The Startup of You

Anyone interested in having a fulfilling career ought to read The Startup of You by Reid Hoffman, one of Silicon Valley's exemplary and visionary entrepreneurs behind successes such as Paypal and LinkedIn.  However, if you don't have time to ready the book, take a quick look at the following slides which do a phenomenal job of delivering the key messages in the book.  ENJOY!

Start-up of You, Visual Summary from Reid Hoffman

Yup, Culture Is Usually the Real Culprit!

It has already been a great year so far.  Many blessings on the family front have kept pace with new intellectual pursuits and personal growth opportunities, all resulting in a flurry of 24/7 excitement and activity around my neck of the woods.

Amongst all that excitement, I still couldn't help but take special personal delight in reading Brad Garlinghouse's recent post on LinkedIn, "What I got wrong in the Peanut Butter Manifesto". Brad, a visionary ex-Yahoo executive wrote the now-legendary "Peanut Butter Manifesto" six years ago, a leaked internal memo in which he pointed out "lack of focus, accountability and decisiveness" as Yahoo's critical problems at that point. He aptly prophesied Yahoo's talent exodus and steady subsequent decline in relevance in the world (until Marissa Mayer).

Now, with the benefit of hindsight and reflecting on his role as the chief executive of YouSendIt, Brad has a revised perspective. Namely, he is now convinced that the problems he pointed at Yahoo were mostly symptoms of a much deeper ailment, one that we could summarize as lack of an entrepreneurial culture:

[Yahoo's] core culture no longer encouraged and celebrated innovation with the same zest and ardent ambition to change the world—too often this had been displaced by half-hearted maintenance of the status quo.

...Great products don’t come out of thin air. They are an outcome of environments where innovation can thrive and talented people are encouraged to be bold.

Sure, one-hit wonders can happen anywhere, but companies that stand the test of time all recognize a fundamental truth: great people build great products and great people gravitate towards great company cultures. The startup culture that Steve Jobs created at Apple to transform a declining computer manufacturer into the creator of era-defining products is an obvious example.

...If a business has to be told that it needs more focus, accountability and decisiveness, there is a bigger problem at hand. Truly successful businesses encourage these qualities innately by creating and fostering a culture that inspires each individual to perform at their peak and rewards passion and results without peanut buttering the end of year bonus.

As I had previously written, the right culture within your organization serves as a success accelerant. The existence of an innovative entreprepeneurial culture is as electrifyingly palpable as its lack is stultifying and stale. But it does not come about by accident. It requires deliberate, relentless acts by the founding team. And it leaves its fingerprint throughout the organization, from the arrangement of desks, to employment policies, perks and benefits, allowed play time, hours worked, mission statement, and even the actual product(s) produced.

As founders, what are some of the things you do to maintain the entrepeneurial culture within your startup? How has that culture helped you achieve your goals?
 

Like it or not, "culture" determines your priorities!

I wrote previously on the virtues of culture as a startup accelerant (by reducing organizational inefficiencies, culture paves the path for exponential growth). However, I left out a crucial effect that culture has on shaping the startup's actual output: namely, that the startup culture manifests itself in the products & services the startup creates.

Here is how:

The entrepreneurial process is the result of making prioritized decisions based on a seemingly infinite set of tasks. Anyone who has spent time at a startup is familiar with the overwhelming (and ever increasing) amount of tasks that can only be tackled in a prioritized fashion in order to make any real progress. The Product Managers are especially familiar with this, as they typically own this process as far as the startup's actual product features and specifications are concerned. They are the stewards of an iterative process that starts with the collection and collation of inputs from various stakeholders inside and outside the organization (including employees and end users), and ending with assignment of the most important tasks to developers and engineers for the upcoming sprint/release cycle.

The most important part of this iterative process, however, is everything that happens in between: Namely, the assignment of prirorities to the requests. And that is exactly where culture comes in since much of the priorities are driven based on the cultural underpinnings (i.e., the "gut instincts" and "feelings") of the organization. Tasks that "feel" important and critical find their way to the top of the list, and those that don't pass the gut check, keep getting relegated to the bottom of the backlog.

To the analytically inclined amongst us, however, the above may sound too fuzzy and perhaps even irrational, as they may object that a responsible Product Manager should primarily focus on the impact of various tasks on the key performance indicators or core metrics of the Product, and leave all emotions and feelings aside. However, even though I firmly believe in the importance of metrics, I have come to view that kind of rigorous analytics in product development as more or less an illusion.

There are many reasons that metrics alone cannot lead to real product decisions: First, the immediate impact of most development tasks is best an estimation and not known prior to release; second, there is usually more than one metric that is impacted by any given product change, and most organizations don't have a strict formula for how to trade off various metrics against each other; third, long-term impact of most product changes are inherently unknown; forth, most startups do not have a formula on how to weigh long term effects against short term effects; and so on and so forth. Product decision makers are dealing with very complex, multivariate issues, things far beyond the capability of the human brain. There is mounting evidence from experimental psychology that it is exactly situations like this where our emotional brain kicks into gear, and helps us make decisions based on our values (for a highly engaging and informative survey of the latest research in this area, I encourage you to read How We Decide by Jonah Lehrer).

