Suddenly, title inflation is everywhere. I’ve seen more business cards or email sigs lately with adjectives like “executive” or “senior” or “senior executive” or “special” or “chief” in front of more traditional titles (e.g. “vice president”). The “chief” one is especially bizarre since it’s not always obvious whether the CSO is a “Chief Sales Officer” or a “Chief Security Officer” which in and of itself is a problem.
I’ve never paid much attention to titles. This is especially true when I’m involved in helping recruit someone for a company. I’m much more focused on what the person is going to do and what they’ve done in the past than what their title is (or was). Every now and then an obsession with title is a positive trait as it drives an important discussion about roles; most of the time it’s an annoying obsession with title.
When I think about roles, regardless of where the person sits in the organization, I like to think of them as “head of something.” That lets me focus on the “something” that the person is responsible for. This scales up and down the organization since the receptionist in a company is the “head of meeting people when they walk in the door and making sure the are comfortable and find their way to the meeting they are there for.” More importantly, it forces senior execs, such as a COO, CSO, CPO, CRO, CIO, CTO, CDO, CAO, or CFO to define clearly what they are the “head” of.
I heard the phrase “be the CEO of your job” a while ago from Mark Pincus and have used it many times over the years. Whenever I’m talking to someone about their role in a company, I’m always trying to figure out what they are going to be the CEO (or head) of. When I have the inevitable board member / executive discussion about roles and responsibilities when there are issues, I always carry this metaphor around in my head (e.g. are you, the executive, being an effective CEO of your job). And, when I meet someone new and I see that their title is “Senior Technology Strategist – Digital Products Division”, I try to figure out what they are “the head of”, even if it is one specific thing.
If you are CEO of a company, try the following exercise. Take everyone that directly reports to you and change their title to “head of X”. Scribble this on a white board and see if you have all the X’s you need for your whole company covered. Is there overlap that is unnecessary or are there big holes. And are the right people the right heads of things?
Then, have each of your direct reports do this for their direct reports. Rather than worry about titles, put “head of X” for each person. Keep doing this down the hierarchy. Do you have what you need covered? Is there duplication and overlap? Are the right people heads of the right things?
While it may not be possible to kill title inflation for a variety of reasons, both internal to a company (mostly ego and culture driven) or external to a company (most ego and power driven), if you are a CEO, don’t let it confuse you when you think about who is doing what in your company.
I spent the day yesterday in Kansas City at the Kauffman Foundation with about 20 women entrepreneurs who were the E&Y Winning Women from 2008, 2009, and 2010. As part of their program, Paul Kedrosky and I spent the morning talking to them about accelerating their growth, dynamics around financings, and boards – mostly about how to build a board and use it effectively. It was a great day – awesome energy with stimulating discussions. In addition to a great discussion, I learned a lot in my continuous quest to better understand dynamics around gender in entrepreneurship. I also met some amazing women.
On Monday, I had a meeting with a CEO of a company I’m an investor in who was frustrated with his role in the business. He had grown bored and restless with a lot of the work he was responsible for and felt like much of what he was doing was a grind that wasn’t inspiring to him. At the event yesterday, I heard from several of the entrepreneurs that they were stuck at a certain size (one at $22m, one at $5m) where day to day activities in the business consumed all of their time. As with the CEO I spoke with on Monday, I heard frustration about the daily grind and a lack of enjoyment and stimulation from the business.
I remember this feeling very clearly from my days running my first business. At about 20 people / $2m in revenue I got very bored. I was very busy, so it wasn’t lack of things to do, I just found the things I was doing to be excruciating dull since I’d been doing them for a while (at least five years). At the time, I struggled with how to address this; we ultimately ended up being acquired before I really felt like I figured it out.
During our discussion yesterday, one of the entrepreneurs brought up the notion of “Working on your business, instead of just in your business.” I heard this line many years ago but had forgotten it. It hit me right between the eyes as something that captured the conversation that I’d had with the entrepreneur on Monday and was exactly the correct notion to summarize the way to address the boredom of the endless business grind.
My friend Matt Blumberg at Return Path has really mastered this. He writes about it a lot on his blog Only Once (in fact, his blog is a tool for him to explore the issues that a first time CEO faces, since you are only a first time CEO once.) But it’s reflected in the impressive business that he and his team have created. Tim Miller at Rally Software is another entrepreneur that I have immense respect for and when I think about how he spends his time, much of it is working on the business. These guys have both scaled from CEO of a raw startup with a few people to CEO’s of 250+ employee companies, while moving through their own personal evolution while the businesses growth and thrive.
