Imagine this. You are interviewing somebody on stage. You ask your interviewee questions. He answers them. So far so good. Problem is: he doesn’t look at you. Not at all. He looks at the audience all the time. You find it very hard to make eye contact and to establish a good conversation.
Mistake 1: Your guest sits looking at the audience, you sit at a 90 degrees angle. Never do this. There is a reason why talk masters always sit facing the audience and the guest sit in profile, not the other way round. Looking at the audience disrupts the guest’s concentration on the host. The guest will start looking at the audience, not at the host. This effectively prevents any real conversation taking place. It ruins the interview.
So, you try to get this guy’s attention. You try to get him to look at you, so you start being part of the conversation. You start making friendly remarks. You start interruption him somewhat. It doesn’t help, he still doesn’t look at you. You start being really frustrated.
Mistake 2: Never become frustrated. Particularly not here. To the audience the guy on stage is a super star. He is Mark Zuckerberg, founder of Facebook. They don’t care how you feel. They just want to hear a cool interview.
And then, after a little while, the audience starts to rip you apart both on stage and online.
My conclusion: 90 degrees can make a huge difference.
To see what happened, have a look here (click to open video on external website):
And the final evaluation of the audience here:
(Mental note to self: Must book another interview training session before we launch)
All of these discussed various aspects of ‘how’ to run a start-up or a start-up business. Arrington says that the two most important aspects of a company are hiring the right people and managing your cash extremely well. I think these two aspects are important, but they are not everything.
For what it is worth, I believe there are three fundamental aspects that will determine the success of a company. They are what the company does, how it does it, and who actually does the work. The diagram below shows what I mean with this.
In my view, the founders of a company, and at a later stage the hired senior managers as well as the board, will determine the strategy of a company, its operational structures and processes as well as some of the tactical details on how things are done. They will also hire new staff into the company.
Let’s have a brief look at these three aspects.
Strategy -“The next bounce of the ball”
There are obviously many aspects of strategy, but this is a short blog post. If I had to pick one thought on strategy, it would be “the next bounce of the ball”.
I have borrowed this phrase from Ronald Cohen and his book: “The second bounce of the ball”. The concept behind this thought is very simple. Cohen explains this phrase using his personal history of founding Apax Partners, the private equity firm. He started out doing corporate finance work, managed to transition into venture capital when that became ‘hot’, then transitioned into buy-ins and then into leveraged buy-outs. Basically, Apax rode the subsequent waves of the European private equity industry and managed to grow very substantially with each of them. The point here is this: you need to be able to ride markets as they appear and expand; it is the easiest and fastest way to achieve substantial business growth. For Apax, that was the transitioning through the various phases of the private equity industry. For example, let’s say you create the best video-sharing site in the US right now, you would have a hard time to grow to a substantial size: you would be too late. If you set up the same company six years ago, you wouldn’t have been able to achieve growth either, Internet access was probably too slow and digital cameras not widely enough spread by then.
So, if you can predict the next bounce of the ball in a significant market and focus your company on that bounce, you will probably do well, provided you can execute.
Operations & Tactics – Execution: How to get it done
With operations, I mean both organizational design and the processes that flow along that design. For example, you will create different operational divisions in your company. These divisions will have different objectives and there will be ways in which they communicate with each other.
It is very easy to get this wrong. For example, should the marketing function be aligned with product management? Or with sales? Who manages customer support? How do does the sales staff interact with engineers? How do engineers interact with customers?
I have embedded a good podcast (audio only) where Andrew Frame, founder of Ooma describes, amongst other things, his thoughts on organizational design.
Overall, I find that there is very little good literature on organizational design out there. Each company will have different requirements, too. In my mind there are two important aspects here: Think it through and keep it very simple. As a start-up, don’t do the fancy stuff like matrix structures. They will slow you down and add little value at an early stage.
