stress

REDUCING STRESS IN STARTUP

Stress is an unavoidable part of a startup. It affects team members in different ways and it’s constant in a founders life.

There is a long list of situations, decisions and expectations that create stressful conditions. Add fatigue and a perfect storm of stress can easily besiege even the most accomplished entrepreneur.

It would be easy to lump startup stress management with the founding team but I think it is, and always will be, a team effort.

It’s one thing to set the cultural tone, it’s quite another to expect an evolving culture to have built-in ways to manage stress.

And let’s be honest, unless you’ve worked together with someone while you've had your feet held to their fire, you won’t know how others will respond to stress.

Founders are in the business of hiring the best people they can afford. This hopefully means they are hiring leaders. People who fit the mound of ‘best in class’. They know stress and bring an array of tactics to work through difficult times. Harnessing this experience is essential.

But how many founders do?

Time usually isn’t devoted to conversations about how people manage stress. And when high-pressure situations come knocking, we’ve been taught to look to the leader at the top for guidance. This can work, but it’s rarely full-proof.

Here are three ways to make managing startup stress a team effort. To solve problems more effectively, provide support to the CEO (who at the end of the day is only human) and unleash the stress management experience of leaders your company has worked so hard to hire.

1. Acknowledge the fear-tension-pain cycle

I first learned of this cycle in a prenatal class. The midwife shared details about how fear, tension and pain are not only interrelated but a virtuous cycle. This simple principle, where greater fear leads to more tension and increased pain, was coined in the mid-1900s and usually affects first-time expectant mothers.

And although stress in startups and childbirth is very different, knowledge is the circuit-breaker in both cases.

The more a mother (and partner) know about pregnancy and childbirth, the more they are able to manage their fear, tension and pain.

Startup teams see the fear-tension-pain cycle play out most days. Acknowledge it and starting conversations that show a willingness to introduce the right circuit-breaking knowledge goes a long way to removing fear and breaking the cycle.

2. Share problems across the business

I’ve written before about the attitude founders often bring to their startup.

The ‘it’s my venture and my issue so I’ll work it out’ mindset is a waste of time.

If you’re thinking this or worried about not having all the answers, you’re thinking about this the wrong way.

The answer to problem-solving in most cases is not to reduce the number of brains working on the problem.

If you look to military special forces around the world you’ll find a surprising fact that escapes most people due to their perception that the military is all about command and control.

Regardless of the size of a team, the leader always knows they are leading other leaders. For this reason, and after establishing the situation and context, they ask their team members for input before making a decision on how to proceed.

This team effort almost always yields a better solution.

And the more prepared you can make your team to engage in a ‘problem-led’ discussion, especially if you ask for their input at short notice, the better it can be for the situation.

I use an approach adapted from a process designed by my friend Adam Mather to give people the best chance of helping me solve issues.

Before bringing people into a conversation, I make sure that:

  1. Context is clear - what the situation is, how it evolved and the fact that I’m not sure how to approach it.
  2. I can articulate the problem - be specific about the nub of the issue
  3. Homework is done - come to the conversation with well-researched options in the mind but do not offer them so as to avoid biasing your team’s input. Instead, have them up your sleeve to respond to probing questions or suggestions from team members

3. Over-communicate

This doesn’t mean sending more slack messages or email. Over-communicate in this context means finding ways to better express intent.

Think about the emails you write and the slack messages you send. Although emojis might help, email and slack messages can’t express the stress, angst or happiness that sits behind what’s written. In fact, they do a good job of removing intent from communications altogether.

The best way to reinstall intent, particularly if your team is not colocated is to communicate, as often as possible, using video.

Do not underestimate the importance of seeing the face and the cues of your teammates. If you use Slack, use their video calling feature. If you don’t (and why don’t you again?) look at Zoom.

One last thing…

The most underrated circuit-breakers in managing stress are humour and optimism. They are infectious and cost nothing. Using them in combination with sharing problems across the business and over-communicating has helped reduce stress in my businesses and I hope it helps you too.


social

THOUGHTS ON SOCIAL PERFORMANCE

An old friend, Fulton Smith, asked me recently if there is a role for entrepreneurs in shaping the social conscious.

The answer is yes. And while I can’t speak on behalf of other entrepreneurs, I think shaping the social conscious can happen in two ways.

The first is through the products you make and how they influence people.

The second way is more personal and begins with an awareness of social performance or the way you contribute to the world as part of your work.

Influence through product

If you look closely at the anatomy of great products built by entrepreneurs they help their user achieve one of two objectives.

They move a person further from fear or they move a person closer to happiness.

It is as binary as it sounds and usually underlying the motivation to build a product that has one of these two effects on its users is the desire of the founder to create a happier life for a stranger.

And herein lies the entrepreneurs' superpower when it comes to shaping the social conscious.

Not only are they intrinsically motivated by some form of social performance, entrepreneurs expose new ways to crack problems and more importantly, provide evidence that it can be done at scale.

Influence through social performance

A little over a decade ago an anthropologist introduced me to social performance. She shared its three tenets with incredible clarity and they have stayed with me ever since.

1. Social performance is the personal pursuit to improve the happiness of one other person.

It can scale to millions of people but it starts with just one person. The point here is that happiness is the quality to improve and whilst subtle, this is important because most people associate the word ‘social’ with disadvantage.

2. The measure of social performance is subjective.

In other words, you are the one to consciously self-assess whether your efforts to improve the happiness of another person meet your own standards, not someone else’s.

3. Social performance has its own network effect.

Efforts to increase the happiness of others will be magnetic to people you do and don’t know if you make known what you do. In other words, people can’t be what they can’t see.

Today, ten years on, these tenets influence my contribution to family, how I build businesses and why I support women entrepreneurs, donate blood and work to reintegrate veterans.

Everyone will describe the important themes of their life differently. These are mine and this structure helps me to maximise my contribution, which also means I deliberately don’t invest capital or effort in other areas.

Being louder on social issues

Fulton also asked if I thought the voice of entrepreneurs should be louder on social issues?

The answer is also yes but that said I hear the voices of my colleagues on social issues loud and clear, and I have for some time.

If you’re not hearing them, I suggest you take a look at what they’re building. There’s a good chance they’re speaking through their product.

One last thing...

If the idea of social performance is appealing and you’re wondering how to make it part of life, here are the two questions I ask myself most days.

First, am I increasing the happiness of at least one person every day? The answer is yes if your actions map to moving someone closer to happiness or away from fear.

The second question is ‘am I doing enough to make a difference?’ Although a deeply subjective question, the answer is relatively straightforward. If you think you can do more, do more.

I hope that’s helpful.


isolation

ISOLATION, DEPRESSION & BEING AN ENTREPRENEUR

This weeks topic is as pervasive as it is taboo in entrepreneurship.

It’s a blunt message that’s contrary to entrepreneurship’s often upbeat narrative, and while difficult to talk about, I'd like to know founder and investor perspectives on this topic, so please leave a comment.

Isolation, depression and being an entrepreneur

Well-known to some and an unexpected to others, isolation and depression (not just being tired but feelings of severe despondency and dejection) don’t affect every founder, but it’s more common than you might think.

These topics often come up in conversations with my founder friends and mentees because they (and their spouses who are along for the ride) are the operators, those building businesses.