In the discussion yesterday, I kept thinking that a CEO’s need to spend more time working “on the company”, not “in the company.” Of course, there are loads of tasks in the company a CEO has to do. But having the balance shift all the way to never spending any time on the company is a huge mistake. Plus, it leads to the inevitable grind that I once found so unsatisfying.
To all the women I spent the day with yesterday – thanks for exposing me to your stories and spending your time with me so I could think through this more.
I strongly believe that entrepreneurial education and community building is not a zero sum game. So when Jim Franklin, the CEO of SendGrid (one of our portfolio companies and a TechStars Boulder mentor) asked if I would write a post about the Founder Institute program in Boulder, I told him that I’d give him control of my blog to write a guest post on it. I have enormous regard for Jim and Jon Nordmark, his co-host of the Founder Institute Denver program and want to be supportive of anything they are involved in. So – following is Jim’s view on the value of Founder Institute, how it differs from TechStars, and a call to action if you are interested in it.
If you read Brad’s blog, you probably have some connection to the world of startups. Do you dream of starting a company, but you just can’t quit your day job right now? I may have just the thing you are looking for.
Last summer Founder Institute held its inaugural class in Denver. Jon Nordmark, CEO of usingmiles.com and founder of ebags, was the host. Jon brought in dozens of CEO/founder mentors and graduated a class of 15 companies including BookBrewer, JetJaw and CipherPoint. Also, the graduating founders have gone on to do joint projects together such as LocVox, which GlueCon recently selected for its “demo pod.”
What the graduates tell me is that they thought the education was worthwhile, and the camaraderie among the group is worth even more. Starting a business can be a lonely venture, and these graduates all have a meaningful connection to each other.
I had the opportunity to mentor a number of the participants and developed several great relationships in the process. I was impressed by the quality of the founders that we have in Denver and Boulder, and I’m looking for big things from graduated companies like BloomWorlds, and ZebraMinds.
For this year, I’ve joined Jon as co-host. We look forward to working with the generous mentors as well as another great group of founders. Founder Institute is a great way for Jon and I to ‘pay it forward’ and help the next generation of entrepreneurs to make Colorado a great place to start a business.
Because I am Boulder-based and also a TechStars mentor, I am often asked about the differences between TechStars and the Founder Institute. Scott Yates, an FI graduate and founder of BlogMutt, wrote an excellent post on this topic last year, and tells me that looking back as a graduate he thinks his analysis still holds up.
The key difference I see between the two programs is the overall goal: at TechStars your team will be in Boulder full-time and demo your work at Investor Day. All TechStars participants form an operating company by the end of the program. With the Founder Institute you will get an education on what it means to be a founder from others who have been there and done that. Most of the participants are operating a new company by the end, or shortly thereafter, but some just keep working their day job until the moment is right for them.
In addition to TechStars, we have many resources for entrepreneurs in Colorado, and all of them have their differentiating points. Here’s what I see as unique aspects of the Founder Institute:
If you are ready to commit 15 hours a week for 14 weeks to get your next business ready to launch, I look forward to helping you do more, faster (although, not too fast!)
And whether or not you launch your business, you will be a much better-informed founder when the time is right.
I’d like to thank Brad for the chance to blog in his space, and I’d like to thank Jon for his continuing effort to help the Colorado entrepreneurial ecosystem, because we all benefit when we have more, better founders in our universe.
Apply before the May 1 and let me know if I can help you with launching your business in 2011.
I was at an board meeting yesterday morning for a new seed deal that we’ve done that will be announced next week. I love the product vision – it’s in an area that I’ve been working in for a while across a variety of companies and will take a new approach to a very old and persistent problem.
The entrepreneurs have been living the specific problem for a long time and believe they have a unique and very informed way to solve it. Given that the company has had no funding to date, the founders have been scrappy and have cobbled together a really impressive prototype that they’ve been using to get early customer feedback. It’s an ambitious product vision that will take a while to fully roll out.
