Take pride or go home

One of the biggest changes we’ve made at CrystalMD in recent times is to replace all prior constraints about how we do things with a simpler idea: we’ll only work on things that we can take pride in.

I chose this over many of the other ideas such as:

  • “Build something people want” (from YC)
  • “Ship early, ship often”
  • “Work hard, play hard”

I don’t think there is anything wrong with the above ideas and they can all coexist. So why is taking pride more important than all the items on the list above? I’ll offer four main reasons:

  1. Pride makes start-ups an emotional affair.
    It has been my experience than if you gave me two designers, the designer who takes more pride in his work will obsess more over his work. And I believe that people who obsess over their work do better work than ones who don’t. If you run a factory, this might not work for you. But at a start-up where you are often limited on resources and can only take so many chances, quality matters a lot. Someone who takes pride in their work will feel “pain” at some level every time she does unexceptional work. Not only is she better than Mr. Oblivious whose work you have to constantly fix but because she feels pained by bad work, she will go to great lengths to deliver exceptional work.
  2. Taking pride requires taking a stance.
    People who take responsibility and take a stance won’t always work out but they are more likely to act like adults. When they screw up, they will own up to it because in their mind, they failed themselves at some level before they failed the company. These people are a lot more likely to fix their problems and constantly improve themselves without needing to be pushed. And for some reason if they can’t do exceptional work, they’ll likely choose to go home before you even have to ask them.
  3. Sets a high bar for the organization
    Anyone with a ton of pride who does bad work(without realizing) will not survive that long at an organization that demands you take pride in your work. So am I saying that its better to work with someone who takes a lot of pride and does shitty work? I’d say yes, its better than hiring someone who only does shitty work. Why? Because someone who only does shitty work might slide by; someone who takes pride in shitty work will stick out like a sore thumb.
  4. Pride delivers regular doses of happiness
    A huge part of a start-up is being able to take blows. Taking pride is a way to manage the blows. It gives you permission to draw doses of satisfaction from things that do not always result in business success. It is this pride that lets you come in to work the following day and still keep going till you do get your next win.
By: Dave Hogg

Deliberate vs. implicit communication

In this age where we’re quick to blurt out our thoughts and plans, it strikes me that the best things that I have executed on in my life happened rather quietly. There were no huge announcements. There were no big proclamations. What I did have in all those situations is tons of time to think about the right things and an obsession to work on those things and bring them to life. If communicating with someone was necessary, it’d be done. But there was no more communication than absolutely necessary particularly about incomplete thoughts or ideas.

Just describing this seems to violate so many tenets of running a successful organization. Aren’t you supposed to hyper-communicate? Aren’t you supposed to take feedback? Aren’t you supposed to bounce ideas?

May be. And that is what makes it challenging to reconcile what the best practices state versus my own experience.

I think traditional theories on communication focus excessively on deliberate communication, such as meetings, memos, phone calls etc. While those things become more important as the company scales, the implicit communication is a lot more critical at the inception.

Implicit communication is another way for me to describe the concept of being on the same page or being able to read the other.  I’ll argue that the best start-up teams, by definition, are masters of implicit communication. It is this implicit communication that lets a CEO trust an early employee to make important business decisions without needing clearance. The CEO doesn’t bet that the employee will get every decision correct; but he is certain beyond doubt that the employee won’t make a suicidal decision and that he will make many more correct calls than wrong ones.

When implicit communication fails, it’s because of a combination of issues from having major differences on some principles core to the organization or a lack of trust in ability to deliver. In these instances, it is better to go to a system of deliberate communication. But it is even better to address the root causes.

Deliberate communication in a start-up is akin to having to physically push a car. It will wear you down in little time. Implicit communication is kind of like riding on a highway full of driverless cars, with each car magically working in harmony with the other.

By: Timothy Vollmer

Ira Glass on taste

Nobody tells this to people who are beginners, and I really wish somebody had told this to me.

All of us who do creative work, we get into it because we have good taste. But it’s like there is this gap. For the first couple years that you’re making stuff, what you’re making isn’t so good. It’s not that great. It’s trying to be good, it has ambition to be good, but it’s not that good.

But your taste, the thing that got you into the game, is still killer. And your taste is good enough that you can tell that what you’re making is kind of a disappointment to you. A lot of people never get past that phase. They quit.

Everybody I know who does interesting, creative work they went through years where they had really good taste and they could tell that what they were making wasn’t as good as they wanted it to be. They knew it fell short. Everybody goes through that.

