“Summon: 15 Minutes with Founders.” Learn Business/Career Tips from Top Startup Founders

Posted on September 22, 2014     Leave a Comment

“I like to listen. I have learned a great deal from listening carefully. Most people never listen.” ~Ernest Hemingway

One of the best ways to learn is to listen. As a CEO, it is important for me to always be in tune with what happens inside my company and with patterns, changes, and trends inside the industry. I’ve found that my friends are a great resource for this. I regularly talk to my friends about the challenges and opportunities for Summon and other startups, and they likewise share with me things that are happening in their business lives. In my own CEO-take on Comedians in Cars Getting Coffee, I began capturing these conversations on video so that I could go back and dig up these bits of wisdom weeks or months later and so that everyone else could benefit from the wisdom of what my car companions had to say : ) That is how Summon: 15 Minutes With Founders was born.

If you’ve seen the show that inspired these videos, you know that the best thing about these conversations is their unpredictability. They aren’t necessarily about Summon or any startup in particular. Rather, they are valuable insights into the world of startups — running a startup, investing in startups, working in a startup.

A few weeks ago, I had the chance to chat with my friend Kintan Brahmbhatt, the Head of Product for Amazon Prime Music and a former startup founder. While Amazon, a multi-billion dollar global corporation, and Summon, a rideshare startup based in the Bay Area, might seem worlds apart, there is actually more commonality there than you might think. Both Amazon and Summon are marketplaces with sellers (drivers) and buyers (riders). Both Amazon and Summon are trying to bring growth to relatively new products (Amazon Prime Music and Summon Scheduled Rides). Finally, both companies are in a highly competitive space (Spotify is to Amazon Prime Music as Uber is to Summon).

Hope you enjoy the video as much I enjoyed filming it with Kintan! Subscribe to more videos in the Summon: 15 Minutes With Founders series here.

Are your Homejoy cleaner and Summon driver servants?

Posted on August 15, 2014     4 Comments

Some time ago, I was at a party organized by Homejoy and supported by several collaborative consumption companies including us. I ended up seated next to New York Times reporter David Streitfield. David was on the NYTimes team that won the Pulitzer prize in 2013 for reporting on the working conditions at tech factories in China. So when he asked me an uncomfortable question, it wasn’t entirely unexpected. David’s question, as I recall roughly, was:

“Do you think collaborative consumption is just creating a servant class in America, similar to what existed in, say, colonial India?

Collaborative consumption (or “sharing driven”) companies are now the fastest growing businesses in huge sectors, such as transportation, cleaning, and travel. Companies in new sectors seem to start everyday, so David’s question about how we are treating workers who are driving this revolution is an important one.

After giving David’s question the thought that it merits, my answer is no. Collaborative consumption is not creating a servant class. Obviously, I have a conflict of interest here, so I want to lay out my reasons, and you can decide for yourself.

A Few Thousand Miles Behind The Wheel

It’s fine for a CEO to lay out logical reasons why the movement his company is a part of is a net positive. How can he know about how drivers are really treated and how they feel though?

Here’s why I think I can: when we started Summon (then called InstantCab), we had no drivers. For the first two months, all six of us in the company wrote code 5 days a week in our shared Mountain View house and then drove up to SF. For 3 nights a week, we drove for 8 hours everyday. Initially, we barely knew SF geography, so each car had a driver and a navigator. 24 hours a week, for several weeks, my wife sat next to me and helped navigate as I picked up riders around the city. I cannot claim to have walked a mile in the drivers’ shoes financially, but I did experience their day to day life for a few thousand miles.

All of us at Summon learned more about driver centric design in those weeks than any of my grad school classes on user centered design could have taught me. I still drive when time permits, to keep up my understanding of what drivers need from Summon.

The American Ethos Respects Hard Work of Any Kind

Americans have always respected people for earning a living through hard work, regardless of the type of work, and there is no reason that this fundamental part of our culture should change with the rise of collaborative consumption.

The Discovery Channel show Dirty Jobs, in which the host Mike Rowe pulls up his sleeves alongside folks who do dangerous, dirty, or outlandish jobs, has a huge cult following. While many episodes have a shock factor, they also emphasize the simple fact that there is nothing embarrassing about doing any job that is a net positive for society.

