• Premature commitment bias

    I’ve had the pleasure to be part of several startup ventures and advise on several others. The one thing I think nobody really talks about is the bias that entrepreneurs here in the Silicon Valley have to prematurely commit to an idea or company. Something I call ‘premature commitment bias’.

    The typical startup scenario I’ve seen around the Valley is:

    • You have an idea. You might get some friends excited about that idea and maybe one of them becomes your co-founder.
    • You and your co-founder start to get so excited you just can’t help yourself. You build a prototype, try out some designs, develop a business plan and start talking to investors.
    • Maybe you get lucky and an investor cuts you a $1,000,000 check. You feel fully committed to the idea and the solution you pitched to your investor and get down to investing a great deal of time and effort to it.
    • Cognitive dissonance kicks in. 3 months in, you find out after doing some market research (if you’re like most Silicon Valley startups, you didn’t do too much of that beforehand) that nobody really gives a hoot about your product. So what do you do now ?

    Most entrepreneurs in this position think:

    “We raised a million, so we’re going to do this, no matter what.”

    They end up burning through all the money after spending months and months of blood, sweat and tears building a business that’s not going to work. If they’re lucky, they might get a second round venture capital, but that’s not very likely.

    They don’t have the option to cash in their chips and return the money to their investors. In reality they could – but psychologically, they don’t allow themselves to think that way.

    How Silicon Valley encourages this bias

    Silicon Valley is structured such that it promotes the kind of culture where you feel like you have to finish the business you started, even though that business may no longer make sense.

    I’ve always felt that entrepreneurship needs to be based on learning. As I look around at Silicon Valley startups and culture, it’s not built around learning.

    The culture here doesn’t promote learning because you’re pitching a business where in theory, you know the absolute least about it. You know about the problem and solution but you haven’t yet validated the market to see if anyone really cares about the solution or that they’re willing to pay for the solution you came up with.

    I’d estimate that 80% of the engineers in Silicon Valley are wasting their time: they’re building something that probably nobody cares about.

    I have a crush on you

    I liken the problem of premature commitment bias to having a crush on somebody.

    When I think about crushes I had on girls in high school – I’d build up a romantic idea in my head, “Gee, this person is really nice, I really like her”, all without validating if she liked me back. The problem is, when you find out she doesn’t, it changes your perspective on things in a hurry.

    Just like you want to have a crush on a girl who has a crush on you, you want to build a business that likes you back – where people care about the solution you have to offer.

    So how do you overcome it?

    I really don’t have an answer for overcoming premature commitment bias yet. I’m not really sure what the solution is. Some people are doing interesting things like Eric Ries and the maturation of his lean startup methodology which has come about from lessons learned. These are steps in the right direction, but I don’t think they’re really addressing this issue.

    What are your thoughts?

  • Customer service vs. irrational client demands

    Trying to deliver great customer service without bowing to irrational client demands takes a somewhat tricky balancing act and some courage. The truth is, the customer is NOT always right. At end of the day a lot of companies have adopted this sort of thinking:

    “The customer isn’t always right, but you want to do what’s best for everybody in the aggregate – for the good of the many.”

    The reality of the situation is that no matter who you are – even a brand readily known for its exemplary customer service like Zappos – you still have scarce resources. You don’t have unlimited customer service people. That’s why I think the secret is to try and focus on what makes everybody’s life the best.

    Good customer service has become the price of admission

    Excellent customer service is paramount to the success of any business. At one time, customer service was so bad, if you did well you could really stand out (back then bad or mediocre service was considered ‘the norm’). A number of companies proudly proclaimed great customer service as their competitive advantage. And I tend to agree with that, even today, when I think of a company like Zappos.

    Today, you really can’t start a business without strong customer service from the get-go. You can’t succeed at something new if you have lousy customer service. It just won’t work. If you want to get in the game, excellent customer service is what you have to do because that’s what people have come to expect. So instead of a competitive advantage, it’s become the price of admission just to get into the game.

    Not all customers are created equal

    You want to treat every one of your customers with respect and courtesy – that should never change. But not all customers are created equal. I’m not saying they shouldn’t all be treated with some baseline level of respect, but the people who are your best customers – you need to recognize that. It pays to scale up in how you treat people based on what type of customer they are.

    A good example of this is Southwest Airlines, who treats all customers with respect, but whose best customers get special attention and the most respect (through the Southwest Rapid Rewards program).

    Crazy customers do exist, but it’s all about the net effect they have on your business. The balancing act is you’d really like to provide even your crazy customers with good service, but if you do it’s going to end up at the expense of good quality service for someone else.

