On Monday, January 7, 2013, OLC attended Founders@Fail featuring Nikhil Sethi of Adaptly. The conversation ranged from finding a co-founder to dealing with investors and scaling business culture.
Host Schuyler Brown sat down with Adaptly co-founder Nikhil Sethi and asked him a series of questions about what Sethi did to overcome hardship and problems that they faced while growing as a company.
Brown asked, "How did you find your co-founders?" Sethi answered, "Everything is relative to experience. I started the business in college—I was a senior and my co-founder was a junior. We met in class.... I interned at HBO and I figured out that I didn't want to work at a big company, so we started to tinker around with an idea and just ran with it."
"What about the fundamentals of building production? How did you get your customers?" Brown asked. "My father was an entrepreneur," Sethi said. "I got to see firsthand what the spirit of entrepreneurship was all about. I went to Chicago in 2006—[the city's] made a big change from no one wanting to talk about entrepreneurs to embracing it. When we started thinking about starting a company, Northwestern was pressured into developing a new approach of entrepreneurship. This new class was three months of developing an idea, writing a business plan and another three months of creating software. My co-founder and I were just hackers, I've always been a surgical engineer, but we've been able to balance it..."
When asked about customer balance and creating credibility, Sethi answered, "There are unfair advantages that you have to overcome. Understand that everything is essentially commodity. Google might have infinite resources and infinite time, but we can start to think about interesting concepts that people couldn't think about. We used the alumni network to get meetings. We tried to get meetings with people at first, but they wouldn't take us, and we turned to the Northwestern alumni network. We went through it and called every brand managers on the list and a lot were willing to have meetings with us."
"Is there a silver bullet to your technology?" Brown asked. "One thing that pops into my mind is Aardvark, a machine-learning Q&A system. Also, 'fake it till you make it,' is true...technology isn't really the end. It's automating some sort of behavior, but it becomes trying to figure out and understand how people are trying to implement ad campaigns on social. Also, media buyers, the ones just out of college, managing 25 clients, what incentives do they have your technology? The advertising world used to be a meritocracy-oriented world, but it isn't the case anymore."
On social hacks, Sethi said, "A lot of the times, when you ask for money, you get advice and when you ask for advice, you get money. This happens when you try to get your first customer as well." Brown asked Sethi how he found his first startup attorney. "Well," Sethi said, "We started the company at Northwestern and we were all assigned an attorney. Finding an attorney wasn't even on our priority list—I don't think it was on a list of things to do at all. We didn't know about startup law—we signed a Vesting Agreement and didn't think twice about equity. We just signed whatever we were given. Of course, two people from our group went on with their lives while me and my co-founder went around fundraising for the company and we got a phone call from these guys asking for a piece of the pie.... So find a really good attorney."
"What about finding co-founders, what tips do you have for people looking for one?" Brown asked. "Think about dating," Sethi said. "You're basically living day in and day out with these people. If you don't know what their motivations are, you're leaving yourself in a ditch. Know where they are in their lives. Think about this in terms of soulmates."
Brown asked Sethi how he handled the call about equity from the two classmates that went on with their lives. "You treat people with reason," Sethi said. "People are usually reasonable. First thing we did was call our attorney. A lot of it is head-on attacking the problem. It was probably the easiest conversation we've had, actually."
"How do you defuse a ticking time bomb [in terms of investors]?" Brown asked. "First of all, be as transparent as possible. Just be very, very frank and transparent with people," Sethi said.
"How would you have done things differently?" Brown asked. "The first half dozen people that we hired were friends. What I was looking for was an unquestioning attitude and absolute loyalty. Those are two characteristics that were integral and important to the business." Brown took the opportunity to ask how Sethi had separated personal and professional life. "To objectively separate personal and work," Sethi said, "You have to make a conscious decision and determine when and what you need to split. When you have to let people go, it's probably the hardest thing to do in your life because they're your friends. We tried three options: create a false role, but that doesn't work; create a managing role, but that doesn't work because they aren't managers; or we let them go, and our friendship suffers."
Brown asked a follow-up question: "When you need to make those hard decisions, what do you do with taking one of the three paths?" Sethi said, "None of these decisions are made to negatively affect the business. It's more positive for both parties in question. It comes down to the individual understanding that they need to learn more—it's an education challenge. What that means is, identifying specific skills that they need more training in and having them focus on that. What we do sometimes is identify top leaders of our organization and give them a leadership coach to learn more layers."
"Who are your mentors?" Brown asked. "My dad," Sethi said, "because of the trusted venue and experiences he's gone through. My co-founder too, because you have to learn to learn from each other. There's a lot of ways—forums—to go through and they can see through things in a different manner."
Brown asked about stumbling blocks that Sethi came across. "The first way to solve relationships with investors is to understand—meaning goodwill—who they are and what their motivations are. Then you can understand what you can do and ask the board. It's more viewing investors as humans. The challenge wasn't finding an investor, it was finding a good investor. The only way to know that is to hang out with them. Knowing what they've done in times of hardship—did they stick it out or did they jump ship—that's one thing you find out."
When asked about company culture, Sethi said, "It's been interesting. It's been about transparency. Culture can be defined or artificially created. If we hire the right people, it'll do it itself—or so we thought. It started to decay with 40-45 people. Cliques start to form. It becomes like high school culture. In our form, structure is important to a degree and it's important not to lose sight of the business idea—the objective, the mission, the idea."
Previous Founders@Fail Events: