Jan 27

Breakfast with Steve Martocci

This Wednesday, InSITE Fellows Joe Rizk, Sean Weinstock, Adam Kalamchi, Marianna Zaslavsky, and myself were fortunate enough to have breakfast with Steve Martocci, who co-founded GroupMe with Jared Hecht in 2010. For those of you who don’t know, GroupMe is a group messaging startup founded in May 2010 at TechCrunch Disrupt and was sold to Skype (Microsoft)… about 14 months later.
Steve, who joined us straight from Sundance (#winning), touched on a number of interesting topics from the perspective of a recent founder, a unique and valuable viewpoint.
The first part of the breakfast was spent discussing numberFire, a sports analytics startup. numberFire is a former InSITE company founded by Nik Bonaddio, where InSITE breakfast attendee Sean Weinstock is the COO. Steve dug-in to understand numberFire’s differentiated approach to sports projections, shared some suggestions about how to better engage readers of numberFire’s newsletter (sign up for it!), and talked about the importance of filling out a round of funding with investors that can add value beyond their capital. Once there is some competition for a round, the entrepreneur is in a better position to select investors that can add unique value based on their industry experience, connections, or perhaps visibility (see: @aplusk, investor in GroupMe).
Steve then shared some great advice about recruiting initial employees. A key to GroupMe’s success and their acquisition was the A+ engineering team that Steve and Jared assembled. This was driven by the networks of the GroupMe founders (prior to GroupMe Steve was at Gilt, Jared at Tumblr) and a willingness to over-pay for great engineering talent. As Steve stated, if you don’t pay above market for the best engineers, someone else will.
Steve was also asked if he felt any trepidation about asking early employees to leave safe jobs for a startup. Steve relayed the importance of aggressively recruiting great talent, and that as long as recruits understand the risks associated with joining a startup, entrepreneurs should not be bashful in their efforts.
Lastly, Steve directly and indirectly touched on the importance of cultural fit, and building a team of people that get along well. In one instance, GroupMe was able to get two talented engineers to back out of commitments to work at another big-time startup after sitting around and listening to Disney music. Why? It was clear GroupMe was going to be a better fit… This strength of the GroupMe team, getting along well, started at the top with the long-standing friendship between Steve and Jared prior to GroupMe. Often we hear warnings about the risks of working with close friends because of all of the things that can go wrong. GroupMe is a clear counter-example. In fact, Steve discussed how critical it is to known your co-founders for a meaningful period of time before starting a venture.
In all, the breakfast was excellent. The team heard some great insights from an extremely grounded and cool entrepreneur.
Ben Sesser, Stern MBA 2012

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