Entrepreneurship Journey, Lecture by Mark Jung / Fox Interactive Media (2007)

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But finding out the hard way is really important. Until you get burned, it's just something that someone's told you. And I think, again, don't be afraid to make the mistakes, that's where you learn the most. And especially because entrepreneurship is a journey, most people are serial entrepreneurs. Which means you do it over and over and over again, that the first stop is not your last stop. And so in the collective set of experiences that you'll develop throughout your career and the mistakes that you make, you'll become a better and better executive, a better and better entrepreneur. Just don't make the same mistake twice.

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Phase one is the start-up and the inception. Phase two is a period of growth. Phase three is the unfortunate setback that invariably every venture faces. I call phase four rejuvenation, rebirth. And the fifth and final phase, a transition for either you as an entrepreneur, or the company overall. In our case, with IGN, that transition culminated in the sale to NewsCorp at the end of 2005. So five distinct phases, five sets of challenges.

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But there is one decision that stands above everything else. And that is: who is the team that you surround yourself with? Now, commonplace wisdom would say, "Oh, I know the answer to this: surround yourself with great people." Surround yourself with the A-Team. It doesn't get any better than that. But is that really enough, is that even relevant? I mean, I ask each of you in this room to look around you. Just look around you. This is the A-Team. Unless I have my statistics wrong, this year, unfortunately for incoming freshmen, their chances of getting in are probably 1 in 30 in the main graduating pool, not the early pool. So if that isn't a screen for the A-Team, I'm not sure what is. Does that mean that you should start a company with the three people who are sitting next to you and be guaranteed that that would be a success? Well, Stanford has done the screen for you, shouldn't that be a success? Well, let's take an analogy; let's take the roommate analogy. Hey, everyone seems to be normal, everyone seems to be a hard worker. Everyone is certainly intelligent, everyone's creative. So let's just put four people together as roommates. It's going to work, no problems. Sometimes it doesn't work. Sometimes it starts with the accusations. "Is that my sweater?" "Hey, did you drink the milk in the fridge?" And then it degrades to a total destruction, a lack of eye contact, the avoidance in the room, and then the countdown of days left in the quarter semester until you get the blank out of there. Well, in a roommate situation, you can get out of there. It's not that easy in a founding situation where you've started the company together, you've split the stock. And so the selection process of the team is really critical. And it's not good enough to simply say who's an A player. It really is important for you to think about values, core values that you share as an individual. No different than a relationship versus a roommate. Core values surrounding a lot of things: trust, commitment, goals. Goals, what are your goals for the venture? When do you say, "I've met my goals"? And someone else says, "Wait, we're not even close." What does commitment mean, what does success mean? How do you define success? Do each of you have a common understanding of what the definition of success is? Because you wouldn't want one person to say, "Hey, we're successful!" and the other person saying, "We failed." So you need to talk about these things up front in the screening. It's really really critical. I can probably try an analogy that it's more like a mountaineering expedition than a roommate search. We are talking about co-dependence, who is on the other end of the rope. Who do you trust to be on the other end of the rope? What happens when the unforeseen occurs, which it's going to? Or even worse, what happens when tragedy befalls? Who can you count on who's still going to be there? Who's going to run for the hills, who's going to give up? And you know, there is no other time to think about this than the time of inception and start-up as you choose your team. You don't want to be going back and rejiggering and dealing with these issues 6 months, a year later.

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One of the biggest challenges that you will face during the phase of growth is learning how to release control as an individual. And what I mean by that is not simply delegating authority, but disseminating knowledge. Knowledge is power. And knowledge is control. And if you're the only one who knows the answer, and no one else knows the answer, well, maybe that's great, but companies don't scale that way. "I know the vision of my company. I'm going to hide this from the rest of my employees." Probably not a good strategy. Probably a recipe for failure. So as your company scales, you hold the keys to everything. You need to understand and think about "How do I release control? How do I disseminate that information out? How do I extract myself from the decision-making process? What can allow the organization to thrive and to grow?" Because at the end of the day, you can't be everywhere. You can't sell every customer. You can't interview or recruit every employee. You can't create every product spec. And you certainly can't draft every press release. The numbers will catch up to you. The faster you grow, sooner or later; you're going to run out of steam. Now, does osmosis work? meaning, I have a conversation with one employee at the water cooler, and somehow it disseminates the vision of the company? Yeah, it works for about 15 people when the water cooler is three feet from every desk. But it doesn't work as your company scales. A few metrics for you just from personal experience: at 50 employees, you'll begin to forget the name of every employee. At 100 employees, you won't know who's employee and who's a spouse at the holiday party. At 400 employees, the employees won't know who you are. And that is a scary thought, but that is a safe enough fact as corporations scale. So the only way that you could deal with this is to figure out how you can release control, how you can teach teachers. How can you provide the organization with the tools so that the organization isn't fully dependent upon you?