    There are those ‘toxic’ customers who don’t treat others like human beings. Always treating your customers with respect doesn’t mean you have to entertain their level of ridiculousness. I don’t want my customer care rep on the phone for 4 hours literally getting berated. That rep. is not going to be on the top of their game for the rest of the day to provide great service to the good customers.

    True, some customers will be worse than others. Just make sure the worst don’t become a liability – where your net customer service score (or Net Promoter Score I’ve discussed in the past) is worse because you’ve spent too much time on the irrational few.

    If you go out of your way to tailor your business too much to the squeakiest wheels, you end up under serving those who are not squeaky wheels.

    What to do about it

    The customer is NOT always right: there will always be those who take advantage of companies. That’s just the way it is. But you need not let that bring you down.

    Find ways to curb the downside risk. Have ways to flag those customers. Have outs to be able to say, “This customer is someone we know who is negatively impacting our team, so we need to have ways to cut the engagement down.”

    Companies still have the right to refuse service to ANY customer. You want to avoid discrimination, but beyond that you should be able to say, “We need to cut this off.” (Check with legal first if there are any doubts.)

    Refusing to bow to irrational customers isn’t profound. It’s obvious. It’s just that not everybody does it.

  • The importance of servant leadership

    Sometimes the concept of servant leadership doesn’t get enough attention. When it does, most people understand the buzz wordiness of it but not its actual meaning and somehow like it to the “Are you a maker or a manager?” question.

    The key to fully understanding servant leadership is captured in its subtlety. A lot of people who don’t appreciate the human side of life may think it’s just another “touchy-feely” concept that doesn’t mean anything.

    Turning leadership on its head

    Traditionally, leadership meant “I’m on top because I lead you.” Servant leadership flips that on its head; it’s about me serving my employees, not them serving me. It’s about the people who work WITH you not the people who work FOR you, so in that sense, it’s a paradigm shift that means looking at leadership with a different set of lenses and saying “I’m here to make these people lives better – I work for THEM”.

    Servant leadership is about putting the people you manage first. The whole idea manifests itself in an upside-down pyramid:

    Servant leadership pyramid from saleslaundry.com

    Servant leadership pyramid from saleslaundry.com

    Servant leadership is about creating a clear path that allows your employees to do their best work. Look at leadership in that way and I think you ultimately create better work environments. I think you get the best out of people because you demonstrate genuine caring and compassion for them.

    3 keys to servant leadership

    In order to be successful, you need to keep in mind:

    1. Servant leadership is a paradigm change. You can’t just read a book about it and say, “I get it.” You have to change how you look at the world. You have to fully adopt the notion that you serve the people on your team.
    2. You have to hire the right people for it to work. You can’t be a servant leader to a team that doesn’t know how to take action and own the outcome of something. Otherwise you’d have to micro manage them. Servant leadership starts with team building. Members of your team have to be self starters of sorts or you’ll never win.
    3. The devil’s in the details. There’s no “kind of” being a servant leader. It has to radiate from everything you do. Everything you do has to demonstrate that you’re putting others first. If you think you “kind of” do it, you don’t. It’s all or nothing.
    Why servant leadership’s important

    So who cares about this touchy-feely stuff? Why is it important? Before you think it doesn’t matter think again.

    Management is a huge responsibility because managers have a profound impact on the lives of the people they manage. I think a lot of managers just don’t grasp the reality of that. Keep in mind, your people are working with you sometimes more than half of their waking time. People’s stress levels have a direct correlation to their health and how long they live. If you’re an @sshole manager, you’re essentially shaving years off of their lives. That’s inexcusable.

    Look in the mirror. Is that the legacy you want to leave? Open your eyes. Day in and day out you have a huge impact over the quality of other people’s lives and that’s a big responsibility. You have the opportunity to make others’ lives more enjoyable, more engaged. If you have a positive, profound impact on the lives of just 5 people, that’s HUGE. This is bigger than you think.

  • Product Management is about Product Discovery

    I’ve always believed product management is all about discovery. As time goes on, I’m seeing that others are also beginning to get on the bandwagon and think it’s a cool thing to believe. But I get confused because there are still so many people – especially entrepreneurs – are so confident their thinking is right that they don’t see the need to verify it or even listen to what other people are saying. Because they are entrepreneurs they are remarkably self assured. They’re extremely confident and believe they’ll do well, so they say, “This is how it’s gonna look, and boom – we’re going to make 10 million dollars.”