The word “servant” has a negative edge because it automatically connotes one person as being beneath another person, in large part because of the type of work he or she does. This edge is sharp because it recalls times and cultures when there were other types of strong bias. For example, in colonial India, Indians were treated worse than the British rulers just because they were Indian. It is reasonable to say that in America today, we live in a much more egalitarian society.

My own experience behind the wheel (most of my riders did not know I ran the company) proved this to me beyond any doubt. Sure, there were people who were a bit curt, but often it was because they were running late. Even in those instances, I never once felt like they thought of me as beneath them in any way.

The Sharing Economy Places Importance on Mutual Respect

Treating someone well means having some respect for them. Most companies in the sharing economy expect that their riders treat their drivers with a basic modicum of respect and vice versa. This is one reason behind driver and rider ratings mechanisms. This virtuous cycle of respect is obvious if you study pre-sharing economy opinion polls of taxi drivers with similar polls of transportation companies today.

Indeed, a core principle of our design is that frequent riders have the best service experience when they get a ride from drivers they have liked before , enabling a long term mutually beneficial relationship rather than just a transactional one. Lyft’s model is based on the driver being a friend.

Collaborative Consumption is Actually Improving Working Conditions

Jobs in the sharing economy are in many ways much better for workers than traditional jobs. Collaborative consumption jobs provide higher income and greater flexibility.

If you compare traditional taxi driver wages with what rideshare drivers take home, the difference is starkly in favor of collaborative consumption. UCLA Professors Gary Blasi and Jacqueline Leavitt researched the working conditions of Los Angeles taxi drivers in 2006 and found that the average taxi driver makes just $8.39 per hour and works 72 hour per week— with stats like these, it’s no wonder Blasi and Leavitt called taxi drivers the “driving poor.” The City of Portland commissioned a more recent study in 2012 and found that not much had changed. Portland taxi drivers on average make just around $6.22 per hour and work 72-98 hours per week, and the City determined that “these low hourly wages are consistent with those found in recent studies in other U.S. cities.”

In contrast, Uber says that its UberX drivers in SF make about $75,000 per year. Those in NY can make $90,000, more than the average tech employee in the US. The gig is also more flexible than traditional taxi driving, since peer to peer drivers own their cars (no leasing fees to worry about to pay to other drivers or to a cab company), don’t have to pay for medallions, and drive whenever they want.

These differences are not limited to driving. Maids in this country typically make $9.51 per hour. Homejoy cleaners, on the other hand, make $12-15 per hour plus tips.

In July, Deloitte asked an aspiring grad student named Bob to use a bunch of different sharing marketplaces for a 5-day work week to see just how much he could make. Bob was able to make $1060, the equivalent of $55,120 per year, almost 40 % higher than the average wage worker and more than 4x greater than the Federal minimum wage. Collaborative consumption is upgrading the job market by offering flexible opportunities to earn money.

If you ask any Summon driver what they like most about their gig, the answer is likely to be the flexibility. Summon drivers, like most marketplace sellers, set their own hours. Many Summon drivers are musicians who drive in between gigs, chefs who cook at night and drive during the day, or stay-at-home parents who drive while their kids are at school. Summon Personal drivers get paid weekly, and Summon taxi drivers get paid the next business day, much better financially than what the traditional taxi driver faces—getting paid once per month after hundreds of dollars of deductions for medallion and leasing fees.

Collaborative consumption is also efficient in allowing for a quick start. Traditionally, taxi drivers have had to buy into corruption (i.e. promise dispatchers a portion of their income to get more rides) and get approved by the existing group of taxi drivers before they could start working. With services like Summon, all you need is a willingness to learn and a smartphone, and ride dispatch is automated and unbiased. More than half of Americans already own a smartphone, and Summon lends phones to drivers with extenuating circumstances.

Summon’s operations team is always creating new driver incentives and developing programs to improve driver happiness at Summon, both on and off the road. For example, we recently negotiated with a health insurance manager called SimplyInsured to make more affordable health insurance available to Summon drivers. We also offer discounts on select car models to make it easier for drivers to purchase a car and join the sharing economy. At least two of our competitors have adopted similar initiatives. Such initiatives were rare in the old taxi model.

