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Lessons

Avoiding the Mentality of Hiring “Rock Stars”

There’s this sub-culture in startup-land where everything revolves around hiring and retaining “rock star” engineers. And I think it’s mortifying. Not the idea itself, but the implications.

I have heard it over and over from people I respect. But there’s a subtle insinuation that the blame of poor execution rests on whether or not somebody is a “rock star.”

Let’s flip the focus around: what is the difference between a good and bad manager? It’s simple:

  1. Good managers make everybody better. Bad managers don’t help anybody, but hopefully don’t make anybody perform worse.
  2. Blaming somebody for not being a “rock star” is an easy way to shift the blame from yourself.
  3. If managing “rock stars” and firing “non-rock stars” is what management boiled down to, managers wouldn’t be needed.

Hiring a Kobe Bryant for your basketball team is a good idea. But it’s preposterous to blame a losing record on the lack of a 5-man Kobe team.

History is full of leaders pulling off great feats with an unknown team of rookies. Be that leader. Elevate the team. The role of a manager is to help people produce their best work — “rock stars” or not. And, if anything, great leaders forge the rock stars everybody ends up talking about.

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How Amazing Features Can be a Waste of Time

Differentiation is another way of saying: define your own market. By doing this well, you can avoid the problem of unseating incumbents because they don’t exist or are significantly weaker.

Why Most Features Aren’t About Differentiating

You’ve got 5 seconds. Tell me how you’re better than the incumbent I am currently using. If your pitch to me — as a customer, partner, or investor — is that your site has the most features: you’re screwed. Here’s why, from the perspective of each:

  • Customers & partners: Yes, but, who are you again? I don’t put my eggs in nests that might disappear tomorrow, even if the nest has a built-in heater.
  • Investor: So your company is a feature away from being destroyed?

In the Internet Era, features are cheap. Big or small, a company can bang out a feature in a week or two and start testing it. You disagree because said company would “never” build that feature? Never say never. Innovative companies always surprise people. Hoping your competition doesn’t want free money on the table is tantamount to gambling, and there is a much safer, more logical way of approaching this problem.

So many “feature” companies (i.e., they’d just be a feature in a bigger company’s product) are born every day. The criticism isn’t that these companies are doing something “easy.” The problem is that many startups use a specific superior product experience or feature as a key differentiator, without considering whether or not it helps them corner a new or different market. Being “better” isn’t enough.

Same Thing, Different Optics

Certain feature sets, if marketed right, completely change your target market. This is key. Let me say it again:

Certain features put you in a different market.

Most all companies are chasing a specific market. 18-24 females. College students. People who like coffee. Couples. Widows. Canadians with houses.

Not all features are created equal. Most features just add further convenience or refinement (i.e., “single sign-on,” “AJAX uploading,” “mobile support.”). Focus on competing in a way that assures your competitor’s destruction if they were to follow your lead.

Why Incumbents Ignore Certain Features

Like I said, some features change who a company’s customers are. In worst case scenarios, some features alienate your existing customers entirely (i.e., killing your existing revenue stream).

For example, your feature might be a free, ad-supported version of an existing model. A very famous site called OKCupid did exactly this a few years ago. Even today, this is what they’re known for. Why didn’t the other players in the market copy them? Because going free would mean changing their customers from their users (who pay a monthly fee) to advertisers (who pay for data and exposure). Yes, much like Facebook, OKCupid’s product is its users, and its customers are its advertisers (mmmm sweet, sweet data).

While the main differentiating feature, being free, is an easy feature to build, even to this day, incumbent sites like eHarmony and Match remain paid services. They are ultimately after different markets. You and I can intuitively see that there is likely a well-defined difference between the two markets of people willing and not willing to pay for dating (income, what they are looking for, age, etc.). It’s clear now that there was always two markets in the dating space, and OKCupid successfully cornered it using a simple marketing message.

The key for you and I is to understand and learn from this lesson: figure out what differentiators you introduce that give you unique access to a new or different market from incumbents.

Don’t Get Distracted

In any given startup, there is probably a backlog of 100 features to choose from. And most of them are from customers. Think about it.

Customers ask for features.

These customers are asking you to pick their market. With each feature you work on, your are moving toward a given audience. If this is a market you don’t want, ignore the feature. A feature that doesn’t help you define, carve out, and keep a specific target market is a waste of time.

