If you work with people, at some point you’re going to need to motivate them to do something you want. We’re not talking anything malicious, just getting stuff done. For most things, that’s always been the carrot and stick approach – if you do what I ask well, I’ll give you a carrot. If not, I’ll whack you with my stick. In essence – if you reward something, you’ll get more of what you want. If you punish something, you’ll get less.
And the bigger the carrot and stick, clearly, it would seem to make sense that the better the motivation derived from them. Because this system is ingrained in us, we see this everywhere.
To escape the status quo, everyone who works with or manages individuals should watch the below video, capturing the highlights of Dan Pink’s book Drive: The surprising truth about what motivates us. (Not only is it extremely interesting, it’s also a really great lesson in using whiteboards to make engaging videos ) Pink also gave a TED talk last summer.
Hopefully, you took a moment to watch it. For those of you that are reading on, here’s a quick summary:
When tasks call for cognitive skill over mechanical skill, larger rewards result in poorer performance. Pay people enough to take money off the table. And, emphasize the three key factors that lead to better performance and personal satisfaction:
1) Autonomy – self-directed 2) Mastery – getting better at their craft 3) Purpose – making a contribution
I found the video extremely interesting. While the carrot and stick approach is so intuitive to us, when you really stop to think about the tasks that we’re motivated to work on, Pink’s points hit home.
When you’re toiling away, in the bowels of some huge project, working on some small part that isn’t going to significantly make or break the big picture, are you really driven to do your best work? Compared with, if you are the “CEO of your job”, making a clear contribution.
This is one key reason why most corporations are at such a huge disadvantage to most startups when it comes to innovation. Having huge amounts of money and resources are fantastic, until you’re trying to get top talent to apply it to new problems. The main corporate driver is to maximize profit, and you work on small chunks of something larger that the end customer really doesn’t care about. Startups facilitate their people in maximizing purpose, making contributions. And if they don’t, they should be – startups aren’t just vehicles to accomplish the founders’ purpose. Startups are an opportunity for everyone on the team to work towards achieving something, a collective victory.
Also, since startups are one of the few places that have the capability to go against the status quo, to implement processes that would make corporate managers shiver in their cubicles, they’re also well setup to allow individuals the other two key factors – autonomy, to decide how best to achieve the task at hand, and mastery, to provide an opportunity to get better at their craft.
The Mark Pincus “Be the CEO of your job” example is a good illustration of this. So is the example that Pink uses in the video about Atlassian and their “FedEx Days”. Who knew how productive one day could be if you just gave your employees free reign to decide how best to make a contribution?
Jeff Atwood has a great post on how he’s applying these principles at Stack Overflow. Are you maximizing purpose and leaving your carrots and sticks outside? Or is your motivation based purely on dollars and thus is an ineffective sham? What’s working for you?
I was chatting with another startup founder recently who was talking a conversation he had with his CTO and what the CTO had told him about a recent issue with their site. Some data had been lost from the site and the CTO apparently immediately started putting blame on some unknown “user error” as the cause of the unknown glitch. This is despite the fact that there didn’t seem to be any relevant connection between any of the functionality on the admin backend and the data loss that had occurred. Fortunately, there were backups and the data was able to be restored, so no real harm done (aside from frustration and lost time). However, what was more interesting was that the situation was apparently only one instance of many similar conversation – strange technology issues occur and the CTO has no clear explanation for what happened.
Startup founders, especially those with no technology background, if this happens to you – stop. Stop letting your CTO get away with providing vague explanations for what happened. Stop letting the CTO off the hook. Everyone who uses a computer knows that technology doesn’t always work right. Startups are, more often than not, dealing with a combination of bleeding edge platforms, compressed time schedules, and lack of sleep – a cocktail that can be exciting, but results in a higher than average percentage of software bugs.
The issue is not the bugs. They are expected. Any founder who expects a system to be bug free is dreaming. The issue is a CTO who can’t explain the issues that occurred, or, more likely, doesn’t want to take responsibility for the issues. And even more importantly, the implications that this has for the technology side of your business.
Founders with no technical experience are in a difficult position in startup world. So much of a startup’s life is centered around the technology. As the company moves from customer development to product development, for someone who doesn’t understand the tech, the startup world becomes a wild roller-coaster ride with the CTO in the drivers’ seat. Make no mistake – you are more or less at the mercy of your tech co-founder if you don’t understand the tech, so you had better pick a good one.
A good way to look at this is what if your CTO walks away – do you know how to access the code, how the architecture is setup, how to get into the various administration tools, how to access the backups? Ideally, the question is yes to all of the above, but startup world is chaotic. New systems are being added, servers are reconfigured – change is ever present. Are you up to speed on stuff?