Some people have non-monetary motives for taking a job, such as learning new skills. In the US, many parents encourage kids to get a job as soon as they turn 13 or 14. 1/3 of American teens have jobs. A lot of these jobs are low-paying service or retail positions, but they teach valuable life skills, including teamwork, leadership, and professionalism. These may be worth a lot more over the course of life than a paycheck. The adult job market has rapidly opened up with the rise of collaborative consumption, leading people to become peer to peer drivers, Airbnb hosts, Homejoy cleaners, and more. These jobs also teach valuable life skills. For example, Summon drivers learn to be good conversationalists, build their customer service skills, and learn the city like the back of their hand.

Jobs in the sharing economy have other “soft benefits” that are often overlooked. They actually do create a sense of community and togetherness. One of our top Summon drivers is an Oracle engineer who works remotely and drives for Summon in the evenings in order to be around people and see the city. Another Summon driver recently lost her daughter and drives to relieve stress and loneliness and keep her mind occupied. Having an office job, despite all the regulatory protections it offers, would not be able to offer such benefits. People join marketplaces for reasons that extend beyond their bank accounts.

Collaborative Consumption Exists Alongside (and is likely helping fuel) a Growing Economy

The critics of collaborative consumption say that the sharing economy is merely the outgrowth of an underperforming economy, but collaborative consumption may actually be fueling economic growth. San Francisco, the birthplace of many sharing economy companies, has seen rising economic growth over the last several years, so people are doing better financially as the sharing economy explodes. Yes, correlation doesn’t imply causation, and yes, the plural of anecdotes is not data, but we are consistently hearing from drivers who say their personal financial conditions have improved significantly over the last few years.

As the graphs below indicate (graphs obtained from the US Bureau of Economic Analysis), the San Francisco metropolitan area has improved since 2008 in terms of overall GDP, per capita income, and average wage per job. There’s a lot of work to be done in terms of reducing income inequality, but these numbers are encouraging. While exact figures were only available through 2012, reports suggest that median household income is expected to grow 4 percent in SF between 2013-2017, and average wages in the customer service area are expected to rise 3.9 percent in the Bay Area in 2014.

All this data suggest that marketplace sellers may actually be getting a pretty good deal. A general culture of respect for service jobs, specific incentives for drivers from marketplace companies like Summon, and a good economic environment make collaborative consumption a positive trend. Rather than creating a “servant class,” collaborative consumption just might be the key to economic growth and worker satisfaction in the coming years.

It is clear to me that collaborative consumption is a net positive for America. I’d love to hear what you think.

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Why?

Posted on May 28, 2013     Leave a Comment

Many aspects of running a startup are incredibly hard. With a startup like InstantCab where our goal is to massively improve a fundamental, real world service like transportation – the challenge of scaling up to serve tens of thousands of drivers and hundreds of thousands of customers is especially hard. At some of our hardest moments, I get asked why I do what I do. The answer is straightforward: I get to lead a remarkably smart team of men and women to solve real problems for thousands of people every day, using technology and empathy, and I get paid to do it. There is really nothing else I can think of doing that would afford me this unique combination of privileges.

Execution lies in the details

Posted on March 2, 2012     Leave a Comment

Once the vision for your startup is firmly in place, it helps to tighten up focus. This quote from philosopher William James about “master[ing] the thousand and one practical matters that will ultimately make your dreams come true” evokes the right picture: “I am done with great things and big plans, great institutions and big success. I am for those tiny, invisible loving human forces that work from individual to individual, creeping through the crannies of the world like so many rootlets, or like the capillaries.”

 

[1] as summarized by Rob Breszny who would qualify as a philosopher in my book.

What I learnt about sales from the angry subway preacher

Posted on May 13, 2010     Leave a Comment

One of the advantages of starting up is that you get to choose where your office is. RideCell’s office is at the edge of the Georgia Tech campus and a 5 minute walk from the nearest MARTA (subway) station. I enjoy taking the train to work, having the luxury of basking in the beautiful sight that is Atlanta’s skyline in the morning sun. The 15 minute ride also gives me an opportunity to think about the “big picture” of our day to day labors.

These days while Arun, Venkat and Sahiti handle a bulk of our coding, I spend a lot of time selling. I do at least five and some times fifteen calls most days with transportation and campus security folks at Universities around the country. Some are cold calls, some are qualified leads. What is encouraging is almost everyone I talk to agrees to see a demo and (literally) every one I have given a demo thinks we have a really useful product. What is frustrating is how long it takes to go from “This is an amazing product, we need it yesterday!” to “Let’s sign a contract”. Weeks, at least. Months, usually.

