“Entrepreneurs like to feel action all of the time. You want to feel like you’ve moved the needle in a measurable way – you want to feel like you’ve moved it that day,” said Charles Seilheimer, co-founder of hotelicopter and serial entrepreneur. “But generally you don’t feel that way, which can be frustrating. You feel like, ‘Oh my gosh, we didn’t move the needle this week,’ when actually you probably did move the needle. It’s a gradual curve – you just don’t feel it.”
In 2006 when Seilheimer co-founded hotelicopter, a hotel meta-search platform, moving the needle fast was key to success in what was an increasingly competitive space (think Expedia, Hotwire, Hotels.com, Trip Advisor, etc.). Success also relied on both his co-founder and he being equally passionate and hard-driving. “We were fortunate to have the same outlook: Through thick and thin we’ve got to make this work! We were very committed to seeing it through,” he recalled. They had met in an entrepreneurship class while at the University of Virginia’s Darden Graduate School of Business Administration.
“I’d started a few smallish businesses, then had gone into investment banking after college,” he explained in providing some context. “But I realized that I wanted to get back to entrepreneurship so I came to business school knowing I was going to start a business.” With his future co-founder also having entrepreneurship in his blood, they naturally gravitated toward each other. When they worked on a class project together, Seilheimer recognized they would be compatible as business partners. In fact, the notion of a “testing period” has stuck with him.
Take Potential Co-founder for a Test Drive
When it comes to evaluating a co-founder, Seilheimer said, “I’m a big believer in testing, so before you actually start the business, do a project together, do something that’s not necessarily the real business, and try each other out. Some people have been friends or known each other a long time they, so they don’t have to do that.”
For those who are essentially strangers to each other, just being passionate about the same business isn’t enough because it can be a long, challenging road. “I’ve seen a number of co-founders who haven’t really known each other that long and just sort of gravitate on an idea,” he said. “They both feel ownership, and therefore they feel like they need to be co-founders and move forward with that. That first step of gravitating to an idea, it’s like the first step of the marathon. You have a long way to go, and there are so many other things that need to be contemplated.”
Those things include personalities and skill sets: “Just think through are both people type A who take complete control of everything, or what are different people’s skill sets, and are they complementary. Analyzing that before getting into the business in the first place is pretty important because if you don’t have some of those pieces together, every other issue is going to be magnified. Then after saying okay we are going to be compatible, we’re actually going to start this thing, then there are some insurance plans you can put in place. If this isn’t working out you can pull the parachute and this person can leave and this is how it’s going to work.”
Schedule Off-site Check-ins
Right out of the gate Seilheimer recommends co-founders schedule regular get-togethers to gauge how each other are doing. “I think having check-ins is especially important in the early days, making sure there is complete honesty. You could schedule meetings every month, or it could be as frequent as every week, but having something on the schedule that says, Hey, we’re going to go out to lunch or we’re going to grab a drink, but whatever it is, it’s out of the office. You go out and have a frank discussion.
“You have a talk that maybe you wouldn’t have time for, or wouldn’t share with other people, especially as the business grows and other employees are around. You can ask, How is it going, really? The issues that people seem to not address are the more personal ones. Hey, how are you doing personally? How are you dealing with this type of stress that we’re feeling? Planning that upfront and telling each other that you want to be that honest is really important, because like any relationship, it’s hard to find the time and right opportunity to have those conversations. Generally, people avoid them until it’s at a breaking point. Then it becomes a crisis as opposed to something that just needs managed.”
Find an Unbiased Third Part as Mediator/Mentor
If there is friction between co-founders, Seilheimer finds mentors and mediators indispensable: “I’ve given this advice to a bunch of co-founders, and I’ve heard that it is helpful. If people can find a third party who both founders can talk to openly, having a third party who can help mediate a little bit with co-founders can be really valuable. You have to have the right person. It’s not like one co-founder’s dad or brother, someone who is biased. It’s a third party.” Their third party happened to be an early angel investor and chair of their board. “At one point we were meeting weekly, but usually we would meet monthly. We would have a bunch of calls. I know other folks who have had a mentor at an incubator, or a professor. They don’t have to necessarily provide solid business advice. They need to just see it from both perspectives and be a good person to talk to.” Also, the “mediator” can be valuable in simply pointing out when one of the co-founders has a good point in debating an aspect of the business; or if necessary, be a back channel for communications.
Sources for Stress: Investors and Pivots
Even though Seilheimer was pretty seasoned when co-founding hotelicopter – he had worked for J.P. Morgan and Banc of America Securities, while also having dabbled in entrepreneurship as an undergrad at Middlebury College – we wondered whether he was more even keeled or still experienced the rollercoaster. Reflecting on the nature of hotelicopter’s business and industry, he answered, “In starting a business, especially one that has outside investors, is supposed to be a quick pace business, and it’s not profitable early on, that compounds the stress. You are going to have a huge emotional rollercoaster.”
