If you want to build a company it will take a team

team

Business Insider has a typical teaser headline: The best advice billionaire AOL cofounder and investor Steve Case gives entrepreneurs is a truth about long-term success. I don’t  believe in teaser headlines but I do recommend the article. .

In an episode of Business Insider’s podcast “This Is Success,” Case said the best advice he can give to entrepreneurs is that building a productive team of people with complementary skill sets is of utmost importance.

It’s got some pithy quotes from Mr. Case, including: the common saying, “If you want to go quickly, you can go alone. If you want to go far, you must go together,” This sums up the cost – need for shared decision making, and the benefit – more brainpower and experience – of partnerships.

Case considers the best advice he gives as, “It ultimately comes down to people and teams, that entrepreneurship is a team sport, it’s not about any one person.” He warns against the ego boost that can come from external expectations of the founder. “The founding CEO tends to get most of the attention, but it really is a team effort,” he said.

CEOs remind me of quarterbacks in football. When the team wins they get all the credit; when the team loses they get all the blame. Well there are 22 players in modern football, 11 on offense and 11 on defense, no to speak of another 11 on special teams, so it’s way off the mark to give the quarterback so much credit or so much blame. And of course pro football teams have squad of about about 53 players plus another dozen on the practice squad. And companies range from dozens, to hundreds to thousands of employees. Here’s another great quote from Case on teams:

If you get the people right, almost anything is possible,” he said. “If you don’t get the people right, I’d argue nothing is possible.

These quotes all come from the This is Success podcast.

I virtually never see a full management team at my mentoring sessions because most of my mentees are at the zero stage and it’s usually just one or two founders. But what I also don’t see is a hiring plan to bring on the balance of the management team and even director level and individual level staff below that. I started my first company with a detailed spreadsheet listing position, hiring date, and projected salary for the first dozen or so hires beyond the management team, so I’m amazed that most of the founders I see have barely thought beyond hiring another engineer!

There are multiple reasons to have a team:

  • Startups are a lot of work. Spreading work amongst a group means the company is not totally dependent on a single individual, which is very risky.
  • No single person will have the engineering, marketing, sales, and support skills and experience to fill all those roles.
  • All founders have strengths and weaknesses. I was taught long ago by successful entrepreneur Bill Warner not to try to strengthen my weaknesses but rather to hire staff with complementary skills to mine and to leverage my strengths.
  • All teams needs a variety of perspective, which only comes from a diversity of teams. Research has shown that diverse teams – men and women, whites and people of color – make better decisions than homogenous teams.
  • You can’t be two places at once! Successful companies are usually national in scope if not international. No matter how smart you are you can’t be negotiating deals in New York, Austin, Beijing, and Silicon Valley simultaneously.
  • Managers only have so much reach, meaning they can only direct so many staffers before they hit overreach. That number varies with the individual, but all individuals no matter how talented and experienced have a limit. The buspeak term is “span of control.” Even if it’s as high as 20, that’s a drop in the bucket in a company of 1,000.

Personally, lacking any individual skills aside from being good at recruiting talent, I love working in a small team. The best ideas always get better, the bad ideas get killed off. And it’s much more fun. That’s a term rarely used in the startup world, but if you aren’t having fun you will burn out. Have some, it’s free.

Unfortunately Steve Case does not go on to provide advice on how to build a team. However, I have a post based on an interview with Julie Larson-Green of Microsoft. There you will find some actionable tips on how to build a team. Another post I can recommend to you is Talent Tracking, which you need to start now, if you haven’t already.

If  you want to build a product you can do that by yourself or with another engineer or two. But if you want to build a company that will take a team. This requires you to know thyself, the absolutely necessary first step for any would-be founder.

The cybernetic startup & why delegation is a key skill of successful leaders

weiner

I started my professional career in the sound reinforcement business as an individual contributor working first for Bill Hanley, of Woodstock fame, and later for his brother Terry, who was doing the sound for Aerosmith at the time I started working for him. Before that I’d been helping my friend Nancy Talbott of the Boston Area Friends of Bluegrass and Old-time Country Music by recording the concerts she put on and eventually doing the sound reinforcement for music greats like Bill Monroe and Doc Watson. Through my connection with Nancy I ended up working as the chief sound reinforcement engineer at The Performance Center in Cambridge. But there I was thrown into management without any idea of what I was getting into, as The Performance Center had two music rooms, each running seven days a week. There was no way I could handle that myself so I hired two friends of mine to fill out the schedule. But my management responsibilities consisted of simply scheduling everyone and ensuring we had backup in case one of us got sick. I hardly thought of myself as a manager and frankly no one else did either! The word “delegate” wasn’t even in my vocabulary.

