Category: Entrepreneurship
My friend Chris Moody, the COO of Gnip, has another guest post up today titled Startup Culture: Values vs. Vibe. He’s written about this in the past on his blog, but we both thought it was worth reposting. Enjoy – and comment freely, especially if you disagree or have constructive feedback.
I hear some form of the following question frequently from founders that are starting to have early success:
“How do we hire a bunch of new people and grow the company quickly without losing the culture we’ve worked so hard to establish?”
I’ve been fascinated by different company cultures for as long as I can remember and I love asking entrepreneurs to describe the culture of their companies. Over time I’ve come to realize that when you break down culture descriptions you’ll often find a mix of two components: values and vibe. Although each component can have a significant impact on the overall feel of a company, the way you establish and manage the two should be different.
Values
I think of values as the guiding principles or a code-of-conduct upon which a company was founded and which it operates on a daily basis. If you establish the right set of values early, these principles won’t change with time. Values establish your company’s view of the world and determine how you treat others including employees, customers, partners, and investors. Most importantly, values serve as the foundation on which tough company decisions are made. Values are 100% controlled by the company and should be unaffected by competitors, market conditions, and industry trends.
The people you hire will come with their own set of values. Every person you hire should have personal values that completely align with the values of your company. 95% isn’t good enough. In fact, if a team member violates a company value, the violation should result in removal of the individual from the company. Here are some other things to consider around establishing and maintaining company values:
- Document and talk about your company values with your team all the time. Consider publishing your values, and talking about them with customers, partners, etc. to add an extra level of scrutiny to your commitment.
- I believe a set of five or less documented values is ideal because you want all your employees to have them top-of-mind when making decisions. If you have too many values, people simply won’t remember them.
- Determine a set of tough “trade-off” questions that you can ask during the interview process that will help you determine if a candidate’s values align.
- Good values require tough decisions to be made in order for the values to be upheld. If you establish values that are never challenged, these values aren’t serving any real purpose.
This last point is particularly important. Watered down or generic values might be easy to uphold, but they also won’t establish a strong culture. Companies with unique cultures tend to have values that are unconventional and sometimes controversial. A famous example of a unique value is Google’s “Don’t Be Evil” (I believe the actual company published version is “you can make money without doing evil”). I’m guessing “don’t be evil” is discussed at Google hundreds of times of day when decisions are being made, and I bet it is surprisingly hard to stay true to this value even though the premise seems fairly simple. The fact that Google allowed this value to become public knowledge has resulted in a huge audience of observers that are constantly scrutinizing Google’s actions to see if they are staying true to their values.
Vibe
Vibe represents the emotional side of the company. Like all emotions, vibe can be fairly volatile and is highly influenced by outside factors. For example, think about the vibe of a company on the night that the first product is launched vs. the vibe of the same company when Apple announces they are launching a competing product or service. When it comes to vibe, management can certainly set a tone and lead by example, but the reality is the vibe of a company will naturally change with time as the company grows and the products/employees mature. The biggest influence on vibe is typically success. Most companies that are doing well tend to have an overall positive vibe.
In the last few months, I’ve talked to two different startups that described one of their values as “Work hard. Play hard.” Is this really a value? Perhaps this statement actually describes the vibe at a certain moment in the life of the company. If an employee is no longer willing or able to play hard but is still producing at a high level, is this person no longer valued by the company? Working and playing hard together might be an important part of the company in the early days, but will it be a necessary component for all 300+ employees when the company has been around for 10 years?
As a leader, there are aspects of vibe that you will naturally want to try to control. However, you have to ask yourself a few questions:
- Is this aspect of the company important to our long-term success?
- Does this aspect need to be maintained forever and is it sustainable?
- Does this aspect apply to all areas of the company and to all employees?
- Will establishing this aspect help us make important decisions in the future?
If you answered, “yes” to all of the above, congratulations: you’ve just identified a new potential value. However, it can be fairly liberating to realize that the foosball table in the middle of the office is nice, but it isn’t crucial to the long-term success of the company.
