Startups Lessons: Product First

I have covered a couple of topics in this series, the first being hiring the best people and the second organizing for success based on the attributes of the people you are hiring.

Today I want to go into territory less obvious because let’s face it, hiring the best people and creating conditions where they can succeed is the kind of startup advice that is squarely in the “stating the obvious” category. This next one is also obvious but has so much nuance that it deserves attention.

3) It all starts with the product: Companies can overcome a great many challenges with band-aids, duct tape, and bailing wire. but one aspect of a startup and/or growth stage company that cannot be glossed over is the product. It all starts with the product. Marketing and sales will be amplified with the right product or victimized by the product that falls short, and not investment outside of product will overcome that reality.

Putting forward the right product for the market is absolutely key, but don’t confuse that with putting forward the BEST product. Ultimately you need to achieve best in class but if you try to achieve that in the first iteration you will be hopelessly late. and more on point is that the best product is a result of what you learn from your customers, not what you think you should be doing.

If we did anything egregiously wrong at Get Satisfaction in the 2010-1012 time period it was to under-invest in the product with the assumption that the existing product was good enough. The early architecture conditions created what engineers called “technical debt” and that effectively became weaponized to stall significant investment in fixing the old in order to build the future. Compounding the problem is that we became victim of agile engineering in a poorly structured development organization where there were no clear teams focused on building to the user archetypes and investing in the platform.. engineers paired would jump from frontend to backend erratically at each sprint iteration.

We failed to accommodate the changing demands that are a result of market, competitive and customer dynamics, all of which conspire to put you at a competitive disadvantage when you don’t have a market footprint that legitimately reclassifies you as a platform instead of just a product. Feature development is a result of the demands of the biggest customers with the loudest voices, the platform evolves at the rate which new customer features are required, not anticipated mind you, and lastly the API development is focused on what internal developers require rather than what the partner ecosystem is asking for.

In the absence of an org structure that creates a constructive tension between the product management and product engineering sides of the house engineers will work on things that are interesting to engineers but fail to advance the business. This is where we really erred in our approach, engineering and product management all report up to the CTO, and the company fundamentally underinvested in product management as a functional area.

In all fairness, the fact that the underlying product architecture was constraining product development had to be dealt with because in order to build better product their needed to be a foundational renovation of the substructure, and after years of kicking that can it was finally addressed in 2012. With that in mind I can’t help but remain conflicted by my view on this, either we replaced the architecture and built little in the way of new product or we focused on cobbling together new functional features that satisfied immediate demands while potentially sacrificing long term gains. and by framing it as a binary choice I am perpetuating the problem in many ways. We should have been able to do both.

My experience at Get Satisfaction has left me with a strong appreciation for the role of product manager, which as many in Silicon Valley will point out is the most powerful role in any company. While true, this oversimplifies the challenge of the role, which is not to wield an autocratic sense of control over product direction but rather be an effective consolidator of many sources of information, from all corners of the company. Good product managers hold dear a narrative about the market that is rationalized with the realities of running the business and they are always a half step ahead of the rest of the company in bringing product capability to bear that is great than the sum of a bunch of features. Lastly, a foundational skill of great product managers is GSD.

Identity and The Rise of Borderless States

I had this conversation with @andredurand a few weeks ago. What services does a government provide?

- Identity
- Central bank-backed currency
- Law-and-order (optimally in equal proportions)
- Defense

Of course there are more but many of the things we associate with government, e.g. social services, are in fact choices that a citizenry has made rather than a core obligation of government as a necessary means to govern. So the question now is whether or not we are entering a phase of a pseudo-borderless form of governance where people self-associate according to fluid social preferences and needs. The reason I am inclined to think this is not only possible but probable is that two of the core services that government provides are being undermined, the first by their own actions and the second by technology.

Currency is increasingly disconnected from economic conditions and central banks are demonstrating on a daily basis that their ability to affect currency is tenuous at best. The rise of Bitcoin is presenting a viable alternative currency that has many of the attributes of central bank backed currencies, namely a liquid market to trade. Games and social networks have similarly organized and promoted virtual currencies that can be arbitraged against non-virtual currencies.

