“Everyone has a plan until they get punched in the face.”

-Mike Tyson

After we launched the GroupMe Beta at TC Disrupt in September 2010, we inadvertently stepped into another round of fundraising.  It was never our intention to raise money at that time, but there was considerable interest from several VC firms on the West Coast, and so it seemed like the prudent thing to do. The opportunity to raise another round of financing was appealing as competition in the space was heating up, and we had a chance to step on the gas.  So we went for it and initiated the process with two firms.

We had full partner meetings which could not have gone better.  I was 50/50 that one company was going to give us a term sheet, and with the other I was 95% certain.  That’s absurdly high certainty, naive certainty, but that was the case.  After some very strong meetings, we flew back to NYC and waited for a term sheet to come in.  The 50% firm was in touch for two weeks, and ultimately came back with a “No” because of an issue in diligence (which we solved down the line).  The 95% firm went relatively silent for two weeks, and ultimately circled back with a “No” due to a conflict of interest.  

What happened? The plan was to quickly close with one of these firms and then go on and grow our business.  That was the only plan, and it seemed to be a sure thing at the time.  When the “No’s” came in, it was a blindside knockout punch to the face.

Word had leaked that we were raising and we were convinced that we had to continue onwards.  Up until that point we weren’t running a process, the process was running us.  There was no backup plan because we never thought one was necessary.  

Fortunately, we were able to get back on our feet fast, recoup, strategize, and quickly talk to some more firms we were interested in working with.  We were lucky that several of them wanted to work with us.  I’m grateful for the way things turned out with that raise - I don’t think they could have been any better and I couldn’t ask for better partners than the ones we had.  Should we have had a Plan B?  Yes.  Was it a rookie mistake?  Most definitely.  But if it didn’t happen then, it would have happened somewhere down the line, and with more severe consequences.

As Mike Tyson said, everything is good until you are knocked down on your ass.  This happens all the time at startups and takes many different forms.  Sometimes a financing falls apart.  Other times a new hire you and the team love bails at the last minute.  Some features and products you pour your heart into don’t scale or gain traction like you think they would when they launch.  I’ve seen plenty of sites unfortunately go down on their launch days after months of preparation.  And sometimes that epic distribution deal falls apart.  It happens.  It’s always important to think through and cover your possible failure cases and have a backup, but inevitably we’re all blindsided at some point. When that happens, there’s nothing left to do but get back up and get revved up for the next round.

I saw something remarkable from a startup I’ve had the privilege of working with recently.  The founders are in the midst of assembling their core team and they’ve been doing an awe-inspiring job at it.  Steve Martocci and I have been working with them for a several months, and one of the first things we stressed most while they thought about hiring their first employees was to utilize a trial period.  The trial period is something we inadvertently stumbled into when we made our first hires.  What began as a series of consulting gigs transformed into a hiring practice that has worked very well for GroupMe.  It has also worked well for several startups that I’ve seen adopt the practice.  Putting together the right core team at a startup is one of if not the most difficult and important things in the early lifecycle, and the trial period can help you find the right people to help build your company.

At GroupMe we never had an employee #1.  Instead we assembled a core team with Pat Nakajima, Cameron Hunt, and Brandon Keene.  Both Pat and Cameron began as consultants in July 2010.  Cameron was introduced to me through Marco Arment, who I used to work with at Tumblr.  We needed a front-end developer with an eye for good design, and someone who could build for iOS.  Marco, with great conviction, said that Cam was the guy.  He was right.  Pat was introduced to Steve through his old boss and longtime friend and supporter of GroupMe, Josh Knowles.  He was in between jobs and agreed to help us get groop.ly off the ground doing some consulting work.  

The time we all spent together during those first couple weeks was pure fun. Everything clicked: personalities, working styles, karaoke duets, and even taste in office music (which admittedly sometimes consisted of various Disney soundtracks at the time). What started off as Steve and I working with consultants in the office (aka Steve’s studio apartment) quickly turned into a cohesive team in a matter of days.  The process of converting from consulting work to full-time work was completely organic.  It was the next logical step in our relationships, and building out the core team. 

The anecdote is important because it set a precedent for GroupMe in how we like to recruit and work with prospective team members.  In retrospect, those early days of consulting were really a trial period to see if we were all a good fit together.  The trial period is something that has worked extraordinarily well for us, and I think it’s something that’s also worked well for those that we’ve recruited.  There are so many things that determine if someone is a good fit (personality, culture, skill-level, etc.), but I think the most important criteria is that you (and the person joining your company) both have a positive gut feeling about working together.  It takes time and some getting to know each other before one can develop that feeling - generally speaking, I think it usually takes around 2-3 weeks.  