So, what’s the point? The point is – if your CTO can’t take responsibility for a tech issue that occurs, if she won’t walk you through what caused the issue, if he doesn’t do a root cause assessment and explain the results – then you are living on the edge. If your CTO can’t own up to one issue, how much other stuff is going on that you have no idea about?
Let’s be very clear – if you are in this situation, then you have a relationship with your CTO where the balance of power is skewed and the wellbeing of your company is at risk. You need to get clarity into what’s going on over on the tech side and restore the balance of power, and more importantly, rebalance your relationship where you’re getting truthful explanations from your CTO. Or find a new one. Heed the warning signs and protect the company.
A fruitful behavioral interview question is to ask about a time when the interviewee was working in a group and they had to deal with someone who wasn’t cutting it. I say it’s fruitful because it usually is always asked and therefore, since candidates know it’s coming, they have a thought out answer for it. The question usually attempts to get at how the person dealt with the issue – did they work with the student to resolve it, did they work with the professor, etc.
It can certainly be interesting to know how people handle themselves in difficult situations. However, I think for entrepreneurs, there is a different, more telling way to look at this theme. You want to get at what did the person learn about who makes them successful.
As I’m finding out, entrepreneurship is everything you expect from hearing about it – it’s fun and rewarding, it’s also confusing and downright tough sometimes. And it’s a constant roller coaster from good days to not so good. There’s some debate about whether you need a co-founder in this modern age of startups, but the plain truth is that it’s hard to succeed, in general, with startups and being alone doesn’t add much to your chances. I’m with Paul Graham on this one (see #6). The point of the Business Insider article is that you have slim odds of finding a co-founder that you align well with.
So, steering back on topic – figuring out who makes you successful.
In most groups in school, students are lumped together in groups, usually at random. But when it’s over, did they figure out who they worked well with any why? Did they distill that thought nugget down, so that the next time they get to pick who they’re going to work with, they know what traits they should be looking for?
Each person usually has specific types of people that they work well with. Maybe a visionary works well with an organizer. Or an organizer works well with a someone who’s very driven and motivates the team. Regardless of the specifics, I think its highly important for people to figure out who those types of people are for themselves and to do so as early as possible. Then, as you meet folks and make connections, you can seek to build relationships with those that align with the type you’d work well with.
This is a critical concept for entrepreneurs. The team is everything – it’s one of the three critical legs of the stool. If you know more concretely who you would work well with, that should go a long way towards helping you to figure out who you want to co-found a startup with.
As I started to discuss in my post on the first two steps to encouraging entrepreneurship, I think a big part of learning to be an entrepreneur is learning to be cognizant of things that most people notice, but don’t take note of or take action on. In much the same way as you need to train yourself to recognize the market “pains” that product opportunities create, you need to train yourself to note who you work best with, what personalities are most compatible. It’s almost like an entrepreneurial variation of Situational Awareness, perhaps a combination of the three levels. Regardless, being able to make those observations and and pushing to distill them down into something more actionable is key and if you can figure that out, you just increased your startup’s odds.
Because FanGamb is a very data-intensive site (lots of constantly updating odds, games, results, etc.), much of the software powering the site doesn’t directly tie to the web interface and instead interacts with our database. Last winter, we had an issue where as usage increased on the site, resource usage increased faster than it should have been and systems started locking up.
Digging through the processes that were running, we finally noticed a confluence of issues. First, one of our data scripts was running away, loading a bunch of duplicated games. This wasn’t good, but the vendor was able to fix it easily. However, this first issue led to a second problem. As the number of games increased in the database, the script that processed these games kept running longer and longer to deal with the increasing number of dups. As game results update quite frequently, our cron jobs trigger in fairly close succession. What began to happen was as the first cron job took longer and longer to complete, the subsequent cron job would kick off before the first completed. So, we had cron job after cron job stacking up on the server, quickly leading to issues, as you would suspect.
The fix for this was quite simple, as well, and has since become a standard practice for us. There’s a utility that EngineYard (our host) pointed us to that implements “locking”, so that one task can’t kick off while the other is already operating – it’s called Lockrun. It uses a temporary file and system ‘flock’ing to implement this, so it’s incredibly simple to install. One little utility and a big issue solved – the best kind of solution.
