Why and How Do Startups Move So Fast?

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The question of how do startups move so fast comes up surprisingly often. I finally gave it some thought, after the question came up again in a recent meeting with one of my companies. Over the last year or so of working with startups, I came up with some observations:
1. Small teams, 1-3 people. Makes sense right? Less time lost, less arguing, etc. Less meetings.
2. Everybody resonates with the idea and generally agrees with direction. Since everyone is either a participant or expert in the field in which the site is created for, then everyone does not need to learn but knows instinctively what to do. Nobody is working on a product that they do not use themselves. It’s a great way to find people like yourselves, when you recruit from the level of common interest in a certain product area.
NOTE: It’s really hard sometimes to get someone to resonate with your idea. You may hire them for their intrinsic talent, but it may be really difficult to get them to feel the instinctive bond with your product area.
Sometimes it’s impossible. Doesn’t mean that great work can’t get done, but it does mean a level of independence can’t be achieved, as non-resonating employees need more directional advice than those who do resonate.
3. Along with 1, the teams usually only consist of engineers cranking away. Most of them are multi-talented to a point, so they play multiple roles of programmer, GUI, html/css, product manager, product visionary.
4. Strangely enough, I have not found location to be a common factor for moving fast. Certainly it enhances the process, but a lot of teams are working with people remotely, since engrs are so hard to find and many just don’t want to move. Somehow, they have found ways of working together and can still make progress. Lots of travel involved and constant communication are two of many key points in making it work. If I get a chance, I’ll dig into it more with some of the startups I work with as to how it’s working and how it’s not. In my startups, 6 out of the 8 companies have resources external to their main location, mostly engineers who are working in remote locations. I have not seen any dramatic slowdowns with their teams.
5. People are generally just cranking. They see something needs to get done and then they just do it. There is less the asking for permission. Everybody needs to get on the same page and just keep moving forward in a very independent way. Early on at Yahoo!, many of our engineers would just do stuff and we would rarely ask them to do some particular thing. The product would constantly evolve while we worried about other stuff. Although when we asked them to actually do something and if they did not agree, it never got done which was frustrating from another viewpoint. So it worked until they got to a point when their initial sensibilities finally turned out to be wrong. Sometimes they could be convinced that they were wrong, but sometimes not…
While speed may be intuitive to some, I think it’s harder to achieve than you think, unless you have the right people with the right sensibilities and right alignment in thinking.
One of the hardest things I’ve seen is when a non-engineer comes up with an idea and tries to get it done. Because they can’t write code themselves, they need to find someone who can. But more often than not, they find only someone who can code but not become resonant with the idea to just work on it and take vague direction and execute on it.
It’s the magic bullet that everyone searches for:
“Dang it, I just want to describe my idea to someone and that someone just deals with the details and makes it happen!”
Unfortunately, it’s the details that often count…you want something done right, you better sweat the details!

