John Milinovich of Aesthetic: “Cash management is your penultimate job”

Cash management is your penultimate job: The number one job of the CEO is to keep enough money in the bank. If you’re not actively working to manage your cash inflows and outflows, you need to stop everything else to get that under control. Money in the bank gives you the time you need to […]

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Cash management is your penultimate job: The number one job of the CEO is to keep enough money in the bank. If you’re not actively working to manage your cash inflows and outflows, you need to stop everything else to get that under control. Money in the bank gives you the time you need to build, scale and prove yourself. If you mismanage your funds you will most certainly fail.

As part of our series called “5 Things I Wish Someone Told Me Before I Began Leading My Company” I had the pleasure of interviewing John Milinovich, an American entrepreneur who’s the CEO and Co-Founder of Aesthetic, a creative automation software company for businesses. Prior to Aesthetic John led the product strategy for Pinterest’s Taste Graph, their knowledge graph of the world’s interests. John’s last company, URX, was a mobile search engine that raised 15M dollars from Silicon Valley’s top investors and was acquired by Pinterest in 2016. John has been recognized as a thought leader in the startup ecosystem and his work has been covered in the New York Times, Wall Street Journal, TechCrunch and many other news outlets. John’s also a thoughtful blogger who writes advice for startup founders. John started his career at Yahoo and Google, where he helped build the developer ecosystem for Google Analytics. John received his BA from UCLA where he majored in Architectural Studies and minored in Accounting.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

Thanks for having me! I’ve been working in the software industry for the last 10 years and am originally from Pasadena, CA. I’m currently living in Campbell, CA with my wife Sherine and dog Lucy. Both my parents were entrepreneurs, so I grew up watching them build and operate businesses. They were early adopters of online marketplaces and at one point were the largest sellers of trading cards and memorabilia on the world thanks to eBay!

I went to UCLA for undergraduate, and decided to take my Mom’s advice and, “do what I love and the rest will follow.” This led me to major in Architectural Studies (buildings, not software!) and a minor in Accounting, which was the closest things UCLA had to a business degree at the time. This led to a lot of context switching between analytical and creative work, which in retrospect was very helpful in preparing me for my time as an entrepreneur.

While at UCLA I realized that neither architecture nor accounting were the right career fit for me, so I decided to trust my intuition and pursue a career with my first love: the internet industry. After some internships at startups in the Santa Monica area I ended up interning at Yahoo! on their Search Ads team as a Financial Analyst, and they paid for me to move to the SF Bay Area after college. I worked at Yahoo! for a little less than a year before joining Google, where I worked for two years in Operations and Developer Relations before starting my first company, URX.

I started URX with three co-founders who I knew from my time at UCLA. I met Andrew Look and Nathanael Smith at UCLA in the Sigma Phi Epsilon fraternity, and met James Turner who was one of Nate’s classmates. While we met under a context that was more social than professional, we quickly realized that we all had a lot of common interests and complementary skill sets. Andrew was majoring in Computer Science at the time, and Nate and James in Design Media Arts.

URX was acquired by Pinterest in 2016, and in 2018 Nate, Andrew and I decided to join up again to give it another go, this time with Aesthetic. We met our fourth co-founder Matt Trost through the Y Combinator network after he had just left another company he had started and was looking for his next opportunity.

What was the “Aha Moment” that led to the idea for your current company? Can you share that story with us?

While working at Pinterest, I spent a lot of time learning about their incredibly rigorous approach to experimentation. Pinterest has built one of the world’s most impressive growth engines, which is part of the reason it’s now a 40b+ dollars market cap company. One of the things that really stuck out to me was how creative the Pinterest growth teams could be with trying new experiments with every lever of the company’s core growth equation. At any given point in time there were 1,000’s of experiments running that would tweak everything about the way the company acquired, onboarded, activated, retained and reactivated their users.

One thing that stood out, though, is what the company couldn’t experiment with. Pinterest has billions of pieces of content that they rank to a user’s interests, but they were never able to generate new pieces of content that were tailored to a user or their context. Practically speaking, this means that even though Pinterest has the best catalog of ideas in the world, they weren’t able to use all of this data about a user to actually generate new content or graphics that were unique to that user.

After spending more time investigating this area, we realized that the real issue was that there was no way to programmatically generate images or other media. What this meant is that every piece of design that existed in the world had to be generated by hand! Pinterest had the benefit of having lots of content in their system today, but what about every other business who’s trying to build their own growth engines and send personalized transactional emails, produce sales one pagers, make compelling SEO landing pages, generate engaging social media content and the like?

We realized the real bottleneck is that there was no way for them to do this easily, because there was no way to generate images from code. This led to our vision for Aesthetic to automate all manual design work for companies so they use design as a new vector of growth experimentation and grow faster.

Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

I’d say the most difficult experience I’ve had to date was with my first company, URX. It was around September of 2015, and the company was around 45 people. At a high level it felt like things were going well and we were making progress in so many different arenas (growth, hiring, etc.) but something still just didn’t feel right. Customers were happy with our product and services, but they weren’t in love with it. Practically, this meant that we had little confidence that the customers that we had were going to continue staying with us. In retrospect, this is because we had good but not great product market fit.

Then one day, it felt like it all started to crumble. We got a call from one of our biggest customers, who told us they were going to stop spending with us. We were an ad network, so when you decrease the amount of dollars flowing through the pipes that means that you’re also going to have to stop paying publishers as much. Then, we got a second call from another advertiser who also wanted to hit the pause button. This led to a series of events which caused us to lose some of our largest publishers because we weren’t able to pay them enough. It felt like almost overnight that our business was cut in half, but of course our operating expenses had stayed the same. This led to us having to go through a round of layoffs before eventually selling the company a few months later.

In the hardest moments, my drive came from the fact that I wasn’t just doing this for myself- I was doing it for the team who trusted me as their leader to do everything in my power to make the company succeed. I treated that responsibility with great care, and tried to keep reminding myself that no matter how things go or how stressed I am, things will be OK and that I will get through this. I told myself that on the other side of this unfortunate experience, I would be a better leader and entrepreneur because of it.

So, how are things going today? How did your grit and resilience lead to your eventual success?

I’m happy to say — with cautious optimism — that things are going quite well today! Aesthetic is still an early stage startup, and we’re doing a lot of things differently this time around to make sure we avoid a similar outcome to URX where we had to sell before we felt we were ready to do so. In particular, we’re doing everything we can to take a more measured approach and be patient in our pursuit of product market fit.

All of the hard lessons that we learned from URX have directly translated into a renewed product and business strategy for Aesthetic. The one thing that hasn’t changed is the scale of our ambitions, but I’d say that almost everything else about how we try to make them a reality has improved for the better! Sometimes you have to touch the stove to know what it feels like to be burned so you can do everything in your power to prevent it from happening ever again.

What do you think makes your company stand out? Can you share a story?

Our company’s mission is to help every company become more valuable by using design, and the way we’re doing that is by automating all the manual design work that companies do today. Not only is this mission very wide in scope, but our vision for getting there is considered heretical by some. If I had a dollar for every time I’ve heard someone say, “How can you have the gall to put ‘design’ and ‘automation’ in the same sentence? Design can’t and shouldn’t be automated!”…

The trick is, we spent 18 months researching the question, “what types of design can be automated, and what types of design should be automated” before we even started building software. For the first year and a half of our existence, we operated as a design agency specifically so we could better understand this question. Then, once we felt we had a good answer, we sold the design agency business so we could 100% focus on building the automation platform that we have today.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?

With URX, I think I spent some time in the first year doing what Garry Tan calls, “playing startup”. This means that you’re doing all of the things that you think startups are supposed to be doing, even though they aren’t actually what’s important or useful to your company. Think press, going to events, hiring, etc.

This is funny to think about in retrospect because I was 25 at the time, and I think that there was a lot of self-understanding that was going on in the background. I’m happy to say that this period didn’t last more than a few months so it didn’t actually get to a point where it was toxic or caused any material issues in the business. When I think back on it though, I can’t help but laugh about how important some of these things felt at the time even though they had no impact on our success.

Often leaders are asked to share the best advice they received. But let’s reverse the question. Can you share a story about advice you’ve received that you now wish you never followed?

In the early days of Aesthetic while we were operating our agency, I caught up with one of my close friends who was also running a company at the time. I was expressing some of my angst at the time that we wanted to grow our revenue more, but were bottlenecked by the capacity our design team had for taking on new projects. My friend made the reasonable suggestion that we simply hire some more people to help keep up with the demand, since it seemed like it would be profitable to do so.

In retrospect, I confused his advice as a suggestion on a tactic about how to grow with what was actually a change in strategy. The reason that we hadn’t hired more people at that point and weren’t planning to was because we wanted to keep the agency large enough to learn from, but not try and trick ourselves into thinking we were building an agency. Unfortunately we did end up hiring a few more people based on this advice and then had to end up letting them go once our strategic perspective caught up to us and we realized the mistake that we had made.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

Curiosity: For as long as I can remember, I’ve been deeply curious about the world and people around me. At my core, I believe that there’s something to learn from every person and situation that I’m exposed to. This fascination and curiosity has taught me how to, “go deep” on a subject area and learn things from first principles. I didn’t study computer science in college, but at this point in my career I can write enough code to be dangerous. Over the last 10 years I have done everything I could to maintain a steep learning curve, and keep trying to expand my technical skills and knowledge by asking lots of questions and trying things that you could generously say are, “out of my depth”.