I still thought of myself as an individual contributor when I changed careers after getting my M.S. in Library and Information Science. However, my first and only manager as a community librarian/media specialist was a great leader – Sigrid Reddy knew how to get more done with less resources, the mark of a successful entrepreneur, despite being an employee of the Town of Watertown. So thanks to her I ended up managing several professionals we were able to hire through government grants: two photographers, a graphic designer, and a filmmaker. As their manager I saw my role as simply getting them the resources they needed to do their jobs and collaborating with them on the direction of their projects. The word “delegate” stayed dormant in my vocabulary.

I had to learn how to delegate and  learn fast when I was thrown into the deep waters of a successful software startup. Although the leaders of Software Arts – the inventors of VisiCalc, the first electronic spreadsheet – recruited me as a product manager, I soon was tasked with growing and managing virtually every function in the company save software engineering. It was delegate or die as my staff grew from one – me – to about 75 marketing and sales people, QA engineers, documentation writers, product managers, accountants, and even facilities management, as we had our own building. Learning to delegate became an incredibly valuable skills in my four venture-backed startups.

I developed a rule of thumb for delegation: delegate everything someone else could do better than I. That was the key to gaining leverage as my management responsibilities grew. Not having any individual skills – I wasn’t trained in engineering, sales, marketing, finance or administration – made delegation a lot easier. I was never tempted to try to do anyone else’s job myself. But I did see other managers who had never learned how to delegate and I watched them reach burnout as they vainly tried to do more and more themselves rather than delegating to their staffs.

Thus the Inc. article 5 Reasons That Entrepreneurs Fail to Delegate–and Fail to Succeed caught my eye, especially the very wise subtitle: Success in a new venture isn’t about how much you can do yourself.

Let’s take a look at each of the five reasons and as usual I’ll annotate them from my own experience.

1. Thinking only you can implement your dream idea

Most founders I mentor are bonded to their startup idea. And very few even think about building an organization, let alone delegating. I learned from VCs that they were investing in the team, not the idea, and building a team was job one for founders. Thus every business plan I ever did, starting with the very first one for Course Technology in 1989, carefully mapped out our hiring plan for the next three years. In knowledge businesses the vast majority – as much as 75% or more – of the operating budget goes to personnel, recruiting costs, salaries, benefits, and overhead. Yet it continually surprises me that founding teams have a DIY ethos. I can understand why founders who come up with a great idea are frankly afraid to delegate, thinking only they can implement their idea. But they are missing out on, and what I learned early on, is if you hire only people  who are better than you are they will not only implement your idea but do a better job than you ever could. I was taught by the VCs that “A “players hire “A “players, but “B” players hire “C” players – out of fear of losing control and being shown up by their “subordinates.” Delegation means letting go. And counter intuitively, only by letting go can you transform your idea into a business that scales.

2. Being unwilling to take the time to explain and delegate needs

Unfortunately many founders operate on the old saw “If you want something done right, do it yourself.” They  are unable to trust their staff. Not only do they lose out on the incredible leverage that hiring great people gives you as a founder, by micro-managing they demoralize their team and can end up not only losing great people but by never actualizing their business idea. I found the best way to develop trust was to assign a small task that could be done fairly quickly with minimal resources , starting with job candidates. Great people rose to the challenge and were hired, others didn’t and were not. But the pattern was set: as their manager I would help them set goals, would get them the resources they needed, and would provide feedback and guidance when asked, but basically they were on their own to achieve their goals. And thus they owned the job, they weren’t just renting it from me. If employees act like owners your venture will succeed! The time you invest in setting goals, providing resources and offering feedback will be paid back 10X by teams that see you as their leader, not their boss.