Those who recoil at these seemingly extreme conditions are people on the sidelines. They are observers of a popular culture, one synonymous t-shirts, jeans, sticker-clad laptops, pitch competitions and product launches.

They rightly admire the tenacity, resilience and conviction of founders and walk away for startup events feeling inspired and craving more of the infectious vibe.

Meanwhile, the operators continue to drive hard in shadows.

While trying to be the best they can for the people they love, they are always running out of time to grow their business. They are always trying to learn in the face of compounding fatigue and they are always trying to increase the quality of their decision making.

At the same time, they are under no illusion that they are volunteers.

Founders readily admit that they didn’t expect to have to wage such a sustained campaign to stay in market long enough to achieve their vision. And the irony isn’t lost on them that everything they have built, everything you see today, is always only a small part of their ambition.

The founder’s struggle is real but it’s not new.

The entrepreneurial pop culture is only a decade old. For generations before this business women and men faced the same challenges, the same isolation and the same risk of depression.

Veneer of positivity 

Founders are optimists. We know that in just about all circumstances a positive attitude is infectious and shouldn’t be underestimated. It helps us to inspire teams, partners and customers, and see silver linings amid the startup chaos.

But positivity can go too far and here's the punchline:

The strongest signal of founder isolation is when every answer to every question asked by everyone is positive.

This veneer of positivity deflects away from talking about issues. It’s protection from answering even the most innocent of questions.

Take, for example, asking a founder ’how’s it all going?’

You might get a brief bullet-point summary of milestones. An isolated founder will almost certainly think ‘there’s no point explaining, they won’t get it’ and respond with a deflecting ‘all good!’

And the context is important.

When you ask a founder a question there is also a very good chance that they’ll be processing a ton of decisions in parallel (that’s always happening). But outside of their family, founders spend 80 to 100-hour weeks building products, selling and forging partnerships, nurturing teams and managing finance and operations, all in the face of nailing one win for every 50 setbacks.

They are all in. Family, reputation, relationships, capital. Everything. The feeling of responsibility that founders live with to deliver is enormous.

It takes a village to build a business

I’m continuously on the lookout for signs of all-positive-all-the-time answers, the isolation signal, from friends building businesses and my mentees.

I know enough to know it’s naive to think the relationship between isolation and depression is linear but I take this signal of isolation seriously because I’ve seen it as the precursor to depression too many times. I also understand that isolation is relative and dynamic. And not surprisingly, it often correlates to the entrepreneur’s rollercoaster.

That said, I hope you open your radar to this signal and act differently when it emerges with your founder friends. Here’s what I do:

Check in regularly.

Instead of asking ‘how’s everything going?’, ask them about their family or the common ground you share.

Then serve them this:

I know you have a lot on but I want to help you with one issue you’re trying to work through. So, how can I help?

And if they cannot provide an answer, follow up with a message a week later letting them know that the offer is still on the table. Then deliver on the offer.

Isolation is eliminated by meaningful help from people you trust. It’s no more complex than that.

It's also up to the founder

Most founders have mentors. We’ve made the ask to people that can help and we speak with them regularly to get help.

If you’re a mentor-less founder, that needs to change. You can't build a successful business on your own.

It starts with a simple ask to a person you know can provide value to your thinking, 'can we connect for 45 minutes each fortnight for the next three months to work through issues and opportunities for my business?'

Not everyone has the time to mentor but many do. Expect this to be a relationship based on the exchange of value. You might not know how to thank them for their time but if my experience is anything to go by (and female entrepreneurs please explore this), it all comes out in the wash.

Strengthening the core

Isolation can also be brought home. And because the nature of the relationship at home with your partner is more intimate, I think about isolation differently.

At home, isolation leads to the creation of what’s known as an entrepreneur’s widow(er).

Next stop, relationship breakdown.

I’ve written about this before and at the centre of the solution is over-communication with your partner.

As a first time founder in 2008 I struggled immensely with communicating the challenges I faced each day in building my company to my loved ones and in particular my partner.

Some challenges were petty, others were significant and at the end of each long day, exhausted and with traction and capital waning, I often didn’t have the words to describe the current state, let alone find a way through it. And at the end of the day, I didn’t want my partner to be burdened with my challenges.

I started this venture.

These were my issues to solve.

I was also convinced that she wouldn’t understand, not because she wasn’t capable or thoughtful, but because she wasn’t in the trenches. How could she possibly understand and even if she did, where would I start?

But she felt the same stress, angst and jubilation that I did. It’s easy to forget that our partners are riding the same rollercoaster as us. They carry the load when business travel calls, they provide encouragement from the sidelines, and they help pick up the pieces when luck is in short supply. And they do all of this with only a fraction of the context and information in our heads.

By the way, if you’re a founder and thinking ‘thanks, but this isn’t a thing’, you’re either single or about to become single.

Relationships fail when information sharing stalls

In most normal, low-pressure environments over-communicating is the act of repeating the same message ad nauseam.

The context for founders is usually different. They usually under-communicate with their partner. The good news is that over-communicating is straightforward but like any disciple takes practice.

And at its core over-communicating means finding common ground to create a shared understanding that will short-circuit angst while further strengthening a relationship.

Start by asking 5 questions

Here are five questions that entrepreneurs should ask their partner. This isn’t an exhaustive list and not all of them relate to building a company.

1. Can I practice pitch with you?

Founders should always be closing deals with new customers, partners, investors or hires. The safest audience is your partner so give them permission to adopt the character and pitch them.

2. Can I get your thoughts on this value proposition?

If you’re spinning your wheels on developing messaging for a new feature or product, ask your partner for their input and how they would describe it to a friend over coffee.

3. Can you play with this new version of our product?

This is an easy one and it’s all about observing and capturing how your partner engages with the product. Try also asking what it would take for your partner to share your product with everyone she knows.

4. Do you have any thoughts on how to manage [insert tricky situation]?

Entrepreneurship is like fire-fighting. There is always a spot fire to extinguish and a tricky situation to manage. Ask your partner’s opinion about how they would handle the tricky situation at hand.

5. How can I help?

This is probably THE most important question that a founder should ask their partner each week, if not each day. This question is a surefire way to reconnect and put your money where your mouth is in terms of being mindful and engaged in your relationship.

Closing thoughts

If you know someone building a business and they're being too positive, act.

If you don't have mentors and you're building a business, change that.

And if your partner is on the ride with you, ask them five questions.

Just don't ignore it. Being isolated is a sad existence which can lead to a devastating outcome.

Consider this the start of a conversation, let me know your thoughts below.


writing

WHY WRITING EACH WEEK MAKES ALL THE DIFFERENCE

LISTEN AND READ

There was never a time early in life when I enjoyed writing. As I learned to write at school, it always seemed more a skill to acquire and less a craft to enjoy and master.

Of course, I wrote assignments at school, at college and graduate school and then internal reports at banks and pitch documents for ventures. I struggled with writing and the irony is that I don’t recall a time when I was inspired to become a great writer or even just a better writer.

In hindsight, the reason I wasn’t enjoying writing, and by extension not practising to improve, was because I wasn’t doing it for me.

I was writing for someone who would award me a grade, pay me a bonus or invest in a venture.

