HOME | NEWSROOM | ARTICLES

How 2 MIT entrepreneurs keep their companies focused

It's easy to sprint in the wrong direction. "Be paranoid about that."

By Meredith Somers  |  February 14, 2018

VC_CEO_hpi

Krishna Gupta (center) founder of Romulus Capital, talks with ClearMotion CEO Shakeel Avadhany (right) during a panel at the Feb. 9 MIT Venture Capital and Innovation Conference. Moderator Ed Pease (left), is a corporate lawyer at WilmerHale.

Why It Matters

When your company grows, a focused vision and hiring strategy will keep you from spinning out.

In its quest to build a smoother, digital auto chassis, ClearMotion grew from 15 employees in 2011 to 115 in 2017, with $130 million in funding. Romulus Capital, an early-stage venture capital firm managing $200 million, started in Krishna Gupta's MIT dorm room in 2008.

With growth comes risk, and at the Feb. 9 MIT Venture Capital and Innovation Conference, Gupta and ClearMotion CEO Shakeel Avadhany explained how they keep their companies focused, and what they focus on when building their teams.

"For any leader, the most important thing is you have a vision, you set the vision, you have to be very critical about that vision," said Avadhany, SB '09. "It's very easy to sprint in the wrong direction. Be paranoid about that."

What's important is to establish your main thing, and "you've got to keep the main thing the main thing," Avadhany said. "That sounds simple, but in practice it's actually an extremely important principle to not let go."

Gupta, SB '08, said he lived that principle when he was forced to decide the future of a struggling company he owned in less than a week. Gupta said he basically lived in one of the company's offices, interviewing employees to get a sense of what was going through their heads, their emotions, and their plans for the future if the company stayed open. (It did — Gupta invested several million dollars into the now flourishing company.)

"Sometimes you just have to sit down and focus on one thing for several days at a time; which was actually quite difficult. That's what I did. I just cut out everything else for those six days," Gupta said. "One week really taught me the value of going all in, putting my focus on one thing, trying to get as many people-related signals as I could. We talk about facts, but sometimes — especially at the early stage — a lot of it is driven by human beings and what human beings are capable of doing and what they're incentivized and motivated to do."

Building a team
Hiring and investing in the right motivated people for your company is another challenge that takes skill.

Hopefully you'll also find a team of people who are in many ways a better leader than you, Avadhany said. And make sure you're all pulling on the same end of the rope.

"I have to be able to trust these people coming on board," Avadhany said. "Because you're not going to be up in their face day to day. That's a great way to de-motivate."

Avadhany said for any CEO looking to hire, it's helpful to pull references from the "referral machine" from the top performers in your business.

"You ask them 'who are the best people you've worked with,'" Avadhany said. "I think in the VC business, a lot of deals that VCs do are by introduction. It's a great way to bring in high-quality people.

For Gupta, trust in a team is twofold: Can members do the work, and can they take feedback.

"I want to see that this person is signing up for creative destruction," Gupta said. "We are going to clash, we are going to debate things."

That's what leads to great decision-making, Gupta said

"It's very easy to develop a groupthink in a company," Gupta said. "A great partner is someone who will actually push you. That's only going to work if I trust that the person I'm investing in is receptive to that. Often times I will turn down a deal, even though I love the team and love the capabilities of the team, but I don't think that entrepreneurial team will take feedback. And that to me is a huge red flag."