No Politics

We see politics in startups as a disease – once it takes hold, it can spread through the company until it kills. So we have a No Politics rule. There are really just two things we do to prevent the disease of politics.

First, don’t hire people who are political by nature. You can usually spot them in an interview by asking what they liked or disliked about people they worked with in their prior jobs. You can also spot them by testing how “attracted to drama” they are. By drama, I don’t mean theater, I mean the basic interpersonal push and pull between people and their perceived interests that characterized junior high school and high school, e.g. “Did you here what she said about him??” People who are attracted to that sort of thing will create that in their work lives as a way of entertaining themselves. One person I worked with years ago, who dislikes politics, said about another colleague in a shock of realization, “For him, if he goes a day without playing politics, it’s a wasted day.” Some people are wired to create politics around them, and, in fact, some national cultures seem more wired to create politics than others. Watch for it.

Second, “expose to daylight” any comment or idea that seems like it’s political. Here’s what I mean. The fundamental particle of politics is the simple act of saying different things to different people. If my VP of Engineering is saying something to me that he won’t tell directly to the Director of Sales, then we have a moment of politics, and the antidote is to have the VP say it directly to the Director of Sales.

In my experience, there are typically three main reasons people don’t say something directly to one person that they will say to another. 1) I’m scared of his/her reaction. 2) It’s not going to do any good, anyway. 3) It doesn’t help me, and it may hurt me if I say something.

To overcome the fears people naturally have to be honest with each other, you have to show people that it turns out OK when they expose these ideas to sunlight. And you have to do it over and over again, because it’s so easy for us to fall out of genuine, open communication. Thus, having No Politics starts at the top of your organization. Look for CEO’s who force daylight through the organization.

Some might say that you can’t get rid of politics entirely for the simple fact we all engage in politics at least a little bit (because we all have our points of view, our fears, and our ambitions). And that’s true. But I believe you should make No Politics your policy. It makes a big difference in how effective and enjoyable your work environment is.

Operations & Product Development

Going Fast Part III: Operations

aerodynamic bike helmet

[This is the third and last of a series on getting your start up to go fast. See the first post to learn where these notes came from.]

Going Fast notes on Operations

Don’t allow process creep. As part of maintaining a fast production culture, you should actively prevent too many processes from getting put in place.

No QA department.

10 at 10 meetings. Have a 10-minute, standing-up meeting at 10 am where everyone on the team reviews what they’ve accomplished yesterday and what they’re planning to do today. This is a quick way to sync people surface any conflicts early in the day before too much work is done.

Spend less than 5% of the minutes you’re working per week on meetings. It can be done, and your communication will be much crisper and clearer if you hold yourself to this standard.

Engineering Task Blast. An engineer presents a task he/she needs to accomplish to the other engineers on the team. Everyone writes down how long they think it will take. Everyone shares their number and then talk about how the engineer might do the task it faster. They agree at the end how long it should take, and then the engineer is held accountable by their peers.

Don’t create silos. Whenever an organization creates “engineers” or “marketing” silos, it slows the company’s progress down. Only allow cross functional meetings.

Establish a cadence of work. Regular releases, weekly milestones, daily short meetings, monthly major releases, regular user testing and review of the report, after work drinks, etc. Get in a grove with your team, your product and your users.

Drive batch size down. “Continuous releases” or at least several times per day or at least once per day, has many advantages. You can course correct easily based on user feedback. You can avoid introducing drama and disruption to your team. Makes it hard for your competitors to keep up. Makes it easy for users to see constant improvement. (Google has small daily releases, medium releases every week, and large releases every 5 weeks. They assumed 5 weeks was enough for almost anything, and that has proven to be true.)

Measure the right things and elevate those to everyone’s view. As a manager you should obsess about choosing the right metrics to measure, how you’re presenting what you’re measuring (meetings, daily email stats reports, flat panels on the wall with real time data, private emails) and then how you reward people for accomplishments publicly.

