Building a Great Team is Hard

At the core of any startup are the people. The founder(s) and whoever they bring on as employees are the lifeblood of that business. When a company is small, but growing, building a great team is a priority.

The challenge of building a great team confronts all startup companies. Small businesses must demand a high level of return on their investment (employees), whereas large corporate or bureaucratic organizations can afford to have a handful of employees who do close to nothing. At a small company though, this could potentially be deadly.

This is not to suggest that one employee should be so valuable that if they were to leave, the organization would collapse. (Think of the hit buy a bus theory). Rather, if one employee does not share the same passion and alignment with the company goals that others in the organization do, it could potentially cause negative effects.

Bringing together 5, 10, or even 15 people to operate, grow and expand a small company is no easy task. This is something I am learning first-hand at MarketSmart.

Sam Altman recently published his Startup Playbook. The second section of his guidelines for startup companies talks about building a great team. It is important.

I am learning first-hand at MarketSmart what it takes to build a great team. A so-so team will not build a great company. It takes a united group of people to create something special.

How to hire

Hiring must be treated as a numbers game, it simply must. Think of a sales funnel. At the top you have hundreds of prospects, at the bottom you have a five signed contracts. At every step of the funnel you refine your prospects, leaving you with your most promising sales leads.

Hiring at small companies should employ this same tactic. The consequences of not talking to enough candidates is deceivingly expensive and disruptive.

At MarketSmart I have worked closely with our CEO to develop our Careers micro-site. On the site there is a short 10 question survey for all interested applicants. Questions attempt to make the applicant think, a noble cause in a world of “click-to-submit” job postings.

This survey serves a dual purpose for MarketSmart and the candidate. One, it weeds out candidates who obviously are not interested in MarketSmart. Two it allows us (the company) to spend more time talking to people who genuinely are interested in us.

For the candidates it has the same effect. Candidates will “opt out” and simply not apply if they are intimidated by the survey, or vice versa, candidates will relish at the opportunity to express themselves and share their interest.

The more I interview, phone screen, and watch the hiring process play out, the more I think of it as dating. Dating is not easy, hiring is not easy.

Be honest and transparent

If you are trying to build a great team you should probably be honest with your employees. That extends to potential employees as well.

When interviewing candidates I like to ask them about their most recent previous work experience. What did they like? What did they dislike? Why did they leave or get relieved? Etc.

I am young and naive, but I find it interesting the number of people that mention being lied to by their previous employer.

I doubt these organizations flat-out lied to these people – I simply can’t imagine that. What I suspect is that these companies “misspoke” during the hiring process. They needed you (the candidate), and were willing to tell you what you wanted to hear to make sure you took the job. Then, three months down the line when you were unhappy you went back on the job hunt and ultimately left.

That is my suspicion, and from talking with candidates that is the story I have heard.

So, when building a great team how can you avoid this? How can you avoid “misspeaking” during the interview process? At a small company one employee may very well wear many hats which makes outlining a specific positions roles and responsibilities difficult.

One surefire way to avoid lying to candidates is to create a timeline. At MarketSmart we explain that the roles and responsibilities you are taking on can vary day to day, month to month. What I do during an interview is layout a twelve month timeline to help the candidate understand what role they would be filling now, and what role they could potentially be in then.

I am honest, candid and forthright. Some people I talk to find this refreshing, others are intimidated by the lack rigidity in the plan.

By being honest, open and transparent with potential candidates I am helping MarketSmart find the best fit. Building a great team is difficult, but being honest helps.

Look for character

Sam Altman wrote in his Startup Playbook:

Good founders have a number of seemingly contradictory traits. One important example is rigidity and flexibility. You want to have strong beliefs about the core of the company and its mission, but still be very flexible and willing to learn new things when it comes to almost everything else.

The same idea that he touches on applies to all employees of the organization. Good employees have strong character and contradictory traits.

Traits are differentiated from skills. Skills can be learned, traits are more innate.

At a startup company candidates who are willing to learn and of high character will be of more long term value than a similar candidate who has high technical ability but a limited desire to grow in the organization. When a team is small, 15 people are less, you need a core group of individuals who have traits that align with the company’s mission.

As the company does space will open up for other individuals who are simply “looking for a job”.

Building a great team is hard. It is necessary. And, it is fun.

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Agile Modeling & Activity Diagrams

Recently I have been spending a considerable amount of my time developing an idea for a new business. I am working with the CEO of MarketSmart to develop an innovative application that could potentially reshape a niche portion of the non-profit world.

Greg, the CEO of MarketSmart who I am working closely with has been giving me guidance during this process.

For the past month or two I have been working on a “scope” document. (More on that below.) But now, I am beginning the process of creating activity diagrams and focusing on agile modeling.

