter for people to have this knowledge and to be able to start companies and know these key secrets?
Brian Friedman: I think it’s really important, because it’s a level playing field. No one should be afraid to follow their passion. At least, one of my motivators in life is to make sure that everyone can follow their dreams, and that there’s really nothing in the way.
There obviously may be some financial blockers. It might not seem the right time in your life to take that leap. At least from my perspective, in a situation where in the past and they say, “Well, I don’t know to do. I’m not going to take that next step.” Now, someone actually has the ability to do so.
I think that matters, because our economy is becoming a lot more globalized, there’s a lot new technology to access from what’s being developed right now. Then also people, they’re going back to their roots.
Everyone is now into more independent brands when it comes to restaurants and apparel. I want to give everyone the ability to say, “Wow, that person is very lucky. How are they doing that?”
Say, “Well, here’s how to do it. Go do it yourself.”
Become a Gambler
Rae Williams: In your very first chapter, part one, you have a chapter that says become a gambler. Tell us a little bit about that.
Brian Friedman: Yeah. The art of gambling, it’s really critical. Looking at from a poker player perspective, I applied it to life and really to my business.
Taking a step back, growing up I was a semi-professional snowboarder. I’m still an avid kite boarder, snowboarder, mountain biker. In snowboarding, for example, and kite boarding, in order to learn a trick, you need to basically take that leap.
However, let’s say I’m hitting a large obstacle for the first time. I don’t want to push it so much to the point where it’s really so far outside my comfort zone that I hurt myself. I want to make sure that I take a gamble slightly so that I can push it, I can land it and I can expand my comfort zone.
Then let’s say over the course of two to three weeks, now I have the ability to do what I want to do in the first scenario, where it could have been let’s say, too dangerous, or too much of a risk.
Applying that to business, it’s really important to know what your ability is and to make sure that you’re not showing it to the world, but at the same exact time understand okay, here is the amount that I’m willing to gamble, here’s the amount I’m willing to risk and here’s my reward.
Making sure that it’s not just one big jump and then you get there, but it’s a daily routine of making the right small gambles that eventually make you a winner.
Toxic Employees and Corporate Culture
Rae Williams: I would love to get your take on corporate culture, especially when you talk about not hiring toxic employees.
Brian Friedman: Yeah. I think, culture is everything, right? People when they come to the office, especially for the first 10 employees, I believe the first 10, that’s going to really form what your culture is. It’s really about the people. They’re humans.
You can say, “Okay, I want everyone to be transparent. I want everyone to have clarity of candor. I want everyone to be passionate about innovation.” However, saying something versus doing it is much different.
I looked at really making sure the first 10 people were a good culture fit. More the fact that I have these different attributes I was looking for such as transparency.
Really for the first few times that I meet with them, making sure well, they’re not just saying it, but they actually live by it. From a company perspective, in the early days if you get a toxic employee, that can destroy the entire culture of your company.
We had this professor come in who did a large study with over 300 corporate executives, and they asked everyone, within your closed team, how many are positive, how many are negative—essentially, the toxic employee.
They actually show that the companies where everyone was positive, they didn’t only do better financially, but also their team was also healthier. They tied that back to when you’re around people that let’s say are negative, or they’re not supportive for your customers, what that does is it actually changes your heart rate. That inconsistent heart rate, it can change your health and then over time, it can make you negative somewhat as well.
In my book, I talk about how you really need to make sure that when you’re building at your culture, there’s a few people that you want to identify really fast that I didn’t at first.
I learned from this. One person is the one who always wants to take time off and vacation, so I call them the no-show. It’s really important that they don’t hold down your team, because you really need to work hard and focus at the beginning.
From there, there’s also the know-it-all employee.
I had an employee who he thought he was better than our customers, and it really came off as condescending and turned them off, even though internally, he was a very intelligent team member.
Then lastly, there’s a team member where he’s not motivated by what you’re doing and the mission you’re trying to achieve, however, they may be motivated more by the money, the stock. That’s fine. However, if everything’s focused around, “Okay, when’s my next paycheck,” rather than, “Okay, how do I help out this customer,” it can really affect the culture from your company.
It’s critical to identify, okay, who are the right people that I want for the first 10? Who’s that dream team? Let’s make sure that we love working together, but we’re also really productive at what we do. Then from there, you can grow out the right company culture.
Rae Williams: Before I pick another chapter, what do you think is the most important secret truth, or the biggest thing that people need to know about leading a startup?
Brian Friedman: Yes. I say when it comes to leading a startup, it’s all about solving a problem. With that problem, there’s going to be a motivation behind it, everyone’s going to be passionate about it. It’s not just coming up with technology. That’s what I see a lot of times.
