Startup Whisperer

What is your one thing?

Your job as CEO/founder is to make the organizational objectives and goals for your startup clear, concise, and measurable.  I am reminded by Jack Palance's character as the wise and crusty old cowboy in the movie City Slickers telling Billy Crystal to figure out what his "one thing" is in his life.  In business, you need to wrap all of the complexities around all of the specific strategies and tactics to something simple that everyone can understand and strive for.  I've worked for some companies that had so many initiatives and goals that it was hard to get a cohesive picture about what everyone is actually trying to do. Ask yourself the question what defines your companies success by the end of the year --
not strategies like launching a big product or a new marketing campaign.

In the end, they have a better grasp of what that "One Thing" is and define it (btw, our goal at WidgetBucks is to serve 2 Billion impressions by the end of 2008).  A lot of big companies develop a Big Hairy Audacious Goal (BHAG) which acts as more like a two-part goal and vision statement.  I like to think of this in smaller time intervals for startups.  I tend to want this to be a year-end goal that encompasses either a market share, revenue, or EBITDA goal.  Its a goal that everyone can get behind that isn't a slam dunk (but isn't impossible).  Then, reinforce it all of the time from email communications, stickers on your companies monitors -- everywhere. 

So, what is your one thing?

Startupwhisperer.com gets recognized

Marcelo Calbucci founder and CTO of Sampa in Seattle just published his lit of influential entrepreneur bloggers in Seattle.  To my surprise, he acknowledged this blog.  Thank you for the recognition and I promise to stay committed to helping entrepreneurs.

Fire your PR firm

I have nothing against PR firms.  I have worked with some fantastic firms in the past.  At Expedia, I had a great experience with Edelman.  When you have the budget and the time, PR firms can be a solid tactic.  However, in startup mode, I have felt that the best salesperson is always the CEO.  A lot of CEO friends of mine believe that hiring a top-notch PR firm is an essential part of their marketing mix in the early stage of their business.  I do not.  Startups change their operating direction frequently and move extremely fast.  It is too difficult for a PR firm to keep up with you. 

Startups will get better results when a CEO takes the time to target a writer directly.  There is so much noise that an authentic conversation from an executive does punch thru the sea of press releases being stuffed into inboxes by agencies.  It reminds me when I decided to contact New York Times writer, Bob Tedeschi, directly versus spending several hours explaining how we were going to approach him.  Bob emailed me back within 5 minutes and we got a stellar story out of it.  Mpire hosted a little event recently where the Seattle Times' technology reporter, Brier Dudley, echoed this sentiment of CEO's being the best PR people.

Get advice from entrepreneurs not boneheads

One thing that consistently dislodges my logic chip is when I get feedback from individuals that do not know what they are talking about.  Nothing chaps my hide more than to listen to blowhards from big companies (or VCs) talking about entrepreneurship.  I am not talking about one of those successful entrepreneurs that scaled a business from a garage to a huge business. I am referring to a big company corporate type that has three devices around their belt, wears chinos, and has a nice plump job that they parachuted into.  Big company skills are different than startup skills. 

You as the entrepreneur should be very careful where you get operating advice from;  it is far too common of a story to hear a first time CEO getting whipped around with contradictory and our tautological advice in Board meetings.  For advice, I would look to have 1-3 advisors for your company that can act as a sounding board.  Once you find a seasoned exec that has some operating experience in your related field or general startup experience, then treat their time with respect.  Use your advisory board when you need industry contacts or some operating advice.  Be strict with the amount of time that you use them (since they are busy). Estimate 2-3/hours a month with them.  In an early phase of your business (< Series A), carve out .1% of your total outstanding shares to your advisors. 

Get your advice from people that are on your team that have actually built companies.

Size doesn't matter

A lot of newbie startup founders ask my opinion about how many employees do they need in that hard phase between product inception to pre-profitability.  More specifically, most of the questions are always focused on product development teams.  My answer is inevitably,  smaller than you think.  Sure, there are lots of examples where there are large infrastructure plays where you'll need a large dev team.  The majority of Internet ventures can get to scale with a very small team. 

The classic "small" dev organization in startups consisted of 2-3 devs, 1 program manager, 1 product manager, a QA person and either a VP of engineering or CTO (who is hopefully the founder).  So, 7 was appropriately scrappy when  building a business.  Nowadays, you can get away with no program manager and product manager as long as the CEO and/or the CTO can direct business and technical direction.  I think a team of 5 is just fine. 

