Perhaps most famous for co-founding Tinder, Dinesh Moorjani has a knack for turning ideas into profitable ventures. In 2007, he launched IAC’s mobile group, and, under his guidance, they had 40 million app downloads and doubled app revenue annually. After that success, he founded Hatch Labs through IAC and incubated about ten startups, including Tinder. Now Managing Partner at Comcast Ventures, Moorjani has accrued practical wisdom about all aspects of the founder’s journey from both sides of the table. In a short, focused conversation with Shikhar Ghosh, Moorjani discusses what he learned about hiring co-founders or heads of product for B2C startups. Ad he shares his observations and lessons he learned about hiring and building a team. An unedited transcript follows the video.
The journey and definition of entrepreneurship is having insufficient resources.
Dinesh Moorjani interviewed by Shikhar Ghosh in September 2018, at the Rock Center for Entrepreneurship, Harvard Business School.
Insights on the Founder’s Journey & Tips on Hiring a Co-Founder or Product Head for B2C Startups
SHIKHAR GHOSH: A lot of times when you look at successful companies, the gap between success and failure was a really narrow gap, and you look back and people have the narratives of, “First we did this and we thought about this need and we created it,” and so on. But the reality is just a lot messier than that. It’s a series of chance happenings that gets you to a certain point. You were one of the forces behind the creation of Tinder. How did that come about?
DINESH MOORJANI: Yeah, I would agree with you that most startup journeys are absolutely nonlinear, and they’re tumultuous journeys that are often unpredictable, but with the benefit of hindsight, it looks like a startup that was founded with a clear purpose and then it was built, I think the vast majority of startups go through some sort of pivot. Ours was a little different. So as most folks know, Tinder was started inside Hatch Labs. We were a Delaware C Corp funded by IAC and Extreme Labs. And the concept for Tinder was actually first called Matchbox, and it was created in a hackathon where I brought my employees together, paired them up, and they worked on new concepts outside their core startup that they were hired to work on inside Hatch Labs. This was both in New York, in Los Angeles.
When we put those teams together, because they’re working on something different, they could take chances with new ideas and we had a set of screening tools to determine if an idea was a compelling idea or not, then I would award prizes. It was also, by the way, a great recruiting technique because we would then have new recruits sit in with our internal hackathon teams that actually work in a pressure cooker with them, which was fun.
The concept for Matchbox was developed in LA around creating and using an interest graph to match people and take a binary decision whether you were interested in them or not, but that team that was working on matchbox was already committed to a product called Cardify, the name of which we came up later, and it was around local merchant loyalty. We hired a designer and a front end engineer to work on that, and that was our tiger team with me. So we were fortunate enough to hire a really talented team that had a lot of elasticity in their capabilities to work on multiple startups, and we went-
SHIKHAR GHOSH: But the core product that became Tinder was something that came up in a hackathon and then you just shelved or put it into the freezer?
DINESH MOORJANI: Right, we put it into an icebox is what the colloquial name we had in Hatch to potentially defrost later, because that team was already dedicated to another startup. That startup actually was very compelling, and in fact in May of 2012 went to a TechCrunch Disrupt finals. We didn’t win, but if you look at who the judges were, maybe you can reflect on why that is.
At the same time we had submitted the app to the Apple app store, iTunes app store for approval, and most of our apps got approved really fast. We had a great relationship with developer relations at Apple, which is one of the benefits of how we got products to market pretty quickly at Hatch. In this case, that product was sitting in purgatory and hadn’t been approved and it had been three weeks, largely because they didn’t understand why we were taking credit card payment information, but not actually enabling e-commerce. That payment information was used for a very different purpose, which we disclosed in the app.
Long story short is we weren’t going to have a team sitting around doing nothing, so it gave us the opportunity to have the conversation with the team to say, “Look, we have this other concept around Matchbox,” which we rebranded Tinder eventually, “To work on something around social discovery to make it easier to meet people that you don’t know,” and after making sure it fit all the basic requirements around the addressable market, the monetization opportunity, and what it would take to build a really compelling network effect we got the team comfortable with the idea of switching gears, which can be a bit of a whiplash effect for the team because they’re all working on one project and then we’re moving them onto an entirely different startup. But we got the team comfortable with it. I think Sean did a great job of-
SHIKHAR GHOSH: This was the same team that in the hackathon had come up with this concept?
DINESH MOORJANI: Two of the four people were the same team.
