Building A Company vs Building A Business
Matt Blumberg, CEO of our portfolio company Return Path, wrote an interesting post last week about the differences between building a company and building a business.
I've been an investor and board member of Return Path for over a decade and I've witnessed the company fail with its first product/business and then through a series of acquisitions build a very strong business and company. Matt and his team built the company first then the business, which is backwards, but it worked.
Matt is right that most of our portfolio companies build the product first, then the business, then the company. And building a company is often difficult for founders because they are so focused on the product.
Roelof Botha, a leading VC with Sequoia, once gave me a great piece of advice in helping founders start to focus on company building. He said founders should think of their company as a product and build it and shape it with the same passion and care. I've taken that to heart and passed it on a few times.
No matter how or when you do it, building a company is a required step to sustainability. Positive cash flow is not enough to keep the company independent and solvent. You need a culture, systems, and processes to keep everyone happy and functioning well. That is company building and Matt and his team are among the best I've seen at it.
It seems like in Return Path’s case, they had the luxury to build the company first, because they probably had enough cash to sustain that phase. More in the exception bucket than the rule.But you need to start taking steps in building the company while building the business, e.g. in the areas of company values, culture. These can’t wait. But HR policies, long-term strategy, and investor reporting can be perfected later and over time once you have a track record of business sustainability.
they did not have cash. but they had supportive investors
Good thing to have patient/supportive investors that let you do the right thing.
that’s a big part of what we present to entrepreneurs when we compete for a deal
I agree. Building happens only once you survive.
But how did they manage to acquire 8 companies in 9 years with no cash?
mostly stocka little bit of cash here and there
One way I like to put this is:”Etch one sentence in stone today, with the vision of having that same piece of etched stone sitting atop the entrance to your headquarters 50 years from now.”
that is damn hard
Ya…it does a good job of eliminating buzzwords, features and even products from the discussion.
You have a point there. Even in product centric companies one can see the creation of layers to package the same product through its generations, but at its core the product premise is usually the same. An example is WesternUnion-AT&T-Wireless Networks which while you see a totally new businesses replacing its predecessor, at its core is simple the delivery of a communication channel from point A to point B.
Done. Though it’s not in a stone yet.
50?? … electronics is doubling every 1.5
Thus the challenge. You have to think of what BENEFIT you will deliver your customers, not what feature.
or what your belief is – even better and longer lasting 🙂
The stmt ends up being customer focused…
A good example of this is Nintendo.112 years ago started selling cards games. Look at them now! =)
Perosnally, I’m worried about them. The idea of the console is slowly disappearing. Then what happens to them?
Well if they die after this, they still lasted more than a 100 years, not every company can claim this. But if they still have it, chances are they’ll move forward imho.
This has always seemed to be priority number one for me in the long run (and sort of what investors expect when they want to see where the company could be 5 to 10 years from now and more), one that has to be built alongside the product and business model in order to function long term. What are the ways to build it from the start? Any good advice? I mean, to me building a company is about building culture, ethics, values, and philosophy in a group of people gathered around a product (or service), most of the failures come from this, not being able to scale this way of thinking inside an ever expanding group, how do you go and start with “company” in mind for the future from day one?
It is sustained values and culture even when you’re getting your brains beat in.
Agreed,But in your own opinion and experience, how have you gone off hiring and building a team that makes this possible? Do you rely on tools and services from the get go, or is there more to it? I mean, it always starts with the founders, but values, culture, ethics and company philosophy goes on to be share across all the members of your startup. I’m personally a big believer of passion&learning above qualification and would rather team with passionate B or C level people rather than A level people who’re disconnected from the values (etc.)
I think you nailed it. You need to build it as you are raising your kids. You might jump directions over a hundred times (like they grow up and want to be something different on a daily bases), but as long as the culture, the ethics and values are the same over the period of that going to happen you have a strong company. A company that eventually will have a strong business once it has settled down. I am young, but this is the vision I have for the company I am trying to build slowly. We have tried a few directions and thoughts already, but the mindset has been the same.
Thank you!I think as long as your ethics and values are tied to your company and its life, you’re onto something. A culture is bound to evolve, just like kids =)I think it’s definitely harder and more challenging to think of a startup as steps to build a company (rather than just a functioning business model), but the outcome can potentially be so great in the long run!