Identity, on the other hand, is increasingly being driven by technology and at CIS the various talks about 3rd party verification services really stimulated my thinking on this. What if government-backed identification is no longer the gold standard for proof of identity? What this would mean is that the ability for governments to authenticate identity for transactions and contracts would be undermined and we would be one step closer to borderless states.

I have no way of assessing probability to any of this but the one certainty is that the pace of technological evolution is accelerating and with it comes dramatic social change that has implications well beyond the product and service capabilities by themselves so if I were to think about what the world looks like in 30 or 50 years, I am not sure I would discount any of this.

Speaking of 50 years, this article in American Banker really drives home the point about how identity is informing future businesses in ways that are entirely disruptive to traditional business models.

Fifty years from now? In her excellent and thought-provoking Long Finance report on the future of financial services, Gill Ringland rather memorably said that the citizen of the future would need the critical resources of an identity, a credit score and a parking place in order to function. If that’s true – and I certainly believe it to be the direction of travel – the bank’s critical role will be built on the customer identities, not their deposits. The vaults will not be stuffed with material valuables, but with the most valuable asset of all: personal data.

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The Chromebook Dulls…

Back in June I wrote a post about my plunge into the world of Chromebooks. I thought it would be a good idea to provide an update on that experience and highlight the reasons why I am putting it on the shelve, or more precisely handing it over to my son…

First the good, which is that it really is a viable alternative to Mac and Windows. Almost everything we use these days is browser based so running a sub-compact laptop that relies exclusively on a browser for applications is workable. It is inexpensive, the battery life is fantastic and it does the job for most tasks.

Here’s what I didn’t like:

  1. The Samsung is slooooooow and the display is actually rather weak, rising to the “good enough” level on the best of days. Admittedly these issues can be resolved with a more capable alternative like the Google Pixel but why would I spend $1,300 on a laptop that has other significant shortcomings? 
  2. Google Print and remote desktop both rely on the host being available (no surprise, right?) but in the case of print this is particularly debilitating. We have no fixed computers in our house, everything is either laptop or tablet and when it comes to printing, which is still a required capability, the Chromebook became a problem because it was looking for one specific laptop that I had sourced with the Google Print capability. It was not always available and this resulted in frustrating moments when I really needed to print something and could not. Google needs to sort out this print feature set to enable direct-to-printer interfacing, even if with a generic driver.
  3. Can’t run installed Java therefore Gotomeeting, Webex, etc. are not possible… this was a major problem for me. There is a way to do this with remote desktop but then we come back to the issue above, if the remote desktop is not available you are out of luck.
  4. Could not connect USB devices I wanted to connect, like my camera. This surprised me, I just assumed that any device connected with USB would be treated as external storage… not the case. #fail.
  5. The last issue is a strange one and it is only when you use the laptop for a while that you notice how annoying it is. There are odd caching behaviors that result in pages being reloaded way too often… for example, if you shift focus away from your Gmail tab for more than a few minutes and then return to the tab it will reload Gmail. This is massively frustrating if you are like me and are in and out of Gmail literally hundreds of times per day. Add up all those 10-15 second intervals over the course of a day and it adds up to a good chunk of wasted time.

On balance I am still happy to have the Chromebook, and for my son it will work really well, but the fact remains that with the significant shortcomings this device is not adequate for business use.

Turning off Comments

I have turned off comments for the time being… 2 reasons:

1) Spam: I am getting inundated with spam comments masquerading as legitimate comments. The better ones are hard to detect at first glance, only when I see the link in either the commenter ID or in the comment itself is it then evident that someone is looking for a free ride on my SEO juice.

2) Alternative Channels: I actually don’t get that many comments, most people that I interact with are doing so via Twitter, Facebook, and Linkedin. For this reason above all else I am not concerned about shutting down comments, the discussion will not be impacted.

I should also highlight that the way I am doing this is by pushing every comment into moderation by default, which means the comment functionality will still display but comments will not immediately post. The way I figure it, if spammers are going to waste my time I might as well turn the tables and waste their time by allowing them to believe they are posting comments but then not having the fruits of their labor display… eventually they will move on.

 

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Startup Lessons: Dynamic Org Structures

Last week I posted the first in a series of posts about my startup experience with Get Satisfaction. The first post focused on hiring and was appropriately the first in the series because hiring decisions will make or break your company.