Avoiding Blur

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I was just talking to a startup about their website and we were strategizing what it could become. We noodled, talked, brainstormed, argued, and finally agreed for over 5 hours and developed a sense for what we want the future site would be like.
At the end of the session, I was still feeling uneasy about what we came up with. The main reason was that it was merely a combination of what other sites were doing in part. One site would have this feature, but not the main direction for the site. Another site had people doing the activity, but in a different way. Some of the bigger sites out there also had the ability to do what we were doing, but of course their missions were much more broader and not focused like ours. Could we do better by simply having a niche, focused mission but having many of the same tools as other sites, and also competing against the fact that users were already using our competitors for that same mission we wanted them to focus on with our site?
This was the source of my unease. If there are competitors or near competitors, or even non-competitors, who allow users to accomplish the same thing on their sites, whether it is their main mission or not, AND these competitors exist already, this is a danger point. I call it “blur”.
The blur occurs in users minds when they hear about what you want them to do, but can’t figure out where to do it. They may already be doing it on some other site, by either using some existing functionality, or jacking some other functionality to get the job done.
Blur is heavily related to product differentiation. You want something to cut through the blur. When they think of something they want or need to do, you want them to think of you. Whatever functions you have must be cool, creative, and original enough to attract them to you despite being in a similar place with other existing sites.
Here is an example. Suppose you want to build a site to allow users to connect with friends. Let’s say your main interface is email, as a possible differentiator. However, as a user who hears about your offering, “connect with friends via this new way, but with email”, they’ll think all sorts of things like:
Hmm I’m already on Facebook and that works for me.
I have my address book on Outlook and email people just fine.
All my friends are on MySpace. Why switch?
I don’t have time to try something new, let alone learning it and THEN getting all my friends on it.
The problem here is that when you express your mission to users, they get caught in the blur of other competitors being able to do pretty much the same thing and you don’t have something to justify the switching cost of going to your service to do something they can do already somewhere else.
You need to find that one (or more) things that people can do on your site that no one else offers, AND is cool enough to get them to come over and learn something new.
It’s always a danger point for me when I hear of entrepreneurs who design something supposedly really cool but then I point out that people are already doing these things on other sites. I ALWAYS get pushback because they think their creation is the best out there, and nobody has mashed up the functions in such a focused manner.
It might actually be great. I’m just talking about risk here and the realities of getting users attention in a crowded space. You might actually have something that is a ton better at doing something, than for them to do it on some existing site.
I’m into risk reduction. Why try to fight with through user blur with something that isn’t shouting “Come here and try me because I’m different” loud enough? You could run out of resources and funding trying to bulldoze your way into users’ attentions. If you had several million dollars in the bank, yeah potentially you could market your way to success in a certain category.
Or you could spend a little more creative time and figure out something to build that is actually cooler and hasn’t done before, and that users will want to spend time with. Enough to get past the switching cost and try your service.
WIth that previous startup I mentioned, after 5 hours of discussion, we spent another 20 minutes talking about something that wasn’t mentioned and was something very unique in their offering. I think that 20 minutes is going to turn out to be most valuable part of that day. Because I think we added back something that would cut through the blur and thus reduce our potential risk in attracting users to our site, to do something that they could do somewhere else in general, but being able to do that one thing that they CAN’T anywhere else.
We could have gone home after 5 hours. But spending that little bit of extra time and effort to find something to avoid the blur was worthwhile and I believe, critical for the success of the company.

Social Networking is the Web 2.0 “In” Thing to Do

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Yesterday I went through an exercise with one of my companies on the social networking feature set. We went through the basic list first:
1. Add, edit, manage, invite friends.
2. Sending and receiving messages privately.
3. Announcing to friends when some activity is accomplished on the site, with announcements going out via email. Management of such communication to your friends list (instead of knowing and typing in tons of email addresses).
4. Commenting on your friends. Approval of comments to appear.
Then we added some more on top of the basic list:
1. Tracking activity of your friends via RSS feeds or announcements.
2. Affecting your public and private activity setting, by being able to expose your activity only to your friends instead of totally public and totally private.
3. Rating your friends. Enabling reputation building through rating.
4. Enabling reputation building through activity on the site.
5. SPAM management.
After that we talked about something I wrote about a while back, which is about Fame and Competition on the Net. I think fame refers to:
1. Fame amongst your circle of friends so that you feel important and have notoriety and show expertise.
2. The creation of your personal fame, which is a great way to encourage activity on the site. Create a system by which people build up their rating and reputation to create fame.
3. Application of that fame in opening up new functionality to those with higher reputation, versus those with little or no, or negative reputation/fame.
4. The ability to see their fame expressed, in leaderboards, star ratings, in comments on users, in lists sorted by fame.
Competition refers to:
1. With respect to fame, competition encourages activity by making people compete to be more famous than other people.
2. When you make things visible like reputation and ratings to the world, you foster competition when users want to have higher reputation and ratings over their friends. Leaderboards, graphical elements like rating stars, reputation building comments like those found on Yelp, are all great ways to show how great you are, which in turn encourages more activity on the site to make you chase greatness over and above your friends.
3. Getting to the top of certain lists, or placement on a certain page like a home page fosters competition. For example, if there is a module on the home page which shows recent activity, a user might increase activity just to be able to say that he got his activity shown on the home page.
4. Competition amongst people you know is great as well as to the rest of the world. A user will want more notoriety within their circle of friends as well as to the world at large.
5. If orchestrated right, competition can bring an element of gaming into the equation which can make the activity fun and engaging. That’s not to say that gaming needs to be in the arcade sense of the word; it just means that a sense of play, of being able to strive and to win are elements that need to be present.
Social networking for meeting and activity management are the basic functions. But I would argue that they are not enough. There are enough social networks out there where you can perform these functions. A site who wants to employ social networking needs to rise above common functions, such as with elements which generate fame and competition. You want to make your site more than just a place for meeting and hooking up. Design activities which foster meeting AND fame and competition AND encourage activity on your site and you’ll win across multiple goals.