    Entrepreneurial confidence and reality distortion

    I’m not faulting the mindset of entrepreneurs. I think they should be “beacons of irrational optimism.” You need someone to be that force of positivity. One term that’s been used when referring to Apple’s Steve Jobs is Reality Distortion Field, or RDF. Jobs is such a believer in what is to come many say reality is actually distorted around him. His charisma is so contagious that suddenly all around him believe they’ll move mountains. So if this sense of confidence works so well, how can it be wrong?

    First, Steve Jobs is not making those products – he’s the visionary leader who’s talking about what the future could be. I’m not an insider at Apple but I assume he’s not in the product war room hands-on managing the product.

    My theory is that most product people are not hired – they’re founders/CEOs. I’m not saying being irrationally optimistic, or being a believer or being an entrepreneur is a bad thing for products. At the same time, that instinct is what drives entrepreneurs to be bad hands-on product managers. “Why do user tests” Why do A/B tests? I know this is going to work.” When I hear that, I know these are going to typically end up as someone’s famous last words.

    Don’t overlook the action in the term product discovery

    The verb “discover” is a very critical part of the term “product discovery”. When using the term product discovery, people too often overlook the action part of the word “discovery” (to discover). To me, “discovery” means you’ve found something out – like something or some place exists that you’ve discovered. It indicates the product is bigger than you – there’s this natural environment out there and it’s your job to discover what’s out there. It’s not called products “creation” it’s called “discovery” meaning there are answers out there for you to find and those answers are found through the users of the product.

    If I had to define the term product discovery, I’d say it’s:

    “The act of ideating with the feedback of your users in an iterative way that enables you to find the right product.”

    The way to build the best stuff is to find out what people really want and would use. But there are companies out there that are spending millions on products that apparently did not get user testing. We all know epic sales launches that have turned into epic failures. People can go a long way without verifying what’s actually valuable or viable.

    There’s a difference between discovery and validation. If you have one bullet to fire – and ask yes or no questions – you’re not doing discovery, you’re just validating. If you’ve already predetermined everything and test that on users, you’re not really discovering.

    Discovery means being open minded. If you’re close minded you’re really not doing discovery. Bring user feedback in the game all the way through the process – even early on, with wireframes, and linking together within prototypes and all the way up the curve bring users in to test to make sure there’s actual value for the user in the interaction.

    The Product Discovery funnel

    Good discovery keeps products in low fidelity longer (see my rapid prototyping post for a discussion of low and high fidelity prototypes). Those who do product discovery best understand the importance of low fidelity prototypes because instead of just testing one thing they have 4 or 5 different approaches to the problem and they’re testing those approaches well before the high fidelity stage is reached.

    Product Discovery Funnel

    Product Discovery Funnel

    There’s an inverse correlation between fidelity and ideas. Early on there are lots of ideas that need to be tested, first in paper and pencil sketches when you have, say, 5 ideas. By the time you get to mockup or wireframe made, you refine your ideas from maybe 5 to 3 and continue learning from that until you start to create 2 prototypes and then 1 polished interface as you close in on the core idea. That’s what discovery is all about: going from low to high fidelity and getting feedback throughout all phases of development.

    The concept of product discovery has always been intuitive to me. If you want to be world class at building great products you need to be willing to accept the fact that you’re going to be wrong from time to time.

  • Prepare for meetings – death by meeting

    In his essay, Maker’s Schedule, Manager’s Schedule Y Combinator’s Paul Graham points out that managers’ schedules and makers’ (i.e. programmers’ or writers’) schedules are quite different:

    • Each day, managers’ schedules are cut into one hour intervals. You can block off several hours for a single task if you need to, but by default you change what you’re doing every hour.
    • On the other hand, makers generally prefer to use time in units of at least half a day. You can’t write or program well in units of an hour. That’s barely enough time to get started.

    As Graham points out, each type of schedule works fine by itself. Problems arise when they meet.

    Experience on both sides of the aisle

    I’ve been in the position of both maker and manager throughout my career, so I can certainly relate to what he’s saying. Meetings are hard, and as a maker I dreaded meetings. As a maker you can either do or talk, and talking seems wasteful. As a maker, meetings suck. They’re terrible. But as a manager, I can see that meetings do have their place. There’s specifically a need for meetings because there are certain things you need to talk about. It’s hard to be strategic if you can’t sit down and talk about stuff. Although I still don’t love meetings today, I realize they need to happen.

    The problem I see with meetings is that they’re often done poorly. For the amount of time people spend actually sitting in the room talking about stuff you’d think they’d actually get better at holding them. People don’t take meetings seriously, so how are you going to get better at conducting them?

