Doug Lebda, CEO and founder of LendingTree, started the company as part of the first generation of dot-coms. Doug still remembers the scrappy, entrepreneurial days of running a startup. That entrepreneurial spirit used to launch LendingTree off the ground in the 90s still remains part of him and the company today.
“There are very similar principles (in place today),” says Lebda. “A lot has changed, but the core has stayed the same.”
In addition to managing LendingTree, Lebda currently co-teaches an entrepreneurship class at the University of Virginia – his alma mater.
“The biggest thing I like to do is hear from entrepreneurs and give them advice,” Lebda says. “I spend a decent amount of time doing that. I love helping them not make the mistakes I made.”
Start With What You Know
The first recommendation Lebda has to offer to young entrepreneurs is to start with what you know.
“The best advice I can give is to start with what we like to call, ‘a bird in the hand.’ The best place to start when you want to launch something is to start very close to what you know.”
Lebda says many startup business owners make the mistake of going too big too fast and end up leaving their wheelhouse.
“Doing something outside their comfort zone would be, you having no technology background but you want to start a website for eyeglasses,” says Lebda. “And you also don’t know anything about the eyeglass industry, beyond that you need eyeglasses. You would not know the suppliers or the technology. You would have to first acquire that knowledge, which is going to be expensive.”
Get Early Feedback from Customers
The next insight Lebda has to offer is after coming up with a business idea you are comfortable with, work with customers early on to get feedback.
“You might write it on a napkin or interview them to ask them about their experience,” Lebda says. “And then say, ‘OK, does this look good to you?’ Would you use something like this? What would you like to see done differently? Your customers can also be your focus group and provide valuable insight on how to improve your product or service.”
Risks Should Be Calculated
The other thing Lebda likes to do for people ready to jump into the startup world is to address the “misconception that entrepreneurs take a lot of risk.”
“Entrepreneurs typically take what we say is an affordable loss,” Lebda says. There’s always risk in an investment, but it’s a calculated risk.
For Lebda, that “affordable loss,” was leaving business school and his job as an accountant to launch LendingTree. He moved to Charlotte and would give the startup one year of his time to see if he could make it work.
He was successful.
Years later, Lebda would return to the University of Virginia to finish the MBA program.
“It was fantastic because even though I was there 15 years ago, the second time around I was able to learn a lot more because I had a lot more experience,” Lebda says. “I learned more entrepreneurial techniques and new strategies. I appreciated it much more.”