In lean startup language, they’ve got a minimal viable product. However, they are faced with two choices. The first is to polish and release the current prototype. The second is to use the prototype to continue to explore and understand the specific customer fit while building a production version from scratch that incorporates much of what they learned during the prototype development.
In their case, the customer is a business customer rather than a mass market consumer web product. Consequently, having 100,000 free users is not important in the near term – I’d much rather see them have 100 paying customers which might translate in several thousand users across all of these customers, as our premise is that organizations will have between 1 and 100 early users of the product.
We spent a lot of time in the meeting talking about this choice as well as overall product cadence. We left it up to the founders to figure out what they wanted to do and what they wanted the cadence to be, but we encouraged a one year top down view, rather than a quarterly bottoms up view. We encouraged them look at where they want to be in a year (remember – this is a seed deal, so we have plenty of ability and desire to continue to fund as they make progress, with or without new investors) and work backwards to a product cadence that works for them.
I don’t know if they’ll have a once a week, twice a month, once a month, or once a quarter release cycle. But I’m fine with any of them as long as they pick the cadence and stick with it. Given my deep belief in an agile development approach, I don’t really care what’s in the actual incremental releases at this point as I fully expect the furthest out they’ll be able to see is one quarter.
It reminded me of something I often tell TechStars teams – “slow down to speed up.” I see so many startups rushing to just get stuff out, without thinking hard about “what that stuff is and why anyone would care.” Part of this is lack of understanding of what you are trying to accomplish, but some of this is a lack of product cadence. When you have a clearly defined cadence (e.g., a monthly release) you can focus on “what’s next” while in parallel explore “what’s after next.” But in the absence of a cadence, you are always working on “what’s next” and never looking out any further.
“Double, double toil and trouble; Fire burn, and caldron bubble.” – Macbeth
Every time I hear the word “bubble” I think of that quote from Macbeth. I also think of Tulip Mania and the South Sea Company which purportedly was the source of the concept of an economic bubble. And then I remember Charles Mackay’s classic book “Extraordinary Popular Delusions & the Madness of Crowds.”
When I returned last weekend from a week off the grid I encountered the word “bubble” over and over again when referring to the tech industry. A variety of people were using it to describe the current situation. This has been going on for at least a quarter or two, but the velocity of it seems to have picked up with a wave of high priced financings along with large financings for nascent companies. While plenty of tech bloggers were tossing around the word “bubble”, I also noticed it among the mainstream media. But more interestingly I saw it in my twitter feed from some entrepreneurs and VCs who I respect a lot. So I spent some time on my run yesterday rolling the idea of a bubble around in my head.
In the tech industry, the great Internet bubble inflated between 1999 and 2000 and deflated (or popped) in 2001. I remember it well as 2001 was easily the most challenging year of my business life. I made a lot of mistakes in 1999 and 2000 that I’ve hopefully learned from (I believe I have) and took on a lot of challenging things between 2001 and 2005 which laid the groundwork for the business context that I find myself in today. So, in hindsight, the great Internet bubble of 2001 was very powerful and useful to me, even though it was very painful.
I refuse to make predictions as the only thing I know with certainty is that some day I will be dead. I view predictions as irrelevant in the context of what I am working on and trying to accomplish. Sure – I pay attention to what is going on around me, have hypotheses about what’s going to happen, and adjust my behavior accordingly. But I think making predictions with certainty such as “we are in a bubble” are useless, especially in the absence of recommendations about what to do to either defend against or take advantage of the situation.
I find this discussion about bubbles especially bizarre and entertaining against the backdrop of the downward economic cycle of the past few years. In 2008, everyone in business and politics was consumed with the “global economic crisis”. However, entrepreneurs just put their heads down and continued to accelerate the current web revolution which started around 2004 with “Web 2.0” being articulated by Tim O’Reilly. Today, there is once again enormous focus on entrepreneurship as the salvation for many things, with the naysayers starting to say “but it’s a bubble” or some variant.
If you recognize that we are in a strong, positive, upward segment of the current “tech company creation cycle”, that’s more than enough. You should accept that we’ll be back in a downward part of the cycle at some point, but that we don’t know if it’ll be in a week, month, year, or decade. We also won’t know the slope of the curve although if you are a hedge fund trader you probably think you can calculate the derivative of some equation about the future that will tell you what to buy and sell. Whatever – have fun and good luck.
