How Can Non-Technical Founders Contribute in the Early Days of a Startup?

I’m really enjoying the “How to Start a Startup” series from YCombinator. Recently, I was listening to Paul Graham’s talk.

During the talk, a question is asked “What can a non-technical founder do to help in the early days of a startup?” While most people assume that the early months of a startup are Redbull-fueled coding marathons, software-development is only one part of the equation.

Even before some degree of “product-market fit” is validated, non-technical founders have incredibly important work to do. In fact, the work of a non-technical founder is as important, if not sometimes more important, than software-development in validating a startup idea.

Here’s a brief list of the critical tasks a non-technical founder needs to accomplish when a startup is in its infancy:

  • Talk to users and get product feedback
  • Figure out what users need in the product to be successful
  • Design product mockups and wireframes
  • Test the product
  • Find users. (Cold calling, attending events, etc.)
  • Build a website to attract users
  • Measure product usage
  • Raise money
  • Manage investors
  • Deal with HR/Legal/Tax issues and to-dos
  • Build marketing content (presentations, demo environments, logos, etc)
  • Blog
  • Manage support for early users

Without users, a product has no direction and no life.  The top priority of a non-technical founder is to bring early users into the product.  Outside of users and product, there are many critical job needed to run and scale the business. Non-technical founders play a pivotal role in creating success in the early days of a startup.

Should startups compete with big companies?

I was talking with a friend a few weeks ago who said he had been toying with a startup idea. But, he recently abandoned the idea because a Fortune 500 company announced they were experimenting with a similar product.

My response was that this was great news for him and his idea.

  • Big companies only pursue opportunities that meet certain revenue potential. For example, I know of one large company that will not pursue an opportunity that cannot become a $50 million business within 24 months
  • There’s plenty of room in big markets for multiple companies to be successful
  • Big companies do not bear all of their resources with a new product. Typically, BigCos may devote 5 – 20 people to an “expedition” team that will try to validate the opportunity
  • BigCos may abandon an opportunity that cannot generate $50M+. However, the opportunity may still be large enough for startups, especially those bootstrapped
  • Startups that are focused can compete head-to-head with larger companies that have more resources

Competing against an aggressive, established company can be scary. But, it also doesn’t spell doom for a startup.

Is the NFL Too Violent?

Over the past week, I’ve digested the horrible news about Ray Rice, Adrian Peterson and other NFL players. As I’ve thought through these terrible stories, I’ve come to the realization that I’m shocked, but not surprised to learn of these cases of physical abuse.

With a league and profession based on violence, how could we be surprised that players are involved in physical abuse outside of the NFL?

As I watched HBO’s season of “Hard Knocks” over the past few weeks, I was shocked at how much fighting occurs on the field today. In practically every episode, there was a Mike Tyson-worthy fight between players. Even between players on the same team.  The punishment for these players? An early shower, at best.

Now, I’m not making excuses for ANY of these players. Everyone has to understand how terrible these acts are. There’s simply no excuse

But, in a league that encourages big hits and “hard knocks,” it’s not a stretch to imagine that the workplace violence may have contributed to family violence.

By spending so much time – and money – on the NFL, are we contributing somehow? I’m afraid, it’s a question I’ll ask myself this Sunday.

A natural reason to love Atlanta

One of the best things about Atlanta is that, despite its highways and skyscrapers, there are many natural spaces. The foothill mountains, Chattahoochee river and a few lakes are all within a short drive.

Yesterday, just a 10-minute drive from my house, I discovered the Jones Bridge Trail. It’s a beautiful trail that follows the banks of the Chattahoochee. No highways in sight; no road noise to be heard.

It’s one of my favorite things about Atlanta. There are dozens of trails, walks, parks and natural spaces for that help make the city seem not quite so overwhelming.

 

How big companies can make better decisions faster

“Startups are fast and agile.”

“Big companies are slow and afraid to change.”

 

In order to make good decisions, the person responsible for the decision must have all of the necessary information.

With startups, all of the information, across the entire company, resides with five, ten or fifty people.

Let’s take an example: you are the executive responsible for making a decision on whether to charge for providing phone support to customers.

What information do you need?

  • What does it cost to provide phone support?
  • How many phone calls do we currently receive? How long does it take to resolve each call?
  • Can customers that do not want phone support continue succeeding without phone support?
  • How much should we charge?
  • Will this change our market position?

