Learning 1: Transparency is non-negotiable

One of the biggest mistakes I made at Trulia was avoiding talking about the challenges that we were facing as a company. This can be tempting as a founder: you want to project an image of success in order to strengthen conviction in your company.

For me, this all came to a tee when we had just done our first major fundraise and launched our V2 product—and it was a complete disaster. Outwardly I remained positive, to the point of hiding the true figures from my team. I was too proud to admit failure, so I kept saying that things were going to be amazing and that it would all work out. 

At the next board meeting, the truth came out. The real numbers came out and we were down on all of our metrics. I could see the disappointment from my team, and that my actions had the complete opposite effect from what I’d intended. So from that point onward I shared every single metric, dashboard, deck, and so on—I was a complete open book. This transparency turned out to be incredibly fulfilling, rewarding, and had a transformative impact on the company. 

Learning 3: Your product is only as good as your distribution strategy

In the early days of Trulia, we dedicated a great deal of time to perfecting our product, creating something that was unique and had an excellent user experience. We needed this to stand out against our competitors in the space. Founders should know, however, that if you don’t get your growth and distribution strategy right, then it really doesn’t matter how good your product is.

We had a number of key strategies we used for distribution. At the time, the SEO space was much less defined and competitive, so we were able to successfully tap into this to stand out.  We also had a fairly aggressive PR approach, meaning our name was quickly established as a leader in the space.

Learning 5: Understand the patterns that investors look for

Many investors’ decisions are guided by pattern matching—essentially, looking for traits or trends that have signalled success in the past, that will hopefully engender success in the future. When I’m writing cheques, I try to look beyond CV points that might bias my decision. 

Here are three of the main traits I look for in founders and businesses:

• Defensibility. Founders who understand how what they’re doing is going to help them be the dominant player in their specific industry or sector. “Competitive advantages” help your company become successful.  “Defensibility” helps you stay there.

• Size and scope for growth. There’s a balance between startups that are big enough to be interesting, and those that aren’t big enough to be interesting. What I mean is you want to invest in companies that have a capacity to grow at great scale, but that are early enough in the journey to feel exciting and unpredictable.

• Ability to hire exceptional people at high velocity early on. To do that, you’ll need both the insights to back up your business, but also the salesmanship and communication skills to attract people. You’re going to have to convince great people to get off their Google salary and be part of a startup.