For your Sunday video watching, I encourage you to spend ten minutes of your life and watch Chris Moody‘s Commencement Address to the Auburn 2016 graduates.
His message is simple: Work Hard. Be Kind.
Having worked with Chris for many years, it’s a great summary of how he lives his life. And he ends with a magnificent Dalai Lama quote. “Be kind whenever possible. It is always possible.”
Chris Moody, the former CEO of Gnip (now VP Data Strategy at Twitter) is doing a fun fundraising drive for the National Center for Women & Information Technology.
Yeah – I know it’s a little silly, but that’s Chris. Delightfully silly and huggable Chris.
I contributed $500 to match the first $500 Chris raises for NCWIT. As the chair of NCWIT, I appreciate his, and your, efforts.
For those of you out there who have asked “hey Brad, what can I do to help you”, get your picture taken with Chris and make a contribution to one of the non-profits I care the most about in this world.
Following is a guest post from Chris Moody. Chris is president and COO of Gnip, one of the silent killers in our portfolio. Once the main stream tech press starts noticing Gnip, they will be blown away at how big they got in such a short period of time by just executing. Chris is a huge part of this – he joined Gnip when they were 10 people and has been instrumental in working with Jud Valeski, Gnip’s founder and CEO, to build a mind blowing team, business, and market leadership position.
Following is a great email Chris sent me Friday night in advance of the Foundry Group “Scaling Your Company Conference” which we are having this week for CEOs of companies we are investors in that are on the path from 50 to 500 people.
Startups that experience success are typically built upon a strong foundation of trust among the early founders/employees. This trust has been solidified through long days/nights in small offices working on hard problems together. The amazing thing is that the founders don’t always realize that their company is even operating under an umbrella of trust or that trust is one of their core values. Instead, they just know that it feels easy to make decisions and to get shit done.
When companies try to scale, one of the biggest mistakes they make is trying to replace trust with process. This is rarely a conscious decision, it just feels necessary to add new rules in order to grow. After all, there are a lot of new people coming into the company and it isn’t clear who of the new people can be trusted yet.
A startup obviously needs to add process in order to scale, but if you replace trust with process, you’ll rip the heart right out of your company. When adding processes, ask yourself the following questions:
- Does this new process help us go faster?
- Does this new process help us be more efficient?
If the answer to these questions is “yes” you are off to a great start.
Now ask yourself “Are we adding this process because we don’t trust people to make decisions?” If the answer to this question even has a hint of “maybe” you need to stop and really consider the cost of that process.
Replacing trust with process is like a cancer that will spread quickly and silently throughout the company. One day you’ll wake up and think “this place doesn’t feel special any more” or ask yourself “why is it so hard for us to get stuff done.”
Trust could be one of your most valuable company assets. As a leader, you need to fight like hell to protect it. If you are successful protecting trust, you’ll actually grow much faster and you’ll still have a place where people love working.
I’ve seen trust work at a 700 person company. Trust can scale.
Today’s guest post from Chris Moody, the COO of Gnip, follows on the heels of the amazing Big Boulder event that Gnip put on last Thursday and Friday. To get a feel for some of the speakers, take a look at the following blog posts summarizing talks from leaders of Tumblr, Disqus, Facebook, Klout, LinkedIn, StockTwits, GetGlue, Get Satisfaction, and Twitter.
- Transition at a Massive Scale with Ken Little of Tumblr
- From Monologue to Dialogue with Daniel Ha and Ro Gupta of Disqus
- Measuring Engagement on Facebook with Sean Bruich
- Measuring Influence Online with Joe Fernandez and Matt Thomson of Klout
- Data Science at LinkedIn with Yael Garten
- Industry-Focused Social Networks with Howard Lindzon of StockTwits
- Distributed vs. Centralized Conversations with Jesse Burros of GetGlue
- Engaging with Customers Online with Wendy Lea of Get Satisfaction
- Creating the Social Data Ecosystem with Ryan Sarver and Doug Williams of Twitter
The event was fantastic, but Chris sent out a powerful email to everyone at Gnip on Saturday that basically said “awesome job on Big Boulder – our work is just beginning.” For a more detailed version, and some thoughts on why The Work Begins When The Milestone Ends, I now hand off the keyboard to Chris.
We’ve just finished up Big Boulder, the first ever conference dedicated to social data. By all accounts, the attendees and the presenters had a great experience. The Gnip team is flying high from all the exciting conversations and the positive feedback. After countless hours of planning, hard work, and sleepless nights, it is very tempting to kick back and relax. There is a strong natural pull to get back into a normal workflow. But, we can’t relax and we won’t. Here’s why.
