John Battelle: Sell as little as possible

Founder of Federated Media and The Industry Standard shares lessons as an entrepreneur

John Battelle, CEO and founder of Federated Media, a leading advertising network, talks to Bambi Francisco about his experience as an entrepreneur and shares a few lessons he learned after more than 15 years building media businesses.

In the Internet boom years, Battelle founded The Industry Standard, a leading magazine about innovation and technology. In this interview, Battelle looked back at those years and said the biggest mistake was not leaving soon enough. His experience is something many entrepreneurs have gone through. They hang on well beyond their time.

"I got so caught up with the fact that I built this myself," he said. "I should have left."

Battelle, who also authored "The Search," offers up other advise as well, such as "sell as little" of the company as possible, and know what you're good and not good at and "follow your gut."

BF: You've been an entrepreneur for a long time now. Please give our entrepreneurs three pieces of advice.

JB: First of all, sell as little as possible and as late as possible. Particularly the first or second time, entrepreneurs think that validation means that if i can just get someone to fund my company then I'm validated. You give up a lot more than you realize when you do a round of financing too big, too early. I try to advise people to hold off.

BF: Did you do that with Federated?

JB: We certaintly didn't do that with Federated. But if you look at The Industry Standard essentially I started that whole business which became one of the biggest industry businesses and one of the fastest growing magazines in history as a 100% wholly-owned subsidiary of another company. I then tried to break it out and that's the board fight started and that's another story.

BF: And that just takes away your focus on building a business.

JB: And number two, know what you're good at and admit what you're not good at. Because entrepreneurs are so good at having a vision, they think for whatever reason that they will be good at all of the things that come with building that vision. You're not. They need to acknowledge that they may not be and should find strong people who are good at those things. This is the reason why I am bringing in someone to run the company. I may be good at bringing the company to a good size but it may take someone else to step in and bring it three or four times the size. The third thing is to follow your gut. That's what got you here. So if you're waking up in the middle of the night on a regular basis - I do almost every night at 3:30 or 4 - I think that most of us do, and something is making you uncomfortable, you need to address it. I think people try to ignore something that is distressing you if you cannot figure it out. Admit you cannot figure it out but don't ignore it. Tell your team, 'I can't figure it out.'

BF: How about a failure or set back?

JB: I should have left The Industry Standard in the beginning of 2000. It was the most profitable and most exciting year but I my gut was telling me to get out because I was in a situation that I couldn't control. I had a new set of shareholders, but we were minority and it was still controlled by a majority of shareholders that I disagreed with fundamentally. I got so caught up with the fact that I built this myself and I couldn't do what I wanted with it. I should have left. If it were to fall into the hands of somebody else, they may have done what they wanted to do but better but instead it was very acrimonious for a year until it fell apart. I should have followed my gut and left. Hanging on was much more painful.