If you are an entrepreneur, you can build a significant, powerful, sustainable business taking advantage of market expansion during the up cycle and consolidating your position during the down cycle. Don’t get distracted by speculating about “bubbles” other than the ones in your bathtub. Instead, spend your energy creating amazing products, thrilling your customers, building an awesome organization, and living your life. Always remember that one day you too will be dead.
While I was on vacation Founder Labs announced their New York program this summer. I’m a big fan of Shaherose Charania and Baat Enosh and agreed to help support the program along with Fred and Joanne Wilson and a number of other folks that support entrepreneurship in New York.
Founder Labs fits in the “pre-accelerator” category – it’s aimed at people that want to experiment with entrepreneurship. It doesn’t require a full time commitment, but it is a very intense program for five weeks. This year’s program is focused primarily on entrepreneurs interested in mobile applications. While Shaherose and Baat are still tinkering with the formula, they are off to a great start and I’m glad to see them trying it out in New York in addition to San Francisco so they can get some perspective on the dynamics in different geographies.
Applications are now open for the New York program until 4/20. While there is a modest cost for the program, scholarships are available so don’t let that slow you down.
My partners at Foundry Group and I decided not to do something after a month of thoughtful deliberation. The decision is fresh so I’m not going to talk about the specifics, but our conclusion was that while it would be relatively easy to do and potential financially lucrative, it wasn’t consistent with our strategy.
I used it as an example this morning during my run with @reecepacheco about fully engaging with your mentors. While we could have made this decision on our own, we talked to a number of people who we consider our mentors (including several peers, investors of ours, and folks that have been doing what we’ve been doing a lot longer than we have), got their direct feedback, synthesized it, and made a decision. Of course, we had plenty of conflicting data, but it was all additive to our decision. And it was ultimately our responsibility to make the call on what we wanted to do.
During my run this morning, Reece and I also talked about fully engaging in the thing you are currently involved in. Reece and his partners are about half way through the 90 day TechStars NY program. He had lots of great feedback for me on his experience to date, but also had lots of questions about what he was doing and how he was approaching things, especially as he looked forward beyond the end of the program. I reinforced that he’s in the program for another six weeks or so and, rather than worry about what to do post-program, he should stay fully engaged in the experience he’s having now.
These two concepts are linked back to the notion of “Deciding Not To Do Something.” In the case of the decision my partners and I made, by listening to our mentors and being fully engaged in the business we are currently in, we decided not to do something that would have been an unnecessary distraction. Part of being fully engaged is understanding clearly the strategy you are executing. In our case, it’s a long term strategy that we are playing out over 20 years from when we started in 2007.
Sure, we’ll adjust tactics on a continuous basis, but we always measure what we are doing against or core beliefs that are the underpinnings of our strategy. And, while tempted by new and interesting ideas, we use these core beliefs to help us decide when we shouldn’t do something, even if it looks attractive.
We also revisit our strategy on a regular basis. We talk about it quarterly and do a deep review – both looking backwards and forwards – once a year. While we evolve parts of it over time, our clear understanding of what we are trying to accomplish helps us have clarity when presented with a strategic option that we shouldn’t pursue.
I find deciding not to do something to be incredibly liberating intellectually and emotionally. And, when I leave a big new idea on the cutting room floor, I make sure I sweep it into the trash and move on, never questioning the decision.
Reece – thanks for the early morning run, the talk, and the opportunity to talk this stuff through in advance of writing this post. Stay in the moment and keep kicking ass.
At the end of each day, I encourage you to reflect on whether you spent your day on “signal” or “noise.” Let me explain.
Recently, I wrote a post titled Managing Priorities. In it I talked about the idea of P1’s. My weeks start on Monday morning so my P1 for the current week (which ends in about 20 hours since I usually get up at 5am on Monday morning) is to get a draft of the new book I’m writing with Jason Mendelson to our publisher (Wiley). That’s it – one P1 for the week. Of course I did a ton of other things last week, including spending two days at Blur doing an HCI brain soak, working on closing a new investment, working on two M&A deals, having a few board meetings, giving a few talks, meeting with a bunch of people, and having a few enjoyable dinners with friends. But every morning when I woke up I thought about my P1 (the book) and every night before I went to bed I thought about whether or not I had made progress on it.