The Chaos of Orgs and How it Hurts Employees: Management by Influence Hurts When Clarity is Absent

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Two weeks ago I met with someone who just left Yahoo!. We commiserated about our experiences at Yahoo! and I asked about this person’s experiences and why they left the company.
It was a familiar tale from many of those recently leaving Yahoo!, and also one that was just beginning to manifest itself when I left in 2004.
As Yahoo! attempts to reinvent itself, a lot of chaos and reorganization is happening under the hood. This person related to me how they had, over a period of only a year, several managers and being passed around to many groups. As this person attempted to do their job, direction was confused in the parties this person supported. As these parties’s ALSO underwent many reorgs and change in management, it caused confusion and a lack of ability to approve anything or willing to make a decision, or even figure out who it was who could really authorize a decision.
That doesn’t mean nothing gets done at Yahoo!. In fact there is (was?) a huge cadre of people who, having grown up with the organization, knew exactly how to get something done. This was accomplished through personal relationships, keeping up with who really supported what technology, and what levers to push in the organization. I call this “management by influence”. The problem is that a huge percentage of the old timers at Yahoo! have or are leaving the company. This leaves a huge void in the company.
So as the people who can really get things done leave, people find it harder to get things done outside their own sphere of knowledge and influence. Add that to a org who may give firm responsibility to people AND announce that publicly and thoroughly enough so that everyone knows who to go to for what they have to get done, and confusion and chaos grow. The funny thing about this is, if you ask any upper level manager if there is clarity in the org, I bet they will say there is total clarity. The problem is that they announce something, but the message nevers get into the lower orgs, or is detailed enough to be clear as to exactly who they should go to for what. Now let’s add communication problems issues to an org too busy to formalize communication. More chaos ensues.
The scorecard now is:
+ Reorganization causes chaos. Too many managers has a negative impact on the employees.
+ Management by influence works for the old timers but they’re all leaving. New timers used to go to the old timers/management by influence experts but now they’re all gone.
+ Communication problems exacerbate the problem.
Employees need stability to perform the best job. They need clarity in their jobs and know that they have a stable manager who cares about them and can direct them effectively. Part of this is because of the dependence on what I call management by influence versus clarity which I argue has obscured the lack of clarity of the organization. By clarity, I mean there is a person you go to for this and everyone knows this. This division does this and does not do that. And on and on.
In small orgs, this is easily achievable. You know someone does something and it easily fits into your mental map of how things work in that company. In large orgs, you have to institutionalize communication and clearly delineate lines of responsibility to the entire company. If you’ve ever worked at IBM, there are huge documents, memos, and directories which document these lines of responsibility. Is it heavy and unwieldy? Yes, probably. But it is definitely clear and removes the need for management by influence alone. People can remove themselves from the org but the position is always there, even if the person is not.
The other part of creating a stable environment for employees is to stop shuffling them around like chess pieces. They are not pawns; they are humans. They need to stop dealing with the chaos and turn that energy on what they got hired for. Those of us in upper management would do well to create these stable environments where employees can flourish, feel needed and valued, and are clear on who to go to to get something done. If you don’t, you’ll get the exodus which ultimately drove this person, and tons of others, to leave.

Hotlists from HotorNot.com

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Interesting new widget from my buddy James at hotornot.com.