In a 25-person startup, this information typically relies with just a few people.

  • Your 2-person support team
  • Your 2-person marketing team

You can pull these people into a room together for an hour, hash it out, and get all the necessary information within an hour to make the decision.

In a 1,000 person established-company, the workflow will be much different.  To get the necessary information, you’ll need to:

  • Ask the VP Customer Support, who will send requests to 4 people on her team to compile the information.
  • Ask the VP Product Marketing, who will ask two people on his team to compile data from customer surveys
  • Ask the CFO, who will ask her team to run price-sensitivity analysis
  • Ask your head of IT if our existing phone infrastructure can support the new model

At the same time, each executive will have 10-20 other concurrent requests. Their first availability for a meeting is three weeks from now.

It’s not that big companies are “afraid” to make decisions, it’s that it takes them longer to gather the necessary information.

How can larger companies gather information faster, and make decisions faster?

The biggest corporate bottleneck is relying on meetings to share information. To make decisions faster, information should be shared as soon as possible via email, apps, memos or even information office drop-ins. Meetings should only be reserved to discuss significant differences in opinion and information.

The goal is to get the necessary information into the hands of the decision maker as fast as possible, via whatever means necessary.

Another key is to only request the minimal amount of information necessary to make a decision. While it may feel like you aren’t being a team player by not including every relevant party in a decision-making process, it’s important to only involve the mission-critical parties if you want to make a fast, effective decision.

 

Three Ideas From “The Hard Thing About Hard Things”

I finished Ben Horowitz’s “The Hard Things About Hard Things” a few weeks ago, and I’m just now getting around to sharing my thoughts.

The book is a fun, useful read for any entrepreneur, CEO or manager.  I found the book to be entertaining with lots of helpful stories.  (Stories are always more entertaining than theory.)

Here are three ideas I took away from the book:

  1. Good managers define the responsibilities and expectations of every role on their team.  Horowitz’s Good Product Manager / Bad Product Manager is the most memorable position description I’ve ever read. It does a great job at specifically describing how the outcomes of a great performer.
    1. A good product manager is the CEO of the product. Good product managers … measure themselves in terms of the success of the product.
    2. Bad product managers have lots of excuses.
    3. Good product managers crisply define the target … and manage the delivery of the “what.”
    4. Good product managers focus the team on revenue and customers.
  2. Peacetime / Wartime CEOs. Horowitz describes “peacetime” as being a time when a company is a clear leader in the market and is growing rapidly. Think Tesla. “Wartime” is when a company faces imminent threats. Think the various assaults on Apple’s mobile phone business via Android devices. Much of the stories in the book come from when Horowitz was functioning as a wartime CEO, and he provides good juxtaposition for how a wartime CEO acts.
    1. A peacetime CEO tolerates deviations from the plan. Wartime CEO is completely intolerant.
    2. Peacetime CEO minimizes conflict. Wartime CEO heightens contradictions.
    3. Peacetime CEO strives for buy-in. Wartime CEO neither indulges consensus building nor tolerates disagreements.
  3. Hiring big-company executives to fill startup roles is dangerous. Sure, the hope is that you can bring in an experienced executive to help you scale quickly. But, most experienced executives are used to having 90% of their time filled with requests from other departments. Startups should only hire experienced executives that want to join a startup so that they can be more creative and productive.

Thoughts on Stock Options

Sam Altman has a thoughtful post on employee stock options.  Sam does a great option at covering the gist of the problem, so I won’t go deeply into that area.

It’s time for founders and boards to reform how employees participate in equity and stock programs. Here are the core problems that need to be solved:

  • Companies are not transparent enough about how common stock, and stock options, will be worth in the event of a liquidation event. Stock preferences, participating preferences, debt and more make it very difficult for employees to understand if, and when, they will receive any value from their stock options.  While fiduciary duty must be respected, startups should provide basic guides to employees at time of grant.  For example: “Based on your exercise price, the company will need to sell for at least $20 million for you to receive any positive value.” Not a lot of intimate details, but at least an employees knows where they stand.
  • The time to exercise stock options for employees should be changed from 90 days to 10 years. But, the initial cliff for vesting options should be extended from 1 year to 2 years.  Here’s why: let’s say one of your first 10 employees does an incredible job helping your company grow. She spends 60 hours a week for three years doing whatever it takes to get the company to the next level. After three years, she decided she needs a change and decides to leave the company. Under a typical scenario, she will have to A) exercise her stock options within 90 days, typically paying tens of thousands of dollars to get her stock, and B) she will be immediately taxed the value of the difference between the current stock price and exercise price, even though the stock is illiquid and may never become worth more than monopoly money. For most people, this is an unattractive scenario. Every BoD knows this.
    • The right thing to do is to reward employees with multiple years of service with extended options timeframes, letting them enjoy the fruit of a liquidation event, even if its years later. And to do it without putting their personal savings and family at risk.
    • By extending the initial cliff from 1 year to 2 years, you only reward employees that make a substantial contribution.
I’m sure there are tax and legal scenarios, for both the company and the individual, that I haven’t addressed here.  But, I’m glad to see this discussion is starting. I’m hopeful other founders and startups will explore providing more equity grants that are transparent and give the employee a fair chance at realizing value from them.

 

Three Ideas from “Remote”

Remote working (formerly known as telecommuting) is growing in popularity, and it’s an idea we’ve been slowly implementing within our team.  The crew from 37Signals (errr … I mean Basecamp) have been some of the leading proponents for working remotely.  I really admire and respect the type of company that Jason and David have created, so I was eager to dig into their latest book, “Remote.”

Here are three of the most compelling ideas I found from the book:

  • Working remotely should lead to a big spike in productivity. Unncessary “check in” meetings get eliminated. No more loud phone calls from your cube mate to interrupt you. No more random drop-ins from your boss. IM and emails can substitute for most communications, and are much more efficient.

  • For teams that are scared of going “all in” and allowing remote working five days a week, starting with “remote mornings” can be a great way to ease into it. Team members can get the work that requires focus done in the mornings and then come into the office for team work in the afternoons.

  • Deep brainstorming and ideation is difficult when remote. Established companies overcome this by bringing teams together every month/quarter/year for strategic meetings.

I really enjoyed the book, and it provided new ideas for using remote work to increase productivity and employee flexibility. I’m looking forward to trying out the “Mornings remote/afternoon office” idea.

 

Thoughts on Codecademy

Codecademy has been around for a while now, but I’ve just recently started using Codecademy. With my day job being more product/marketing focused, I’ve been looking for a way to brush up on my programming. (Use it, or lose it.)

After completing the PHP, Javascript and jQuery lessons, here are my thoughts on Codecademy:

Pros:

  • Codecademy is a great place for non-developers to quickly learn basic programming concepts
  • The courses are a great refresher on the latest language developments. (ie HTML5)
  • The lessons are simple and fast-paced
  • Codecademy courses are a great foundation for anyone trying to learn the foundations of software development or wanting to hack on their own projects
Cons:
  • Courses are not very deep and don’t address the most common challenges developers face
  • Language courses are siloed. For example, most developers would use PHP/jQuery/SQL in combination with each other.
  • No courses on database development.
I’m hoping Codecademy will continue to evolve providing easy ways for anyone to learn programming concepts.  I’m also excited to check out Treehouse and Code Wars.

How to Ace a Job Interview

On Friday, I had the chance to spend the day at Georgia Tech conducting mock interviews with students. Since we’ve been spending a *lot* of time interviewing at Silverpop lately, I was eager to share a few keys for success that we’ve noticed among candidates.

Here are the three common tips I shared with the students:

1) Be enthusiastic. We’re looking for people that will bring positive energy to the office every day and are genuinely excited about the opportunity to grow their career with us. We will generally prefer enthusiasm over experience with any candidate. You can show enthusiasm by asking thoughtful questions during an interview, responding to questions with well-thought out responses and even telling the interviewees how excited you are about the opportunity.

2) Have something unique.  Most candidates talk about wanting to be creative, tackle new challenges or gain opportunities to increase responsibility, but few candidates can actually talk about times when they previously stretched themselves for a new challenge. Whether it’s starting your own blog, teaching yourself to program or volunteering at a nonprofit, if you want a job with a lot of opportunity (and challenge), you need to be able to provide evidence that you’re up for the challenge.

3) Show evidence of constant learning.  Especially in technology companies, the world constantly changes. If you are interviewing for a role with a company that faces constant disruption, you need to show evidence that you can adapt and learn. One of the largest risks with new employees is that the person won’t be able to ramp up or be productive without a manager constantly providing guidance.  You need specific examples of times when you’ve taught yourself new skills or figured out something on your own.