Posts Tagged ‘startups’
Gurley dispels the myth of The Church of Lifetime Value of the Customer (LTV)
Some people wield the LTV model as if they were Yoda with a light saber; “Look at this amazing weapon I know how to use!” Unfortunately, it is not that amazing, it’s not that unique to understand, and it is not a weapon, it’s a tool. Companies need a sustainable competitive advantage that is independent of their variable marketing campaigns. You can’t win a fight with a measuring tape.
via The Dangerous Seduction of the Lifetime Value (LTV) Formula « abovethecrowd.com.
4 awesome B2B startup sales tips from Steve Blank
Lessons Learned
In complex B-to-B sales, multiple “Yes” votes are required to get an order.
A single “No” can kill the deal. Understanding the saboteurs in a complex sale is as important as understanding the recommenders and influencers
We needed a selling strategy that took all of this into account.
In a startup not losing is sometimes more important than winning.
via At times not losing is as important as winning « Steve Blank.
The Mythical “A” Player
“A” players are executives that are 10x more productive than their peers. They are equally excellent strategically and operationally. They are equally capable at rolling up their sleeves or leading others. They thrive – with or without direction. They are big picture and detailed. They are the perfect mix of confidence and humility. They fit into any team culture, thrive under any leadership style, and raise the game of everyone around them, while befriending them all at the same time. Best of all, they miraculously fit within your pay scale, and you can retain them despite brutal competition for their services. “A” players are perfect – except for one small issue – as defined here, they don’t really exist.
via The Mythical “A” Player and The CEO’s Real Job « Thinking About Thinking.
A maturity model for startups
Lots of people talk about ‘before product market fit’ and ‘after product market fit’ as the two main phases of a startup’s evolution. I’d argue that what Ho Nam (Altos Ventures) proposed in his recent blog post might be a better, more granular way to look at the startup evolutionary process:
Getting through the first breaking point is not about rushing into execution mode. It’s a gradual process that will never end. A framework we’ve found useful in assessing progress along a continuum is the Capability Maturity Model see the five levels of maturity below. It’s a development model whose origins trace back to studying software projects and failures in the 1960s when computer science was in its infancy and few “best practices” existed. Within any company, there will always be processes at different levels of maturity. It’s important to keep in mind that even successful large companies will have chaotic episodes and continue to live with countless undocumented, ad hoc processes that are developed and refined over time. Initial – the process is new, ad hoc, chaotic and undocumented. Individual heroics are relied upon to get the job done. The focus is on outputs. Repeatable – the process is somewhat documented. Repeating the same steps may be attempted. It’s not clear if the process will yield desired outputs. Defined – the process is well defined, documented and confirmed as a standard process that can produce results. Managed – the process is quantitatively managed in accordance with agreed-upon metrics. Optimizing – process management includes deliberate process optimization and improvement.
Another perspective on the “fire fast” mantra
I understand and admire the wisdom of the “fire fast” mentality but that wisdom is no substitute for the real work of leadership: figuring out the right people for various roles. Often when I help a client unpack their feelings while they are in the throes of a decision about whether or not to terminate someone, what is revealed are contradictory facts and ambivalent feelings. And too often, our discomfort with our contradictory feelings, our ambivalence, leads us to rush to judgement, destabilizing and antagonizing the entire organization.But if we wait, if we can pause and bear the discomfort of uncertainty, then we have a shot at getting to the heart of the problem manifested in all those facts. Then we have a shot at creating the kinds of organizations that not only succeed, but embody the best of our values, the best of our aspirations.
via The Gift of Our Ambivalence | The Monster In Your Head – Blog by Jerry Colonna.
Hire the future startup stars
Experience is often over-rated. Some of the most successful startup teams consisted of people that lacked relevant experience at the time they joined. But, what they lacked in experience, they more than made up for in sheer talent and hunger. In the early days, hire athletes. People with raw talent and a propensity to get things done. Don’t be resistent to recruiting people that are early in their careers. You’re looking for arbitrage opportunities. You’re looking for the future stars — because you likely can’t afford or convince the current stars.
via Startup Lessons From 17 Hard-Hitting Quotes In “Moneyball”.