I’m curious as to whether you think services such as Jive and Base Camp are very helpful at building culture, ethics, values, and philosophy ?
Sorry, I’m a bit late to the party!Somehow, yes, but at first, you need to have those yourself (as a founder), tools or services like Basecamp, Jive or yammer will only help you let what you’ve installed as a founder, bloom.They have an impact, don’t get me wrong, only if you hire the people that share those values/ethics/philosophy with you.But if you deviate away from your own culture (or the one you want to to breathe into your company), if your ethics, values, and if your philosophy about your business is not tuned to the very first people you work with, no tools or service will help you out.
While it may not be as fun for some of the founders to work on building the company, it is important that they set their core values early. It is much easier to get a team to agree and live by these core values if they are present from day 1. It also helps ensure that you are attracting the people who are the right fit for your company.
Building the company may appear to be “unsexy” but it is just as fulfilling as creating a great product. A great company can also outlast a great product and create a new great product.
May I suggest this modification to your comment? “A great company is defined by its ability to outlast a great product and its ability to foster the development of a long line of great products.”
Which is a good description of HP – or rather, has been, so far; the future remains to be seen. But they more or less did that – “foster the development of a long line of great products” for many decades, earlier.
Takes more time at the beginning to get it right, but simplifies everything in the long run. I like to think building a company is more fun than what people want you to believe.
I completely agree. As a non-technical cofounder, I think it is very exciting to build the company with the right values and to attract the right people. And both Toms above really nailed it — the best companies are built to outlast a great product or at least reinvent and innovate that product to take it to new places not originally possible
So, the Company is the Product.The Product is the Product. The Business is a Product of the former 2 Products.
Can’t have a business without a market.Add market, even early community as the third leg and I’m in.
That makes me think about the Steve Jobs journey.1- He had the vision to spot the nascent home computer market2- He and Woz got down in his garage and built the product3- He floundered at building the company while building up the business4- On his return to Apple he finally Zen mastered how to build the company !
Like this Ray!Turns out that when building a company, thinking about the company is important!Query – do you use the saying ‘ it takes two wings to fly ‘ ? I am using it all the time….And I picked it up from a post here.
market is everything. You either can serve or create.
“Founders should think of their company as a product and build it and shape it with the same passion and care.” May I suggest Steve Jobs did precisely that.
Hewlett and Packard did that too, then Carly Fiorina destroyed the HP Way because she wasn’t schooled in it, and then Mark Hurd trampled all over it. When Leo arrived, there was no sign of it. Not too long ago, Apple bought acres of land in Cupertino that used to belong to HP where Steve Jobs did his first summer internship.
I did not know that, thank you, William, for sharing that insight. I think Walt Disney took that approach – almost a paternal approach to building a company. I think it no accident that Steve Jobs seemed to emulate the approach to business that “Uncle Walt” may have originated so long ago. And no accident either that Jobs became the largest owner of stock in Disney – having twice as many of his billions in Disney than in Apple.
Speaking of HP, coincidentally, I happened to read the book “The HP Way” (great book) written by Dave Packard, just recently, in fact, I finished it just a few days before all the recent hoo-ha at HP started, i.e. around Leo talking of selling the PC division, buying Autonomy, etc., and then being removed by the board. As a former employee of an HP joint venture, and an HP admirer, it was depressing to read all about the ways in HP seems to be going down (over the last few years, from the Fiorina days, not just recently) … A big contrast to the earlier days when Hewlett and Packard were running the company.
Disclosure: I’m probably biased, having worked at Return Path and associated companies for a number of years.I’ve said a number of times over the years that the product that Return path is really trying to build is Return Path itself — Matt’s vision, which I think has spread through the company, isn’t a specific product or service, but rather a company where people are excited about and proud of what they’re doing.When that vision and the effort Matt puts into developing it is paired with the product-specific vision of someone like George, you get a powerful combination.
i dig thatwhile i think the best co’s have a strong product vision, the founders have to want to build an organization as well, because the product is going to change over timeif you have a vision around the company you want to build, the type of people you want to work with etc… it’s a strong way of keeping everyone aligned and working together
I think this is why you see a lot of web development companies (who develop 3rd party websites) who eventually build their own product(s). Whether the egg or chicken comes first in this case doesn’t really matter; Purpose to develop products for others for profit to fund your own ventures or decide later to develop your own products.