I see a lot of founders and even people starting companies where they say, “Okay, I have this unique –” for us, it was Bluetooth technology. Or, “I have this unique new spatula.” It’s about the problem it’s solving.
For that problem, you really need to make sure that it has clear benefits. It has to be obvious to the people. There are three things that I always look for: it makes life more simple, it makes it faster, and it makes it universally better.
If you think of the mindset, how do I make life simpler, faster and better? Then your entire team, your culture can be motivated by that and inspired. Rather than hey, we have let’s say a screwdriver that is lighter, more stronger, it’s also more effective at screwing in different kinds of equipment.
It’s really important to understand from the beginning, “Okay, why am I doing this? How does it affect the world? Then how do I hone that motivation internally and externally, so that comes off not from just our culture, but our culture also drives our brand?”
That helps grow a very profitable, healthy and powerful business.
Fundraising the Right Way
Rae Williams: How does fundraising play into all of this?
Brian Friedman: Yeah. There’s this myth I feel where fundraising is successful, right? You hear the stories of a company gets, let’s say $500,000 seed around, or they close their Series A and they’re not profitable, they don’t have a product. Then they basically – they party.
There’s a company called Clinkle who did that. From my perspective, I think you need to get funding only in a few scenarios. If there is, let’s say, a large market that’s ripe for disruption and there’s other companies that are also working on solving a similar problem, and you know that with your team and with the market share, that if you basically raise funding, that you can get into the market faster and secure those customers, then I’d recommend getting funding.
There’s a lot of companies that feel like, “Well, I can’t do anything until I get funding.”
You look at Kickstarter, they didn’t raise funding for the first few years. They basically worked on perfecting their initial idea. Then once they had enough money, they started building it out. Then once it was valued at a certain amount, then they raised that money.
What I would say is it’s all about being at the right place at the right time. For myself, I was fortunate enough to get funding from Tim Draper.
Tim Draper is a venture capitalist from DFJ Ventures, and he believed in what I was doing. The only reason I had that opportunity is because one of my college friend’s fathers, he recommended that I should go to Draper University in order to build a network out there.
I said, “You know what? I’m going to take the leap. I’m going to basically leave college for a few months. I’m going to go out there and try to meet some people.”
Because of that leap, Tim opened up his world to me. I was able to understand, “Okay, here’s the right time to raise money, here’s the time when I need it.”
Always be fundraising. However, don’t always take funding as a form of validation. You should take funding to help you get to the next tranche, which is essentially the next state of your company, in order to really further out your mission.
Startup Highs and Lows
Rae Williams: I’d love to hear a little bit more about your story and about your company and some of the highs and the pitfalls of your startup personally.
Brian Friedman: I was a senior at Lehigh University, or I was actually going into my senior year. I loved starting projects and small companies. My friends used to make fun of me, because when I was 12 and 13 years old, my dad would actually—we’d write business plans together. We’d go to different business plan contests all throughout the Boston area.
I would walk in and they’d say, “Okay, your son can sit outside.” My dad said, “Actually, he’s here to pitch his new business.” I was always trying to get to California.
My good friend from college, his father was an active investor, he knew that I was very entrepreneurial and that I ran the Entrepreneurship Club at Lehigh University, and he said, “You know what, Brian? You should take the spot. Go out to Draper University and see what happens.”
When I was out there late one night, I read an article for the Buddy Cup, which was a connected beer glass that they created as a concept for a campaign around the FIFA World Cup, where when you clinked two beer glasses together, you’d exchange Facebook information.
I thought this was super cool, because at the time, all my friends were really antisocial. They were more focused on Snapchat or Instagram, rather than actually engaging with the people around them. I want to have a real conversation with my friend, and half the time, he or she be looking at their phone.
Within Draper University, we had a contest where they said we had to make a wristband concept and go sell it on the street.
I came up with the concept for a Buddy Band. The idea was that if you shook hands, you could actually exchange different kinds of information.
At first, we were saying if you shake hands, you’d exchange LinkedIn information. If you would high-five, for example, you would exchange Snapchat. If you fist bump, it would be Instagram. You could control that on a mobile app. Our team ended up pitching that.
Tim really liked the idea, because he had been going to events and it was really challenging to create a high-quality network by meeting so many people. Basically, Tim told my team and I, “If you guys want to do this, you’ve got to commit, all-in. You’ve got to basically come out here to California and start your company.”
I said, “I’m going to take the leap of faith.” I ended up leaving Lehigh University. My two other co-founders left. We all moved out to California and we started focusing on a market.
We focused on the event market, because my family has a lot of experience in that space and once again, is a large market that was right for disruption. They were using tracking technologies such as RFID for the last 15 years. There was nothing that really had innovated in the space.