3. Not trusting key team members to get required results

When we hired Howard Diamond as our VP of Marketing and Sales at Course Technology he built his organization around peer-to-peer management. Each sales territory had an inside sales person, a field sales person, and a customer support rep. The teams were compensated based on the results the team achieved. There were no individual goals. He used peer pressure to deliver great results. In the rare occasions when he hired someone who wasn’t pulling their weight the team let him know immediately, because they knew that hiding that fact would hurt them in their pocketbooks. Giving his regional sales teams autonomy delivered amazing results, but of course required delegating traditional sales management to his teams. They knew the results they had to deliver, but it was up to them to figure out how best to do so.

4. Having a lack of your own clarity about what it takes to succeed

Most of the founders I mentor are engineers. They like to build stuff. They know how to build stuff themselves. What doesn’t come naturally is helping others to build stuff. I find engineers often need a lot of coaching to learn how to provide their teams with the “what” and “why” of their goals, leaving the “how” to the teams. This requires focusing on results, not activities. Too many inexperienced managers focus too much on process and not enough on results and on the metrics they need to help their teams become self-managing.

5. Being afraid that delegating means losing control

Like any green manager I had this fear myself, but because it I was endanger of drowing in work if I didn’t delegate I was forced to give up control. Through my initial experience managing media professionals I learned that while I needed to hold my staff accountable it was up to them, not me, to get the job  done. The real trick is NOT to set goals for your teams but to help your teams set their goals in the context of the venture’s goals. Collaborating on goal setting is far more effective than dictating goals as teams will buy-in to goals they set with you.  Delegation requires trust and giving up control, but you will find that if you hire “A” players their drive and ambition will deliver results beyond what you ever imagined. Your management role may well become pulling your team back from setting unrealistic goals, not pushing them to achieve stretch goals you have set for them. Pull works far better than push when it comes to managing your staff and in selling to customers.

Delegation all boils down to leverage. You can get much more done through others than you can by yourself, which can be thought of as the defintion of management. Startups are expected to scale and grow rapidly. To do so you need to focus on what you and only you can do and delegate everything else. It’s scary, so start small with very short term projects to build trust and autonomy. Don’t expect that you can just hand your team their year-end goals and walk away. Create short term projects with accompanying feedback – I call this cybernetic management – courtesy of Norbert Weiner. I’ve taken his term  beyond communications and control in the enterprise to encompass communications, creativity, and collaboration. The cybernetic organization appears to manage itself, with a minimum of friction. Management thus can be “management by exception” leaving founders free to set strategy, manage their Boards, and otherwise focus externally.

 

Startup companies are archaic!

Libin

One of the major issues I’ve seen in mentoring over the past decade is the discomfort, pain and even confusion great engineers go through when they enter the dreaded “time to start a company” phase. As a serial entrepreneur, my product sweet spot was building the company. I enjoyed the entire process, from idea to idea validation, to forming a business entity with a partner, to recruiting. The thing I didn’t like and wasn’t good at was finance and I always had a CFO to handle that. But engineers are just the opposite. Engineers like building things, but things don’t include companies. It’s amazing to me how many teams form and never have a founder’s agreement, only to run into problems when they actually have to create a business entity. So how do engineers get their products to market without going through the pain, hassle, and major distraction of not just forming a company, but then running it?

Scott Kirsner, The Boston Globe correspondent who writes the Innovation Economy column weekly, has an excellent article entitled This former venture capitalist is reinventing the way a company works that focuses in on one former founder’s response to this problem.

Phil Libin, founder of Evernote and a former venture capitalist thinks he has the answer.

“The whole venture capital model is stupid,” Libin says. But “the stupidest thing,” he continues, “is the idea of a company. Companies are increasingly archaic, as a unit of organization in the world. What is it about companies that makes the most sense?”

People who are smart and skilled at creating products, Libin says, shouldn’t have to “raise money, have human resources drama, and run a small little fragile company.” Instead, they should “use their superpower to build a great product,” while having ownership in what it becomes

Libin has founded an alternative to creating companies for entrepreneurs. All Turtles. (All Turtles? Yet more proof that all the good names are taken!) I found the AI generated painting on their home page rather disturbing – not a great way to attract people to your venture. But don’t let that stop you!

