Take Care of the People, the Products, and the Profits

From The Hard Thing About Hard Things by Ben Horowitz

This passage really resonated with me. There are a lot of crappy companies and a lot of disloyal employees. If a CEO cares about keeping a great team, he needs to make his company a great place to work. Things always go bad, and if your company is a crappy place to work, when things get hard, people will leave. Do yourself a favour and make your company a good place to work. Reward your employees, give promotions before they are asked for, and give visibility to people who have made huge achievements. Don’t let people get bored. And help them see the big picture that is how their  job at your company fits into their career.

In Ben’s words:

  • Being a good company doesn’t matter when things go well, but it can be the difference between life and death when things go wrong.
  • Things always go wrong.
  • Being a good company is an end in itself.

When things go well, the reasons to stay at the company are many:

  • Your career path is wide open because as the company grows lots of interesting jobs naturally open up.
  • Your friends and family think you are a genius for choosing to work at the “it” company before anyone else knew it was “it”.
  • Your résumé gets stronger by working at a blue-chip company in its heyday.
  • Oh and hey you’re getting rich.

Things Always Go Wrong

There has never been a company in the history of the world that had a monotonically increasing stock price. In bad companies, when the economics disappear, so do the employees, the spiral begins: The company declines in value, the best employees leave, the company declines in value, the best employees leave. Spirals are extremely difficult to reverse.

 

Solo Founders Should Focus on Building a Great Team, Then Figure Out the Idea

Solo Founders Should Focus on Building a Great Team, Then Figure Out the Idea

A frequently repeated mantra around the tech startup ecosystem is “it’s all about the team”. Perhaps that gives the wrong message though. Too many entrepreneurs believe they should first find a good idea and then build the team. Entrepreneurs should be motivated to find their partners first so they can hash out the idea together.

Dropbox founders Drew Houston and Arash Ferdowsi

We live in a society where it’s easier to make one founder the center of attention. Bill Gates, Steve Jobs, Richard Branson. They all had partners from the very beginning. Don’t expect a person on the street to know the names of their partners or that they existed. But, if you read their biographies you can easily see the importance their partners played, and it’s hard to imagine things going well for any of these entrepreneurs if they didn’t have help from day one.

Solo = No Go

The truth is, without a co-founder most solo founders are dead in the water. Sure some build a prototype, and then get co-founders on board once they have proof of concept. But this, more often then not, is a waste of resources. Think about the consequences of building before you have the appropriate team to build the company from the ground up.

  • Sales focused founders who pay a freelancer or offshore company to build a prototype can sign up customers early on, but when a would be technical founder sees what they technically have to work with, they will want to rebuild it from scratch. That’s a huge turn off, the potential CTO will hardly be enthusiastic to pick up where someone with no passion for the product has left off.
  • Technical founders who lack the sales & marketing qualities necessary to evangelize their apps early on may overlook important features for the customer|market fits and build a product potential marketing & sales parters aren’t eager to sell. “Nice to meet you, I can’t sell your product!”
  • Investors will wonder why a solo founder didn’t have the foresight to find at least one partner. Is no one willing to work with this person? Does no one believe in his idea? Maybe the founder’s network is too small to find a partner. Maybe he doesn’t know how to leverage his network.

To all solo founders out there, take my word for it, do not contact investors until you have at least one co-founder on your team.

Birchbox founders Hayley Barna and Katia Beauchamp

Network Magnification and Credibility: As a solo founder you can only gain the support of your network. With a network of 300 people you can potentially reach hundreds of thousands of people to promote your startup. But through the power of 2nd and 3rd degree connections, just one additional partner can increase your network by many magnitudes reaching not a few hundred thousand, but probably over one million people, and you will need every last one when it’s time to start promoting and finding early adopters.

