Ten Characteristics of Great Companies

Yesterday I got to do one of my favorite things. Our portfolio company Etsy invited me out to their new offices in Dumbo to talk to the entire team. Since they didn't ask me to talk about anything in specific, I picked a topic and composed some thoughts on the F'd train ride out to Brooklyn.

The topic I picked was "What Makes A Great Company?"  I picked that topic because I think Etsy can be a great company and in fact is already well on its way to becoming one. I thought it would be good to share with the team some traits I see in many "great companies."

So here are the ten characteristics that I jotted down on my blackberry on the subway. This is not meant to be a comprehensive list. It is the ten traits that came to me on a 15 minute subway ride. And it is also true that great companies don't hit every single one of these traits. But they hit most of them. And some do hit all of them.

So with that caveat, here is my list of ten traits I see in great companies. This is aimed at web/tech companies but I believe it can and should be applicable to all companies.

1) Great companies are constantly innovating and delighting their customers/users with new products and services.

2) Great companies are built to last and be independent and sustainable. Great companies don't sell out.

3) Great companies make lots of money but leave even more money on the table for their users and partners.

4) Great companies don't look elsewhere for ideas. They develop their ideas internally and are copied by others.

5) Great companies infect their users/customers with their brand. They turn their users and customers into marketing/salesforces.

6) Great companies are led by entrepreneurs who own a meaningful piece of the business. As such, they make decisions based on long term business needs and objectives not short term goals.

7) Great companies have a global mindset. They treat every person in the world as a potential customer/user.

8) Great companies are attempting to change the world in addition to making money.

9) Great companies are not reliant on any one person to deliver their value proposition.

10) Great companies put the customer/user first above any other priority.

So there it is. The Q&A session after the talk was quite stimulating and I expect the comment thread here will be equally so.

#VC & Technology

Comments (Archived):

  1. Name

    All thoughts are really interesting!I not clear when you say “great companies are attempting to change the world in addition to making money”. Can you go a little deep here?

    1. fredwilson

      what i mean is there is another purposebill gates said that he wanted to put a computer on every desk and in every homei don’t think microsoft is a great company, certainly not anymore, butthey did have a mission that was a change the world kind of mission

      1. scottmag

        This is a great point that extends beyond the “great company” discussion. Everyone can do this in their current job at their current company. Take a look at what you do and think about how you affect others. Do your actions make anyone’s life better? Are you enabling something? Are you building or creating something useful or important? Focus on any one of those things and view your job through the lens of how you are, in any small way, making the world a better place. If you internalize that, you can use it as motivation even if you otherwise don’t love your job.

  2. David Semeria

    3) Great companies make lots of money but leave even more money on the table for their users and partnersOr as Tim O’Reilly said, “startups should create more value than they capture”.

    1. fredwilson

      yeah, that’s a great way to say it

  3. Sampad Swain

    Theoretically, great points. But what the heck it always start with the mindset I believe. BTW just wanted to drop in a line actually – don’t know why but while going through your 10 points, it seems that you’d “Google” in mind while framing those (for each & every point) :)—@Sampad

    1. fredwilson

      nope. i was thinking more about other companies to be honest

  4. Nigel Walsh

    I not sure I follow #2 – specifically “Great companies don’t sell out.” I assume this is not the same as get “bought out”. Many companies that merge, get bought out etc do so for great reasons – bringing together multiple innovations, ideas, people etc to create even greater value…

    1. fredwilson

      it’s a tough one for sure because the vast majority of our portfoliocompanies “sell out”but the very best companies stay independent and build lasting franchises

      1. Nigel Walsh

        I’m struggling to think of many lasting independent companies now..If I look at a company that needs to do something, then they usually follow a path of Reuse, Buy, Build… in that order.If its not in their kit bag, they cant reuse it, therefore the path of least resistance is to Buy and has to be cheaper than building from scratch..Why re-invent the wheel? eg eBay buying Paypal rather than develop its own payment platform.. (I know that’s a whole different discussion) but ultimately it created a better proposition and end user experience.

        1. Farhan Lalji

          There’s a difference between building a company that could stay independent and grow and building a company that’s aim is to sell out. Build to last not to sell out.If you look at some of USV’s portfolio sure they sell out, but Delicious, Feedburner and Tacoda all could have stayed independent and been successful, some arguably more successful then post acquisition and the bulk of the portfolio of investments right now are being built to last. Good post Fred.

          1. kidmercury

            the feedburner sell out is the one i find most disappointing. after getting over the fact that i didn’t think of that idea myself, i was hoping they’d stay independent and unleash the world’s most awesome set of APIs so that leeches like me could grab them and build a business on fred’s dime. but then google bought them and that sort of put the dream to an end. damn.

          2. Farhan Lalji

            The key is that Feedburner, Delicious and Tacado all were killing it before acquisition and could have all stayed independent and done big things. We could play “what could have been” with both Delicious and Feedburner, sadly we’ll never know. But they both innovated like crazy and would probably have been better had they stayed independent.

          3. fredwilson

            Yes they would have done better as indies

          4. ShanaC

            It’s not worth speculating about. We are not fortune tellers of what would have been if they had stayed independent.

          5. fredwilson

            You don’t engage in woulda, coulda, shoulda?That’s a good practice. Keep doing it

          6. ShanaC

            It’s not that. I’m human. I make a lot of mistakes that I do regret. I worked hard and still work to try and learn from my experiences to change myself and my envrioment and make the most from it. The Traditional Coulda, Woulda, Shoulda is just a way to create anxiety and negativity. I rather learn and grow, so it is a matter of analysis, acceptance, and application. It’s the only way I’ve found towards a true forgiveness of the self.I’m also wil;ling to admit to myself that it might take a few tries at the same mistake until you get what the mistake is. So the Coulda, Woulda, Shoulda is just a way of beating yourself up. It should be “Who, what, when, where, how, am I a force, and same goes to “forces on me.”*Shrug* Tenacity?

          7. fredwilson

            I agree with damn on that one. And delicious too

          8. Cyrus

            With all of the buzz now about how “RSS is dead” (which I agree with to a certain extent), perhaps it was their best play in hindsight. Point being, a company based on a standard that can become outdated might be better off selling out.

          9. kidmercury

            there is only one thing i can say to the “rss is dead” argument: pfft.i think the problem stems from the fact that the geeks embraced RSS and thought it would be a consumer technology. but alas, it was not meant to be. however, i think businesses will need to invest in RSS to create cool things consumers will use, and to help with internal communications systems.ultimately all companies are based on standards….whether you speak the english language, do business in US dollars, create web pages in HTML….we’re all beholden to standards. for better or worse few of us position ourselves the way feedburner did, which in my opinion had the potential to be truly outstanding. dave winer hated on them for trying to own the standard, and while i sympathize with his concern, i was keen on giving feedburner the benefit of the doubt to see what they could do to improve the standard and create even more opportunities for themselves and others. of course it doesn’t matter at this point, maybe someone else will come along and play the game.