Definitely agree. Bringing together the right types of people who want to work on something great is the most basic need.There is no use in trying to recruit hard if a person is not passionate or interested in being part of the greater vision.I don’t want to have to hard sell or convince someone to work on a product. I want people who are so compelled by our culture that they want to be part of it and contribute.Fred’s culture/system/processes statement is so true. We have been experimenting with the right tools for a fast-paced development culture. As much as it seems like HR jargon to create “processes and procedures,” it’s the best thing that we’ve done: the framework that allows us to efficiently create together. Nice post.
exactly. the matt/george pairing is fantastic
This is what is what makes me most excited: the community I hope to cultivate within the company.
In it for the long run huh =)
Of course – aren’t we all? 🙂
I heard something very interesting the other day about the balance sheets of companies and how inaccurate they really are because there is no value put on the people. The true value of a company involves the ability of a team to work together to build a new product, attack a problem, innovate, etc. The better the company and employees are aligned, focused and work together as a well-oiled machine, the more value that is hidden from the balance sheet.
I really enjoyed your thoughts on this topic and would be interested hearing your bigger picture perspective. Largely because many entrepreneurs raising capital, early stage at least, seem to either hear, “that’s a great product, where’s the business model” or “That’s an interesting business, call me when the product is finished.”In terms of the Company aspect, my experience has been that there is an appropriate level infrastructure and planning but when you cross that fine line, too many policies and procedures kill early stage companies.Mark
While it may not be something that as a founder you’re thinking about directly day-to-day in the early stages of building your product / business, you’re sewing the seeds of your company from the beginning. What / who your company is springs from how you think about and look at the world. Granted there are less sexy procedural actions that grow from this, but it’s the genesis.Because 2 of our co-founders came from large company backgrounds with terrible / no corporate culture, we tried to focus on building an environment that we wanted to be a part of from the start. This of course continues to evolve, but it’s become the framework of our company…
I’ve observed in some instances that it is the lack of focus on culture or a poor culture in a previous environment that has inspired some to place so much emphasis on this from the very beginning.
1. KNOW WHO YOU ARE2. COMPANY IS YOU3. PRODUCT IS YOUREST WORK ITSELF OUT.
In a partnership, 1,2,3 is much harder.
I would imagine you’d need a dominant partner, who’s more of the visionary with the other partners understanding the trusting the vision and/or the process of discovery?
In dating, yes, in business, hell no.
Matthew has a point. If you truly believe that the vision guy can see through the maze and has all the answers then perhaps he ought to be followed. If successful everyone will praise the approach and if it fails you’ll be accused of tunnel vision or cultism.Imagine if Apple failed to deliver the product/market? Apple would be sued by its shareholders for following the “false” prophet Steve.
Right, but I know me, and I often know what vision looks like for me. Matt may have a point in general, but I think he is misguessing many aspects of my personality.
You want a different skill-set, but the same mind-share…
Right. And I know that in business, the suggestion given probably wouldn’t work, because we’d either be aggressive agressive or passive-agressive constantly.
to your reply under: Touché. =)
NOT MATTER WHERE VISION COME FROM.MATTER THAT ALL PARTNERS SHARE IT.
Correct. Which means knowing how you work in many different kinds of partnerships.
IF PARTNERS NOT AGREE ON WHO ARE TOGETHER, IT NOT PARTNERSHIP, WILL FAIL.
It would be really fun to do an AVC book (best commentary, etc) and then have a GrimlockNotes on the side to summarize…
EVERY BOOK SHOULD HAVE GRIMLOCK ANNOTATION.
It’s things like this Fake Grimlock =)
Etymology speaking, both terms are interesting…”Business” : something that keeps you busy.”Company” : something that puts people together.
I want to keep good company while I keep busy!
This. Definitely this! (and a bit of fun in the mix!)
Good company will make it fun!
I’m not sure if we’re excited – or if we’re yelling!
funny – when talking shop with other startup people, i tend to explain that as a founder, you need to build 1. a product, 2. a company, and 3. a brandyou’ve covered product/business and company already, but i think “brand” is a strong 3rd branch and it’s not that there isn’t overlap – all three must be considered and developed simultaneously and permeate through the company
Is brand not interchangeable with company in this sense?
if i thought they were, why would i have made the distinction? ;)very separate in my opinion
Would like to hear more about this. When you say “brand” I think of a brand for a particular product, and a brand for a team. Are you talking about both, neither?
brand is the thing that connects the company to the product and the product to the user
Technically, splitting hairs here, brands are only for products that are purchased with no human contact between the consumer and the company ( think Campbell’s soup ).Reputation is what a B2B company builds ( spitting hairs again ).What is interesting is that you need all three, but I would argue that the order can be varied, based on the opportunity.