I am blown away when I hear about startups hiring dev management in the beginning of their businesses.  I typically have never found that you need to have any management layer between the CTO and the people doing the work. Keep the team size small.  You will be amazed at the returns that you get by doing so.  Startup founders from big companies typically fall back to their waterfall style development
styles in their team sizes and launching product.  Just about everyone now develops product in a Scrum-style development process.   I joke that at Mpire we are so scrappy that we've implemented the CRUM process.

You get faster, more focused product delivery with smaller teams.

Mother Clickers

This little snippet from MediaWeek reminded me of debate that continues to happen.  Advertisers are still too click focused.  I just had this debate recently with an advertiser.  We debated how important optimizing your campaign for just straight click-thrus.  The majority of Internet users don't click on ads. 
The MediaWeek has a great quote from a Tacoda exec:
"Close to 70 percent of the online universe doesn't click at all," said Greg Rogers, VP of sales strategy at Tacoda.

Your brand still makes an impression on the consumer. I can't believe that we're 10+ years into the online advertising space with under 10% of the global media business spent on the Internet and we're still having this debate.

Clearly the same bar of online effectiveness is not apparent in the offline space (hello, Nielsen boxes
anyone).  This quote from the dawn of online advertising has always rung true to me:

"Clickthrough is a poor measurement of banner ad effectiveness, especially for low involvement products. It is foolhardy to think of Web ads solely as a device to move visitors to the advertisers' Web sites. For many products, the Web ad should be designed to communicate a selling message in a manner akin to print media."

    - Jef I. Richards (1997), advertising professor, The University of Texas at Austin.

There is no better way to target customers than online advertising.   Its only going to get better as technology better targets consumers.  Eventually brand advertisers will not be so short-sighted.

Startup OECs (uh, CEOs) do you have Dyslexia?

A friend sent me this NPR clip about how a high % of entrepreneurs have dyslexia.  The research study showed that 35% of US entreprenerus are dyslexic accoreding to the London's Cass School Business.  It is a very fasncinating interview.  My Mom told me after college that I was diagnosed as midly dyslexic when I was a child.  If you do have dyslexia then you are in good company with famous CEOs like Virgin's Richard Branson or Cisco's John Chambers.

Startups are stressful, but always remember the passion

Are you stressed out as an entrepreneur?  My guess is that you are.  You are the few, the brave, and sometimes the most anxiety ridden business people on the planet.  Its not easy forging a new product and/or business.  Serial entrepreneur and friend, Kelly Smith, just presented to the Northwest Entrepreneur Forum and has compiled some interesting quotes from Seattle Entrepreneurs.

There is a lot of stress in startups.  But, there is tremendous joy and fulfillment in them, too.  Please remember to not lose sight of why you decided to start a business - you are passionate around an idea.  Don't let your employees forget that they are not simply working at a job, they are on a mission to achieve something great.  I always felt that if one can tap into higher levels of the proverbial Maslow's hierarcy, then you can get a team to do anything.  You can face industry titans, super hard technical challenges, and teamwork during the hard times.

You can do anything (even while being stressed out) if you stay true to your passion.  One of my big inspirations in life was my high school cross country coach, Pat Tyson.  Coach Tyson is one of the most respected long distance running coaches in the country.   I've used his lessons about running for my life and for business.  Coach Tyson taught us to have passion for what we do and then everything else will fall into place.  An actual quote:

"Number one is just to gain a passion for running. To love the morning, to love the trail, to love the pace on the track. And if some kid gets really good at it, that's cool too."
- Pat Tyson

Anyone can live a normal life. Congratulate yourself for pursuing you passion.

Tips to effectively scale and manage startups

A newly minted CEO friend of mine recently asked me how to run effective meetings, organize staff communication, communicated effectively to employees, etc.,etc.  Much is written on this topic from larger, more established firms, but, startups pose some difficult and different challenges.  Because startups are small and are growing quickly (hopefully);  the CEO is constantly reinventing the organization.  But, this doesn't mean that the business needs to be chaotic.  Here are some tips that might be helpful:

Operating meetings
In this section, I attached a grid that I created for myself over the years.  The startup executive will want to keep an active set of regular checkpoints (I like to call them "operating drumbeats") throughout the organization that ensure that the business is marching to his/her key objectives.  Regular checkpoints on strategic direction, weekly staff meetings, and 1:1s with your direct reports are an ideal way to structure this.   Here is a sample guideline:Download sample_business_planning_process.pdf

There are some things that could be tweaked based on the business. Evaluate your own business and constantly scrutinize your method of information flow.  Always be willing to cut a meeting if it is unnecessary.  Your goal at a startup is to be a fast mover;  that is your edge that your larger competitors do not have.

