Minted.com CEO Mariam Naficy shares ‘the biggest surprise about entrepreneurship’

The veteran founder discussed hiring, management and other core responsibilities

At TechCrunch Early Stage, Minted CEO and serial founder Mariam Naficy got into the weeds with us on some of the topics founders don’t often discuss. What’s the difference between expectations and reality when it comes to entrepreneurialism? How do you split responsibilities between co-founders? What’s the key to being great at hiring?

We also talked about some of the harder parts of being a leader, including how to handle layoffs and what to do with an employee who likes to rock the boat.

Minted is an e-commerce platform that connects indie designers with customers for products like stationary, art and home goods. The company has raised nearly $300 million and generates hundreds of millions in revenue. And it’s not Naficy’s first stint as a founder: she previously co-founded Eve, which she eventually sold for $100 million+, according to reports.

We covered a lot of ground in the interview, including some questions from the audience, which you can check out in the video below. You’ll also find a lightly edited transcript of the conversation.

The most surprising part of being an entrepreneur

I didn’t realize what was, I think, one of the biggest differences, which is how much, if you are successful, you become a leader of people, whether you are a reluctant leader of people or an enthusiastic leader of people. If you’re successful, your company will inevitably grow and you end up, believe it or not, being a role model for people. People actually look at you and they emulate your behavior and that is not something that I expected.

I thought I was just going to be making products and selling products. I just didn’t think that it was gonna be such a people job — a management job, a talent development job, a leadership job — and that people would care when you walked in the building every day whether you said hello to them in the morning. They would actually notice whether you said “hi” or not to them at the coffee bar when you’re half asleep. What you do every minute actually matters. Every minute of the day. So I think that’s probably the biggest surprise about entrepreneurship.

Being a sole founder versus starting out with a co-founder

If I were starting all over again, I would still choose to do it with a co-founder for my first company because everything was new and I felt like I learned so much by being able to bounce things off someone. We spent hours and hours debating what to do. I think the complexity comes in when you disagree with your co-founder and there’s not a clear decision-making structure as to who, at the end of the day, gets to make a decision. That can be awkward.

I think also there’s this aspect of how big of a company you are building and what is your plan for exit value? Do you think you’ll be acquired, or do you think you might go public? What might be the exit value? Given how hard you’re going to have to work, thinking about the capitalization structure really carefully and how much equity you want to divide upfront with how many co-founders does come into play, if it’s going to be a smaller type of exit. So I think that’s another consideration to think through.

The second time around, it was scary to not have a co-founder. And yet, on the other hand, I could, to some degree, make decisions a little bit faster. Because there wasn’t as much of the debate. I really missed having a sounding board.

Hiring and developing talent from within

Our hallmark is really developing from within for senior positions, even more than importing. We have hired at the senior level, but we’ve probably equally developed people from within, quickly finding director-level stars and also getting people who are really outperforming into positions with even greater responsibility.

Part of the secret sauce is developing this bench that is just under the most senior layer and really building that bench out very carefully. You’ll find that they are some of the best hires you can make to build your management team.

When it comes to talent, the first thing is that you’re going to make a lot of mistakes. If you think statistically: out of 10 hires, how many out of 10 do you think are really going to be superstars? Maybe it’s one. Maybe, if it’s really good, it’s two. Everybody else kind of falls in the middle. You have to cut yourself a break a little bit and say, “to learn, you have to fail at hiring.” Unfortunately, you learn so much from making mistakes.

One thing we’ve learned over time is making sure there’s a values fit. For us, that’s finding people who are really smart, but who are humble as well and have humility. So it’s important to understand what some of the signals of that might be, and how we look for them. For example, if we’re looking for someone who can just keep pivoting and learning no matter what life in the corporate world, the marketplace throws them, we need to find people who love learning, who really have this endless capacity to learn. Again, what signals do we look for to identify that. If we were to find someone who comes in talking a lot about title and about how many direct reports they have, we might wonder what are they really coming to the company to do? We need to snuff that out.

To some degree, it’s a bit easier to hire people who really want to be with you for the right reasons, at the very earliest stage. When you start raising, if you’re successful, and you start getting really big rounds of capital at high valuations, you’ll start to have to develop your filter a little bit more carefully. In the beginning, when you’re an unknown company, nobody knows who you are, and you’re really small, you often find people who are there because they love your mission. They love your product. There’s a passion, and they’re joining for what I think are some of the right reasons. Later on, they might be attracted by your investors, by your capital or by something else.

The Google founders famously interviewed, I believe, the first 500 people on staff. That first couple hundred people are so critical to sort of determining the future culture because those people end up obviously being the ones to hire the next group of people. Maybe one thing to think about, and plan critically at the beginning, is up to what point will you as a founder, or your co-founders, continue to interview for culture fit. And we found that going into that sort of going up to that 200 or 300 mark was really helpful in making sure there was consistency of culture.

How to manage employees who rock the boat

There was a woman who was right out of undergrad, and she was somebody I would call a “boat rocker.” You need these boat rockers around. Otherwise, nothing is going to happen. She was reporting to some managers who wanted to terminate her and it came up at a management meeting. But I said, “You know, this person always raises her hand, when we’re in a group meeting, she says something brilliant. She might be a boat rocker, but she always had something amazing to say at these meetings. Isn’t there some other role?”

It turns out, we could redirect all that energy towards a job where you have to find bugs. You had to find bugs and be loud in product management meetings and you had to really drive change across the organization to get people to focus on specific problems with the site experience. They needed somebody who was a very loud advocate, somebody who totally would not take no for an answer, a real bulldog, super smart, but could just take hold of these problems. And once we directed her that way, she added huge value and had a very long successful career at Minted.

I like to work with people who actually respectfully can just tell me, “you know, it’s kind of a bad idea.” At some point, you’re going to be surrounded by people who might want to say “yes” to you all the time. That’s one of the crazy things about if you build a big company, and it’s successful, strangely — I know it’s weird for a lot of founders to think about it, but — people are gonna want to say “yes.” They’re going to become yes people. You have to continue finding the people who are really honest with you.

Otherwise, you’re living in La La Land. You’re living in some bubble that is not real. So that’s really important.