That changed in 2008 when at 30 I discovered blogging and wrote my first post.

Writing became a weekly habit in 2014 when I started my second venture with a vision and very little domain expertise (former soldier, medical science undergrad, MBA launching an audio recognition business).

I took inspiration from Fred Wilson, who often refers to how blogging helps him reflect and sharpen his thinking, and I haven’t looked back.

I write each week with two people in mind.

Me and one other person.

I don’t know that other person.

They change each week according to the replies I get from the newsletter I send each Sunday.

Whoever they are, they receive help and that makes my day.

Those who say, ‘I don’t know where you find the time’ are missing the point.

Because it’s not about finding extra time.

Writing is part of my routine and I’ve found that writing each week frees up time.

Instead of constantly processing half-formed thoughts, I produce an artefact that I know is valuable and one I’m proud of.

And although I write for two people, I write for four reasons.

I write to clarify my thoughts, it separates me from my psychology and the precision of thought that writing provides me is immense.

I write to help others learn from my experience in building companies because I believe in paying it forward and delivering 51% to anyone who wants it.

I write to leave a calling card.

But the most selfish of the reasons is about control.

Amid the turbulence of growing a business, I can predictably control the crafting and delivery of what I write. It might sound strange, but it’s energising to be able to control one thing amongst the chaos.

Just start.

It’s not rocket science but there are three reasons why you won’t.

It may be that you doubt yourself. You might fear how people will respond to your thoughts. Or you might be convinced that there isn’t a story to tell.

You’re wrong. 

The world is drowning in information and starving for wisdom. From the mistakes you’ve made and how they are propelling you forward.

And all you need to do is help one person.

Here’s how I got started.

I took Andrew Chen’s advice.

While I’ve been writing on Medium since 2014, I also took Andrew’s advice to write with decades in mind. That’s why what I write usually ends up on my blog first.

I also took Gary Vaynerchuk’s advice.

Document. Don’t create.

And I took Jon Westenberg’s advice.

Plan what you’re going to write on paper first. Target 400 words to start. Deliver useful lessons. Spend equal time writing and editing. Publish at the same time each day, week or month and be religious about it. It’s how communities are born.

As I wrote about recently, it’s no longer optional to think publicly. I do this by writing my blog each week.

Find a method that works for you.

If that method is writing, just start writing.

Here’s what I would say to my 30 year-old self about writing: Start on Medium. It’s the one corner of the internet where ideas are cherished and where many writers in the world first felt the exhilaration of pressing Publish.


auditions

THE PAID AUDITIONS PLAYBOOK

Paid auditions are just that, opportunities to work with someone before you tie the knot and become employee and employer.

And there are three reasons why you should them.

The first is that no matter how confident you are in your ability to hire, no matter the process you use, the only way to understand technical competence and ‘fit’ is to work with that person. By extension, if you don’t use a paid audition, you significantly increase the risk to your company. Hiring the wrong person can bring your company to the brink of collapse. Most founders have a story like this to recount. I know I do.

The second reason is that the risk in hiring isn’t just on the company side. It’s also on the candidate side. There is a growing acceptance that the pitch (from an employer) rarely correlates with the reality once on the inside.

Candidates know this.

They’re more reluctant than ever, at least for startups, to leave a safe job behind in exchange for this risk of a new venture working out. It makes sense that there be an opportunity to ‘try before you buy’. In the case of a paid audition, the candidates get paid to try before they buy.

The third reason is the benefit of ‘fresh eyes’. The regular introduction of people into your business sheds new light on issues and almost always exposes new ways to increase momentum.

If you subscribe to one or all of these benefits, the next step is to get practical by asking yourself one question…

Can they be my ally?

This is the question you as the hiring manager should be asking yourself. You’re looking for an ally and not for someone to join ‘your family’.

Think about this carefully.

Entrepreneurs often use the term ‘nurture’ when describing the business, relationships and culture they’ve created from nothing. Nurturing also happens in families to help children grow and flourish but it’s dangerous for a founder to think about hiring in the same terms. Families are complicated and don’t rely on product and financial performance to be sustainable.

On the other hand, allies share a common, performance-based belief system where allies stand to benefit individually when they collectively achieve success. LinkedIn co-founder Reid Hoffman goes into great detail on this in The Alliance (highly recommended).

To that end, hiring managers need to ask themselves will this person:

  1. Bring their full expertise to help achieve the milestones essential to my company's success?
  2. Act like an owner?
  3. Be strong, kind and humble in the good times and when the going gets tough?

I use these questions as the basis for starting and ultimately concluding the success of a paid audition.

Can I do my life’s best work here?

This is the question a potential hire should be asking themselves as they consider and enter a paid audition. As a sign of respect and in an effort to further develop our relationship, I prompt candidates to continually ask themselves this question as they consider and undertake the paid audition.

Ultimately, if they are excited to learn, achieve, solve the challenge at hand and get well compensated for their investment in time, they will do their life’s best work.

Remember, they are assessing you as much as you are assessing them!

For the most part, paid auditions fail for 6 reasons:

  1. The purpose of the business is unclear
  2. Milestones aren’t crystal clear
  3. Candidates feel like an outsider
  4. Duration is too short (or too long)
  5. Assessment happens at the end
  6. Agreement was made to work for free

They also lead to competitive advantage

However you arrive at the decision to enter into a paid audition, turn the following steps into a habit that differentiates your business.

Introduce the mission

This step is often overlooked. Hiring managers or the founder assume the world has completely understood the vision and purpose of the business through their marketing efforts.

Assume this is never true (because it rarely is!).

Go into all the detail necessary to help the candidate feel inspired by the mission you will achieve. You might confidentially share sales collateral and pitch decks with them to land this message. It will make all the difference.

Create crystal clear milestones

Each task that a candidate will undertake must be clear, specific, time-bound, measurable and most important, practical. With the ‘Can they be my ally?’ question in mind, I frame the auditions like this:

  • Provide sales targets and a challenge to optimise existing sales processes for sales candidates
  • Set feature enhancement tasks which rely on hypothesis-led and data-driven experiments with customers or people who use the product for product candidates
  • Design and implementation of campaigns that demonstrate a change in the company's core metrics can be the ask of marketing candidates

These are just some examples which also apply when auditioning freelancers.

Eliminate potential for candidates to feel like outsiders

The first step is to welcome candidates into your company's way of communicating. This means making yourself as available to the candidate as you would any other team member. If you use Slack or another team-based messaging service, get the candidate on there too. They should also be part of businesses standup rituals and one-on-one meet routines where their schedule allows.

Nuance alert: The nature of paid auditions is that they nearly always happen outside of normal hours. This allows the candidate to keep their day job while auditioning for you.

This means candidates won’t always be able to make standups or respond to emails or Slack messages as quickly as you or the team would like.

Be explicit on how you and your candidate will communicate with one another.

This is the lynchpin of the audition.

Over-communicate how you will communicate.

If you don’t, you and your team will become frustrated and this is the single greatest way to make your candidate feel like an outsider.

Set an audition of between 6 and 10 weeks

Most candidates will be juggling their day job and auditioning at your company and they will need time to demonstrate their expertise and fit.

I find that a paid audition duration of 6 and 10 weeks works well.