SHIKHAR GHOSH: Okay. So there’s a continuity in that and it’s completely what felt like bad luck, which is Apple saying no to the core product, but turns out to be fortuitous that then you start to work on this.
DINESH MOORJANI: Right. Apple didn’t say no, they just wouldn’t give us approval yet. We eventually did get approved in the app store, but yeah, it was adding two team members to a concept that we had come up with, putting resources behind it, and moving it from private beta to public beta in August of 2012. So sometimes these unexpected challenges or these major pivots, in this case with an entire business pivot with two of the same team members working with me, allowed us to go pursue something we thought was compelling because we had to put the other one into a holding pattern.
So it is an absolute nonlinear journey, and sort of the one thing I take away is that when you’re building startups, you often have to take these leaps of faith but do so in a way with as much information as you have because you’ll never have perfect information, and you’re really in that startup effort trying to move from point a when you start a company to point B where it’s successful with insufficient resources to oftentimes get there, whether it’s capital, team size, et cetera, as you take on incumbents.
That’s sort of the journey and definition of entrepreneurship is having insufficient resources. So if it was a piece of paper and I had point A and I had point B on it, really what you’re trying to do is bend space by turning the paper over and crossing that journey in a way that a conventional company wouldn’t have been able to do.
SHIKHAR GHOSH: And so much of the time after you reached point B, the story then gets rewritten as if you knew the pathway, each step was planned, all of those things.
DINESH MOORJANI: Yeah, we didn’t, even when we had early metrics for Tinder in the fall of 2012. They were certainly compelling to show signs that a network effect might be taking hold, but that’s with a very small base of users, even though they were highly engaged. So all you know is that it’s worth spending more time trying to flip the card to know whether you should be investing more money, but you really don’t know if it’s a successful venture or not. That’s not possible at that stage. You need a much larger user base and much more detailed engagement metrics to know if there’s something that’s taking hold here.
SHIKHAR GHOSH: In your case what made this even more complicated was then Apple says yes to Cardify, right? So now you’ve got a real, you know, the thing you started on and you could choose to put this back into the freezer or go back here.
DINESH MOORJANI: That’s right. So in the summer of 2012 Apple did approve Cardify, and we were continuing a field and inbound sales team effort to grow Cardify because the product was working, but we now had the team redirected on Matchbox, which again, we rebranded Tinder, and the idea of working on both is not sustainable, so we have to take a difficult choice. And again, that choice is often mired in insufficient information to make an informed decision. And that’s where you really get into a leap of faith. And given the team DNA and the early traction we saw in the product experience where we were coming up with a real compelling product insight around the double-blind introduction model, I made the decision that we would move all the resources to Tinder, and we had a fantastic team to work with. Sean did an amazing job helping to build that out and then eventually growing the business. So it was, with the benefit of hindsight, very fortunate.
SHIKHAR GHOSH: How would you apply that insight into what product managers, particularly I’d imagine for B2C, should do? How does one actually take that insight and make it practical?
DINESH MOORJANI: I think it starts with something very core. You don’t just hire a product manager and have them develop an insight. There has to be some nagging problem that’s driving that person to spend and invest the time to figure this out. So how that product manager manifests a product insight into a solution is a function of building a company. Every startup is effectively a hypothesis that’s going to get proven or disproven and the market has all the answers and it’s going to tell you whether it works or it doesn’t work. So, the product insight is laying out what you believe is a hypothesis that’s going to be true, but you might be proven false.
If the hypothesis is underpinning a startup. The startup is just a process to prove something, effectively an experiment that you believe in, and it takes a lot of motivation and energy to put your life on hold to go try to solve this problem. It’s the reason why you shouldn’t start a company for financial motivation. That’s really the byproduct of having created value and built something.
So I think it gets back to the motivation behind the people and are they willing to focus on coming up with that insight, especially in a B2C company, then do they have the resources, capabilities, team and everything else to surround that hypothesis with, to then go execute to find out if that hypothesis is valid or not.
SHIKHAR GHOSH: So when you’re hiring either a product oriented founder or looking at a product oriented founder or a product manager for a company that needs something, what are you looking for in them?
DINESH MOORJANI: If I’m hiring a product head, I’m looking for a few things. I’m looking for the art and the science. The art is this indescribable obsession bordering on unhealthy, but not unhealthy where the person is compelled to solve this problem. Involved in that art is the ability to have a gravity well around this person to recruit additional talent. Oftentimes junior product talent, engineers, designers, a UX, and visual design. The other component of the art is that they have not just the gravitas but the chemistry to create a team that’ll work night and day, which is what it takes typically to build a startup with high velocity, especially if it’s venture funded, to break ground and then iterate very quickly.