Mhhh not sure I agree with you here,somehow, a brand, a company and in some case the product are closely connected and act as a whole, not as a possible contact based on what type of customer you have.What makes Apple, Apple, is its products, its brand but most importantly its people.
Products have brands. Companies and people have reputations.Alignment makes the company very effective. The very first job I ever had taught me a lot, but most importantly, it taught me that I would hate working somewhere where I was personally out of alignment with the culture and people.Oh, and it is still the best managed company I have ever spent any reasonable amount of time around. I just didn’t fit.
Culture is brand. where’s the heck is JLM?
Hi James — I don’t want to be the one to argue this since I am not a professional marketer. But this description of “brand” seems pretty narrow to me, and the use of “reputation” seems too all encompassing.
I second this 🙂
It is narrow. But it is also historically and intellectually accurate. People like to stretch words like strategy, brand and synergy into all kinds of weird concepts.That does not mean it is right or true. Why do you think intellectually rigorous cats like Fred & Brad Feld get so frustrated with marketing hacks – they are always playing with words.Brands are not reputations. Animate objects don’t have a brand. Mountain lions don’t have a brand, they have a reputation as the world’s fiercest land born predator.A brand is, by definition, an anthropomorphic concept – it adds human traits to something that does not have them.A company has human traits – it has humans! So, X Corp has a reputation for building great stuff, treating customers like dirt and churning employees – that’s not a brand.A brand, properly constituted, focuses not a series of anthropomorphic traits, but a single attribute that is then driven into a position of emotional importance by effective, evocative communications.Is Tiger Woods a brand? Actually no, He has ( Ok had ) a reputation for excellence and branded goods paid big big dough to associate his reputation to their brand. Endorsements are the easiest method to evoke emotions around your brand position……..Just Do It is pretty powerfully reinforced when someone is doing something amazing.But it does not give Tiger a brand. And Nike Inc has a reputation, as a fantastic branded goods marketer.
Don’t agree with you at all — Brand is stretched into a weird concept bc brand is a weird concept – brand by it’s very nature is a perception intentionally constructed through the use of media – Digital has impacted the very nature of brand (as it has so many things) which makes the notion of a singular focused brand promise irrelevant. Customer experience has become the marketing [email protected]:twitter and @bfeld:twitter may be frustrated by marketing hacks but that doesn’t make them right on the subject of brand.It also doesn’t mean there aren’t a lot of marketing hacks.
Vision and gut belief in what you are trying to do is one thing…and core.I believe that culture and brand are connected and in many cases really don’t have granularity until you connect with your early community and customers.This is one reason why I think that marketing or better, thinking about your market, needs to become part of product and company DNA early on.And a strong reason why in almost every case, a community manager as the connector to enthusiasts, alpha/beta users is a very early hire and core team member.
I see myself, founder and product person, as this role – to cultivate community / be lead customer support. Is that not usually the case?
Not always. In the best yes but great developers are not always great at understanding, encouraging and leading their community.Whenever market is an afterthought, that gene is missing.
“…culture and brand are connected …”One of the saddest things I see is when there is dissonance between the culture and the brand. The company Cranium, led by Richard Tait (before the Hasbro acquisition), was one where I witnessed what seemed to be an almost seamless culture and brand. Was freaking brilliant. Sure, it was easier to pull that off as an entertainment products company. Although, interestingly, the co-founders came out of Microsoft and the company had a tech startup feel to it. Interestingly, from what I observed, they did exactly what you prescribe here in terms of connecting with the early community and customers and very quickly took market share.They also built brand and product side-by-side. Is that unusual?
Thanks for the story. Real life examples always bring home the point.Per your question. No not that unusual but there really aren’t any norms, just a handful of best practices to guide us and to be adapted to each situation.
ha – was scrolling down the comments waiting for you to jump on the brand or JLM to jump on culture – you came up first- now gonna continue the scroll down….