HR tip – Promote fast
CEO’s and managers in high growth environments don’t have time to micro-manage. They need staffers who can JFDI, without requiring a lot of care and feeding.
If you have someone on your team who is consistently overdelivering, requires little supervision, and makes the team around them markedly better, promote them immediately and give them more responsibility along with that promotion.
A promotion is a great way for a CEO or manager to recognize ‘A’ players, to position them as role models within the team or company, and to regain valuable management bandwidth.
If you’re thinking seriously about promoting someone, especially at a startup, then it probably means you should do it. I have managed people who fit into the ‘Promote Fast’ bucket before, and the only regret in my time working with them was that I did not promote them sooner.
Why VC’s should be startup CEO’s via @sgblank
Today, you can start a web/mobile/cloud startup for $500,000 and have money left over. Every potential early-stage Venture Capitalist should take a year and do it before he or she makes partner.
via Steel In Their Eyes – Why VC’s Should Be Startup CEO’s « Steve Blank.
Entrpreneurship Tips from Max Levchin via Quora
It’s usually better to have a cofounder than go it alone.
Being an entrepreneur is not about being in love with an idea, it’s about being in love with running a company.
Having a highly homogeneous (background, education, values, preferences, etc) very early team is better than not — cuts down on time-wasting arguments.
You can have successful teams where people hate but deeply respect each other; the opposite (love but not respect among team members) is a recipe for disaster.
If there is any doubt about hiring a candidate for your first 5-6 positions, there is no doubt — do not.
You cannot hire a cofounder.
Do not allow senior managers to develop long-term grudges against each other. You will have to arbitrate those later, a huge time sink.
All compensation information eventually becomes public, and usually eventually == very quickly.
In many cases “working from home” is not really working.
Most often, when someone wants to leave your company, you should let them. Chasing them with offerings of money and power messes up the incentives of others.
Intra-office romance is usually (but not always) bad news.
Figure out one thing each of your investors is genuinely really good at, and insist they help you with that. Among other things it will save you from their help in other areas.
Consider on occasion whether the adjective “relentless” applies to your team. If not, you probably need to step it up.
Leadership by example is the most effective type. If you expect the troops to crank through nights and weekends, better be there yourself, even if you aren’t actually involved in the task at hand. It’s a little irrational, but it inspires people.
(I’ll keep adding to this list as I think of more of these. No doubt the second batch won’t be as good as the first, and so on, but might still be useful to some people. Plus, next time I am asked to speak on this topic, I can use this article as cliff notes.)
One usually raises money on great story or great results. Raise before, or right after launching. Don’t plan to raise a few weeks after launch.
Having a large and complicated cap table is rarely a good idea. Few committed angels is better than $5k from everyone and their brother.
Board meeting should never be product strategy debates. Double true that for product tactics.
Have a cardboard box at board meetings where attendees must deposit their mobile devices at the start for the entire duration of the meeting. At the very least suggest that idea.
Serve food at board meetings.
If you have a cofounder, give them a board seat. If you can, keep one more for yourself, and leave it empty. You’ll need it later.
Cofounders (under usual circumstances) should have same amount of equity.
Raising money between May 20th and August 10th, and Nov 10th through January 15th is somewhat harder than during any other time of the year — many VCs vacation during those times.
Never, ever agree to participating preferred.
Redemption rights are actually OK (it seems to be an East Coast thing), if placed a bunch of years out. Startups shouldn’t be in a limbo for that long anyway.
If you are going for a big raise at a huge valuation, consider the resulting pref overhang (and its impact on future employee motivation) very carefully.
You are not designing for yourself, and shouldn’t be. Most people using the Web don’t understand (most of) what makes it work and don’t want to. Design for those people — there are many more of them than you.
via (60) Home – Quora.
Career advice from an entrepreneur
But entrepreneurs instinctually realize that the best advocate for their careers is themselves and that there is no such thing as a linear career path. They recognize they are going to have to follow their own internal compass and embrace the uncertainty as part of the journey.In fact using uncertainty as your path is an advantage entrepreneurs share. Their journey will have them try more disconnected paths than someone on a traditional career track. And one day all the seemingly random data and experience they’ve acquired will end up as an insight in building something greater than the sum of the parts.
