The following question was posted on Quora and I saw it at the end of the day as I was winding down. The question was very relevant to me, and I wanted to share my answer here on my blog as well. I will also be starting to post more startup related topics and fewer cleantech related topics, as that is where my attention is these days.
What does a day in the life of a SaaS startup CEO/founder look like post product-launch?
Especially when the founder is scaling up the business.
Wow this question is very relevant to me. Good on you, Quora. I will try my best to capture a day in the life for me but obviously everyone is different. Lets actually start before I wake up. I dream about the business, usually about some challenge or problem we want to solve. If it is a good night’s sleep I actually generate insights and ideas I think might be useful and I wake up energized to try them or tackle whatever challenge. A bad night’s sleep means that my dreams are more about what might go wrong or negative feelings. Then I wake up grumpy and annoyed. Sometimes I wake up in the middle of the night and then I have to decide to go back to sleep to make sure I am rested or just get up and do something productive since I’m up anyway.
Once I roll out of bed and go into my home office, I tackle whatever customer issues have come up and emails. We are 2 people and we have a lot of east coast customers so even if I’m up at 6 the day has started over in NY so stuff is already happening.
I keep a list of all the discrete tasks that I need to accomplish in a separate project in Pivotal Tracker. I’m sure this will annoy any agile developers out there to no end, but since we use it for development tasks it is convenient to keep my “to do” list there too. The problemis that the things I have to simultaneously deal with every day are not remotely serial tasks that can be prioritized simply. I wear so many hats and my list of to-dos is vastly longer than I can hope to get to so every day is an exercise in getting extremely focused on what will make the most difference. The problem is there is no easy answer to that.
The reason it isn’t easy is that for an early stage company everything needs to be done right now, but that isn’t possible. I focus a lot on customer acquisition which is critical, but customer acquisition is a combination of many things. There are the tactics of trying to get people to sign up (marketing and sales stuff) and then there is obsessing about all the shitty UX aspects of your product that you know are preventing people from making it to the next step in the funnel or prevent them from enthusiastically recommending to a friend. Even if I make things much better it’s still way worse than we want it to be ultimately. This sounds negative but its not - I think its an important part of having the drive to continually improve things.
We are still in the rapid prototyping and test/learn phase, so I obsess about what features we could develop that would reduce friction in the system or increase virality or utility. We also think about what we can remove or simplify. I meet with my CTO at 10am in a cafe somewhere and I bounce my ideas of him to get a sanity check since I think that it is dangerous to follow the siren call of “if we only built this then more people would sign up and use our service”. After he and I have had our morning pow-wow I go home and get back into execution mode. We interact for the rest of the day over Campfire.
I try to make sure that every day I accomplish one or more major tasks that relate directly to customer acquisition or otherwise driving brand awareness or user growth. If I don’t I feel that I accomplished that then I am not a happy camper in the evening which is my family time. The problem is that the more focused you get on execution the harder it is to pull up and really thing strategically about what direction you are going and how you should be doing things differently. Until you have achieved real product/market fit and just need to scale, I think its important to spend a good amount of time thinking about how the business needs to evolve and adapt. I have no problem with strategic thinking but I have to get over the fact that stepping away from the computer and spending time thinking and pondering and not “doing” is not “being unproductive.”
At some point I try to shower and shave, especially if I will be seeing other humans that day. Shaving is highly overrated.
By 6 or 7pm I try to start winding down and focusing on tasks that are repetitive or boring but serve to clam me down in a zen sort of way (think of sorting or de-duping lead lists or something along those lines). I do this because I want to ease into a more calm state of mind before going upstairs and spending time with my wife and 3 year old daughter before she goes to bed.
Evenings are for me and my family, and while my phone or iPad is always nearby, I really try to just veg out and recharge. Belgian beer is a critical component of this. I tell myself that when we close the Series A things will settle down. I know thats a load of B.S., but its nice to think about anyway.
I received this forwarded email with a concise comment from a prominent journalist at a major news organization:
From: Khobi Brooklyn [mailto:XXXXXXXXX@teslamotors.com]
Sent: Wednesday, September 01, 2010 12:21 PM
To: Khobi Brooklyn
Subject: Tesla statement on GM’s attempt to trademark “range anxiety”
Statement in response to GM’s attempt to trademark the term, “range anxiety” from Tesla VP of Communications, Ricardo Reyes:
By all means, GM can have “range anxiety.” To Roadster owners, the term is as irrelevant as “gas stop” or “smog check.” We are, however, looking into trademarking “Tesla grin.”
Khobi Brooklyn I TESLA MOTORS
office: 650 XXX XXXX I cell: 415 XXX XXXX
Morgan Stanley’s first coverage report was a fascinating read last night given Tesla’s rebuttal to my analysis of the ZEV credit market and the potential impact to EV startups. It also highlights Tesla’s bizarre PR approach to critical journalism.
Morgan’s analysis related to the ZEV credits reads like my original reporting in Wired verbatim:
“In 2009, ZEV credits sales totaled $8.2 million (7.3% of total sales and 86% of gross profit). For 2010, we forecast ZEV credit revenues of only $2.5 million as more sales are outside the US.