I can put the persons, places, and things that resonate with me in this widget which denote what’s cool, influential, and important in my life from brands to people and anything. Pretty nifty. I think a way to express this is actually kind of interesting. No other way exists that I know of to do this.
We always express ourselves by the things we wear, or who we talk about or idolize. But we have primitive tools to make this known. We cut out pictures and paste them to our wall. We buy clothes and wear them. At least with this widget, we have an easy way to pick out those things that influence our lives and let others see them.
Something interesting to watch….

Corporate DoubleSpeak is Alive and Well

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Thanks to IBM, corporate doublespeak is alive and well. In fact, they are so good at all those corporate buzzword techniques that they put it all in an ad at JFK Airport:

I suppose if you want to help at getting better at whatever these buzzwords actually mean, you should hire IBM and they’ll “chain optimize” the hell out of those buzzwords into your psyche so that you’ll “process transform” your business for the better.
I once tried to learn corporate doublespeak. At one point, I thought it would make me more successful. But then I read Dilbert. And it was all over.
Corporate buzzword books plague the bookshelves and make you want to buy that book out of sheer curiosity of wanting to find out what the hell that term means. Thankfully, I’ve “re-engineered” my tendency to buy these types of books and now avoid them by at least “six sigma” distance.

Voxpop Moves to Pier 9

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Voxpop just moved from their high rise offices in the financial district to a space much more cooler and startup-chic:

Pier 9 is owned by the city. The rent and view are AMAZING. Looking forward to beer parties on the pier overlooking the Bay Bridge this summer!

Are You Startup Material?