As a company it is important to recognize the difference between a milestone and a meaningful business result. Although it took us almost nine months to plan the event, Big Boulder is really just a milestone. In this particular case, it is actually an early milestone. The real results will likely begin months from now. All too often startups confuse milestones for results. This mistake can be deadly.
Milestones Are Not Results
Milestones represent progress towards a business result. Examples of milestones that are commonly mistaken for results include:
Getting Funded. Having someone make an early investment in your company is positive affirmation that at least one person (and perhaps many) believe in what you are trying to accomplish. But, the results will come based upon how effectively you spend the money; build your team/product, etc. Chris Sacca has tweeted a few times that he doesn’t understand why startups ever announce funding. Although I haven’t heard him explain his tweets, I assume he is making the point that funding isn’t a meaningful business result so it doesn’t make sense to announce the news to the world.
Signing a partnership. Getting a strategic partnership deal signed can take lots of hard work and months/years to accomplish. Once a partnership deal is finally signed, a big announcement usually follows. The team may celebrate because all the hard work has finally paid off. But, the obvious mistake is thinking the hard work has paid off. Getting the deal signed is a major milestone, but the results will likely be based upon the amount of effort your team puts in to the partnership after the deal is signed. I’ve never experienced a successful partnership that just worked after the deal was signed. Partnerships typically take a tremendous amount of ongoing work in order to get meaningful results.
Releasing a new feature. Your team has worked many late nights getting a new killer feature in to the product. You finally get the release out the door and a nice article runs in TechCrunch the next day. The resulting coverage leads to your highest site traffic in a year. But, have you really accomplished any business results yet? Often the results will come after lots of customer education, usage analysis, or feature iterations. If no customers use the new feature, have you really accomplished anything?
Is it okay to celebrate milestones? Absolutely! Blow off steam for a half-day or a long celebratory night. Take the time to recognize the team’s efforts and to thank them for their hard work. But, also use that moment to remind everyone that the true benefits will happen based upon what you do next.
Results Increase Value
Unlike milestones, results have a direct impact on the value of the company. Results also vary dramatically based upon different business models. Examples of common results include: increasing monthly recurring revenue, decreasing customer turnover, lowering cost of goods sold (increasing gross margin).
Announcing a new feature is a milestone because it adds no value to the company. On the other hand, having customers actually adopt a new feature might increase customer retention, which could be a meaningful business result.
The Work Begins When X Ends
When I worked at Aquent, there was a point in time when we were doing lots of tradeshows. We noticed a pattern of team members taking months to prepare for an event and then returning from the tradeshow declaring the event a success. They would put a stack of business cards on their desk and spend the next several weeks digging out from the backlog of normal work stuff. The business cards would begin to collect dust and the hot leads from the show would eventually become too cold to be useful.
In order to avoid this phenomenon, someone coined the expression “the work begins when the tradeshow ends”. This simple statement had a big impact on the way that I think about milestones versus results. Since that time, I’ve used the concept of this phrase hundreds of times to remind my team and myself that a particular milestone isn’t a result. You can substitute the word “tradeshow” for whatever milestone your team has recently achieved to help maintain focus.
The most recent example? The work begins when Big Boulder ends.
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.
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 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.
Chris Moody, president and COO of Gnip, is back with a guest post in his Moody on Management series. Following are Chris’ thoughts on negotiating compensation with a prospective employee. Enjoy and comment freely!
In my last post, I provided a few tips for job candidates when interviewing at a startup. This week I wanted to cover a simple process for hiring managers to follow when communicating with candidates about salary requirements.
There is the old saying that people spend more time planning their vacation than they spend planning their retirement. I’ve found the same concept sometimes applies to job candidates when thinking about their compensation requirements. As the hiring manager, you need to ensure that a candidate has fully considered their compensation needs before you make an offer. Over the years, I’ve refined a simple and effective approach to facilitating this discussion. I’ve used this technique countless times with great results. The process starts with an email to the candidate:
From a skills and values standpoint, it seems like we are both excited about the possibility of you joining our company. If you agree, the next step in the process from my perspective is to determine if we are aligned from a compensation standpoint. As such, it would be helpful to get the following information from you:
– Current compensation. Please breakout your base salary from any variable compensation if applicable.
