Posts Tagged ‘Organisational Culture’

“Running a start-up is like being punched in the face repeatedly”*

September 10, 2009

In my experience of working for a large global software manufacturer and now having my own software startup Paul Graham* is spot on. Paul said  Running a start-up is like being punched in the face repeatedly… but working for a large company is like being waterboarded.” (Waterboarding is a form of torture involving simulated drowning.)

I’ve found the bigger the company the more market power you have  but the less freedom you have as an individual. However having startup’s freedom means getting  rejected   (‘punched’) continually as you have virtually no market power. Get used to it and come out fighting because startup and small companies are more fun.

matrix_punch

The ultimate punch in Matrix Revolutions, 2003

During my career I’ve worked for several small and medium companies and one of the world greatest ever tech corporations, Novell Inc. People generally open doors warmly when you’re from a large corporate enterprise but in the startup they often don’t even give you the time of day.

The Big Corporate Enterprise

When I joined Novell they were enjoying a temporary revival with Eric Smidt at the helm. Interestingly Eric is now the CEO of Google.  Even during Novell’s decline I always remember the feeling of power when I meet customers and partners. They all took you seriously. Even prospective customers, partners and ex-customers would welcome you in.  Novell and other corporate enterprise’s have huge amounts of market power.

Market Power

By market power I’m referring to a company’s credibility. Being creditable reduces the customers perceived risks and often increases trust. From my experience market power is derived from having several of the following:

  1. Customers Referable large company and well known household name customers.
  2. Partnerships – creditable partnerships with creditable leading companies.
  3. International service/product – Effective provision of services across the globe.
  4. Scalable service/product – The capacity to take on new large scale orders and customers without over-stretching.
  5. significant assets – Whether is be customer base, IP, financial or contractual assets.

As an employee working for a large enterprise you are riding on this power. Unfortunately decisions and change happens very, very  slowly and painfully within the corporate enterprise. The large companies often rely on the status quo. There is certainty in the corporate world for the company and the employee.

To get on in the large company you have to be a good corporate citizen . This means towing the line, keeping you head down and doing as your told even if you don’t believe in it. It can become torture for many. What makes all of this worthwhile is the pay and the perks. However there is more to life than money…

The Small to Medium Size Company

This size of company sits somewhere between the giant corporate company and the startup. They’re often in partnership with the big companies, reselling or distributing their goods or services. The effect of having referable customers and being involved with a large stable enterprise company brings credibility. This increases the smaller companies market power.  However they often still lack market power because they’re not making an embedded product or service product.

The good thing about working as an employee for smaller companies is that you get paid and the decision making progress is shorter and therefore quicker. This means as an individual you have more freedom than within the corporate environment. However as a small company you have to fight alot harder to survive. Interestingly some larger companies like Virgin Group, Ltd and WL Gore & Associates, Inc have successfully divided into small units  to act  and feel more like smaller companies.

The Startup

You love your startup like nobody else. You believe  your product is a world beater but unfortunately very few will agree.  As a startup you have no market power unless you have a track record of previous startups. Again and again you will get “punched in the face” by people all around: customer’s,  partners and investors. Graham says “everyone has a problem with your product” .

As a founder you have to draw strength from somewhere. Graham says “uncertainty” abounds, “as well as a persistent fear that a single bad decision could doom the whole enterprise” and “the gut-wrenching period when you realize that success isn’t going to come quickly or easily”.

Your strength may be your family/partner, friends or an inner driver of your vision of the future. Something has to drive you. And it has to drive you hard to gain market power. However a startup is something very special. Many only dream of having one. A startup brings the idea of freedom. The freedom to create and grow something of your own.

It’s very interesting to see people from all three types of companies sharing public discussions. Now I look back on my career the differences are amazing. The corporate citizens often lack passion, individuality and an inner drive. From all my years of experience I enjoy working for startup and small companies the most. They give you a sence of purpose, belonging and fun. Unfortunately the pay sucks in a startup but then money is not everything 😉

Advertisements

Do student interns work for startups?