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It all started with my recruiting woes. I dutifully plowed through my contacts every time one of my startups was looking for new hires. I talked to many of them but almost all of them refused to leave where they were to go take the leap to a startup. After many conversations, I figured out that startups aren’t for everyone. It was a frustrating but interesting learning experience into the changing lives and minds of our workforce, and what was appropriate for one person would be inappropriate for another, and that which could change over time.
Are YOU startup material? Looking now at who you are, what motivates you, and where your life is – would you want to make the leap to join a startup? Some questions to ask yourself (and some discussion on each):
How young/old are you?
Startup people are typically young. At least from a physiological standpoint.
Young people have lots of energy and stamina to stay up late for nights on end. They still have the ability built up from pulling constant all-nighters from college so they still retain this ability even after they graduate. Their youthful bodies still have strong hearts bolstered by endless, sleepless nights partying on beer and chicken wings. Their brains are quick and agile and not dulled by age. The older you get, the more your body has reduced stamina to stay up all night and hack. Old brains just don’t work so fast without proper sleep.
And it really sucks that as you grow older, your chances of entering a startup diminish greatly. This is a shame because the most experienced people you want tend to be older.
Can you go for a long time with a reduced salary? With no salary?
Once you enter a startup, you’re entering a place where reward is typically bound to options and stock, not weekly salary. This reward can be long in coming, ranging from months to years. How long can you survive with reduced salary, given your dependents and lifestyle? Are you willing to risk that? Do you have enough saved up to last for a long amount of time, say months or even years?
Startups can’t pay market salaries. If you need immediate cash, startups aren’t for you. Go find a job at a stable, growing company.
After a startup raises money, they can pay you more, but it can still be reduced from market levels. After all, the money is a great motivator for you to work long hours for the big win; if you get it all upfront, then where’s the motivation? You’re not hungry.
How many attachments do you have? Are you married and have family or dependents? Do you have a lifestyle that requires attention and/or capital?
As for age, young people have little or no attachments like spouses or children or possessions, which is another reason why you find young people in startups. Starting from almost nothing, they have nothing to worry about except themselves. It is very easy to throw your life into a startup when your life is not occupied already.
But perhaps you have other interests which take time. You may like to volunteer at a non-profit and gain lots of satisfaction from that, or train for Ironman. You like these so much that you are unwilling to give them up for something else which will undoubtedly be all-consuming.
Owning expensive things like houses and boats take up resources. You need immediate cash to pay for mortgages and bills. Do you race cars for a hobby?
Are you married? A spouse and family will put demands on your energy and time. Are they willing to give up their time so that you can pursue your interests in a startup? Are they truly OK with not seeing you at home for dinner many nights? Be warned: those that have not experienced the startup world may think they know what it’s like time-wise, but I will guarantee you that they may have zero concept of what it’s REALLY like. Make sure you sit down with them and talk it through in excruciating detail and get their support and buy-in. More than one family has been wrecked because of too much time spent at a startup. Make sure YOU know you’re joining the startup for the right reasons and with the right familial support.
Are you comfortable where you are in life, job, family, etc. or are you hungry?
If you’re comfortable, you may not be willing to give up your current job with nice high salary and which supports your current lifestyle. You may not want to stay up all night working for little pay and for a risky return some unknown time in the future.
If you’re hungry, then perhaps you could be right for a startup. You may want more out of life, more money, more fame. Whatever it is, it’s more than now and you want it fast and not wait decades. The only way you can get this faster is if you take more risk at a startup which could vault you to whatever it is you’re lacking.
Which leads to the next point….
Are you conservative or a risk taker?
If you are a conservative person, STAY AWAY FROM STARTUPS. If you cannot risk your entire career, fortune, whatever, at all, you shouldn’t consider a startup. You’ll drive yourself nuts and everyone else around you.
Can you deal with ambiguity, adapt well to change, be ok with constant chaos?
A startup is not known for stability. Things don’t work as smoothly as you want and you have to be OK when things aren’t perfect, or forgotten, or done in haphazard ways. If you require order in the way you do things and need that around you, a startup is probably not for you.
Do you like to learn and do everything? Do you not mind taking up tasks outside your areas of expertise?
Startups are typically short staffed. Everyone typically pitches in and does a little of everything. Marketing people code HTML pages, Business Development folks take out the trash, Engineers open up photoshop and crank out graphics for the site. If you like to learn and either want to become or are a jack of all trades, startups are the perfect environment to grow your ADD.
If you just like to do your thing and pass the buck on everything else, I am certain you will be shunned by everyone on the team.
Lastly, are you passionate about the startup you may join?
Passion drives humans to do amazing things. If the startup you’re joining seems cool but your heart really isn’t in it, I would highly recommend not joining it. Wait until you find something that you can really get behind. Passion will give you strength and stamina to work long hours, to really resonate with what you’re working on, and give you extra motivation to keep working even when you’ve been not sleeping for days.
Startups can give you the experience of a lifetime. I would not have given up my experience at Yahoo! for anything and it taught me a lot about passion, the thrill of working together with a whole bunch of smart, motivated folks, and a lot about myself and what I am made of. But like it or not, we’re not all startup material. It’s something we need to be realistic about, and also, for us on the other side trying to recruit for startups, it’s frustrating but we understand.

iPod/iTunes is cool until you lose everything…Part II

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The saga continues..(from Part I)…
So after many weeks of going cold turkey and doing some research, I finally found my answer on About.com. I used a program called iPodRip which was well worth the $14.95 I paid for it. I downloaded this program, ran it, opened up all the music (and videos!) on my iPod and copied it all back onto a new external hard drive I bought.
This took many hours but was finally done. It was thankfully in the right format, so then I pointed my iTunes music folder to that folder and imported it all to its library, which again took many hours. But it was mostly back.
All my videos were gone, but like I said it was unlikely that I would go back and watch all those episodes of Lost or Battlestar Galactica. If I wanted to watch them again, I resigned myself to buying the whole season again, since our nice friends at Apple decided that upon losing your copy of the music or videos, you’ll have to buy them again (wonderful).
So being Mr. Paranoid, I bought two other 750 GB hard drives on which I wanted to copy all my music, for a total of 3 copies of my iTunes folder. I figure, what’s the chance of all 3 hard drives dying at once? So after a few days delay, I finally decided to do that late last week when….my Mac mini decided to crash on me.
This story is never going to end. I tried Data Rescue on it, but didn’t want to retrieve the files; I wanted it back up and running! So tonight, I am bringing it to the Genius Bar at the Apple Store to see if they have suggestions. Ideally I could just reinstall Mac OS X again on the hard drive and everything would be fine…theoretically.
At least I’m not crying over this. I didn’t keep critical data on the Mac Mini hard drive. It’ll be a pain to reinstall everything but better than losing data….Sigh….

