Management

If you are growing at a rate of less than 50% year over year, you should consider viewing 2017 as the year of flat headcount. As budgets are settling down and getting approved for many of the companies I’m on the board of, I’m seeing a general trend of much less headcount growth in 2017 than in 2016. In some cases, companies got ahead of themselves. In others, they need to integrate all the people they’ve added. In some, they feel like they have a critical mass of people and want to march to get profitable on current headcount. And still others are profitable and have realized significant operating leverage in the past two quarters that they want to continue. ...

Lately, I’ve been stewing over increased complexity being generated by companies around their organization approaches. While this activity varies by stage, in many cases the leadership team expands to a large (greater than six) number of people, there become two executive teams (the C-Team and the E-Team), the CEO gets sucked into endless distractions and working “in the company” rather than “on the company”, and I could go on with a 1,000 word rant on the challenges and complexity. ...

Everyone has a junk drawer. Or two. Or ten. One of mine is to the left. So does every company. It’s now often referred to as “Labs” (as an homage to the infamous Google Labs which was disbanded in 2011.) We’ve seen a lot of companies spin up a Labs as a way to try to create new products. In most cases, after about a year, it’s a junk drawer of random shit. ...

As we head into 2017, I have a steady stream of operating plans hitting my inbox. Since many of our investments are companies that are scaling, vs. companies that are just getting started, there are a lot of derivative metrics in these plans. Q1 is the easiest quarter to make your plan, so most of these companies are getting a free pass for the next three months after fighting the good fight of making or beating plan in Q3 and Q4. For the SaaS and recurring revenue companies, if they missed by more than 5% in 1H16 and didn’t reforecas t, they’ve had a particularly grueling uphill climb for the past six months. ...

I woke up this morning thinking about people who have a desire to please. This is not my personality type, but I encounter it regularly. Amy often describes herself as an “approval-seeking people pleaser” and I’ve learned a lot from my 30 years of interacting with her. With CEOs I often notice the pleaser personality in the context of employees. The pleaser wants everyone around him to be happy. This creates a positive reinforcement dynamic for the CEO – if everyone is happy, things must be good. If employees aren’t happy for any reason, that becomes a priority for the CEO to solve. ...

I had lunch recently with a founder. We were talking about current and future board configuration for his company and he said “Up until this point, all my board seats were simply for sale. Whenever a new investor showed up, they wanted – and got – a board seat.” I loved the phrase “board seat for sale.” It’s exactly the opposite of how I think about how to configure a board of directors, but I recognize that it’s a default case for many VCs and, subsequently for many entrepreneurs and companies. ...

As we get to the end of 2016, I’m in many conversations about 2016 performance and 2017 budgets. While 2016 isn’t over yet, most SaaS companies know how things are going to end up within a few percentage points. As a result, their focus on 2017 is an extrapolation from how they have been doing in 2016, typically building on month over month activity. Since there are plenty of variables, the conversations are generally quantitative. In the midst of one last week, I said “why aren’t we talking about increasing conversions and lowering churn?” This was in response to a CFO who had modeled conversion rate and churn at a fixed percentage each month throughout the year. ...

Yesterday I talked briefly about taking a break from media. However, I wasn’t precise, as the one thing I read each week is the New York Times Sunday paper. When Amy and I lived in Boston we started reading it every Sunday morning and continued whenever we travelled. Several years ago I started having it delivered to our house on Sunday morning and it is a delightful Sunday morning ritual for us. ...

Recently I wrote about how I think about private company acquisition strategies using FullContact as the example of one where it is working well . Last week I was at a board meeting for a different company which did an acquisition a month ago. I heard a fantastic line from the founder of the company that had been acquired. It’s business as usual except better. Now, it’s only a month in. But this is what an investor loves to hear after a month. ...

Here’s something actionable for you on a Monday morning. If you want to improve your business, in addition to all the other things you are doing, focus on changing thing by 2%. For example, raise your prices 2%. Eliminate 2% of your variable costs. Focus on the bottom 2% of your team and ask yourself if you really want them on your team. When you cater in food for a meeting, arrange a long term relationship and ask for a 2% discount. Take advantage of any pre-pay or early pay opportunities from vendors who offer a 2% or greater discount. Go through all of your recurring payables and ask yourself the question “do we need this?” and see if you can cut at least 2% of them. The next time you buy something from the Apple store, ask if you are getting a business discount and, if not, ask for one. If you get paid online using credit cards, explore options that are 2% less expensive. If you travel a lot, consider doing 2% more video conferences. ...