And if you are just starting out or if you are still in this phase, you gotta know its normal and the most important thing you can do is do a lot of work. Do a huge volume of work. Put yourself on a deadline so that every week or every month you know you’re going to finish one story. It is only by going through a volume of work that you’re going to catch up and close that gap. And the work you’re making will be as good as your ambitions.

I took longer to figure out how to do this than anyone I’ve ever met. It takes awhile. It’s gonna take you a while. It’s normal to take a while. You just have to fight your way through that.
—Ira Glass

 

Why Yahoo should acquire the BusinessInsider

Read the two headlines below and ask yourself which one am I most likely to click on:

  • “The face of Obamacare speaks”
  • “Smiling Woman On Obamacare Website Says She’s Been Relentlessly Cyberbullied”

The first headline is from Yahoo’s homepage:

The second headline is from the Business Insider:

Yahoo and BusinessInsider are covering the same story. But BusinessInsider’s headline makes the story sound much more interesting. The visual accompanying the story is large and clear. Yahoo’s presentation is cluttered with weird screenshot angles and a text overlay that makes it less likely for a user to read the headline.

Yahoo tries to redesign its homepage every year. It has many, many PhDs on its payroll crunching out numbers and algorithms to optimize the homepage. The only problem? The homepage is still full of content that is uninspiring and disengaging, especially when compared to the standards set by HuffingtonPost, BuzzFeed and BusinessInsider.

It makes you wonder how companies in the last decade have built entire businesses on top of engaging news while Yahoo, after decades and throwing many times more resources, still has a cluttered homepage with boring headlines. After all, Yahoo’s entire mission with the homepage is to personalize it to your taste. Then, shouldn’t the Yahoo product based upon personalization completely destroy competitors with no such goal? A look at the Yahoo homepage should have news items that are much more relavant to my taste than BI or the HuffPo. And yet, it doesn’t.

This leads me to conclude that Yahoo’s mission with the homepage is deeply flawed. It is working too hard in trying to personalize content. But the problem with the Yahoo homepage is that even after they correctly determine the news stories you would like, the actual headline and presentation of those stories are of very low quality.

On the other hand, the HuffPo and BusinessInsider have much more engaging homepages with no attempts to try and personalize it for you. They have achieved that by methodically rewriting headlines in a manner that baits people into becoming interested in stories they may have never been into. They have internal tools that assist editors in coming up with engaging headlines and pictures for each story. Most importantly, HuffPo and the BI are entirely focused on presenting the most intriguing parts of any story and less on figuring out what types of stories you’d like to see.

Both Yahoo and the BusinessInsider are focused on writing algorithms to engage users with news stories. The difference is that BI’s algorithms focus on turning any story into an engaging one while Yahoo is mistakenly focused on finding the right stories. The BI is seeing insane growth, from 5M uniques last year to over 30M this year. Meanwhile, the Yahoo homepage is stuck in a vicious redesign cycle yielding no results.

Yahoo needs to move away from trying to personalize news and focus more on optimizing each news story. What better way to do that than acquiring a news site that has methodically scaled itself from a tiny blog to tens of millions of uniques?

By: Jorge Jaramillo

Facebook’s shiny object non-problem

Facebook’s CFO David Ebersman revealed during the last earnings call that there is a noticeable exodus of kids from facebook. Why are kids leaving facebook? What does facebook need to do about it?

When I started school, facebook was the shiny thing. Almost a decade later, its shiny creds have been passed onto the likes of Instagram, WhatsApp, SnapChat etc. Whereas my generation only got introduced to facebook in college, today’s kids are joining facebook as young as 10 years old. By the time they turn 18, you cannot expect them to see facebook with the same passion and excitement as when they first joined.

To facebook’s credit, it hasn’t built its business on being a shiny object. Facebook has serious lock-in that goes far beyond the often-cited network effect. Facebook’s real lock-in is its success in becoming the digital archive of the lives of hundreds of millions of its users. Facebook is no longer just a communication tool; facebook is what you’ve been up to in your life all through high school and college. And while the ebbs and flow of life may push its users to deactivate their facebook account, they are far from permanently  leaving facebook because permanently leaving facebook is akin to burning your decade worth of photos, letters and diary entries.

No one is burning their facebook accounts. They’re merely locking themselves out of it…until they are bored with the new shiny object that was supposed to kill facebook. That’s when they hop right back onto facebook.

So what should facebook do about not being the shiny thing any longer? I don’t think it needs to do much! In my casual conversations with younger cousins, they talk often about deactiving or no longer logging onto facebook. But very few if any actually delete their accounts. And as long as people aren’t deleting their accounts, facebook has nothing to worry about.