          10. ShanaC

            The thing is, standards change. You are going to hate my example, but we used to have purely gold backed currency. The idea of paper money hadn’t even been invented yet. Coinage was a weight of metal…(that is such a weird idea to me, I have to say that.)Now we have banking cards….Someone could come along and change the standards game by being that much better. we just have yet to meet that person, and see how it all works.

          11. fredwilson

            I think maybe I will post my thoughts on rss because I need to write something kid will agree with

          12. fredwilson

            I don’t agree with rss is dead and wrote a post on why. Not sure I’ll post it though

          13. timraleigh

            Well I for one would like to see (your post) on RSS…the UI in most readers is dreadful.

          14. fredwilson

            That’s what I said at etsy yesterday when asked about this in Q&A. If you build to last you don’t have to sell and that’s how you build great companies

          15. ShanaC

            That comment puts you in a rock and a hard place- why did you sell- easiest exit? Best exit? Is it worth seeing if there will be other exits?

        2. ShanaC

          I don’t think reusing is inherently so bad. Or buying. A good company also knows its weaknesses. And can bend and shape itself to the times.Look, if an idea wasn’t reusable in a new form, it would have died. The fact that it can have so many derived meanings, and that companies need new lifeblood, mean that there is an organic process to all of this. You just happen to be dealing with non-organic beings. They go through life death cycles under the same name, I would suppose. Until they really die, in bankruptcy, or they avoid that plague, through merger. That’s the organic process of the market. I accept it the way I will turn to worm mush when I die, one day a long day from now.

      2. GlennKelman

        I loved this post, especially the emphasis on building a lasting company by changing the world in a lasting way. In an exchange we had in the past, it seemed like you were more focused on acquisitions as the “smart” outcome for many companies:http://www.avc.com/a_vc/200…I know there’s no one-size-fits-all solution, but do you still think that’s the outcome most entrepreneurs should focus on?

        1. fredwilson

          Yes because sadly there aren’t many great companies. There are a ton of good ones. But very few great ones

  5. TimWalker

    Thought-provoking list, Fred. I would amend #4, “Great companies don’t look elsewhere for ideas,” maybe to say “Great companies don’t HAVE TO look elsewhere for ideas.” They’re perfectly *willing* to come up with all their ideas themselves.But really great companies also avoid Not-Invented-Here syndrome: if a great idea does come up from a competitor, a vendor, an outside researcher, an unrelated industry — they’re happy to run with that idea, too. The point is that they’re always looking for great ideas that make a difference, and then executing the hell out of those ideas, whether they came from inside or outside their own company.

    1. fredwilson

      That’s a great point and nuance to my point. I accept it wholeheartedly

      1. Mike O'Horo

        Embracing, applying and adapting others’ ideas is true of every entity, whether company, government, school, group, etc. An it’s not always voluntary. One baseline reason for this is that a good idea, once exposed, rapidly becomes an expectation. For example, way back in the early days of what was then called “e-commerce,” when Amazon made it so noticeably easy to buy from them online, that became the expectation of every online shopper. One could argue that “free” has followed a similar arc, i.e., once someone began publishing worthwhile content for free, it became the expected norm. Today’s innovation is tomorrow’s norm.

    2. ShanaC

      I agree with this too. I want to change #4 to Great Companies are ever vigilant for good ideas, no matter where they come from. They observe, they think, they learn, they experiment, and then they grow.I really wanted tyo stress the idea of observant people who experiment and tinker is what makes a great company. Nothing wrong with running with a good idea from somewhere else and really improving on it. I’m sure the first wheel was sort of crappy….

    3. Cyrus

      The best example of this is Facebook. As the service became more robust, it was clear that they were borrowing and modifying ideas from other successful startups. It seemed to be very cause-and-effect in the sense that Facebook incorporated features from other startups just as they became mainstream. Examples that I can recall off of the top of my head include:Status sharing – TwitterNotes – blogger, Livejournal, etc.Videos – YoutubeShared items – Pownce (to a certain extent…)”Like” – FriendfeedUnlimited Photo Uploads – Flickr, etc (at the time this was huge because MySpace was extremely limiting in this regard)The list gets bigger as time goes on, but the point is that even great companies can borrow ideas and implement them in a manner that makes their service more robust and more valuable.

      1. fredwilson

        Yes. Its very true of facebook and also microsoft

    4. Vincent

      #4 Replace “elsewhere” with “everywhere”Quote: “It is the ten traits that came to me on a 15 minute subway ride”Good start, but I’m sure that if you take a little longer next time, the criticisms will be much less, and the final result much more respected 🙂

    5. Doug Stewart

      Therefore, if great companies develop ideas internally then great companies create the right environment for ideas to bubble up from anywhere within the organization? An environment of idea sharing and an environment of idea nurturing is built into the dna of the business?

      1. TimWalker

        Doug — I think you’re right. Many companies wonder why they’re bad at innovation, but what this really means is that they’re blind to all the ways they stifle it. Great companies *welcome* beneficial change.

  6. karen_e

    Great post! Some surprises.

  7. Druce

    I would rephrase #4 as, great companies don’t imitate others. If they do, they’ll never be better than others. Great companies are leaders, not followers.But I think great companies look everywhere all the time for new ideas and practices. Great companies understand what others do, and then do things their own way for a reason. You can be inspired by others but give life to that inspiration through your own vision and culture. When a great company screws up a product, not-invented-here syndrome is often the reason.

    1. fredwilson

      Yup. That’s consistent with other’s feedback on that one. You are right

    2. ICMA

      Agree completely. It seems to me that there’s this particular size, or level of arrogance, that many companies hit where they sincerely believe that they have all the answers, and that nothing anybody else does can possibly be of value. Maybe it’s a corporate/them and us thing? I hope I’m never too proud to spot a good idea, give credit where it’s due, and see what I can add to make it fly for me.

  8. MarkfromCT

    I want to see a little more emphasis on the employees….too many companies, mine included, are squeezing the employees to do more, outsourcing jobs, and have an all-consuming focus on the bottom line. I am not so naive to think that none of that is nececssary, but think that the pendulum has swung so far toward EBITDA and away from employees that loyalty and esprit de corps are completely anachronistic.

    1. Dave Pinsen

      The employees in Etsy probably at least have options that give them the hope of making significant money if the company successfully goes public or is acquired. That potential upside often helps with the esprit de corps in start-ups. In general though, I think you’re right that more focus on making the company a good place to work for employees is important. If memory serves, this was one of Jim Collins’s characteristics of great companies, although he balanced it with his observation that those companies tended to be great places to work for employees who drank the Kool-Aid (“cult-like places to work”).

    2. fredwilson

      That’s a glaring hole in my list. I didn’t mention employees once. Total fail on that one

      1. Dan T

        I don’t think you wiffed on employees – number 9 says a lot with a very few words > another way to say it . . .”Great companies consider their people to be their most important asset”.Great list and fun to self-rate against.