I whole hardheartedly intend to start my own business in the near future. My personal Big Hairy Audacious Goal (BHAG) for the next 3-5 years is to be operating my own company.

The first day I interviewed for the web developer position at MarketSmart I mentioned that desire to Greg. In between working on client related tasks I have found myself making progress on this new product. I occasionally remind myself how fortunate I am to be working with a seasoned entrepreneur who is not only willing, but wanting to teach me anything and everything involved in this process.

Staying late at the office to make progress on this project feels like I am taking night class. Who knew school could be fun.

A few weeks back I posted a short article called Notes From Creating a New Product. I touched on four key theories I had picked up on during my first month of working with Greg on the new product.

During that month I was focused on developing the product scope. For that I found myself using Microsoft Office Outline. In Outline mode I created headers that represented pages, and sub-headers that related to page elements and page functions. In addition to writing thousands of words in Outline mode I created a series of page mock-ups in Adobe Illustrator. The mock-ups showed how the user would sign up, enter their data and view their “dashboard”.

Now, a few weeks later I have moved on from scoping out this idea, to modeling how users will interact with it. The goal here is to create a presentation that can be shared with technical professionals. These people should be able to look at this presentation and suggest what tech stack options are in play, and how long it would feasibly take to develop. I started to engage in this modeling process when I created page mock-ups in Illustrator, but that simply was the tip of the iceberg.

Here is what I have been learning and researching. I plan to implement these new techniques for this project within the next two weeks.

Activity Diagram

Greg has a large network of friends, business partners and advisers. He took the scope document I created in Outline and the mock-ups I put into Powerpoint and shared them with two highly technical people. Their response was to have me create activity diagrams.

So I researched and figured out what activity diagrams are.

UML 2 activity diagrams are typically used for business process modeling, for modeling the logic captured by a single use case or usage scenario, or for modeling the detailed logic of a business rule. Although UML activity diagrams could potentially model the internal logic of a complex operation it would be far better to simply rewrite the operation so that it is simple enough that you don’t require an activity diagram. In many ways UML activity diagrams are the object-oriented equivalent of flow charts and data flow diagrams (DFDs) from structured development.

State Diagram

Next I was instructed to look into state diagrams. This was another term I had never heard before and more researching ensued.

UML state machine diagrams depict the various states that an object may be in and the transitions between those states. In fact, in other modeling languages, it is common for this type of a diagram to be called a state-transition diagram or even simply a state diagram. A state represents a stage in the behavior pattern of an object, and like UML activity diagrams it is possible to have initial states and final states. An initial state, also called a creation state, is the one that an object is in when it is first created, whereas a final state is one in which no transitions lead out of. A transition is a progression from one state to another and will be triggered by an event that is either internal or external to the object.

Unified Modeling Language

After researching activity and state diagrams I did a google search for “uml”. The acronym was coming up a lot in my reading, and although it had not been mentioned by Greg I thought why not read more about it.
Unified Modeling Language (UML) is a standardized modeling language that (from my research at least) is mainly used for software development. UML enables developers to create models of highly complex processes that can be easily interpreted by others.

Agile Modeling

After researching UML I found myself stumbling upon the phrase “agile modeling”. I have frequently seen the word agile and scrum pop up on hacker news, but I had never taken the time to research what either meant or referred to.

While reading about both agile and scrum methodologies I found myself thinking about activity diagrams. Applying th ideas of scrum product development are further down the line. For now, my main priority is modeling user interactions with the application. For that, agile activity diagrams seem to be the way to go.

Wireframes

The last request Greg’s friends had of me was to create a wire frame sitemap. Although I enjoy designing in Illustrator, creating 50+ pages will be a task that I reserve for software more well suited. I plan on using Balsamiq to create a site map and show user flow throughout the app.

And that is what I have been learning over the past few weeks. Fun stuff. Important stuff. Practical stuff. I can’t wait to put it in action!

Notes From Creating a New Product

When I interviewed for an open position at MarketSmart I made it very clear to the CEO that I was passionate for entrepreneurship. I was hired as a web developer, and since then I have spent most of my time writing code. But, I have on occasion sat in on sales calls, made cold calls to potential clients, and received lessons from Greg, the CEO in startup financing.

At MarketSmart I have been given the opportunity to learn how nearly all aspects of the business function. I leave work every evening with the same feeling I used to get when I would walk out of a calculus class. I take in a lot of important information throughout the day.

About a month ago Greg approached me with an idea for a new product. For the past thirty days I have been working side by side with him to develop our plan of attack. I have learned a lot, actually more than a lot.

I am in an extremely fortunate position to be working with an experienced entrepreneur in a real world setting. I am playing a major role in a project that could generate millions of dollars of revenue and be extremely beneficial for nonprofits.

I have a rare opportunity to “build” a meaningful business with no financial risk. This is the type of experience that will pay off dividends when I found a company five or ten years from now.

