February, 2010


8
Feb 10

Management Undercover

After the Super Bowl, CBS aired the premier of its new reality show, Undercover Boss.  While I’m not usually a fan of most reality TV, I actually found the show to be interesting and worth a watch.  While its merits as good reality TV may be debated, the show’s concept is one that all managers should stop and pay attention to.

I think it’s fairly common for those being managed to think that their corporate overlords don’t understand what they do, how hard they work, and in general, feel under-appreciated.  It certainly doesn’t necessitate that a company have 45,000 employees (as Waste Management does, the company in the first episode) to find a couple of steps in a chain between policies being set at a company-level and workers implementing those policies.  And the more steps you have, the more of a disconnect you get.  Just ask any elementary school kid playing whisper down the lane.

Why don’t more corporate executives and managers try to step into their employees shoes every so often, to see how their policies are actually being implemented?  Why is this a novelty fit for reality TV?  Shouldn’t this be good management practice, that we see all the time from executives?  Especially in a world where executives are trying to determine which jobs aren’t important any longer and should be on the chopping block?

In the corporate world, the practice seems to be for policies to be set, then communicated down the series of managers and their underlings via all-hands blast emails and quarterly conference calls.  Sure, your direct manager might have a decent understanding of how hard you’re working and what resources are needed to increase performance.  But, the farther up the chain you go, the more quickly individuals just get rolled up as metrics in a spreadsheet.  Looking at a spreadsheet with your employees as numbers quickly makes you lose perspective on what those numbers actually mean in human-terms.

If more executives took some time to come out of the corner office and actually work with their employees in their jobs, they’d learn a lot more about how to set effective policies.  It wouldn’t even have to be undercover management style – just watch the show to see what an impact it makes for your employees seeing that an executive cares enough to come out and see what they’re doing and how hard they’re working to contribute to the company’s success.

Startups don’t have to worry about this (as much) at the beginning. Everyone is usually in the same room.  There’s only one level separating the executives from the worker-bees (not that anyone uses those terms).  It’s very easy to see when a policy doesn’t work out, and everyone usually shares roles.

But startups (hopefully) grow, and grow quickly!  This has the “executives” learning on the job how to manage people in the larger company.  And then you need to start worrying about how to retain folks, that your company is a company people want to work at, and make sure that everyone shares the vision.  How do you do that?  We haven’t gotten there, yet, but I suspect that making sure you understand what your employees are doing (again, not necessarily “undercover management” style) will be a good start and an important way to make sure that you’re not setting policies that have employees thinking “that guy in the corner office has no idea what I do all day…”

Hm.  Maybe there is something we can learn from reality TV after all?


7
Feb 10

New Surroundings

As you may have noticed, I’ve ported the content of my blog from Tumblr to WordPress.  I liked the simplicity of Tumblr a lot and the fact that it handled everything for me was nice.  However, I found myself wanting to tweak things and do more with the blogging platform than Tumblr would natively allow (Embedding iFrame-based content and file attachments were two such things…).  I initially started with Tumblr because I wanted to see what blogging was like without having to worry about the mechanics of the platform.  It’s certainly nice, but the flexibility and maturity of the WordPress platform is hard to beat.

So, before things got too far advanced, I decided to make the move.  Pretty much everything should have come over seamlessly.  I’m still waiting to migrate the Disqus comments over, but the post content has been moved plus redirects for the old URLs have been setup.  For anyone else looking to make the move, Tumblr2WordPress made it very easy (I was happy to find this tool – there was lots of information on WordPress -> Tumblr, but not very much at all on moving the other direction).  Be sure to follow the instructions at the bottom on setting up redirects via htaccess for a seamless transfer.

Anyway, hopefully, you’ll enjoy the new surroundings!


6
Feb 10

How much equity?

I wanted to republish here one of my posts from PSUstartups.com, the blog on Penn State startups that I’ve maintained.  This post was originally published on March 30, 2009, as we were in the midst of figuring out the equity stakes for FanGamb (now Three Screen Games).  We were hunting for advice on how best to figure this out amongst a team that hadn’t worked together before and we came across the following model, which I published for the benefit of others.  In trying to compile some of my thoughts on this blog, I wanted to move this post over.

……….

Recently, I was asked to help figure out how much equity the co-founders of an early-stage startup should be given at the outset of the venture. This is an interesting question – in most cases, I think that early-stage startups all too often forgo the question and just divvy the equity pie up evenly. It’s quick, easy, and doesn’t require difficult discussions and decisions. Still, there’s often many differences in what is brought to the table and the risk borne by the each individual co-founder, and it makes sense to factor this into the equity pie from the start.

Still, how do you make “equitable decisions” on this topic? :) Some quick research presented this article from OnStartups.com that essentially states what was already discussed – the simple, equal division, is rarely the correct answer. Still, it doesn’t provide many suggestions about making the right decisions.

However, one of the comments is more helpful and provides a link to a page written by Frank Demmler, Associate Teaching Professor of Entrepreneurship at the Tepper School of Business at Carnegie Mellon University. Frank was previously in senior positions with multiple investment/venture funds in the Pittsburgh area, including general partner of the Pittsburgh Seed Fund, so he clearly has some experience in this space.

Frank promotes the idea of developing a matrix with the key elements of the business (idea, business plan) along with who’s bringing what to the table (risk, responsibilities, domain expertise), along with each of the founders. The key elements should be weighted and then values assigned in each category for the founders. The article just shows screenshots and doesn’t provide an actual Excel model that you can use, so I created my own version of the model in Excel – please see attached Equity Model Spreadsheet. This certainly seems to be a more empirical and quantifiable means of answering the question “How much equity?”

…………

Note: The above Equity Model Spreadsheet link goes to the file on PSUstartups.com.  I have also placed this file on Drop.io here and on Google Docs here to make sure it can be accessed.


6
Feb 10

I was reviewing my Feedburner stats recently and saw something interesting.  I’ve kept the same Feedburner feed URL for both of my attempts at blogging (the first time, during college, which ended sometime in 2007; and now this second effort at getting a personal blog going!)  The slope of the subscribers line at the start of both of these time periods is interesting.  Back in 2006, it was a very gradual climb in subscriber growth.  This time around, growth has spiked much more quickly.

I’m attributing much of this to the importance of social media – blog posts are broadcast and retweeted so much more in today’s world.  Before, sharing and broadcast options were more limited.

I think this is an interesting comparison between the time periods, with my own little sample set, and clearly shows the importance of using social media to drive readers to your posts.


4
Feb 10

Legal Innovation for Startups from Legal River

Link: Legal Innovation for Startups from Legal River

Legal River, a LaunchBox Digital company, recently launched a Terms of Service generator and a similar tool for creating Privacy Policies.

Along with their new StackOverflow-style Q&A forum, I think these are great moves for the company.  Granted, there are many nuances and details that must be considered and each company is different, there are also a number of common legal questions and action items that startups have.  Thus, it would be a real savings if there was a common checklist and resource to accomplish these without having to pay the lawyer bills.  After all, most lawyers just pull these things out of their document repository and simply customize them for each client.  The more that startups can do this on their own, the more we can save the legal dollars for when it really matters.

These recent offerings from Legal River, in my opinion, are much, much more valuable than their initial lawyer search engine (when we started this past spring, we just asked around in the community for lawyer recommendations – I don’t think we would have trusted an online search engine to find us a reliable attorney).

This touches on what Dave McClure wrote about back in 2007 – innovate and automate.  Nearly three years later, not much has changed.  It’s good to see some innovation.