August 28, 2009

Interns are an attractive option for startups. The benefits are clear. They’re low cost, eager to learn and need the cash. We have two developer interns working for our website motioning startup right now. The alternatives to interns are either expensive freelancers/contractors, low cost but inflexible off shoring resources or permanent staff.  I’ve posted before about finding and working with freeelancers or off shore companies. Despite the benefits care needs to be taken in finding the right interns and setting an effective working relationship.

YoungOnes Students Potential interns? ‘The Young Ones’ students (Source)

Our experiences goes against Seth Godlin’s and Loic Le Meur’s. Seth believes “internships are overrated” and “we (employers) are doing them a favour”. We’ve found this is not the case if you find the right people,  pay them and work together on clear objectives.

  1. Finding the right people – We directly approached 12 Universities and assessed 20 students. Our criteria was  they had paid work experience; were skilled in our development platform and they showed strong initiative.  We were lucky to find two motivated interns who had worked at Google and a London digital agency. We also thought it was better to employ two interns rather than one. With two they can share ideas and work out problems together.
  2. Paying  interns – Despite being a cash strapped and starved  startup we think it’s better to pay interns. Paying them changes the nature of the relationship because they are expected to deliver on objectives. Also interns who have paid experience expect to be paid for their next project.
  3. Clear objectives – Like all employees they need managing and trusting. Student’s aren’t dumb. Treat them as adults. Let the interns set their own objectives and work with them. If you’ve found the right interns trust them to solve problems and they probably will deliver.

Our experiences of interns so far is great. Yes, it does take a chunk of management time to get them up and running. But that’s OK, because if they’re good you will get that time back later on in the summer as they become more productive. I know several other UK startups including EveryCity and Huddle who also have employed interns. And they think interns are great too. Sam at Chinwag posted his positive experiences of their intern at Chinwag.

Our interns Dave King and Phil Howell have done an incredible job for us. I dread to think how far behind our software development would be without them. From our experience I would highly recommend interns. They bring new fresh ideas to the project and they’re eager to learn. But like all recruits you’ve got to find motivated, responsible and self disciplined individuals for it to really work. You can’t just blame them if it doesn’t.

Do startups really need branding straplines?

August 19, 2009

Branding straplines (also known as taglines) aren’t just for big companies or films. There also great for startups. Like a startup pitch the written word needs to state very quickly what your startup does and will do for potential customers.  They’re not as easy to create as you might think. However they are extremely important to bring understanding and direction.

Alice_drink_meAlice in Wonderland
read the label (source)

Prospective customers and partners will only give your written words a few milliseconds  to make their mind up if  your service is a fit for their needs. A strong strapline brings a clear understanding, direction and clarity of purpose to customers and employees. We’ve found that straplines are not easy to create. They take time, effort and commitment. Which is why they are so powerful and effective.

This is a good article on creating straplines.  Once made you also have to deliver on your strapline promise. Otherwise your statement is meaningless and trust will be lost. Over the last few months we’ve found some company/startup straplines we’ve liked:-

  • Invent – Hewlett Packard still remains focused on innovating. This dates right back to the time the founders made things.
  • Experience Fanatical Support – Clearly Rackspace are committed to proving the best possible support. Rackspace’s branding artical.
  • Painless Billing – Again a very clear message. This time from FreshBrooks. Outsource your billing to remove the headache.
  • You Send. They Sign. Its DoneEchoSogn’s use of the classic three short statements. Very effective on what the product does and will do for you.

The top level strapline can build out with more detail into sub messages. Freshbooks is a great example:

  1. Painless Billing
  2. The Fastest Way To Track Time and Invoice Your ClientsThis second message brings more detail on the customers pain point and how Freshbooks will save their customers time.
  3. Send, track and collect payments quickly. Great for teams, freelancers and service providers. – Reinforcing speed and who the service is made made for.