I committed to myself to spend all day Saturday and Sunday on the final edit push. Now that I’m on my second book, I know my limits and know that six hours is the most I can work productively on the book in one day. So yesterday I slept in, did email and my normal Saturday morning info scan, and then settled in for six hours of editing. Every 30 minutes I took a short break – did email, had lunch, took a nap, talked to Amy, and did a 15 minute phone call with another VC who was struggling with an issue in real time. But I got my six hours in and then went out to dinner with Amy and a bunch of friends. Today I’m going to catch up on email until about 11, head to my condo in Boulder, and spend a good solid six hours on the final pass before hitting send on the draft. I’ll reward myself with dinner with some friends, although I have no idea with whom at this point.
So, while I let a little noise drift into my weekend, I’ll have spent the majority of it on signal (my P1). This morning as I was doing my morning infoscan (Daily Web Sites, Twitter, RSS Feeds) I noticed a ton of stuff that I’d put in the noise category. There were apparently a few debates that blew up yesterday – I’ll use the one around Angellist as an example of noise.
I love Angellist and think it’s a remarkably interesting thing. However, it’s of relatively little direct utility to me – of our 35 investments made from Foundry Group, none have come from Angellist. Regardless, it has had an undeniably huge impact on angel and seed investing in the past few years. At the minimum, it’s interesting to watch the social dynamics of it. Will it impact a new generation of successful entrepreneurs and angel investors or will it result in a big money pit? Who knows – check back in ten years.
However, I saw a bunch of tweets about it (including some hostile ones followed by some conciliatory ones from the same people) linking to a handful of blog posts, comments, and more tweets. After reading a few of them, I’m not actually sure what the debate is actually about. I thought it was about “is Angellist helpful or not”, but it quickly evolved into something else.
As I was pondering this, I saw a tweet from Paul Kedrosky that said “I have had more than a few entrepreneurs complain lately about VCs/angels tweeting/blogging up storms, but ignoring emails.” While I’m not 100% sure Paul was building off of the Angellist noise, I know Paul pretty well and am going to guess that at the minimum it inspired his tweet. And his tweet is on the money – I know plenty of VCs who are making a ton of “content noise” these days but don’t seem to be able to respond to their signal-related emails. And if entrepreneurs think VC to VC email is somehow special, I’m included in that category (there are plenty of emails I’ve sent to my VC friends with specific stuff in them that are never responded to.)
Now, this is not criticism of the Angellist discussion or VCs not responding to emails. Rather, it’s an effort to give an example of noise overwhelming signal. In this case, Angellist is the signal. The discussion around it in the last 48 hours is mostly noise (I’m sure there’s some signal in there, but it’s a lot of work to pull it out, which results in a bad signal to noise ratio.)
In my little corner of the universe, signal matters a lot. I can’t consume signal 100% of the time (or my head would explode) so I let plenty of noise creep in, but I’ve got very effectively tunable noise filters. Anyone involved in the entrepreneurial ecosystem should ponder this – I encourage you to focus on amplifying signal, not noise.
As my partners at Foundry Group know, every time I hear the word “marketing” I throw up a little in my mouth. I hate traditional marketing and have always resisted it early in the life of a new company.
Fred Wilson has a phenomenal blog post up this morning titled Marketing. Among other things he demonstrates his mastery of marketing by sending me an email this morning pointing me to the post and saying that he’s channeling me knowing that it’ll likely inspire me to blog something about it and link to his post, increasing the chance that he’ll be the first Google result for the search “Marketing” (he’s already #6 for marketing VC).
When I think off all of the companies in our portfolio that are growing like crazy, they all spend money on marketing. However, it’s driven by an obsessive focus on the customer and the product, rather than a “marketing budget” or “marketing initiative.” And phrases like “social media marketing” and “marketing spend” rarely surface in discussions, and when they do I vomit a little in my mouth.
Of course marketing is a key part of the success of these companies. However, it’s wired into the DNA of the business, not an extra thing that is attached on, like it used to be in the 1980’s and 1990’s as “marketing”, “PR”, “marcomm”, etc. were a key part of every startup plan.
I’m currently in a world of conservation of words as I drive to finish the draft of “VC Financings: How To Be Smarter Than Your Lawyer and VC” due to Wiley on Monday at 5:59am so I’m going to stop now, go brush my teeth again, and remind you to go read Fred’s post on Marketing right now.