I speak tomorrow at the Business of Software conference. Here are my notes from the sessions so far.
1. Jason Cohen : Healthy, wealthy and wise
“This is not a presentation, a sermon” – a passage from the book of hackernews. “I don’t want to be a founder anymore – there’s a lot to lose from speaking how I feel. We’re profitable, growing, debt free and about to be acquired. The problem is I am supremely unhappy”
The founder who posted this had four choices:
- Quit, killing company
- Hate the next 2-5 years
- Fix it
- Keep running the company
It seems to be a common pattern that founders aren’t happy despite achieving all the things they set out to do (See Credit-Suisse research study).
You have to decide to face some ugly , emotional truths – no one will force you to since you have no boss. It’s easy to be a victim of your own denial.
Jason asked the room “who here has taken too long to fire someone?” and most people raised there hands. “Too soon” – on ly a few people. There’s the good reason, and then there’s the real reason we do (or don’t do) thing.
2×2: matrix, Things that don’t need to be done, needs to be done, want to do, don’t want to do
The fact that a thought won’t go away, and keeps you up at night, is a good indicator it’s something you need to deal with.The emotionally tough choice is usually the right choice.
How to do the tough thing:
- Be swift: delay never helps, often hurts
- Be decisive: flapping hurts
- Be kind: to the person, to others, to yourself
Someone is always the smartest people in the room, but many people might believe that it’s them.
A players hire A. B’s hire Cs.. The presumption is that as an A, you are an A at everything, but when you take on a new role, like finance, even after a couple of months you are not really an A. And when you hire, you are calibrating against yourself, so you unintentionally hire a C and staff new roles or departments with C.
“We don’t hire smart people to tell them what to do. We hire smart people so they can tell us what to do.”
Be an editor, not a writer. Hold people to hire standards, but hire people who can do their own job/role better than you can.
Action oriented vs. results oriented – results are about outcomes and customer satisfaction, action is just a series of acts and choices
He told the story of selling his first company Smart bear. He got an offer and talked to his wife, who said “you have to sell.” And he asked why. And she said “Don’t you know how unhappy you are?” And even when he sold the business, he thought he’d feel better, but not at first. It took a long time to resort himself.
2. Seth Godin, Lessons from 33 years in software
Has been marketing software for many decades, almost 40 years.
- Just because its good software doesn’t mean it’s a good business.
- B2B is different (if you type in B2B in google image search it’s all handshaking). Purchasers are spending other people’s money – different from selling to customers. They need to know “what will I tell my boss?” without something better, they will buy the cheapest one assuming they are all the same. Your job is to reduce fear.
- The connection ratchet (or racket). Phone booths do not improve as more people try to use the same one. Metcalf’s law vs. Fight Club. Instead of thinking of funnels, think of megaphones. Purple cow is remarkable, which means something worth making a remark about. “make things in a way that they are worth talking about”. The marketing of ringtones is built in to ringtones themselves. People like us do things like this (e.g. instead of bilboards and TV ads,we need to think about the minimum viable audience of passionate people)
- Packaging is obsolete. Infocom games and competitors invested in packaging and how things appeared on the shelf. Album and CD covers.
- The art of promising. If we over-promise to get in the door, you are set up to disappoint.
- Free (Price) is not related to cost. Three reasons to make software free: 1) engagement 2) to get people hooked (to upgrade) 3) spread the word. Customer traction means to get people using and talking about your software.
- Make it Matter.
3. Natalie Nagele, Keeping the fun in your business life
Managers job is to create an environment – the business exists not strictly for the customer but also for the team (especially if sustainability is the goal – a future proof organization). A team is committed to each other, not just a product (it’s easier to replace a product that a team).
Culture sometimes happens to you. As the founders age the culture will tend to shift with them, but this isn’t the best way as the founder centric culture can leave other people behind (e.g. she had her first child and the company became more family friendly).
She tried to enforce culture through policy but at a retreat she learned from her team that they weren’t fond of this approach. They asked the question: what are our values (what do we expect from ourselves)? how do we support them? And clarify the values to new people who join? This was the first time they took culture seriously and clarified their intentions.
Why do people have a job? 1) Success of purpose in their professional life 2) Enable a life outside of work (we work for our hobbies). Work to live or live to work? The came up with these values for the company:
- Wildbit is product agnostic. We exist to support our team.
- As individuals, we are self-motivated and constantly improving our craft.
- As a team, we support each other to do the work of our lives.
- We expect great things from ourselves. You should expect the same from everyone else.
- We are motivated and rewarded by our customer’s success.
Perks: Flexible working hours, profit sharing, competitive salaries, private offices + best benefits we can afford
There is nothing wrong with being a regular business. You don’t need to a lifestyle business, or a growth business, or a Unicorn magical business. Business are not built for martyrdom. There is no obligation to be a workaholic or not to have time for ordinary pleasures.
Growing to sell vs Growing to keep: if you are growing to sell you are making a huge bet that a final success (acquisition) will validate and pay for all of the sacrifice and debt along the way. But if you grow to keep, you have a sustainable and reasonable business (and founder salary) along the way, and likely have a better negotiating position. Take care of yourself so you have the incentive to keep going. Many founders exit because they are tired and broke.
Quit serving the business, serve the people. And by doing this, it serves the founders too.
Don’t grow unless it brings you joy – Seth Godin
4. Chris Savage, Scaling Well
When you are scaling big problems are scarier – there is more money and more people impacted. Communication as you scale gets hard.
Clarity and authenticity are important, but tone is part of the message too. And the medium you use changes it (an email vs. a text vs a post – different levels of formality).
He told a story about a major issue that the leadership team felt was best solved by raising prices. When they told the team, they revolted and said “it can’t be done.” They formed a new team to own the problem – they did something very different. Instead of going off to discuss in private (like the leadership team did) they worked on the problem openly. They reached a similiar conclusion, but because the problem was solved openly people’s responses were different.
Lesson: Solve big problems openly – instead of shielding people from uncertainty, it creates fear and a whiplash effect
As a company scales, finding time to think becomes a challenge. At the beginning it’s much easier. He showed his schedule one year after the company started and it was mostly empty.
Work life unbalance: his calendar and schedule made it seem like he was a balanced person, but he wasn’t present with his family and friends. He forgot that thinking is work. Running a company is a creative endeavor in a different way that starting a company.
Problems are rarely schedule problems, they are people problems. You need to delegate more or get better people. Being busy is a people problem, not a productivity problem.
- Focus on Tone
- Solve big problems openly
- Don’t feel guilty having free time