Glenn Kelman is a smart guy. He graduated summa cum laude from Berkeley, helped found Plumtree Software back in the 90s and is now running one of Seattle’s most successful startups.
But over the years, the Redfin CEO began to realize that in the startup world, it’s not all about how quickly you can analyze a problem or crunch numbers.
To Kelman, it has less to do with your head and more with the heart.
“I do think entrepreneurs need to be smart, but there’s another scale I never evaluated myself on that is now the source of my deepest strength: Not how much brains I have, but how much love I have,” Kelman said. “Over the years, I just started paying a lot more attention not to whether I was right or wrong, but just to how I make people feel.”
It was revelations like this that Kelman shared during a 45-minute keynote to Startup Weekend participants on Saturday at Redfin’s HQ in downtown Seattle.
Speaking to a crowd of mostly young, up-and-coming startuppers, Kelman retold tons of stories — some very personal, others downright hilarious — to help illustrate some advice on what makes a successful entrepreneur.
1. Startups need to work on a problem that matters
Before Plumtree became successful, Kelman’s team was working on a project that was basically a Quicken for foods. You could eat a hamburger and then convert it into different points, whether it was Weight Watchers points, Atkins Diet points, etc.
“None of us really cared about it and I don’t think any of us had been on a diet,” Kelman said. “It was a shitty problem to work on that no one else wanted to do.”
The lesson? Do something you care about, and something that others will care about, too:
It’s really important to make sure you have a problem that’s a really deep problem and one that you’re passionate about. You’d be surprised at how long you’ll work on the problem. I’ve been working on Redfin for 5-to-6 years now. People don’t think of me as Glenn Kelman; they think of me as the real estate guy. If I wasn’t interested in real estate, that would be pretty tragic, wouldn’t it? You need a deep passion in the subject. I met some young entrepreneurs doing something with nursing homes. I asked them, ‘Have you even been to a nursing home? Do you like it there?’ They were like, ‘No, but we just think it’s an under-penetrated space.’
Another important thing is really validating the problem, and it has to be a deep problem that people care about. And the only way to find that out is to talk to the customer. You have to be so curious about what customers really like.
One reason I was so convinced that Redfin would work was that I never met anyone who bought or sold a home who thought the process was ideal. They often thought real estate agents lived in the stone age, weren’t on their side and were overpaid. It seemed like a hard problem to solve, but if we solved it, everyone would want it.
When you’re thinking about your startup, wave a magic wand and say, ‘Let’s not worry about how we solve the problem.’ First just decide if we have an actual problem and then ask if people would pay you for it.
And when you think about your company, you have to become the chief salesman. I used to think I was too nerdy or intellectual or too good for that, but no, you have to be that person. If you can’t sell it, no one else can.
2. Working at a small company can help you become an all-around stud
Kelman’s first job out of college was at a startup, something he called an “irrational decision because the people that interviewed me were all extremely strange.”
“But it was hard for me to fit in at a regular place,” Kelman said. “I felt totally at home there.”
More from Kelman on his first startup experience:
The best thing was that I got to do everything, whether it was engineering, product management, documentation, sales, marketing, answering the phone — I did everything. The risk you have at a larger company is that you will only do one thing. The company will focus you on building not just the product but on one part of the product. You will be the nerd in the corner and someone will slip a spec under your door, give you a cup of Cheez-Its and hope you never see the light of day again.
The reason that’s a problem for you is that you need to meet customers to really understand what problems they have. If you’re only coding, or only doing sales or business development, you won’t have the breadth to really be successful at all the tasks that an entrepreneur needs to understand.
3. “The most underrated aspect of successful entrepreneurs is toughness”
Thanks to all the different types of work Kelman did at his first startup, he was forced to learn how to do many different types of things. This in turn fueled his confidence and made him tougher:
I learned I could figure almost anything out, and sooner or later you will need to get comforable with the idea that you will need to solve problems that you’re not normally comfortable with solving. Sometimes, the only difference between me and someone who comes into my office with a problem is that I feel like I can solve the problem, not that I have any better knowledge on how to solve it. Sooner or later you need to be in a gladiatorial situation that develops toughness in you so you can develop confidence to solve any problem.
Kelman also talked about his less-than-perfect childhood where he first learned to stop caring about what other people thought of him. That, along with several other “crappy jobs,” helped Kelman develop a certain level of toughness, which he said is the most underrated quality of entrepreneurs:
John F. Kennedy was once visiting a coal mine during a campaign and someone asked him if he had ever worked a hard day in his life because he had soft hands. To his credit, he said, ‘No, probably not the way you have.’ I do think sooner or later you have to do something really hard, raunchy hard. If you don’t do that I wonder how you will be ferocious enough to get through the hard times.
4. There is no magical transformation that happens at a startup
Among Kelman’s countless analogies came a scene from the Die Hard series when the characters rile through six different bank vaults before finally getting through to the seventh. After finally making it to the last vault, the actors dance around and throw the money all around in happiness.
“That’s the way I thought a startup would happen,” Kelman said.
Not the case:
I always thought it would be grinding and grinding and grinding and then there would be this incredible magical moment and you’d become Mark Zuckerberg or Jack Dorsey. But what I’ve found is that it’s all drilling for the most part. Once you find a good, big enough problem to solve worth years of your life, you just keep working at it.