Building a great company, if it’s anything it is building a strong team of the right people. It’s great to see that Matt has finally been able to do this at Return Path. As the pace of innovation accelerates, NYC internet companies should be able to do this in less than 10 years.I believe there is deeper learning from the guys on the West coast, like Roelof and others. They really seem to get the value of getting the right people on the team right from the start. They bring in the experts to help build a great exec team & company. In fact, the top west coast VC’s see this as such an important function that they have a Human Capital partner or team dedicated to quickly exhausting their internal networks for top talent and then partnering with the right search firms to build the team quickly without sacrificing professional thoroughness. Moreover, they often help with executive coaching and pair CEO / Founders with guys who can coach them like Bill Campbell. The high-level of activity in NYC over the past 24 months has created great positive movement towards this end and away from the parochial view of DIY recruiting at the CEO & VC level. More liquidity in the labor market for top performing talent accelerates the pace of innovation and value creation.
we have all of that in NYC too DaveUSV has Gary Chou who helps our companies recruit and much moreand Jerry Colonna is the Bill Campbell of NYC
Gary & Jerry = Sparks of brilliance in a burgeoning NYC ecosystem that is building momentum. The work they can do in conjunction with other successful entrepreneurs to coach, mentor and help first-time CEO’s and early entrepreneurs become leaders is what will build the kind of foundational infrastructure for startups to be more successful sooner. Surely, the recent inflows of VC & Angel funds to the NYC ecosystem are also important. Moving fast to build strong exec teams with leadership capabilities around disruptive businesses is perhaps the best allocation of resources especially for startups and is what will create the kind of lasting value that enrichens our NYC ecosystem with great companies.
I’ve been inspired by the firms building those internal HC/talent teams in support of their portfolio and even have a Partner focused on this. Sends a strong message.Just as inspiring/encouraging to hear about the coaching/mentoring pairing.VCs have such a huge opportunity to make a difference in a founder’s success well beyond funding. Fred’s example of this is one of the reasons I landed at AVC.Is this type of support a growing trend, or am I recently noticing something that has been happening all along?
As you start a new venture/start-up with an idea and/or a prototype, you need to hire folks that can make the product great and share your vision. As the founder, it is your role to define the culture you want and have it trickle down. You’ve got to check your ego out and trust the team that works for you. The real challenge is to find, hire and keep that team, from accounting to product development.
I presume, most of your portfolio companies are founded by ppl who think like engineers. There are very few people who think like MBAs. Thanks for the article.
One of the best quotes I have heard on this topic is from Robert Kiyosaki: “You only truly have a company if you can walk away for a year and come back and the business is bigger then when you left.” After I heard that I knew I needed to build a company with self-growing systems.
That is a tall order.
I agree, but if you did create something like this, would you not be amazed with yourself. I am guessing no-one ever really walks away for a year but the concept in your mind gets you to focus on building a company not just a product.
Not understanding how to make these transitions is the downfall of so many startup CEOs.Jack Dorsey strikes me as someone who didn’t know how to shift from product to business at first.Now you watch what he’s accomplished at Square, and it’s clear he has learned how to do all three.
You just have to be “crazy”/passionate about an idea at first and the rest will evolve if your base idea comes into a functioning product with potential. Steve Jobs follows a similar sequence.This process reminds me of the quote I read on Ben Horowitz’ blog last night,”There’s no sense in being precise when you don’t even know what you’re talking about.” – John Von NeumannThe other good one that made me smile there,”Just win baby.” – Al Davis
Not to totally disagree, but I think you can be crazy passionate about product and be really good at it…and not have a clue how to build that into a real business.If you’ve got even a few skills surrounding that, or have good people surrounding you, you’re right that it may just come. But I wouldn’t bet on it. There’s a skill set there that you have to learn.
Indeed, if you don’t have any idea how to go about guiding or getting the help you know you need to turn it into a real business, then you’ll be in trouble.For example, I know there’s lots I don’t know – but I know people at AVC have plenty of experience and have learned lots from them; There will always be more to learn, your whole life. 🙂
Evolving is painful. It involves a lot if unknown unknowns.The opposite of Von Neumann’s really good advice……….’ you better have what you need to do right now [email protected]&king taped partner ‘ JamesHRHA startup that is building a new solution or solution category has to define winning first. Most startups fall into this category, making Al’s advice irrelevant.Of the three common types of startup founders ( tool maker, experience builder, efficiency wizard ) only one is classic ‘winner personality’ – the Dellzos efficeincy kings.
to understand @jack in his role as CEO of Twitter, you have to understand that the Chairman was @ev who controlled the company by virtue of being the majority stockholder.