In some markets, usability is everything (mobile). In others, aesthetics (marketing). Yet again in others, speed (search engines). Maybe in another, depth of technical end points (APIs). And within these markets, there are niches with even finer requirements.

Identify your core desired audience and build features only they yearn for. Everything else is a distraction.

Feature != (does not equal) Technical

A feature isn’t necessarily a boat load of programming. A “feature” is a marketable unit of software development. The complexity of that development is irrelevant. It can be as simple as a change in design, pricing, copy, or even name. Here are some examples:

  • Pick an XXX domain for your Pinterest clone: bam! PinPorn (NSFW). No difference in technical features from the original, but the site successfully corners its own market via community (the feature).
  • Want to be a Groupon for gay people? Fab. (Another year later, they’ve exited their niche and become a mainstream fashion site.) You know how they did that? They built a sizable mailing list of the gay community from their original ideas to be a gay Facebook and/or Yelp. Fab’s differentiator? Good taste, according to them.
  • Instagram’s killer feature was tight social integration (arguably pretty technical); yet Hipstamatic came first. Instagram brought easy sharing to a paid digital photo filter market that Hipstamatic defined.
  • And, of course, there’s Facebook: a MySpace for college students. The killer “feature” was that you had to have a “.edu” email address. Facebook probably would have perished in its early days without those 5 lines of code (maybe less).

The Real Meaning of Market Differentiation

Recall my example about the free dating market. Rewind 10 years. Online dating was something you paid for. That was it. Maybe this is easy to recognize now, but this market dichotomy (free vs. paid) was not apparent until only recently.

When smart people ask you about your market differentiation, this is what they mean. They are asking you if you’ve found a market angle that existing players will gladly give up because they either don’t value it or can’t compete in it due to conflicting interests.

So next time you’re looking at a list of features to work on, ask yourself: “is this feature putting us in the market that we want to be in?”

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Lessons

Three Analogies for Pitching Your Startup Right

Below are three analogies on how to prepare and pitch your startup better.

TLDR: Don’t focus on being right. Don’t rush the sale. Find believers.

I recently got my startup funded. It was an extremely, extremely challenging exercise. Today’s post is short; I’ll save the funding journey for another time. Today, I wanted to talk about pitching. I’m going to focus on three big, often overlooked issues.

1. Friend-speak: “That’s an awesome idea!” => “Good luck, bro.”

Friends tell you what’s wrong with your idea, but they often say it nicely. Listen to your friends carefully, and recognize that “That’s a cool idea, but what about blah-blah?” is a veiled criticism of your idea. Listen and understand their concerns. A good pitch patches up these holes before they’re even asked.  Often, when an idea is criticized, it’s natural to want to be defensive. It’s important to take criticism as something to solve for, not something to “be right” about. Ok here’s the analogy:

You’re a pirate. You’re practice fighting with your buddy pirates when they accidentally shoot a hole through your hull. But you’re smart so you win the argument with them that there is in fact NOT a hole there (Uhhhh). You decide to go out and challenge some Brits to a battle to the death without first addressing the damage your buddies left on your idea — er, I mean — ship. Oops!

2. You need more time to sell

I haven’t pitched that many people specifically to get money (a lot of pitches were over partnerships), but when I felt rushed there wasn’t a second meeting. When you are trying to convince somebody to give you — a nobody — enough money to buy a few cars (or a house), they need time to digest things. Here’s the analogy:

Your startup is like a restaurant. First you lure in a customer to try out your food. Once inside, you serve your customer what they are going to eat. It’s a game changing meal, so they’re naturally skeptical. They start to nibble on it. Maybe it’s good. Maybe it’s not. But you’re in a hurry so you jam the food down their throat, ask for money, and remind them to leave a good review on Yelp. They throw up and get major indigestion.

Like with any good meal, make sure you have a full hour to pitch. Your pitch should be 30 minutes max. Leave 30 minutes for questions (which will be sprinkled throughout your presentation).

3. The Crazy Idea Train needs passengers

You’re the conductor of the Crazy Idea Train. You built it, actually. It’s a little rocky, but it’s speeding along! But there’s no passengers. Your friends say they’ll get on the train later. Strangers say you need to pay them money for them to get on board (it looks really ghetto and unstable, after all). And nobody really knows where it’s headed. Maybe it’s going to Billion Dollar Land; maybe its going to Unemployment Mountain. You think it’s the former. But it looks like most people believe it’s the latter.