      2. Michael Weiksner

        Great companies fail repeatedly – and learn from their mistakes.Fred, your previous comment here is a terrific example how admitting a “total fail” really can be a source of strength.

        1. ShanaC

          Can we make it 11 and say- a great company is always learning from its own mistakes. Because everyone screws up.

        2. fredwilson

          I love this one. This and the employee point are going to make this list get a bit longer

          1. Michael Weiksner

            Thanks! Here’s a powerful Nike spot with Michael Jordan that inspired the point for me:http://www.youtube.com/watc…Michael Jordan talking: “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been entrusted to take the game winning shot, and missed. I’ve failed over and over again in my life my life. And that is why I succeed.”Gives me tingles watching the video.

      3. ShanaC

        Nah- Let’s put it this way. Except for me wanting to shift number one to make it a more curiosity driven definition, I would work at this mystery company being the secretary gal because it seems like an overall good company. I don’t even know what the company does. But I would take the secretary job. It’s a good list.

      4. scottmag

        I was going to add that great companies are made up of great people. They find, motivate, and retain them. But I see others beat me to that observation.It’s funny that you say it was a “total fail” that you didn’t mention employees in your ten item list, but the whole point of the exercise was a discussion with the employees at your portfolio company. You said talking to people like this was one of your favorite things. Even though it’s not enumerated, it seems to me that you certainly acknowledged how important you consider the people in your “great company” profile.

        1. fredwilson

          Thanks for making me feel better about it. It worked

        2. Mike O'Horo

          According to all the recent Gallup Mgmt stuff, the key is, as scottmag says, finding great people, but if you align their jobs with their strengths, you no longer have to motivate them, train them or manage them because they bring all that with them. “Guide”? Yes.I would also encourage all to read “Pyramids Are Tombs,” by Joe Phelps, who owns a creative shop in L.A. that is 100% operated by self-directed, self-managing teams. Joe has proven that this is not mere theory, but a reliable strategy. I met him by chance when we were both dining solo in NY. He’s an interesting guy and worth looking up if you go to L.A.

  9. kidmercury

    IMHO #8 is the most important one — at least for me, i’m working on building a great company and that is the point i focus the most on. when you take that point seriously, you take your mission statement seriously and create a humble culture that is capable of uniting people in working towards a single goal. also, very, very, VERY few people are motivated by money. i’m tempted to say no one is motivated by money, but there might be the occassional exception somewhere in the course of human history. so when entrepreneurs focus on accomplishing the mission rather than making money, i think they exhibit greater self-awareness and maturity, which i think will give them the psychological poise needed to succeed and not quit the mission when the journey inevitably becomes tougher than they imagined.of course with all that said making money is of course extremely important for a variety of reasons, but when i meet entrepreneurs who focus almost exclusively on making money, i know they wont build a great company. maybe if they are exceptional in someway they can build something impressive (i.e. few hundred employees and worth a few hundred million or something) but ironically it won’t be as profitable as the truly great companies motivated by things beyond profit, nor will it have the lasting legacy.good to great and built to last by jim collins are two books which i think do an excellent job of addressing the “what makes a great company?” question.

    1. fredwilson

      Collins got two whole books out of this subject and all I got was a short blog post and a 30 minute talk!

      1. Aaron Klein

        we’ll get you a t-shirt that says that on top of your birthday challenge. 😉

        1. fredwilson


      2. ShanaC

        State of literature today, summed up in one line ” He got X books on the subject and all I got was a blog post.” That is totally quotable.

        1. fredwilson

          Replace blog post with tweet and I’ll give you it

    2. MattCope

      At the risk of exposing myself to backlash, I am *highly* motivated by money – and I know I’m not alone.I am motivated by the things money can help me do – build new products/features, explore new ideas, etc. – not just backstroking through a swimming pool of gold. Money’s the means, not the ends.So I think Fred stated #8 well: Changing the world is the subject, making money is the predicate – not the other way around.

      1. kidmercury

        a ha! so you’re not really motivated by money, but rather by what money can get you.moreover, people are always motivated by things that cannot be traded (i.e. love for their family, compensation for low self-esteem, etc). let’s assume, for instance, there are two people who both profess to be motivated by money, and both will do almost anything to get more money. but let’s say person A wants to spend it on fancy clothes, fast cars, trophy girlfriends, bottles at the club, bling bling, etc. let’s say person B doesn’t want to spend it, but rather is the cheapest person in the world, and just hoards and hoards. while both may profess to be motivated by money, in reality they are motivated by very different things. person A is ego driven and motivated by things like attention, status, etc. person B may be motivated by insecurity. we can get an even better idea of their true motivations if we learn more about their psychological backgrounds, relationship with parents, environment growing up, etc. their true motivations will eventually shine through and will affect all aspects of their business and their relationships with people. if they don’t know their true motivations, they will be more inclined to deceive themselves and others, often unwittingly.my $.02 fwiw

        1. ShanaC

          Joy of psychology.

        2. MattCope

          KM,I think we’re on the same page. Money is nothing more than a vehicle to obtain what one values, right?Some people have done the (often difficult) introspection to determine what it is they actually value (It could be time with family, ability to retire and build boats, time spent living in other cultures, etc. And, maybe some people really do value fast cars – who knows?). And many of those people produce value for other people (and are often compensated with money), save it up, and trade money for that which they value.And some people don’t bother to do the introspection work, and (lazily, IMO) look for social cues for what to value. Often, when they do obtain the bling, cars, bottles, etc., it’s hollow – because they don’t actually value these things, or even know what they do value. And then – to your point – deception of self and others follows.It’s not the pursuit of values (which can be obtained with money) that bothers me so much, it’s the pursuit of values which aren’t one’s own.So, what do you think – are we on the same page?mC

          1. kidmercury

            yeah i think we’re on the same page. i think it can be a challenging issue; it’s hard to know what we value, and i think our values change as we get older. i’m sure i’ll value different things ten years from now.

      2. fredwilson

        Money matters to me too. But the more I get the more I invest. I don’t like cash. I like money at work. And giving it away is ‘at work’ if it is given away to the right people working on the right things

        1. ShanaC

          Beyond investing investing, what else counts as an investment. Would you fund something just because it filled one of Kant’s moral imperatives, even if you made no inherent cash at the end. IE Would you spend extra money going nowhere for now for twitter because of what happened in Iran.Should a good company have the ability to have some cash to burn to do this?

    3. reece

      Good to Great is an excellent read for this topic and there are many parallels between Fred’s list here and Collins’ book. I loved Collins’ discussion of Level 5 leadership, in particular the humble resolve it takes to lead a great company which is similar to Fred’s #6, and the decision making that good entrepreneurs must go through.That being said, I think Fred sort of missed one important part of being a great company. Great companies fully believe they are going to succeed/be the best. Perhaps that idea was latent in #8, but this is super important if you are going to convince people to use your product, convince investors to finance you, and convince others to be a part of said company etc. Again Collins says it well with the Stockdale Paradox – always confronting the brutal facts of your reality, yet maintaining ultimate faith that you will succeed in the end – an inspiring narrative for any entrepreneur.Fred, don’t beat yourself up. Collins had a whole research team!

