There have been significant layoffs at all the major tech companies, the economy has softened, and valuations are plummeting.
Now's the time to get a bargain on talent, right?
Not so fast.
Putting aside for a moment the fact that the "Laid Off Tech Workers Quickly Find New Jobs" - the reality is that "A small team of A+ players can run circles around a giant team of B and C players" (Steve Jobs).
I can't tell you the number of conversations I've had with founders and executives who - once identifying a rockstar hire - shared some version of the following sentiments.
- "Wow, they're way too expensive!"
- "Their salary expectations are way above everyone else on our team!"
- "I'd rather hire three engineers over there than just 1 over here for the same money!"
These kinds of comments are rooted in a false assumption - namely that, generally speaking, individuals and their impact on your company are roughly comparable.
This is false.
Talent is rooted in a long-tail distribution.
In other words, a very small number of people can have a massive and disproportionate impact on the productivity and success of your company.
Why?
Because a small number of people have the experience, talent, and hustle you need (combined) to make a huge impact. And a huge impact at the early stages of your company can have a massive, disproportionate impact on your outcomes over the long term.
So to the sentiments above, I'd ask...
- Are you sure they're too expensive? What is the value of increasing the chances and scale of your success by 100x?
- So what if their salary expectations are way above everyone else on our team? Are the other people on your team as good? Are the other people on your team getting it done? Is this a game of keeping things fair for the other staff, or is it about having an outsized impact on the world?
- Are you sure you'd rather hire three engineers "over there" than just one "over here" for the same money? What if I told you this one engineer could do the work of five of those engineers - and the outcomes will be better?
In addition to all of this, AAA players want to work with other AAA players. Start hiring amazing people now, and you will start increasing the overall quality of your team and further have an outsized impact on your success.
When it comes to talent, The goal is simple. Hire the best people you can find. Incentivize them well. Hold onto them for dear life.
This is one of the many ways that Startups are counterintuitive. If you want to get more content like this, subscribe to my free newsletter at https://www.chrissaad.com/startupnewsletter
Product & Startup Builder
The great big mystery of tech startups
The great big mystery of tech startups
1. Build a product that solves a real and embarrassingly narrow problem
2. Put it in front of the right users
3. Learn and iterate
4. Rinse and repeat
That's it.
The faster and more efficiently you do that, the better.
Ignore the noise. Set aside your ego. Avoid the bright shiny lights. And keep a keen eye on opportunity cost. They will all sink you before you even get to step 2.
But here are the real questions...
1. What is a product?
2. What is a real, embarrassingly narrow problem?
3. How do you solve only a narrow problem when you know the real issues are so big and complicated?
4. How do you put the product in front of users?
5. How do you know those users are the RIGHT users?
6. How do you learn?
7. How do you make sure you learn the RIGHT lessons?
8. How do you know exactly HOW to iterate such that the changes are as surgical and effective as possible?
This is what makes the simple 4 step dance of startups so hard. It's the definition of terms and the methodologies for effective and efficient action at each step.
The trick?
Find people with experience, intuition, taste, and talent. Bring them into your process. Put them in positions of authority. Hold onto them for dear life.
Do you have an ops problem? Some solutions from a former Uber exec.
Do you have an ops problem? Some solutions from a former Uber exec.
If you’re a scaling tech startup with a heavy operational side to your business (a group of non-R&D/corporate people who need to do physical things for your product or service to work), then…
Treat it like a machine with one major goal: increasing efficiency and repeatability over time.
Use techniques like…
Separate it into a distinct department
Hire a strong operational leader
Create very specific and tightly defined job descriptions, org chart, KPIs, and playbooks that tightly define what success and vectors or scalability look like
Make it everyone’s job to refresh and socialize the playbooks as they learn
Remember that you’re ultimate efficiency is to automate most things with software
Strongly consider a "Product Operations" role for each of your key squads that connects your product thinking and planning to your ops thinking (and vice versa)
Remember that when you automate most things - you may need to start creating and hiring for more junior roles that are less creative but more productive using your tools
As a result, your operations org should be…
Getting measurably more efficient all the time
Continuously self-renewing/refreshing as staff rotate out (because your ops leaders are continuously hiring at pace)
Infinitely scalable (and elastic) by just adding (or removing) bodies to a scalable org and process
Eventually able to 10-100x its capacity so you can scale globally
Go upstream to solve problems at their root
If you're experiencing daily thash, disagreement, hard trade-offs, etc then the problem is very likely upstream.
It's rooted in a lack of specificity in the business strategy, customer persona, core problem, product principles, key assumptions etc etc
It's very, very hard - especially as an individual contributor or middle manager - to encourage or even force leadership to take a step back and establish concrete agreement on these high-level concepts.
Why?
For many reasons...
A few that come to mind today...
1. No one asked you - it's not your job, and it can be seen as arrogant or out of band
2. Because companies with bad strategy and planning hate nothing more than making concrete decisions about their high-level strategy. They resist collapsing potentialities into realities. They resist saying "no" to pathways and opportunities in favor of a focused bet (but they must).
3. Because of point 2, the conversations are very, very hard to have. They feel painful and confrontational. And people try to avoid pain and confrontation.
However, if you don't confront the pain upstream at the high-level concepts/consensus once and for all, you will simply have to confront it day-to-day in your operations.
On Consistency
Probably the character trait least well adopted is consistency.
I’ve seen business strategies abandoned because VCs said so.
I’ve seen product strategies abandoned because a little time has passed.
I’ve seen product tactics abandoned because engineering said the implementation might be a little harder.
I’ve seen mental models abandoned on just a single data point.
I’ve seen peaks in initial effort abandoned after just a couple of days or weeks.
I’ve seen half baked pivots that fail to be consistently applied to all aspects of the product and business.
I’ve seen decisions unwound as soon as some of the pain of execution sets in.
It seems that one of the hardest things in life is making a decision. The next hardest thing is sticking to it consistently and methodically over time.
I’ve seen this in life, and in startups.
Related: People often confuse agility and speed for thrash.
Agile is about working on and releasing thin slices with learning along the way.
It is not about making a radical new choices on strategy and tactics every cycle.
Clever pricing tricks and product cheats
When trying to maximize conversion and revenue over the long term - making your product easier and better is a superior tactic to clever pricing tricks and brute force.
6 common reasons why many people don’t manifest their goals into reality…
Because they think failure and anxiety are conditions to be avoided
Because they fail to understand that opportunities at first appear like hard work
Because they think that things are broken “for a reason”
Because they believe that the conditions and constraints of the world are immutable
Because they don’t understand how to sustain high-quality execution over time
Because they likely have some self-limiting beliefs, instincts, character traits, and/or behaviors and anyone who provides opposing signals will at first appear wrong.
The empathy advantage
Lately, there have been many books and commentaries on the advantage of empathy in leadership and the workplace.
I would argue that beyond empathy, bringing humanity - our whole selves - to work is necessary.
In either case - this will take a lot of practice and cultural change after centuries of top-down, aggressive work culture.
In the short term, though, it’s important to remember the power of positivity and praise in day-to-day leadership.
There will always be the next challenge and concern for you and your team to tackle. It’s easy - as a leader with more context or tactical distance - to fast-forward every conversation to aspects of the work that need fixing or changing.
However, I’ve personally witnessed the profound effects that regularly pausing to celebrate hard work, clever insight, and productivity breakthroughs can have on individuals and teams.
Given my job, I have small windows to engage with my startups and deliver massive value. Value can often mean focusing on what’s broken.
Even so, I try (often unsuccessfully) to first start a review with what’s working great and to ensure that hard work is acknowledged.
I recommit myself to doing this even more and more consistently.
I encourage you to do the same.
Are you really building a B2B company?
I've often written about the need to rethink your business model from first principles. Particularly the idea that many B2B companies and founders actually want to pursue full-stack disruption as B2C companies.
However, another critical mistake founders make is to confuse a B2B2C company with a B2B company.
B2B Companies build products to help companies operate more efficiently. Think Salesforce, Slack, Google Docs. Their products don't really touch the business' customers in any meaningful way.
B2B2C Companies, on the other hand, build products for end-users/consumers but happen to be purchased, re-branded, and re-sold by other businesses.
