Pixable

Today, together with a small group of MIT and Harvard students, I had breakfast with Chris Hughes, cofounder of Facebook. Chris joined General Catalyst Partners (GCP) as an entrepreneur in residence 2 weeks ago. The breakfast was held in a small room at the offices of GCP. Joel Cutler and Hemant Taneja, Managing Directors of GCP, were also at the breakfast. It was a very interesting 90 minute discussion in which I also had the chance to talk about Pixable. The founder of The Ladders (from Harvard) was also in the breakfast.

I like General Catalyst because it is one of the only firms in the East Coast with a very ambitious mentality even if it requires taking high risks. As Joel Cutler mentioned today, “different VCs do things differently. If you focus on breakeven too soon, it will limit the growth.”

Chris Hughes (born in 1983, only 25 years old) co-founded Facebook, with Harvard roommates Mark Zuckerberg and Dustin Moskovitz. He worked at Facebook for 3 years and most recently served as New Media Strategist for Obama’s presidential campaign and pioneered the use of online campaigning through the political social networking site My.BarackObama.com. Chris was featured as the cover story of April 2009’s Fast Company under the headline “The Kid Who Made Obama President; How Facebook Cofounder Chris Hughes Unleaded Barack’s Base- and Changed Politics and Marketing Forever“. He holds a bachelors degree in history and literature from Harvard, where he graduated magna cum laude.

The conversation was more about what we were doing and how we wanted to do it, than on his experience (although in the end, everyone was asking him about his experiences). Some good insights of the conversation:

• About Chris’s experience at Facebook:
  • At Facebook, Chris focused on user experience and product design
  • Before Facebook, sharing personal info on the web was about dating sites. Now it is a different paradigm.
  • I asked about the challenges of managing older people with more experience and expertise. He said that you need to be surrounded by good advisors but you also have to trust your instinct. As an example, he pointed out that when they had the $1B offer to be acquired by Yahoo, older people just wanted to take it because they had lived the Internet bubble and burst; but the young ones wanted to make it bigger and thought that it was possible.
  • He left Facebook when there were 200 employees (now there are 900).
• In the process of starting a company:
• • Identify inefficiencies in human interactions. E.g., recommendations of restaurants in the neighborhood, search of grad housing, etc.
  • Design a web product that can make the interaction easier
  • Think about how to make money out of it
• Use your own experiences and pain points to identify an opportunity. And BE ARROGANT THINKING YOU CAN DO IT BETTER THAN OTHERS (he stressed this many times)
• Look for opportunities in which the product demand already exists. Never create a demand that does not exist (e.g., never say “People may want more of this”). With Facebook, they saw that people were interested in “what are my friends doing?” but it was very inefficient to find out.
• Again, focus on a product that solves your pain point. And make sure that there are a lot of people with the same problem.
• Although you do not need barriers to entry at the beginning, think about them for the long term. For example, Kayak could have been copied in the beginning but they just focused on the product and now is when they have barriers to entry
• About the board of advisors for your startup: look for genuine advising that complement your skills. They should be people that were helping even before becoming part of the board.
• VCs make two types of investments: a) ambitious about the impact (and then they will figure out the final way to monetize it); and b) investments to make money.
• There are a lot of opportunities to make money in other countries adapting successful ideas in the US. They gave the example of European Founders
• He recommended us: Find a good idea and just do it; building a websites is easy and you can see what customers think. And later, write a business plan. You learn much more doing it this way than talking to VCs or experts (except when there is a big ecosystem or you are in a mature industry)
• Go where change is happening in the world and learn from it
• During the first year, focus on product product product. Everyone will tell you that what you are doing is wrong
• As a founder/CEO, most time is spent hiring people (the most difficult part) and raising capital. Be always welcoming potential candidates.
• Expertise is not important. You just need to suffer a pain point as a customer and have a vision and ambition.
• There are 3 things that take a lot of time: hiring, product and monetization. As an early stage startup, you should focus on hiring and product development.
• As an entrepreneur, you need to spend a lot of time with the startup but you should learn to prioritize how you spend your time.
• About LISTENING TO CUSTOMERS: “PEOPLE ARE NOT GOOD AT EXPRESSING THEIR FRUSTRATION”. Listening to the customer is not about feedback emails or questions you ask your users. The best way to listen to the customer is THROUGH METRICS: heat maps, who comes back, who they are, etc.

Overall, a very interesting breakfast at GCP.