      1. kidmercury

        yes! personally every few months i look in the mirror and ask myself, “how can i be a better a level 5 leader?” in my opinion that is definitely where it’s at, glad you brought it up.the stockdale paradox is so true as well, particularly now, i think very few companies are facing the brutal reality of the environment their business is in.

      2. fredwilson

        I don’t think a research team is any better than 24 years and over 100 startups watched from the front row

        1. reece

          I like the high standard you’ve got for yourself. That being said, Collins at least wasn’t typing on his Blackberry while riding the subway…

        2. Steve

          Fred care to add one more GREAT company to the lineup?Launched in 2005 – because I believed in the visionLanded a multi-year agreement with a Fortune 100 company based on the conceptCurrently have a patent-pending status on a web-based application (SaaS)DON’T WANT TO SELL OUT TO REALIZE THE VISION…

          1. fredwilson

            send me an email with the details of your business to the address onthe “contact me” button at the top right of this blog

    4. Mike O'Horo

      At the risk of sounding like the crusty old dude here among all the young mountain-climbers, I’ll suggest that motivation (appropriately) evolves with age. In our 20s, many Boomers wanted to (and arguably, did) change much about the world we perceived then. Our social/political activism was the zeitgeist of the ’60s and early ’70s. It may be that those now in their 20s perceive the way to improve the world is to create great companies that make work/life so much better than what most of us experienced throughout our careers. That would be a huge contribution to the world. I would put it on par with our having gotten 18-yr-olds the right to vote and changing the civil rights/race relations picture in the US.Many of us now in our late 50s have climbed various business mountains and, having fallen off some of them or, more recently, learning some harsh truths about the financial instruments in which we misplaced our faith, find the desire to make some money to assure a dignified retirement sufficiently noble, indeed. What we feel no need to add is that the same values that drove us 40 years ago are now long baked into our business philosophies and need not be part of our rhetoric.So, we’ll do things the right way, and be fair and equitable to those who help us. However, we’d be supremely disingenuous if we posed like we weren’t doing this for money.Pursuit of financial return and making a meaningful difference need not be mutually exclusive. It all depends on what you’re already made of.

  10. Jason

    15 minute subway ride => this is a favorite post.

    1. fredwilson

      Inspiration comes in interesting places. Treadmill, shower, subwayAnywhere I can be alone with my thoughts and some music playing is good

      1. Dave Pinsen

        Can you share the music that inspired this particular list, or is it proprietary?

        1. fredwilson

          The soundtrack for my subway ride to brooklyn yesterday was the new arctic monkeys record Humbug

  11. xyzmo

    Influenced by Seth Godin my version of 1) is: Great companies are constantly innovating and delighting their customers/users with remarkable (= truly noticeable) products and services.

    1. fredwilson

      Did I steal #1 from seth? Its entirely possible since he has taught me much over the years

  12. William Mougayar

    That’s a very practical list and close to the reality on the ground. How about adding something about “employees” which I didn’t see. Perhaps inserting employees in #9, as follows:9) Great companies respect, empower and reward their employees, making them effective brand ambassadors for delivering their value proposition.

    1. fredwilson

      As noted elsewhere I totally whiffed on the lack of mention of employees. That’s a big miss

      1. William Mougayar

        Sorry I didn’t see the previous point on employee miss. I didn’t mean to double-wham you on it. (my browser was sitting at 10 comments, then jumped to 33 after the comment)

        1. fredwilson

          Double and triple whams are totally cool here

      2. lawrence coburn

        I have always liked the concept of employees that act like founders.

    2. ajpape

      I just had a really valuable, productive ‘fight’ in my main work team and it made us way better at serving our clients. We learned a lot and implemented some good changes.So I like what you say about employees and would add to it what I said downthread that part of “respect and empower” is making room for individuality, uniqueness, I think Seth even says “weirdness.” Never as an end in itself, but in service of what the team, business, and customers need.

  13. Carl Rahn Griffith

    Nice and simply expressed, Fred.This is how any business should – and could – be.What’s remarkable is how (seemingly) so few companies possess any of these characteristics.It’s getting the product/service right that should be the hard bit. The company ethos should be simple. clear and natural like this, so positive energies can be focused where it matters.

  14. Vladimir Vukicevic

    So because of #4, do you avoid investing in fast-follower companies?

    1. fredwilson

      I really dislike the fast follower model I know you can make money with it. But it just doesn’t sit right with me

  15. Mike Duda

    Great companies have a great, authentic story.

  16. maxkalehoff

    To be a great company, do you have to make the world a better place (not just “do no evil”)?

    1. fredwilson

      I’d shoot for the former. Its much more satisfying

  17. Monty Kalsi

    Fred great points. Can we simply say that:Great companies have a soul that is: listening, breathing, touching, smiling, connecting, appreciating, rewarding and more…. like a positive human being to create a better world through their “window of the world”?

    1. fredwilson

      Works for me

  18. willgoldberg

    Hi Fred,Two companies that could use this advice are Equinox Fitness and CBS.

    1. ShanaC

      Correct, I was once chatting up the ex brand manager of Equinox on a train (don’t ask) (more people should talk to people on trains, you’re stuck anyway)There is a reason they can’t crack Chicago….

      1. willgoldberg

        Hi Shana, the bottom line is that they are a clean gym and a nice place to work out. They do not know how to treat their employees/prospective employees with any respect.

        1. ShanaC

          Not the conversation I had. Was more about Brand management in Chicago and “neighborhoodness” as a concept that did not translate well from NY.

          1. willgoldberg

            Unfortunately, I think they are having major problems from a human capital perspective, marketing, and sales. I think they grew too quickly and did not have the infrastructure in place to handle the massive expansion

  19. Sachin Jade

    Good Post Fred. The startups that we advise and invest in – they are probably tired of hearing my mantra by now 🙂 ….. which relates to #10 in ur list.Customer is the King. If you cannot satisfy them, forget about everything else. The more you get better at service and listening to customers and satisfying their needs, the better you will be at creating value for yourself, the shareholders and the ecosystem as a whole. The more you think about how you could enhance the service(s) that the customers seek, the better you will be at innovating and creating new products and services. And so on…….

  20. Jeff DiStanlo

    not sure where it fits, but from where i sit great companies know how to and embrace risk taking. so many companies start out strong and become adverse to risk for any number of reasons (don’t want to jeopardize prior successes, etc.). leads to stagnation.

    1. fredwilson

      Yup. That’s why being led by an entrepreneur is important

  21. ceonyc

    Great companies are able to attract the best talent–and the people see themselves as part of a whole greater than the sum of its parts. The Dodgers got Jim Thome to come and pinch hit. Twitter got Dick Costolo to be COO after he’d already been a successful CEO. They’re not concerned about their title and role–they just want to be part of a great team.