– Your view of your current compensation as it relates to your next opportunity. It is particularly helpful if you provide this feedback by selecting from either
a) I believe I’m fairly compensated and would anticipate making the same salary at my next opportunity
b) I’d be willing to take less for the right opportunity
c) I feel I’m currently under valued and looking for an increase of $x in order to be excited about my next opportunity.
If it works for you, I’d prefer to have this communication via email. Over time I’ve found that putting this stuff in writing helps people think about it more before responding.
Of course there are no right or wrong answers. The goal here is simply to get a clear understanding of how the candidate is thinking about their future compensation by using their current compensation as a frame of reference. Best case, the candidate’s expectations align with yours and the offer moves forward with a high probability of success. Worst case your expectations don’t align but you now have a thoughtful starting point for negotiations if you still want to move forward with an offer.
A couple of additional points:
1) Even if the candidate has expressed salary requirements during the screening process or during your discussions, I strongly recommend you have this written conversation as the final step before you make an offer. For example, perhaps your conversations along the way changed their perspective on salary requirements for the position.
2) The key to this approach is to do this communication in writing. I know it can seem silly or impersonal, but it makes a huge difference in terms of requiring people to give thoughtful answers instead of answering on the spot.
Before using this approach I had more than a few occasions where candidates indicated verbally that they wanted $x, we offered $x, and then they responded with “I was thinking about it more and I really need $y to feel good about joining”. Once you hit this situation, it puts both parties in an awkward position and it can be hard to recover. You can avoid this potential pitfall with one simple email.
Oh, by the way, Gnip is hiring!
My long time friend Chris Moody, president and COO of Gnip, has offered to write some guest posts on management – we’ll call the series Moody on Management. In addition to being an outstanding early stage / high growth executive, Chris has made a study of management in startups and is extremely thoughtful about what does and doesn’t work.
His first post is aimed at anyone looking to get a job in a startup and talks about how to be effective at interviewing for a job. Feel free to weigh in if you have other “Stop, Don’t, Nevers” or “Pleases”
I love interviewing people to work at Gnip. Unless I’m having a really crappy day, I enter each interview full of hope and optimism. I’ve done countless interviews in the last 20+ years and I can easily slip into autopilot mode if I’m not careful. In order to avoid this trap, I mentally prepare by reminding myself “today could be the day I’ll meet the next great team member.” I’ve found this mental pep talk helps remind me that there is no better use of my time than investing in the interviewing process. In other words, the next interview could be a company game changer and I need to be 100% engaged.
Most interviews don’t directly lead to someone joining our company. Often the person doesn’t have the right skills or experience. There are plenty of cases where it becomes clear to the candidate that we can’t provide them an opportunity that meets their interest/needs. Both of these outcomes are normal and healthy. Unfortunately, I often find another outcome can occur which is frustrating and deflating. This situation occurs all too often when a person is so poor at interviewing that we’re unable to determine if there is a potential match. I’ll invest up to an hour in an interview trying to peel back the layers. However, I’m frequently unable to get to a substantive layer of discussion that will help both parties determine if there is a potential match. I’ll leave these interviews thinking, “Maybe that person was great, I’ll never know”. Over time, I’ve started to referring to these as the “who knows?” interviews.
The good news is that I think job candidates can follow some simple guidelines when interviewing at a startup that will help avoid the “who knows?”
Stop, Don’t, Never
- Stop selling and start engaging. In order for this to work, we both have to determine if there is a match. The best way for us to determine the match is to have a thoughtful/engaging discussion. If the interview process only involves me asking questions and you giving answers that you think will impress me, we’re going to waste a perfectly good hour.
- Don’t talk in sound bites and buzz words. You might think they make you sound smart, but they don’t because they lack substance. We need to have a real discussion. If you find yourself rehearsing answers before the interview even starts, we’re almost certainly going to have an unproductive meeting. Speak from your heart and your experience not from a script.
- Don’t agree with everything I say. I’m wrong… A LOT. I once went on an all beer and water diet for a week. Challenge me. Startups thrive when each person hired is smarter than the person hiring them. If you agree with everything I say in the interview, I’m left wondering how are you going to contribute when we are working together trying to solve tough problems.
- Avoid talking about past individual results. I know this sounds unconventional, but as the interviewer is often very hard to contextualize how these results might translate to our business. I’m much more interested in discovering what you learned in your last job that we might leverage at our company. For example, telling me you increased sales by 300% isn’t that helpful. Telling me how you learned to handle customer objections around price could prove to be very useful.
