Archive for the ‘Best Practices’ Category

Urban Airship Meeting Rules

I love Scott Kveton, the CEO of Urban Airship. He and his team are building an amazing company in Portland. If you do anything mobile-related and use push notifications of any sort, or real-time location targeting, you need to be talking to them. But even more impressive is how Scott leads his company.

The other day, I got an email from my partner Jason with a photo of the Urban Airship Meeting Rules posted on the wall. They are so logical as to be rules that should apply to every meeting at every startup from now until forever.

Urban Airship Meeting Rules

0. Do we really need to meet?

1. Schedule a start, not an end to your meeting – its over when its over, even if that’s just 5 minutes.

2. Be on time!

3. No multi-tasking … no device usage unless necessary for meeting

4. If you’re not getting anything out of the meeting, leave

5. Meetings are not for information sharing – that should be done before the meeting via email and/or agenda

6. Who really needs to be at this meeting?

7. Agree to action items, if any, at the conclusion of the meeting

8. Don’t feel bad about calling people out on any of the above; it’s the right thing to do.

I particularly love 0, 1, and 4. I rarely walk out of a meeting when I’m not getting anything out of it. I’m going to start paying more attention to this one.

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January 22nd, 2013     Categories: Best Practices     Tags: , , , , ,

Give Before You Get

This first appeared in my LinkedIn Today column titled Give Before You Get. I post unique content on LinkedIn a few times a month (I ultimately reblog it here) but if you want to get it when I first publish it and you are a LinkedIn member, simply follow me on LinkedIn.

As 2013 begins, I encourage you to adopt one of my deeply held beliefs, that of “give before you get.”

I’ve lived my adult working life – first as an entrepreneur, next as an angel investor, and now as a venture capitalist and a writer – using this credo. It’s a core tenant of the Boulder Startup Community, which I discuss extensively in Startup Communities: How To Build an Entrepreneur Ecosystem in Your City. And it’s at the heart of how I live my personal life and is part of the glue that holds together the awesome relationship I have with my wife Amy Batchelor.

In order to give before you get, adopt a philosophy of helping others without an expectation of what you are going to get back. It’s not altruistic – you do expect to get things in return – but you don’t set up the relationship to be a transactional one.

In a business context, my favorite example of this is the difference between a mentor and an advisor. The word “mentor” has become very popular and trendy recently, yet few people really understand what it means, and many mentors are actually advisors. To understand the difference, here’s an example. An advisor says “I’ll help you with your company if you give me 1% of the equity” or “I’d be happy to spend up to a day a month advising you if you give me a retainer of $3,000.” A mentor says, simply, “how can I help?”

As a partner at Foundry Group, I interact with hundreds of entrepreneurs each week. I’m an investor in a few of their companies, but many of the people I intersect with are entrepreneurs whose company I’m not currently invested in. While a few of these companies are potential investments, the vast majority of them are companies I won’t end up being an investor in. Yet I try to be helpful to everyone who crosses my path, even if it’s an answer to a simple question, feedback on their product, or simply a response to their email that what they are working on isn’t something I’d be interested in investing in. Sure, I’m not perfect at this, but the number of entrepreneurs who have helped me in some unexpected way because of my approach to them dwarfs the energy I’ve “given.”

I believe that I’m playing a very long term game in business, and that my actions today will impact me in 20+ years. I feel the same way about my non-work life. My goal is to life as happy an existence on this planet as I can and, by giving before I get, I maximize my chance of this.

As you begin 2013, consider adopting a give before you get approach. It might surprise you what you’ll get!

January 1st, 2013     Categories: Best Practices     Tags: , ,

Should Your Board Members Be On The all@company.com Email List?

tl;dr – Yes.

I’m on the all@company.com list for a number of the companies I’m on the board of. CEOs and entrepreneurs who practice TAGFEE welcome this. I haven’t universally asked for inclusion on this list mostly because I hadn’t really thought hard about it until recently. But I will now and going forward, although I’ll leave it up to the CEO as to whether or not to include me.

In an effort to better figure out the startup board dynamic, I’ve been thinking a lot about the concept of continual communication with board members. The companies I feel most involved in are ones in which I have continual communication and involvement with the company. This isn’t just limited to the CEO, but to all members of the management team and often many other people in the company. Working relationships as well as friendships develop through the interactions.

