5 Steps to Starting & Selling: Inspired by Webs CEO Haroon Mokhtarzada

March 8, 2012

11:00 am

“As a kid, I always felt like I was going to be an entrepreneur.”

Haroon Mokhtarzada, the co-founder and CEO of Webs.com, knew this early on. As a child, he watched his father build a successful small business. Following in his father’s footsteps, Mokhtarzada quickly realized that entrepreneurship would offer him an opportunity for freedom in the long run. He sat down with students from the University of Maryland to share his story, from life as a Terp (’01) to a successful CEO who just recently sold his business to VistaPrint to the cool sum of $117.5 million. If you had to package all his wisdom into 5 steps, it would look like this:

1. Create something and don’t look back.
When you have a great idea, just go with it. “If you don’t launch, you’ll never have a chance at success,” Mokhtarzada said. In fact, his initial product, Freewebs, was accidentally released when his little brother listed the URL on a popular web directory. Once users started coming in, they soon realized that there’s nothing to fear from launching too early. “You can always create new iterations of your company later and mistakes matter a lot less at the beginning,” Mokhtarzada said.

2. Hire people who can roll up their sleeves.
After raising venture capital, Mokhtarzada quickly expanded his business and hired more staff, including a lot of middle and upper management. This led to an increased burn rate that could have threatened the business. Mokhtarzada reevaluated their staff and quickly saw that the key players in their business were their developers, designers, and other product and customer focused staff. In a bold move, Mokhtarzada cut his executive staff—there just wasn’t enough room for delegators.

3. Choose something you’re passionate about—it won’t feel like work.
“I love what we do and I love the people we work with,” Mokhtarzada said. If you want to start your own business, it has to be something you love or else you’ll never survive the startup roller coaster ride. If you’re lucky, you may actually be able to exit successfully. But to get there, you’ll have to go through a lot. It’s your passion that will keep you motivated through these challenges.

4. Focus on what works.
Once Webs brought on VCs, they transitioned from a subscription to an ad revenue model, which caused their business to suffer. Mokhtarzada encouraged his team to return to a subscription model but with an increased focus on their target audience – micro businesses. This focus became the secret to their success. Mokhtarzada explained that it’s really important to figure out what works and doesn’t as quickly as possible. Once you crack that nut, double down and get laser focused on it.

5. If it adds 2 digits, consider selling.
It took four years of bootstrapping for the founders of Webs to build their foundation. That was until VCs took interest. Mokhtarzada stressed that if you’re not planning on creating a company worth more than worth $100 million then you shouldn’t raise venture capital; you’re better off with angels. His reasoning? VCs are driven by huge exits and push companies towards being more aggressive and risky since modest outcomes are less interesting to them. When it comes to selling, a general rule of thumb is that you should seriously consider an exit if it will add two additional digits to your bank account.

Editor’s Note: Guest Author Amanda Nachman is the founder of CollegeMagazine.com, the ultimate guide to college written by students nationwide. She graduated from the University of Maryland in 2007 and currently lives in Washington, DC. When she’s not busy brainstorming crazy contests for College Mag readers, you’ll find her at Pilates, enjoying spicy hot pot or jamming out…in the audience…at air guitar competitions. Follow her on Twitter @AmandaNachman

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