- Be honest
- Ask lots of questions about stuff that matters to you. Reviewing a company’s web site before the interview will give you some reasonable background. But, I can assure you that no company web site answers all the questions about a business. It is often the case that an interviewer can learn more about the way someone thinks from the questions they ask than from the answers they give.
- Ask tough questions. You are considering investing a huge portion of your waking hours at our company. Think about the risks and the downsides of the company or the role and freely express any concerns.
- Figure out if our company is a good culture and values fit for you by asking tough situational questions based upon your past experiences. Questions like “Can you give me an example of how the company handled a situation where a customer had a bad experience with the product?” can be very revealing about how the company acts/thinks.
Ask CEOs of successful startups about their biggest challenge and they’ll often cite the inability to hire great people. My theory is there are plenty of great people, but many are just terrible at interviewing. Hopefully these few tips help lead to more great matches down the road. By the way, Gnip is hiring!
One of the jokes in my little universe is that “every time I hear the word ‘marketing’ I throw up a little in my mouth.” I’ve been joking about this long enough that it’s become conventional wisdom that I hate marketing. Yet, if you look at many of our successful investments, they are extraordinarily good at marketing and some people suggest we (Foundry Group, me) are also good at marketing.
Thirty minutes ago, Chris Moody – a long time friend and COO of Gnip – sent me an extremely thoughtful email titled “Food For Thought”. I read it, thought it was 100% correct, and asked if I could reblog it verbatim both as (a) an explanation of how I actually should / do think about marketing and (b) an example of how I learn through direct feedback.
Chris – thanks for taking the time to write this. You nailed it. The way I articulate how I think about marketing will be permanently different going forward.
At this point I’ve probably heard/read most of your basic philosophical points on the various aspects of building a successful business. I agree with most of them of course. However, there is one area where I’ve consistently felt that you have under represented your true feelings and it feels like your general input on the topic has been mostly nonconstructive. I’d like to try to help change that for the good of the broader entrepreneur community (and to make you look even smarter).
The topic is marketing. I have no doubt missed some brillant thoughts you’ve offered to the community and I’m sure you’ve provided countless pieces of good advice to individual entrepreneurs in one-on-one situations. But, the sound bite version I’ve heard from you on a few occasions goes something like this “I hate traditional marketing. Focus on building a great product or all the marketing in the world won’t matter.” When I think about the first time entrepreneur, this response feels particularly unhelpful. And, the second part of the quote could be applied to almost all aspects of a startup business including sales, finance, etc. If you don’t have a great product, none of the other shit matters.
And yet, when I see how Foundry Group approaches marketing and when I look across your portfolio companies, I see a very common thread around how you guys approach marketing. I would characterize the theme as “marketing through thought leadership.” In more basic terms it is expressing marketing ideas via “this is why we are doing what we are doing and why it is important” instead of “hey, look at me.” Have a new product feature? Sure blog about the feature, but spend way more time on why the feature is important to your overall purpose and beliefs.
To illustrate the point, I’ve recently talked to/interviewed a few current/former people from Rally and ReturnPath. When I ask them “what is the most significant thing you did from a marketing perspective to accelerate the business” the answer across the board has been “we focused on being a thought leader in our space.” As you well know that is the same approach we are taking at Gnip and I see it in many of your other portfolio companies too. Not sure it is always a conscience effort by the companies, but it seems to be pretty consistent across the portfolio..
When I think about FG itself I see tons of “marketing activity” but most of it could also be just be labeled: thought leadership. You sponsor conferences around topics that you care about. Your blog post are rich with “here’s why did it and why it matters” instead of “here’s what we did”. In fact, your whole theme based approach is really about thought leadership focused in a few areas. Foundry Group clearly believes that startups have the power to change the world. You guys spend countless time and effort expressing your opinions on this topic. You write books to support your beliefs. If you only talked about what you do with your startups “we invested in x, we sold y”, the conversation would be short and have a limited audience. Instead, you talk about what you believe and why startups matter. As a result, you have built a real following around people that care about the topic.
If I were going to create the Brad Feld sound bite for Marketing it would go something like this “Don’t do marketing. Focus on becoming a thought leader in your space. Talk everyday with your customers, perspective customers, partners, and the world about why you do what you do and why you think it is important. The reality is you can only talk about what you do one or two times before people think ‘got it’ and stop listening. But, if you talk about what you believe and point to countless examples that exemplify your beliefs , you can build real engagement with people who care/believe the same things.”
Not trying to put words in your mouth. Just saying that the actions that I see don’t match the words that I hear and I think there is easy opportunity to change that for the better.