Instead of being a board member with his arms crossed who shows up at a board meeting every four to eight weeks to ask a bunch on knuckleheaded questions in reaction to what is being presented, I generally know a wide range of what is going on in the companies I’m on the board of. Sure – there are lots of pockets of information I don’t know, but because I’m in the flow of communication, I can easily engage in any topic going on in the company. In addition to being up to speed (or getting up to speed on any issue faster), I have much deeper functional context, as well as emotional context, about what is going on, who is impacted, and what the core issue is.

Every company I’m involved in has a unique culture. Aspects of the culture get played out every day on the all@company.com email list. Sometimes the list is filled with the mundane rhythms of a company (“I’m sick today – not coming in”; “Please don’t forget to put the dishes in the dishwasher.”) Other times it’s filled with celebration (“GONG: Just Closed A Deal With Customer Name.”) Occasionally it’s filled with heartbreak (“Person X just was diagnosed with cancer.”) Yet other times it is a coordination mechanism (“Lunch is at 12:30 at Hapa Sushi.”) And, of course, it’s often filled with substance about a new customer, new product, issue on tech support, competitive threat, or whatever is currently on the CEO’s mind.

As a board member, being on this list makes me feel much more like part of the team. I strongly believe that board members of early stage companies should be active – and supportive – participants. My deep personal philosophy is that as long as I support the CEO, my job is to do whatever the CEO wants me to do to help the company succeed. Having more context, being part of the team, and being in the flow of the all@company.com communication helps immensely with that.

There are three resistance points I commonly hear to this:

1. “I don’t want to overwhelm my board members with emails.” That’s my problem, not yours, and the reason filters were created for people who can’t handle a steady volume of email. If you are a Gmail user, or have conversation view turned on in Outlook, it’s totally mangeable since all the messages thread up into a single conversation. So – don’t worry about me. If your board member says “too much info, please don’t include me”, ponder what he’s really saying and how to best engage him in continuous communication.

2.”I don’t want my board members to see all the things going on in the company.” That’s not very TAGFEE so the next time you say “I try to be transparent and open with my investors”, do a reality check on what you actually mean. Remember, the simplest way not to get tangled up in communication is just to be blunt, open, and honest all the time – that way you never have to figure out what you said. If you don’t believe your board members are mature enough to engage in this level of interaction on a continual basis, reconsider whether they should be on your board.

3. “I’m afraid it will stifle communication within the company.” If this is the case, reconsider your relationship between your board members and your company. Are you anthropomorphizing your board? Are you shifting blame, or responsibility to them (as in “the board made me do this?”) Are you creating, or do you have, a contentious relationship between your team and the board? All of these things are problems and lead to ineffective board / company / CEO interactions so use that as a signal that something is wrong in relationship.

Notice that I didn’t say “all investors” – I explicitly said board members. As in my post recently about board observers, I believe that board members have a very specific responsibility to the company that is unique and not shared by “board observers” or other investors. There are plenty of other communication mechanisms for these folks. But, for board members, add them to you all@company.com list today.

May 14th, 2012     Categories: Best Practices     Tags: , , , ,

Three Magic Numbers

Every company I’m involved in keeps track of numbers. Daily numbers, weekly numbers, monthly numbers. Ultimately, all the numbers translate into three financial statements – the P&L, Balance Sheet, and Cash Flow Statement. While these numbers are sacrosanct in the accounting and finance professions, they are lagging indicators for most startup companies. Important, but they tell the story of the past, not what is going on right now.

I’ve formed a view that every young company should be obsessed about three magic numbers. Not two, not five, but three. Before I explain what those numbers are, I need to tell a story of how I got to this point.

My brain works better with numbers than graphs, so over the years I’ve conditioned most people I work with to send me numbers on a regular basis. Words are good also, but I love numbers. Early in the life of the company I request numbers daily. Some of this is for me; most of it is to try to help the entrepreneurs build some muscles around understanding the data and how to use it.

Recently, I’ve noticed a cambrian explosion of data among several of the companies I work with. The number of different numbers being tracked daily is massive. When you walk into their office there are screens full of graphs on the wall. Everyone in the company has access to the trends over time across a number of dimensions. These graphs are pretty, the numbers are dynamic, and there are often blinking lights to go along as a bonus.