Another important tool that you will want to develop is an internal scorecard.  The internal scorecard should basically bleed out of your unified objectives, goals, strategies, and tactics.  The scorecard is basically a functional KPI (Key Performance Indicators) list.  This way from the Board down to the average employee, everyone is aligned.  I typically share this scorecard with all of the managers and then have a very general goal for all of the employees to focus on  (revenue, profitably, market share).  Example, would be "hit EBITDA positive by July," "exceed 2 billion impressions", etc. I am assuming that the entity has already gone thru a strategic planning process.  If not, then that will be a posting for another day.

Format for staff meetings
I like to constantly ask my team(s) what are the key issues that we should cover for each staff meeting.  Typically you will get a mix of both tactical or strategic issues. Each startups tactics tend to run the show which is just fine. It is 'fine' because focusing on launching your first product is the difference between having a business (or not).  Get a sense from the team on what key issues are out there.  But, please do make it a point to layer in more and more strategic discussion over time.  My typical staff meetings start out with (btw, usually an hour and a half every Tues...I have always hated Monday staff meetings):

1. Housekeeping (things that are tactical but require cross-functional input)...things like office space planning, HR, morale event planning, etc.  No more than 15 mins.

2. General discussion (70% tactical for early stage, 90% strategic for later stage companies) <you can interject your own points as well as ask for them from your directs;  I always had a review of the scorecard and financials as part of this section."  At least an hour.

3. Next steps

• Write things down & collect action items;  get someone to take notes and send them out < 24 hours after the meeting; make sure that action items are tracked and reviewed in the meeting.  At Mpire, I take the notes and everyone gets a copy of the notes within minutes.

• Write down topics that you didn't get to - collect anything that was a parking lot (aka something that you couldn't get to). 

• Don't talk a lot in your staff meetings.  Play traffic cop. Meeting style is ideally empowering with you make the decision on an item or making time decisions in the meeting.  Remember, this meeting is for you as a team to weekly track the business.  It is not all about you.  You are a team.

btw, you should send out an email no earlier than 24 hours before the meeting on a call for agenda items.

Communication
Another important tenet to running an effective organization is communication.  Communication is very key especially as you get bigger.  I tone down the centralized communication as organizations grow (toned down meaning instead of a weekly CEO email, it turned into a monthly).  Basically, the rule of thumb for me  was < 100 employees:

• CEO weekly emails (highlighting the company value, key initiatives, and goals)

• Managing by walking around - have your directs give you updates on key things going on with the staff; stop in and talk to a star or someone that is having issues.  Eat lunch with your employees.  You can use this for your directs, too.

• Regular townhalls - great time is Friday afternoon;  open up beers and give the employees time to listen to you but more importantly listen to them.  This keeps everyone together and synched up on what is happening at the company.

• Email communication - I tend to think about my week as being direction setting and people management.  So, send less email and make bigger decisions.  At the same time hire the right people and give them the right care.  You'll know how much is enough.

Communication for > 100 employees
I would basically do everything above except move to monthly emails and more formal
townhalls (with audio conferencing, webex, etc).  It also depends on how distributed you get, too.  In addition, I added a weekly 1:1 style update from my key direct emails updates.  So, you would get the following:

• Business performance v. key metrics (best for multi business lines but you can also have things like % spec complete, etc...basically your directs are reporting on the kpis that they own).

• Updates on key initiatives (in other words, these are your strategies...everyone should only have no more than 5 within the entire organization;  everyone will have their own sub-strategies to achieve the global strategy).

• Key competitive issues

• Escalations - these are for you; but, everyone can see them. Watch these closely...they also end up being discussed in your staff meeting (aka stratcom).

This was very helpful when needing to communicating at different levels (especially Boards, investors, etc).  In addition, your direct reports will be able to better understand what is happening in other areas of the business. I had some managers that used this format to structure their own team staff meetings, too.  It is glorious when your organziation is fully aligned and constantly reviewing their job performance to the organizationas key objectives.  That is a beautiful place.

My First Post

Local Seattle journalist, John Cook, recently blogged about whether Seattle is the next Silicon Valley?  With Washington being the 4th largest state in the US in terms of venture capital invested, I'd say that our time has come. 

I've spent a lot of time in the Valley recently.  The companies that I talk to and the parties that I attend have started to remind me of some of the zany Web 1.0 days.  Certainly there is less capital being thrown at zany ideas, but, that sounds a little like Ben Franklin's famous quote about the definition of insanity.

So I have been inspired to start to blog about startups. I've pretty much only done startups and have both the tread marks and the awards to show for it.  Hopefully, you'll get something out of the conversations.