They can be shorter but the risk in this is that you don’t get past the honeymoon period. This can mean that you don’t get the opportunity to see the candidates true colours…the whole point of the paid audition!

Assess progress each week

Leaving assessment to the end of the paid audition is a recipe for disaster. The hiring manager won’t be able to recall everything that happened during the last 6 to 10 weeks. There is also a good chance that the candidate may also move off task through a lack of guidance. The bigger issue here is that the candidate will get an insight into how the business is run. If you’re not serious about performance now, will that change in the future?

Set up a weekly conversation to exchange ideas, coach your candidate and assess performance.

Pay for the candidate’s time

Time is your most valuable asset. The same is true for each candidate. Pay them an agreed hourly rate for an agreed amount of time. In the case of a sales audition, this might include a commission.

It’s a mistake to agree to audition for free. It simply doesn’t represent a fair exchange of value and this lack of incentive impacts motivation.

Closing thought

Three questions usually come up when talking about paid auditions. The first is isn’t this the same as a probation period? The answer is no. The probation period comes after the hire is made. Consider it a secondary opt-out mechanism for both the candidate and the company.

The second question is how is this different to an internship? The reality is that a paid audition and an internship are structurally very similar. As I’ve written about before, I look at internships as an opportunity to bring new but less experienced talent into a business. A paid audition is more focused on introducing experienced talent to help accelerate growth and momentum.

The final question relates to paperwork. Is there an agreement template I should use? A paid audition should use a standard contractor agreement which covers appropriate legal and confidentiality matters.

The best part of a paid audition is that it offers the chance to learn quickly.

If it doesn’t work out, the candidate gets paid, you learn and you mitigate the risk of hiring the wrong person.

And if it does work out, you’re off to a flying start!


Lessons

12 LESSONS FOR ENTREPRENEURS TO CARRY INTO 2018

LISTEN OR READ

These 12 lessons come from notes I’ve made each week in 2017. I find it useful to do wholesale reflection at this time every year to make sense of the year that was, gain clarity on lessons learned and create my 10 objectives for 2018. More on that later.

The other 40 observations are interesting but these 12 have shaped my thinking on family, inkl, mentoring, my social performance in supporting veterans and women founders and being an entrepreneur with more windups than exits.

1: Thinking publicly is no longer optional

As I wrote last week, to think publicly means you place your ideas into the hands of others. The underlying motive is to learn as quickly as possible and then move an idea forward or to kill it and move one.

I do this by writing this blog each week. The precision of thought that writing provides me is immense.

And writing is just one example. Many of my colleagues and mentees have found the courage in 2017 to share big issues with their team in order to increase solution surface area. And the results have surprised them (in a good way).

Find a method that works for you. The crowd’s wisdom has never been more abundant and you have nothing to lose.

2: Investor expectations on traction are very different to two years ago

The funding cycle for consumer technology ventures is maturing. Capital is available but it’s increasingly expensive in the face of soft traction. Two years ago $30K in monthly recurring revenue (MRR) would start a conversation with Series A investors, today $100K MRR is where the conversation begins.

Seed investors also require a lot more than a 10-slide vapourware pitch deck to get excited. And those investors who once specialised in Series A investments, for the most part, have moved further upstream and now invest in Series B and C.

The reality for entrepreneurs is that the rate at which a business can capture monetizable value for its customers is the main game.

3: Scenario planning is your best friend (in all circumstances)

It’s dangerous to assume people think about scenarios the same way. No matter the situation, be it a major decision or tactical campaign, there is always a best-case, worst-case and a few mid-case scenarios that could reasonably eventuate.

Spend time working through and agreeing the three actions that apply to each scenario with your team. It will reveal blind spots, establish a consistent level of awareness across the team and minimise stress caused by knee-jerk reactions to scenarios you could have foreseen.

4: Cherish life. It ends unexpectedly.

When you think about someone close to you, someone who brings value to your life, express your gratitude in that moment. Don’t wait. You might not get another opportunity.

5: Being ‘venture-backed’ isn’t a business model

On four separate occasions this year I was stunned to learn that a product that I expected to be paid (and I was ready to pay for) was free because the company was ‘venture-backed’. In each case, this message came from a front-line salesperson (?).

This turn of phrase means that a company has raised money from investors and is focused on growing the number of people who use their service and considers generating revenue a secondary priority. This can make sense when building a marketplace business model where you monetise people’s engagement (like Facebook does with advertisers).

If this isn’t the case, one of two bigger problems is lurking below the surface.

The first problem may be that the company doesn’t know how or lacks the confidence to price its product. The second problem is that the company may have become reliant on raising capital from investors in order to survive. Either way, neither one is conducive to survival so why buy from them?

6: Understanding incentives is 80% of forging great partnerships

In other words, if you don’t have an intimate understanding of what’s in it for the other party you’re trying to forge a partnership with, there will be no partnership. You might establish a transactional relationship but the value to be limited to that relationship and it probably won’t grow.

The key is to find ways to make your partners shine.

7: Growth changes everything but it’s rarely linear

The reason that growth isn’t (often) linear is that it requires a venture to undertake continuous experimentation. Each experiment is designed to edge a product closer to its ‘fit’ with a target market. More experiments fail than succeed until one day the unrelenting focus on optimising a collection of processes or features hits the mark and a ten-year-in-the-making-overnight-success is born.

Growth changes everything but thinking it will just happen with the current version of a product is a mistake.

8: “In the spirit of radical candour….” was the most productive sentence-starter of the year

Radical Candour was published by Kim Scott earlier this year and it was a game changer. It means to challenge directly while showing you care personally. It’s a simple construct and one I’ve used it at least twice a week this year. I also introduced it to our team at inkl.

Radical Candour has helped me deliver and receive difficult feedback in 2017. And in 100% of cases, the outcome was better than I could have expected. If this book is new to you, get it here or listen to it here.

9: Trust is a competitive advantage

There is only one way to develop trust between a product and the person using it: Continuously deliver on the expectation you set with them.

Achieve trust and people will talk about it.

Break trust and people will talk about it.

It’s your call.

10: Beware the shadow cast by disrupters

Every leader creates a shadow within their organisation. Like children taking cues from their parents, employees take cues from their leaders, in most cases more than leaders realise.

Leaders who seek to change the status quo create a ‘disrupters shadow’. There are those leaders who espouse a do-whatever-it-takes attitude and those who consider every option but act after considering risk. The latter may still proceed with an ‘if it won’t break the organisation, then just do it’ approach but the difference is they are sufficiently self-aware to make that call.

Uber is an easy target for the do-whatever-takes camp. To be fair, they had to fracture deeply entrenched, multigenerational taxi cartels in order to change personal transport as we know it. But a lack of self-awareness has introduced dire risk into its business which could have been avoided.

If you’re looking to join a high-growth venture, look for evidence of self-aware leaders. They will flex their style according to the situation, admit mistakes and consistently practice a growth mindset.

11: The soul of a product is as important as its function

A new feature might magically unveil a previously unavailable convenience.

A personal touch that a founder makes to thank you for joining their movement might surprise you.

Or it might be an elegant effect that helps express your reaction or makes you say, “that’s cool”.

Each of these is examples of how the soul of a product captures a person’s imagination. In 2017 it was interesting but not enough to simply save people time. This trend will no doubt continue in 2018 as product managers fight for people’s attention.