When Jason Calacanis talks about buying cheap tables and expensive chairs, he is describing tactical elements of how to run a company. Other such examples are going staff flexible working hours, buying them free coffee, etc. you could call these the tricks of the trade. Tactics essentially describe how small groups of people interact with each other and use their resource to achieve very specific goals. These tactics are useful for those ones that will make it happen, the people in your organization.
People – “Making it happen”
I fully agree with both Arrington and Calacanis on this point. People are the ones who will make it happen. Taken from Arrington’s post:
“The most important part of hiring correctly is to not hire the wrong people. The second most important part of hiring correctly is to hire the right people. What that means is that it is better to not hire anyone at all if you can’t find the right person. And if your startup fails, all the perks, time off and general coddling that many outraged commentators called for isn’t all that useful.
So who are the right people and who are the wrong people? It’s not that hard to tell. The right people are the ones that really, really want to work with you. You can tell they’re excited to be a part of the team. They actively look for problems to solve, and then solve them. This is a personality type that is very easy to spot once you know what to look for – they have fire in their eyes. They’re warriors.
I’ll take the fired up warrior any day over the more experienced but otherwise meek alternative. Skills can be learned quickly on the job (excluding certain specialized skills, which mostly means developers for a young [software] startup). But if you aren’t already the kind of person who’ll just get the job done no matter what, you’ll likely never be.”
A former boss and mentor of mine said to me that the people you want to hire in a start-up are the ones you would have wanted to have next to you in the trenches in Word War I. The ones you just trust to help you through this. I think that sums it up.
I have been travelling for the last week, hence the absence of posts on this blog.
While I was sitting on the plane, I was thinking about something that I read a few weeks back. According to a book, written by Frank Bettger in 1954, the biggest mistake that sales and marketing people make when introducing their product is: “Making too many positive statements”.
Doesn’t sound right, does it? Clearly, when we market or sell something, we have to emphasize the good aspects of what our products and services deliver. How else would we sell them? I guess this notion is especially true when pitching a new product that your customers may have never heard of before.
Here is the interesting part: I have been trialling this approach of not making positive statements over the last weeks and found it to work, not just in selling situations, but in other situations, too. For me, it works.
Here is why I think this is. I think it has biological reasons. For example, when you are running through the woods (I know it is a bit stereotypical, but bear with me) and you see something unexpected, what do you do? First response is usually to freeze and not move. Second response is to evaluate: What is it? What does it do? Is it dangerous? And so forth.
I think we go through the same response when we encounter a salesperson or a new product: Freeze, don’t move. What is he/she selling? What does it do? Is it dangerous? And so forth.
So, why is this a problem? Can’t people overcome their initial reaction? The problem is that biologically, one has two main responses after these initial evaluation steps: either you run and hide or you prepare for attack.
I think the same is true for an encounter people have with a marketing message or sales person. They either don’t want to hear it or they start arguing. Sounds familiar, doesn’t it? So, this is the problem with making too many positive statements.
How do you overcome this situation? I found an effective way to do so is to shift the way in which something is presented. There is at least one very strong biological drive that one can try to activate in prospective customers in order to try and overcome the threat evaluation reflex. This is the drive to explore, discover and understand. Ever wondered why so many new products are exclusive for a certain period of time? Some people say it is scarcity and that we want things that are scarce and that others don’t have. This may be true. For me personally, I was just curious to see Gmail, when it was first introduced. I just wanted to understand what it does. It annoyed me that I couldn’t just use it, so I asked people until I got invited to the semi-open beta version.
Overall, I find that people respond much more positively to new products when you help them discover and understand them for themselves. Frank Bettger did this by asking his prospective customers questions. I think this is a very good technique of starting somebody’s personal discovery mode.
Overall, the only way in which people will buy something is for them to want to buy it. Are you more likely to buy something you have discovered and understood yourself or something that was pushed on to you by somebody else? I love the stuff that I found and discovered myself.
Imagine this. You are interviewing somebody on stage. You ask your interviewee questions. He answers them. So far so good. Problem is: he doesn’t look at you. Not at all. He looks at the audience all the time. You find it very hard to make eye contact and to establish a good conversation.
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