We're pleased to announce the launch of Mucker Academy, a new initiative meant to help entrepreneurs understand and master the brass tacks of building a great company. To kick it off, we'll be sharing videos from our "Leadership Stories" series, where leading experts from the Mucker network sit down and talk with current MuckerLab companies.
Leading the way, we have a discussion with one of the first founders Mucker invested in, Jerry Jao, the CEO and founder of Retention Science.
Watch the full video here, along with some key highlights transcribed below.
William Hsu, Mucker Co-founder and Managing Partner, introduced Jerry with the following:
"Jerry is a shining example of the type of entrepreneurs we like to invest in. And, that is someone who is humble, but understands that sometimes you gotta stretch yourself to make it work, who is relentless, and who really understands what it means to sacrifice to be an entrepreneur."
Below are 10 of Jerry's key insights from the talk, edited slightly for clarity.
1. On moving to the U.S. by himself at fourteen:
Jerry Jao: I basically looked up a bunch of classified ads in Chinese newspapers, and called about fifteen families, told them I'm not just renting a room, but I'm actually calling them to see if I can have them be my legal guardian as well, because I moved here by myself. So, I need someone who could oversee me and register me to school, and in exchange I'll pay you $200 more. That was my first lesson in negotiation and trying to think outside of the box a little bit. Like Will said, it's a lot of hustling, entrepreneurship. It's not a lot of glamour. It's really just figuring out ways to make things work.
2. How to be taken seriously when fundraising:
JJ: You know, we're only here today because Mucker, too. I was one of those entrepreneurs who hated fundraising, I didn't know how to talk to investors, I was really shy actually. And if you talk to Will, the one thing that really took me far today in my personal career is that he once told me, "Jerry, you're too nice. Cuss a few times in between sentences just so they know you are serious because you look like a kid. Investors need to take you seriously." And so I took those words and I tried to figure out how I can be myself.
3. On building a great team and focusing on their journey:
JJ: I started a company because I'm really passionate and I like to build things. But what I also realized is that once you pass twenty people, it's about the team. And the only way you can inspire them, the only way you can build a great company is if they are just as much into it. I try to focus the conversations on them. What do they want to learn, what do they want to get out of the company, what can they do to personally improve. And I wanna say to them, selfishly, that I really wanna hear from them. Because I know that I'm far, far away from being perfect, and I'm learning on the job. I have a lot of great folks that started with the company, started with me very, very early on, and now many of them have passed the two year mark, the three year mark, and I owe it to them to make sure that this becomes a successful journey for them. And that's the only way. And I don't know if that makes me a great manager, other than just the fact that I care a little bit more. And, I don't say it, but I try to show it.
4. On his earliest business development experiences and the CEO as full-time salesperson:
JJ: Early on, we have nothing to show. We don't have great case studies, it's all them believing what you are trying to build and what you can do for them. I think being as genuine as you can... if there's anything I can say I'm decent at, it’s that whatever I say, I really mean it. If you really mean it, and you really convey that, people can sense that.
I've learned a lot during my journey as a CEO in the last three years... I never realized that I would basically be a full-time salesperson. As a CEO, as a co-founder, when you're trying to hire someone, you're selling. When you're trying to convey your product, you're selling. When you're trying to get a client to not leave you, you're selling. You're constantly in the mode of storytelling. Not only to the clients who are our customers, who pay for our bills, but I also think of the team as my customers, I work for them. So, the storytelling, being genuine, being authentic, and then just being able to sell that vision, it's part of everything that you do as a founder and as a CEO.
5. On the "babysitting" side of investment:
JJ: You shouldn't rely solely on venture capital, because I've started two other companies, and I know what it means to have a board, and what it means to raise money. So while it sounds really good to say, "we raised ten million plus," and it sounds like a lot of money, in the back end you're losing control, you're giving away equity - there's a lot of added stress... Most of it, if you do it right, 80% of it should be additive and really good for your business, but there is 20% that some of the team hears me call 'babysitting,' because you have investors that you have to report to. They will send you quarterly audits just to make sure they have the right amount of numbers and things that they need to check in with you. And so, while some of it is a distraction, some of it's really good too, and they definitely open doors.
6. Something he wish he had done differently:
JJ: One that comes to mind right now is to hire experienced people in areas of need. Once you have capital, time is more important. And being able to figure things out faster versus investing in someone who is just as passionate as you without the necessary experience to take your company to the next level, I realized that really is a big difference, and I think that is actually one of the mistakes I made. I'm still being challenged by our board to fill in senior roles in a couple areas because I tend to be someone who believes in investing in younger talent and growing with them because I personally get a lot out of seeing someone grow, and I've seen that through our team... seeing them completely transform from when I first met them to where they are today. But, I think that our responsibility as CEOs and founders, or whatever hats that you wear, your responsibility is to the company. One of the key things is putting the right people in the right place so the growth can accelerate, and experience matters.