12: History doesn't repeat itself but it often rhymes

This quote, often attributed to Mark Twain, says it all. Somewhere in our history, there is evidence of an idea or an outcome that can accelerate learning and decision making. There is immense value in examining history. If you genuinely believe an idea is novel, there’s a better than average chance you haven’t used Google properly.

Closing Thought

At this time last year we began winding up AirShr. As each member of that team underwent their version of reinvention, I committed to doubling down on learning and optimising for time as my two core priorities for 2017. That decision has paid off in spades and I plan to continue that pursuit in 2018.

So before I get into my 10 objectives for next year, what are your key lessons from 2017?


WIN

10 REASONS WHY ENTREPRENEURS WIN

Entrepreneurs win for 10 reasons. Military forces win for different reasons and it might surprise you to learn that these reasons often overlap.

Last week I shared those 10 reasons with members of the Army, Navy and AirForce from three nations at the Australian Defence College.

I’ve seen these reasons play out time and time again in the ventures I’m involved in and through countless conversations with world-class founders. I hope they're useful to you too.

1. Time Is THE ONLY Currency

The single most important resource available to entrepreneurs (and intrapreneurs) isn’t domain expertise or their track record.

It’s time.

Time is every precious moment you have from the instant you decide to start working on a new business model. How you decide to use time governs how productive you will be, how quickly you can fail and above everything else, how quickly you will learn.

I was asked about how to manage time if you’re working on a side project while working a day job. The reality is that nearly every new venture starts this way. If you want to know if there is a there, there (i.e. if people want to buy what you’re selling), you’ve got between 9pm and 2am each day to work it out. It’s that simple.

And if you’re wondering how to stop pontificating and starting doing, here’s how to validate an idea in 30 days.

2. Urgent Focus

Urgency characterises Steve Jobs and other immortal entrepreneurs - Malcolm Gladwell

'Urgent focus' is the potent byproduct of knowing time is running out and an insatiable appetite to learn in order to move toward.

When you break this behaviour down, urgency drives entrepreneurs to keep looking everywhere to get answers. We look for where the components of our future business models have been tried before and we use every manner of sticky tape to bring them together to prove a concept.

Focus comes from knowing the question we want to be answered and acknowledging the path to the answer will be anything but linear. In other words, it will take time to answer and that’s OK but it doesn’t mean generating activity (picture of a lot of people just doing stuff) in the hope the answer will reveal itself. It means conducting experiments to validate (or invalidate) hypotheses in order to learn as quickly as possible.

And herein lies the litmus test between entrepreneurs and those playing entrepreneur.

The latter is busy doing stuff, unclear on their central thesis and being easily distracted by new opportunities that vaguely fit with a vision they have trouble articulating.

By contrast, entrepreneurs create momentum by continually testing to validate and learn against their central thesis. And it’s this approach that delivers a massive competitive advantage to founders: the ability to determine the difference between an opportunity and a time suck.

3. Think Publicly

If you think you know what people need before you ask them there’s a great chance you’re wrong.

Sharing ideas with others is not only essential to understand the demand for products and services, but also to unveil adjacent opportunities and applications.

And before you think people will be critical of your idea or that it will be stolen, think again.

Whenever I’ve provided the right context for a new idea and given permission to receive point blank and unbiased feedback, I’ve always received it.

When it comes to an idea being stolen, people don’t realise that it takes tons and tons of heart to bring a new business model to life. You have to love it. You can tell when entrepreneurs love what they’re building. It’s a mistake to think that two people will have identical motives and identical drive to see the job through. And even if there is more than one person with a similar idea, that’s fine. It’s called competition. So compete!

If you’re wondering how to think publicly, start with a group of ‘friendlies’. These are people you know and trust, and who have permission to give you feedback and suggest new ways to think about the idea. For me, I either start with my mentors or my mentees, a collective of emerging founders in my private Slack channel who provide rich and rapid perspectives on ideas.

Tip: Develop a group of five friendlies who act as your early sounding board. Given them permission to help you, thank them and develop a habit of thinking publicly.

4. No Original Idea

Someone somewhere has thought of your idea and/or tried to bring it to market.

This is my underlying hypothesis for all ideas and I’m waiting for it to be invalidated.

An outcome which I’ve heard many times before, which is a by-product of identifying wrong competition, ignoring obvious competition or missing previous pioneers is this: “No one is doing what we’re doing.” 

If this is your perspective, remember this from Guy Kawasaki:

This is a bummer of a lie because there are only two logical conclusions. First, no one else is doing this because there is no market for it. Second, the entrepreneur is so clueless that he can’t even use Google to figure out he has competition. Suffice it to say that the lack of a market and cluelessness is not conducive to securing an investment. As a rule of thumb, if you have a good idea, five companies are going the same thing. If you have a great idea, fifteen companies are doing the same thing.

Tip: When you have a new idea, spend $50 doing this.

5. Network Is Essential

Networks are to entrepreneurs what force multipliers are to the military. In other words, the strength of the network often correlates with how quickly an entrepreneur can learn and move forward.

And networks aren’t just ‘business contacts’. They include mentors, friends, family, other entrepreneurs, business partners and investors, to name a few.

Entrepreneurs are weapons at networking and the best ones abide by the 51% rule as they create, grow and nurture relationships in their network. If you think sending thousands of random LinkedIn invitations is the way to go, you’ve missed the point.

6. Bet On Strengths

It’s no secret that people love doing what they’re good at. And while it might not always be practical to do what you love, there is a strong chance you’ll achieve more doing things that leverage strengths when compared to tasks that don’t.

If you overlay this idea with the value of time, it makes sense to double down on strengths and find ways (e.g. freelance talent) to manage weaknesses.

7. Infinite Learners

Entrepreneurs are infinite learners. We consume incredible volumes of blogs, books, podcasts and courses because we are genuinely interested in learning. Our brains are hardwired for curiosity. An interesting byproduct of this obsession for founders is that this knowledge becomes inevitably useful as you continue to fight fires at every turn. Reid Hoffman does an excellent job of explaining the infinite leaner psychology in this episode of his Masters of Scale podcast.

8. One > Zero

Many people have ideas. Very few do anything with them and that’s because convincing someone to buy something you’re selling is tough and getting tougher as people’s attention spans continue to shrink.

Traction starts with getting one person to act and then 10 people to act, then 100 and then 1,000 and then 10,000 and so on. It doesn’t start with 1% of a population doing something (like so many first-time founders misjudge when trying to quantify their target market).

When building a business it’s easy to forget how much fun it is to create a custom experience for the first people who engage with what you’re making. Enjoy and learn from it because there will come a time when this luxury won’t exist.

9. Set The Failure Standard

The byproduct of failure is a lesson. Lessons drive momentum. Momentum creates change.

It is as simple as this and it’s up to leaders to set the tolerance for failure. In doing so, they have two binary choices.

  1. Condemn failure, in the slightest way, and you can kiss goodbye to any implicit desire to improve and evolve.
  2. Establish behaviours that always surface and understand lesson(s) that prevent failures from being repeated.

Option two always wins.

10. Know There Is ALWAYS A Way

There is always a way. Period.

People who disagree do so for two reasons.

The first is they are tired.

