My colleagues and I are asked all the time for recommendations for coaches, mostly for the founders and CEOs we work with, but often for others on the senior team. I am a huge fan of coaches. I think they can be game changing for leaders and their teams.
I always ask a bunch of questions to find out what kind of coach someone wants before making suggestions.
A key question is whether you want answers or questions from your coach.
I’ve spent a large portion of my career investing in early-stage companies. Part of that job is to advise and counsel, to assist a company in reaching its potential. I try to ask for feedback on how I am doing in that job. A constant thing I hear is to provide more direct answers to problems posed to me. Typically, I am told, I answer their questions with further questions.
Yet, I think it’s important to tolerate ambiguity. Maybe there isn’t a direct answer. Maybe I don’t know the answer. Maybe I want to assist others in coming up with their own answers.
I have to confess that I am more of a “why don’t you try this?” sort of advisor.
Andy is more of a “why do you want to do that?” sort of advisor.
Both can be very valuable but it really depends on what you want/need in an advisor. Getting answers when you want questions can be frustrating. Getting questions when you want answers can be equally frustrating.
So think about what it is you want from a coach before going out and finding one. Getting the fit right is important.
Martin Luther King Jr. was a man of words. He used them to inspire, to rally, and to ultimately bring change. The change he brought is the reason we remember him on this day every year.
Many of his words are broadly applicable, well beyond the worlds he occupied.
This quote strikes a nerve for me as we work with many founders and leaders:
A genuine leader is not a searcher for consensus but a molder of consensus.
Martin Luther King Jr.
Leading is knowing where you want to go and working to get others to want to go there too. That could be your team, your board and investors, your customers, or the entire world.
Molding is the word I like most in that quote. It describes the work of leading correctly. You can’t will people to follow you. You can’t expect people to follow you. You need to work to get them there.
I’ve written about these two related but different topics before but I’ve been doing a lot of board meetings as we kick off 2019 and I am reminded of how important both are.
At the end of every board meeting, the board should meet alone with the CEO in an executive session, followed by a session without the CEO, followed by a session where at least one director, but possibly all of the directors, meet again with the CEO.
This requires a fair bit of time to do right. These three back to back sessions will easily take thirty minutes to do right and could take as much as an hour.
When a board meeting goes three or four hours, it is tempting to wrap when everyone has “hard stops” and punt on these executive sessions.
But that would be a big mistake.
CEOs need to know where the board stands on the meeting, the big issues, the team, the strategy, and most importantly the performance of the CEO. And CEOs need to know that in real time and all the time.
The big problems that I have run into with companies over the years often have to do with misalignment between a management team and the board, and most acutely misalignment between a CEO and the board.
A process by which the CEO gets real time, regular, in person feedback from the board will alleviate many of these issues. These can be hard conversations and they can be difficult for the CEO to understand and process. None of this is easy stuff. But when people know where they stand and can react to it, things go better. It is when people don’t know where they stand and are grasping for straws when things go most badly off the rails.
The executive session/feedback process is also used by audit committees to manage the relationships between the board, CFO, and external auditors. I have found that they are incredibly important in that setting too.
If you aren’t doing executive sessions with your board, start doing them. And if you do them, but you skimp on them frequently due to time issues, shorten your board meetings and protect your executive session time. These sessions need to come last and that makes protecting them challenging but I believe a board meeting without an executive session is a bad board meeting.
I guess I was the only one who reacted that way given the amount of abuse and vitriol that has been thrown at him on and off Twitter for that tweetstorm.
I understand the frustration that users feel about the things that don’t work right on Twitter, particularly the abuse and hate and the other unpleasant stuff that the Twitter platform attracts, including our horrible President and his nonsense.
I also understand that the country Jack visited and made a number of positive comments about, including suggesting that others visit there, is a place where the government and military has done all sorts of bad things, including genocide.
Certainly the comments that Jack’s tweetstorm was “tone deaf” are accurate.
But I would like to take the other side of the argument here and make a few important points.
Say what you want about Jack Dorsey, he came up with the ideas for two hugely impactful products that I use every day and many others do too. Those products are Twitter and Square.
Not only did he come up with the ideas for those products, he has breathed life into them with his work and his passion and they are two of the best products brought to market by the tech sector in the last decade.
Jack is not a conventional CEO. He does “run” two companies. But he has very strong teams who operate both companies underneath his leadership.
And since he came back to Twitter full time in the summer of 2015, Twitter has slowly but surely addressed much of what was ailing it. The stock has doubled in the last 18 months and user growth has stabilized. And, most importantly, the company is addressing many of the most troubling aspects of the service, certainly not as quickly as its critics would like, but the service is undeniably dealing with the abuse issues more seriously than it has in the past.