We’ve worked hard on our straplines for our startup:

  1. Aware Monitoring – What we do is in the service name
  2. The easiest way to measure website performance – We make a complex thing much easier
  3. On-demand website monitoring with actionable alerts. Share reports in your business and with your customers. – We are a SaaS service (not software) and we bring useful results which can be shared.

So far we’ve used our strapline messaging for our service blog, launch page, company Twitter and on Crunchbase. Of, course we still need to deliver on the promise.. As Charlie Chaplin said “Words are cheap.”

Straplines embody the vision of an organization, no matter how small the company is. All product/company descriptions and messages  can be derived from the pitch and strapline. Its a like a pyramid of descriptions. This structure bring consistency of understanding and clarity of purpose to potential customers and employees.

Pitching 2.0+ : A clear, concise & complete message

July 8, 2009

It’s not as easy as you think getting your pitch/message down to a few very clear and concise words. I’m pitching our website monitoring startup again. This Pitch is part of a national Pitch competition. Click the links to see my last pitches: Understanding Pitching and Learning to Pitch. We’ve been short listed based on our application form. All the hard work we’ve been putting into our Website messaging is really starting to come through. Our message must be improving.

ChurchillChurchill. Good with words.

Like a marketing strapline a pitch needs to be boiled down to a very few key words. It says what your company does and what you stand for. This message is then developed into longer pitches to include more and more detail as required. 3 second, 30 second, 3 minute pitches, etc. Its a bit like a pyramid of descriptions with the shortest and simplest pitch at the top. This structure brings consistency and clarity. Ultimately the culture of a startup is formed around the principle messages and values formed by the founders. In this way employees, customers and investors understand what your company stands for.

How we get on today at The Pitch competition is important but its not critical. Its the journey that’s the useful part. Improving, testing and refining our message is the reason to pitch. Although the £50,000 worth of prizes would be nice. This practice is preparing us and our message for potential customers. After all The Pitch panel will not be buying our product, customers will. Keep pitching – practice makes perfect 😉

The spirit of Entrepreneurship

May 19, 2009

This is a great video! It’s viral but worth talking about. Micheal Acton-Smith Re-Tweeted the link last week.  The video is very well made and makes some good points.

The term Entrepreneur has many different interpretations. Unfortunately academics can’t seem to agree on a definition. The press often put Entrepreneurs onto a heroic pedestal. They tend to focus in on the big risks and the big winners. Like the video I believe we are all Entrepreneurs. The essence of Entrepreneurship is about experimenting and learning. Which most of us did alot more of as ‘kids’.

Companies can also be entrepreneurial. Some organisations learn and adapt better than others. Universities can even be entrepreneurial risk takers. Employees don’t even have to leave their jobs to be entrepreneurial. Just as long as they are learning and growing. Why can’t an employee dream of over coming difficult challenges, making a difference and a better world? They can! However the problem comes when employers hold back employees ideas.

Unfortunately organisations often don’t let employees experiment and innovate. Business politics gets in the way of trying new things. Employees can then loose their individual entrepreneurial spirit and the job becomes a 9-5 routine. Being self employed holds a dream of hope for many. However the risks can seem just to high to leave. I’ve heard this so many times, “I wish I could have my own company”.   The answer in this video is that you can. You just need to be prepared to try out new ideas and learn fast.

New media channels: Weakness, opportunity or threat?

August 6, 2008

The way we communicate and consume media is changing. This is affecting old media channels and creating an explosion in the media market. According to a report (download) from Ross Dawson last month the growth in the global media and entertainment market is set to grow from $1.7 to a massive $5.4USD by 2024 (in todays terms). The report was part of Ross’s Future of Media Summit 2008, which Seth Yates did a good review on.


Publishing has come along
way since the old wooden press

New media has brought a change in market dynamics with more consumer choice in how/where we consume and share information. This change is breaking down old media markets. Existing firms are being forced to try and communicate with potential new generational and innovative customers through new media. However Enterprise firm’s social network communities and external corporate blog initiatives don’t seem to be working. This lack of success has reduced the number of larger firms externally blogging according to a report ‘2B2B Blogging Takes Nose Dive’ from Forrester and reviewed by Gavin O’Malley. In addition most corporate on-line community sites are failing according to a report by Ed Moran of Deloitte and review by The Wall Street Journal.