The second is they are caught up in their own thinking. They usually aren’t thinking publicly. If you’re wondering what I mean, think about the last time you shared a problem with someone else and they gave you a really simple answer and for whatever reason, a weight lifted from your shoulders. Got it?

There is always a way. Entrepreneurs usually find it.


WORLD

HOW TO KEEP UP WITH THE WORLD

I have discovered a way to keep up with the world and it’s thanks to a guy called Tom Wharton.

The world was a busy place in 2017. The good, bad and ugly seemed to be on fast forward and I expect 2018 to be no different.

A different type of FOMO

There were many times this year when I wanted the information merry-go-round to stop. I deleted Facebook from my phone in an attempt to slow the pace of information being served at me. It helped but within a week an unexpected type of FOMO (fear of missing out) started to take hold.

I wasn’t worried about missing the endless updates from Facebook friends. And I certainly wasn’t missing the advertising.

The FOMO was connected to wisdom. I was starving for it and reading the news helped but it wasn’t enough.

As I’ve written about before, the best products and services in the world help people in one of two ways. They either move people away from fear or closer to happiness.

It's called a wrap

Tom helps move me (and people in 199 countries) move away from FOMO by writing a weekly wrap on world affairs.

It explains complex issues.

It elevates issues that I didn’t even know were issues!

Most importantly, it increases my knowledge surface area because it helps me better understand the world. Not so I can be the smartest guy in the room. So I can make better decisions to help raise my daughters, be a better husband and be more useful to those I care about.

Tom is inkl’s staff writer. In 2017 we have become colleagues and friends. And when I think about the things I am grateful for this year, making his acquaintance is certainly at the top of the list.

Here are three of his wraps which changed the game for me in 2017:

The first one…

…the second one

And the third one

Tom’s weekly wrap comes free with inkl. This is how I plan to keep up with the world again in 2018 and I hope it helps you too.


losing your way

LOSING YOUR WAY & 5 STEPS TO GET BACK ON TRACK

LISTEN OR READ

Feeling lost as a founder happens to us all at some point.

You might be being told 'No' more than you expect after pitching new customers or investors.

You might be seeing changes in your industry and feel that pivot options are in short supply based on what you’ve built.

You might be trying to balance being a parent and/or partner with building a company and you’re fatigued and running low on answers.

It happens.

It’s part of being an entrepreneur. And no one said it would be easy.

Getting back on track relies on one simple truth

Getting back on track when you lose your way relies on understanding that people’s capacity to process information decreases as fatigue and pressure increase.

And it’s a cumulative effect.

The longer the pressure or fatigue, the lower the processing power until, eventually, it renders a person more or less paralysed. At this point it doesn’t matter how capable you think you are at problem-solving (or strategy or marketing or coding or growth hacking or leadership...), your mind becomes an echo-chamber of the same thoughts.

If this sounds familiar, you’ve probably also felt anxious, can’t sleep well, drink more caffeine, don’t feel fully present for your family or team but still think that working harder is the solution.

It doesn’t take much to see when a founder is on track to get to this place. They usually look exhausted (and they’re trying to hide it, which is impossible by the way) and they use a statement like this:

‘I’m the founder, I’ll work it out’

Yes, you are and no, you won’t.

This is a ‘brave face’ statement. It’s made by people full of pride, hoping that the answer will just present itself as long as they just keep working hard.

I’ve made this statement countless times before realising that sometimes the reality is you will lose your way. The good news is that there is a way to negotiate these times. And perhaps not surprisingly, it takes practice to move through these times because as an entrepreneur it doesn’t just happen once.

Losing your way is the result of losing perspective. Recapture it.

The steps that follow have become somewhat of a prescription over the years for me and those I mentor.

Step 1: Revisit your original inspiration

Starting a venture, for most founders, is usually a well-considered decision (and usually a step that comes after a fair bit of side-hustling and experimentation). That single decision to start is usually born from a repeated experience combined with a nagging desire to create a new order.

Whatever that experience was, the one that started you on today’s journey, find evidence of it. The first text you sent to your friend telling them you’re going to start a business, the street corner where you saw the need hiding in plain sight, or the disappointment you had when a product let you down and you thought you could do it better.

Whatever it was, find it.

It will show you how far you’ve come.

Step 2: Call your mentor

If you don’t have a mentor, get one.

If you have one, call them and ask for help by explaining how you’re feeling and how you’re framing the issues that are making you feel the way are feeling.

Be vulnerable. Tell it how it is. Mentors are a founder’s safe place because nine times out of ten, we’ve been there too! Let them hear what you’re thinking.

As difficult as it might be, pay very close attention to what they have to say. More often than not, they will be helping you break down the issues that feel insurmountable. The value they will present you is perspective.

Step 3: Sleep + Exercise. Repeat.

Get home, switch off your phone, put it anywhere that isn’t your bedroom and sleep. Wake up the next morning and exercise. Then turn your phone on.

Beyond the immediate benefits to your brain’s chemistry, you’ll become reacquainted with the world. And perspective.

Step 4: Complete a business model canvas

This one-pager (and I prefer the free one from leanstack.com) helps ask the fundamental macro questions that are essential to any venture. The speed at which founders run and adjust often means that they will lose sight of who their target customer is, how they want to make money (compared to how to actually make money) and a suite of other fundamentals.

Get reacquainted with the business model you’re building. Not only will this show you how far you’ve come, it may also show you what changes need to be made for you to regain an even footing. Every time I’ve done this, it’s provided much-needed perspective.

Step 5: Pay it forward by helping others

‘When we help others, the focus of our mind assumes a broader horizon within which we are able to see our own petty problems in a more realistic proportion. What previously appeared to be daunting and unbearable, which is what often makes our problems so overwhelming, tends to lose its intensity.’ - Dalia Lama

On last thing...

The root causes of most things that result in a founder losing their way can be identified and managed when they have perspective.

This is a hypothesis that I’ve seen proven time and time again. This doesn’t mean that difficult decisions are made easier. It means that those decisions can be taken objectively.

Tactical, day-to-day issues will always conspire against perspective. That's why it's our job as entrepreneurs to recapture perspective as often as possible.

If you learned something new, let me know by leaving a comment below, thanks!


struggle

WHY BUILDING A BUSINESS IS HARD

I leave this here as a reminder to me and to you that building a business is hard. It is the most succinct summary of thoughts and emotions that entrepreneurs can feel on any given day and it was written by Ben Horowitz, an entrepreneur turned investor, who wrote The Hard Things About Hard Things.

Ben makes it his business to mentor founders and share knowledge while investing in the world's emerging technologies.

The Struggle

The Struggle is when you wonder why you started the company in the first place.

The Struggle is when people ask you why you don’t quit and you don’t know the answer.

The Struggle is when your employees think you are lying and you think they may be right.

The Struggle is when food loses its taste.

The Struggle is when you don’t believe you should be CEO of your company. The Struggle is when you know that you are in over your head and you know that you cannot be replaced. The Struggle is when everybody thinks you are an idiot, but nobody will fire you. The Struggle is where self-doubt becomes self-hatred.

The Struggle is when you are having a conversation with someone and you can’t hear a word that they are saying because all you can hear is The Struggle.

The Struggle is when you want the pain to stop. The Struggle is unhappiness.