By: thebarrowboy

Guarded patience

Ethics 101 was my favorite class in my first semester in college. It was also the most annoying class. Why? Because unlike the readings in my other classes which could be merely skimmed over, I learned that you cannot skim over a philosophy reading and expect to be prepared for class. I found myself in deep thought after every few sentences of my reading and I found myself walking to class with a lot more questions than answers.

A lot of building a successful enterprise is about finding answers to questions–and quickly. I like to call this brute-forcing. Have a problem with your sales strategy? You can brute-force your way to having it reviewed by advisers and get near instant feedback that you can put to use.

But what about figuring out where you are going to be in six months as a company? If you are running a public company, that should be largely predictable. But if you’re a year old business, a lot may be up in the air. In that case, the initial question will raise an endless stream of questions. Ultimately, you end up with more questions than answers and you feel like you’ve just taken on a philosophical question that has no signs of an answer.

The ability to handle these questions ends up defining your company. You can easily let the lack of answers or the lack of clarity bog you down and paralyze your team. You can also try to brute-force your way to an answer via a marathon session…and get even more annoyed when you don’t find the answer. Or you can show a little bit of what I call guarded patience and let the answer come to you.

What’s guarded patience and how is it different from just being patient? When you are simply patient about something, you risk becoming complacent. Guarded patience means to maintain awareness of what you do have answers to, use those answers to push forward until you arrive at some big revelation that answers your original question.

When you’re brute-forcing, you’re on a mission to find the solution. When you use guarded patience, you’re letting the solution find you. You do this by applying a lot less pressure on yourself to find the answer. At the same time, you’re wide awake so when the answer does come to you, you’re not going to miss it.

By: Jeramey Jannene

Kobe Bryant on Leadership

Leadership is responsibility.

There comes a point when one must make a decision. Are YOU willing to do what it takes to push the right buttons to elevate those around you? If the answer is YES, are you willing to push the right buttons even if it means being perceived as the villain? Here’s where the true responsibility of being a leader lies. Sometimes you must prioritize the success of the team ahead of how your own image is perceived. The ability to elevate those around you is more than simply sharing the ball or making teammates feel a certain level of comfort. It’s pushing them to find their inner beast, even if they end up resenting you for it at the time.

I’d rather be perceived as a winner than a good teammate. I wish they both went hand in hand all the time but that’s just not reality. I have nothing in common with lazy people who blame others for their lack of success. Great things come from hard work and perseverance. No excuses.

 

By: Kyle @SuburbanDollar.com

Sales/marketing spend vs. Product development spend at recently IPO’d SaaS companies

As someone in the SaaS business, I am intrigued by the recent rush of SaaS companies that have IPO’d. The biggest two expenses in most SaaS business going for scale is product and sales/marketing. I wanted to know the proportional breakdown in spend on product dev and sales. So I made a Google Spreadsheet and filled in the numbers from the S1 filings of ten SaaS IPOs. Here’s how much each spent on sales/marketing for every dollar on product dev*:

  • Workday spent $0.97 on sales for every dollar spent on product / dev
  • Veeva Systems – $1.43
  • Marketo – $2.06
  • RallySoftware – $2.28
  • Eloqua – $2.31
  • ExactTarget – $2.52
  • RingCentral – $2.55
  • BazaarVoice – $3.16
  • ServiceNow – $4.36
  • Marin Software – $5.00

Workday is hailed as the model SaaS IPO and has been crushing it for many reasons. At least one of those “secrets” is that they can spend as much on building out their product as they must in convincing people to buy their product.

Deciding how to allocate resources between Sales and Product Dev is an especially difficult question for new SaaS companies. On one hand, spending significantly more on sales can help you hit near term numbers. But a significantly higher spend towards sales may be telling of  a larger problem: that there is less natural demand for your product. Smart investors and entrepreneurs should make a distinction of which one of the two it is.

Now, I don’t think a significantly higher spend for Sales/Marketing relative to ProdDev is always a bad thing, especially in cases where you can show high customer retention and lifetime value. In Workday’s case, their lifetime value is incredibly high because they deploy their solution to large organizations that pay them millions of dollars for a robust solution. But this also means that the Workday product must be that much advanced given its critical role in the day to day operations of its customers. Therefore, we find Workday’s spend on sales to be very close to their spend on product.

In contrast to the role Workday plays in the life of its customers’, a company that loses access to their BazaarVoice subscription is unlikely to suffer any significant organization-wide disruption. This naturally means that BazaarVoice is a much “simpler” product relative to Workday.