However, it doesn’t stop there and once you have a team of smart capable professionals you have to create an organization structure that breaths and grows with them as the team accomplishes key objectives and develops an operational cadence around key business metrics.

2) Dynamic organizational structure: Not everyone will scale with the company and an essential strategy for accommodating and driving growth is continual reorganization. At Get Satisfaction we should have done more of this, moving people around as we grew and then pairing up different teams to accomplish specific objectives.

An example is that Marketing was inexorably linked to the enterprise sales demand gen requirements and while that would never go away the fact remains that other parts of the business suffered as that focus became all encompassing. In retrospect it would have been advantageous to pair marketing with a different team each quarter and set an an objective improvement in a key metric not related to demand generation, for example, working with customer support with the singular goal of improving customer communication efficacy.

As a company grows the requirements placed on individual leaders change and not everyone will make the shift so deliberate transition into different roles or out of the company is something that has to be planned. This isn’t a reflection of people failing but rather succeeding and the new demands evolving as a result.

Dynamic organizations reflect this by moving leaders into different roles not as a reaction to what is happening on the ground but as a forward motion intended to create progress in a new and emerging area. Successful startups move early executives into new roles frequently, not in an effort to sideline them but rather take advantage of their unique skills and organization knowledge to advance an area that would otherwise stagnate.

I am taken aback by how much time should be devoted to team and people issues in a startup, for a company like Get Satisfaction I would say at least half of the CEO time needs to be spent on managing this and recruiting the best people for the challenges that are currently being experienced and what lays ahead. Once you have a team of good people you need to continually optimize that for business results but also change it up keep the people you have operating at peak intellectual engagement and interest.

Part of the challenge with “the best people” is that they don’t neatly fit into the existing organization structure, and the other part is that everyone has a sweet spot of company phase that they thrive in. I am a good example of this, very large companies are soul crushing for me, the overburdened process and gravity to inertia absolutely deflates me, yet the pure play startup is equally outside my comfort zone because I don’t bring tools that are well honed for business creation. I am a best fit for a company with presence, a reasonably complete product, and customer assets, in other words growth stage or on the precipice of a growth stage buildout.

Creating organization structures for people based on their capabilities rather than your org chart and recognizing where people thrive and where they outlive their utility is essential.

Equally critical for dynamic organizations is to decentralize decision making to the nodes of the organization. This is no small challenge for companies that achieve mass after having slogged through a startup period that is an all-hands exercise. Top down decision making results in critical time lost and decisions that are inexorably compromised in order to satisfy the personalities of the team rather than the outcomes that is desired. You hire smart professionals who have, ideally, good judgment and intellectual capacity, why not lead them by getting out of the way and letting them do the jobs they were hired to do rather than managing indecision as a result of people not measured by the specific outcomes affecting the strategy and tactics required to get there?

Terms and Conditions May Apply

This is a really interesting movie about how consumer services are building businesses on the private data that consumers are handing over, and by extension how big data is fueling new concerns about how that data can be reconstructed and infringe on our personal liberties.

Startup Lessons Learned: Hiring

I spent 3 years at Get Satisfaction, going from around 10 employees to 70′ish at the peak. Leaving was not an easy choice but after 3 years I needed to do something different, not better just different; I detailed my reasons and next move here. After much contemplation I decided to write a blog post in an effort to document my lessons learned about what worked and did not, in an effort to hold myself accountable for personal and professional development. I wrote it and posted it, then immediately took it down because I realized this was far too long for a single post. so instead I rewrote it as a series of posts, the first of which goes up today.

As you might imagine, I learned about more than just a business in my time at Get Satisfaction, and with the benefit of hindsight I was able to reflect on the subtle but critical lessons learned through mistakes and successes over my time there. This is not an easy series for me to write because while the thoughts are crystal clear I don’t wish to reflect poorly on my former colleagues, therefore take what I write with the intention it is written, that of self-reflection for the purpose of learning and self-improvement.

1) Hiring decisions will make or break you, sometimes all at once: The axiom that great companies are built with A team players could not be more true. There are 2 dimensions to this that are worth highlighting, hiring the best people and then structuring them to succeed, which will be addressed in a later post.

