Why 90% of Startup CEOs Are Failing | John Kim Sendbird

EO
18 Aug 202308:05

TLDRJohn Kim, CEO of Sendbird, emphasizes the importance of customer interaction for startup success. He suggests that founders should speak with 3 to 5 customers daily and balance networking with product development. Kim shares his experience of building a strong product-market fit and the iterative process of feature development and release. He also discusses the critical role of company culture, which he compares to a muscle memory, and the necessity of aligning with the company's core values. Furthermore, he advises startups to seek guidance from those who have achieved success, focusing on strategy, team, and resource management. Kim's own journey, including overcoming the skepticism of expanding into the US market, reinforces the importance of having a long-term vision and the courage to take risks.

Takeaways

  • 🗣️ Founders should talk to 3 to 5 customers a day to ensure a strong product-market fit.
  • 🎉 Networking and attending events are less important than building a solid product based on customer feedback.
  • 💡 Founders often pick ideas that aren't aligned with their strengths, leading to challenges and early failure.
  • 🤔 Commitment to an idea for the next ten years is crucial for long-term success in a startup.
  • 👥 Balancing product development with customer interaction is key, as different skills can lead to biases.
  • 🚀 Early-stage startups should focus on product-market fit and not get distracted by other activities.
  • ⏱ Quick iteration and follow-up with customers can be a distinguishing factor in the early stages of a startup.
  • 🌐 Culture is a critical component of an organization, and it should be nurtured from the early days.
  • 🧘‍♂️ A company's culture is like a muscle memory; it's formed by collective habits and is difficult to change.
  • 📈 Seeking advice from those who are a few stages ahead can provide valuable insights for growth and avoiding pitfalls.

Q & A

  • What is the recommended frequency of customer interaction for startup founders according to John Kim?

    -John Kim suggests that startup founders should be talking to 3 to 5 customers a day to ensure they are in touch with their market and customer needs.

  • What is the importance of product market fit in the early days of a startup?

    -Product market fit is crucial in the early days of a startup because it is the foundation upon which a strong product is built. Without it, other activities such as networking and attending conferences are less impactful.

  • How does John Kim describe the role of networking and conferences for startup founders?

    -While networking and attending conferences are important, John Kim emphasizes that they should not distract founders from the fundamentals of building a strong product and finding product market fit.

  • What does John Kim suggest about the alignment between a startup founder's ideas and their own strengths?

    -John Kim advises that founders should pick ideas that are aligned with their own strengths. He notes that many founders give up too quickly because they chose ideas that were not in line with their long-term commitment and abilities.

  • How does John Kim define the concept of culture in an organization?

    -John Kim views culture as an organization's superorganism, a collection of people's habits and values that are greater than the sum of the individuals. It is a reflection of the personal core values of the people within the organization.

  • What is the significance of having a strong culture in a company?

    -A strong culture is critical as it acts as an operating system for the company, guiding day-to-day decision making and operations. It is not something that can be easily changed and is a result of collective habits and values.

  • What is John Kim's advice for startup founders who are good at one thing but may overlook others?

    -John Kim suggests that founders should be aware of their strengths and make a conscious effort to balance them with other essential aspects of the business, such as customer interaction and product development.

  • How does John Kim approach the development and release of new features in Sendbird?

    -John Kim emphasizes quick iteration and communication with customers. He mentions setting expectations during the first call about follow-up times and the potential delivery of features within a week.

  • What is the recommended approach for a startup founder when seeking to scale their business?

    -John Kim recommends seeking out companies or individuals who are one or two stages ahead and learning from their experiences. He also suggests having a clear strategy, building the right team, and managing resources effectively.

  • How does John Kim describe the process of building a company's culture?

    -John Kim describes building a company's culture as an iterative process that involves workshops, discussions with early employees and management about core values, and a continuous feedback loop to evolve the culture over time.

  • What is the role of a CEO according to John Kim?

    -According to John Kim, the role of a CEO involves getting the strategy right, ensuring its execution, onboarding the right team, and managing resources, which includes fundraising and allocating resources effectively.

  • What advice does John Kim give for startup founders who are considering expanding to new markets, like the US?

    -John Kim advises having bigger dreams and a longer time horizon. He encourages founders to have the patience and confidence to take risks and learn from previous experiences, even when faced with skepticism from others.

Outlines

00:00

🤝 The Importance of Customer Interaction and Product-Market Fit

John, the founder and CEO of Sendbird, emphasizes the critical nature of engaging with customers during the early stages of a startup. He expresses surprise at founders who interact with a mere handful of customers per week, advocating for daily conversations with 3 to 5 customers. John stresses that networking and conferences are secondary to understanding the customer's needs and building a strong product. He shares his experiences with Sendbird, a leading platform for mobile application conversations, and how they achieved success by focusing on product market fit and rapid iteration. His insights also touch upon the importance of aligning startup ideas with personal strengths and the commitment required for long-term success.

05:01

🌟 Cultivating a Strong Company Culture and Leadership

The second paragraph delves into the significance of company culture and its impact on the success of an organization. John discusses his observations from past experiences, where a lack of strong culture led to poor execution and the departure of valuable employees. He contrasts this with the importance of understanding and empowering good people within the company. When starting his own companies, John and his team focused on establishing a mission statement and core values, conducting workshops to ensure alignment. He advises seeking out mentors or individuals who have achieved the goals you aspire to, in order to learn from their experiences and patterns of success. John also highlights the three key responsibilities of a CEO: setting strategy, assembling the right team, and securing resources. He encourages having bigger dreams, a longer time horizon, and the patience to take risks, drawing from his own experience of overcoming challenges and naysayers to achieve success.

