Posts from management
One of the things I often press for in my role as a board member and investor is a greater “sense of urgency” in our portfolio companies. The founders and CEOs, it turns out, are hungry for that even more than I am. It is a collective frustration.
So when I hear a suggestion on driving urgency, I take notice. I got this one from a CEO who I’ve worked closely with for years.
I find many business books to be fairly useless or at best irrelevant to my situation but I read John Kotter’s book “A Sense of Urgency” over the weekend and it was excellent. I highly recommend it.The best thing about the book is that it creates a common definition of what “urgency” and “complacency” mean and even cautions against creating “false urgency,” which is a lot of anxious frenetic activity without no forward motion. False urgency is just as bad as complacency.
I didn’t understand the role of simplicity and messaging early on. One of the things that happened at one of my start-ups was that I would get bored saying the same thing every day. So I decided to change it up a little bit. But then everybody had a different idea of what I thought because I was mixing it up.
So my big lesson was the importance of a simple message, and saying it the same way over and over. If you’re going to change it, change it in a big way, and make sure everyone knows it’s a change. Otherwise keep it static.
The number one cause of employee unhappiness and unwanted departures is “I don’t understand where we are going.” That is a failure of leadership on the CEO’s part. I agree with John, keep it simple and repeat often and don’t mix up your messages. It is critical, particularly as the organization grows in size.
Many of the leaders of our portfolio companies struggled to get their teams focused last week. We heard from many of them asking questions like “If either of you have thoughts on leading a team through exogenous events, happy to take your guidance”
It may sound insensitive or crass to be asking how you get people focused on work when they are upset, dismayed, and devastated. I understand that people need time to come to terms with something that is so emotional for them and that employers have to be sensitive to that. I am all for that. Much of last week was spent on that.
But I also believe that getting the team off of Facebook and Twitter and back into the code and shipping product is actually a healthy thing for everyone.
Many of USV’s portfolio companies are mission driven. That’s not our investment strategy per se, but it seems to be an output of our investment strategy. We have portfolio companies trying to democratize access to healthcare, education and financial services. We have portfolio companies trying to make it easier to be an artist, an entrepreneur, a freelancer, or an author. We have portfolio companies trying to make it safer to use the Internet without being spied on. I could go on and on.
And so, working in these companies and working to help these companies and the people they support succeed is important. And if you are upset with the world, then one of the most therapeutic things you can do is try to change the world to be a better place. If you work in a company that is mission driven and you connect with that mission, then I would encourage you to throw yourself at that work this coming week. I can assure you that it will help.
And if you don’t work in a company that is mission driven, or if you don’t connect with your company’s mission, then I would encourage you to quit and join a company that you are inspired to work for and then throw yourself at that work. Here is a list of those kinds of opportunities.
The NY Times has a great longish piece on David Letterman today.
This quote got my attention:
Maybe life is the hard way, I don’t know. When the show was great, it was never as enjoyable as the misery of the show being bad. Is that human nature?
Building companies includes a lot of “misery of the show being bad” as David Letterman puts it.
And I really love the idea that you can enjoy that struggle.
Obviously you want the “show” to be great, but his point is that greatness is fleeting and you have to go through a lot of bad shows to get to some good ones and you’d better figure out how to enjoy that struggle, as he and his team did.
Good advice for all of us who hang out in startup land.
Our portfolio company Meetup was launched in June of 2002. We invested five years later, in 2007, when the company was already profitable and was approaching double digit revenues. Nine years later they are 3x the size when we invested in revenues, meetups, and more. But the founder and leaders of Meetup feel like they are just beginning to scratch the surface of their mission which is to get people out of the house and into the real world doing things they enjoy with other like minded people.
This video, which they created as part of their re-launch this week, shows the range of things people use Meetup to do with others:
Many people associate Meetup with night time events where people with name tags on them walk around and introduce themselves to others. Those sorts of things happen on Meetup for sure. But the more common uses are runners using Meetup to schedule group runs, moms using Meetup to hang out with other moms, and, apparently, jugglers using Meetup to juggle together.
So Meetup is relaunching the Company this week, fourteen and a quarter years after its initial launch. This means a new logo (the name badge is gone), new mobile apps that use deep learning to understand what you want to do and encourage you to do more of it, a new team (with women leaders in both product and engineering) with lots of new engineers and data scientists, and a sharper focus on marketing.
If you want to see what the new Meetup is all about, download the new app (iOS and Android) and check it out. Maybe you will find yourself juggling in the park this weekend. I sure hope so.
I’ve been in board meeting blitz since the summer ended. Many of the companies I work with are well past the startup phase and are well into or even past the growth/scaling phase. And the thought that keeps occurring to me as I go from board meeting to board meeting is the key to success when you are past the startup/product market fit stage comes down to two things, team and strategy.
You have to get the strategy right and you have to have a team that can execute it without your day to day involvement. The CEOs that I work with that are struggling are usually running into issues with their team and/or their strategy. And the CEOs that I work with that are doing great generally have gotten the strategy set and have built a strong executive team underneath them.
This sounds so simple. But it is not.