A co-founder adds vital creditability. Just like the investors who ponder the credibility of your one man show, people in your network who have to decide if they will shamelessly promote you, and will subconsciously wonder if they are telling their own trusted network about a new and great company a personal contact of theirs is building. Being able to talk about what “we’re” doing reassures them you’re officially a team, you can float up your partner’s credentials for bragging rights, this sounds better than just talking about yourself. Coming off as a team full of skills and past experience combined to take on the challenge drastically increases the chances of convincing others your company is an exciting adventure and they will feel important when you give them the chance to tell the world about it.

Google founders Larry Page and Sergey Brin
Google founders Larry Page and Sergey Brin

Collaboration: Having a partner protects against pursuing bad ideas. A solo entrepreneur has nobody around to agree to call it a day. Or to try harder when it feels like it’s time to give up. Larry Page and Sergey Brin openly joke about how they didn’t get along when they first met, they had strong opinions and disagreed. Would Google exist today if they hadn’t challenged each other ideas ideas back in 1995?

When people of more than one specialty and background work together, their synergy produces the creativity startups need to think through problems in new ways. It’s important to have devils advocate who isn’t afraid to second guess the logic behind an assumption.

Uber co-founder Garret Camp
Uber co-founder Garret Camp
Uber CEO & co-founder Travis Kalanick
Uber CEO & co-founder Travis Kalanick

Complementary Skills: The number of companies started by one person are extremely rare. In the few cases it has happened, the technology and opportunity was so huge, and the company was growing so fast, it didn’t take long to have the traction necessary to recruit other team members with necessary skills to scale the company. For the other 99.999% this wont be the case. From the very first days important skills will be needed to divide and conquer the onslaught of challenges that will come from every direction.

Steve Blank wrote a piece about what it takes to build great founding teams.

The goal of a founding team “is to take the original idea and search for a repeatable and scalable business model– first by finding product/market fit, then by testing all the parts of the business model (pricing, channel, acquisition/activation, partners, costs, etc.)” — Steve Blank

A solo founder is going to have a tough time doing all of that. Building, searching for scalable business model, finding product|market fit and iterating through various tests on assumptions for the business, it’s too much to do alone. Few people are so talented to understand all of these areas completely, and again. The expertise should be divided to achieve greater focus, which in turns leads to greater success.

Airbnb founders Nathan Blecharczyk, Brian Chesky, and Joe Gebbia

How to build your team: The take away of all this is solo entrepreneurs can explore ideas, and launch prototypes. But they should prioritize the activity of finding people who are interested in building a company. Founder dating, and networking events despite lots of suggestions on this subject are probably not the best place to start looking for co-founders. A better approach is reaching out into one’s network, being open with others about searching for a co-founder, and asking for introductions.

What your team should look like: Unfortunately most people won’t get to be picky when looking for the right co-founders, and yet finding a co-founder fit with complementary skills and the readiness to tackle very hard problems during periods of serious doubt, is critical. If the team cannot get through the worst times, many costly issues will stand in the way and waste valuable time. If differences arise far enough along, a founder will have to be bought out, or sit on the founders shares of the cap table, which could cause irreversible financial pains for the company.

Entrepreneur and VC Mark Suster has written specifically about this subject and gives a good punch list of qualities to look for while creating a team. He makes several good points worth keeping in mind in a team as well as an investors perspective on what matters in the team. Being well rounded in skills, having consultative sales people versus relationship management style sellers, structuring tech teams with strengths of “people process & technology”.

I’m a solo founder. What now?

  • Start contacting friends and telling them you’re interested in building a company, and would love an introduction to anyone that might make a good co-founder in your company.
  • Do your own recruiting, identify the skills you lack to build a company, and search through Linkedin, Twitter, and tech blogs for people who have those qualities, and are in an appropriate place to start something new. Hint: an employee at a startup that is about to go into the dead pool maybe looking for new opportunities. Consulting firms, business schools, and agencies are full of people who may be planning to leave and start their own business, but don’t know a partner to do it with. Find a way to get an introduction to them.
  • Use the web to tell the world about your interests. Tweet and blog about subjects that you find interesting and see opportunities. People who are also interested in these subjects will find you, some may be your potential partner or know someone else who is.
  • Don’t sweat the critics, there are many thought leaders who claim a co-founder can’t just be picked out, that there should be a deep history between team members. While the reasons for this are obvious, there are lots of founders who met from different circles and went on to form great companies. Don’t let the nay sayers talk you out of pursuing your dreams.

