As part of our series about the “Five Things You Need To Be A Highly Effective Leader During Turbulent Times,” we had the pleasure of interviewing Hooman Radfar.
Hooman Radfar is a serial entrepreneur, investor, and the co-founder and CEO of Collective. He previously co-founded AddThis (exit: Oracle), the largest platform on the web to help drive traffic and engagement for marketers. He was also a founding partner at Expa, a platform started by Uber co-founder Garrett Camp, to support entrepreneurs by building and investing in their companies. He was an early investor and adviser in category-defining companies like Uber, Hinge, Sweetgreen, Onfido and Convoy. Hooman co-founded Collective to create a better future workplace by supporting the largest class of entrepreneurs in the world — businesses-of-one.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I founded my first company, AddThis, after completing graduate work at Carnegie Mellon. AddThis is an embedded service platform for online publishers and advertisers that increased their traffic and engagement. It was an amazing experience. When we sold to Oracle, AddThis was the largest personalization platform online, used by 15 million websites to increase their traffic to nearly two billion unique users worldwide.
Through AddThis, I met my friend Garrett Camp — founder of Uber — when he was running StumbleUpon. After moving to the west coast, I joined him as a founding partner at Expa. Expa is a venture firm that helps founders at the earliest stage. It was here that I developed my passion for being a founder that helps other founders. While I loved this experience, I missed operating and I also wanted to help founders at a larger scale.
Collective leverages all of my previous experience in a really fun way. Through Collective, I not only get to be a founder/operator, but I also get to be a founder helping founders at scale. With 36% of Americans freelancing, businesses-of-one represent the largest group of founders in the country.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
Initially, we financed AddThis through consulting work and grants. One of the funniest mistakes I made — and it’s ONLY funny now in hindsight — was during a consulting project. I left a voicemail ‘correcting’ a client on asks that they’d made for the project. Let’s just say my corrections were a bit too direct.
Luckily for me — and our company — the client was kind enough to give me feedback as a first-time entrepreneur and offer us another shot after giving me an earful. This experience taught me to be very careful about not only my messaging to customers, but also the mediums I choose to deliver those messages.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I couldn’t agree more — our friends, family and mentors carry us forward in ways we don’t always recognize until much later in life. I’ve been very fortunate to have many mentors in my career. One mentor that has played an outsized role in my journey is Nigel Morris. Nigel is founder of Capital One and QED Ventures. Nigel sat on my board at AddThis and was instrumental in teaching me the basics of running a data-informed business. During the great recession, he and his team played an instrumental role in steering a test-and-learn approach that helped us discover a business model that ultimately helped us get acquired by Oracle. I’m excited to work with Nigel and the QED team again as they’re now investors in Collective.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. When your company started, what was its vision, what was its purpose?
Collective is on a mission to make businesses-of-one more successful by enabling them to focus on their passion, not their paperwork. We want to help the largest group of founders — freelancers, consultants, and more — enjoy the freedom and independence of being their own boss, while having the security and safety of having a team. Given we spend the majority of our lives at work and that this group of people represents the majority of workers, it’s an absolutely amazing opportunity for our team to make an impact.
Thank you for all that. Let’s now turn to the main focus of our discussion. Can you share with our readers a story from your own experience about how you lead your team during uncertain or difficult times?
Collective was born in a period characterized by uncertainty. Within the first two months of 2020, the COVID pandemic hit. Our company was roughly 10 people, most of whom had only been with the company for 2–3 weeks. 2020 was supposed to be a big year — we needed to hire a team, build our service, and launch to the public. We were not only faced with the challenge of facing a pandemic, but the new and uncomfortable reality of building a company remote-first environment. The way that we dealt with that situation was simple — we were open and transparent. We told people what we knew, we told them what we didn’t know, and given both we worked together with them to shape approaches and plans. The more you can include your team in the ‘reality’ of the business, the more engaged they can be in helping you navigate difficult situations.
Did you ever consider giving up? Where did you get the motivation to continue through your challenges? What sustains your drive?
