Tuesday, November 28, 2006

Value Creation in a Startup.....

I believe building a quality company from nothing, that creates value for both customers and shareholders is one of the toughest things to do in all of business.

Being a executive at a mid-size or large company, and making decisions when a company is already established, branded, and selling a quality product in the marketplace of ideas – is VERY DIFFERENT than building a business. I believe you make certain decisions based LESS on what is best for the business – but MORE about EGO and PERCEPTION.

I’m finding myself interviewing people for positions at my new company who have never been in a start-up firm. These candidates (that I’ve met) have always been in a company that has had more than 50 to 100 people, and have never had to come in to work, and worry about their respective jobs on a day to day basis.

They felt (the candidates) as though if they were doing a good job, their cube would always be there, the desktop computer would always be on, and the coffee machine will always be a few short strides away.

That’s not life in a start-up internet company.

No matter how hard you work ,there is no guarantee of anything. There is no guarantee of a job in the months ahead, no firm placement of a where your office may be, and certainly no perks that established companies have.

But, you know what you in a startup have, that larger companies yearn for from their employees?

Confidence, desire and a hunger to perform….

Confidence in leaving what they were doing at a established company, that may have evolved away from it’s roots – and transformed into a company that is well established, and stable – but LESS innovative than ever….. this is part of the phases that large companies go through in their evolution. (Some call it success) Many employees of these companies, see INNOVATION and the ability to perform, as taking a backseat to politics, ego’s and the internal “running scared” mentality, to protect their small empires. The percieved success, drives valuable employees to look elsewhere, and begin their quest to find a place where they can feel rewarded......

Desire – Desire to create and share new ideas in a open environment that breeds and welcomes thoughts and ideas. This is what a startup company is all about. Sharing, laughing and coming up with new thoughts, ways of solving problems, and communication. Larger companies sometimes lose this important internal fabric, of what made them great as they grow in headcount, and employees leave. Politics, Egos, and internal empires – (chain of command issues) replace the fostering and fertilizing of creative plans, fresh ideas, and innovation.

I respect Google and their internal structure more now than ever. They realize that as they grow, they still need employees to “think outside the box and be more than creative.” This has helped to breed employee satisfaction, and at the same time – assisted Google in building and executing against new products, that came from grassroots employee ideas. It's hard to believe that 5 years ago, they did not even have a ADVERTISING plan......

Many companies and their leaders stray from what made them great originally – (which is understandable as they grow and scale) but what is 110 % unacceptable, is to allow – EGO, AND POLITICS -- to crush creativity, and innovation completely…

These corporate leaders are nothing more than mid-level managers, with big titles, who have been taught that using slogans, symbols, and hallow half hearted communications, can somehow replace a SINCERE and GENUINE desire to create value, reward employees, and build confidence with REAL managers intent on making their staff feel GREAT. (they are more concerned with making themselves look good, and worry far less about their workers and their future)

All big companies go through phases, but much of what history has taught us in regards to corporate value DESTRUCTION, starts at the bottom of the company – and works its way north, to the top of the org chart.

As I hire and fill out the rest of my company, I can promise you that staying as focused and true to what helped us land our FIRST two customers, will be with me (and our corporate DNA) as long as I’m a leader. Putting every single employee FIRST, and making sure they know they add genuine value – and making sure they feel as though they are CREATING VALUE, through THEIR innovation is critical.

I encourage companies to create a “politics free zone” in their offices. A place where ideas can be shared with their managers in a arena FREE of ego’s and attitudes.

The “politics free zone” is any startup company – in their offices, in tight quarters…….and it is PRECISELY what creates value, and breeds employee satisfaction.

It’s the reason many of you who work on the internet, have a job.

Get part of your company BACK to it.


Anonymous Joey Roth said...

This is going on the wall above my desk.

12:37 PM  
Anonymous Brian said...

I forwarded it to my boss, and I expect the entire company will be reading it tomorrow.

12:45 PM  
Anonymous Anonymous said...

I think you are more secure in a small company than a big one.

When I first started companies in the 1980's this wasn't true. Go to work for BigCo, don't screw up and you are there till retirement.

That changed in the early 1990's and when I recruit anybody I remind them of that.

Do a great job for BigCo and they find your line non-core you're gone.

Get a boss that screws up, you're gone.

You get outsourced, you're gone.

At SmallCo if you are 10% of the workforce and you are kicking butt....guess what?? The company is doing well. Think you will be gone?? No way

12:59 PM  
Anonymous brent said...

Job security is part of it, but from the other angle job rention is likely to be a lot higher too as people are getting recognized, utilized and rewarded.