And that's exactly where the startup culture makes its imprint on what it produces.

For instance, if "user experience" is important to the culture, then things that help the user's experience will become prioritized, at times even at the cost of some core metrics such as revenue or profits. On the other hand, if "fast growth" is in the startup DNA, then you will see tradeoffs that put at risk user experience and even long term financial viability of the organization.

This is why the role of founders as the guardians of culture is so critical to the success of startups!

Are you "Michael Jordan playing Baseball"?

Much more often than I like to see, I come across entrepreneurs who remind me of Jordan retiring from basketball to try his hand at baseball in 1994 (speculations abound as to why, but nonetheless he had the good sense to pivot back to basketball just after one miserable baseball season).

These days, with the consumer Internet momentum in full swing, I see first-time and repeat entrepreneurs from many fields (including law, life sciences, and enterprise software) pitching their Powerpoints and raising money for their first consumer Internet startup. And although I am usually the optimist and last guy to discourage anyone from a path of entrepreneurship, I can't help but be quite disappointed by this crop of entrepreneurs.

My disappointment stems primarily from the fact that in this new gold rush, Silicon Valley's greatest asset (intellectual capital) is wasted on futile reinventions of the consumer Internet wheel. To the uninitiated, building this shiny "wheel" may seem as simple as outsourcing a website and hooking it up with a set of "spokes" consisting of a database, Google Analytics, and a Facebook Connect integration to boot. But those who have been through the ordeal before, know better.

For starters, you need an understanding and appreciation of what it means to deliver a virtual consumer user experience that delights and transforms casual visitors to engaged users who would return and promote your services via repeated interactions. You need an appreciation of the delicate interplay between your technology platform and analytics, traffic and rapid iteration (aka A/B testing). And you need to understand how critical time is to everything you do. Which means, you cannot afford to start from ground zero and therefore, need to be able to recruit expert UI & UX designers, analysts, and developers that can deliver and improve what your users need faster than competition.

Is that impossible? Of course not, but as a first-time consumer Internet entrepreneur, your chances are pretty slim unless you bring in a co-founder that has done this in the past. Plus, you will need to recruit mentors, advisors and Board members that can shed light for you on the areas that you are lacking.

In summary, my advice to first-time entrepreneurs in consumer Internet (as well as any other field) is from the onset to

(1) talk to industry experts to map out the areas of competence that you need in-house to be successful,
(2) take an honest look at the founding team to assess which areas of competence you are lacking, and
(3) recruit co-founders/advisors/mentors/board members to fill in those holes.

Although entrepreneurship is a noble endeavor, doing it without adequate preparation is socially wasteful and irresponsible.

To Succeed, Tear Down Those Walls

And I mean this literally: If you want your startup to succeed in today's hyper-agile and über-competitive environment, you've got to tear down those office walls. Why?  

Because in a startup environment, communication trumps privacy!

Over the past ten years, I have visited the offices of well over 100 startups in Silicon Valley, and looking back, there has been a very strong correlation between those startups sporting an "open office" layout and their ultimate success. Here are some examples:

Powerset (acquired by Microsoft as foundation of their Bing natural language search engine) started with the whole company huddling around a large conference room for the first year in CommerceNet headquarters in Palo Alto. No executive offices, no cubicles, not even individual desks.

(Which, coming to think of it, reminds me of another quite innovative, albeit a bit older startup)

Facebook Long rows of tables with monitors facing in every direction has been characteristic of Facebook offices from the humble beginnings in scattered offices throughout downtown Palo Alto, to their new digs at the former Agilent building in Palo Alto. Here is a skateboard video tour of the new office, which illustrates that they are still true believers in the open office philosophy:



Google When they outgrew the garage and moved to 165 University Avenue, Palo Alto (also known as the "lucky building", home to other notable startups such as Logitech, Paypal and Danger) with their 8 employees in 1999, they didn't have any offices. They are still trying to maintain the open office feel, although it gets a bit harder to do once you have over 20,000 employees worldwide.

(Larry and Sergey in their startup garage. Pic from http://bit.ly/JnL9x)

Of course, just having an open office layout does not guarantee you overnight success, yet without one, you are putting your company at a distinct disadvantage versus your competitors, as they will be able to innovate and move much faster than you can. In startups, every nanosecond counts. Your employees need to be in constant communication with one another, and your job as founders/executives is to eliminate any barrier and friction in that process (coincidentally, this is one main reason it is usually not a good idea to outsource/offshore development in a startup, regardless of the immediate financial benefits).

As for those employees who come to you and tell you they need a cubicle/office because it is getting too loud for them to be productive, well, you may just want to offer them a pair of noise-canceling Bose headsets before you make any rash decisions.