Kevin Hartz has learned that falling on your face is inevitable, if you’re too focused on the competition. Being capital efficient and giving yourself options are also some invaluable lessons he's learned through his career as the founder of two transaction companies - Xoom and Eventbrite.
"The number one tip is to have a lot of options," said Kevin, in this "Lessons Learned" interview with Bambi Francisco.
This is extremely important particularly for companies who are just focused on raising tons of capital with expectations of venture funding readily available. It could "vaporize," said Kevin. This is why his next piece of advice is to "be capital efficient." Many times when companies raise a lot of cash, they learn "bad habits."
An example of great entrepreneurs/managers who understand frugality are those who are currently managing Xoom.
When Kevin sits in the Xoom board meetings, he witnesses a team that is "frugal and thoughtful" about spending. "That translates as you scale a business," he said. "You’re more intelligent in building a highly-successful and profitable business, vs adding a lot of headcount and spending profusely."
Here are other highlights:
Don’t focus on the competition: Spend your focus on building a great product and not who’s launching what when. Focus on building a great team and getting your product to market without being distracted by the competition. Kevin learned this the hard way. While at Xoom, he focused on taking down Western Union, and that caused him to spread his team too thin. Fortunately, Xoom has recovered, said Kevin.
Don’t spread yourself thin too early: Focus on one product and it’s perfection before trying to incorporate other projects and products into the mix. Not all great ideas are meant to happen at once. Focus on doing what you do best.
Metro-sizing: In a payments and transaction style business, you have to drive specific numbers by looking at averages and rates.