    I admit, I’m not great at meetings either. Death By Meeting by Patrick Lencioni is essentially a fable about a video game company with really good people who have really bad meetings. Lencioni saw two primary problems with meetings:

    1. They’re boring (they lack drama)
    2. They’re ineffective (they lack contextual structure)
    Does this meeting have a purpose?

    Inspirational meetings, where you actually kick around ideas or resolve conflicts can be fun, interesting and productive. But informational meetings are far less interesting, so I have to question why they exist. If you don’t have conflict, you should ask yourself why you’re having a meeting in the first place. If everyone’s going around the table agreeing with each other, why do you need to sit down and talk about it? Couldn’t this just have been emailed? The typical rebuttal to that question is that things can get done urgently in person. But if everyone’s in agreement, where’s the urgency?

    Time is the enemy

    People have a habit of using all the time allotted to a meeting by expanding what they do to fit in the timeline. So if you have a one-hour meeting scheduled and you’ve already covered what you needed to cover with time to spare, the pace of the meeting slows down and everybody thinks they have to fill the entire hour. A better practice is to end the meeting early so people can get back to work.

    Most people think 30 minutes is the minimum for a meeting. They don’t often do quick meetings. Agile uses “standup” meetings – which I think can be powerful. In real life I’ve seen 5-minute standup meetings every day actually do work. Standup meetings have to be on time and because you’re standing (like a huddle): they’re not designed to go long.

    Why in the world would you set a minimum time for a meeting?

    Recurring meetings are usually unnecessary

    As manager, I don’t like recurring meetings. In my opinion, there should be very few recurring meetings. Have a meeting as something comes up and the need to have a meeting arises. Don’t just have a meeting because it’s scheduled. The most wasteful meetings are those that occur weekly or monthly to talk about XYZ, although it may depend on time frame. For example, board meetings happen every quarter and they’re not wasteful as the group hasn’t been together for an entire quarter.

    What’s missing is great facilitation

    Meeting facilitation is a lost art. I’ve gone to way too many meetings where somebody called the meeting who didn’t create the agenda and doesn’t actively run the meeting. If no one runs the meeting there’s no way the meeting can be functional. If everyone has a different agenda and no one is running it, the meeting can’t be functional by definition. Someone should always be designated to run the meeting – ideally the person who set the agenda whenever possible.

    A meeting alternative

    Instead of meetings, I get a lot accomplished with “drive-bys” (see my post Management by walking around). A significant part of my calendar is blocked throughout week. I have a backlog of things I want to talk about with each of my direct reports. So my “drive-bys” involve walking by and chatting with them. If they’re busy and need to be in the zone, I don’t bother them. But I can knock out 5 or 10 drive-by discussions in an hour’s time or less. And I cover a lot of small topics, which might have led to meetings in a less disciplined world.

    While I got into the habit of doing drive-bys out of necessity as the number of my direct reports has grown, I’m a big proponent of doing them as you can nip things in the bud just by stopping by someone’s desk for 5 minutes. If you can’t accomplish what you have to in that way, then it’s okay to eventually do a meeting.

  • Not all experience is created equal

    In my earlier post What would I look for in a co-founder?, I talked about some lessons I’ve learned along the way and the type of person I’d be looking for in terms of experience. That got me to thinking about technical experience in general and how not all experience is created equally and the difference between experience and non-experience.

    When I’m thinking about the lessons I’ve learned throughout my entrepreneurial journey, one thing I regret the most is that in the early days I was too young to understand the difference between good engineers and experienced engineers. I just didn’t appreciate the value then.

    My thinking was that I could get young passionate engineers cheap right out of college. They’re excited. If I chose someone else who had 5 or 10 years of experience, they’d cost much more. I was thinking along the lines of “I can get 2 young guys for the price of this other person.” When I was younger, I’d think there’s no way this experienced person can be twice as valuable – they’re not going to write twice as much code – but I’ve learned that was the wrong way to look at it. It’s not about that.

    In the early days, with first-time hires what matters is your architecture. If you’re lucky enough to need to scale (someone’s willing to buy your product), you’re probably going to end up doing something you regret in the end. If no one uses your application, it doesn’t matter. So when it comes to scaling, trying to minimize the amount of architectural decisions you’ll end up regretting is key. And that’s where the right experience counts.

    Why years alone don’t matter

    People systematically overvalue years of experience. Nobody should really care about that. Just take a look at some of the most successful entrepreneurs of our time. How many years of experience did Mark Zuckerberg have to put Facebook where it is today? Think about it. It’s the same with Microsoft, Google, Apple, and others.

    On the other hand, I meet people who seem lucky to have gotten where they area and have what they have today. They somehow found their way to where they were going, but in reality, life is just passing them by as they rack up years of “non-experience.”