Quick, cheap, early user feedback. Put up design mocks on forums. Put up a video of what you think it will do and ask for feedback. One CEO told me the best thing he did in 2009 was implement a weekly program of buying 5 tests of his product by target users from http://www.usertesting.com and then reviewing the resulting videos on Friday afternoons.

Transparency. Having all goals and data available throughout the company allows good people at every level to make the right decisions faster. You must make it really easy and really clear (and perhaps fun!) for people to get the data they need to make decisions.

Small teams. Google constantly breaks teams down into no more than 7 people. Amazon has “Pizza box teams” which is defined as a group that only needs one large pizza to have dinner. Over 300 Pizza Box Teams touch Amazon’s home page.

Communicate priorities. Create a spreadsheet that everyone on the team easily has access to that shows all the major things that need to be done in priority order with the name of the person to do them and the date they are to be done. In meetings, argue over this list.

Create the perception of competition to motivate all external relationships. Getting other organizations and people outside your company to move quickly (VC’s, clients, distribution partners, potential employees, users) is very difficult. The main lever you have is to always make it clear to them that there is time urgency and competition for whatever they think they may want from you. That’s the most repeatable and universally effective lever you have.

Ooga Labs, Operations & Product Development

Going Fast Part II: Culture & Personnel

[See the first post in this series cheetah-running and an explanation about where these notes come from]

Notes on Culture & Personnel for Going Fast in start ups:

Get cultural DNA for speed. Make sure the people in your company want to go fast and know how to go fast. Make it a major part of your interview process and visible culture. Web 2.0 folks generally get it, but others don’t and they need to be cycled out. Can you pair fast people with not-fast people and teach the not-fast people how to go fast? No. You can’t. In short, get the right people.

Every engineer ships production code their first day at work. As part of building up the cultural DNA about quickly writing code and pushing it out for users to use, you should set it up so every engineer writes and pushes live some code to the production servers on their first day of work. If the site breaks in some way, shame on you for not having it set up avoid that.

Make shipping a fetish. Make shipping product fast to the right customer the obsession.

Fast is not sloppy. Make sure your team knows the difference.

The best thing to do is the easiest thing to do. But do it right. That’s speed.

Don’t own the product, own the goal. At Google, teams choose a goal to own, not a feature to own, or even a product to own. What product solution ends up achieving a goal evolves much more in a business than the goal itself, so the goal is the better target, and gives the team more opportunity for creativity and speed.

Make decisions. Make sure you’re making decisions, not pseudo-decisions or delaying decisions. Commit to it as a team, and have the team demand it from management.

Ship Fair or Good. Don’t ship Poor, but don’t ship Very Good or Excellent. And when the Fair-Good is shipped, management is not allowed to send an email out noting the bugs or criticizing it. Get your team to embrace “Good Enough.” I [heart] good enough. “That which is worth doing is worth doing poorly.”

Operations & Product Development

Going Fast, Part 1: Planning Notes & List of Resources

The Flash going fast

Speed. The holy grail for small tech start ups. A few weeks ago, I had the pleasure of sitting with 20 other entrepreneurs and talking through how we can make our start ups go fast. Here are my notes combined with some additional notes I’ve taken over the years. It’s divided up into 3 long blog posts: Planning & Resources, Culture & Personnel, and Operations. Many thanks to the many entrepreneurs who shared their thoughts openly that day. I hope these notes are useful to you.

Resources

BLOG: Eric Ries http://www.startuplessonslearned.com/

BLOG: Sean Ellis http://startup-marketing.com/

BLOG: Dave McClure http://500hats.typepad.com/500blogs/ (Dave has a presentation called Start Up Metrics for Pirates)

BOOK: Four Steps to the Epiphany, by Steven Blank: http://www.amazon.com/Four-Steps-Epiphany-Steven-Blank/dp/0976470705/ref=sr_1_3?ie=UTF8&s=books&qid=1256622987&sr=1-3