Drinking the Kool-Aid Ain’t So Good

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When I worked at frogdesign, I remember our team going to a PC client and getting reprimanded for not using their company’s PCs If we were going to work for them, then shouldn’t we be using their products and getting to know how “great” their products were by living with them day to day?
The same thing happened at Yahoo!. I remember a sales rep who had a major PC manufacturer as a client and he immediately went out and bought a laptop made by that company to show solidarity and support for the client. I don’t know if he used it when he got back to the office, but definitely he brought it with him to client meetings. He even switched his cellphone to that company’s brand (maybe you can figure out who this company was now heh). It was all to show that he was in full support of the manufacturer as client and supported them so much that he lived and breathed their products, as much as what he did with them at Yahoo!.
I drank the Kool-Aid too. When we worked on Yahoo! products, we were told to always use them. It kind of made sense at the time. If you lived and breathed the products, you could make them better. You could spot problems, make suggestions, and overall show the world that a company who uses its own products must obviously have the highest confidence in them to do so.
After observing and experiencing this behavior for many years, I’m going to take the contrarian view. I am going to suggest that using solely your company’s products is not so good as people claim.
I reached this conclusion just now, almost 3 years out of Yahoo! and have been out there using whatever it was that made my life easier, instead of just using Yahoo! products only. I found that there were a huge number of products out there that were really great, and often much better than what Yahoo! could offer. I even took Yahoo.com off my home page button, which had occupied that button since 1995. Drinking too much Kool-Aid too long made me miss out.
If you are constantly using your own products, I would put forth that it’s the best way to put blinders on. Sure, your company’s products may be the best there is when they come out, but they may not be at some time in the future. With Web development happening so fast, it could happen sooner than you think.
In today’s Web, things move so fast. People come up with stuff that you personally would not have dreamed of. The more you focus on your own products, the more the likelihood that you fall into that comfortable place where you don’t need to change, you don’t look for something better, and you just don’t feel like learning something new. You get complacent and feel that what you have is good enough, or you think it’s world class because you worked on it and people have told you so. How can it not be? You take pride in what you’ve done and nobody can knock you off the mountain. Everyone tells you to research and look at competitors’ products, but yet nobody finds the time to do so. It is a small number of people who actually have their own personal curiosity to go out and try somebody elses products. It’s too freakin’ busy to go and do this in your spare time!
I would put forth that the blindness that happens with being comfortable and focusing on yourself and your own company is precisely the way you get blindsided by some fast moving kids out of college developing something that is so cool and compelling and you see them gaining traction only after you’ve fallen behind.
What’s the best way to combat this?
USE THE BEST PRODUCT OUT THERE FOR WHATEVER IT IS YOU DO.
Force yourself to always try new things, even when your boss is telling you to use the company’s products. Fake using Gmail when you go to a client meeting, but return back to what you think is the best product for email when you’re out of that meeting. Use the best cellphone for you, but when you go back to work carry your Sony-Ericsson.
You can’t learn about a product by just trying it; you really need to live with it and become a real user of that product and internalize why it is great.
Always ask your friends what they use. Read magazines and blogs about what they recommend. Collect your insight and feed it back to your own development process for your own products.
Don’t get complacent about your own products by missing what’s happening in the greater world. This is more than just being “innovative”. It is experiencing and acknowledging the world is a bigger place than just you, your product and your company. Broaden your horizons and you’ll be a superior product person for it. Truly in today’s Web, the best product does win.
POSTSCRIPT:
When you realize that you are practically using none of your company’s products because your competitors’ products are so much better, and you can’t get your company to realize this, I think it’s time to leave.
POSTSCRIPT Part II:
If you’re a boss, don’t be an ass and make everyone on your team use your own products, if they aren’t as good as your competitors’. That should be motivation enough to make your own stuff better.