RPM Chat with Hunter Horsley
We had the opportunity to sit down for lunch with an ex-RPM, Hunter Horsley, about life at Facebook, becoming a startup founder, and why he decided to start a cryptocurrency startup (Bitwise). I’ve captured some of the notes around his journey and some of the learnings that he shared with us.
Starting a Startup After Big Tech
Hunter started as a Rotational Product Manager (RPM) at Facebook in 2015 where he worked on various products across IG/FB. Looking back on his experience at a large tech company, there were two core reasons why it was not the best environment to incubate his startup ambitions. 1) Working at large tech companies (such as FB/Google/Amazon) doesn’t help you find startup partners, and 2) it doesn’t help you find problems worth solving.
The people that tend to work at large tech companies are specialized. Most people only focus on their one job function, whereas people who work in startups need to have a very rounded out skillset. Because of the scarcity of resources, startups require people who are like swiss army knives in order to stay lean but complete the work required to ship a product. People must be able to flex outside of their job function, whereas large tech companies have the luxury of hiring people who are good at one specific thing. For example, teams on FB have both designers and content strategists, where a team in a startup can only afford a single designer that must do both.
In addition, the lives of employees who work at large tech companies are very different than that of the rest of the world. Because of the perks and amenities provided, it’s easy to have blind spots for problems that have been taken care of by the company.
However, there were some benefits to working at FB that were helpful to Hunter when he was looking for funding. Having a brand name on a resume will open many doors, including meetings with VCs and investors. Having experience running large teams and building products within a respected company will give ex-employees a swath of opportunities in the future.
Finding Ideas to Work on
After he left FB, Hunter and his cofounder spent a lot of time figuring out what sorts of ideas they wanted to work on. There were 3 methods that they tried when looking for problems to solve, one of which was more effective than the others:
1) Generate a massive list of ideas and get feedback from people (worst) This method was flawed because it was easy to get biased feedback. For example, pitching a dog spa to people who happen to hate dogs and only own cats would give you a misleading signal that this was a bad idea, even when there could be some merit.
2) Have two ideas, one “academic”, one “regular” problem, and work on them both simultaneously (not good)
The issue with this method was that Hunter and his cofounder found that they always favored one idea over the other, splitting their resources and wasting time on an idea that neither person was particularly passionate about.
3) Deep dive into one specific problem (preferred method)
Hunter found that his preferred method was to take a step back and first have a structure around how to prioritize ideas. After selecting a promising idea, he did a 6–10 week deep dive to better understand the problem space. During this time he would dictate what the MVP for success looks like, and what needed to happen before putting more effort behind this idea (e.g. a single person agrees to pay for this service). This deep dive allowed him to avoid constantly evaluating if this was a good idea and gave him focus. After 6 weeks, he would come up for air and make a more informed decision.
Confidence and enthusiasm are scarce resources early in a company’s life. It’s something that needs to be professionally managed, and as a founder it’s essential to minimize how much of that is wasted. It’s also important to only get feedback from the target customers to avoid misleading signals.
The value of crypto in investments
In one of their deep dives, Hunter and his coworker realized that the ecosystem around cryptocurrency was growing, and that there was an opportunity to help fund managers diversify the investments with a new index fund centered around crypto. Cryptocurrency is unique as a new asset class because is not correlated with any other existing types of investments in the market, making it a desirable addition into an asset manager’s portfolio. With this realization, they started their startup, Bitwise.
When building an investment vehicle for cryptocurrency, Hunter discovered that there are nuances which make it unique, mostly centered around its volatility. On a typical day, a cryptocurrency could swing 5–10%, a scary amount of variance for investors who are more acclimated to the smaller deviations of the S&P 500. One of Bitwise’s goals is to educate its customers on the virtues of cryptocurrency, and provide an index fund that asset managers can easily invest into. Bringing awareness to this allowed them to drive investment in the space and helped push Bitwise to become one of the leading providers of index cryptoasset funds in the world.
Regardless of the value that people see in cryptocurrency as a value store or as a new transaction platform, it is here to stay.
Thanks to Tyler Lehman for arranging the lunch, and for Hunter for spending the time to chat with us.
