• Sweat parity and the success disequilibrium

    Startups are a funny thing.  The amount you learn in the first 24 months after inception is enormous.  You discover all the best kept secrets about entrepreneurship that no one  teaches you about when you are first starting out.  One of my favorites is a thing I call ‘sweat parity.’  While some of us understand the concept intuitively, few of us ever talk about it.  So I’m setting out to change that.  Here goes:

    Do you know any dumb, lazy entrepreneurs?

    Entrepreneurship isn’t for the feint of heart.  It’s for people who have the guts (and irrational drive) to attempt the impossible.  The confidence, passion, and sheer determination that these people posses didn’t come from nowhere.  We spend years of our lives developing the core of who we are.  While each of us fire-starters has a different background, we are the products of an upbringing that breeds hunger.

    Hungry people aren’t lazy.  We work hard.  We get addicted to the problems we are solving, and as such, get accused of ‘working’ 18 hours a day.  But for the true-blooded entrepreneurs out there, we’re never really working.  We are just doing what we love.

    Not only are entrepreneurs passionate and hard-working, but we’re often smart.   Here’s why: the core competency of starting companies is learning.  Period.  The one thing you are guaranteed of when you start your company is this: it won’t go as planned.  You need to learn and adapt quickly or you won’t survive.  Dumb entrepreneurs don’t last long in this game.

    All sweat is created equal.

    What I’m getting at is this: Every founding team I meet is hard-working and smart (with very few exceptions)!

    Founding teams pour a ton of sweat equity into their startups.  We incept the idea, immediately start sketching it out together, and our energy multiplies.  We decide that our new concept needs to be made a reality.  Yesterday.  We start designing and coding right away.  And before we know it, we can’t stop.  The weeks to come are a flurry of interaction flows, wireframes, test cases, code, deployments, and private beta invitations.  It looks a little something like this:

    Here’s the thing: As much as we don’t want to admit it, other entrepreneurs are often just as smart and hard-working and we are.  What I’ve found in my experience is that, generally speaking, startups are in ‘sweat parity.’  That is to say that their sweat is roughly equivalent to the sweat of other startups.  (The incremental difference, when it exists, is often minor.)  Most of us that have a professional network of folks in the entrepreneurship game know this to hold true intuitively.

    Sweat parity looks something like this:

    But success isn’t.

    The cold cruel reality of startups is this: even though sweat is mostly created equal, success is not!  If we look at a random sample of a 100 startups that are 6 months old, we’ll most likely see the story unfold the same way.  The companies are in sweat parity.  But most companies will have a mediocre outcome, at best.  A majority of the group is likely to get no significant traction.  People just don’t care as much as the founding team thought they would.  Or maybe they do care, but the solution doesn’t actually alleviate the core pain point.

    One of these companies, however, will take off like a rocket ship.  Word spreads like wildfire, and people all over the internet begin to use the product.  Barring no major mistakes, things will continue to compound, and the company will continue it’s ascent to greatness.

    I call this the disequilibrium of success, and it looks kind of like this:

    I don’t have a great answer to why this happens, but a few things seem clear:

    • We can’t see the future.  And we must not be that good at predicting it.  If we were, there’d be more rocketships and fewer mediocre companies.
    • Clearly, some of the value of the opportunity or space is beyond our control.  There are things like market interest, market timing, and macroeconomic factors that are at play.

    Sweat equity + Disequilibrium of success ==  Waste

    This may seem obvious, but it’s worth noting anyway.  When most startups have really smart and passionate people and few of them will be successful, the net result is a lot of wasted potential.

    This is something I think a lot about because I really don’t like seeing it happen.  Perhaps more importantly, I know that I’m going to pour at least 2 years of blood, sweat, and tears into what I do next.  I don’t want that potential to be wasted.  I want to have a big impact.  I’m not the only one, am I?

  • So + Lo + Mo = LOL

    A lot of things are sort of funny right now with respect to technology entrepreneurship. One of those things is apparently called SoMoLo (or SoLoMo or MoSoLo, depending on who you talk to.)