This was on my mind today as I walked out of the MARTA Midtown station and sat down on a bench outside to wait for the Tech Trolley. About 15 feet away from me was an angry looking man, standing next to a large copper drum, waving pamphlets in the air and shouting. At first I thought he was a salesman, but turned out he was an angry preacher denouncing fake gods and chastising folks to follow him or burn in eternity.

The brand of spirituality that he was selling: “my way or hell”, if it can be called that, was hardly to my liking. Neither was his style, in fact: I don’t like angry strangers who shout at me. But then it occurred to me: how many deals do you think this man ‘closes’ in a day? Heck, how many people actually even pay attention to him? Yet here he is, standing in a public place, selling his ‘product’, shouting at the top of his voice day after day. On the other hand, most of my potential customers actually take an hour out of their busy lives to see a demo, and even praise what I am selling. So it takes a few weeks to close the deal, big deal! I believe in the utility of my product more than he believes in his. Heck, unlike him, I got stats to back up my beliefs! So if he can stand out there, shouting hour after hour at people who ignore him in the hopes that even if he doesn’t ever get to know about it, may be one of them will look into his brand of spirituality, what right do I have to complain?

TL:DR; When you get frustrated with long sales cycles, think of how bad it is for the angry subway preacher!

A dispatch from the startup frontlines

Posted on March 3, 2010     Leave a Comment

It is a cold rainy day in Atlanta today. Bleak as it can be. My daily startup roller-coaster has hit its periodic low and I find that yet again, I need to remind myself why I am doing this. For me, a great thing about starting a startup is all the new things I have learnt. I find that writing down what I have learnt makes it more concrete. Hopefully this will be also be useful to a few others.

It has been over a year and a half since we started RideCell, less than six months since we pivoted into building a product which has brought us non-trivial revenues and less than three months since I started working full time on RideCell. Here are a few things I have learnt so far:

0) Advice is useful, but mostly after the fact.

If you are sitting there on the couch, with an idea in your head, and you have never built or tried to sell a product, stop reading this article and go do that first. Seriously.

All the ideas, advice, articles, anecdotes, books and events about startups are not very different from a novel. The vicarious pleasure they provide you is as fleeting as infatuation and over almost as soon as you are done reading. A real startup is like marriage. A lot more hard work and much more satisfying.

Get out of the house/office/classroom and talk to the people who you think want your product. Build  a minimum viable product. (Try to) Sell it. It is scary, but doable, and a lot more exciting than reading. It is the real stuff of startups. Try not to indulge in reading about startups or fantasizing about new ideas till you have built and tried to sell the first version of your product.

Advice is 10x more useful after you have tried to accomplish something instead of just thinking about it. I know this for a fact. The rest of my advice has no basis more reliable than my own meandering experience.

1) You are building a palace in the air. And that is o.k.

If you are feeling scared about the fact that you have only an idea, don’t be. Be concerned. Act. But don’t be afraid. If you focus on talking to potential customers and building what they want, you’ll find yourself a few months [or weeks, if you use python ;)] down the line with your first user singing paeans to your product (followed, almost certainly, by 10 feature requests).

Build fast. Talk to your customers constantly. Don’t worry too much about potential competitors.

2) Know that inertia doesn’t love you any more.

If you are doing this right out of school or a job at a big company, starting a startup may feel a bit like swimming up stream to you. In school or at a large company, you have your teacher or your boss constantly telling you what they expect you to do next. If you find yourself depressed one Monday morning, everything around you is not going to stop. Meetings will still happen, your boss will still ask for status at the end of the day, and almost counter intuitively, this can be a good thing. If you start working on something because you have to, you forget about the things bothering you and if you do something productive, you become happy again.

At your startup, if you stop, the company stops. You decide what you need to do next, so if you are depressed one Monday, there won’t be a boss or a teacher to tell you to can your self pitying and get shit done. Tuesday will be bleaker because you got nothing done on Monday. So this kind of thing can become a bad self reinforcing cycle.

To fix this, get a good co-founder who can kick your ass into gear or drag you out for ice-cream if you are slacking/sulking. Learn to recognize inertia, self pitying and other self reinforcing cycles of doom in yourself and respond to them with merciless action. Inertia is your enemy now. Pick a task, any task, and get it done.

3)  Re-examine all your virtues.