I’m have a passing familiarity with two Boston-based attempts at solving this problem:
Paul English’s Blade Network and Joe Chung’s Redstar. I’ve met both founders and they are super smart, very experienced entrepreneurs. I wonder if Libdin has talked with them. I also worked in one of the region’s first incubators, HyperVest.  All Turtles is not an incubator nor an accelerator. The former incubates startups, the latter accelerates the progress as a company. The product of All Turtles is products, not companies.

What differentiates All Turtles from other attempts at taking ideas to market without the hassle of creating a company as the vehicle is that AI is the foundational technology. I can’t remember if this is an original idea or I read it some place, but I believe that AI will be like electricity – it will be everywhere, in everything, but rarely visible to consumers.  The competition for great AI developers is intense – they are more options than just about any other tech niche.

But Libdin is really aggressive.

Startup creation and venture capital funding, in Libin’s view, are too focused on “the 50 miles around Stanford University,” in the heart of Silicon Valley. All Turtles has already set up operations in San Francisco, Tokyo, and Paris. Libin says Mexico City is next, and his goal is to be active in 20 of the top 50 cities worldwide in the firm’s first decade. That is largely a strategy to tap markets where there is technology, design, and product development talent that are less competitive than Boston, New York, or the Bay Area.

While Libin seems to disdain VC money he’s accepted a $20 million investment from General Catalyst (a great name, by the way).

“Phil has a brilliant mind and has been able to attract incredible talent from all over the world,” says Niko Bonatsos, a managing director at General Catalyst. And Libin is “spot-on to notice that not every amazing product thinker loves or cares enough to do the company-building part of the equation.”

Depending on the value-added and T’s and C’s of working with All Turtles it may well attract great engineers and scientists, but I’m not optimistic, as it’s just one in a series of series of attempts to create a Ford-like assembly line for technology concepts that could turn into the next big thing.

My best guess is that All Turtles will go the way of the Blade Network and end up creating a company or two and putting all their resources there. But time will tell. In the meantime there’s at least one viable alternative for creators of great products who want to avoid the hassle of creating a company, while participating in the wealth a truly great product can generate. Check it out if you aren’t afraid of see the disturbing image on the home page.

Hierarchical vs. networked management models

eileenfisher.jpgReading two very different articles about business in two different publications the other day got me thinking about models of management. Management Today by Chander Chawla on Forbes.com is an overview of what he sees as the models of management.

The military was problem the first attempt to gather a diverse group of people organized to work together towards a common goal. hat structure gave us a few principles:

  1. Hierarchy

  2. Command and control

  3. Incentives for achieving the goals

  4. Division of responsibility based on function

  5. Centralized decision making

My experience working for a very large company, then called Thomson, now Thomson Reuters, with about a $7 billion dollars in yearly revenue down to a two-person startup jibes with the traditional model. And every startup I mentor at MIT has a CEO, CTO, and often a COO. Startups all have boards of directors, CEOs and a hierarchical management structure. Nothing has changed in my five decades of working life.

But Eileen Fisher, founder of her namesake clothing company, managed to build a company that for three decades has gone without a CEO.

The unconventional leadership structure reflects Ms. Fisher’s belief that consensus is more important than urgency and that collaboration is more effective than hierarchy.

She’s driven her company to annual sales of $500 million and it’s still growing. The interview with her in The New York Times Corner Office column by  David Gelles provides fascinating insight into a company with decentralized decision making and no boss.

I’ve written previously about how companies need to be built on a foundation of values and Eileen Fisher clothing is built upon the values of timeless designs, sustainability, and simplicity.

Her employees now own much of the company and she believes that really works:

It engages people and their sense of ownership, and they’ll tell you things. They’ll say in a meeting, “Don’t spend my money on that.” People aren’t happy when they see people wasting money here or there or being extravagant on something.

Nothing could be more counter business cultural than Eileen Fisher’s “leadership through listening.”

At that point you had a real business going. What was it like to become a boss?

I still struggle with that. I don’t think being a boss is my strength. I think of myself as leading through the idea, trying to help people understand what I’m trying to do, or what the project is about, and engaging them. I always think about leading through listening. I was a designer, so I didn’t have preconceived ideas of how this business works. And I was kind of lucky to not know.