    Some people think more than other people – period. Someone with little experience who is thinking critically about what they’ve learned, actively seeking out a mentor, etc. have introspective experience. Their experience index is high. And I’ll take 2 years of introspective experience over 6 years of just going through life any day of the week.

    The experience index

    Not all experience is created equal because not all people equally reflect on their own experiences (how they could improve, etc.). There should some sort of experience index that factors in much more than years on the job. I think it’s important to differentiate between experience and non-experience. Maybe what’s needed is some sort of algorithm that might look something like this:

    Yrs of experience x Level of introspection x Capacity to learn = Experience index
    You don’t have to know everything

    When I look back I didn’t know very much. In a lot of ways I still don’t. I think that’s important. There are people who need all the details before they can operate. Those people make terrible founders. The reality is you don’t know anything when you’re starting out – your product, your customers,etc. but there’s no question, the ABILITY TO OPERATE UNDER UNCERTAINTY is critical. Some people just aren’t built for that.

    To be successful in a startup environment, you have to be cut out to work in non-structured environments. You need to be introspective. Those who aren’t will find they hate what they’re doing or wait around for someone to tell them what to do. And that’s no formula for success.

  • Parts of Management suck

    Management – or at least the path to management – is a funny thing. Traditionally, the path to career advancement has meant that people start out as individual contributors. There’s only so far they can advance as “doers”, so they strive to move up the ranks by becoming managers. Those who are upwardly mobile work hard to be recognized as among the few smart contributors who get chosen to move into management. So the typical track to career advancement is sequential – entry level, senior level, principal, manager, etc.

    The single silo trap

    The presumption is that in order to advance, individual contributors will have to go from “doers” to managers. It’s been embedded into our culture as part of the dream to make more money and be more “successful” by becoming a manager.

    Sequential career 'silo' approach

    I think what has become the standard culture – stacking individual contributors and management positions as some sort of linear “silo” is a fatal mistake made by a lot of companies and by a lot of very bright individual contributors who want to get ahead and feel valued in an organization.

    In some ways, and for some very talented individuals, forcing them into management is like throwing them under a bus. Why? Because parts of management suck like they’ve never imagined.

    How parts of management suck

    Management is not what it’s cracked out to be. When you become a manager your employees come first and you come second. If you’re going to be a good manager, you need to understand that your needs, desires, etc. come second. Your job is to serve the people you manage – so they have clarity, so they know what success looks like. The reality is most people aren’t ready for that.

    Putting people first is exhausting work. You have to always think about their happiness. People in the aggregate can be hard to deal with – you’ll have under performers, troublemakers, etc. As a manager, you have to be ready to give your employees the direct feedback they deserve, and that’s not always a comfortable thing to do. There will inevitably come the time when you’ll have to let someone go. In short, you’ll have to deal with a lot of meetings, politics, and other intricacies of the role, all the while making sure you’re being tactful.

    Don’t give me that

    When I interview people for managerial roles, I ask them how they deal with the sucky parts of management, like firing and disciplining employees. I often hear, “No parts of management suck”. That’s just sheer bull. Either they’re completely disillusioned or weren’t really in a true manager’s role before. Maybe they were called “managers” but have never had to deal with real management issues. In truth, becoming a manager impacts your quality of life inside and outside of work.

    I’m not saying advancing into management or being a manager is a bad thing. I’m just saying it’s not for everyone. All too often, when you promote someone into management as part of a sequential silo, you lose your best individual contributor and gain your worst manager.

    The bad news and the good news

    The bad news is the legacy of corporate America is what it is. Traditional silo-style career progression is asking for trouble. Yes, there are people out there who are built for the transition to manage and understand what they’re getting themselves into. However, that seems to be the exception rather than the rule.

    The good news is that some companies are creating parallel tracks where contributions are highly valued both as an individual contributor and as a manager. Good companies place equal value on top notch individual contributors and top notch managers. Both have room for progression. Both are recognized for their specific talents.

    Doing it right involves equality and voluntary transitions.

    In my earlier post, Mentorship vs Management — Solving the problem I suggested that getting an org chart right involves equality and voluntary transitions (illustrated above). This is a dual approach where individual contributors have more room to grow in a mentorship path and remain contributors. They can move into management if they want to – and honestly believe they have what it takes to be good managers – but they can also move higher within their role as contributors, with increasing levels of compensation and more room for growth. As they move up the ladder, their opportunities and responsibility for mentorship increase.

    In short, the best doers can spend their time doing and the best managers can spend their time managing. And I’ve got to believe that’s the best long-term solution for keeping workers happy.