That’s interesting. Obviously there was drama there but from the outside, it seemed like the board did the tough job of making sure the right people were in the right jobs at the right time.
So on company – why doesn’t positive cash flow for a SMB be it? I’ve seen companies be sustainable even without the investment in company culture (rare, but it happens).With precious time, which would you choose first?
I think that more important than all of those aspects or stages of business development, there should be a set of core values that make the company authentic, the only thing which can keep it together in the long run.It could be synthesised in one simple question:What does your product/business/company stand for?Steve was contradictory about this tenet in the last 5 years, but he did know it better than anyone in his prime, the man at his finest that I used to greatly admire.http://www.youtube.com/watc…
strategy should shape structure.
counterexample:What’s Google’s strategy and structure like exactly?
a couple of examples of what i consider strategy (picking what not to do, e.g. having a primary customer and focusing 100% on them):1) “Focus on the user and all else will follow.”2) “It’s best to do one thing really, really well.”from:http://www.google.com/intl/…their org chart would show the structure. and this structure dictates how resources flow.
Those are some core values stemming from the Google vision and mission. Strategy is far more than that, it includes process and how to tackle complex problems.My point is Google seems o be a rare company that doesn’t have one single strategy, the only recognisable thing you can call a strategy would be on a per product basis.Which is the same as saying Google does not have one single company-wide strategy.
Those are some core values stemming from the Google vision and mission.they answer strategic questions such as: who is your primary customer?, and what strategic boundaries have been set?Strategy is far more than that, it includes process and how to tackle complex problems.and strategy is also far more than that, it includes things like core value prioritization, picking the most critical performance variables, how creative tension is created, amongst other things. and at each point it’s about making tough decisions, deciding what not to do. this allows effective alignment.i consider process tactical. you’ve got to decide what’s most important before creating processes, otherwise you’ll end up allocating resources to unimportant tasks.and the same with how to tackle complex problems — tactical. the strategic question to my mind is: which complex problems should we be focusing on?.My point is Google seems o be a rare company that doesn’t have one single strategy, the only recognisable thing you can call a strategy would be on a per product basis.yes, each product devision has it’s own primary customers, stakeholders etc and allocates it’s resources accordingly.these devisions are shown on the org chart eg:http://www.ge.com/pdf/compa… Which is the same as saying Google does not have one single company-wide strategy.i didn’t say that. i said strategy should shape structure
Reading the convo between you and @vruz:disqus is strangely making me think of Christmas. Interesting thread, BTW.
A company is a form of business organizationthis is what i get from wiki. but i have accompanied many businesses. SJE
company = people focus.Larry Bossidy, business practitioner, says it best that you should focus 40% of your time as CEO on the people process when building a company, and 20% once you stabilize… not formal reviews, but walking around, personally developing and coaching and learning from your employees and managers. Matt’s comments reflect this…It’s interesting how Bossidy lays out this process… he meets with the head of a functional area, meets with all their employees, takes the staff through a 30 minute preso on where the company is, takes questions for 30 minutes (from the questions he knows whether it is an open community), sits down with the functional head to agree on some things moving forward, writes a follow up letter confirming the agreements, and a personal thank you note to thank the functional head for the honest dialogue. This is Bossidy’s modus operandi… he does it 2 to 3 times a year for 35 to 40 functional areas.When Bossidy’s hiring, he’s looking for people who are absolutely determined to succeed even at the expense of pedigree and a lower IQ. He’d take Podunk state over Harvard if the Harvard grad was gliding along, and the other got things done come hell or high water.Bossidy describes culture as simply the exchange of values and beliefs… Bossidy values coaching and developing his subordinates…shit, you’re damn right I’m do that as well without him saying a word… and once you develop a core group of believers with smart values and beliefs, Bossidy advocates cross-functional meetings to further engrain the culture… he uses cross-functional meetings to direct what he calls the annual “people review”, “strategy review”, and “operations review”…yeah, my head is spinning too, but it’s all important shit… and you’ve got to have “culture, systems, and processes” to build a “company” as Fred mentioned. And the best way to learn is from people who are the best at it (like Bossidy and Matt). Bossidy ran Honeywell International for 15 years and beat Wallstreet expectations every single year by focusing on this. I know, he’s not an entrepreneur, but sometimes we can learn a lot from other industries.