    I was talking with a VC friend of mine who brought up the idea of SoMoLo. Oddly, I hadn’t heard of it and asked what it was. He explained it was the convergence between social, mobile and local and that it’s all the rage right now for Silicon Valley startups. Everyone wants to jump on the bandwagon.

    SoLoMo, SoMoLo, MoSoLo. WTF?

    (The legendary) John Doerr, of the high tech venture capital firm Kleiner Perkins, is credited with coining the term, SoLoMo, which seems to be the most widely adopted version in use today. But I’ve even seen references to MoSoLo, like this one by Lisa Barone over at Outspoken Media (although the piece is actually titled The SoLoMo Revolution: Social Media, Local Search & Mobile Search Collide). This Tumblr post from blogospiel even refers to it as ‘Human Pixeling’: the idea that people today are addressable wherever they are.

    SO what?

    I’ve always made fun of startups that all want to do the same thing. (Not just because I’m trying to be mean, but because I’m trying to raise awareness and help people, I swear!)  Anyway, this do-the-same-thing phenomenon may be no more evident than it is today here in Silicon Valley with SoLoMo. It’s not that I don’t agree that the three converging trends are interesting, but…

    What people don’t realize about the utility tools like mobile apps that make it easy for you to find deals, your friends, etc., is that by and large, they don’t often produce great businesses.  Why?  Because they are winner-take-all markets. You either make it big or you go nowhere. Few startups in these markets are doing really well. People think they can get a base hit or a double, but the reality is they’re either going to hit a home run or strike out.

    Either you’re Twitter or you’re nobody, as far as I’m concerned.

    It all goes back to what I said in The Irrationality of Entrepreneurship. With SoLoMo, you have a very high probably of wasting 2 or 3 years of your life coding/designing your butt off for something that will never gain (enough) market traction.

    LO and behold, you still need to be unique

    I think more young people are starting companies around the world than ever before. I have no problem with that; in fact, I love it!  I was 14 when I started my first company. But here’s the problem: I think most successful entrepreneurs are uniquely positioned to tackle whatever problem they take on.

    Just because you’re a 20-year old kid who knows how to use your mobile phone to check-in somewhere doesn’t make you unique. It means you are just like everyone else.  Perhaps worst-of-all, you probably have the power-user bias.  You’ll pitch something like a ‘geo-enabled meta-checkin game layer that incentivizes users by allowing them to unlock daily deals when their friends are in a 300 meter radius from them.  It’ll be huge!”

    My answer: O rly?

    You can’t just pile on because there are so many other college kids starting companies now and they all expect to succeed. You have to bring something unique to the table. You need to go after something that is special to you and you’re background. Something uniquely your own.

    MO is not the answer

    Investors: Just because a space is hot doesn’t mean you’re going to pick a winner. And taking money and throwing it at a bunch of startups in the SoLoMo space just so you can ‘have a horse in the race’ isn’t the answer either. Just because you buy 10 lottery tickets doesn’t mean you’ll win. You increase your odds a bit, but it’s still a long shot!  What you are really doing is just wasting more money.

    I know SoLoMo is hot. I know it’s a big trend.  If I could invest in an index fund of the space, I probably would.  But I realize that most individual contenders in the space are losers, and I’m not crazy enough to invest in one.  You shouldn’t be, either.  The reality is, most companies in that space are not going to win. They’re not hot and never will be. Which brings me back to the original equation:

    SO + LO + MO = LOL

    SoLoMo is hot. True. But isn’t it just another example of Extraordinary Popular Delusions and the Madness of Crowds? Which, by the way, was written in three parts:

    1. National Delusions,
    2. Peculiar Follies, and
    3. Philosophical Delusions

    Ring a bell?  Still want to go out, jump on the bandwagon and waste several years of your life?

    If you do, then I’ll be here ROFLMAO.