You can see my original spreadsheet here.

*Data is based on 3 full year numbers from the S1, typically 2010, 2011 and 2012 but not always

By: E. Dronkert

Is Google too lean for its own good?

Google announced the shut down of the Checkout product this past week. They’d like Checkout users to move to the latest shiny object inside Google Inc. called Wallet. The only problem? Google Wallet does not work for physical goods. And it doesn’t seem to have better customer service than PayPal. And it doesn’t seem to be an alternative to PayPal.

This got me thinking about a deeper issue with Google’s product strategy: Google is incorrectly applying the lean principles in mature categories where a more complete product is required to even get a seat at the table.

Let’s talk about the online consumer payments market…the same market that Checkout was attacking. It is a market that is in the midst of disruption given PayPal’s PR problems and the rise of Square, Braintree, Stripe etc.

Yet, while each of these companies have carved a niche and are “crushing” it in some manner, Google Checkout has been an overwhelming product failure. It was always a confused product with extremely weak positioning. The name “Checkout” suggests that it could be for ecommerce transactions. Yet, Checkout never had any special API or feature set that made it set apart from PayPal or the traditional merchant account experience. The typical Checkout experience consisted of linking out a customer to a Google page that collected the payment information. That is far, far from being seemless in the way that Stripe or Braintree or even PayPal’s advance offering.

Fast forward to Google Wallet. It reeks of the same kinds of problems as Checkout. There is no clear market positioning. Is Google Wallet like PayPal? Or is it like my credit card? Or is it meant to replace all my cards into one place? What is it really?

Unfortunately, I remain unclear even after reviewing the messaging on the homepage. In one screenshot, I see  a “Buy with Google” button. What does that mean? In another screenshot I see a “Claim Money” button. But I see no elaborate section that explains how I receive money. In contrast, PayPal has two very clear options on the homepage: “Buy” and “Sell”.

A headline on the homepage of Google Wallet screams “Start sending money in Gmail.” I use gmail all day long for years. But I cannot recall the last time I had an email open and I wished to attach money to it. It isn’t how we are used to thinking about transacting on the Internet. Now, Google’s got every right to innovate but making a feature such as this the focal part of your product’s pitch shows a fundamental misunderstanding or miscalculation of the market.

What’s the cause behind Google’s failure with payments? A post from May on the MobileWorld blog provides a few hints:

First there was Vikas Gupta in January 2012. About the same time Rob von Behren made departure, followed by Jonathan Wall and Marc Freed-Finnegan, who left to do their own thing. In June, Stephanie Tilenius left for a career in venture capitalism. Finally, last week it was the news that Osama Bedier had made an exit. Google has been losing its payments executives at a surprising rate since its launch in the autumn of 2011.

 

Adjustments

Recently I’ve been fascinated by the idea of “adjustments” in professional sports. I’ve been trying to apply the same perspective and concept of “making adjustments” at work.

In basketball, each team is making adjustments in a rapid fire way…

Your main scorer gets injured…so you make adjustments.

Your opponent decides to deliberately foul you using Hack-a-shack…so you make adjustments.

Your bench player is having an incredible night, better than your stars…so you make an adjustment.

At work, I’ve started to look at change as an adjustment. It is extremely easy to argue that “wait but we just decided on x and now you want to switch to y?”. The answer often is “yes” as long as it is well-reasoned. Since I started seeing revising of decisions as an adjustment it’s become much easier to change my actions, perspectives and philosophy in light of new information.

That last part is critical: there needs to be a clear basis for an adjustment when possible. This is something that is much easier to obtain in competitive sports where you know you are getting your ass kicked by your opponent and must adjust or lose. At a new business though, you will rarely see a clear signal that an adjustment is needed. Still, keep a few things in mind:

1. You will still make incorrect adjustments, but hopefully fewer over time

2. Asking yourself these two questions before making an adjustment can be super helpful. (a) “Why do I think an adjustment may be needed?” (b) “How will I know if _____ change is having the intended impact?”

3. If you are making an adjustment without pondering and answering the question above, you are likely making an unneeded, incorrect or arbitrary decision. The good thing is, in my experience the above two questions become easier to answer after you have done it a few times. And ultimately, this becomes second nature and you begin seeing work as a set of rapid adjustments with a defined feedback loop.

My hypothesis is that if my feedback loop is relatively accurate in its reporting and we as a company make at least a majority of the required adjustments and do it extremely well, we’ll do just fine.

Next Posts