I encourage you to read the rest of the article for more details on this founder who has refused to  become a boss and has succeeded not despite that,  but because of it. Those of you with the time and patience can also read the full Management Today article where the author posits four types of management:

management

Frankly I can buy into both domain management and organizational management. You will have to decide for yourself about Perception management and Feelings management – neither resonated with me. While perception is important in any business and of course we all have feelings, that doesn’t mean they are domains of management. Mr. Chandra himself admits that However, the four management categories do not carry equal weight. A lot depends on your level in the hierarchy, the maturity of the organization, and your function. 

Before you just follow your friends and classmates by building your startup on the military command and control model at least take the time to understand where that model came from and that there are alternatives. And whatever you build, build it on a strong foundation of values.

Being a rather anti-authoritarian myself, the choice of models is easy, the one built upon the values of the networked model where colleagues collaborate, create, communicate and arrive at consensus.

 

 

 

How to find a technical co-founder

graph

As a business person with zero education or experience with software engineering if I was to start YASU (Yet Another Start Up) tomorrow I would be in need of a technical
co-founder. So I read the article 3 strategies to find your next technical co-founder without looking like an idiot by By Daniel Wu and Stephen Turban on Hackernoon with interest.   The sub-title tells you the takeaway: Develop expertise, traction, and technical proficiency. There’s no “business side” — you do what it takes to build a viable business now.

Brian Chesky of AirBnB, Reid Hoffman of LinkedIn, and Ben Silberman of Pinterest are all examples of highly successful non-technical co-founders. The authors conducted an informal research project spanning 50+ technical and non-technical co-founders. Their conclusion was that the old model of dividing responsibilities between co-founders as “the tech side” and “the bus side” is obsolete. Companies need to meld expertise, traction and technical skills. 

Tech co-founders are a very small group in inversely high demand. You will be competing with other business co-founders, startups with plenty of traction, big tech, and even their own startup ideas. So the lesson is don’t start out looking for a technical co-founder. Get started building the business – now.

If you are a non-technical co-founder here’s what you need to do to find a tech co-founder:

  1. Expertise — Show that (only) you can grow and sell the idea;
  2. Traction for your idea — Prove that your idea is valuable and has traction; and
  3. Technical proficiency — Develop the technical skills you need.

Here’s a great quote from the article: To attract a technical co-founder, you should show that you are the connecting glue between them and the problem.

The best way to do that is to have an idea that already has traction. Sound familiar? That’s exactly what investors are looking for as well. As I’ve written previously, startups are scientific experiments; you need to test your hypothesis, track the results and use clear metrics for the data your experiment delivers, and most important translate that data into at least a small set of customers. Here’s a chart that shows how you can go from a “low-fidelity” to “high-fidelity” proto-business.

chart

As a business type you need to climb the tech ladder. The best place to start is the front-end, the UI/UX. Ben Silberman is a designer, so he had a real head start there.  And that’s how I started Throughline, Inc. – I designed a prototype which I had a friend code for me. And a prototype is worth a thousand pitch decks when it comes to gathering that necessary and sufficient set of customers. The authors also recommend learning some back end tech as well, though I disagree. Better to have deeper expertise in the front end – which sorry, engineers, but many of you lack design skills – and no back end skills than be “a mile wide and an inch deep” by trying to learn back end as well.

According to the authors’ survey, what founders agreed upon was that having technical skills is about developing empathy and credibility. Developing products involves trade-offs and the  more technical you are the better qualified you are and the more value you bring to the table when you and your technical founder sit down to make those trade-offs.When you propose a strategic move – and you will – your co-founder knows that you’re coming from a place of understanding. Credibility builds trust – and invaluable ingredient in a startup.

The bottom line: if you have an idea, and better yet a solution to a real problem, start building your tech chops and get user traction immediately. Tech co-founders, like investors, are looking for value add. The more tech expertise you can add to your customer traction the better your chances of landing that technical founder to help you make the leap from a prototype to a real product.

Doing the right thing or doing things right?

dilbert

I’m a pretty faithful reader of Dilbert and I can’t remember a strip of his about entrepreneurs. But given that Dilbert works in a seemingly large bland, established corporation that is no surprise. But this is at least the second time I’ve found a Dilbert strip that worth commenting on for founders.