Anything, taken to the extreme is dangerous. So it is with all virtues. Take perfectionism. As a startup and a two (one?) person team, you are not going to ship the next best thing since sliced bread at version 1.0. In fact, chances are, many aspects of your product will be cringe worthy. As long as your product is still useful, that is o.k. Cut the right corners.

Perfectionism is just an easy example. Re-examine other virtues also: Are you too flexible? Do you always want to say yes to all customers? Is that scalable?  Do you want to build a framework that will scale to a million simultaneous user sessions before you ship your first version? Are your first 100 users going to pay for that?

4) You are two people: Maker and Manager

Makers need to focus on one thing at a time in long stretches. For example, when I code, I always feel like I need at least a couple of hours to get anything significant done. Managers need to focus on fighting a hundred fires and pursuing a hundred fleeting opportunities. If I focused on trying to recruit one customer per day, it would take me years to be cash-flow positive.

It is hard for makers and managers to even work together. But when you are playing both roles, it’s like having full blown multiple personality disorder. The only way I have found to manage it is by setting aside specific chunks of time to do maker type stuff.

5)  Keep an eye on the roller coaster, or it will kill you

The startup roller coaster has higher highs and lower lows than you can imagine. On days you hear positive feedback from one of the leading institutions in the world, you will feel like a young Sergey Brin. When you don’t hear back from them for a couple of weeks, you will feel like the biggest loser in the world. The only way to deal with this is to recognize and acknowledge the roller coaster. “This too shall pass” should be your daily mantra. When you are feeling high, spend no more than a few minutes basking in your imagined glory. When you are feeling low, know that something will likely happen soon that will cause you to feel positively glorious again. Through everything, always, always, keep working.

6) Either your ego dies or your startup dies

At a startup you will spend much of your time either talking to customers or working with your team. It is important that you keep your ego out of these interactions because they will make or break your startup.

Customers: Recruit customers who are helpful and willing to talk. Then listen to them like they are the smartest people in the world. These are people telling you exactly what you need to do to make money from them. If you have chosen your field wisely, this is work you really like doing. So these people are telling you how to do what you like and make money doing it! Sure, you are probably an ace hacker and maybe even a world-class expert in technology. Forget that for the moment and listen to what the customer wants. All the technology in the world is worth bupkiss if the customer doesn’t get what she wants.

Team: Recruit only people who are smarter than you at what they do. When they talk about it, listen to them. Unless your goal in life is pay people to listen to you brag about your superiority, the reasons for this should be obvious.

7) It’s hard to be king. If it’s not, you are doing it wrong.

If you have people reporting to you, you should know that being a boss is a lot more than just “delegating work”. Sure, not having to do everything yourself is awesome; but presumably you have had a boss before; did you want them to treat you like a cog in the machine, just assigning you work and squeezing everything out of you? I didn’t. When that happened, I quit.

Take care of your people. Different people need different things from their boss. Try to understand what. Your job is to try to give them what they need to get their work done and then get out of their way. Think of yourself as their problem solver. Sometimes this may involve guidance with personal problems. Sometimes they will just need technical guidance. Sometimes they will need you to understand what you are doing wrong as a boss without taking it personally. Sometimes they’ll just need to vent. This kind of stuff is supposed to be hard. If it’s not, you are doing it wrong.

8.) Your startup will try to kill every other aspect of your life (again, and again, and again)

The CEO of Coca Cola said it better than I can:

Imagine life as a game in which you are juggling some five balls in the air. You name them – Work, Family, Health, Friends and Spirit and you’re keeping all of these in the Air.

You will soon understand that work is a rubber ball. If you drop it, it will bounce back.

But the other four Balls – Family, Health, Friends and Spirit – are made of glass. If you drop one of these; they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same. You must understand that and strive for it.

Except that at a startup, the work ball has expanded and will continue to expand until you make it stop. It is your decision where to make it stop. Naturally, if you expect work to take less time than going out with friends, a startup may be the wrong place for you. Ever so often, think of your friends, family, health and spirit and examine if the balance between these things is where you want it to be.

9) Be relentlessly resourceful

PG said it better than I can. Being Relentless is your hammer, Being resourceful is how well you wield it and where you aim it.

10) Pivot

If your (potential) customers tell you you are working on a problem they don’t have, and/or help you identify a problem they do have, pivot to solve it. Eric Ries said it much better than I can: Pivot, don’t jump to a new vision.