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P.S.

So who were the solo founders? While writing this I started to wonder who some of the solo founders of tech companies have been. This is just off the top of my head, there are certainly more. Feel free to share with me off line or in the comments.

  • Ebay: Pierre Omidyar
  • Dell: Michael Dell
  • Amazon: Jeff Bezos
  • GoPro: Nick Woodman

The Role of a Product Manager

My resume says I’m a product manager. But that’s a change only seen in the last 2 years. It took me a while to understand where I fit into the long term scheme of all the companies I worked with, in, or for.

It wasn’t until I lived in Germany that I could proudly wear the title of Product Manager (or CPO, or Head of Product, whatever you want to call it) and feel safe that no one would call me out for a hack). Germans have embraced the idea of a Product Manager (PM) for a long time (meanwhile in the US we’re much more focused on the CTO and CEO until only recently, and still I feel it’s a title reserved for companies with larger infrastructure).

For that reason, while in the US, I always felt I was making up a title whenever I explained what I did to people while still back in the the States. Whether in a job interview, party, or networking event, most of the time “Technology Management” or “Interactive Technology Manager” usually did the job, as long as I conveyed that I bridged the gaps between business objectives and technical projects.

An elevator pitch style sentence that I’ve probably had memorized by accident for the last 6 years was: “I respect the needs of the business and know make sure their ideas are described with wireframes, designs, user stories, and technical detail”. Which usually is followed by explaining that I know enough about the technology to communicate the requirements of each feature, bug, product, etc to the developers, while being sympathetic to the reality of each task put before them. And then I have the job of explaining to people with business and UX (user experience) requirements when and how technical products can be delivered and why it’s not going to happen overnight (usually).

If I could make a venn-diagram, or comic strip to illustrate the PM better, the following statement of each party would somehow fill their comment bubble, or comment in that visual:

Business: “I need a new landing page to sell product, but don’t waist tons of resources building it, of yeah if it’s ready by tomorrow that would be awesome.”

Marketing: “We need tweaks on the funnel to optimize conversions, and there are new tags too”

Programmers: “The technology needs to be stable and consistent, it’s going to take longer” (sub-text: you’re giving us too many things to think about)

User Experience & Front End: “The experience should be fluid, beautiful, and utilize the best in class technology”

QA: “There are serious issues to fix still, it’s killing the experience and probably killing conversions”

Product Manager (right in the middle of it all): “I need to make all of this happen, with the best outcome possible”

As such an illustration would show, what’s important about a product manager is he/she sits in the middle of the technology, the customer, and the business. Whether a team is a guy who is thinking about sales and marketing all day, and another guy who is programming database queries or  HTML/CSS interfaces, or it’s made of a front end engineer, a programmer, a QA test manager, sales managers, an SEO consultant a the CEO. The job the product manager has is to bring it all together; to understand what each entity of the company needs, what the limitations are, and to make sure each other understand the constraints of the other team members’ needs.

Ex: If sales needs to have a new landing page with lead submission form live by Wednesday, then:

  • programmers, and front end guys need sales to understand the bugs they are working on will take a back seat which could hurt the business more than benefits of the new lead form.

If a front end developer thinks she can get this form up without any backend programming – to short cut the programming that would have to be done by the programmer – thus allowing sales to move forward while the programmer solves a critical bug, then:

  • the sales guy needs to understand the programmer will likely still want to modify the lead form later on so all the technology is built consistently (which means there really wasn’t a short cut you just used the front-end dev’s time before the back end guys were ready, which may ultimately cost more development time overall since the backend folks probably wont like the front end work around).

If the various members of the team are all on different planets(and they usually are to some degree), things can feel nuts, and the PM will likely resemble a guidance counselor, easing the anxiety and mitigation conflicts, more than a person who gets things done.