I’ve thought about this a lot, and I’ve decided that this is actually super duper important not just from an investor’s point of view, but from a founder’s point of view. If you can’t convince one person to join your Crazy Idea Train, then is it really a good idea? Finding a co-founder is social validation that your Crazy Idea has legs. Without this, investors are left to imagine the worst.

I’ve also heard cases of people unsuccessfully looking for co-founders. Again, this to me is a sign of a crappy idea or worse. There’s a lot of reasons why somebody would be unable to find a co-founder, and most of them are bad signs. Are you arrogant and un-friendly? Do you seem untrustworthy? Do others have no confidence in your ability? Are you a terrible leader? Are you all talk? Are you no fun to be around? Do you kill kittens for entertainment? Maybe. Maybe not.

Your number one job as a founder is to sell the company to future investors, acquirers, and employees. If you suck at this, that’s a death sentence. Start with selling to a co-founder.

Summing it up

Don’t focus on being right. Don’t rush the sale. Find believers.

Bonus pro-tip: make sure your lawyer doesn’t put your cell phone number in the SEC filings. Yeah, that happened.

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Lessons

What Agile is NOT

Agile Will NOT Make People Work Faster

People will work just as slow or fast as before. It is not a miracle drug. Agile DOES ensure people are working on the stuff that matters at that particular moment. Which leads to the next point…

Agile Does NOT Mean You Can Change Your Mind All Day Long and Still Ship on Time

If you change your mind that the product should do X instead of Y, you may have to throw away code. This is a fact of life. Agile DOES encourage making key decisions at the last possible moment so that the cost of change is minimized. Agile (a la retrospectives) exposes why or how the deadline was missed and how costly bad decisions were.

Agile is NOT a Better Way to Manage Down

Yes, there are lots of little tasks now. And yes, they are all prioritized and bite-sized so it’s easier to micromanage, right? But you’ve missed the point. Agile let’s the engineers tell the managers what is going on. Agile IS a way to manage expectations (e.g., “managing up”).

Bonus Non-Issue: “We Need to Focus on How It Will Scale”

I’ve heard this a lot. It doesn’t matter (and if you disagree, then you probably aren’t ready for Agile). Agile is about making stuff that works – right now – so you can see if what you’ve made has any value. If it has value, then you worry about scaling. If it’s garbage, nobody will care how it was architected. Get it to work first; scale second. Getting stuff in the customers’ hands and then making decisions based on the feedback is your top priority. If you aren’t focusing on that, you’re probably on your way to creating your very own crappy product that nobody uses.

Today we learned that “agile” is a loaded word.

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Failure Paralysis – The Thing that Holds You Back

We all have this friend: he talks about all the things he will do soon. He’s going to ask out that cute girl. He’s going to start hitting the gym. He’s going to ask for that big raise. He’s going to be more social. Yet, he never does.

Your friend is a victim of Failure Paralysis.

It’s clear that inaction guarantees a lack of success. No success can be achieved by doing nothing. You can’t even win the lottery unless you buy a ticket. This applies to anything: becoming president, getting a girlfriend, losing weight, seeing a movie, etc. The first step, is to start moving toward the goal.

This is the struggle every entrepreneur eventually has to overcome.

A lot of people talk about the uncertainty around taking that first step. The reality is that as soon as you take that first step, you’ll be hit with 100 new issues you never imagined. You can read all day about poker theory, but it pales in comparison to real playing experience. And yet, so many people get stuck in the theory-crafting stage of an idea. Move past this step.

To succeed, you must do. And not doing assures failure.

What are the odds that the idea in your head will become a million dollar company? Well, if you do nothing, the odds are 0%. If you start now, maybe you increase your odds to 0.1% – a literal infinity-percent better odds. The problem is that some people don’t want 0.1%. They want 99%. Thus, they wait while they do stuff to try to increase their odds. But isn’t actually doing it going to increase your odds too? When does the waiting stop and the doing start? Well, for most people: never.

Everybody has excuses to do something later. But only a few don’t let those excuses stop them. Kevin Rose famously destroyed his relationship to fund Digg. Mark Zuckerberg dropped out of Harvard for Facebook. HARVARD! Actually, so did Bill Gates for Microsoft. Michael Arrington, a now-famous tech journalist, abandoned a career as a lawyer to join the startup world. Even Jack Dorsey bailed (I use this term in jest) on Twitter to go do Square.

