Hongwei Liu is co-founder at mappedin, which brings the ease of outdoor navigation indoors. He studied EE at the University of Waterloo. Liu likes rock climbing, watching movies, playing video games, and occasionally blogging at hongwei.ca. Follow him @thehongwei.
Who is your hero? (In business, life, or both.)
In business, Elon Musk. In life, my hero is definitely my grandfather. He taught me many things, but above all else, to be curious.
What’s the single best piece of business advice that helped shape who you are as an entrepreneur today, and why?
Paul Graham’s essays were really formative for me. In particular, his recommendation to “do things that don’t scale,” which explains that most startup ideas are necessarily impractical, hard, or initially unprofitable because the easier ideas have already been done. I’ve often paraphrased this, saying that a startup is made up of the series of unscalable, difficult factors that only founders will work with to succeed. Of course, by the time the public and news sites notice, the idea will seem obvious and inevitable. But early on, they never are. Building a company inevitably takes you off the road, and sometimes even off a cliff. Graham’s essays taught me to embrace and expect this type of hardship and to not waste too much time when facing a difficult decision.
What’s the biggest mistake you ever made in your business, and what did you learn from it that others can learn from too?
Prematurely scaling. Back in 2014, I’d read “The Lean Startup” and knew the premise of “Crossing the Chasm,” but when we closed a big round of funding, I decided it was time to grow the business. Of course, the easiest way to do that was to hire more people. Four months later, I realized we were way over-resourced and didn’t have a tight go-to-market strategy where those additional people could be efficiently utilized.
This happened because I was lured by vanity metrics. Typically, after people ask you what your company does, they want to know how much you’ve raised and how many employees you have. Though these are universal measures of a startup’s size and stage, they are also indirect measures. A startup raises a Series B and employs 100 people because they have successfully found product-market fit and proven their ability to scale. The underlying metrics of the business, such as growth rate, churn, LTV and CAC are what should drive the vanity metrics of funding and size, not the other way around.
What do you do during the first hour of your business day and why?
Normally I wake up and immediately start loading up the queue with tasks I have to do. In the shower, I’m thinking about my top three things for the day and how to execute. By the time the day starts, I’m at full speed writing out a tricky email response or working on a strategy deck. The first few hours of my day are normally my most productive.
What’s your best financial/cash-flow related tip for entrepreneurs just getting started?
Stay lean and focus on core metrics. While everyone knows that, you must really do it. Even when you think everything’s going great, remember that it takes five to ten years (or longer) to build a real business. Resist buying the fancy furniture.
Quick: What’s ONE thing you recommend ALL aspiring or current entrepreneurs do right now to take their biz to the next level?
Find an early investor who has built a business before and is willing to spend time coaching you. Make sure they are someone you respect and admire and that they are comfortable giving you tough feedback.
What’s your definition of success? How will you know when you’ve finally “succeeded” in your business?
Success would mean the following things: early employees pay their mortgages, investors make money, and customers love our products. Hopefully, achieving those three mean I can take a vacation (or get hit by a bus) and come back knowing the business will be on track.