BOOK: “Getting Real” eBook by 37Signals: http://gettingreal.37signals.com/

BOOK: “Lean Thinking” (a book about Toyota’s management process) http://www.amazon.com/Lean-Thinking-Banish-Create-Corporation/dp/0684810352

BOOK: “Back of the Napkin” by Dan Roam: http://www.amazon.com/Back-Napkin-Solving-Problems-Pictures/dp/1591841992/ref=sr_1_1?ie=UTF8&s=books&qid=1256623431&sr=1-1

TOOL: Balsamiq allows you to mock up ideas get the idea across and talk about it. Very fast, saves time and hand waving. http://www.balsamiq.com/products/mockups

TOOL: UserTesting.com : http://www.usertesting.com/

Notes on Planning

Fast toward what? You have to define your goal well. Often it’s worth spending a few more weeks up front not building anything but doing more research, more inexpensive testing of your assumptions, and more brainstorming to get a better idea of WHAT to build before you start building. Who is it for? What problem are we trying to solve. If you change your strategy, you could lose months of time.

Fast depends on stage of business evolution. When it’s you alone, fast is checking your assumptions and coming up with the right plan. When you know what you want to try, but you have no working product, it’s perhaps getting a usable product to some potential customers. When you have found product/market fit, “fast” will mean something different. When you have revenue, it’s probably different. When you’re profitable, fast is perhaps different yet again.

See Going Fast Part II: Culture & Personnel, and Going Fast Part III: Operations.

Analysis, Ooga Labs

We must do both.

The book “Built to Last” is excellent. Here’s an excerpt.
“…a key aspect of highly visionary companies: They do not oppress themselves with what we call the ‘Tyranny of the OR.’ The ‘tyranny of the OR’ pushes people to believe that things must be either A OR B, but not both. “OR” thinkers say:

· ‘You can have low cost OR high quality.’
· ‘You can have creative autonomy OR consistency and control.’
· ‘You can make progress by methodical planning OR by opportunistic groping.’
· ‘You can create wealth for your shareholders OR do good for the world.’
· ‘You can be idealistic (values-driven) OR pragmatic (profit-driven).’

Visionary companies liberate themselves with the ‘Genius of the AND’ – the ability to embrace both extremes of a number of dimensions at the same time. Instead of choosing between A OR B, they figure out a way to have both A AND B.

– purpose beyond profit AND pragmatic pursuit of profit

– a relatively fixed core ideology AND vigorous change and movement

– conservatism around the core AND bold, committing, risky moves

– clear vision and sense of direction AND opportunistic groping and experimentation

– audacious goals AND incremental evolutionary progress

– selection of managers steeped in the core AND selection of managers that induce change

– ideological control AND operational autonomy

– extremely tight culture AND ability to change, move, adapt

– investment for the long-term AND demands for short- term performance

– philosophical, visionary, futuristic AND superb daily execution, ‘nuts and bolts’

– organization aligned with a core ideology AND organization adapted to its environment

We’re not talking about mere balance here. ‘Balance’ implies going to the midpoint, fifty-fifty, half and half. A visionary company doesn’t seek balance between short-term and long-term, for example. It seeks to do very well in the short-term and very well in the long- term. A visionary company doesn’t simply balance between idealism and profitability; it seeks to be highly idealistic and highly profitable. A visionary company doesn’t simply balance between preserving a tightly held core ideology and stimulating vigorous change and movement; it does both to an extreme. In short, a highly visionary company doesn’t want to blend yin and yang into gray, indistinguishable circle that is neither highly yin nor highly yang; it aims to be distinctly yin and distinctly yang – both at the same time, all the time.

As F. Scott Fitzgerald pointed out, ‘The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.’ This is exactly what the visionary companies are able to do.”

Career Advice

Career Advice: What’s your Superpower?