If this is your cron job:
/usr/bin/php script.php > log.log
Using this utility, just change to:
/usr/bin/lockrun –lockfile=/data/path/JOBNAME.lockrun — sh -c “/usr/bin/php script.php > log.log”
This past weekend was the kickoff event for DreamIt Ventures’ 2010 program. The program, considered as one of the top three accelerators in the country, received over 350 applications for its third class, per opening remarks from co-founder Mike Levinson.
On Monday, I wrote about some of the lessons that the 2009 DreamIt Ventures alumni panel spoke about at the kickoff event for the 2010 cohort. Following this panel session was a presentation by Steve Barsh. Steve was the DreamIt partner who ran the day-to-day operations last year, but he’ll be taking a somewhat reduced role this year, as his main focus now is his newly launched startup that’s a marketplace for great last minute deals on vacation rentals, PackLate.com.
As always, Steve had a ton of great thoughts for the companies. His presentation was a collection of startup tips and tricks, to get the companies in the right mindset for the first day of the program (which was Monday). Here were some of the highlights of his talk:
Steve talked about some of the common problems startups face. One of the key issues he mentioned was early-stage startups commonly looking for validation from investors, and thus attempting to raise money from investors too early (More on Steve’s blog). Steve told the DreamIt companies that you don’t need any funding to go out and ask your customers if they would buy your product if you built it. And if they say no, you can ask why not and dig into what their concerns are. For more, see Steve’s blog post on the topic.
He covered the concept that every startup has a number of key assumptions and that the companies want to be looking for ways to kill these off as early as possible during the summer. Remove these assumptions to increase the probability that your business will succeed, but also if you are going to look for funding at some point down the road, this is one of the best ways to improve your valuation. (Post on Steve’s blog)
This concept of de-risking your business plan was an extremely transformative way of looking at building startups for me last summer and I hope that this important concept was driven home for the new founders in a similar way.
Steve spoke about how a startup’s job is to learn as quickly as possible – to run through a maze filled with a ton of dead ends, realizing that you’re heading towards one of these dead-ends as quickly as possible, and pivoting to start off on a new route.
To this end, each week, you should be figuring out what you can learn, what experiments you’re going to be running. What marketing experiments? What product experiments? Pitch experiments? Set a hypothesis and then go off and prove or disprove it. Build a minimum viable product, release it, learn, improve, and release again. Along those lines: If in retrospect, you look back at your first product and you’re not embarrassed by it, then you waited too long to release it.
Steve also talked about the importance of not sitting there and debating these learnings amongst your team. A/B test everything. Think people want a new feature? Put a button on a page and see if people click on it. Put Google Adwords up and see what people click on – refine your pricing and positioning via this methodology. Steve has some good tips on these techniques here and here on his blog.
He shared an interesting way of looking at startup strategy: every single day, what can you do to gain an unfair advantage? What can your mentors, advisors, board, university connections, LinkedIn, etc. do to give you an unfair advantage? Can you call in favors from friends? Can you get in touch with a key contact through a fellow alum? Figure out what you can do to give you an edge over your competitors – you are in this to win. In that vein, start building your networks on LinkedIn – those shared connections will be the basis of your personal competitive advantage.
Steve shared one of his classic tips that I’ve always thought was one of his best: he suggested that the companies, as they’re meeting with investors this summer (for advice – most are too early stage to be pitching for real), end their conversation with this question: “If you would ever consider making an investment in a company like ours, what would it take for you to make that investment?” I love this question, because it’s a great way for the entrepreneurs to get inside the investor’s thought process, and get some insight into the kinds of issues that they’re going to need to address before they can have the follow-on investment conversation for real.
Steve closed with this bit of advice: You are getting on a roller coaster. You are going to have great days. You are going to have days where you’re ready to pack up shop. Stay stubborn and focused, but keep looking for pivot opportunities.
And so many more great thoughts and ideas. The summary recap hardly does the presentation justice. So, the presentation is embedded below – check it out.
In many ways, Steve offered similar thoughts and techniques to what he presented last year at the DreamIt kickoff event for the 2009 companies, however, I think the presentation was much richer this year. For the better part of the past year, Steve has been living the early stage startup life again and putting all of these techniques into practice with PackLate.com. All of the lessons learned really came through in this talk. Tons of great advice for the DreamIt companies – hopefully, they’ll take a handful of these and put them into practice. And just like that classic novel that every time you read, you get something new out of it, there were even things for the DreamIt alumni in the audience to take away and put into practice. Certainly, if you ever get the chance to hear Steve speak about his tips for startups, take him up on it – there will certainly be something worthwhile for you and your business.