I think every entrepreneur has considered giving up. The time when I was closest to throwing in the towel, was when we were in the early days testing for product-market-fit at AddThis. We were in Pittsburgh, were running out of what little money we had, and had not cracked the code. One of our team members quit and it was just me and my co-founder. I called my mom the day he quit and told her that I was running out of steam. She was calm. I’ll never forget it and she told me something that I often tell myself when I’m stuck, “keep going.” Her point was simple. Half of the battle is hanging in there. It’s stuck with me ever since.
What would you say is the most critical role of a leader during challenging times?
I think the most critical role of a leader is to quickly provide clear goals, resources to achieve said goals and a calm and constructive environment in which to work along the way. Any challenge can be overcome with teamwork.
When the future seems so uncertain, what is the best way to boost morale? What can a leader do to inspire, motivate and engage their team?
One of the best ways I’ve found to keep morale high is to approach situations with levity, humility and honesty.
What is the best way to communicate difficult news to one’s team and customers?
When communicating difficult news, I find it best to be vulnerable. The more open you can be with people about the considerations and drivers underlying any challenging news, the more likely they will be to respond with sympathy. Be human and great things will happen.
How can a leader make plans when the future is so unpredictable?
Dwight Eisenhower has a famous saying, “plans are useless but planning is indispensable.” Leaders should set key goals and identify their best hypothetical plans to achieve said goals. The process of planning will help reduce execution risk. In order to maximize agility and create a learning environment, leaders should establish a regular cadence to review goals and plans so they can adjust accordingly. It’s all about setting up an engine to learn as quickly as possible.
Is there a “number one principle” that can help guide a company through the ups and downs of turbulent times?
Absolutely — be people first. Business is simple. One group of people — a team — is dedicated to a mission where they serve another group of people, customers. If you remember that we’re all a community trying to be happy and move forward, you can do amazing things when times are tough.
Can you share 3 or 4 of the most common mistakes you have seen other businesses make during difficult times? What should one keep in mind to avoid that?
Here are a few mistakes I’ve seen and some recommendations:
- Cutting salaries is the last resort. When businesses are suffering, executives often implement across the board salary cuts to preserve cash. It’s better to have a smaller team that’s better paid, than more people that are now struggling. The economic reality of your employees doesn’t change just because you can’t pay them as well.
- Be transparent and share the facts. If you have a good team, they’ll know times are tough. You don’t need to sugar coat, or hide things. In fact, that will likely just make things worse. It’s better to share the facts that you already know and ask for help finding the facts you need to know. Great people want to help get through challenges. They can only do that if you let them.
- Being tough doesn’t mean acting tough. It’s tempting to become more dictatorial when trying to move quickly through a tough situation or to be mean or short-tempered with your team. It’s harder to encourage levity and empathy — that’s what being tough is really about as a leader — it will get much better results.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
The most important strategy is to set up a test-and-learn culture. By framing key decisions as experiments, it not only gives your team permission to move quickly with key decisions, but also to fail and course-correct. This permission is essential in a highly uncertain environment where you have low visibility on key business drivers.
Here is the primary question of our discussion. Based on your experience and success, what are the five most important things a business leader should do to lead effectively during uncertain and turbulent times? Please share a story or an example for each.
- Be calm — when there is a crisis, or difficult situation, you need to be a source of stability for your team.
- Be empathetic — you need to listen and deeply understand the needs and feelings of your team and customers.
- Be decisive — In times of crisis, your team needs direction — fast. You need to make those choices quickly.
- Be focused — Do less, better. Focus your resources on the highest leverage projects that will help you move forward.
- Be agile — Set time to reflect and learn. When making decisions quickly in uncertain territory, it helps to reserve time to change course. This also helps you reduce risk around decisions.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My mentor and former investor, Ted Leonsis — owner of the Capitals — once told me something that has always stuck with me, “Do you want to be right, or do you want to win?” Success in business and in life is not always about you proving your point. Sometimes you can lose the real battle in an attempt to be the smartest person in the room.
How can our readers further follow your work?
I share my insights on Twitter @hoomanradfar, or via @collectivedotcom on Instagram!