8 revised learnings from running a digital startup for 30 months (and counting)

Eugen B. Russ – 5. Jul 2016

phoenix-revised-learnings-1

In January 2015 I have written an article, reflecting on the first year as CEO of Erento.
I have identified five main points I believed were critical in leading a digital startup company:

  • Be good at hiring AND firing: Be very selective with the people you have on your team.
  • Be resilient: Have patience and endurance. The way to success is not a straight line but full of obstacles.
  • Have a vision and build a culture: Communicate often and clearly. Ensure alignment and autonomy of people. Do your best to make your company a fun place to work!
  • Be close to the customer: Solicit customer feedback often AND act on it. Be a customer-driven company.
  • Have a passion for technology: Share your developer team’s passion for building great software and enable them to do so.

Today, some 1 ½ years later, let us review which of those statements are still valid and which of them would I rather make undone.

Be good at hiring AND firing

I still believe that the key to success is carefully selecting a great team. However, today I believe that it is much more about coaching rather than hiring and firing people.

Teams need time to find together and only then rise to their full potential. It is important to hire the right people (intelligence, energy and integrity) and then develop them over time.

High team stability is key for long-term success and that is something I will have to work hard to achieve over the next months and years. Therefore, the statement should go:
„Be good at hiring AND firing, be even better at coaching“.

Foto:Pixabay

Foto:Pixabay

Be resilient

Resilience is key. Most things take much longer than originally anticipated (and even much longer than I expected when writing the original article some 18 months ago).

It’s absolutely key to celebrate the small victories on the way to keep yourself and the team motivated rather than focusing on big wins down the road. It is the CEO’s job to break down the journey into milestones and celebrate reaching those intermediary goals.

I really liked the flywheel analogy made in the book Good to Great by Jim Collins: “Driving a new strategy is like getting a huge flywheel into motion. Initially, there is no movement – many people think that the strategy is absurd – it is almost impossible to imagine the flywheel at speed. With great exertion of will, the CEO is able to deliver some results that get the flywheel moving. They appear small and trivial initially, but create the credibility to move to more ambitious results. As more and more results accumulate, more and more people throw their weight behind the wheel and the momentum of the flywheel builds and builds.”

The same thing applies to a company: You put a lot of effort into forming the right team, changing the processes and doing things differently. You will only reap the fruits of your efforts much later, once you see important KPIs (conversion rates, number of customers, NPS, revenues, &c) pointing north.

Reflecting on the title, I would change it to „Be extremely resilient! It is hard to get a heavy flywheel in motion“.

Have a vision and build a culture

Nothing to add or change here: a clear and consistent vision is key and cannot be communicated often enough!

Be close to the customer

While I believe that getting ample customer feedback is important there are situations where you get contradictory customer feedback.

Being close to the customer is absolutely core but you need a structured approach to customer interviews. Atlassian offers a great framework to get the most out of customer visits: you can find some interview templates in their blog here.

While I still believe that being close to your customers is important, you need to ensure to feed the information you get in those interactions back to the team.

Have a passion for technology

In my last article I wrote about the importance of sharing your developer team’s passion for building great software and enabling them to do so.

I would go a step further here: I now believe that it is not only about enabling and sharing the passion but understanding and actively experimenting with web technologies.

By coding yourself you not only win the development team’s respect but you also gain a much better understanding of the technical issues the company is facing. Also you get into a position to challenge technical choices and act as a sparring partner to your technology lead.

There are a ton of online classes and tutorials on coding, most of which are useless either because they are too basic (“I don’t see the point of doing this mundane exercise. What will I be able to do with this knowledge eventually?”) or too advanced because the class assumes coding experience in another language (in this case the tutorial will make excessive use of foreign vocabulary like “immutability”, “object”, “inheritance” and alike).

My recommendation is to first find a cool pet project you want to work on (for me it was playing with the Tesla API). Next figure out which set of languages will help you to get there. Last, find a practical book that shows you how to set up an environment and lets you implement what you’ve just learned at the end of every chapter.

I started off with the following Python course/book which I can highly recommend: http://www.pythonlearn.com. Small caveat: if you want to learn about web technology it is more advisable to focus on Javascript due to higher availability of resources and libraries.