Having started up a “company” when I was a freshman in college I thought I had experience in developing a business. As I have learned over the past month, that experience is not nearly as practical as I thought.

At MarketSmart we are developing this new product while also growing a multi-million dollar business.

Here is what I have learned so far. These notes are for my own reference in a few years when I attempt to found something of my own.

Ideas are worthless. Execution is priceless.

This mantra has become overwhelmingly clear to me. An idea is awesome, it can be cool, it can even be great. But an idea is exactly that, it is in a idea. A business, a real revenue generating machine needs to be more than just an idea.

To build a business you need a plan. Keep in mind this does not mean you need to write a standard business plan, rather I’m suggesting that you need to have every thought laid out before you begin spending money.

Working with Greg on this new product has required hours of note taking, organizing and editing. We have taken the original idea, spun it around in every possible direction and then spent hours writing down every thought that came up in discussion.

Next we (I) took these notes and developed a scope document. In this case it is simply a power-point with 30 slides that outline every single far-reaching idea we touched on in our discussions.

The scope document is our plan. It serves as the blueprint for the products foundation.

Don’t build an MVP, build a MFFP.

Like many people I have read Eric Reis’ The Lean Startup. Reis preaches to the reader that they should develop a Minimum Viable Product before investing heavily in building their business.

Greg brought this up in one of our earliest meetings. He agrees with Reis that the concept of an MVP is powerful and important but counters with his own acronym. He suggests building a Minimum Functional Flexible Product.

The distinction between viable and functional is moot, but the idea of flexibility has been ingrained in my mind.

The goal of a MFFP is to spend the necessary money (not the least, not the most) to develop a product that provides the the base functionality to the end user while also having the capacity to easily be extended upon.

For example, the software that MarketSmart currently sells to some of the largest nonprofits in the world was developed so that a developer like myself (one that is not an expert) could come in and develop meaningful upgrades. I could not have created the MarketSmart software, but I sure as hell can build on top of it.

That is the idea. Build a product that provides the must have functionalities while also keeping in mind that the product needs to be flexible enough to support the “nice to have” features down the road.

Get other stakeholders involved.

So far I have not played much of a role in this area of the products development. I have recognized though that it is very important to develop strategic relationships with people who hold power in the marketplace.

I need to learn more about this.

Identify influential people who will help market what it is you are selling.

The previous note piggy-backs into this one. This is more of a coming to market strategy, but it is something I have identified as important thus far.

You don’t want everybody to have access to your product at once. Greg has devised a really simple plan to get influential fundraisers excited about our new product before we even build it.

He did the work here, but the principle will need to replicated in any future situation. When developing a new product you need to align with people who have influence over the market.

More to come

I will be adding to this list in future blog posts. I want to create a repository that I can reference a few years from now. Stay tuned.

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5 Traits of Successful Companies

There are over 30 million businesses in the United States. Approximately 125 million in the entire world. Those are overwhelming statistics.

When you hear numbers like those it is hard not to ask yourself a few questions. How can this many businesses survive? How can each business differentiate from one another? How is the world not entirely stuck in “perfect competition”? How can my company achieve more than the millions of others who are already operating?

By researching companies that have achieved the most success an entrepreneur can gain insights into what makes a company operate well. There are key traits that extremely profitable organizations tend to share. These characteristics are not requirements for achieving popularity and profit. Rather, they are merely indicators of businesses that are following (intentionally or unintentionally) in the footsteps of those who have built great organizations before them.

Vision

Large, powerful, and profitable organizations have a clear and concise vision.

Take for example IKEA. Their vision statement is two sentences – clear and concise;

At IKEA our vision is to create a better everyday life for many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.

A company’s vision is their road map – it indicates what they currently do and what they want to become. These few sentences are intended to serve as a guide for executives when making decisions that impact the future of the company.

At the core of successful organizations across the globe is a strong, well thought out vision.

Integrity

Having a well crafted vision statement is great. Having the integrity to stand by that vision is absolutely necessary.

Organizations that do not wholeheartedly believe in their vision do not last very long. Where as companies whose executives, board members and employees all believe in the vision do.

Take for example the worlds second largest automobile manufacturer Volkswagen. The most recent vision statement released by the company was this:

The Group’s goal is to offer attractive, safe and environmentally sound vehicles which can compete in an increasingly tough market and set world standards in their respective class.

Earlier this month Volkswagen’s CEO resigned from his position amid a global scandal revolving around falsified emissions test results. This is a perfect example of an organization not maintaining the integrity necessary to grow their business.

Integrity and honesty go hand in hand. Any company that aims for prolonged profitability and success must stick by these two mores.

Leadership

People need leaders. People want leaders. At the center of every successful organization is a passionate, dedicated and driven leader.