Sounds a bit like you’re preaching for the man but i’m digging it!Do you have any links or book recommendations on this?
haha… yeah, I do the preaching thing sometimes. The book is “Execution; the discipline of getting things done.” I came across it after asking a fortune 1000 CEO who had just finished turning around an Enron-esque company from destined bankruptcy, what the most influential book he had read (in a note). He sent me back an email with 13 words… “execution by larry bossidy is one of the best books I’ve ever read”
Thank you, I’ll look into it =)
Jack Welch – 90% of a CEO’s time should be spent on people. He put up some #s too!
well said! Bossidy actually learned under Jack Welch… he worked at GE for 35 years…some say he was better than Jack… either way, they both created performance cultures and processes.
This distinction is why Apple is poised for long term success and MS is a floundering mess.Marc Andreesen spoke @ length on Charlie Rose about Steve Jobs focus on the company, not just the business, in the last 15 years.Talk to anyone near or @ MS and all you here is that the focus is solely quarterly business metrics….
I’m kind of biased here because i’m a bit (a bit) of an MS fanboy lately and the more I see, the more I think they’ve got that attitude out of the company. It may well still be a mess inside with the wrong objectives, but there seems to be light heading their way…
I have personally been chatting with a number ex MS folks this year, so that is the feedback I have received. They left, and that may be shading their comments.And, to support your comments on product turnaround, my co-founder reports that the Metro apps sessions @ Build were very slick……
Agree with the MSFT resurgence. Mango and 8 seemed to bee from a different co.
ME, GRIMLOCK, SUSPICIOUS WINDOWS 8 JUST NICE PAINT ON SAME BROKEN MANAGEMENT STRUCTURE AND LACK OF LEADERSHIP.
Steve Jobs on the Apple brand:http://www.youtube.com/watc…what do we stand for?core value: people with passion can change the world for the better.that my friend – is brand –
i’d suggest it’s best to remember what keeps you competitive and focus on that. the company is then structurelised/formed to a lesser or greater degree.
Personally, syncing all three of these is far harder than most people give it credit for. The human equation in a group setting is so complex and changing all the time.Focus on the right things, versus having to do everything perfectly right. Creating and sustaining the oxygen of the business. Manifesting/Becoming an organization with a spirit, a velocity and a sustained approach to engaging a market. Think about it. How many companies do you come to deeply respect as a company and a business through the way that you experience their products?For me, it’s like Apple, Amazon and Cheesecake Factory (and Peet’s Coffee).
One of the greatest benefits that I have with my start up is that I have had the opportunity of “being part of” and also “outside of”The company is the product. When you build a company that makes tee shirts, you are in a commodity business and you become so focused on creating and growing that you really have no time to look around and wonder the why of your success; especially in a market with lots of competitors.I mean lets be honest, we made tee shirts, which isn’t rocket science and we were not cheap.Now I find myself working with people who were our customers and it never fails that I do not find myself being “educated” about what made us different.Its people. Its always quality, which is people, service, which is people, and partnering, which is people. Build your company first, right along with your product, because at the end of the day its the people of your company that will make your business and your product.The key to people is not money, because our success was people, and we are an industry with low pay, hard work, and minimum skills. You have to let people know you care, and that they are important. Our biggest draw as an employer was our daycare and our health insurance; they solved problems for the employees so that when the employee came to work they could in fact focus on the work….If you want to create a customer experience, then you have to create an employee experience because it is your employees who in fact are the backbone of the customer experience.I never can remember my wife’s birthday or our anniversary, but I made sure that I always remembered an employees birthday, and the anniversary of their employment. Gives bonuses? Then hand them out personally. Ever try celebrating “Administrative Assistant’s day” when you have over 150 office employees by buying individualized gifts for each and every one of them?Do it, it pays dividends; great products come and go, great companies have a way of lasting forever!