It’s not my intention to backstab people after the fact but the fact remains that we hired some people who were simply not up to the task that was in front of us. A worse failing than hiring the wrong people up front was keeping them in place after it became evident that they were not succeeding and taking the rest of the company down with them.

This dynamic is interesting to explore and reflects the challenges of hiring good people in Silicon Valley but more critically reflects the sense of ownership that the executive management team has over top level hires, and the subsequent desire to not have bad hires exposed for what they are, a failing of process and judgment. It happens, everyone is human and in the final equation it is better to just acknowledge a bad hire and move on rather than stick with someone who will impair the business the longer they stay in place.

A bad executive hire is like a cancer and the treatment for a cancer is to get rid of it, not get rid of it and replace it with something else, just get rid of it. I wrote a post about fear shapes personal behavior that was directly in response to my frustrations in dealing with a colleague who was failing in his role.

What makes a good executive hire? If I had to pick one thing in particular I would say good judgment is what is missing in every executive hire gone bad. People skills, execution capability, cross team collaboration, and many more skills essential for the modern executive can all be learned and adapted to different teams, but good judgment is as much a function of DNA as it is education and discipline. Good judgment trumps all because it brings with it focus, confidence, and optimal outcomes relative to execution effort.

Staff hires are no less critical and again the tendency to stick with people who are not A or even B team quality just to have a body in place reflects the challenge of hiring people in the Valley. However the fact remains that if you have a D team member and your aspiration is to bring them up to a C level, what exactly is your strategy? A and B quality people don’t just contribute disproportionately to the success of the company, they inspire other people of similar quality to join as a result of them being there while D quality people drive away the highest quality people you will attract.

In the spirit of full transparency and disclosure, hiring is something I do not consider a particularly strong point in my favor. My personality tends to attract to people who have similar “strange attractors” in their own character and for better or worse I tend to evaluate people on my gut level reaction to them. This has made me more attuned to my own judgment and forced me to be very strategic and deliberate about hires, at any level. Time will tell if I am getting better at it but without a doubt I am more conscious of the consequences of bad hires and looking beyond resume and personality when considering prospective hires.

I have 7 additional posts to publish over the coming weeks, detailing everything from fundraising to product/competitive strategy to managing your board of directors. Stay tuned.

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The Return of Mike and Ike

The movie trailer style advertisement for Mike & Ike candy is, in a word, completely awesome (2 words).

This really underscores a broader movement that the less time constrained online media world started, advertising as storytelling and entertainment, not just another commercial. We all want to be entertained, we don’t want to be sold to…

 

Google+ Turns 2: How Hangouts Completely Changed My Work Routines

Google+ turned two this week and by all accounts Google has won over critics with a compelling social network experience. I have been a fan from day 1 and perhaps what I admire most about Google is that they ignore the pundits while playing a very long game of their own making… so while my initial reaction that Twitter and Tumblr would be the biggest losers, which obviously was not the case, there are other factors that are worth looking at.

Simply put, Hangouts have been enormously impactful on me and how I work. Here is something they nailed and it is so profound that I didn’t even realize it until just this week, Hangouts are built around the notion that a video experience is YOU first, and then whatever you are sharing second.

Think about how Gotomeeting and Webex handle video, it is something that is added to the act of presenting something and despite a significant push to feature video, I have encountered few instances where someone says “hey share the camera!”. Contrast that to Hangouts where video is a primary experience… Google just figured this out while Webex and Gotomeeting are still locked into their traditional mode, which also limits their ability to have an instant video conference in the absence of a persistent conference room.

We have a very distributed company and on any given day I will have between 3-6 planned video Hangouts and a bunch of ad hoc ones. This has become such a fundamental mode of communication for me that I invested in SteelSeries gamer headsets to provide the best audio quality while also improving the comfort factor.

The integration with Google Calendar is another winner, where adding a video conference to a meeting is as simple as clicking the link. No scheduling service, passwords, dialin numbers. and so on… it just works.

Another experiences I had recently that drove this home was at HP with one of their sophisticated teleconference systems. Yes, it was remarkable but I kept thinking that I could do something a lot easier with Hangouts… instead of getting a bunch of people in dedicated rooms just to talk to each other, we could have each run a separate video in Hangouts and the result would have been the same in terms of what we accomplished… and for free.