Most of the companies I work with didn’t really start out with a strategy. They started out with an idea that turned into a great product that found a fit with a market. And they jumped on that and used it to build a company. Most of them wake up at some point and realize that a single product in a single market is not a strategy and they need to come up with a plan to get a lot bigger and build a sustainable and defensible business. I like to think that this is one place where a good investor group can help. If we are doing our job, we push our portfolio companies to work on their long term strategy and refine it to the point where it makes sense and is executable. But an investor group cannot give a company a strategy. It has to come from the founder/CEO and a small group of senior leaders. The smaller the group that is working on strategy, the better. Strategy is not something that can be done by committee.
The second thing, building an executive team that can execute the plan without day to day involvement of the CEO, is even harder. Most of the companies I work with go through a lot of hiring mistakes on the way to building this team. Some hire too junior. Some hire too senior. Some hire bad cultural fits. Some hire people that are nothing but cultural fit. And an investor or investor group can help with this but I believe that founders/CEOs need to learn how to do this themselves and make these mistakes. The best thing an investor group can do is to help a founder/CEO to understand when they have the wrong person in the job. Or help them understand that more quickly.
These are both areas where experience is huge. The CEOs I work with who have done the job multiple times get these two things right much more quickly. But even they can take a year or two to get these right. First time CEOs often take three or four years to get these things right. But sticking with founders who are first time CEOs through this process is usually worth it because they have a connection to the initial vision and mission that a hired CEO has a hard time replicating. There is not a good rule of thumb on this issue (who should run the company). Facts and circumstances on the ground will generally determine how that should go.
My final point on this is that once you have the strategy and team locked down, you should step back and let the machine do its thing. I like to say that CEOs should do only three things; recruit and retain the team, build and evolve the long term strategy and communicate it effectively and broadly in the organization and externally, and make sure the company doesn’t run out of money. When those are the only things you are doing, you are doing the job right. Very few CEOs get to focus on only these three things all of the time. Things break and you have to fix them. But when the machine is working and you can step back and watch it hum, it is a thing of beauty.
I saw this tweet yesterday:
“Great Board Directors behave like shock absorbers, not amplifiers”
wisdom from @roelofbotha
— Tom Hulme (@thulme) August 4, 2016
It really resonates with me.
Companies go through lots of “shocks” over the years. I have seen Boards react in different ways. Sometimes they freak out and make things worse. Other times they are the calming force and voice of reason.
It is that latter behavior that the Company needs in that moment. Everyone is already freaking out. Amplifying that, as Roelof calls it, is not in the least bit helpful. Their is plenty of time for post-mortem analysis and learning from the situation. That can wait.
Companies need support and help during times of crises. Boards are uniquely positioned to provide that. The ones who can actually do that are incredibly helpful.
The New York Times has a piece today about how bay area tech companies are giving the Phoenix Arizona economy a boost.
I think this is a trend we are just seeing the start of.
A big theme of board meetings I’ve been in over the past year is the crazy high cost of talent in the big tech centers (SF, NYC, LA, Boston, Seattle) and the need to grow headcount in lower cost locations.
This could mean outside of the US in places like Eastern Europe, Asia, India, but for the most part the discussions I have been in have centered on cities in the US where there is a good well educated work force, an increasing number of technically skilled workers, and a much lower cost of living. That could be Phoenix, or it could be Indianapolis, Pittsburgh, Atlanta, and a host of other really good places to live in the US.
Just like we are seeing tech seep into the strategic plans of big Fortune 1000 companies, we are seeing tech seep into the economic development plans of cities around the US (and around the world). Tech is where the growth opportunities are right now.
A good example of how this works is Google’s decision to build a big office in NYC in the early part of the last decade and build (and buy) engineering teams in that office. Google is now a major employer in NYC and the massive organization they have built has now spilled over into the broader tech sector in NYC. My partner Albert calls Google’s NYC office “the gift that Google gave NYC.”
We will see that story play out across many cities in the US (and outside of the US) in the next five to ten years. It is simply too expensive for most companies to house all of their employees in the bay area or NYC. And so they will stop doing that and go elsewhere for talent. That’s a very healthy and positive dynamic for everyone, including the big tech centers that are increasingly getting too expensive to live in for many tech employees.
Although we are not where we need to be, it feels to me that we are entering a period where women will be increasingly the choice for leading our companies and our countries.
The rise of Theresa May in the UK is the latest high profile example of a woman being selected to occupy an important leadership position.
In the US, Hillary Clinton is currently the odds-on favorite to win the Presidency.
Imagine the power of the imagery of Angela Merkel, Teresa May, and Hillary Clinton meeting at an important event. That picture will tell a thousand words about the rise of women leaders.
In the tech business, women have rarely been in top leadership positions. But that too is changing. Women hold the CEO positions at IBM, Oracle, HP, Yahoo, and a number of other leading tech companies.
In the largest companies I work with, women hold many of the top leadership positions and these women are extremely talented executives and are likely to end up running companies someday soon.
So from where I sit, I feel we are on the cusp of a new era for women.
None of this changes the specific challenges that exist for women, the conflicts between family and work that are still more acute for women than men, the societal biases that still exist, and the muscle memory that will take time to unwind.
But as a husband and father of three amazing women leaders, it’s a great feeling to see the promised land emerging over the horizon. I am quite confident we will see real gender equality in the workplace in my lifetime.