Check out the presentation for yourself, from SlideShare:
This weekend was the 2010 DreamIt Ventures Kickoff Event in Philadelphia. It was great to see 15 new startups in the Philadelphia area, buzzing with activity and ready to get started. The kickoff events were held at the soaring Comcast Center on the 45th floor, an exciting venue that helped amplify the energy.
Lots of folks from the Philadelphia startup community attended and there was a ton of good advice dolled out to the incoming companies. Two segments of the weekend, in particular, captured some good lessons for the 2010 DreamIt companies. I’ll recap these from my notes in two posts.
The first segment that I want to summarize was a panel session with three companies from the 2009 cohort: Jack Groetzinger from SeatGeek.com, DJ Stephan from Notehall.com, and myself for FanGamb. Clearly, having been on the panel, I’m a bit biased, but I felt there were a lot of good points made.
A summary of some of the important takeaways from the panel discussion:
There’s more than one way to build a startup.
SeatGeek launched at TechCrunch 50 and raised a good sized series A VC round.
Notehall.com was featured on ABC’s SharkTank program in October and closed a moderate seed round.
FanGamb closed a family & friends round in the fall to continue iterating the core game (something larger in the works that can’t yet be disclosed).
The message: There are lots of different funding options. Find the one that works for your business. Raising VC funding isn’t the only definition of success. The longer you hold off on raising funding and the less you raise, the more options you keep open and the more ownership you maintain, generally. Another point by Jack: when raising funding, put one person in charge of the process and send him/her to the meetings only – don’t let the process distract your entire team, keep them focused on building the product.
Don’t be afraid to pivot.
SeatGeek grew out of the largest pivot from DreamIt ’09. The founders, Russ D’Souza and Jack Groetzinger, were accepted to DreamIt with an entirely different business – Scribnia.com, a blogger review platform. They sold this business in June 2009 and built the SeatGeek prototype in 1.5 months in time for Demo Day. The message: no matter what pivot you’re considering, it’s not bigger than changing your business entirely, so keep all options open.
Notehall changed the way it sold notes at campuses. Originally, it gave notes away for free to kickstart the market, but advisors were suggesting they try another model. Finally, after months of ignoring this advice, they finally piloted a different model and found it to be hugely more successful. The message: be open minded – the DreamIt partners and your mentors may not know your market specifically, but they know how to grow businesses. Be true to your vision, but be open to trying other models.
FanGamb pivoted with regard to two aspects of its model – how to drive engagement and its business model. Regarding engagement, a key assumption was that badges and leaderboards (i.e. social proof) would be enough to drive users to be engaged with the site. To a point this was true, but never to the level expected. Similar, virtual goods were expected to be a key monetization engine for the site, however, without the high levels of engagement, this wasn’t effective as a first step. As a result, the FanGamb team tested multiple options and is in the process of implementing a new model (again, no specifics currently – news coming soon). The message: get your core user base using the product as soon as possible, throughout your iterations and test your user acquisition methods, too. We wrote off early user behavior because we were testing with a different sport than we would launch with in the fall, but in retrospect should have taken a harder look at the data.
What do you think some were some of the key factors that led to your companies succeeding, versus those that didn’t from your DreamIt cohort?
Don’t die – find a way to pivot. In nearly every startup concept there is a nugget of truth/value – you need to distill your concept down and figure out what that is as quickly as possible and make course corrections along the way. Startups are a process of going down as many dark alleys as you can before you run out of motivation and money.
Get real customers using the product as soon as possible and find out what they really think. (Side note: it was amazing how many of the DreamIt startups talked about the status of their customer development efforts in parallel with their product development efforts in their overview/status talks – quite a change from a year ago, really showing how the lean startup methodology has taken hold. Seems to be effective lean startup, too, not lean washing…)
Solid, stable teams that put in a ton of hours (the three companies on the panel represented teams that put in some of the most hours throughout the program – SeatGeek put in 36+ straight at one point, winning the prize for the most time in the office) — this wasn’t specifically mentioned during the panel, but was an observation we noted afterwards
Certainly lots of good thoughts and lessons learned from the panel. More great thoughts and startup advice from Steve Barsh’s Kickoff presentation coming in a future post.
Hi! I'm Rob, a technology entrepreneur living in Dublin, Ireland, originally from Philadelphia. I co-founded BetDash.com which was acquired by Paddy Power.
I lead an awesome internal startup engineering team at Paddy Power, where we're continuing to build cool stuff for our extremely enthusiastic customers! We're using Ruby on Rails, Backbone.js, Sencha Touch, Redis, Resque, MySQL, and git. Previously, I worked with data warehouses and business intelligence at IBM Global Business Services. More here.