The science is a little bit different. The sciences is, do they understand and have the discipline to proper product management. In the tech world that involves everything from understanding how to release product, how to manage sprints, how to run Scrums in an Agile methodology, paired programming when appropriate, how to handle QA with respect to build acceptance testing and functional testing and crowdsource testing. Understanding how the release in the app store works, how to prioritize features that contribute toward the underlying goals to prove the hypothesis around product market fit in an early stage company. How do they prioritize those? If you add X feature versus Y feature, how are you measuring success? What analytics package do you have in there and does it deliver the value that you intended? That’s a very analytically driven sort of left brain set of skills that you learn through apprenticeship.
I almost think of product management as an apprenticeship role because you have to learn it by watching and experiencing it with someone else. So there’s a very different set of skills, the art and the science, but if you can put them together, you can have very talented people.
SHIKHAR GHOSH: So the science part, I can figure out how you can sort of assess whether somebody has that particular mindset or not. The art part, because it’s art, how do you actually interview for that? How do you test for that? How do you observe for that?
DINESH MOORJANI: Yeah, that’s a great question. So I have a very unconventional approach to how I test for it. We don’t just interview candidates from a combination of behavioral interviews and maybe a slightly analytical case study and then have them meet a few people and then make a hiring decision. I think that’s a conventional approach. The challenge with that approach is it does not replicate what the real life environment is working in a startup, which is essentially a massive pressure cooker.
You have to work in very tight timeframes, deal with uncertainty, and have situations where things go wrong every day. Essentially in a startup, you’re putting out fires constantly. So how someone reacts in that environment is completely differently, so you essentially have to test them in that environment. What we did at Hatch was we would have new employees actually sit in on occasion with us inside a hackathon, and we’d put them on a team and see how they operate for 48 hours.
Now, the first screen is, are they willing to invest the time to do that with us, to sit in a hackathon? And if they’re not willing to do it, then you have to question their motivation for working with our team to build a startup or build a company. So that ends up becoming a screen, which is the time commitment.
Number two is in that pressure cooker how do they interact with the team? Are they respectful? Do they show integrity? Do they demonstrate trust? Do they live by the value system which was share everything, do your best, and root for others, and the operating manifesto, which guided how we operated as a company. So we would screen for some of that as we would recruit talent. And very quickly we found that someone with a phenomenal resume or a great pedigree may be a very difficult person to work with in a team. Because again, startups might have a hypothesis underpinning it, but it’s a team effort. And if the team can’t function, then you don’t have a business. You need a highly functional team. And ideally, a low ego team to be able to deliver on that, and there are very unique sets of people that have both the art and the science, but can also work in that team environment.
SHIKHAR GHOSH: So that’s almost a third requirement, right? That you know or you have a sense of the art, you understand the technical sides of the job, but then most of all you get along with the other people who have to make this happen for you.
DINESH MOORJANI: I think that’s absolutely right, but there are particular roles inside companies, especially as they start to scale, where certain roles can be compartmentalized. In some cases, data science can be compartmentalized. Graphic design as opposed to UX design can be compartmentalized, so they don’t necessarily have to be perfect team players as long as they can function with the teams. But product management, which is core to how modern day tech startups operate. If you’re hiring a product leader and you’re looking for that type of leadership on the team, that person does have to have what you’re calling the third criteria, and essentially great teamwork skills.
So we would interview that way and we would also screen for talent by actually getting on whiteboards and working with them through product concepts from cradle to grave and how they would launch it and what they would do instead of, again, just going through behavioral interviews, which frankly you can learn and train for.
SHIKHAR GHOSH: So when somebody comes in, how long does it typically take you to know? There’s this John Gottman who studies marriages, right? And he says that within I think 45 minutes he can predict with 90% accuracy who’s going to stay together for more than I think six years. He says that just some signs really early on when you see the way people interact that say that these two people should be together or they don’t have the skills to do it. How long does it take? Do you need full two days to kind of figure out this person, or you sort of know in the first couple of hours?
DINESH MOORJANI: So I don’t have the wisdom or the insight that he might have to determine that so quickly. But what I might suggest is that very quickly you can read the EQ—the signals that they’re giving off to determine if they might be easy to work with. If they have the intellectual horsepower. If they have the vision and the unstructured thinking ability to work in a startup environment. So that is happening in a few minutes when you get to know somebody, and then over the course of a full interview process or a working session, you do end up interacting in a way where you can suss out if they don’t have the natural capability to operate with other team members in that environment.
