Mark Pincus on Why Most Startups Fail, Founder Control, and How to Win

Summary

In this candid conversation, Mark, a serial entrepreneur and investor, discusses his journey from founding Zinga to his experiences navigating the challenges of building and scaling companies. He reflects on the importance of founder control, dealing with board dynamics, and the evolution of his entrepreneurial mindset. Mark emphasizes the value of founder mode, the significance of aligning with investors and teams, and the need for speed and resilience in decision-making. He also shares insights on hiring, building early teams, and the role of intuition in driving innovation and success in the startup world.

Takeaways

• 😀 Founder mode is about controlling your vision and the company direction, even if it means making tough decisions that may not align with investors' immediate expectations.
• 😀 Early stage founders need to embrace the idea that failure is part of the journey—'all new fails' should be your mantra to encourage rapid iteration and learning.
• 😀 True signal in product development means identifying what genuinely resonates with users, rather than relying on abstract metrics or theoretical improvements.
• 😀 MVP (Minimum Viable Product) is outdated; founders should focus on creating products that are launchable and scalable rather than minimal.
• 😀 Building conviction in your product or company comes from continuously testing and refining ideas through real user feedback rather than betting on random chance.
• 😀 True signal is a guiding principle in product development. When something works perfectly, it’s evident, and founders should be students of that experience to replicate success.
• 😀 When hiring early employees, founders should prioritize speed and be willing to take risks, even if it means making mistakes in the hiring process.
• 😀 Founders shouldn't get bogged down in finding the 'perfect' first team. It's better to hire quickly and refine the team through practical experience and learning.
• 😀 Don't be afraid to copy successful elements from other proven products. The key is to capture what works, and then add your unique spin to it.
• 😀 Control is critical in the early stages of a company. Having control allows you to steer the direction of the company, even if it means pushing back against your investors or board.
• 😀 The real innovation often comes from small, iterative changes that improve user experience, not from radically new ideas that haven’t been tested in the market.

Q & A

What does 'founder mode' mean to you, and how does it impact the success of a startup?

Founder mode refers to a state where the founder has full control over the direction and strategy of the company. It is crucial because it allows the founder to make bold, sometimes unpopular decisions without being micromanaged by investors or boards. This autonomy is essential for navigating the ups and downs of building a company, as the founder can stay focused on the mission without being bogged down by external pressures.

How can founders align themselves with their investors and board when making risky decisions?

Founders must ensure that investors, the board, and the team understand and accept that building a company will involve risks and setbacks. Clear communication about the bumpy ride ahead, aligning the investors with the founder’s vision, and making them a part of the mission ensures smoother decision-making, even when taking bold and risky actions.

What is the importance of control in the founder’s journey, and how does it affect the company's direction?

Control is vital for a founder because it allows them to steer the company in the direction they believe is best, even if it goes against the expectations of investors or board members. Having control ensures that the founder can make long-term decisions based on their vision, without the fear of being pushed out or forced to follow someone else’s plan.

What role does true signal play in product development, and how does it influence conviction?

True signal refers to moments when a product or idea resonates deeply with users, creating an undeniable sense of validation. It’s an indicator of a successful concept, signaling that the product has real value. For founders, recognizing true signal is critical to fueling conviction, as it provides confidence to push forward even in the face of challenges.

What is the concept of 'proven, better, new' in product development, and why is it important?

'Proven, better, new' is a framework for product development where the focus is on improving existing ideas (proven), making them better (better), and then introducing new elements (new). This approach minimizes the risk of failure by starting with what is already working and refining it. It ensures that any innovation is built on a solid foundation of proven success.

How does focusing on the user’s experience help in product development?

Focusing on the user’s experience is essential for creating products that people truly want to use. Instead of prioritizing internal assumptions or peer approval, founders should examine how users engage with a product. If the product feels right to them, it’s a true signal, and that’s what should drive further development.

What mistakes can founders make when hiring their first team members, and how can they avoid them?

Founders often make the mistake of over-obsessing about finding 'best-in-class' hires right from the start. While it’s important to hire quality people, the early-stage team should prioritize speed and adaptability. Sometimes, founders should hire people who might not be perfect but show potential, using the hiring process as a way to discover gems and refine the team over time.

Why is hiring speed critical in the early stages of building a startup?

In the early stages, speed is critical because delays in hiring can slow down product development and team progress. The focus should be on getting talented people on board quickly, even if they aren't the 'perfect' fit. Early hires should be seen as an investment in the growth of the company, and the founder should be willing to adjust as the team evolves.

What challenges did the speaker face in hiring during the early stages of Zinga, and how did they overcome them?

The speaker faced the challenge of not having the ideal team members available right from the beginning. They resorted to unconventional methods like hiring freelancers and running interviews in a very informal, rapid-fire manner. Despite inefficiency, this strategy allowed them to hire quickly and find talented individuals who contributed greatly to Zinga’s success.

How did the speaker’s experience with Zinga shape their approach to company building and leadership?

The speaker’s experience with Zinga reinforced the importance of maintaining control over the company and its culture. It taught them that sometimes, even with control, external factors like public expectations and investor pressures can still cause challenges. However, the ability to adjust the company's direction and culture at key moments was crucial in ensuring its survival and success.