I know this won’t be a popular statement, but I don’t think maintaining culture (as defined by many entrepreneurs I’ve encountered) is important. Instead, I think it critical to focus on establishing strong values early and hiring people that have aligning values. Maybe it is all just semantics on how you define culture, but I believe you shouldn’t sweat the vibe part. You’ll have an overall positive feel if you are successful and that is the only type of vibe that really matters.
I judged Lean Startup Machine Boulder yesterday afternoon. I had a blast and thought the program was really impressive. I didn’t really know what I was getting myself into and usually protect my weekends pretty aggressively from stuff like this so I can spend time with Amy and recover / catch up from the week but for some reason Trevor Owens (Lean Startup Machine CEO) and Ray Wu convinced me to come out and play.
I’m a huge Eric Ries / Lean Startup fan and believe that the methodology can be quickly taught. What I saw yesterday is further evidence of this – 13 teams spent from Friday afternoon to Sunday afternoon using the Lean Startup Methodology, the concept of customer development, and the lean startup canvas to go from idea through a series of validated learnings to get to a better idea. It’s not a coding / hacking weekend – it’s an applied process of the Lean Startup Methodology.
The event took place in the Scrib co-working space in downtown Boulder. I hadn’t been there yet so it was a good chance to meet the founders of Scrib, see the space in use, and get a sense of the energy. It was excellent and I expect Scrib will be a great contribution to the Boulder Startup Community for a long time to come.
After we saw 5 minute presentations from each team, the judges sequestered for a while and came up with first and second place. The winner of Lean Startup Machine Boulder was I Want My Bike Back and second place went to Dig Rentals. We came up with fun awards for all of the other teams and there was no doubt in my mind that it was a useful event for everyone.
Lean Startup Machine has a goal of doing 50 events in 2012 and 200 events in 2013. The next ones are in San Francisco (5/25), Toronto (6/8), Rotterdam (Netherlands – 6/8), Los Angeles (6/15), Boston (6/15), and Seattle (6/29). If you are in any of these cities, I encourage you to check it out.
If you are a developer, I encourage you to carve out an hour and watch TechStars CEO David Cohen’s presentation at RailsConf 2012 (30 minute presentation and outstanding 30 minutes of Q&A). He starts out with the assertion that “developers are the new investors” – how could you not be interested in hearing more about that?
David and I wrote a book last year called Do More Faster: TechStars Lessons to Accelerate Your Startup and this is his riff to a room full of developers about some of his top tips. Special bonus – see a photo of me in my pajamas at minute 7.
Today’s post is a guest post from my friend Nicholas Napp. We first met five years ago and while I’ve never invested in anything he’s done, I’ve tried to be helpful along the way. Nick is currently running a company called MoveableCode and has a great Kickstarter campaign going for his latest product Incantor (Magic Made Real). Go check out the campaign and support him if you are interested. In the mean time, enjoy his story about Never Giving Up and Never Surrendering. And yes, I recently “invested” in Nick via Kickstarter at the $250 level – I now am excitedly waiting for my Incantor Nobilis for 2.
First – an overview on what I’m working on now
I founded MoveableCode back in 2009, initially to do some mobile Augmented Reality research on a National Science Foundation SBIR grant. We quickly learned that we could make cool things but no money and pivoted. Two years later, we are all about innovative mobile entertainment. We have a grand vision to build a kickass company and Incantor is a big part of that.
Post pivot, I’ve been lucky enough to lure in two good friends, Kevin Mowrer and Trivikram Prasad. Kevin used to run all of R&D for Hasbro and founded their entertainment division. He used to be a client of mine. Triv was an engineer at a company I worked for when I first came to the US as a product manager. He went on to lead teams for Intel and Intuit and is now based in Bangalore, India. I’ve known both of them for 15+ years and we immediately clicked as a team. We’ve raised a modest amount of money, just enough to get some proof points and are now getting in to high gear.
Incantor is our vision of what happens when addictive gameplay is combined with immersive, community-driven fantasy. It is built on a simple premise: Magic Made Real. The game unites people, places and things and is played with your smartphone, a magic wand and your friends. The magic wand is a sophisticated bluetooth device and the game is played as a fantasy LARP in the real world.
We made the decision to go the Kickstarter route because we wanted to connect with fans. Community is vitally important to the game and we want to embrace that from day one. There’s nothing quite like it out there… and there are some really cool parts we’re not talking about yet. This is going to be a fun ride… “Do or do not. There is no try.”
Rewind to five years ago
Brad was my first VC man-crush. About five years and a couple of startups ago, I mercilessly tracked him down and he was good enough to meet and hear the pitch for the startup I was with at the time.
To say we were excited was an understatement. This was the guy that we wanted to meet. If he heard our pitch, the infatuation would be instant and we would walk away with a nice big check. We were going to score!
Sadly, I can say with some confidence that it was the worst pitch I have ever given. Everything that could go wrong did. We crashed and burned as badly as possible and Brad and his colleagues were as gracious as they could be. I even made the “oh no you didn’t” mistake of mis-dialing after the meeting and accidentally calling Brad as he went to the airport.
But as an entrepreneur, you move forward by getting up after you fall down. That startup died, but I stayed in contact with Brad and we’ve chatted many times since then.
MoveableCode is my latest startup and it’s been getting some great early traction. He’s now a backer of our Kickstarter project and I couldn’t be more pleased.
As the saying goes… Never give up, never surrender
As the endless stream of emails, tweets, and news comes at me, I find myself going deeper on some things while trying to shed others. I’ve been noticing an increasing amount of what I consider to be noise in the system – lots of drama that has nothing to do with innovation, creating great companies, or doing things that matter. I expect this noise will increase for a while as it always does whenever enthusiasm for startups and entrepreneurship increases. When that happens, I’ve learned that I need to go even deeper into the things I care about.
My best way of categorizing this is to pay attention to what I’m currently obsessed about and use that to guide my thinking and exploration. This weekend, as I was finally catching up after the last two weeks, I found myself easily saying no to a wide variety of things that – while potentially interesting – didn’t appeal to me at all. I took a break, grabbed a piece of paper, and scribbled down a list of things I was obsessed about. I didn’t think – I just wrote. Here’s the list.
- Startup communities
- Hci
- Human instrumentation
- 3d printing
- User generated content
- Integration between things that make them better
- Total disruption of norms
If you are a regular reader of this blog, I expect none of these are a surprise to you. When I reflect on the investments I’m most involved in, including Oblong, Fitbit, MakerBot, Cheezburger, Orbotix, MobileDay, Occipital, BigDoor, Yesware, Gnip, and a new investment that should close today, they all fit somewhere on the list. And when I think of TechStars, it touches on the first (startup communities) and the last (total disruption of norms).
I expect I’ll go much deeper on these over the balance of 2012. There are many other companies in the Foundry Group portfolio that fit along these lines, especially when I think about the last two. Ultimately, I’m fascinated about stuff that “glues things today” while “destroying the status quo.”
What are you obsessed about? And are you spending all of your time on it?
The Magic Moment When You Shift To Executing As Fast As You Can
There is this magical moment that happens when a startup finally puts the key components together to build a successful business. After months or years of iterating and pivoting, they finally have the right product for the right market at the right price. At this point, the company has to shift gears and change their mindset a little. They need to stop looking for gold and start mining as fast as possible. My friend Chris Moody, President/COO at Gnip, refers to this as the execution phase of a business and there is no better example of execution in our current portfolio than the team at Gnip.
After 2.5 years of product development and varying business approaches, Gnip found their magic moment about a year and half ago. Since that time they have been heads down executing and the results have been incredible.
Today Gnip announced an exclusive partnership with Tumblr. This monumental partnership will give Gnip’s customers full coverage of an amazing source of social data that has never been available. With 50 million new posts per day and 15 billion page views per month, Tumblr offers a huge new data stream for companies to analyze and use to drive business decisions. The fact that businesses will be able to receive this data via the same reliable and scalable Gnip infrastructure that currently delivers Twitter and other important data sources is a major win for the ever growing social data economy.
The Tumblr partnership is the kind of announcement that companies plan their entire year around. However, in Gnip’s case, it is just the latest activity in an impressive series of events that shows the Gnip team knows how to get shit done. It is only April and Gnip has already done the following in 2012:
- In January, Gnip announced an exclusive partnership with Automattic to provide firehose streams of WordPress.com and WordPress.org data to the enterprise. This partnership increased the amount of real-time blog data available for business analysis by 70% overnight.
- In February, Gnip announced a premium partnership with Disqus. Disqus is the largest third party commenting system in the world (I use it on my blog) and the data offers tons of valuable insights to drive lots of cool business use cases. The Gnip/Disqus partnership makes this comment data available in full firehose coverage form to businesses for the first time ever.
- Also in February, Gnip released the first ever commercial Twitter historical product. Gnip’s 30-day replay product allows their customers to go back and replay Twitter history. As the old saying goes, hindsight is 20/20, and Gnip’s replay product allows companies to replay the entire Twitter stream for a full 30 days to look for things they might have missed. This product was a monumental engineering feat and a huge portion of Gnip’s customers have already taken advantage of this product in just the first two months after its release.
- In March, Gnip announced Big Boulder, the first ever conference dedicated to social data. Take a look at the list of speakers – it will blow your mind.
- Just last week Gnip announced that they added the largest microblogging service in China to their Enterprise Data Collector offering. Sina Weibo has over 300 million members; brands across the world are very interested in the conversations happening on this enormous platform. Gnip continues to push to increase the number of international data sources in their offerings and Sina Weibo represents a huge addition to their portfolio.
Okay, so the Gnip team is getting stuff done, but at what price? They must be cracking the whip pretty hard and creating a real sweat shop, right? Wrong. In spite of growing their number of employees by 300% in 2011, Gnip was just named The Best Place To Work in Boulder. Not the best startup, the best company. And, the best news of all? They are hiring!
Last week at our Yesware board meeting, we talked about the idea of “the monastic startup.” This was a phrase that Matthew Bellows, Yesware’s CEO, came up with, and it characterizes the culture they are creating at Yesware. It embodies two concepts:
The monastic startup is a place where engineers do the best work of their lives. This place involves work with long stretches of uninterrupted time.
This idea sung to me. As I sit here in front of my 30″ monitor, working away in the peacefulness of my office in Boulder, surrounded by 10 of my favorite people (the gang I work with), listening to Lady Gaga, and connected to thousands of others via the computer in front of me, I realize that I long for more “monastic startup” time.
When I think about the culture of many of the companies we are an investor in, the definition of the monastic startup rings true. Oblong immediately comes to mind for me. Kwin Kramer, Oblong’s CEO, wrote an awesome guest post on TechCrunch over the weekend titled The Next, Next Thing. Oblong is one of the most monastic startups I’ve every encountered (using the definition above) – even Kwin and his partner John Underkoffler still spend long stretches of time writing code as they do the best work of their lives.
In my networked world (vs. hierarchical world) a monastic approach works amazingly well. I’ve started experimenting with more non-in person tools to increase the quality of communication across my network, while preserving a level of “monasticness.” The Yesware guys use HipChat for persistent chat. I’m looking for others – suggestions? I’m especially interested in things that work well across organization and communities.
If the phrase “monastic startup” rings true to you, what are the other characteristics that you’d expect to have in this environment? And what tools would you use?
I love talking to, meeting with, and teaching college students. A few weeks ago I sat down to do a 30 minute interview with a young woman from CU Boulder who is an engineering student. She did a great job of capturing my essence, and that of Foundry Group, in our interview. I particularly loved her conclusion, which I asked if I could repost (she said yes). It follows – I hope it’s as inspiring to you (about the next generation) as it was to me.
For Any Young Entrepreneur: My interview with Brad Feld was encouraging to me as an engineer with a passion for innovation. Brad described how he is intrigued by the array of problems that he is faced with everyday. This is especially relatable to me because I fear spending the rest of my life bored by monotony when there are so many problems to be solved. It was enlightening to hear Brad discuss how to conduct a business. I expected to hear trade secrets or how to be the next great thinker, but it really came down to focus, determination, clarity, and inspiration. Feld is another who really believes that the way to survive, as an entrepreneur, is to be open minded to new experiences instead of just being “lucky”. I appreciated seeing the business method that less is more. Yes it is the dream of many to be the most world renown business with 100% return on investment, but it can be just as rewarding to be the successful yet small venture with no need to own a market. Observing the office reminded that an entrepreneur could have a business, enjoy art, and even find time to exercise, instead of engrossing oneself in work at all times. The entrepreneurial lifestyle actually seems like a sustainable one. This opportunity has helped me realize that the life of an entrepreneur can be accomplished simply by merging the things you love with what you are good at.
Indulge me while I think out loud. I’m trying to decide if I like the phrase “poke people in the eye with the truth” or not. Help me by reacting to the following rant – good, bad, bullshit – and feel free to poke me in the eye with truth if you’ve got some, just give me a hug at the end.
Last week, at the Startup America Regional meeting, I got into a conversation about the role of state and local government in the development of startup communities. I went on my typical rant about how entrepreneurs have to be the leaders and government is a feeder to the startup community. I talked about a few things government can do that have a positive impact and a number of things government does that hurts startup communities. More specifically, I talked about specific types of people in government and their roles, including the people with an “economic development director” title (or something like that – who I’ve come to learn are called “ecodevos” which makes me think of Devo and the B-52s and then my brain goes somewhere completely else other than startup communities and government.)
One of the people I was talking to said “that’s all well and good, but I’m not comfortable telling my fill-in-the-blank-with-a-government-title person this stuff. I’m concerned they won’t respond positively to this. I strongly agree with you on what your saying, however. How should I approach this.”
I responded that “sometimes you just have to poke people in the eye with truth.” Be blunt. Be direct. Be firm. Don’t be an asshole – just say it like you see it. And if they think that makes you an asshole, that’s their loss. And when you are done, give them a hug so they know you care and are trying to be constructive.
I carried that line around with me for a week. I observed myself (which is deliciously meta) poking people in the eye with truth and then giving them a hug. My animal spirit, according to Amy when she’s in an earthy crunchy woowoo moment, is a giant polar bear. I like to think of this as the warm, cuddly, lovable version of a bear – the one that won’t crush you when it hugs you. Somehow these two thoughts merged together in my head and continue to circle around.
I’m at Venture Capital in the Rockies today. This is our annual Colorado VC / entrepreneur thingy. Last night I had dinner with a bunch of entrepreneurs who didn’t have dinner plans. It was last minute and a lot of fun. At the end of the dinner we got into a great conversation about the state of the local VC community and I was characteristically blunt about what I thought had happened, was going on now, and would go on in the future. While I have no idea if I’m right about the future, I made the strong assertion that it doesn’t actually really matter that much given the incredible underlying startup community and incredible entrepreneurial talent in the region.
While on the surface there’s plenty of political correctness about this conversation, and lots of “we need more VC money”, which I’m sure will be echoing in the hallways at VCIR today, I realized that I was once again simply asserting my belief that this didn’t really matter. At dinner, I wasn’t poking any VCs in the eye with the truth since there weren’t any there, but if they had been, I’m sure that’s how they would have felt I was behaving. It probably wouldn’t have been comfortable, but if they’d been willing to respond and challenge my assertions, it would have been a robust conversation.
I’ve got plenty of other examples of this from the last week, but you get the gist of this. Is “poke people in the eye with truth” a good phrase, or just nonsense?