The Struggle is when you go on vacation to feel better and you feel worse.

The Struggle is when you are surrounded by people and you are all alone. The Struggle has no mercy.

The Struggle is the land of broken promises and crushed dreams. The Struggle is a cold sweat. The Struggle is where your guts boil so much that you feel like you are going to spit blood.

The Struggle is not failure, but it causes failure. Especially if you are weak. Always if you are weak.

Most people are not strong enough.

Every great entrepreneur from Steve Jobs to Mark Zuckerberg went through The Struggle and struggle they did, so you are not alone. But that does not mean that you will make it. You may not make it. That is why it is The Struggle.

The Struggle is where greatness comes from.


OVERCOMING VULNERABILITY THANKS TO HAIRY MACLARY

That's right, Hairy Maclary from Donaldson’s Dairy.

Most parents, grandparents, aunts and uncles know of Hairy Maclary. For the uninitiated, Hairy is a fictitious dog who lives at a dairy and embarks on adventures with his friends. Each story is playfully illustrated, written in rhythmic verse and begs the reader to deliver each page with theatrical enthusiasm.

I owe a great deal to New Zealand author Dame Lynley Dodd, the creator of this great character.

An embarrassing realisation

My introduction to Hairy Maclary took place when our eldest daughter was a small number of months old. Until that point, I had been winging it. As clumsily as one could, I had been making my way through our story time routine using stilted and stutter-filled language. It didn’t seem to matter until one day our daughter looked up at me when I tripped over a simple phrase, again and again. The look on her face said, ‘what’s wrong?’

Filled with shame, I had no response.

Through no fault of her own, this grew worse when my wife was in the room. More often than not I would defer to her incredible narration skills, born of being a voracious reader throughout her life, to deliver a far more elegant experience to our little angel. I would stay and watch in wonder as the littlest member of our family absorbed every syllable and developed her unique sense of language.

On reflection, I can trace this internal torment to my childhood. I was an awkward first child growing up in Australia’s capital in the late 1970’s. I have vivid memories of wanting to fit in and be part of the cool kids gang but when the opportunity presented to say something, to communicate my worth, I stuttered.

It became a vicious cycle and the ridicule that followed for many years afterward placed a toll on my self-confidence. For some reason, however, I knew there was a way through it, I just didn’t realise, aged five, that my course of action would have sustained unintended consequences.

I had to practice speaking out loud. What would new friends ask me? How were other children in the playground responding to one another? Which answers made sense, which didn't? Which sounded good, which didn't?

Walking around school speaking out loud to myself wasn’t about to win me new friends so I hatched a plan to reduce the likelihood of appearing to be a complete lunatic. If I wasn’t remaining silent, I would still speak but as a kind of ventriloquist. I could still hear myself speak but others wouldn’t see me speaking.

This happened many times each day, at school, at home, anywhere. The habit was fuelled by the positive feedback that my thoughts became clearer. The very significant downside was that I started to mumble. Badly. And this made me withdraw further.

At all costs, I would avoid public speaking and presentations through school, the army, my undergraduate degree, as a national athlete and the early parts of my career, particularly as the founder of my first company.

This couldn’t continue but I was clueless on how to change.

My first visit to Donaldson’s Dairy

The day I first read Hairy Maclary to our daughter and felt that shame coincided with the year I was finishing my MBA. I was well aware, through my experience in the army and triathlon, of the impact that training has on preparation, and by extension, success.

Later that evening, I took the three Hairy Maclary books we had in the house, went to laundry beneath our home and read each story out aloud over and over for hours and hours. I practiced theatrical delivery in different forms, each time imaging I was sitting in front of my daughter. I did this for months.

I noticed gradual improvements until one day, as if by adding some compound to catalyse a chemical reaction, the confidence I had been pursuing for 30 years appeared!!

Not only could I entertain my little angel at story time (with or without my wife in the room), public speaking and presentations became occasions I genuinely got excited about and looked forward to.

Dame Lynley Dodd and Hairy Maclary (and Hercules Morse as big as a horse, Bottomley Potts all covered in spots, Muffin McLay like a bundle of hay, Bitzer Maloney all skinny and boney and Schnitzel Von Krumm with a very low tum) helped me realise that change was desperately needed. I will be forever grateful.

We all have vulnerabilities

This was one of mine. And if my experience is any measure, it only takes a small, conscious step and practice to change a behaviour. For me, it started with Hairy Maclary.

How will it start with you?


disruption

BRINGING A KNIFE TO THE DISRUPTION GUN FIGHT

Disruption comes with two inconvenient truths.

The first is that it's happening every day, in every industry, in every sector. And while you think disruption is a cliche, the reality is that if an industry hasn’t already been displaced or isn’t grappling with how to respond to new threats, it’s very likely that it lacks the self-awareness to appreciate that its future exists on borrowed time.

In the last month, I have twice presented a perspective on how disruption plays out. On both occasions, the audiences were companies who are responding to disruption. They were looking for advice on how to innovate. Instead, they were greeted with the second inconvenient truth; that failure drives innovation.

The irony, beyond showing how disruption plays out to organisations being disrupted, is that there IS time to fail and by extension, time to innovate.

And here’s the grossly obvious, frog-in-boiling-water punchline: The longer an organisation postpones decisions to refactor its core businesses, the shorter the available time it has to experiment and learn (through failure) and ultimately benefit from reinvention.

Disruption doesn't happen overnight, but it will happen.

It takes time for disruption to play out. It can decades but more recently, decades have become years. And there are usually two reasons why it takes this long.

The first is that new threats in the form of start-ups, led by enlightened industry veterans or naive entrepreneurs, need time in the market to refine their proposition so that they can deal sufficient damage to incumbent business models.

The second reason hails from the romance tied to how money has been made in the past. The human addiction to familiarity and relative stability for the ‘tried and tested’ more often than not drives decisions that favour the status quo and more importantly the misdiagnosis of threats.

This combination of sustained ambition from entrepreneurs, fuelled by vision and the size of the prize (which isn’t always financial) and slow speed of appropriate response from incumbents sets the stage for inevitable disruption. And by the time spectators feel confident to call out that a company or industry is facing disruption, the horse has already bolted.

The fascinating idea here is that incumbents were once start-ups.

There are 5 steps to industry disruption

There is an alarming precision with which these steps play out. Transportation, retail and media are the popular case study but take a moment to consider just how practical these steps are and the fact that the closer you get to the fifth step, the smaller the available time to experiment, fail and reinvent.

Step 1: Competitive response

On realising a threat has emerged, incumbents create a short term competitive response, usually price driven, to flex their market muscle. This is designed to discourage start-ups or new entrants for proceeding but this is like bringing a knife to gun fight. It never works. Not only does it provide new players with competitive intelligence on how incumbents react, it’s usually the only response they have which isn’t sustainable.

Step 2: Underestimate the full scope of disruption

“It’s just an app.” How many times do you think these words were spoken by management teams at Budget, Avis and other car rental companies when they first learned of Lyft and Uber? That romance for how money is made is also responsible for narrowing how people analyse trends, meet needs and do business. After all, their rewards are tied to delivering in the short term.

This is disastrous because it means the full breadth and depth of the pending disruption is either ignored or completely misunderstood.