Did these guys fear failure? I’m sure. You can’t gamble your future and not be. But that didn’t matter — they ignored all the “sound” advice from their friends and family. I won’t get into each case, but history shows us that if each had waited an extra year or two to make the jump “safer,” they may have missed the boat entirely.

Later is the same as never. Now is the only acceptable time.

Your friends might buy your excuses, but as an Internet-Stranger, I’m going to say the truth: your excuses don’t matter. Results do.

  • Too tired after work? Suck it up or change your sleeping habits.
  • Credit card debt holding you back? Pay it off and quit going out.
  • Not enough time? Manage your time better and quit reading Reddit.
  • Can’t code? It’s OK to suck at it. Learn.

So, take a deep breath, and do something. Anything. Don’t fear failure. Fear not-succeeding.

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“Michi’s Minions” – On Respecting Co-workers

Relatively early in my career, I’ve heard the phrase “Michi’s minions” a number of times. People use it to jokingly refer to my team. They say it in private, so I think some people might conclude it’s just a crass joke. Perhaps. For people that know my crude sense of humor, my offense to this joke probably takes you by surprise. Every time I hear that phrase, I immediately conclude the other person is not somebody I want to work for.

To me, it indicates a condescending attitude that the person has toward employees. I once heard the analogy that management is like a rowing team. You’re the coxswain that helps keep the rowboat straight. Yet, when you think about it, you don’t lift a finger to help the results get done. If somebody gets tired or wants to quit, you can’t take out a whip and start cracking. At the same time, without the coxswain, the team will never make it to the finish line. You both need each other. All of my greatest accomplishments as a leader in an organization were because of the hard work the team put in. To forget that your staff were the ones furiously rowing is ignorant if not insulting.

When somebody thinks that “managing” equates to “having minions,” it’s not pretty to watch them get a little power. I’ve seen this a few times now and it had disturbing results every time. The usual trend is:

  1. They give their staff all the boring, dirty work
  2. They scold in public and praise in private (if at all)
  3. They say, “I don’t need to be liked as long as work is getting done”
  4. People start quitting

I want to address #3 really quickly. “Being liked” and “getting things done” are not mutually exclusive. A good leader will get both done together, every time. If you can’t create a work environment where people are happy, you aren’t qualified to be a leader. Think about the last job where you constantly went above and beyond. Did you like your boss? I bet you did. I am very confident in the importance of having a good relationship with those you work with.

This post isn’t about watching your language. It’s about watching your attitude.

You need your team more than they need you.

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Incentives and the Related Dangers

Incentives are just as dangerous as they are powerful. I have the running theory that most incentives can actually do the exact opposite of the intended goal when executed wrong.

Let’s start with an example to illustrate. You’re in charge of a small company that picks up garbage after events like street fairs and parades. However, you just got an angry call from your customer (the city) that your company has been doing an increasingly poor job and they are threatening to cut your contract.

You can fire and hire people, but ultimately, you or some new manager will need to fix the culture of the team. Aside from the obvious choice of talking to your staff about goals and values, let’s assume that incentivizing performance ends up being the option you go with. It’s time to play with fire.

What are some obvious ways to incentivize good cleaning efforts? There are many, but I’ll focus on a really obvious one for this post: Tie bonuses to volume/weight of trash picked up.

Is this a bad incentive? Not necessarily. But if executed poorly, it can be disastrous.

Which is more important to pick up? The pile of 50 napkins or the four empty soda bottles? Under this solution, people would be incentivized to ignore napkins, cigarettes, and plastic bags while encouraged to chase after bottles (bonus points for liquid content) and discarded food. In fact, once employees start realizing this, they might even start picking up rocks and dirt instead of actually cleaning — in effect making the situation worse.

The situation above is universal across all industries. In software, the oft-cited “Dilbert” situation is when performance gets tied to lines of code written. The point is, any system introduced that attempts to incentivize a certain type of behavior can cause employees to focus on the wrong thing. If you tell your staff that closing bug tickets is tied to bonuses, your entire team will focus on that metric like a laser. This will be good at first until you realize that everybody is spam-fixing the “misspelled text” bug tickets and nobody is bothering with the REAL problems.

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Why Being Hard to Replace is Bad

I read something I’ve always followed without realizing exactly why:

Don’t be irreplaceable; if you can’t be replaced, you can’t be promoted.