The integration of Talk with Hangouts is a mixed bag and I hope that Google restores the ability to place voice calls from the Hangouts add-on in Gmail. Google has an interesting integration challenge that is a result of an embarrassment of riches with a robust chat product that built on XMPP, Google Voice, and Hangouts. A big change they announced last month was the abandonment of XMPP, which has a lot of features as well as a big developer community, and the replacement of Talk with Hangouts. I like the user experience and having my chats pop up in Hangouts in addition to Gmail, but the degradation of features is disappointing, most significantly the inability to place voice phone calls right from Hangouts.

I don’t know where they are going with this but the result for me is that I now use Skype more frequently for voice calls instead of hitting the phone icon in Talk and placing a call.

Lastly, the mobile experience is completely seamless, and that extends to video as well. On my Samsung S4 the mobile video conferencing is surprisingly good and glitch free… how far we have come from commercial video phones that started showing up in the 1980′s that used super expensive hardware and puts POTS through an extreme gymnastics routine.

Design Principles and the Value of Experimentation

I have been watching Chris Harris’ Youtube channel while on the treadmill and yesterday I caught this fantastic segment on the legendary 1987 Porsche 962 that dominated Le Mans.

There were 3 distinct parts of the video that are worth highlighting. Le Mans is a unique motorsport event, a 24 hour event that features a wide range of classes racing together on the same track and combining the technical prowess of manufacturer sponsored teams as well as the innovation of privateer teams. The race was held this weekend and Audi won in their class, again.

1) Norbert Singer, the Porsche engineer who had a strong hand in every one of Porsche’s 16 victories at Le Mans, talks about Porsche’s reliability, a hallmark of the Porsche customer racing car program (you could actually walk in and buy a 962, hand over some money and get a set of keys… imagine that, a race car with a keyed ignition!). At about 1:30 in the video Singer is talking about reliability and how everyone in the Porsche racing program oriented their worldview around Le Mans because of the demands the race presented. Running a high performance vehicle for flat out for 24 hours and crossing the finish line is no small feat, and as Singer highlights it “first you have to finish the race and then you see where you are”.

This is a great commentary on design principles and everything in life and work has attributes that can be isolated to drive this degree of clarity. Now, if the car isn’t fast, handles poorly, or any one of a thousand other factors you won’t win but if the car isn’t reliable you won’t finish, much less win.

2) The 962 had for it’s time some pretty revolutionary ground effects, which also reduced drag as well as generating downforce that contributed to the extraordinary handling of the car. Following the successful 917 program, Singer sought to create ground effects by mimicking what Formula One cars were doing at the time and dramatically increasing downforce irrespective of the consequences on drag because with 1,000 horsepower they had plenty of power they could tap into to overcome deficiencies in aerodynamics.

Through experimentation the engineers learned that controlling the airflow over AND under the car improved the downforce while at the same time improving the slipperiness of the car itself. Conventional wisdom held that the two goals were in conflict, Singer developed the science of design based on his observations of air flow and continued testing to learn the science. Testing and experimentation can always be relied upon to overcome the power of repeated anecdote.

At around 11:40 Harris asked Singer some interesting questions about the handling of the car and Singer went into some detail about how the increase of ground effects on the rear of the car, with the extended tail, has the effect of improving the force on the front axle. This is really surprising and again points to the value of experimentation because what Singer and the Porsche team were learning is how the air moving over and under the car can be shaped to deliver specific forces with outcomes that are very desirable in a race car.

3) Finally, Singer is asked about the dramatic performance gains that were created in just a few short years. As is the case with new technologies, the biggest gains come in the beginning and after the big steps are taken everything is incremental. I am struck by this because I think we, as an industry, adhere to the notion of disruption but far too often deliver incremental. Therefore, if we more finely tune our appreciation for big steps we will then seek to upend the balance with new invention rather than fine tuning the status quo… as Audi did when they introduced diesel powered cars that were not only more durable than competitors but also more fuel efficient which resulted in fewer pit stops.

I would encourage you to watch this video because the lessons that are revealed extend well beyond racing.

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