When people ask me about joining startups, I always ask them what their superpower is. What is that thing that you can be counted on to do better than anyone else on the team? It could be that you’re willing to stay up for 3 straight days and grind out a deadline. It could be that you are the best writer and are super creative. Maybe you can raise money for the startup through connections or experience. Maybe you can prototype fast, even if your production code is mediocre. Maybe you can help recruit new employees to the team because of your contacts and enthusiasm. Maybe you know how to buy traffic cheaply and run the spreadsheets to never make a mistake. Maybe you’re great in presentations and speaking.

If you have a superpower, and you know what it is, a start up team might find you useful. If you don’t have a superpower, then you have to create one. Maybe you’ll work for free. Maybe you’ll be the first who’s willing to take the risk of believing in their crazy idea.

Even if you’re in a small company or a big one, it’s important to develop a superpower or two. Then people know what to come to you for.

Ooga Labs

Kent Lindstrom, former CEO of Friendster, Joins Ooga

We’re very happy Kent is here! Here’s the Wall Street Journal coverage. Stan was an Adviser to Friendster while Kent was turning that company around between 2006 and 2008, so we saw Kent’s steady leadership and good judgment up close. During his tenure, Kent recruited a brand new team to rebuild the product, solved Friendster’s significant (and well documented) technical challenges, and refocused the company on the Asian market. In that way, Friendster became the #1 social network in Asia, and the 7th largest website in the world. That turnaround was backed by Kleiner Perkins and Benchmark Capital. As the company regained traction, Lindstrom helped raise more than $30 million to fund growth and recruit the head of Google Asia-Pacific to be Friendster’s new CEO. The chart below says it all.

Kent Lindstrom Friendster Growth

At Ooga, Kent will create a company addressing opportunities in the ‘local’ space, an area currently targeted by consumer Internet businesses like Craigslist, Yelp and Google Latitude.

So welcome to Kent! And if you’re a CEO or engineer needing a home, and you fit with the Ooga way of doing things, Ooga may be for you.

–

Analysis

The Advisor Compensation Gap

I’m getting the feeling that there is a significant gap between what a good Advisor is worth to your start up, and what the going compensation rate for them is in Silicon Valley. An Advisor typically gets .1% – .4% of a start up, vesting over 2-3 years, with 100% acceleration on change of control. But they can add more than 10X that value to your company by doing just one of many things including: introducing you to a key teammate like a VP Engineering, giving you credibility where you had none, keeping you from wasting 6 months pursuing a wrong strategy, improving your pitch to investors by 10%, telling you business metrics that would’ve taken a year to discover on your own, or keeping you from signing a contract giving someone a “first right of refusal.” Good Advisors often do several of these things, adding huge value, but not getting compensated for it.

Off the top of my head, I can think of five possible reasons this gap persists.

1) Advisors tolerate the gap because they have fun

2) Advisors tolerate the gap because they believe they will learning something valuable

3) Entrepreneurs won’t pay more because Advisor performance is too variable. Maybe the entrepreneur actually IS paying for the value overall because they give .1% – 4% to many Advisors, and only one Advisor makes the difference.

4) Perhaps there is no perceived cost to the Advisor for giving a few hours per month. There really is both a cost and an opportunity cost, but the point is the perception of that cost may be too low due to underlying math, which says “What’s two hours out of 720 hours per month? Nothing, really.”

5) Perhaps Advisors tolerate it because it’s the going rate, and everyone has gotten used to it. Kind of like how everyone has become used to 2.5% management fees for hedge funds.

The other way to look at it might be to conclude there is no real gap. Maybe I’m imagining it. Perhaps we would feel this same gap for anyone in a startup if we looked closely at their situation… like the Office Manager, or the Director of Sales, or the interface designer.

So I wonder what would happen if we created a website that auctioned off Advisor time? Would the average compensation go up or down? What should a rational Board of Directors be willing to pay for their CEO to get advice from a guy like Philip Rosedale about their startup? Or from Caterina Fake about their Website design?

Cool Stuff

You’ve Gotta Have Heart at Crunchies

Michael Arrington commissioned my singing group, The Richter Scales, to write and perform a song for the Crunchies this year. Here was TechCrunch’s post about it.