Enthusiasm: Startups are hard. The only thing that helps you get through the rough patches is a deep enthusiasm for what you’re working on. If you don’t love something so much that you’re willing to endure some pain in order to see it through, you might not be working on the right thing or have the right fortitude to deal with life in the trenches. I’ve always been the type of person to lead with my enthusiasm, which has led me down some pretty funny paths. You’ve probably never met someone who’s as enthusiastic about task management as I am, but hey… if you’re going to do something, do it with everything you’ve got to give.

Determination: Startups are like rolling a boulder uphill. The moment you stop rolling it, it’ll fall back down on you and you have to start over. The only way to deal with the weight of this pressure is with extreme grit and determination. In order to succeed in a startup, you need to be able to show up and work hard everyday, and then be able to turn it off to relax and recharge. You must have the discipline to do this day in and day out for months and years at a time.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

Companies must reset their cultural norms and expectations to make it clear that not only is working too much not encouraged, it’s actually as bad as not working enough. One of Aesthetic’s principles is, “Something’s wrong if you feel like you’re working too much.” This isn’t because we don’t like working hard, it’s because our natural predisposition is to work too much so it’s important for us to reiterate how important it is that we don’t do this.

What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?

The most common mistake I’ve seen founders make is not launching fast enough. Startups by definitions are experiments. Once you’ve proven your core hypothesis and have a way to build a scalable and repeatable business model, you’re no longer a startup. As such, it’s extremely important that companies orient themselves around shipping small tests very frequently that are in service of de risking their broader vision. If a company isn’t learning at an increasing rate, it is not doing something right.

The next most common mistake I’ve observed is founders not being user-centric enough. They think they already have all the answers, and don’t bother to talk to the people they expect to use their products. When a company ignores their users’ voice in the development process, it takes nothing short of a miracle for things to work out correctly. You have to make a recurring and ongoing habit of talking to users and getting feedback from them to make sure you’re building the right thing to solve their problems.

In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?

The biggest misconception about building products is how long it takes to make something great. Everyone is familiar with the idea that, “Rome wasn’t built in a day” and this is equally true for startups. You can’t expect things to be perfect out the gates — especially if you’re shipping fast enough — which means you need to take a longer view of how long it’s going to take to build something magical. If you look at the V1 of many of the world’s most popular products, you might not even recognize them as they are such reduced versions of their current selves. You can’t expect your product to look and feel like it’s been worked on for 10 years when it’s coming out the gates- you have to have clear expectations and use this as motivation to move fast.

Ok super. Here is the main question of our interview. What are your “5 Things I Wish Someone Told Me Before I Began Leading My Company”? Please share a story or an example for each.

  1. You can’t rush product market fit: No matter how much you want to find product market fit, you can’t rush it. Product market fit is a highly iterative process that requires you having an intimate connection with your customers and fast feedback cycles with your development teams. You can’t simply will product market fit into existence, and if you try to do that or pretend that you have product market fit before you do, you will most likely fail.
  2. Cash management is your penultimate job: The number one job of the CEO is to keep enough money in the bank. If you’re not actively working to manage your cash inflows and outflows, you need to stop everything else to get that under control. Money in the bank gives you the time you need to build, scale and prove yourself. If you mismanage your funds you will most certainly fail.
  3. Always ask how you can do it faster or more simply: It’s easy to assume that the solution you’ve arrived at to solve your customers’ problem is the correct one. Before agreeing to anything, make sure that you pressure test all of your assumptions about what you need to make to ensure that there aren’t any ways that you can do it faster or more simply that you haven’t thought of yet.
  4. Write as much as you can: Startups are learning machines. The faster you learn, the more quickly you’re able to translate these learnings into action. In my experience the best way to learn fast is by making a daily habit of writing. I follow the Morning Pages ritual, where I write 3 pages per day. It’s not prompt-based, but what I usually end up writing most about are my learnings from the day and ideas for what this means for our future. My personal writing ends up being the best vehicle for me to flush out my thoughts and synthesize ideas into a more cohesive strategy.
  5. Always set clear goals for yourself: An early stage startup can sometimes feel like you’re on a ship that’s lost at sea. If you don’t have a clear north start to measure yourself by, you’re almost certainly going to vanish along the way. Set clear, measurable and time-bounded goals for yourself that help you define your own success. This will help make sure that you’re able to know whether what you’re doing is working as well as you thought that it would.

You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

I would bring back the Golden rule as something that we don’t just learn as kids, but have to practice as adults in our personal and professional lives. How much better would the world be if everyone, “treated others as they wish to be treated”?!

How can our readers further follow you online?

Follow me on Twitter @jmilinovich!

This was very inspiring. Thank you so much for the time you spent with this!

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