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It really becomes a test of your own personal faith, your own internal compass. And there a couple of questions I think you have to ask yourself in that process. Why do you still believe in yourself and in the company's faith? Look at yourself in the mirror, and you're going to ask yourself: What do I see? And why am I maintaining my sense of attitude and positive approach? You're going to ask yourself: what does failure mean? What defines failure to yourself and what can you learn from it? And how are you coping with it in the moment? You'll ask yourself: how much of this carnage could have been avoided? And how much responsibility or blame should I take for this? Was this in my control, out of my control? Because everyone else seems to blame me. But it's something that you really have to look inside and think about. And perhaps one of the most difficult questions you'll ask yourself is: What do we do now, going forward for the employees who are still with us? Am I in denial? Am I prolonging the inevitable for them and therefore, frankly, I'm doing them a disservice? Or is there a future? Because it can get really dark when it gets dark. And during the dot-com crash, it was as dark as you can possibly imagine. Okay. With my discussion of this phase, I will say this much on what I call the dark phase of a setback: there are no answers. There are no answers to help you, mentors, supporters could help, shoulders to cry on, but frankly there are no answers. These are tests for yourself and your own sense of perseverance and loyalty to yourself. It's a very personal situation. But I think you need to be prepared for this phase, because I can tell you, every company goes through this.

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So the question is, the importance of attracting a team, what if you've already created a team, and you find out that things aren't going as well as you originally thought? What do you do? Divorce or mediation, or therapy? What do you do? There isn't really a good answer for this. I would say this much: I think, as with any relationship, the easy way out is to head for the door. That's the easy way out. But depending upon.. If it's been one day, and you decide after one day, it's not working, there probably isn't a huge cost. If the shares had been issued, business cards have been issued, and it's 6 months into the endeavor, do you really want to press the Restart button? I think you need to analyze what it is in the team dynamics that are not working, and try to figure that out. And if you can't do that collectively as a team, and I'm not being facetious here, go get help. No different than an intermediary, a mediator, a counselor. And there are executive coaches and team coaches that work with the interpersonal dynamics of management teams, to help you as a third party, think about what dynamics are, what is dysfunctional. Because there has to have been something great about each individual for you to have gotten together in the first place. It probably wasn't a random occurrence. You hopefully didn't just tap three people who were sitting next to you in the audience. And so there's probably an accord there. And the question is, can the rest be managed or mitigated? If you can't do it collectively as a team, lock yourself in a room, face the facts, go get help.

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The question is, given that web companies have a low cost of entry, what is the best way to create a proprietary brand? You know, the web was created around a network effect. And the network effect really means that each individual that joins the network benefits the collective. Which means the collective is better off for that n+1 person joining the network. So you want to think about a network model. The best way to build a brand is viral marketing by your audience. Especially if you're a start-up with low cost entry. It may be low cost to start the company, but there hopefully are low costs for customer acquisition. And the way you get that is to develop a service, a utility that unlocks and empowers the audience to build the brand for you. Because they will. How many dollars did MySpace, or Facebook or Photobucket, or YouTube really spent on direct marketing, building a brand, as opposed to the attraction of the service creating a brand in itself? So what you really need to think about is, how do I get the users of my service to promote and market what they have? And I'll say one thing to close on that, which is: there has to be a vested interest for them to want to do that. You just can't rely on the fact that, "Hey, they're nice guys or girls, and they're just going to do it because they're altruistic." You have to key in to what it is that drives them to want to promote. The more ownership they have of your service, the more ownership they have of the product and services that they use, the more it links to their own ego, their own desire for self-promotion, the more likely they're going to pour their heart and soul into it and promote what it is that you have.So, leave it at that.