    1. fredwilson

      Since I left out the whole issue of employees (regretfully), this would be a good one to add

  22. Emeri Gent [Em]

    Agree with everything plus the missing people component mentioned in the comments, but #8 is one that needs a little bit more to it. Terrorists attempt to change the world also, so there should be some articulation what change the world actually needs, and if that means creating organizations that are human rather mechanical places to work and lifestyles that foster quality of life, it is something more than the “change the world” mantra that sometimes becomes an unintended consequence. Change for me is first within and then ripples outwards but most of all it is about bringing intelligence to all of humanity, rather than simply all of humanity to change.[Em] 2:50pm GMTHB#03

    1. Monty Kalsi

      Great thought Emeri!!

      1. Emeri Gent [Em]

        Monty, just to add that so much of change today seems to be dominated by the lowest common denominator that it is no wonder IMHO that we so often fail in collective (rather than exceptional) leadership response, which isn’t simply to build great companies, but to build great life. Yet this is paradoxically why we need great companies, because so much of what surrounds these islands of eternal hope are still mountains of mediocre moments of marveling or valleys of professional plaudits of pleasurable promise. This is where great leaders, great pioneers and great companies continue to be the exception rather than the rule. Greatness is not bequeathed through the offering of a quote, but is the price to be paid when any quote becomes payable as transformative or transmutable action – otherwise IMHO even great companies can turn into capitalized mythologies rather than a compounding intelligence (which like any long-term investment) is the essential “interest” for a sustainable and value enabling life. [Em] 4:15pm BST [Edited:6:33pm 03 SEP 2009]HB#03

        1. fredwilson

          Emeri – have you left comments here before? I don’t recognize your voice but I really like it

          1. Emeri Gent [Em]

            The greatest of all new social media laws is this one…CHECK THE DISQUS !!! : http://disqus.com/people/Emerigent – but please forgive me if I tend over-inflate my vowels and adjectives, for I am oft to think out aloud way too much even for my own introspective good . . . 🙂 [Em] 9:50pm BST

          2. fredwilson

            Good point about checking disqus. But I’m on a blackberry on a train so I tend to avoid the web if I can

        2. Monty Kalsi

          Emeri – I couldn’t agree more. Your thoughts reminds me of my professor at the business school. I believe a paradigm shift is happening and a new level of “collective conscious” is emerging on the internet..and we are just beginning to see the early reflections of that emergence!

        3. John Sharp

          “Compounding intelligence” – what a great phrase. Great comment/post.

        4. Mark Essel

          Great thoughts, but even I who has often adorned rose colored glasses, amin awe of your tenacious faith in the promise of businesses. It’s almost as if you perceive of emergent inspirational morality as the ultimate resultant of companies.The system serves a purpose, and that purpose as I recognize it is the efficent satisfaction of our needs, the collaborative pooling of our resources, and the infrastructure of the future.

          1. Emeri Gent [Em]

            Mark, I admire your pragmatism but it is not that I have a tenacious faith in the promise of business, but that I have a tenacious faith in the promise of kids that are being born of the 21st Century. Society will always have its mythologies but it won’t always have the kind of conditioning that is a throwback of the industrial age. Have faith in that kind of forward thinking vision and then pragmatism becomes the moment when our kids grow up as business leaders and look back one day at the history we all write today, the moment in human history when the system became more than just a resource pool of a mechanical age – and for good measure if we should lack that kind of business vision, it is up to those future business leaders to determine if we were the last of the old culture or the first of the new.[Em] 12:33am BSTHB#03

    2. fredwilson

      I hadn’t thought of it that way. I guess its because I just assumed it would mean ‘for the better’

    3. Name

      obviously change is for the better. The mere mention of Terrorists has no place in this article. Then we will also need not talk about Politics and Democratic Terrorist Governmentsthis article is written in best light about great Companies not Organisations. Change for the better good of all. Do we need to expand on what good means

      1. Emeri Gent [Em]

        Dear “Name”, I must say that I remain somewhat confused about your distinction between great Companies and Organizations. I am never afraid to indulge in accepting what does not make visceral sense to me because I always assume that the other person see’s something that I do not. Therein lies the opportunity to learn and transform oneself in the light of another view.I did learn from your comment at least one big thing. That I had never considered the distinction between the word “company” and the word “organization”. I recognize that a simple visit to a dictionary would have sufficed but I struggled with your distinction for a week only to end this struggle by doing precisely this, to head for the simplest explanation (this is way more than just dabbling my intellectual whatsits by citing grandly “Occam’s Razor” – but I did find the dictionary definitions very helpful)COMPANY: an organization which sells goods or services in order to make moneyORGANIZATION: a group of people who work together in a structured way for a shared purposeWait a company is an organization WHOAAA! Man, this sushi is beginning to taste like real cold fish. Now I am trying to figure out (I would use the word distillate but I don’t want to set off more fire alarms) what it is that you meant when you said “this article is written in best light about great Companies not Organizations”, because though I always manage to learn something or another from my own verbose nonsense, I always like to give others the benefit of the doubt. Moreover I am still learning the art of engaging a conversation, otherwise it really is more of a case of “hit and run” isn’t it mate?I always thought that greatness is a comparison. If the above definition serves me right, then great people create great organizations which become great companies. I also recognize that within an individual itself, there is never a case of 100% greatness. Take Paul from the New Testament for example. His greatness lies in the fact that his transformation was from Saul, that the extent of Saul’s evil was also the possibility of Paul’s good.So let me then come back to “Great Companies”. Companies therefore are organizations unless there is some magical thinking involved and people are devoid from this equation. Moreover we have heard about those who focus on not so great companies. Among these people are Noam Chomsky, Naomi Klein and Micheal Moore. Grant it that these people also make their livelihood from the very commercial system that they deem to criticize, I certainly do not need to give them any more publicity than they have already attained, but I cannot see how one can talk about great companies (The Paul Corporations), without addressing the awful ones (The Saul Corporations) and the only point in doing so (as far as I note it) is that we believe in our heart of hearts, that a conversion is possible.Otherwise why seek the unattainable, why commit a horrible form of organizational idolatry, by placing “great companies” on some higher plane or mantle or pedestal and worship them thus. Unless this comparison affords a future shift, a transformation or (as I prefer a metanoia) then any other way of looking at this is simply a pointless list.I am sure that what you meant with your distinction has a basis of profound virtue for me, but I cannot find it my friend, for I have been thinking about this one for days now and there is no personal payback. I found the distinction interesting when you raised it but I can’t see what it is you see here. This is not a case of agree or disagree, or put up or put down, this is just simple 101 learning, that I am capable of learning from my mistakes, I am not afraid of exploration (nonsense) and I should speak less to say more (the Bible also a thing about how one wags their tongue and how a tiny rudder can steer a great ship).Treat this response not as a rebuttal or an argument but merely serving my tendency to think out aloud. I am very sure that this tendency often gets me into more trouble than it appears to be worth, but if I come out the other end, an ounce or an inch wiser than I came in, that is called personal profit – the kind that people in organizations must make, for without that sense of personal profit, there is no opportunity to expand company profit.Since our collective mission here is hopefully to know how to create, form and lead great companies, I still thank you my friend your interjection, but alas, as much as I have learned from this interaction, I cannot see separate greatness by separating company and organization.Pax Tecum[Em]GoAL #04