with this approach the question is what if you have a wrong product in the market.i think this should be applicable when the product find its place where it was intended to serve the need.All business are conducted better in a good business environment which include systems and process rather than where there is none. John Mwangakala
I will like to say here that both business,products and company are functions that relate to wealth creation through ones knowledge and ability to see things done accurately in a proper manner.some people cannot do all this together, while it is cheap/easy to some people who have the ability to bring it to conclusion.Austin Imevbore-Onime
I’ve just been through the entire set of comments and I am a bit confused about all the discussion around product, business, company, brand, reputation, market and the rest. I’ve never started my own company but it’s got to be simpler than that. At lest, conceptually simpler. Translating those concepts into clear actions can be very difficult – otherwise success would be easy and we would all be there! – but the concepts should be crystal clear.I do agree that having the right people is everything. If you help people – particularly smart, driven people – understand a) who you are; b) what you do and c) why you do it, chances are, they will follow – or, at the very least, help you along the way. Both employees/partners as well as customer. To me, in my simple mind, that is how you build anything!
IT SIMPLE.DECIDE WHO ARE, WHAT STAND FOR, WHAT DOING.IF PICK RIGHT ANSWERS, REST HAPPEN ON OWN.IF NOT, TRY AGAIN.
my best friend’s mom makes $77 an hour on the computer. She has been out of job for 9 months but last month her check was $7487 just working on the computer for a few hours. Read about it here CashSharp.com
Building companies take a lot of hard work and for the most sturdy a lot of time to build. I like to think of companies like trees….some of the harder woods take longer to grow. Some may grow fast but are soft and can topple easy. Some are small and remain small. And some are simply like the giant sequoia. It takes all kinds.
With the news today about AOL trying to merge with Yahoo, we are not sure whether companies, businesses or products are merging. Coming to think about it, is IBM a proven company to date.
On the ball today Charlie. :)A company’s principles being the guide also provides a framework for focus – otherwise there are nearly infinite possibilities and you’ll get lost and spread yourself thin – and not only resources but spread the attention of your visitors/users/customers (dilute).I just want to throw in here that businesses/products should be fundamentally about people too – providing useful tool or service, educating them/helping them along, making their life easier, etc.. and not just for one specific purpose but being aware of how it will influence / affect the rest of their life (holistic-view).
May I reblog this?
Alignment is a big word. Its the heart of any high performing organization.’companies are fundamentally about people’: totally agree.As does Peter Drucker ~ ‘ the purpose of ANY ORGANIZATION is to attract & retain customers, although the people that fill the customer role may have a wide variety of names.’
Charlie, great reply. On the business/product side, can you mention the products and industries that you ‘would’ work on today?
I know you are kidding here, but early on in a startup, I don’t think that is a bad method.You need co-founders, investors, exec/staff, alpha/beta groups, etc……. Attracting them is key, but retaining them is not always top of mind in startup land.It helps you think short & long term before acting.It is a fundamental piece of our company building philosophy.
Sorry – my bad on the kidding.To clear up the Drucker ‘customer names’ issue: he meant you might call them donors, congregants, party members, volunteers, etc.On the employee front, respectfully, I disagree.Employee performance is what attracts & retains customers. Retaining and pleasing employees can lead a company to put their employees happiness first – and that is deadly.In Calgary, we have an amazing startup success called WestJet Airlines. From 1996 to about 2002 they were one of 3 profitable airlines in NA ( Southwest was one of the others & not surprisingly, they were modeled on Southwest as so many now profitable airlines ares today ).WestJet did exactly what I have laid out – they put employees ahead of customers. I was a ridiculous advocate of the airline – they had transparent pricing, rolled back on time over 96% of the time & and treated you great.Then, in 2002 after a disappointing business trip, I stood in line, while my departure time rolled by, and watched three gate employees celebrate the airlines 9th anniversary of service to the market I was leaving ( late, for no reason other than employee happiness ). It’s been downhill from there and the airline is still good, but not the laser focused customer machine it was before. It is a bit like every other airline now.I believe that leadership requires the management of tension. Not everybody gets what they want, when they want. Sometimes one group needs to be favored for the long term benefit of the whole. And sometimes a great employee needs to go, if they will not put customers first.One of my business bibles – The 500 Year Delta – starts with a great allegory on this topic. About a female sales person who has a huge piece of new business locked up and demands preferential comp ( or she will walk the deal ). I won’t ruin it – it’s worth reading.Bottom line, tension holds things together.