At Plumtree, we never became the Wizard of Oz or anything. We just kept going and the product kept getting better and we kept selling more of it. The same thing has happened at Redfin. I always thought there’d be a magical moment, but instead we just keep doing something that is fundamentally really good.
There is a massive worldwide shortage of software engineers. There are just not enough of them and there are a million problems that could be solved by software. If you find one of these problems and work your ass off, eventually you will build a valuable company.
5. The importance of showing love
As stated above, Kelman has found the value of “showing love,” as he puts it:
At some level, the passion you have for your business and the love you have for other people around you will be the reason that they stay. I’ve never heard anyone say they’re going to stick with this company because this guy there is really smart. But I have heard a lot of people say that I’m going to stick with this company because there is a lot of love here.
At the end of the day the most important quality you have is the quality of your energy and that quality comes from the amount of love that you have. I once had a partner tell me how [former Oracle executive] Ray Lane would walk into a room and make everyone feel better because he gave them all of this love. Over the years I just started paying a lot more attention not to just whether I was right or wrong — and that definitely matters — but just to how I make people feel.
Once your company has more than one person, and then more than two people, how you make those people feel is more important than whatever work you get done. Generally if you try to prove that they are wrong or idiots, you can win that argument, I guess. But ultimately you lose. You have to figure out a way to share the love.
6. Startups are prone to mythologizing and nostalgia
When he was at his first startup, Kelman often saw pictures of other entrepreneurs playing ping pong, having fun and seeming totally enthused about what they were doing.
That wasn’t how it went for for Kelman:
I was just rife with anxiety and was miserable. I was like the person who just married and was on a horrible honeymoon, wondering if this was going to be the rest of my life while everyone else was having an amazing time.
Well, I’ve learned that in general, startups are just really prone to mythologizing and nostalgia. Even now, people will say to me at Redfin, ‘Oh, this isn’t the best time. The best time was two years ago, those were the days.’ I’m like, ‘You mean when we were about to run out of money and I could barely go to the bathroom because I was petrified that the company was going to go belly up? That wasn’t fun! That was miserable!’
I also used to meet friends and talk about how hard it was to raise money. We were being so candid and I would just tell them I pitched 20 or 25 of VC’s and got rejected. They would say they pitched two or three VCs and then got fantastic valuation. They’d tell me to keep my head up, and I’d feel terrible. But then I would talk to them later and find out that they actually talked to 50 VCs who all said no.
Everybody around Silicon Valley, and this is becoming increasingly true in Seattle, will say everything is great and fantastic with their startup. Then two months later, they will describe, in the most euphemistic terms, their pivot. I just think everybody is assaulted with anxieties. Some people will say that when you meet the person that you will marry, you just know. But it’s not like that in business. It’s so rare to have an idea and have immediate and deep sense of conviction. I just don’t think that’s the case. You work on it and work on it and it gets better and worse and better and worse — you can do this for years and still not be totally certain you found the right idea.
7. Be truthful when telling your startup story
Kelman noted that when a lot of people tell their startup story, it involves guys running into that vault and throwing money around in celebration. Or, they’ll convince others to join their company solely because of the monetary potential.
“That’s like telling your wife the reason she’s marrying you is because you’re going to be successful,” Kelman said. “But what do you actually say at the altar? You’re getting married in sickness and health.”
Same goes for startups, says Kelman:
It’s the same fundamental tale you tell your employees. There will be ups and downs in this business, there will be setbacks. If you haven’t prepared people for this on Day 1, they will be totally disoriented when you have your first setback, which will happen on Day 2.
The story we still tell ourselves at Redfin is that there will be good days, bad days, you’ll make money, lose money, we’ll ship a lot of product and screw up some things. But fundamentally, what we’re doing is a good thing, a moral thing, something that will make the world a better place. And at the end of the day that is why I think we will win.
I just think being really genuine about the risks and the drama of startups is OK. I finally stopped feeling like a frog when I started talking about stuff like that. I used to say everything was great and couldn’t be better. The truth was often far from that. I think you can truthful about that stuff.
8. Be open about improving yourself as a person
While you often hear about the pivots startups are making, rarely do you hear the same for individuals.
“Most people don’t view themselves as a work in progress,” Kelman said. “They view their companies like that, but not themselves.”
To be a successful leader, Kelman said, you have to undergo a “massive personal transformation.”
The worst role model for this is Steve Jobs. Everyone wants to be Steve Jobs. He was always cool and never wrong Trying to be that cool guy makes it impossible for you to get better. Have you ever noticed how the happiest people in the world are those who are born-again? Those people who have admitted their sins and are committed to where they are going, and excited about what they are going to become.
I just think that you will find yourself as a leader of a company constantly in a defensive crouch, always defending the decisions you made, always trying to seem like you’re right like Steve Jobs. What you really want to do is just embark on a personal project that forces you to be much better than you are right now at running a large organization, at being a leader, at meeting people and learning things you don’t understand.
When I was younger, I was always trying to prove to everyone that I already knew everything. Every time someone tried to explain something essential I needed for my survival, I would say ‘I already know that, dude.’ Now I’ve gotten really good at saying, ‘I just don’t understand. Tell me more.’
You already know what your weaknesses are and what your annual review is going to say. It’s going to say you need to be more assertive, you need to control your temper, you need to micromanage less. Most people just don’t attack the problem the way they would an engineering problem, but you have to do it that way.
Previously on GeekWire: Stop being a founder, and start being a CEO