A few months ago I stood in the middle of the office of a 30 person company and stared at the flat screen TVs hanging from the ceiling showing an array of graphs. I’m sure my mouth was open as I tried to process the data and make sense of it. I knew this particular company well and could reduce the number of different data points to a small set, but I was completely overwhelmed by the visual display. As I systematically looked at each of the graphs, I realized very few of them mattered much, nor where they particularly helpful in understanding what was going on in the business.

At the moment I realized these were no longer magic numbers. Instead, I was looking at wallpaper. Data porn. The entrepreneurial aeron chair equivalent of 2012. Pretty, but a bad allocation of resources. The 30 people in the room might be looking at the graphs. They might be looking at one of the graphs. But they probably weren’t seeing anything.

This particular company runs off of three numbers. Daily active users (DAU). Live publishers. Trial publishers. That’s it for now. In the future, there will be a daily transaction metric (Daily transaction revenue) that replaces trial clients. But that’s probably a quarter or two away.

I then started thinking about each company I’m on the board of. This rule of three applies. For many of the companies, DAU is one of the numbers. In others it’s daily orders. Or daily revenue. Or daily activations. Or total publishers. Or new publishers. But in every case I could reduce it to three numbers that I felt were the most important to pay attention to.

The absolute number is what matters. The trend is driven by day over day changes. If during the week (assume the week starts on Sunday) the numbers are 47, 67, 69, 72, 174, 80, 53 this prompts the question “what happened on Thursday to drive the number to  174?” If the next week the numbers are 53, 75, 214, 83, 80, 73, 45 this prompts two questions: “what caused the spike on Tuesday” and “why is the week over week trend downward?” Clearly there is seasonality within the week and there is a new high, but the overall trend going into the weekend is negative.

My brain can focus intensely on three variables like this in a business. Once I add a fourth, I have trouble figuring out the relationship between them. This doesn’t mean that the leadership and functional managers shouldn’t track and analyze the detailed data. They should. But they should realize that when they show this to everyone in the company, no one knows what to care about.

Instead, my new approach is to focus on three numbers. These three numbers should reflect “what’s going on right now in the business” and the trend of the numbers should be a predictor of what’s going on. As I think about the companies I’m involved in, I can define these three numbers in 60 seconds – they are almost always painfully obvious. Sometimes I do end up with four and have to make a choice, but I rarely end up with five.

The technology for displaying these three numbers is remarkably simple. They make this thing called a whiteboard that you can write them on. An email can go out to everyone in the company with the three numbers. That’s it.

What are your three magic numbers?

 

February 7th, 2012     Categories: Best Practices     Tags: ,

Best Practices: Annual CEO Expense Audit

I’ve started a new category on my blog called “Best Practices.” These are going to be posts inspired by my experiences with various companies that I feel are above and beyond the normal activities you’d expect. The first one comes from Matt Blumberg, the CEO of Return Path. Earlier this week the board received an email from him that included the following:

“Although [our CFO] approves my expenses in our accounting system, inspired by Mark Hurd, I decided it would be a good idea to add a level of transparency to you in terms of my expenses.

To that end, I’m doing two things:

  • I’ve asked our auditors to include some analysis/testing of my expenses in this year’s audit
  • Attached, please find a spreadsheet which details all expenses, with a summary tab that has the overall picture and a few explanatory notes

Trash or treasure, as they say, but please feel free to ask any questions or poke any holes you’d like.  I can assure you that I’m pretty disciplined about expenses (both in terms of not being profligate and in terms of not abusing company money for personal use), but I did think it would be good housekeeping for you to have visibility.”

To a person, we responded that while unnecessary, this was a nice gesture of transparency. The spreadsheet that Matt sent around had every expense item he was reimbursed for in the year. The summary was helpful for putting it all in perspective, but I could look and see where (and with whom) Matt ate dinner, which hotels he stayed in, how much he paid for plane flights, and what he charged to the company as miscellaneous expenses.

I thought about it more and decided it was an awesome display of trust. I have immense respect for Matt, his leadership, and his management skills. But more than that, I’d go to the ends of the earth to do anything for him. Unilateral, unexpected gestures like this one just reinforces that for me. So, more than just transparency, this best practice increases the level of trust between a CEO and his board.

March 12th, 2011     Categories: Best Practices     Tags: , , ,