    4. Name

      Great companies don’t get involved in damaging politics that contributes to the harm of humanity and the planet

      1. Emeri Gent [Em]

        Do agree with both of your posted comments. When Fred Wilson replied “I hadn’t thought of it that way”, that did give me pause for thought why I should have personally read the negative into this.If I walk away with one learning point from this thread, it is what you have stated in your first response “this article is written in best light about great Companies (I stand corrected on Not Organizations)”. The last thing I want to do is come online with pretensions and declarations, for thoughtfulness I guess is a way of connecting our prefontal cortex with our basal ganglia. I think your interjection yesterday was poignant and I learned from it. Thank You for your considered response. What I agree about most in your comment is that we do not need to expand on what good means, for it is difficult and personally challenging enough simply trying to find the good in our own selves and let that guide our integrity and personal awareness.Pax Tecum[Em]GoAL #04

  23. andyswan

    Good list.A great company is one that everyone wants to work for…..and those that do LOVE Monday mornings!

  24. schmiddi

    i think the first point can lead to a bit of confusion in the market place and is probably the hardest one to do well. i think you have to strike the right balance between delivering a world class product and innovating on it. innovation into completely new areas can be great (see Nokia), but i think is very hard to achieve and innovation should be seen as a way to improve on the core competency/product of a company, and not done just for innovation’s sake.

    1. fredwilson

      True. But you can do things that aren’t visible in the product. You can build something that allows your customer service people to solve a common problem in less than thirty seconds. Imagine having that experience and how wonderful it would be

  25. taylorwc

    The discussion on this post really is delightful. One thing that is always inspiring about great companies (related to employees) is the passion they instill in everyone they touch. It starts with the entrepreneur and naturally builds into your point number 5–pretty soon users/customers are so pumped up about it, they can’t help but infect other people with their passion.

    1. fredwilson

      I love the comments here at AVC. I spend a lot of time with them!

  26. johndodds

    Great companies inspire passion.

  27. thewalrus

    great list…..straight to the heart of my entreprenuerial motivations.how do you see this fitting a VC model that generally requires an exit to realize their ROI? do you think the next craigslist-type companies will be VC funded or do they need to be more organically bootstrapped to maintain the best possibility to fulfilling the aspirations in your list?

    1. fredwilson

      Matt asked me this question at Etsy yesterday and its a good one.My answer is that companies are valued on the sum of their future earnings discounted back to the presentThe key word is sum.You can maximize current earnings and risk your future earningsOr you can make choices that cost you today but insure that you have a customer base that will be with you for the long haulAnd a long haul of good earnings is way more valuable than a short haul of great ones

      1. ShanaC

        That is by far the most useful piece of information I’ve heard today. That could be applied to anything, even to people. Wow.

  28. KareAnderson

    Great companies • hire the right person for the job so all works are using best talents (rather than trying to fix weaknesses)• have a clear top goal, specific rules of engagement and, place a high priority on forging the right teams to solve a problem or seize an opportunity• value those who can work with people extremely unlike them – those who can focus on the top goal in a project or situation.

  29. Shane

    I would submit the following.Great companies execute better and faster than the competition, regardless of where the ideas came from. You don’t necessarily have to re-invent the wheel to be a great company, Facebook comes to mind here…

  30. ajpape

    Like the list, Fred.My adds would be:* Great companies have the right amount of healthy open conflict to keep the thinking fresh and people growing.* Great companies get the best work from everyone by matching their unique talents with business needs, versus getting average work by asking people to conform and fit in.

    1. fredwilson

      The conflict point is big. Third required add of this thread

      1. ajpape

        Fred do you think bad group dynamics ever sinks otherwise-good startups, and if so, is it a very rare event or not so rare?Disclosure: it’s a self-serving question because I see the damage in my corporate clients all the time. I’ve always wondered if I should be trying to help startups too.

  31. jacopogio

    I would add #11 Great companies become concepts as … Coke, Ford, Apple, Xerox, Nasa, GE,

    1. fredwilson

      Yes. I tried to communicate that with the point about infecting their customers/users

  32. davidcalabrese

    The most interesting thing, in my opinion, is the constant focus on the customer/user. So many startups forget about that. They build a product that they would like or think can get acquired and forget that the value in the business is the usage/patronage and revenues from that usage/patronage.My first entrepreneurial endeavour was planning an event. It was simple logic. What is missing in the area that a lot of people would like to do, how much will they pay for the experience and how much will it cost me to coordinate? If the #’s make sense and I can provide consumer value while driving revenues, I do it, if I can’t marry the two… next!

    1. Nick Giglia

      I couldn’t agree more. I’m working on a start-up right now, and we realized from the beginning that we needed to focus on serving our selected market. Too many people I’ve encountered are wrapped up in fancy technology that has certain capabilities, and they can’t articulate how and why this solves customers’ pain points. If you start by asking yourself about the barriers to adoption and the problems with the current “way things are,” and keep the customer in mind as the business progresses, you will more often than not create a superior solution that wins in the marketplace.

  33. rsummer

    And how do you know when a company has achieved greatness? Return on Capital? Margins? Size? Competitive advantages? Striving for “greatness” is great advice for my kids, but it feels less tangible for a company. I agree the list is important — I’m just not sure it is predictive.

    1. fredwilson

      The goal of it was not to predict. It was to inspire.But I believe you can predict. You can see it in the eyes and the hearts of the people in charge and you can hear it in their wordsBut even so, we only get it right a third of the time

      1. ShanaC

        Great Companies think they are the user. Most don’t. It’s not just the idea, it’s the total exectution. You can tell looking at something if they thought about the people using it. (and this scares me) A lot of times, even though they want to delight the user, it is as if no one sat down with the user to study thier behavior, how they naturally react to these products.It scares me a bit, actually. It can be a passionate product, a beautiful product, and if it totally ignores the fact that people behave in certain ways that cross chasms *shrug*. If they were designed originally with that in mind, and with the people, as actual characters, I feel like I would see so many more successes. And I want to see successes. This is not out of reach. I don’t get it.

      2. rsummer

        Outstanding then . . . it is inspirational.

  34. hypermark

    Perhaps a bit more tactical, here’s my list of nine essential truths of entrepreneurial success:1. It’s About Who, Then What2. Say Goodbye to the Tyranny of the ‘All or None’3. Be Use-Case Driven4. Spell out the Jobs, Outcomes and Constraints That Your Product or Service Addresses5. Know What has to go Right for You to Succeed6. Sanity Check the 1.0/3.0 Paradox7. Always Have an Official Plan of Record8. Is Your Solution a Vitamin, Aspirin or Penicillin?9. Be a Detective, an Anthropologist, Sociologist, Psychologist and Zen MasterThere is a full description of each here, if interested: http://bit.ly/13YGMyBest,Mark

  35. john wang

    the company I work for does the opposite of all those!