Miguel Gonzalez believes that ‘Corporate culture discourages the kind of openness needed to make a blog — corporate or not — worth spending time reading’. I think the issue may stem from customer engagement and employee trust. The challenge to firms is to be risqué as shown by successful blogs. These blogs present a personal view which can be deliberately controversial to spark conversations. This spreads the word and thus the link. Yes, it’s viral marketing at work again but by a real person and not from a faceless marketing department.

Being controversial is not normally associated with speaking your mind as an employee, with the exception of journalists. Even they are known get in trouble when stretching the truth a little too far. Some firms ban their employees from expressing any opinions on their personnel blog in reference to their industry. This seems a little dragooning but you can understand business fear of reprisal from customers should an employee make front page news. Firms also fear that employees may inadvertently give away secrets to competitors. All this control is probably borne out of a lack of trust in employee’s judgement because of our current hierarchical command and control management systems.

What’s the next innovation after digital printing- Social Media?

Are blogs and new media channels going away? Almost certainly not and overtime they probably will move more into the mainstream. A good but long review ‘Beyond Blogs’ by Stephen Baker and Heather Green from BusinessWeek concludes: “Even if the bubble bursts (Web 2.0)—and we predict it will—the power of social media to transform our businesses and society will only grow.”. I agree, change and evolution is inevitable. So is developing a effective new media strategy important for large firms? Defiantly, because as Ben Parr says social media is about ‘customer retention and growth’; ‘which meets company’s one overarching goal: to increase profits.’ As always the challenge is change and the need to change is getting ever more pressing.

“Would the real”…person…”please stand up”

July 11, 2008

I think Malcolm Gladwell (Tipping Point author) is right in his parting comment from his ‘Mismatch Problem’ presentation , “you only know what a person is like when you have worked with them”. Gladwell criticises the recruitment selection process for sportspeople, teachers and lawyers. However he did not put forward an alternative method. Perhaps that’s in his next book! Referring to today’s hiring practices and commenting on Gladwell’s talk, Guy Kawasaki posted: “Guess what: this method doesn’t work. Jobs–of all types–are more complex, and the desire for certainty increases but is manifested in measuring the wrong things. Do you hire people based on the measuring the wrong variables?”

Jim Collins’s classic Good to Great (2001) research refers to the importance of organisational culture in creating an enduring firm, with culture forming from the founders personality, beliefs and the collective employees. Jason Powell of 37 Signals recently posted about the importance of culture in Pixar’s tightknit culture being its edge.

Collins believes that ingrain character attributes of: work ethic; basic intelligence; dedication to fulfil commitments and values are the things to really look out for in potential new employees. Collins goes on to say whilst other attributes including educational background; practical skills; specialized knowledge and work experience, remain important they are all learnable. I think the challenge is that its much easier to select based on education/experience than in identifying the real persons character.

Many of us have been through the various recruitment selection processes to weed out the best knowledge workers, including : hand written applications; panel interviews; psychometric tests (e.g. Myers Briggs) and even team recruitment days. However with practice all of these methods can be learnt, the right answers given and thus real persons character can remain hidden.

If we have not worked with the person or are unable to rely on social networks our only real choice is to very carefully go though the process, check-up on references and trust in your gut instinct. I bet the Pixar team take great care when selecting new employees to maintain their pure culture. The audience at the future of management conference seemed surprised by the significant amount of time senior management time Larry/Sergey and Dr. Eric Schmidt of Google spends on screening up to 80-90 candidates weekly. Interestingly one of Google primary criteria for new recruits is educational background and achievements.

The dangers of bringing people that don’t fit can have a far reaching and significant knock-on impact on employee culture. If the people in the company are really the most important asset then the selection process must also be one of the key priorities for the firm. Perhaps winning the right people is even as important as winning new business.