Square is a company that Jack has run since day one. And as Jack tweeted out the other day, the Square cash app is doing great.
And here is Square’s stock price since going public:
Even with the recent pullback, Square is up 5x since its IPO in late 2015.
So, it’s not like Jack hasn’t been doing his job. He is leading not one, but two companies, and from the outside, I would argue that he is doing a pretty solid job at that.
I am not on the inside at either Twitter or Square, so I don’t really know how things are going at these companies, but from where I sit, I would say he’s doing well.
So, with all of that backdrop, I want to make a point about the toll leadership takes on someone and the need for self care, particularly in high stress jobs like running public companies.
Leadership is a burden. You are the one everyone looks to for inspiration and direction. The things that land on your desk are the things that nobody else wanted to or could deal with. Leadership is lonely, stressful, and takes a toll on people.
Just take a look at the faces of every President on the day they took the job and the day they left the job. You will see the burden and toll of leadership right there.
And so, it is very important for leaders to take care of themselves. That can take many forms, but here are some things that I recommend to the leaders I work with (in no particular order):
Working On Your Marriage
Spending Quality Time With Your Family
And yet, for some reason, we criticize our leaders for doing these things. Like taking a vacation, or doing a workout, or going on a meditation retreat is some abandonment of their duties.
I think it is exactly the opposite. It is their duty to take care of themselves. Because if they don’t take care of themselves, they can’t take care of their companies and all the stakeholders who rely on them.
I am glad Jack went on a meditation retreat. I am glad he is taking care of himself. I understand why that tweetstorm was tone deaf, but let’s not get carried away here. Leaders are humans too. Let’s be decent humans to them.
Disclosure: My wife and I own shares in Twitter and I was on Twitter’s board a decade ago.
As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.
I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve.
After considering all of these factors, I met with Tesla’s Board of Directors yesterday and let them know that I believe the better path is for Tesla to remain public. The Board indicated that they agree.
So which is it?
I strongly believe that being public is the best form of shareholder ownership for the vast majority of companies and advocate for that path to the companies in the USV portfolio that have the opportunity to be a public company.
The pressure of quarter to quarter execution is hard on a team. But running a company is hard. And the accountability that comes from this quarterly reporting is a good thing too. If you have problems in your business, you can’t hide them. You have to come clean about them, deal with the implications of them, and fix them.
The long-term vs short-term thing is the critique I hear most often. But I don’t buy it. The best run public companies manage to think and act with a long-term focus while being public. I think it comes down to leadership, courage, and foresight more than whether you are public or not.
Stock price volatility is a factor no matter if you are public or not. At least when you are public, everyone knows when your valuation is going down. Private companies are able to hide that from their employees, the media, and others. Which is just kicking the can down the road and that always ends badly. I prefer the transparency of being public on this one.
And the short seller argument is nonsense. People are always working against you. Your competitors are working against you. The media may be working against you. The regulators may be working against you. Short sellers are just another group that wants to see you fail. But they are not the only ones and you can make them pay by executing against your commitments and guidance.
For me, it just comes down to leadership, courage, execution, and setting and meeting expectations. All good companies must have those in place. If you do, being public is not only manageable but preferable.
And I am pleased to see more and more high growth tech companies coming to this conclusion and taking the plunge.
I’ve been chairing a $40 million capital campaign for NYC’s CS4All effort to bring computer science education to every school and every student in the nation’s largest school district.
We are just into year four of the ten-year CS4All effort and we are also into year four of the capital campaign.
The good news is I can see the light at the end of the tunnel. Depending on whether you count “soft circles” or not, I think we have about $10 million left to raise.
We started out with a bang, announcing $11.5mm in contributions, including those of my wife and me, at the start of the effort.
Year one went well, with another roughly eight million raised.
Year two was a struggle and year three started out similarly. We made some changes to our team and strategy and message and the second half of year three was much better and we are entering year four with great momentum.
I have learned a lot about running a capital campaign or any sort of large and long fundraising effort and I thought I would share some of the big lessons:
1/ You have to be patient. It is a marathon, not a sprint. No matter how much you want it to go quickly, it won’t.
2/ Cultivation is the name of the game. You have to work the top prospects slowly and carefully and patiently. Most eventually come through but you need to invest a lot of time and effort without any certainty of closure. I found this particularly hard as I always want to be investing my time where it is going to pay off.
3/ You need people around you who are experienced fundraisers. There is an art AND a science to qualifying, presenting, and following up that the best people in the fundraising business understand and bring to their work. Without that, you are going to flounder.