For Seilheimer, stress came from two sources in particular: investors and pivots. “For me personally there was a decent amount of stress that came from having outside investors,” he explained, “especially outside investors in a capital start up business.” Ultimately, over three rounds they would raise $5 million from high net worth investors. “A lot of our angel investors, our first investors, were my friends and family. This created an added level of stress for me. Adam (his co-founder) did a good job telling me, ‘Hey, they understand the risk they are taking.’ He wanted to do right by them, but didn’t feel the same level of stress.” Seilheimer sees this heightened stress happening all the time to others. You raise outside capital, feel the stress, and then when you have “a blip in the road that stress is exacerbated.”
Those blips can include a significant pivot, which hotelicopter also experienced. Technology drove some changes; for example, not long after its founding in 2009 the company introduced maps with hotels (common place today). But in 2010 they changed their business model by seeking out strategic partners to create affiliate networks; for example, partnering with local chambers of commerce and other third parties. “In that business we had some what you would call big pivots,” Seilheimer explained. “We had some big strategic things that came up. We had formulated the business to be going one way. We knew it wasn’t working that way, so we had to make a big shift in direction.
“I would say in hindsight those changes always seem so much bigger than they actually are. It seems like you’re making your business twice as risky by changing it. Partners, employees, among others are impacted by it.” They had data points so they knew the shift would be successful, but it was difficult none-the-less. “Making those changes, coming to agreement on those changes, making sure everyone was onboard, and orchestrating it, that was stressful, especially from a partnership point of view,” he said. “There are a lot of decisions that need to be made. Different people will feel different pressures. I felt pressure because I was dealing with all of our outside development partners. I had sold them on this is the type of company we are and this is what we are going to do, and then I had to go back to them and say we’re changing. That was hard from a relationship point of view.”
Relieving the Stress – Getting Distance – Maintaining Perspective
On a personal level, we wondered what Seilheimer did to relieve some of that stress when it was peaking. First, he offered a caveat: “I don’t think that one method works well for everybody. My partner would go on retreats for a week to do yoga and meditate. He also hired a professional coach, which he thought really moved the needle. That coach was helping him in life and in business. A lot of people do go for professional help.
“Some things that really helped me were one, just pulling myself back and doing some things that were personal, things where I could appreciate the bigger picture of the world. For me, my outlet for just clearing my head is doing things in nature, hiking and biking, things like that. On the weekend or even after work I would go on long walks. Those types of things really helped me.
“For one, I was able to get my mind off stuff, but also I was able to step back a little bit more. When I go on a long walk I’m able to think better, more clearly, get more perspective. Vacations are important. As a founder you don’t really get vacation time. You don’t expect vacation for years. I think it’s valuable if you can find some way to take a real vacation where you can breathe a little bit. Obviously you’ll be checking email. It’s very hard to get off the grid.” He suggests structuring your business to allow for this.
Another critical piece for Seilheimer in maintaining perspective is his significant other: “I’ve been very fortunate to have an extremely supportive wife and accepting of the entrepreneurial path. She keeps me grounded and gives me perspective. It’s a matter of talking through the logic of something that seems so important, but isn’t the most critical thing in the world. Also, she’s great at sensing when there’s a lot of stress and saying let’s go out. For me, if it didn’t work out, I still had her.” He sees that kind of supportive relationship among other entrepreneurs; however, he also warns if that relationship is not supportive of the entrepreneurial path, it’s the kiss of death.
Celebrating Little Wins and the Magnification of Losses
Another means for maintaining positive momentum through the rollercoaster is the celebration of little wins, as well as creating the circumstances for those little wins. “There are things from a personal point of view,” Seilheimer explained, “how you as the founder manage those wins and losses, but then there’s also how you help the greater company manage wins and losses. I think from a company point of view, celebrating wins is pretty important. Even if it’s a little win, celebrate it. You’re not just going to celebrate when you have an IPO or sell the business because that may never happen. So you have to constantly celebrate hey we just launched something or we just won this client. I think smaller goals as an organization is important, not just big ones.
“The small losses are tough ones because any small loss feels bigger, and any big loss feels catastrophically big. I’m more focused on feeling the losses personally, even if there are a lot of wins. I still feel like I’m losing and that’s probably more me personally. In talking about this I think that’s what is important about a co-founder. Whenever we had a loss, we were stronger because of it. We were both able to get through it because we were both in it. We’d go out to lunch and be like, Oh my god, this is catastrophic, this is terrible, but we’re going to make it through. We would rally each other. I think if you’re just on your own, sometimes you beat yourself up a little bit more. You don’t necessarily have someone to rah-rah with through those dark times.”
You can also create little wins for yourself by creating a to do list. “Finding some way to feel like you accomplished something that day is important,” said Seilheimer. “I’m someone who likes to make a to do list. But if you set something that’s big, like a multi-day project, if you set it too big, you don’t get to cross it off. Instead having a list of like 20 things and you get to cross some off, say at the end of the day you’ve crossed off like 15 things, it’s a little bit of a sense of accomplishment. You can look at that list and say hey this is what I’ve actually done. Maybe they aren’t huge wins, you just made a bunch of calls, but you get to cross them off. For me there’s a sense of accomplishment just by getting through that list and reviewing what you’ve done. And it keeps you pretty organized.” Circling back to the entrepreneur’s need to feel action … everyday … being able to cross items off that list can move that needle.