Long story short, we started focusing on corporate events. We launched at South by Southwest with a really focused scavenger hunt, where people could use Bluetooth technology to walk around the show floor and meet people and check off all their stops. From there, we became the most innovative and fastest-growing on-site technology for attendee experiences.
Our entire goal was saying, “We’re not a platform with Bluetooth technology. We are a connection platform.” How do we connect people physically on a human level?
From there, we ran Loopd for about three years. We decided, the fastest way to grow our company, to connect the most people and create the largest community impact was by joining the Aventri team.
Aventri is the second largest event management platform. We’ve rebranded to the event connection platform, which is powered by our technology. Now I am on the executive team in the VP of innovation array, furthering out our mission.
The one story, or I’d say takeaway that I’d love to share with everyone is, how did I go from a junior college student in Pennsylvania all the way to a rising star in Silicon Valley? It was all about putting myself in the right position at the right time, knowing what I was trying to do, not getting distracted by that mission.
From there, understanding okay, what are my drivers to make the biggest impact in the world? Follow those on a daily basis.
False Expectations Appearing Real
Rae Williams: What are some of your favorite success stories that you can share with us that illustrate what happens in your book and what you’re telling us?
Brian Friedman: Yeah. This is actually an unconventional story. It’s an interesting one. I first raised funding from Tim Draper. He was our lead investor. The lead is key. We were looking for more strategic investors. I was watching Dreamforce, their live stream, and I saw Marc Benioff talking about how the future of CRM was capturing all the data physically and combining the physical and digital worlds.
I had Tim basically introduce me to Marc Benioff.
We started chatting but didn’t really go anywhere. Then one of my other investors actually had an invite to a party at Marc Benioff’s house. He gave me his plus-one invite and he said, “Hey, Brian. I’m going to meet you in an hour. We’re going to his party. Go dress up.”
Myself being a startup guy, didn’t really have too many dress-up clothes. Basically took out my one suit that I had from college, that I didn’t wear too often at the time, ended up going to Marc’s house.
To my surprise, Marc was actually there. As the party was winding down, I went up to Marc, and Marc is this—the life that he has around him, the persona, it’s amazing.
He’s a really tall, big guy, but really conscientious and just a really empathetic person. I went up to him and said, “Hey, I’m Brian Friedman. My company is Loopd. I’ve been reaching out to you about combining physical and digital data at events and in the real-world. I really think this is the missing component of Salesforce.”
Marc said, “Sure, I’ll talk to you for a few minutes.” We end up chatting. He really liked it. He became one of our main investors and then invested a few other times in our company as we strategically needed funding.
The one lesson really is that for myself, I was able to identify this opportunity of someone else’s mission that was also critical to what I was doing. Rather than e-mailing and calling, like a lot of people might do, or reaching out to LinkedIn, I said, “Okay, my whole entire goal is to connect people on a physical, human level. How can I do that with all the team that I want to back me?”
I saw the opportunity to go to Marc’s house. When I got there, I saw the opportunity to go up and talk to him, even though I was afraid and I was nervous. I didn’t let that stop me.
I said, this fear, it’s false expectations appearing real. I need to go out there and do it.
That was just one of many success stories, more from a funding perspective, but it was a really good example of don’t be afraid and follow what you believe in.
A Challenge from Brian Friedman
Rae Williams: If you had to issue a challenge, so to your readers, people who are listening to us today, to people who might be thinking, “I wanted a startup. I want to start a company, but I don’t know if I can,” what would that challenge be?
Brian Friedman: Yeah. I would say the challenge would be try to sync your startup and personal goals. Specifically, what our challenge is ask yourself a few tough questions to help you find your flow, to help you find your motivation in life, rather than saying, “I’m going to start a company.”
If you have a few minutes, I would ask yourself where do I want to live? What lifestyle do I want for myself? Who do I want to work with? What people do I want to be around? How do I want others to view me as an individual?
Then really lastly, the main question that you should ask yourself is, why am I starting a company?
Is it for the money? The fame? Am I trying to solve world problems? If you can take this challenge and understand personally and professionally, here’s what I’m trying to do, here’s how we can align them, then I promise that you’ll find your flow and that you’ll be very passionate, you’ll find your motivation.
Then you can move forward in starting your next venture, or your next business.
Rae Williams: How can people contact you if they’re interested in learning more?
Brian Friedman: Yeah. You can follow me on Instagram, also my website, brianmfriedman.com. You can reach out to me. Then also, Brian Friedman on Facebook. Feel free to message me. I always watch that, so I’ll get back.
If you have any questions, or there’s anything else that you want to know about my book, definitely reach out. In addition, I have a podcast, Takeaways. It has the first 10 shows for free. I also have a blog called Own It, which goes into more details around my stories.