If someone is currently a consultant, or in between jobs, we like to bring them in as a paid consultant for a 2 week period and see how things unfold over the course of that time.  This way, we don’t make any rash decisions, we can see how they mesh with the team, and they have an equal opportunity to determine if our company and culture is the right fit for them.  More often than not, the trial period leads to a full-time position.  There have definitely been instances when someone was not the right fit, but we would have never been able to figure that out on both sides had we not engaged for those 2-3 weeks.

There are some situations when it’s difficult to do a trial-period; for instance, when a potential hire already has a full-time job.  When this happens we like to bring them in after work or over multiple weekends to work on projects with the team.  We’ll order lunch, and hang out and work for the afternoon and try to complete a specific project end to end.  This gives both parties an opportunity to test things out in an abbreviated time span.

The trial period doesn’t just extend to engineering, but all departments: support, marketing, sales, business development, etc.  Steve Cheney, our first BD hire, worked at GroupMe for 4 weeks before we brought him on full time.  We were setting up for our first major brand partnerships and I was overworked and dropping the ball.  Steve came walked in the front door and got up to speed in two weeks, and we went on pitches together for the rest of the month, ultimately leading to one of our most successful launches to date.  Kevin Crowe and Tanuj Parikh both had full-time jobs, so we’d all meet on the weekends and run through projects and whiteboarding sessions together. 

When a startup is small and growing, every employee plays a pivotal role - and it’s not just their respective job - it’s contributing towards building the culture you want to be around forever.  One bad apple will bring the team down, and one exceptional person will elevate your and everyone else’s game by 10x.  That’s why it’s so critical to hold to your highest and most important standards, and the trial period helps you do exactly that

It’s impossible to sum up the past year in a blog post, so I’ll stick with a bullet point list of some of the things I’m thinking about:

• Thank you to my fiancé and my family for your support and putting up with me. 
• Steve Martocci is the best co-founder anyone could ask for.  He’s brilliant and has taught me more than I could have ever imagined.  And most important, he’s one of the nicest, big-hearted people I’ve ever met.
• The GroupMe team is world class.  The team is everything.  It’s an absolute honor to work alongside these guys everyday. They’re family.   
• Our investors and advisors are amazing.  They are the most entrepreneur and company friendly people I’ve met.  They’re also the best mentors and teachers one could ask for.
• GroupMe users are amazing.  From the feedback to the support, they keep us all going and I can’t wait to share all the new things we’re going to build with them. It’s why we do what we do.

The past year was incredible, but I am so incredibly excited by what lies ahead. The Skype team is staffed with some of the most talented people I’ve met. Working with them and their network of hundreds of millions of users is a once in a lifetime opportunity. Since day one, GroupMe has always been about helping change the way the world communicates and enabling people to connect, share, and make decisions with their close ties. Skype is the best partner to help execute that vision and bring it to over a billion people across the globe. I’m thrilled for the future. 

Spotify is my new obsession.  I’ve been on it nonstop for the past week ever since my invite.  I became a paying subscriber within 24 hours.  The thing I like most right now is that I’m listening to music that I haven’t thought about in years - and it’s fun.  I’m going back to the places where I first fell in love with music.  Last week I rediscovered Less Than Jake.  Know when the last time I listened to Less Than Jake was?  7th grade. At a concert with New Found Glory in a mosh-pit.  Wow. 

Then I put on some Jack Johnson and remembered the first song I learned on guitar, and the first time I played to an audience: Inaudible Melodies at a campfire at Camp Timberlane in the Summer of 2002.  It was a special moment.   

I’ve got the first jazz CD I ever owned in a playlist (Joshua Redman’s Beyond).  I remembered when my dad gave me that CD and it inspired me to pick up the tenor sax and join a jazz band.

And now I’ve got all my college favorites queued up: Animal Collective, The Avalanches, Sufjan Stevens, and the list goes on and on and on.  And all of these bands, and all of their songs are right there at my fingertips whenever I want.  And they all remind me of something and take me back to a place where I fell in love with them, or an obscure moment where I remember something that puts a smile on my face.  And they make me nostalgic, but happy because I remember why music played such a formidable role in my life.  And Spotify helps me relive that and keep it all going.