Not only is this strip very funny, there’s a lesson behind it, as there are with many of Scott Adam’s strips. It’s the difference between doing things right and doing the right thing. When it comes to startups we all focus on doing the right thing – that’s the big idea, vision of the founder that drives the formation of the venture, that will captivate investors, and convince millions of customers to use and pay for the product of that vision. And there is no question that startups start with the idea. In fact since I’ve been a kid I’ve always questioned the status quo and often felt that I knew a better way of doing things. That’s what drove me to start my first company, Real Time Audio. As a music fan since being totally enthralled by Gene Vincent’s Be Bop a Lula while at summer camp I attended a lot of music events. And as an audiophile – someone obsessed with reproducing music as realistically as possible in their home – I felt that most concert and club sound was terrible. I knew I could do better. That was the idea, provide audiophile standard sound for bands. Unfortunately, being beyond totally ignorant about business I didn’t realize how capital intensive the sound reinforcement business was. And while I quickly got customers it was only those bands who couldn’t afford their own P.A. and thus could afford to pay me much either. So that vision fell by the wayside.

What brings up the difference between doing the right thing and doing things right has been the recent trials and tribulations of Elon Musk. I admire him and follow him as I regard him as being one of today’s great entrepreneurs. He looked at how NASA sent up rockets and very wastefully let the booster section fall back into the sea, wasting millions of dollars. His big idea for SpaceX – doing the right thing – was to build re-usable booster rockets, which could be retrieved and used over and over again, saving millions of dollars and thousands of hours of operations time. SpaceX has been a big success.

But he’s not in the news lately for the successes at SpaceX – he’s in the news for problems at Tesla. And there’s little doubt that his vision of doing the right thing by building cars than would run on electric power and not fossil fuels has been the right big idea – every car company in the world is now on a crash course – whoops! – to catch up with him.

And up until recently with the production woes of the Model 3, Tesla has done things right to an extraordinary degree. Doing things right is all about execution and the Tesla Model S is the only car to ever receive a perfect score of 100 from Consumer Reports, just one of many indicators that Musk could execute not just at a world-class level, but world leading, standard-setting level.

But as he’s admitted, he’s been in production hell with the Model 3. Worse yet, according to a recent news report, in the past year or so he’s lost 30 top executives! So not only has he repeatedly failed to meet his production goals for the Model 3, he’s lost top flight personnel to Apple and other companies. What’s wrong with this picture? What’s wrong is that Musk feels he must work 120 hour work weeks to get the Model 3 up to the necessary production levels. He’s sleeping on the factory floor. Well here’s the lesson for founders – in a word, delegation.

Building great companies means building great teams. And to do that the founder has to hire the best people in the world, not just people who could “do the job.” Steve Jobs doesn’t receive enough recognition for his incredible ability to attract, retain, and engage incredibly talented people, many of whom have gone on to great success since leaving Apple. Perhaps because he was at best a mediocre engineer, he had to delegate. There was no way he could write the code necessary for an operating system nor design extremely complex hardware like the iPhone. So he was forced to delegate. Apple executed at the highest level; its customer satisfaction levels lead the industry. And while Jobs did work long hours, especially during his first tenure at Apple, I don’t recall any stories about him sleeping on the floor of Apple’s factories or flying around the world to solve problems on production lines. That wasn’t his job. His job was to have the company do the right thing: combine a phone, Internet communicator, and music device all into one form factor, with a revolutionary touch interface. It was everyone’s job at Apple to do things right. And they did. Apple was and is famed for it’s level of execution., When the screw up, as every company does, it’s worldwide news.

Why can’t Elon Musk retain great talent? Why is he sleeping on factory floors and driving himself to exhaustion? Obviously he can’t delegate. And as a brilliant engineer, unlike Jobs, he can actually add value not just in design of Tesla’s cars, but in how they are manufactured. But execution is where the company has fallen. And until he starts replacing those thirty top execs and who knows how many top flight staffers he’s also lost, he will be sleeping on factory floors. Jobs was a micro-manager, just as Musk is, but the difference is he enabled his people to exceed their own expectations and they were able to take enormous pride in the products they produced, used and loved – yes loved – by millions. While I can name at least half a dozen of the original Mac team I can not tell you the name of a single person at Tesla other than Elon Musk!