For the Model S, we forecast ZEV credit revenues of $5,000 per vehicle but recognize that there is uncertainty as Tesla has not finalized contracts to sell ZEV credits for the Model S. In our 2014 base case, ZEV credits account for 2.8% of revenue, 13.2% of gross profit, and 57% of operating profit. Because ZEV credit sales are nearly 100% margin, Tesla could have an EBIT margin advantage of 1.5–3.0% compared to traditional automakers.”
and a little later they confirm it is Tesla who provided this guidance:
“Our forecast of $5,000 per Model S sold in the US is based on management’s guidance. If Tesla cannot sell ZEV credits, our EBIT margin forecast would fall an average of 2.4% per year.”
If you read Tesla’s rebuttal to my original post, where I sourced a morgan stanley analysis from the roadshow that I saw myself, they say that they never said the $5,000 figure, and imply that their profit margins are not dependent on ZEV credit numbers. This flatly contradicts what Morgan Stanley (one of their underwriters) just released in a report.
The one thing I appear to have gotten wrong in my reporting is my failure to point out that the ZEV credits apply only to about half of their projected volume, but on the other hand I used Tesla’s own estimates for operating margin which are optimistic in drawing my conclusions. Morgan stanley believes their operating margins will be about half of what they project, so the bottom line potential earnings impact if ZEV credit value goes to zero is still 50% in the Morgan Stanley scenario.
All of this highlights what I consider a compulsive desire for Tesla management to rebut anything said in the press that can be interpreted as critical or unfavorable. The fact that they would do so on a day when all of the analysts who they have been working closely with came out with reports that reinforce my original point is mystifying.
My guess is that their rebuttal post will do more harm than good as they find themselves having to explain the inconsistency to the analysts they have been working closely with to provide “guidance” on financial projections. The easy solution to this would be for Tesla management to be transparent about what they believe the market for ZEV credits will look like in the 2012-2017 timeframe so the various analysts covering Tesla can reflect this in their models.
Here is a link to Tesla’s rebuttal to my ZEV credit article, where I point out that the value of ZEV credits will likely crash and that may present additional chalenges to profit margins.
Tesla has a record of being combative with journalists who offer criticism or unfavorable opinions, so I was pleasantly surprised that there were no obvious ad hominem attacks in the rebuttal. Actually I was disappointed.
Its a long rebuttal, but I can sum up their argument for you:
1) We didn’t say what your source heard us say on a conference call (which was corroborated by what another source told me)
2) Your analysis of our projected gross margins (which came from theTesla roadshow) is wrong but we can’t say why its wrong because we don’t make forward looking statements. But you’re wrong.
3) You were wrong in your analysis because we are only going to sell a fraction of our cars in ZEV states, which means the $5,000 per car figure (which we never said) is even less attainable than you thought (you douchebag.)
So I ran it by my sources and one of them said the following, which I think sums it up quite nicely: “So if I hear it right, they are willing to talk in general terms that could be misleading as long as no one questions the assumptions. And then if someone does they will defend themselves vehemently?”
Here is a link to my latest article on Wired.com.
Its always tricky to write about anything related to the CARB ZEV mandate, since it is probably the most opaque and confusing reg in the world (ok, maybe that is hyperbole, but it’s pretty accurate.)
In the past year I’ve spoken to dozens of analysts and investors and not a one had a good understanding of the reg. Ironically Automotive News ran an article today that gets it all wrong too (sub req’d)
So much of AONE’s prospective value is tied up in the volume that Fisker will deliver over the next years, as they represent the largest PHEV program that AONE has locked down. What is interesting to see is that very few of the analysts covering AONE make much effort to discount the execution risk of the Karma program and the volume expectations.
I think it would be wise for anyone advising investors in AONE to recommend a fair value based on the Fisker’s current stated launch date and volumes. Then provide a downside scenario. There is no upside scenario because the manufacturer’s statements are the upside scenario. So my question to the Barclay’s analyst is what do you think the fair value of AONE shares are if Fisker enters production in Spring of 2011 and is able to support volumes of the Fisker Karma in the 3 to 4000 unit range over the next years? I’m not necessarily picking on Fisker here - all startup manufacturers of EVs/PHEVs will always present the most bullish estimate of volumes before they actually bring product to market for the obvious reason that doing so presents the best picture of their business. It should be the role of analysts to do the work to come up with a reasonable discount for those company statements, or a rationale for why they support it. In my opinion, the key factors which cause me to discount Fisker’s projections are: 1) They have not yet demonstrated a real production intent prototype with production intent parts. This is a very big concern that can’t be allayed with the waving of hands and PR statements.
2) They only locked down a battery supplier in February, when AONE bought the contract out from under HEV. I believe they have still not finalized a volume production partner for motors, which are an important piece of the puzzle.
3) The Karma’s current projected price is around $90,000. The market for $90,000 cars is quite small. The market for PHEV $90,000 cars is a smaller portion of that.
On the plus side,
1) I continue to believe that the market for PHEVs will be bigger than the market for EVs in the short term, even though the media attention seems to favor pure BEVs.2) They already have 40+ dealers who are eagerly awaiting product to sell to their customers.3) The car is very pretty, which matters a lot.