This is an essential distinction because while B2B companies may spend a lot of time focusing on enterprise features and support processes, B2B2C companies, in many ways, need to act more like B2C companies.
B2B2C companies and products (like B2C companies) must remain laser-focused on building incredible features that end-users love. Otherwise, why would other businesses buy your stuff and offer it to their customers?
But here's the real secret...
These days - the only thing that really matters is the C. Even in B2B, where it appears like there is no C!
Why?
Because in all cases - B2B, B2C, B2B2C, or Even B2D (developers) - you're actually dealing with human beings who need to use and love your stuff.
The massive and growing collection of incredible, product-led business tools (think Slack, Product Board, Calendly, etc) has taught users to demand more from the products they use - both in their personal lives AND at work.
The lines have blurred. The bar has been raised.
In short. Focus on users. Build beautiful products. The rest is mostly a distraction.
Affiliate deals come third
Don't race to affiliate deals.
Fix your product. Make it usable, delightful, retentive, and habit-forming first. Figure out how to sell it YOURSELF second. THEN think about affiliates third.
Product suites require strong mental models
One of the keys to moving from a stand-alone product to a suite of related products is having a strong mental model or metaphor for how they fit together.
This helps the product/design/engineering team to…
1. Design user experiences that more naturally and logically connect together (particularly if the team is broken into different squads).
2. Design user experiences that organically move users from product to product.
3. Design features that make your products work “better together” to ensure they’re not just shipping more stuff - but rather creating lock-in via a cohesive ecosystem.
4. Understand opportunities to create shared naming conventions, primatives, patterns and product surfaces that improve all your products at the same time.
Ultimately this all helps users to more easily and quickly onboard and broaden their usage across all your products.
Don’t just build more stuff. Figure out the mental model first.
#product #productstrategy #consultingconvos #startups #scaleups
Ideas for avoiding partnerships with incumbents
A friend asked me how to avoid partnering with incumbents when they have exclusive control of the supply side of your industry (in response to my previous post about incumbents).
Some of my ideas…
1. Don’t rely on them to promote you. Aquire users directly
2. Don’t build and sell software to help them run their operations - only build enough to facilitate a transaction. Give it to them for free and take a clip of the transaction. They are not a customer they’re a supplier.
3. Find other ways to grow your utility and super engaged user base that does not rely on their supply - so that you become a large enough center of gravity and source of qualified leads that they can’t ignore you. This will allow you to dictate some of the engagement model.
4. Engage with smaller players that are more desperate - related to point 3
5. Build products/processes that are so damned good that users and partners can’t ignore you.
Start from the ideal user experience and work backward.
Start with smaller or more innovative partners who are willing to innovate.
And/or give them equity or big $$ to play nice - i.e win them over with competence, equity and/or money.
Should you hire a CPTO?
I’m still hearing about CPOs/PMs reporting to CTO or "CPTO".
Stop it.
Regular reminder:
Some individuals can be very, very good at Product AND Engineering, depending on which role you place them in. But that is rare.
It is an extremely rare unicorn that can juggle both product AND engineering thinking at the SAME time.
You are setting yourself (and the R&D team) up for failure.
Why? So, so many reasons. Just a few top of mind today...
1. Engineering is like a soldier in the trenches - getting stuff done. Product is the like the General at the forward operating base - they have a higher-level view of the battlefield.
2. Product needs a first-class seat at the leadership table.
3. Product and engineering need creative tension in order to function correctly.
There are many, many other reasons - check out my latest Ebook about being a product-led org for more details.
You won’t succeed at VC fundraising
Your small business won’t raise VC
And that’s ok.
I just saw a post from a successful small business operator who has built and operated a solid service business for over 12 years.
In it, she lamented that she had always been bootstrapped and never raised capital, which always made her feel like she never quite measured up.
This is heartbreaking and frustrating for so many reasons.
Regular reminder: Small businesses are not startups, and startups are not traditional small businesses.
They are designed to operate completely differently on pretty much every level.
Startups can raise Angel and VC capital because they are powered by software and can (hopefully) experience exponential growth with incremental cost to serve.
Small services business are not designed to do this.
Neither one is better or worse, but they are completely different “games” with different rules. If you don’t understand which game you’re playing, you will ultimately create a lot of frustration, pain and suffering for yourself and your stakeholders. It will also likely undermine the success of your company.
I’ve shared thoughts about this in many ways and in many forms. Not the least of which is the first episode of The Startup Podcast and the first book in the start up scale ebook series at chrissaad.com/startupscale. Link attached below.
#business #growth #experience #startups #scaleups #consultingconvos
Ingredients for conviction
Conviction takes vision, constraints, data, intuition, taste, experience, leadership, trust and courage.
Properly testing your conviction takes high-quality execution at speed.
The only thing worse than conviction about the wrong thing is failing to make decisions and learning/iterating quickly.
What’s the difference between B2B2C products, and Channel/Affiliate partnerships?
Channel/affiliate partners send users to your branded site or app, and users sign up to YOUR service and become YOUR customers. You have the right to up-sell and cross-sell to them. You get to establish cross-partner network effects. They don't typically pay you. You might even pay THEM commission for leads.
B2B2C products are typically when your product is white-labeled or embedded into a 3rd party site or app. Users sign up to the OTHER service and do NOT become your customers. You do NOT have the right to up-sell or cross-sell to them. The 3rd party site or app typically PAY you as your CUSTOMERS.
Don’t confuse the two.
Don’t accidentally stumble into B2B or B2B2C when you really want to do B2C and/or affiliate.
Your pivot will result in lost clients
This is true of startup pivots and “focusing” exercises as well…
“Your new life is going to cost you your old one.
It’s going to cost you your comfort zone and your sense of direction.
It’s going to cost you relationships and friends.
It’s going to cost you being liked and understood.
It doesn’t matter.
The people who are meant for you are going to meet you on the other side. You’re going to build a new comfort zone around the things that actually move you forward.
Instead of being liked, you’re going to be loved. Instead of being understood, you’re going to be seen.
All you’re going to lose is what was built for a person you no longer are.”
― Brianna Wiest
Fundraising requires competition
As a founder, the moment someone starts sniffing around for an investment in your company that looks even mildly interesting, you need to start talking to other potential investors.
This gives you more negotiating leverage and may even help you find a better investor+deal
Disruption and incumbents
Startups are about disruption.
Disruption, by definition, means that legacy players (otherwise known as incumbents) are having their world changed/disrupted in some way.
When dealing with incumbents...
You want to: address their concerns and overcome them with better products, user experiences, and business models. Along the way, focus on those who get it and ignore the rest. They'll either jump onboard later or die.
You do NOT want to: Compromise your vision and work around their fears. You don't want to waste too much time trying to convince those who resist change.
Better: Whenever possible, go directly to the demand side (end-customers) and control the transaction end-to-end. Cut incumbents out or - worst case - come to them with deals/$ (not hat-in-hand asking them to change their business with a clever new product).
What to do when your colleagues don’t like you
Once people decide they don’t like or trust you - it’s very difficult to convince them otherwise.
Everything you say and do from that point forward will be filtered through that lense.
This makes advocating for yourself and personally changing the tide of sentiment difficult (if not impossible).
In a business environment, it takes a strong and articulate leader/manager to push back on false narratives and elevate truth and justice.
But that’s hard and rare to do because the manager risks their own alienation.
The solution?
For leaders:
1. Work intentionally to create a culture of truth-seeking that minimizes personality/emotion-based decision making. Conversely be vigilant about signs of fragility and easy intimidation (ideal case).
2. Encourage direct communication between stakeholders rather than games of telephone.
3. Defend unjustly criticized employees (This reenforces point 1).
For individuals:
1. Ensure careful and diplomatic day-to-day execution so as to avoid crossing the point of no return. (However be careful: too much of this runs the risk of undermining a truthseeking culture of honest communication and rapid improvement).
2. Hyper-vigilance to share your perspective and contributions as you go using a range of communication techniques (clear roadmaps, group status updates, metrics, etc) (taxing but often necessary).
3. Building political alliances that will support you (yuck).
4. Grit and perseverance (but don’t spend too long banging your head against a wall - sometimes it’s better to move on).
In short, it takes hard, intentional work from good faith actors on all sides.