    1. fredwilson


  36. Crifae

    Great companies are open to change and value open debate even if it means going against the grain!

    1. fredwilson

      True. But also have a leader who can cut the debate off at some point and make a decision that everyone will support

  37. Nick Giglia

    Great List, Fred, and an even better discussion on here about what makes a truly great company. I think there should be one tweak:For #10 – Great companies put the customer/user first above any other priority, but they are not afraid to say no. Too many start-ups are destroyed by scope creep, where they keep providing new services to their clients either at too low a price, or in a way that distracts from their value proposition. Customer needs always come first, but you also need to be sure you can meet those needs.

  38. Maurice

    #4 – give me a break. Look at how Apple started. Apple is a great company that got it’s start by seeing the GUI Xerox PARC developed…

    1. ShanaC

      I bet you the first wheel was sort of lumpy and not perfectly round. The Xerox PARC GUI was not going to be a commercial success without massive improvements. Apple did do that.

  39. paramendra

    I am very familiar with the F train. Used to live off of a F stop. Glory days.I disagree with 4) Great companies don’t look elsewhere for ideas. They develop their ideas internally and are copied by others.The rest look great.

  40. Mark Geller

    Fred, Great post. As an entrepreneur, I was glad to see the emphasis you placed on innovation, and not simply execution–although of course outstanding execution is critical as well. In fact, I wrote a post today on the value of innovation vs. execution for new startups.Btw, I would maybe add one more point to the list, which is great companies are not afraid to say no–to projects, products, features, or even customers–that would distract them from achieving their central vision in serving end users.

    1. fredwilson

      Focus focus focus

  41. gomobile

    Thought provoking, nice work. One of my favs is # 5.Great companies inspire market competition to drive evolving innovation and user experience for the benefit of the entire category. (the reason for #3)Great companies have a unified company culture where every single employee knows and executes their goals that all feed the goals of an exceptional business.

  42. Guest

    Great points, Fred; interesting to see how almost all of them show great companies to be built on top of real organic value. This is in contrast to some companies, or even problems in our economy, that are just propped up with capital — just throwing more money at something never gets to the root problem.Also interesting that you pointed out that great companies not only build tremendous value, but also re-distribute that value to consumers and end-users as much as possible too. Low margin seems to go hand in hand with large scale.

  43. Adelaide Fives

    I like all the things you have said here, Fred. There aren’t enough voices that influence start-ups and entrepreneurs to think about their long-term value as a company or their long-term relationship with their customers. And, too often the short-term focus just short-changes customers and entrepreneurs and mostly the innovation/idea behind the business.Etsy is a great company to think about through the lens of these characteristics especially the long-range, short-range. Momentum, tech improvements, ever-enhanced, new and evolved offerings are critical to their success but so are the community fabric, real people relationships, and underlying business purpose.Great food for thought…thanks!

  44. Michael Diamant

    Great list, and one I’m going to forward to my company. Number 3 isn’t totally clear to me though, I’m thinking it’s more digitally oriented? Our “users” (who for us are our customers) get all the value they want in our products – no more no less – and we wouldn’t be making money if we didn’t invest in what our customers want. Product development is one of our biggest “costs” and truly is the investment. As far as partners, we value them extraordinarily but I find that they show their true colors when you’re being successful, with the best ones continuing to offer great value but too many others trying to maximize their margins on you – the partner who is doing the best. So I’m trying to figure out what it means to “leave more money on the table” for them.

  45. Uday Subbarayan

    “Great companies solve customer problem”. Is it a good summary?

  46. Joy Chen

    Sounds like “great companies” and “public companies” are mutually exclusive terms.

  47. sachmo

    In my humble opinion #8 should be appended to simply, “Great companies are trying to change the world.”I think its kind of obvious that its for the better (despite what some others might say) …The money in the end is just a scorecard; proof that the concept is sustainable. In a capitalist world, if an idea / process / company is not a money maker, its a money taker.Also, I like the analogy between Facebook and Microsoft that someone made earlier in this comment stream. It’s so true. What Facebook and Microsoft have in common is a tremendous penchant for strategy. They draw boundaries around their turf, draw theoretical boundaries around their opponents turf, and go for the jugular. They practice good strategy, but their fatal flaw is as Yeats said, “The Center cannot hold.”Sooner or later, someone is going to come out with a much better OS than Windows. I know its been 20 years, but it’s going to happen soon. I also question Facebook’s staying power. Will be like AOL in 20 years? I have a feeling it might be.What really makes a great company is CONVICTION. #8 nailed it.

  48. zionaetzion

    Change the world…what a loaded statement.If this is what they are looking for why do they continually fund the same type of projectsand not those that actually go about offering skills for change for as many people as possible.Why do they continue to insist on leaving early after making a killing and not really letting the company build and have strong foundations?There are plenty of great ideas that never reach their potential through lack of adequate funding and lack of focus.

  49. Marie Gibson
  50. Silvia Bassi

    I was preparing to leave to the office when I saw the post. Brilliant and I can’t agree more.On top of that, last week I’ve seen Tony Hsieh talking about great companies and the pursuing of happiness. What a great week!

  51. Pierre Bastien

    Hi Fred, enjoyed your post, and wanted to say you can follow subway alerts for the F’d train (and others) on Twitter: @NYC_F_trains (http://twitter.com/NYC_F_tr….

  52. leahkaiz

    It’s probably been addressed in the comments below but 4) “Great companies don’t look elsewhere for ideas. They develop their ideas internally and are copied by others.” needs a bit of expanding. A great company knows what ideas are coming out of their competitors and knows how to interact and change within their industry so that they are not left behind.And in my opinion the people who work for a company make it great, so treating your employee’s well and creating an environment of dedication and mutual respect and appreciation is a key component to making a company great.But for a quick list, it’s a great start.

  53. Michael B. Aronson

    Fred, I think it would be worth exploring collaboration between Etsy and our portfolio company, Diapers.com (started by PENN Alum and Wharton student) in the baby space.

  54. Daniel Weinreb

    What are some specific examples of companies that meet all of these criteria, especially “high-tech” companies?

  55. josr

    Nice post with very interesting comments!

  56. Mark Essel

    I’m starting to think there are as many answers to the question “What are the top characteristics of great companies” as there are great companies. Of course I’m fascinated by what makes fantastic businesses, and have scratched down some of my favorite traits as well. Great to see some overlap, as I only have my instincts compared to your deeply relevant experience Fred.

  57. John

    What about writing about the processes these great companies to guarantee that the customer is put at the front seat, for instance. In this case the how would be even more interesting than the what. John Wyse

  58. Dan Ilves

    Overall these are good points, but not all hit the mark universally. Changing the world isn’t a relevant top-ten item. Being customer-centric is very much a key point, as is supporting one’s one team members, and empowering them to make decisions! What’s missing from this list, however, is “passsion.”. By living our company values every day — we have short daily meetings throughout our branches to review and discuss these — out of hundreds of companies, TravelStore was recently voted as one of the “Best Places To Work” in LA County by LA Business Journal.