Mindmap

Keywords

💡Product Market Fit

Product Market Fit refers to the state where a product successfully meets the needs of a specific market and is able to sell effectively. In the context of the video, John Kim emphasizes that finding a strong Product Market Fit is crucial in the early days of a startup. It is the fundamental goal that should guide the initial development and validation of a product before anything else. An example from the script is when John says, 'None of that really matters until you find a strong product market fit.'

💡Networking Parties

Networking Parties are social events where professionals gather to make new contacts, share ideas, and potentially find business opportunities. In the video, John Kim points out that while attending such parties can be beneficial, they should not distract founders from the core task of building a strong product and talking to customers. He mentions, 'You'll be attending so many networking parties, going to every single conferences,' to illustrate the potential for distraction.

💡Fundamentals

Fundamentals refer to the basic principles or essential aspects of a subject or activity. In the video, John stresses the importance of returning to the fundamentals of building a product, which includes understanding customer needs and creating a product that meets those needs. He states, 'But you don't go back to the fundamentals of building a strong product,' highlighting the need to focus on the basics rather than getting caught up in superficial activities.

💡Sendbird

Sendbird is a company mentioned in the video that provides a leading Conversations platform for mobile applications. It is used as an example to illustrate the success that can be achieved by focusing on customer interaction and product development. John Kim, the founder and CEO of Sendbird, discusses how the company has powered major applications and has a significant user base, as mentioned in the script: 'We powered a quarter billion users on a monthly basis.'

💡Customer Interaction

Customer Interaction involves engaging with customers to understand their needs, gather feedback, and build relationships. John Kim emphasizes the importance of talking to customers daily, suggesting that founders should aim to interact with 3 to 5 customers a day. He criticizes the lack of customer interaction by some founders, saying, 'I'm like, Are you kidding me? You need to be talking to 3 to 5 customers a day.'

💡Core Values

Core Values are the fundamental beliefs or guiding principles that dictate the behavior and decision-making of an individual or an organization. In the video, John discusses how personal core values translate into corporate core values, which form the basis of a company's culture. He mentions, 'If you kind of map that to an organization, you can also think of the culture as your core values,' indicating that core values are integral to the identity and success of a company.

💡Culture

Culture, in an organizational context, refers to the shared values, beliefs, customs, and behaviors that characterize a company. John Kim describes culture as a 'superorganism' and a 'muscle memory' that is difficult to change. He highlights the importance of culture in driving the day-to-day operations and decision-making within a company, stating, 'Everyday execution is really dictated by the culture of your organization.'

💡Iterative Feedback Loop

An Iterative Feedback Loop is a process where feedback is used to make improvements in a cycle of continuous refinement. John Kim talks about the importance of creating an iterative feedback loop to evolve the company culture and to ensure that the organization is constantly improving. He says, 'So you have to like really nudge and create an iterative feedback loop,' which shows the need for ongoing assessment and adjustment.

💡Leadership

Leadership involves guiding a group of people or an organization towards achieving its goals. In the video, John Kim discusses the role of a CEO, which includes setting strategy, building the right team, and securing resources. He emphasizes that leadership is critical for navigating a company to its next level, as he states, 'The job of a CEO is to do three things, right? One is get the strategy right for your company, making sure it's executed.'

💡Risk Taking

Risk Taking refers to the willingness to take calculated risks in pursuit of goals or opportunities. John Kim shares his experience of taking risks, such as moving to the US despite others advising against it. He suggests that having the patience and confidence to take risks can lead to greater achievements, as evidenced by his statement, 'Also have the patience to hopefully dare and again risk greater things.'

💡Time Horizon

Time Horizon is the length of time over which an individual or organization plans or makes decisions. John Kim encourages having a longer time horizon and bigger dreams, which means thinking beyond immediate gains and considering the long-term impact of decisions. He relates this to his own experience, saying, 'Being able to achieve something, have the positive feedback loop and increasing, the time horizon of the next journey.'

Highlights

Startup CEOs should talk to 3 to 5 customers a day to ensure they understand their needs and are building a product that fits the market.

Networking and attending conferences are important, but they should not distract from the fundamental goal of creating a strong product.

John Kim, CEO of Sendbird, emphasizes the importance of product market fit in the early days of a startup.

Sendbird, a leading conversations platform for mobile applications, powers major applications like DoorDash, PayPal, Reddit, and more.

Founders often pick ideas that are not aligned with their strengths, leading to challenges and potential failure.

Commitment to an idea for the next ten years is crucial for long-term success in a startup.

Engineers may be biased towards product development, neglecting the importance of customer interaction and validation.

Balancing customer communication with product development is key to startup success.

In the early stages, startups should focus on finding product market fit and deprioritize other activities.

Sendbird's rapid iteration and development cycle, with new product releases every two weeks, is a testament to their commitment to customer feedback.

Managing customer expectations and setting a clear cadence for product updates is important as a startup scales.

Company culture is a collective of people's habits and is as hard to change as muscle memory.

Core values of individuals translate into corporate core values, shaping the culture and identity of an organization.

Leadership and culture are critical for a company's success, with a strong culture being able to prevent the rise of toxic behaviors.

Seeking out companies or individuals who are ahead in their growth can provide valuable insights and learning opportunities.

Identifying the skills and attributes needed for future success and actively working towards acquiring them is a strategic approach to growth.

The role of a CEO involves strategy, team building, and resource allocation to navigate the company to the next level.

Having a longer time horizon and the patience to take risks are essential qualities for a successful startup CEO.

John Kim's experience of overcoming doubt and taking risks to bring Sendbird to the US market highlights the importance of confidence and vision.

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