All employees want is a chance to make a difference and be recognized when they do a good job. That's more likely to happen in a smaller venue. Thus, they're more likely to stick around, work harder and be more creative in the approaches they take.

Great post...lots of companies say these things, few walk the walk.

1:05 PM  
Anonymous Anonymous said...

well I applaud the sentiment and the writing. But the inference that politics and egos are absent from internet startup orgs doesn't jive with my own experience. I've been at 3 startups - all peppered with intense egos!

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Blogger Dave! said...

Very, very well said.

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Anonymous Anonymous said...

Start ups may be what many of us think are the answer to years spent in big companies ... we'll see. I'm making that move myself right now, having voted with my gut (and my feet, my desk and my paycheck) to leave the big corporate gig and go for something early stage.

There is no way, however, that any organization of more than one person will ever be free from egos and politics. This is the human condition. Start ups are no different than anywhere else.

To Brian, who forwarded the post to his boss -- good luck to you. You'll be gone by tomorrow.

Joey, you might not want this posted in a highly visible place above your desk -- post it in your home office.

Value is very subjective -- we all think we create value. Whether others understand this is another question.

Thanks --

2:59 PM  
Anonymous Anonymous said...

Could be a fine post, could be a worthless pile of crap, and it all assumes that you can define 'value'.

Seriously, can you define 'value' from the perspectives of the shareholder, the Exec team members, the staff?

For example, reviews. Who gets a good grade? Why? Because they added 'value', right? So, how much 'value' did they add? How did that compare to the lowest? The highest? What is your system of measurement? Do the individual staff members share this same perception of measurement. How do you ensure that all of you are on the same page?

Looks like a slippery slope...

5:11 PM  
Anonymous Anonymous said...

The last annonymous who was talking about defining value missed the point. Yes, there need to be metrics, but even more importantly it is an attittude, a desire to create it. That's what's missing. Not more evaluation forms.

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Anonymous Anonymous said...

blah blah blah...you and every other shmuck all saying exactly the same meaningless stuff and you'll take the same decisions everyone else does when it comes to crunch-time.

this kind of jerry maguire lite stuff just gets old after a while. and the pointless "god i RESPECT google so much" crap gets irritating fast as well.

metrics...value...passion...GO TEAM! why not just pipe down already and get on with actually doing whatever your job is instead of this inane cheerleading?

5:35 AM  
Anonymous Alex Bellinger said...

Some corporations are good at bringing a little entrepreneurial spirit into their organisations. There simply aren't enough of them though.

Job security isn't the issue. Attitude is.

5:34 PM  
Blogger Lena L. West said...

I completely agree.

I just wrote a blog post about how horrible it was when I was doing consulting for huge corporations and the C-suite suits would pull projects from us with no explanation.

When you work with small businesses (or work in one) it's like you're hooked up to an IV that supplies ambition, adrenaline, intestinal fortitude and sheer will.

I hate to say it but it seems like it all goes down the tubes as companies get larger. This is why a kick-ass Advisory Board is so important. You need people who care about you and your company to tell you, "Hey, the direction this company is taking sucks and the culture is going to hell in a handbasket."

I only hope that with proper support, strategy and planning, my company can stay true to its original vision, mission and purpose - to help companies use technology to grow.


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Anonymous Eduardo Carvalho said...

Great post. And doesn't work only for internet company in the Valley. I'm on real estate in Brazil and all those statements works perfectly. Congrat.

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Anonymous sean said...

Politics are part of human nature. If there is no human connection between employees -- a way in which we look across the conference table and understand who are co-workers actually are -- ego's will form.

I think it's important to make sure your company also breeds an environment where relationships exist outside the 9 to 5, however that may look. (And that means no cheesy holiday parties.)

3:12 PM  
Anonymous John Koetsier said...

Love this post. Hate the fact that it's (mostly) true, and that 9x out of 10 you have to get out of BigCo to inject passion and meaning into your work.

For me, there's a simple equation: passion up, ego down. Not that passionate people are necessarily egoless. But they matter a whole lot less than achieving the mutual goal.

Note to anonymous posters:
If you don't have the guts to put your name behind what you say, don't open your mouth.

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Blogger Matt said...

Can you explain this more in depth?

"All big companies go through phases, but much of what history has taught us in regards to corporate value DESTRUCTION, starts at the bottom of the company – and works its way north, to the top of the org chart."

My experiences have told me the opposite. The leaders of a company start to introduce bad and destructive policies which kills the employees spirit. After a while, they just give up. Yet the people at the top never realise they might have initiated the destruction.

I'd be curious about your historical examples.

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