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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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The Work Begins When The Milestone Ends

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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.

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.

Big Boulder Brings Social Data to Boulder

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This week I’ll be kicking off the second day of Big Boulder with a talk about how the Boulder startup community has come to be what it is today. Big Boulder is a conference on social data held by our portfolio company Gnip.

Last year Chris Moody wrote a blog post about how companies should pursue thought leadership. To me, Big Boulder is the embodiment of this. Gnip believes that social data will change the world. To that end, they’ve brought together some of the biggest players from social media publishers including Facebook, Twitter, Klout, LinkedIn, StockTwits, Disqus, Tumblr and WordPress. They’ve put together a killer agenda talking about the many uses of social data and how publishers are thinking about it and what is enabling people to do.

Part of Boulder’s ability to grow as a startup community is our ability to bring high-level events to Boulder. To that end, Foundry Group has worked hard to bring and keep Defrag and Glue in Boulder. We’re excited to have Big Boulder as another high-profile event attracting people to our city. This affords more people to see everything Boulder has to offer a startup community and for our community to interact with attendees. I know that some Big Boulder speakers like Daniel Ha of Disqus are also sticking around to speak to the TechStars teams.

If you’ll be at the conference, please come and say hi.

The Power of TAGFEE and Just Executing

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So far I’m pleased with my shift to Maker Mode this summer.  I’ve managed to get in a solid four hours of writing on my Startup Communities book each day and will have a full draft to circulate to a small group of people on Saturday. I chose deliberately to skip TechStars New York Demo Day (which looks like it went great) this year, which was a hard choice for me but I just didn’t want to break the flow of what I’m doing. And I’m still running on inbox zero and – other than physical proximity – haven’t heard any concerns about my responsiveness or availability. As a bonus, I’m getting to spend 24 hours a day (except when I’m out running) with my amazing wife Amy.

Yesterday I saw a post from Gnip titled You Are What You Do. Gnip is one of the companies we’ve invested in that I refer to as a Silent Killers - they are building an amazing company by just doing things that customers care about, not hyping themselves, and delivering what they say they are going to deliver, ahead of and beyond expectations. No hype – just substance – and execution.

This was coincidentally followed a few minutes later by an email exchange between Ben Huh (Cheezburger CEO) and Rand Fishkin (SEOMoz CEO). Rand and SEOMoz run on a set of principles called TAGFEE (Transparent, Authentic, Generous, Fun, Empathetic, Exceptional) and if you want to see this in action, take a look at the post Rand wrote recently about the financing we led titled Moz’s $18 Million Venture Financing: Our Story, Metrics and Future.

Ben (to:Rand, Brad): Just a random thought… Maybe I don’t have the balls to do it, maybe I just think that I want to run my biz differently, but the more I do this, the more I converge on TAGFEE. Thanks for putting it out there in the world.

Brad (to:Ben, Rand): I am 100% convinced TAGFEE is right. It’s so unbelievably liberating. 

Rand (to:Ben, Brad): This email put a huge smile on my face. That said, it’s fucking hard. So hard I can barely believe it. Being TAGFEE yourself when there’s always pressure not to sucks bad enough. But working with a large team and getting managers and individual contributors to act this way (and figure out when/where/how/whether it’s being broken) is the toughest challenge I’ve ever had. Thankfully, it’s incredibly rewarding, too. Oh – and there’s a missing “H” in TAGFEE. For humility. In fact, empathy and humility in potential hires are the best predictors that they’re going to fit with our team and be TAGFEE.

In contrast, I got an email from a VC earlier this week who said “aren’t you worried that one of your LPs will see your post about spending the summer at your place in Keystone?” My immediate reaction was to point him to TAGFEE and say that we try to be 100% TAGFEE with our LPs so I hope they see what I’m doing and appreciate why I’m doing it. I know unambiguously what my job for my LPs is – they give me a box of money and my job is to give them back – over time – a much bigger box full of money. I’m never confused this and I always try to do it in a way that maximizes the size of the box I give them back.

If you line up You Are What You Do, TAGFEE, and Silent Killers you start to get a feel for the type of entrepreneurs we love to work with. An awesome part of it is watching them learn from each other and learning from what they are learning. It informs everything I’m thinking about and the last 24 hours once again reinforced for me the power of TAGFEE and just executing.

Getting The Compensation Conversation Right

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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:

“Dear 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.

Love,

Chris”

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!

Guidelines For Interviewing At A Startup

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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.

Please

  • 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!

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