Knowing what I know now, I would change the statement to: Have a passion for technology and experiment with it yourself.

Foto:Pixabay

Foto:Pixabay

Three additional learnings

In addition to the five (slightly altered) critical points to success, I would like to add three new ones:

1. Hire builders with a complementary skillset, not managers

When I first joined Erento I made two major mistakes when it came to hiring. First I hired people who had a skillset too similar to my own. Second I overvalued management skills and discounted “builder-skills”.

The key to success is a diversified team: you need people from different backgrounds with different skillsets. By focusing on hiring people with skillsets and strengths similar to my own (sales, general management), we ended in a highly unbalanced company with an outperforming sales but a weak product team.

We have since hired great people into product and development in an attempt to make the company more balanced. I believe that Erento will greatly benefit from a more diverse and balanced team.

Beware of managers: especially in small team settings you need people who are doers (“builders”) rather than great at managers (who will they manage in the first place if there are no builders?). Managers will always find creative ways of keeping busy at the detriment of company success.

A great team does not need managers in the first place because a great team is self-organizing. Micromanagement of people might work in slow moving, low complexity environment but definitely not in highly agile environments.
2. Utilize the power of micro-teams: Autonomy, purpose and mastery

Coming from a very hierarchical structure of a traditional management consultancy the agile world was something very foreign to me. The idea of giving people the freedom to make their own decisions, choose their own working hours and set their own priorities took (and still takes) some getting used to.

In an environment that is as fast as running a digital marketplace you can only succeed by fully empowering your employees. There are three core components in an agile setting: autonomy, purpose and mastery.

Autonomy describes a state in which the individual is fully empowered to make his own decisions and set his own priorities. No need to double check with your superior. If you are stuck, you can still ask for help or coaching from others but you don’t need to get formal approval.

Purpose is having full clarity on how you contributing to the big picture. Company leadership will have to focus relentlessly on communicating vision, mission and values. This is to ensure alignment between the individual contributors / teams and the company.

Mastery is about gaining excellence in what you do. It is about constant improvement and the positive feeling of succeeding in your job. An employer has to ensure the right balance between challenge and motivation.

If those three criteria (autonomy, purpose and mastery) are met in a work environment, your organization is ready to work in micro-teams which can decide and act independently. This is the only way for an organization to succeed in such a fast and complex environment as ours.

Foto:Pixabay

Foto:Pixabay

3. Leverage your network

In our industry “networking” is probably the most overused term. However, there is great value in knowing people in your industry. The value lies in knowing people who share your values but are different enough in their skillset so you can approach them for expertise or connections.

Also networking is about giving and taking: be sure to give to the people in your network by helping them out and you can be sure that they will gladly return the favor.

Beware of networking events where you meet people who are exactly like you. Try to go to events of other disciplines. Arrange meetups yourself. Always be open to meet new people but be equally quick in cutting off people who are just wasting your time.

Don’t underestimate your network’s reach: you will always be able to get an introduction to virtually everyone if you know where to look. I have been surprised to find out how many people from my network are connected to potential future customers and could give me an introduction.

Summary: 8 learnings after 30 months as CEO

  • Be good at hiring AND firing, be even better at coaching: Be very selective with the people you have on your team. Spend ample time on people development.
  • Be extremely resilient! It is hard to get a heavy flywheel in motion: Have patience and endurance. The way to success is not a straight line but full of obstacles. It will take time before you see tangible results.
  • Have a vision and build a culture: Communicate often and clearly. Ensure alignment and autonomy of people. Do your best to make your company a fun place to work!
  • Be close to the customer: Solicit customer feedback often AND act on it. Be a customer-driven company.
  • Have a passion for technology and experiment with it yourself: Develop a true understanding of the tech stack your team is using and enjoy experimenting with it yourself.
  • Hire builders with a complementary skillset, not managers: Hire a diverse set of people who are willing to get their hands dirty and work hard on executing your company’s vision.
  • Utilize the power of micro-teams: Autonomy, purpose and mastery: Create an agile environment in which your employees can thrive
  • Leverage your network: Your network goes a long way if you utilize it properly

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