So founders, as Bill Belichick, Head Coach of the five-time Super Bowl winning New England Patriots says, “Do your job!” Your job is to set the company direction, and provide the resources for your teams to execute your big idea – the right thing, to constantly communicate and make mid-course corrections as necessary. But you need to step back and your employees each figure out how to do things right. Because the true driver of excellence is not salary, stock options, titles or the number of staff who report to you. Those are all extrinsic drivers, the true driver is intrinsic: the feelings of accomplishment, teamwork, pride, and knowing you have done world class work. If as a founder – no matter how great an engineer you are – you constantly step in and don’t let your staff figure out how to do things right, if you never delegate. you too will find yourself not only sleeping on a factory floor, but having a Board of Directors that may decide to replace you with someone else.

My big lesson as I went from an individual contributor mixing sound to an executive with dozens of people reporting to me and a budgets of millions of dollars, was the definition of management was getting things done through other people. And getting things done was the reason so many founders who had the vision, who knew what the right thing to do was, recruited me to run their operations – to do things right.

While Elon Musk is about as far from the  Dilbert’s dumb boss as you can get, he’s acting exactly the same way. Whether he pulls out of this nose dive and gets back to his winning ways is not the point. The point for founders is to learn from his mistakes so you don’t make them yourself. Recruit a great team, give them clear direction, and get the hell out of their way!

A team of all stars is necessary but not sufficient

astroball

It’s long been a truism in sports that the best team in the league can beat a team of
all-stars handily. The reason given is that the league champion has practiced and played together innumerable times compared to an all star team. But the review of the book Astroball in The Wall Street Journal makes clear that there’s another critical element to winning teams. While Ben Reiter’s Astroball may seem to be about team sports, which it certainly is, many of its insights apply equally well to startup teams. Note his sub-title: The New Way to Win It All. 

The VC mantra back when I was building companies was hire the best person in the world for the job. However, it’s become clear since the late 1990s that’s not the best way to build a winning team in business. The savviest CEOs and founders hire for company fit as well as individual talent.Just as startups all seek the elusive product-market fit, a startup team needs to work together effectively. There’s no room for prima donnas, or to use the startup tech term, no room for assholes. But whether you follow the old style of trying to hire the best individual for their position or today’s model of hiring the individuals who will not only make sterling individual contributions but who also fits the company culture, there is still a missing element.

Here’s the money quote from the Journal review of Astroball:

This roster-creation, all by itself, did not bring home the championship. Building an exceptional team is one thing, but making it work as a team is another. “Fault lines” exist in all complex organizations—including baseball teams. If these lines can be bridged or eradicated, a team is likely to win more ball games. To use another bit of old-fashioned terminology, a team needs chemistry.

So where does chemistry come from? In the case of the Astros it came when they signed veteran outfielder Carlos Beltran, who immediately took on the role of chief chemist. In addition to creating a postgame ceremony that awarded prizes for excellence in the field coupled with a fine system for those who failed to attend, he had a strong desire to close the gap between English and Spanish speakers on the Astros team.

Your chief chemist may well be a founder, or might be your CEO. But in the case of Course Technology, the educational publishing company I co-founded in 1989, our chief chemist was Howard Diamond, the fireball VP of Marketing and Sales who galvanized the company though his then unique sales team model. Like other publishers Howard established geographic territories for each team. But unlike any other sales team, Howard’s team was made up of three people: an inside sales rep, a field sales rep, and a customer service rep. The three of them shared in the yearly bonus based on the performance of their team. These teams became self-managing for excellence. We quickly found that Howard’s teams easily beat out the old-fashioned teams of competitors where every sales person was in it for only for themselves and customer support was relegated to a backroom, somewhere, some place.

So when you are building your team if you or your co-founder is that chemist who can close gaps, whether between English and Spanish speakers or between sales and customer support, you are all set. But if not, start looking for that chemist, almost always a veteran who has been proven to not just close gaps in the company but to erase them completely.

All star teams in sports lack chemistry. Don’t model your team after the Washington Redskins where owner Dan Synder has never learned the lesson that you can’t buy your way to a championship. Not only do you need to hire for company fit, you need the secret sauce, and that sauce is leadership.