But I don’t think you can determine right out of the gate, because you could have a false signal whether that person is going to be successful in the role or not. I actually think you need to work with them, which is why I suggest the whiteboard concept. A startup among the founders is very much like a marriage, and that’s why you have so many founders that don’t get talked about who end up having breakups. And those startups that never get off the ground or don’t reach escape velocity, oftentimes it’s because there was an altercation among co-founders, but it’s just not made public by the VCs or the founders themselves because it’s not in their best interest. But a lot of startups have that problem, it is a marriage. You’re oftentimes spending more time with a cofounder than you are with a spouse or partner. So I think you can pick up on the EQ signals, but I think you need to put them in a pressure cooker to really know how they’re going to perform.
SHIKHAR GHOSH: Because, there’s also a question of endurance. That somebody, when they are fresh and want to be cooperative and so on, they act a certain way. Then after 18 hours of working and so on people have different tolerance, sort of windows of tolerance for what they’ll take.
DINESH MOORJANI: Right. That’s true. And a version of that is the airport test. If you’re traveling with your co founder and you’ve been on a road show talking to investors and you’ve seen this person for twelve to fifteen hours in the day and you’re going to end up having a late dinner, do you want to tear your hair out or are you looking forward to the conversation? And that just gets to founder chemistry or early management team chemistry. But at the same time, you want people that are respectful and easy to work with. It’s a very delicate combination, because those that are very successful type A, ambitious folks oftentimes will have to let go of some of the other natural personality traits that make them easy to get along with.
Finding that very subtle balance. Again, obsession bordering on unhealthy without being unhealthy, is a very difficult tightrope to walk. So it’s the reason we screen out so many entrepreneurs before we find folks that either we want to work with or product leaders that we want to hire. There’s a very small group, and once you find those people, they tend to be forces of nature.
SHIKHAR GHOSH: Okay. So whenever a group of people are working together in an intense pressure filled environment, there’s going to be a bunch of opinions on it. They’re going to have opinions about the team, the teams different members, the team are going to have opinions on them. How do you then pull all that together and say, “this is somebody we’d want to commit to, to be part of this team going forward?”
DINESH MOORJANI: Yeah. It depends on your leadership style. Are you consensus driven or are you going to be more of a dictator? But ultimately someone has to take the decision. And in Hatch Labs, I was the founder and CEO, so I had to make a decision, but my approach was to gather input from the team members to find out if they had the ability to work in teams and they demonstrated horsepower insider capabilities that extended beyond anything we’d see on their CV or resume. So I’d gather their input and make an assessment.
Now, before we send an offer, we would obviously do reference checks. We’d have everyone send us their references, and then we do our own network searches to do reference checks behind the scenes so that the references weren’t baked. And we’re not necessarily looking for talent that only reference checks that they got along with everyone and did everything perfectly in their work environment. Some of the most talented leaders—especially in a startup—they’re going to create positive disruption. And we’re in the business of disruption. They’re going to break some glass. The question is, how did they break the glass wherever they worked before? So we’re interested in their motivations and their approach and what happened, not just the fact that someone had a mixed experience working with someone else. So we do a lot of our own internal checking as well.
SHIKHAR GHOSH: So, how did they break the glass? What’s the answer you’re looking for? What’s the thing that would disqualify somebody, and what’s the thing that you’d say, “That’s OK,”?
DINESH MOORJANI: If in a reference check we heard someone broke glass by not agreeing with a path forward for what a product experience should look like, for example, for a product manager. Then I’m saying, “I’m willing to work with the team to do it, but let me propose an alternative and I’ll come back to you in a week.” Then spending their nights and weekends actually designing an entirely different user interface, and maybe conducting their own initial primary research or secondary research to substantiate that. They’re not agreeing with the team, but they’re doing it in a constructive way to push back and show why their path and their vision is better than what the team has come up with. That would be very constructive.
Disruptive would be disagreeing, throwing the design on the ground, and walking out of the office and being impossible to work with. So there are different ways of breaking glass, but ultimately we want people to think differently. The diversity of thought adds to the quality of the discussion. Doing so in a respectful way, and being able to break glass and convince others as part of that.
SHIKHAR GHOSH: Okay, great. Good.