  59. Alex Hammer

    Great companies execute (not just innovate) around curves. They understand the next next thing.The next thing, when executed, is by then the current thing, while the next next thing becomes the next thing.

  60. Josh331

    First of all you’ve got to love the writing of Emeri Gent below! … “professional plaudits of pleasurable promise” I don’ know what that means but it sounds damn poetic!I was just directed to this blog by my friend Jer979 on Facebook but these are some insightful ideas on a 15 minute train ride!I think #10 needs to be #1. If you start with the benefit of the customer in mind first and let that be your guiding vision at every turn, things will work out.

    1. Emeri Gent [Em]

      Deep apologizoments Josh, I did not pick up on your comment until now, and just like Rambo, I am still in the thick of my verbal forest while everyone else has returned to a different channel or thread of civilization to carry on in the chattering city. I do not know what my “pp of pp” comment means either, other than it is poetic and that it is probably an extremely good thing not to be encased in a box called logical parameters.I always find the best response by far is to be left speechless by a comment. There is no emoticon that can substitute the singular act of jaw dropping and wide eyed silence. The single most valuable act of community isn’t to occupy our time in responding, but occupy our time in thinking. I remember once reading Taiichi Ohno just becoming speechless in the way he tackled Toyota as a system and like you, he put the customer first, in reading him, he directed me to “Today and and Tomorrow” a 1926 book by Henry Ford. For many Ford is deemed an ignorant man, but one isn’t made speechless by judgments, but by the things that surprise us. Henry Ford sure surprised me and the emoticon for that kind of surprise I guess, is just pure “white space”. It is after all in that “white space” that thinking can occur (I mean here the single K of dynamic knowledge and certainly not the triple K of highly programmed or conditioned linear mindsets).Pax Tecum[Em]GoAL #04

  61. eran shir

    Good list. However your first point:1) Great companies are constantly innovating and delighting their customers/users with new products and services.Is kind of in contradiction with your previous post about Craigslist being your dream company. Craigslist is a paradox in many respects, but probably with regard to product innovation the most.Perhaps a a 1a) is in order: Great companies don’t fix what’s not broken 🙂

  62. Donna Brewington White

    Fred, what an elegant list…and even more stunning when considering that it was produced in 15 minutes — that’s 90 seconds per idea. I can’t imagine that in the 162 comments prior to mine someone hasn’t already brought this up, but there has to be something about the people that make up the company…something about an environment where people thrive. Okay, my guess is that this could be inherent in the unmitigatedly remarkable company that meets these other criteria, but I’ve seen too many good companies miss their shot at being great because they neglected their internal culture…it’s painful to watch. I’d love to hear how you’d state something along these lines…in 90 seconds. Anyway, Fred, thank you for another pearl. BTW, the book is out when?

    1. Donna Brewington White

      Okay, I see…you’ve already caught flack on the employee element. Where’s the delete button on this thing?

  63. nathanvingoe

    I have been working on a set of core values for our startup, spooky enough, 6 of your list, appear ( within 5 of our cores ) – is it pure plagiaristic to add the other 4 from your list!one thats clear on my list ( different context tho) but would have expected to see on here too…Our team is of paramount importance to the success of KangaReview – You are surrounded by intelligent, committed and friendly folks. Keep it that way, nurture all ideas, don’t dismiss or belittle any idea without giving it consideration. It is everyones role to make this place we work, a place we all want to come back to.Remember its stil draft!! I’m planning for a bigger day, when there is more than 3 of us!! but you get my point!

    1. fredwilson

      Pls feel free to use whatever you like from my list. and I know that I left employees off the list. Not good on my part

  64. Jose Hernandez

    Excellent article.

  65. Gregg Amos

    Excellent list & interesting comments ! It may be a separate post, but I wonder what are the key individual founder, employee and group motivators & characteristics that presage, give rise to the great companies that in time display these characteristics ? A strong urge to change the world ? A quest for perfection ? .. Any good links on ?

  66. sachin

    excellent characteristics of a great company…I agree with all..

  67. hoongyee

    hi fredi am always thinking about what makes a nonprofit organization great and here is my list of ten traits:1. a great nonprofit questions every move it makes by asking “how does this move our mission forward?”2. a great nonprofit builds niche services, never duplicates3. a great nonprofit can scale successfully providing maximum impact with minimal overhead4. a great nonprofit staff uses the pronouns “we and us”5. a great nonprofit leader is a presence but works as an connector, aggregator and curator of creative energy6. a great nonprofit treats everyone as a potential partner7. a great nonprofit hangs out with great people!8. a great nonprofit board loves to succeed together and bring in like spirited folk9. a great nonprofit defines what success means with compelling data that is transparent10. a great nonprofit is a creative consensusa list is a great place to start thinking about how to be even better at what we do.thanks for riding the f train.hoong yee

    1. fredwilson

      That’s a great list. But why should we differentiate between for profits and non profits?

      1. hoongyee

        I don’t see any difference at all. Greatness is its own gene pool. I look forward to philanthropy becoming synonymous with venture capital and vice versa.

        1. fredwilson

          me too

          1. Mike O'Horo

            Mario Morino is the retired founder of what became Legent. After selling to CA, he led the DC-based “netpreneurs” (www.netpreneur.org) community through the first dot-boom in the late ’90s. Since then, he’s been committed to the problems of urban youth, and is engaged in what he calls “venture philanthropy,” which refers to using VC principles to help disadvantaged groups create sustainable sources of income, value and wealth. This is his alternative to simply bestowing grants. You can find him on Facebook. He’s a great and warm man; I’m sure he would be happy to share his concepts with those of you in the philanthropic world.Entrepreneurs, please don’t contact him for investment in commercial ventures. That’s not where his head is now.

          2. fredwilson

            I love it

  68. Mohamed Attahri

    Ten Characteristics of Great Companies

  69. Anthony Bynoe

    Couldn’t have listed it any better. Great post.

  70. Paul

    Good post. Gives a lot to think about.

  71. billbliss

    Great companies also have great leaders who know they must grow and develop more great leaders for the company to continue to grow and prosper – so that the cycle of all you spoke about can continue.

  72. Jeff Slobotski

    Great post! Fred, you constantly amaze me…keep up the great work and congrats on Foursquare!

  73. RJ

    Do you think manufacturers and distributors are utilizing technology to improve their business processes effectively? Or is there a generation chasm that needs to get crossed that holds them back?

  74. Senia

    LOVE IT! Just sent this as a note to our main staff to see how we can be even more of these.

  75. WaterWise Inc.

    Well put. I shall pass this on! Mary

  76. Carol Bradley

    I hope Etsy staff listened. They often put the engineers’ ideas first and customers (sellers) last.

    1. fredwilson

      Have you noticed any change in the past six months?