Take for example Elon Musk, the executive of Tesla, SpaceX, and a handful of other companies. As a leader of these different organizations, Musk believes strongly in their independent visions, and also has the integrity (as of writing this blog post Elon Musk has not done anything that makes me or anyone else question his honesty) to lead them in a positive direction.

Musk is outspoken, outgoing, and never out of reach. He stands up for his companies and his products, while also making himself accessible to his employees and consumers.

Large, profitable and popular companies have a leader. That leader has a face, she or he is well liked, well-respected and highly regarded.

Value

At the crux of a successful company is the idea of value. Without providing value to consumers a business would not exist in the long run.

Value and vision tend to fall hand in hand. At least, that is to say that the value a company provides and the vision the company has should align with one another.

Take for example the largest business in the world, Apple. What value does Apple provide to their consumers? Steve Job’s answered that question many years ago when he said;

[Apple is here] to make a contribution to the world by making tools for the mind that advance humankind.

Apple improves the quality of life for their consumers. That is their value proposition. A less overarching example comes directly from the organization that I currently work for.

At MarketSmart we work tirelessly to help nonprofits raise more money while drastically reducing their costs.

Strategic Planning and Innovation

Many companies fail even when they have the four previously mentioned traits of successful companies. Vision, integrity, leadership and value only get an organization so far.

Remember the statistics from above, over 125 million organizations are competing for profitability and popularity at the same time. Surely some of those companies will go under even though they share characteristics with successful organizations.

This is the result of strategic planning and innovation. Hugely successful businesses are constantly planning their next product or service. Companies that become complacent and cease to innovate will inevitability lose market-share to competitors.

This is why vision statements are fluid, they can change annually, monthly, weekly.

Again, let’s look at Apple. Their track-record of innovation and product development falls hand in hand with their vision statement. Each product the company releases has a strategic place in their long-term plan. There is a reason that Apple is the largest company in the world.

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A Case For Thank You Notes

Have you ever been in a situation where you want to leave a strong, positive impression upon someone? Have you ever interviewed for a job? Have you ever received a birthday card from a relative? Have you ever been… You get the point.

We have all experienced moments when we feel as if we should show our thanks and appreciation to someone.

As a young adult I fear that my peers don’t say thank you correctly. Every situation requires a different approach, especially in the professional setting.

A text message carries the right amount of weight to thank a friend for doing a small favor. A phone call to a relative is appropriate when they send you a birthday card. Yet, in a professional setting these methods of “thanks” are not suitable.

The Problem

In my short-lived experience attempting to hire interns I have seen this problem firsthand.

Every individual I have interviewed (between 5 and 10) did not send a follow-up thank you. No email, no phone call, no thank you note. One student went as far as to send an email with further qualifications but forgot to mention his appreciation for my time.

This is not an ego driven approach to hiring. I don’t care if someone thanks me for my time. In this instance principle takes precedence over my desire to be “thanked.” I was, and still am looking for a candidate that goes above and beyond.

We haven’t hired anyone yet.

The Solution

So what gives? Why do I care so much about being thanked? Why do I even think this is a problem to begin with?

I’m nervous that the handwritten thank you card is dead.

For people my age (18-30 years old) the thank you card is one of the most powerful tools in your arsenal when looking for a job. Even beyond job hunting, a thank you note carries immense weight.

Who doesn’t like receiving something in the mail? Not your email inbox, but your physical, actual mailbox. You like it, I like it, everyone likes it. Receiving a handwritten piece of mail still elicits the same excitement today as it did 10 years ago.

So, do yourself a favor, make someone’s day – send them a thank you letter.

After your next interview, send a thank you letter. After your great-aunt sends you a $22 check for your 22nd birthday, send her a thank you letter. After you experience great service at a business, send them a thank you note.

Why? Because of the law of reciprocity.

The law of reciprocity rules the land. Go out of your way to make people feel good and they in turn will go out of their way to reciprocate.

Thank you notes are your secret weapon. Use them often and use them wisely.

A Template

Writing a thank you note is simple. You should be able to jot one down in under 5 minutes. But, in case you cannot you can use this template.

Dear ________,

I wanted to send you this short note as my way of saying thank you for ___________. I greatly appreciated ________, and __________.

I look forward to ________ with you soon.

Best,

Zach

For example, your note could read…

Dear Mike,

I wanted to send you this short note as my way of saying thank you for the birthday present you sent me. I greatly appreciated the sunglasses, and the fact that you went out your way to send them to me.

I look forward to catching up with you soon.

Best,

Zach

I actually sent that note to Mike a few months back. His response was:

Thank you notes work. Use them.

PS Mike does sell some great looking sunglasses with an awesome social entrepreneurship twist. When you buy a pair of Waveborns, you’re helping fund life-changing cataract surgeries around the world. Thanks again for the shades Mike.

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