This country has always attracted the brightest, the most assiduous to her shores. Farhad Mohit, who co-founded Bizrate as a class project at Wharton, and grew it as a personal passion accepted the hospitality of both. Bizrate, which became Shopzilla in 2004, and soon thereafter was acquired by E. W. Scripps in 2005 for $525 million, makes you feel like a smart shopper.
Choosing the right partners is essential to a successful venture. But how precisely do you choose the right person?
There are shared fundamental values, and then there are complementary skills. The most fundamental thing is honesty. I like people who can’t lie if their lives depended on it. That way, we both always know where the other stands, which is important. When things are moving at a million miles an hour, you don’t want to be uncertain about your partner. Next comes intelligence, because in an Internet startup, things are moving very fast, and you need to be able to think on your feet. If all you have is honesty, you’d make a good friend, not a good business partner. Finally, you need passion, because without that, all the honesty and intelligence will at best make you an interesting person to chat with or maybe a good academic. You need to be almost delusionally passionate about any idea and naturally driven to create something out of nothing, if you’re going to turn an idea into reality.
Beyond these shared fundamental attributes, I look for non-overlapping complementary skills. For myself, my strengths are vision and the ability to communicate it in a way that rallies people around a cause. However, I’m not a technical person. So, for every one of my ventures, I need a technical partner. Henri Asseily, C’92, WG’96, my partner at Bizrate, is a perfect example of a brilliant coder who single-handedly coded the entire website for Bizrate. The company would never have happened without him.
With Bizrate and then Shopzilla, you came to hit the market on target? How can an entrepreneur focus in on the right offering, demographic, price, features, etc.?
A startup is like being on a ship, lost in the ocean, with limited resources, and you are trying to find land, because that’s where you can refuel and move forward. You have to pick a direction and go. If your ship is going in four different directions, you will definitely run out of fuel and die. So, focus is very important.
However, in the online world, a mitigating factor is that, if you know what you’re doing, you know you will be wrong at first, but can measure your environment and adjust your plan very quickly. So, the right method is to pick a direction, launch very quickly, then measure what works, adjust your course and iterate again. As an example of this method, if you’re thinking of providing a print function, before coding it, just put up a button that says “print,” and see how many click it. Sure, you’ll disappoint some early customers with “coming soon” messages, but at least you won’t be coding features that nobody wants!
So this is a method of listening to your customers online?
Absolutely. The traditional way was that you would try to predict exactly what the market wants, raise some startup money (say, $500,000), put together full specifications of what the product should do, code the whole thing and launch. Now if that launch didn’t work, you’d be in hot water with your investors and less likely to get additional money.
However, today, you launch a basic prototype very quickly, and for under $10,000, see what works, and then iterate again. That way, with the same seed money, you have 50 iterations to get it right, each time seeing who clicks on what, prioritizing features, tweaking and relaunching. Now, this is easier said than done. For instance, we’ve been trying for over two years with DotSpots, and we still haven’t cracked the code or, should I say, are still in the flat part of the exponential curve.
To Summarize: the secret is to iterate as fast as possible, building, measuring, learning … building, measuring, learning. The efficiency of this cycle, and how many iterations it gives you before you run out of money, is much more important than how much money you have.
You impart a sense of optimism and energy. Where does that come from, and how important is it to your success?
From being unconditionally loved by my parents, for sure. We live in resource-scarce environments, where time is money, etc. However, you should remember that the most important things in life are not bound by the laws of scarcity theory or economics. Consider love — you can give it freely, and the more you give, the more you get. My parents didn’t instill in me any fear … they thought I could do no wrong. This gave me confidence to be myself and do things my own way. I always felt loved, no matter what, and that is more important than material success. Beyond that, I think that being optimistic is just smart, because it leads to good results. It’s almost a learned disposition. No matter what happens, I figure out what it was that’s good about it, and then I feel good, and life’s great. For example, when my mom was diagnosed with cancer, at first, I was bummed. Then I thought about it, and we had a talk. I told her, “This is an opportunity for you, to take control of your life in a way I’ve never seen you do, to step out of your helpless-mom-sheltered-by-dad kind of disposition, and to be the badass woman you really are! You may even be thankful for this cancer in the future.” Now, with her cancer in remission, my mom is an example for all of her friends. She changed her diet, she changed her physical regimen, she’s taken charge of her life and teaching other people about it. You can say, “Oh my God, I have cancer, my life is over, why me,” etc. Or you can take it as a challenge that will help you expand yourself as you gain a wider range of experience.