  • The (ir)rationality of entrepreneurship

    I am convinced that entrepreneurship is far from a rational pursuit.  I am also pretty sure that I’m not the only person who thinks so. I’ll put it simply:

    • the numbers are stacked WAY UP against you.
    • the personal, professional, emotional, and financial commitments are borderline insane.
    • the ‘expected value’ of the investment is well below zero.

    In short, there is not very much that’s rational about being an entrepreneur.

    While I am sure that entrepreneurship is not rational, I am not really sure about whether irrationality is an entirely good or bad thing.  This subject has been plaguing me for a while, actually.  I’ve always viewed rationality in a positive light, and I’ve always thought of being irrational as a weakness (or an opportunity for improvement.)  But, for whatever reason, I never connected the dots.  My whole life has been one irrational pursuit after the next.  Yikes!

    Rationality reduces waste

    So what’s so good about being rational?  It mostly has to do with waste, it seems.  If we are rational about the world, then we’ll pursue opportunities that have higher probabilities of success (less risk) that are typically accompanied by less reward.  But if we are irrational, then we’ll chase huge outcomes, even though we are very likely to fail.  So what happens when we fail?  Typically, we waste stuff:

    • Wasting time: if we pursue something irrational that doesn’t pan out, then we wasted some significant amount of time.  And, of course, in startup-mode, these aren’t normal days we are wasting.  These are 18-hour all-in days.
    • Wasting money: we usually waste some combination of our own and other people’s money.  Usually, the other people (investors) have a lot more of it than we do, so the impact to our personal bank account is the most meaningful.
    • Wasting potential: life is about opportunity cost.  Just because we fail doesn’t mean we are not talented.  If a startup we pursue doesn’t pan out, we have lost the opportunity to have applied our talent to a ‘winner’ during the same time.

    So, the real positives of being rational are that we waste less.  We take paths and seize opportunities that have a higher probability of success, and as such, have some peace-of-mind in knowing that our time and money was reasonably well spent.

    Irrationality has upside, too

    What most people don’t often realize (and I’m not sure I ever did until now) is that irrationality has some potential upsides.  Those upsides are particularly useful when you are trying to start something new.

    • Potentially huge wins:  By attacking a significant space full of huge incubements, you not only prove that you are crazy, you have the potential to pull off a monstrous success if you can make it work.  (Examples: Google, Zappos, Dell)
    • Powerful motivation: Nothing drives you quite as much as ‘having no choice’ but to make it.  I’ll never forget the first time one of the companies I started was at risk of not making payroll.  I was never better at pounding the pavement for new revenue than I was then.
    • Few stones unturned: When you are irrationality committed to a problem (I use ‘problem’ instead of ‘solution’ very deliberately here…), you are driven to try many different things to find a solution.  Perhaps more than one would rationally pursue.  One of those stones may be your winner.

    The positives around irrationality are all around guts and upside.  If you weren’t crazy enough to keep going, you may not ever find that ‘huge win.’

    Whatever you do, own it

    In the end, it seems impossible to figure out which trait is better.  They both clearly have strong pros.  I could agonize forever about which path yields a better life, but I’m not sure its worth it.  The choice that’s right for us depends on who we are.  There is no one ‘right answer.’  Also, I think that each of us can be rational or irrational in different spheres of our lives.  (Example: I was very rational about breakfast this morning, but am totally irrational about the company I’m going to start next.)

    While there isn’t just one right answer, I do think its really important for us to be aware of how rational we are with respect to the different decisions we make in life.  It’s ok (I would even say ideal) for us to ‘own it.’  We should know what our core assumptions are when we make a decision in life, and should acknowledge it if we are being completely irrational.  Two things happen when we do that: 1) we are much more honest with ourselves in our intellectual dialogue and 2) we are able to learn a lot more from both our successes and our failures when we understand what truly motivated us in the first place.

  • Empowerment is everything

    If I were to simplify the world into two types of teams, I’d have to say there are extraordinary teams and then there’s everybody else. If you want to build an extraordinary team, empowerment is a requirement, not an option.