I once worked with two programmers who told me they purposely wrote convoluted code. When I asked why they would do that, they replied, “Job security.” I always wondered why that company let its employees do that despite the impending likelihood that they would eventually quit and leave their mess for someone else to clean up.

Ever since then, I’ve always advocated for strict adherence to coding standards and frequent code ownership swapping. I’d like to add to the advice:

Nobody will choose to promote an individual who screws the company over – on purpose – on a daily basis.

I thought that was a neat tip to share on a Friday. 🙂

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Five Things New First Time Employees Should Know

Just out of college? New to the workforce? Here’s five tip that you should keep in mind.

  1. Assume the world is tiny. Perhaps the biggest eye-opener is just how small the working world is. People in the same industry routinely work together at different companies over their career. But this also means your reputation at one company will likely follow you, and the likelihood of this increases as you work at more places. It doesn’t just stop there. Managers and executives at companies often know each other through their careers. This means one bad piece of history might haunt you at several potential jobs in the future. As such, don’t burn bridges. Even if you are the guy firing somebody, be nice. You never know if next time they’ll be your boss (no, seriously, this is more common than you think).
  2. Respect everybody, especially those below you. This sounds obvious, but sometimes you work with people that seem less intelligent, less capable, or less motivated than you. First of all, that’s based on your limited understanding, and second, you haven’t figured out the political state of the office. As such, don’t step on the toes of co-workers, regardless of their position. Sometimes, the people below you have the ears of the people above you. Besides, being nice is a Good Thing (and, see #1).
  3. Make your suggestions count by limiting them to a few good ones. As in, don’t give suggestions early at a new job. I know some people might disagree, but let me explain. You might see it as a cost reduction measure, but others might see it as a quality reduction or removal of an important sanity check. Anybody can walk into a bank’s mainframe and give a million reasons to upgrade the 20-year-old UNIX build to something more modern, but this only makes you look naive and misguided. Before you suggest using Ruby on Rails instead of ASP, it’s better that you yield the decision until you have a fuller understanding of everything happening beneath the business hood. Business decisions are often limited by constraints that result in less than ideal solutions – but this is the reality. The key is to understand which constraints can be manipulated. This can’t possibly be done effectively by somebody who just started.
  4. Assume your Internet activities are being watched. If you work for bigger companies, it is highly likely that the computer you are using has keylogging or other “big brother” software on it. How likely? According to PC World, 60% of companies monitor where you visit, 50% monitor your email, and 20% monitor IM chats!
  5. Don’t engage in side projects early on. When you’re still learning the ropes, it is expected that you are committing 100% of your professional time to the new job. So save yourself a headache and preemptively decline all side jobs for the first six months of your career. If you have time to be doing side jobs when you are just starting out, you are probably not focusing enough on your career. And this is exactly how your boss will feel if they catch wind (see #1) of this activity.
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My Single Most Valuable Skill

Recently, I’ve come to realize that my most valuable skill is my writing ability.

I’ve had the honor of helping a few of my just-graduating friends apply for jobs and polish their (sic due to laziness) resumes. From that experience and also being involved in a hiring process more than once, I’ve had a wide range of exposure to the “best” writings of others.

I say best because I imagine people would spend a significant time trying to write the very best cover letter they can. Unfortunately, much of what I read was riddled with run-on sentences, vague arguments about their ability, and a lack of focus. This doesn’t mean they didn’t get the job, but it certainly didn’t help with their first impression.

Writing is a skill we should all continuously improve. Granted, I probably make typos or grammatical errors all over this blog; I’m not perfect either. But I have always strived to improve my writing skills, which is why I have always kept a blog or journal.

Recently, my company offered to purchase gifts for everybody. One guy got really expensive headphones. One guy got an iPod Nano. One guy asked for an LCD. I asked for a $150 book. The book I received is called Steal This Book!: Million Dollar Sales Letters You Can Legally Steal to Suck in Cash Like a Vacuum on Steroids. Yes, quite possibly the worst title known to man. I wanted this book so I could see what excellent sales writing looks like.

Writing is persuasion. I used it when I wrote cover letters to convince employers to give me a job. I used it to sell my case to a professor a few years back when I realized I had accidentally skipped a midterm (long story short, I passed). And most importantly, it helps me practice expressing arguments in a coherent manner — a skill that comes into play when I start opening my mouth.

In other words:

Writing is like singing: anybody can do it, but most people suck at it.

By the way, I suck at singing.