7. Why money lets you learn from your mistakes:
JJ: I try to save on expenses for myself and my founding team, but not really on the rest of the team. For the first two years of the company, Andrew and I didn't pay ourselves, and that was a little bit extreme. But then once we felt that things were a little bit better, we started paying ourselves... Andrew and I paid ourselves $60k a year until last year.
And so, those are things you do as your personal commitment to the company because you believe in it. Up to this day, every trip I take to San Francisco, I book zero hotel rooms. Zero. Because I think about how a hotel room is one night - six or seven hours of sleep. I'll just sleep on someone's couch, and that is one lunch for my entire team for one day.
You, as a founder, can figure out what level of comfort you can take on. There's no right way to do it. But I think that being able to make your money work longer is really, really important because it gives you time to make mistakes too. And you will, and I have made more mistakes than I would have preferred. But it allows you to learn, and I think that's what venture money allows us as entrepreneurs to do.
8. On how his idea evolved over time and taming the control freak:
JJ: It's very scary because I think many of you guys that start companies, there's a little bit of control freak in all of us. And to give control and to really trust your team and to let the feedback that you get from the market to improve your product, it's your baby, it's your idea - and realize that whatever you had was not good enough, or sometimes in certain cases, my idea was complete shit. You have to be able to be OK with it, and then evolve and become better. The market will tell you. If you have the right team members, and they're collecting the right feedback from the users or your buyers, you will know. And once you realize that, things just feel a little bit easier, because sometimes if things are not right, if you don’t have the right product and you don't have the right business model, everything feels like you are taking three steps forward and then four steps back. If you have the right business model and the right products, you will still have a lot of bumps along the way, but hopefully it's a little bit easier and it feels like you're taking two steps forward and one step back instead of three steps back.
9. When to start developing stricter procedures and processes:
JJ: For whatever reason, I think at 30-50 people... I call it the kinda ugly adolescent stage, where you're not a big company yet, so there's a lot of things that you haven't really figured out, but you're no longer a startup so you can't use that as an excuse. And that's when process, procedures, and knowledge transfers and documentation becomes really important, because you will have a lot more people that are joining you, you will have some people that are leaving you - there's gonna be a knowledge gap. And, we started to experience that a lot more past the 30 mark, at least that I'm hearing about. But I'm sure at the team level there's even more frustration. So, the sooner you can implement some of those, the better."
10. On storytelling, being honest, and keeping everyone on the same page:
JJ: There's different components to storytelling. There's making your story emotional so people can remember you. I forgot who said it, I think it's Ghandi or Mother Theresa, one of them, it's not about what you say to people, it's what you make them feel that they will remember. And if you can make your story emotional so that it really resonates with someone, or inspiring... I don't dare to say that my personal story is inspiring in any way, but I know that my story is slightly different.
There are investors that if you are too polished, they think you are faking it, and they will think that you are actually hiding something from them. You don't want that. You want to have a very honest relationship with your board, so when times get tough, they really are your partners, versus you hiding everything away from them. But, you also don't want to ask too many questions... sometimes there are board members that, if they see you asking too many questions, they see it as evidence that you can't figure it out on your own, they see it as you not being good enough or inexperienced. So, you're doing this very delicate dance of how much can you show that you don't know. As a CEO and as a founder, there are plenty of things that we run into that we have never done before, so how do you ask questions, how do you tell that story in a way that they can understand it, but they won't judge you for it.
All the early team members, they're really close to me, they text me, they know that they can joke with me, make fun of me, and I'm very very OK with that. But with a lot of new team members, I've realized there's a little bit more distance. So, how do I tell a story that our older team members, because of the context they have and the history there... you know, you have to tell things in a very different way, you have to explain things in a different way. We have a monthly team meeting that basically communicates high-level information to everybody, and I'm still trying to figure out the perfect way to tell the story because everyone, depending on what you do, you have a very different perspective and you look at the company from a different angle. You feel like the company goes through different kinds of struggles. So, how can you bring that to an even playing field so that you are communicating to everyone from the same platform. That's really really hard. It's really hard to do with precision, and without a lot of consistent communication, and busy as everyone is, I think it's worth investing in, and to me that's also the art of storytelling too.
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