4/ Communicating and engaging your donors is critical. I thought a donor would write one check and be done. It turns out many donors like to start small and grow their committment over time as they see progress and get comfortable with the effort.
It turns out that raising a big sum of money is like a lot of other things in business and life. Slow and steady is a virtue, great people make all of the difference, your best prospects are the people you have already closed, and frequent communication fixes a lot of problems.
I think all of these lessons I have learned in the last three years are applicable to raising capital for your business. Fundraising is a process not a campaign and it needs to be part of a CEO’s daily cadence and calendar.
You are never not raising money when you are running a company or any sort of business endeavor that requires capital, which is basically everything.
I am not reading Bad Blood, the book about Theranos, but many of my friends and colleagues are.
One of the many “tells” that Theranos was not a good company was the board chock full of trophy board members.
A “trophy” board member is someone with a big name who, in theory, brings credibility and connections to your company. They are often out of the world of politics, or a Fortune 500 CEO job, or Wall Street.
I dislike trophy board members and advise our portfolio companies to avoid them. But they don’t always take our advice.
One good example is Lending Club, a very good company run by a very good entrepreneur, who got thrown under the bus, in my view, by his trophy board.
USV is an investor in that entrepreneur’s new company which says all you need to know about where we come out on that one.
Trophy board members are more concerned about their reputations than your company and will often react badly in times of crisis and challenge, which is exactly when you need your board members at your side more than ever.
Trophy board members often miss board meetings, show up unprepared, and frequently don’t take the time and effort to truly understand your business.
I am a huge fan of independent directors to complement the founders and investors on a board. The quality of the board is highest when there are more independents on it than investors and founders. Try to get that ratio right on your board as soon as practical.
But don’t put “names” on your board. Put operators, ideally very seasoned operators, who have done everything you want to do, ideally multiple times, and can help you spot the issues before they become problems and spot the opportunities with enough time to go after them.
These ideal board members are often not big names and they usually don’t have big egos. They are solid, steady, and worth their weight in gold. They come in male and female varieties and across the racial and ethnic spectrum too. It is true that it takes a bit more work to build a diverse board of operationally focused board members but it is worth it.
But whatever you do, stay away from trophy board members. They rarely help and often hurt.
We spent the last week getting a project we’ve been working on for two years over the finish line.
I find that the last 10% is so much harder than the first 90% of any project.
That is true whether it is software, an event, a construction project, or really anything that requires a lot of planning and then a lot of execution.
I also find that you have to have a “ship it” mentality and be willing to make hard decisions at the end in order to meet the “ship date.”
One time I asked a bunch of founders and CEOs whether they insisted that their teams meet “ship dates” and the answers were all over the map, but the ones I liked best were of the variety that ship dates are respected and met but features get pulled to meet them.
Pulling features is an example of the mess that happens at the end as you are trying to get something out the door.
I’ve also found that knowing that there will be bugs to get cleaned up and “punch list items” to be resolved is helpful to getting something out the door.
Perfection is not just the enemy of the good, it is the enemy of the ship date.
That is not to say that critical bugs (security, performance, etc) can be ignored in the effort to ship on time, but there are always clean up items to be dealt with after the fact.
Hitting dates is so important. And it takes someone, often more than one person, with the willpower and commitment, to get it done.
The Gotham Gal and I got to see Patty McCord give a talk a few months ago and I was blown away by her pragmatic, no-nonsense, calling out bullshit approach to managing people. Patty helped Netflix build their culture and left about six years ago to advise companies, small and large, how to manage people better.
She’s a breath of fresh air in a world of corporate speak. I think you’ll enjoy her as much as I do.
The best companies I work with have a heartbeat, they operate on a pace and a cadence and a rhythm that is perceptible to everyone in and around the company.
I am not talking about just product and engineering, although you can’t have a company with a heartbeat if you don’t have it in product and engineering. A company that doesn’t ship product regularly builds clogged arteries and that becomes pervasive in the culture and you end up with low morale, a lack of confidence, a revolving door, and a mess.
There are many ways to get this beat going and sustain it. There are techniques like agile product development, monthly and quarterly OKRs, weekly show and tells at the all-hands meeting, metrics meetings, etc, etc.
What it comes down to in my view is a mindset around getting stuff done on a regular cadence and then letting that rhythm become a wave and riding that wave.
And it starts with the CEO. They are the drummer in the band. They set the beat and keep the beat. And everyone plays around it.
If you have been in a company that has a heartbeat, you know what I am talking about.
If you haven’t, then you need to find one and join it and learn how it feels.
Becuase a heartbeat is what you want in your company.