The PM has to understand the needs of each member of his team, make sure the best solution is achieved and the end product result is ideal for the business. Sometimes this means pushing back for more testing and cross platform support, others it means cooling off an over aggressive sales & marketing endeavor which is undermining the quality of the product.

What all of this also means is, if any member of the team is not there (as in it doesn’t exist) the product manager should fill that seat, and make sure those issues are represented.

  • If the CEO doesn’t understand online marketing, the PM will likely fill this seat.
  • If there aren’t enough engineers in house, the PM may need to pitch in here if he can or find a way to close the gap.

Truly a wearer of all hats, yet the most under celebrated of all, the Project Manager is the unicorn – a rare find. But it is an invaluable asset in any team that doesn’t strike a clean balance between the skills of each team member especially with startups, because usually, when starting small and with beginners minds, the improvisation and solution making tactics of a PM smoothes out the kinks as they come, and there are always kinks.

 

Simply Aiming for Cash Doesn’t Work

Looking around the landscape of startups and founders around presently, it dawned on me, the aim for many of them is simply to succeed. Their company is not one they dreamt about as little kids. The problem they solve isn’t making the world a better place. Maybe it optimizes some workflow for someone somewhere and is therefor valuable. But if you boil down what the end to those companies are, and the wins along the way they may bring, the plainest take aways are success i.e. proof he can start/operate/grow a company, and cash.

So if the company doesn’t actually fulfill the dream of the founders, and it doesn’t make the world better, why are they doing it? What is the point of earning money simply to have money? It’s an empty goal. The results of it will be empty for all involved. People should avoid taking jobs, or starting new businesses just for the money. There is no greater waste of your life than to look back at 80% of the time you had and feel like it didn’t amount to anything but cash.

Yes there are skills to learn, and perhaps you have to take one for the team so you can get to a point where starting a meaningful company, or doing something meaningful is possible. But at all costs, avoid making that huge investment. Life is beautiful, and short. There isn’t time to waste just so you can have more money.

Every single moment of time is an investment into something, whether it’s sitting in a chair and investing into a bad back and bigger waistline, or talking to someone, and investing your thoughts, and ideas into the exchange of thoughts and ideas with that person as well as your relationship with them. When a employer pays an employee to be in one place doing one thing 40 hours a week, they are investing their cash into having a warm body available to perform a task when they need it.

Try to avoid being the one that is throwing away valuable time investment dollars into someone else’s pot, unless it builds assets for you and can make you happy, it’s a waste of your investment resource of time.

Small Businesses Should Barter

A really useful service for small businesses would be a platform for exchanging services in a barter style system. This could enable a computer programmer in South America to travel to wine country in France, and enjoy a vacation there without having to shell out tons of money for bed & breakfasts. All he’d have to do is find a local accommodation that needs help with their website.

  • A writer could probably earn a a huge discount if not free pass aboard a cruise ship if she agreed to re-do the ship crew’s bios.
  • Foreign language speakers can add value simply by providing translations of web content to anyone that needs it.
  • All those DSLR totting travel lusts could earn their meals by doing new interior photos of the places they ate at.

The possibilities go way beyond these examples, and to make things more interesting, imagine if said exchange platform offered a central currency, where perhaps one small business could earn credits instead of a direct goods for goods exchange. Now this company is able to charge a small percentage for the currency transaction. And what’s better now, businesses don’t need to directly interact to get one kind of goods for the value of theirs. Now a Social Media Manager could work 140hrs for company X, and then cash out the value earned on that job for plane tickets with company Y.

I love this idea, I used to only imagine it as being an incremental improvement of WOOF’ing a way for young people to learn new skills and travel the world before they have earned the money to do so. Which in itself is still great, because it solves the problem of people getting jobs to travel, and then getting stuck in that job and never actually traveling (instead just taking their 2 week vacation allotted by the employer). Anyways as a general services exchange network, it seems much more useful and dynamic to support a freelancer economy of similar attributes.