    Ownership and empowerment

    Think about the most talented people you know – really high velocity people. Are those the kind of people who can operate in an environment where they have no sense of ownership? If you give that some thought, I think you’ll come back with the answer that highly talented, high velocity people want and need a sense of ownership because that’s how they operate.

    The most effective people are driven by a sense of passion. Emotion is part of what makes them so good at what they do. I’ve always characterized them as “hungry.” But what are they hungry for? Typically, they’re hungry to prove something; to make a difference; to make an impact. You can’t be hungry to do those things if you have no sense of ownership over what you’re doing.

    Ownership provides a sense of receiving credit for something good. At the end of the day, some of the best of us want to see our name in lights – “This is something so and so did.” There’s nothing wrong with that and it’s not a matter of being egotistical it’s just that it’s very difficult to prove something you can’t put your name on. High performers don’t want to put their name on something they had no input in. It just wouldn’t mean anything to them.

    So if you want to create extraordinary teams (and why wouldn’t you want to?) you have to give people ownership. Empower them. Empowering people results in a whole different level of performance.

    Empowerment opens doors for succession and referrals

    Through empowerment you not only get the best work out of that individual, you attract the best people to the team.

    Teams that are empowered become so proud of where they work they develop a reputation and buzz that attracts other great people. Google demonstrates that with their 20% time – you can do whatever you want to 20% of the time. Zappos, whose mission is to wow the customer, keeps it broad. They don’t say, “Here’s how you wow the customer.” They just say, “Here’s what we want to do. You go figure out the best way to wow the customer depending on the situation.” Now that’s empowerment!

    Empowerment is your succession plan. If you want to build an organization that will live on after you’re gone, empowerment is the answer there as well. If your team members are not empowered, they won’t know how to function without you.

    The subject of empowerment means a lot to me and I hope to write more on it in the near future. How do you feel about empowerment?

  • Ideas are worthless, execution is everything

    The thing that always surprises me is that entrepreneurs are so protective of their ideas. They don’t want to talk about them for fear that you’ll steal their idea and claim it as your own. They won’t give you the time of day unless you agree to sign an NDA or otherwise agree to put yourself in jail and throw away the key.

    When I encounter people like this, I can’t help but to put them in the same category as Betamax cassettes. To some degree, the protectiveness isn’t as prevalent here in Silicon Valley as in other parts of the country, but still it exists.

    Ideas don’t have inherent value

    What I find is that people systematically overvalue their ideas. They think the idea in itself is inherently valuable. In reality, it’s the execution, not the idea itself, that holds value (with the possible exception of medicine and a few others-maybe). Most people have the same ideas or they have ideas that are in and around the same thing. In fact, when you think you’ve come up with a great idea, you should assume 10 other people have that same idea (or ideas that are very similar). What’s more important is your ability to execute against that idea.

    What really matters

    The ability to execute is what really matters. If asked to evaluate a potential opportunity as an outsider, I tend to ask 3 questions:

    • How well is the founder/entrepreneur able to do this versus somebody off the street?
    • What are the dynamics of the business itself and how well-positioned is the team to run the business?
    • How well does the business scale (not the idea itself)?
    The reality of it all

    Everybody knows you’re not going to end up doing what you say you’re going to do in your business plan. Reality is going to intervene at every turn. Being successful, in large part, depends on how flexible you can be and how quick you are on your feet to respond by taking advantage of unforeseen opportunities and making course corrections in response to challenges.

    When people are secretive of their ideas with the attitude of “If I tell you you’ll just go build it”, I figure they’re either not well-positioned to run the business or they’re not confident that they’re the only person that can do it right. If they’re worried about it, they probably didn’t have a lot of chance for success anyway.

    Ideas themselves don’t have inherent value – it’s more about your ability to execute them.

  • 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?

  • 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.

  • 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.

  • What would I look for in a co-founder?

    One of our investors asked me an interesting question recently:

    If you had to do it over again, how would you describe the background that you would have loved to have coming in as the technical co-founder of Modcloth? What technical skills as well as soft skills do you think would be helpful to have in the initial stages and as you scale as you have done?

    This got me to thinking. If I was looking for a technical co-founder today, what would I look for? I think it’s a timely question considering the startup environment right now, and it’s possible (maybe even likely) that some of you are asking yourselves this question right now.  So hopefully you can benefit from some of the experience I’ve gained over the years.

    Without further ado, my co-founder wish list:

    • Someone who’s failed at least one (preferably 2-4) significant software projects in the past. Nothing teaches you about the reality of software development more than failed or canceled projects. In fact, working on a failed project is probably more important than traditional ‘agile’ methodology experience. Why? Because nothing teaches how to ‘unbundle risk’ better than having had the rug pulled out from under you in the past.
    • Someone who’s had to answer to real people and has had to compromise on product vision. Client services experience could be a plus here. A lot of technical people are uncompromising in the wrong ways. They think they are experts on the product and fall far too in love with their own ideas. (Sadly, a lot of stupid companies get started this way…)
    • Someone who’s had to play all roles. (Think ‘independent freelancer’ who has to do a little bit of everything, again in the name of client service.) Someone who has had to actually fix bugs in IE6, make rough prototypes, slice PSDs, and configure the database server will have an appreciation for all the moving parts of a good engineering team.
    • Someone experienced with scale. From a purely technical standpoint, having built or maintained a system that has scaled significantly will go a long way. (It doesn’t have to be scaling on an insane degree, a la Facebook, Groupon, etc.)
    • Someone who’s not overly academic. Designing an application the way the ‘textbook tells you to’ often doesn’t scale. But hey, at least your code will look good when the site goes down : )
    • Someone who knows how to ‘go fast’. This is paramount because the burning needs of a rapidly scaling business wait for no one.
    • Someone whose #1 core competency is learning. Technology stacks come and go. You want someone who learns at an insane speed. (I used to mini-test engineers in a language they didn’t know, on purpose. It worked wonders.)
    • Someone who understands fairness. As the team scales, you need someone who is level-headed and willing to take all perspectives into account without playing favorites. I bring this one up not only because it’s critical to keeping a team engaged, but because I see it rarely.
    • Someone who can keep their calm at all times. People who fly off the handle suck. No one wants to work for a ticking time-bomb. Furthermore, bad stuff *will* happen. Sites go down, get hacked, etc. Being able to keep your cool makes all the difference in terms of getting stuff fixed and not losing half your team to ‘asshole attrition.’
    • Someone who knows how to ask questions. A key soft-skill is knowing how to ask questions as opposed to giving answers. I see the opposite *ALL THE TIME* with good engineers. They don’t know how to shut up, and they take up too much airtime. Top talent doesn’t want to be told; they want to be asked. The secret to getting the best out of a good engineering team is learning how to STFU.
    • Someone who knows how to write code. Beware of the people who “don’t write code, but know how to architect.” If you’re not writing code, you’re not architecting. Period. Anyone can draw a relational-model diagram. I’m not saying the person needs to be a hard-core coder…but if they are afraid of touching the keyboard, you have a problem on your hands. The reality is that you won’t know how good it is until the rubber meets the road.

    Grounded in the real world

    Doing things the right way technically (I’ve always liked using the term ‘better practices’, not ‘best practices’) takes a lot of time and effort. When you’re young and a founder you want to do everything the right away and have working code in the morning. You want people who understand how to make those investments/tradeoffs the right way – they understand there is such a thing as overegineering and going too fast. Someone who knows from feeling the pain – who’s done it both right and wrong and has a good alignment between the two.

    In the real world, the pendulum swings. One time you might overengineer and then know you need to cut back next time and vice versa. In addition to the characteristics in my wish list, for a co-founder I’d want someone with a balanced background in reality who can settle into a healthy middle ground.