Step 3: Invest in the wrong innovation

Setting up a corporate venture fund to invest in startups is in vogue. However, the hard truth about these funds is that they invest in interesting startups that aren’t likely to resolve the core issues of the parent company. In other words, these investments don’t create capabilities that the parent company can use to out-manoeuvre threats.

Step 4: Cut costs

There’s only so many times you can cut costs.    

Step 5: Look to consolidation to drive sustainability

The cumulative effect of the first four steps drives companies to the brink where the only real option for survival is joining forces with or being acquired by another company.

The Red Pill And The Blue Pill

With disruption taking place everywhere there are two options to consider.

The red pill: Discard disruption as a fad and take your chances with the five steps of industry disruption. That’s it. Good luck.

The blue pill: Accept disruption is normal and become a badass innovator. Here are the six behaviours that these people live by:

1. They value time

They know it’s the most important asset and they treat it as such.

2. They think in public

There is next to no value in an idea that no one knows about and people don’t (often) steal ideas so learn by getting your idea to people that can help you learn and evolve.

3. They experiment in short cycles

There’s something wrong if you’re not learning something new every week about what you’re building. The faster the learning cycle, the faster the progress.

4. They celebrate lessons (the byproduct of failure)

People fail. Products fail. Markets fail. That’s reality and how humans learn. Celebrate the lesson learned and be ok with the idea that failure and learning are inextricably linked.

5. They are aware of luck

Whether you like it or not, luck has a role to play in just about everything. Innovators and entrepreneurs know that. They don’t rely on it. They just know it exists and that helps when the unexpected, good or bad, happens.

6. They create air cover

It’s wrong to assume that leaders are the only source of air cover for divisions and teams. Colleagues and teammates are the primary sources of air cover and this comes in the form of having their backs while at the same time living up to high shared standards.

---

At the end of the day, there's no reason why you can't take the blue pill and it's also important to be aware that it's not just David's fighting Goliath's fighting it out. Start-ups are also disrupting start-ups. Game on!

Here's the audio from MediaCom's ComX 2017.

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If you learned something, let me know by leaving a comment. Thanks!


Founder / Family Fit

I recently shared my thoughts on company building on a new podcast hosted by Shu Das. I laud Shu’s initiative. It’s not easy to put yourself out there with the ambition to create value for others.

We had a great time and covered a lot of ground before he asked me about how I integrate family with entrepreneurship. Although this question was unexpected, I constantly think about this pursuit. And, as any parent will attest, there are few things in life more challenging than raising a family while working.

Here’s how I answered Shu’s question (scroll to 49:10 if it plays from the beginning).

And here’s the complete episode.

https://soundcloud.com/user-744482387/shus-fresh-ideas-podcast-ep-1-interview-with-phil-hayes-st-clair

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Please consider tipping if you learned something (every cent goes to Soldier On).


MENTORS

ADVICE FROM MENTORS

My good friend Jo Burston asked me a question during a panel discussion for Inspiring Rare Birds last week. We were talking about mentoring as a competitive advantage to entrepreneurs.

“What is the best advice you’ve received from your mentors?”

I responded with two thoughts which are always in the back of my mind and were handed down to me by my mentors.

1. If they’re not laughing at you, you’re working on the wrong stuff.

The language used to describe the intent of this advice has morphed over time but the core idea is to accept that as entrepreneurs (and intrapreneurs) we see opportunity where other’s do not. Some ideas will be genuinely contrarian, while others will seem inspired or just plain strange.

This advice is a constant reminder that it’s OK to operate outside the bounds of established conventions and seek to create value in ways that create habits that change people’s lives for the better. You don’t have to look far in history to find the once fringe dwellers who at some point inspired change in the world.

2. This, Too, Shall Pass

This holds true no matter the situation. Difficult times ultimately don’t last forever and the same is true for purple patches. For me, this advice serves as a reminder to remain self-aware. Armed with the knowledge that this, too, shall pass adds context to situations that might ordinarily trigger a fight or flight response (tough times) or blind optimism (purple patches).

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I expect all entrepreneurs to have mentors. Those who don't are operating at a disadvantage because whether you believe it or not, it is close to impossible to grow a company or build a movement without them.

I also really enjoyed the advice that Jo shared. Jo's mentor taught her to religiously ask each day "what were yesterday's sales and how much cash is in the bank?"

What’s the best advice you’ve received from your mentor?

 


Co-Founders Need To Be On Your Work Bucket List

A couple of times each month I see questions pop up in different forums about the ideal founding team size for new ventures.

The answers are typically framed from the point of view of a venture capital or angel investor who is (correctly) concerned about de-risking the business. Often times this will be described as an appropriate mix of quality technical and business development skillsets matched by the founders’ ability to balance workload and deliver on a hiring plan to match growth ambitions.

There are those that say ventures can have a single founder (that was me once) and the same people, including Fred Wilson at Union Square Ventures, note that it can be done but it’s a lonely existence. Experience tells me that the optimal number of founders in a new venture is three but it turns out that this is (at best) a second order consideration. The primary consideration is who your co-founders should be.

Your future co-founders must be on your work bucket list.

That's the bottom line.

My work bucket list is a very short list of (at the moment) eight people who I would love to work with before it’s too late. Whether through an existing relationship or via their own admission (because I only know half of my bucket list personally), each person:

  • Is insanely curious
  • Uses empathy and compassion to lead
  • Is at the top of their game
  • Has a great sense of humour
  • Loves learning

Gautam and Opher were on my work bucket list when I formed AirShr because they each have these qualities in spades.

But here’s the thing, the true awesomeness of these guys has really only been revealed when the going has gotten tough like when pressure mounts because raising capital is taking longer than expected or life is a bit overwhelming because you haven’t slept properly in two years.

This all might seem obvious but it seems to me that when founders are out seeking partners they tend to lead with a function-first approach (i.e. I need a chief technology officer or a VP business development). In doing so their first step is to look at a candidate’s ‘on-paper’ track record and give little consideration to qualities that really matter, particularly when the going gets tough.

If you haven’t done this before, perhaps give some thought to your work bucket list and why people would earn the right to be on your list.

I don’t know when and I don’t know how but I also look forward to one day working with Jeff Weiner and Emily Ma.

Now you know half of my work bucket list. Who’s on yours?


ROLLER COASTER

MANAGING THE ENTREPRENEUR'S ROLLER COASTER

There are countless references to ‘the roller coaster’ of emotions felt by entrepreneurs (and by association their family and friends). The analogy of the rollercoaster is an attempt to describe the speed and amplitude with which situations can change and, given the situation, how much more or less likely you are to achieving you venture’s next milestone.

It’s not until committing to a venture full-time that it becomes clear that roller coaster actually means making continuous decisions in overwhelming and chaotic environments where the future is deeply uncertain.

Effective decision making relies on the capacity to process information. And everyone has a threshold up to which they can efficiently process information, even the most decisive leaders. Pilots refer to the distance between this threshold and relatively normal situations as ‘spare capacity’ (to cope with the unforeseen or unexpected). Spare capacity becomes compromised as the need to resolve multiple interlinked decisions increases. When spare capacity runs out stress and anxiety can make even the most elementary tasks impossible to conquer.

Founding or co-founding a venture inevitably means people are covering multiple roles, acting on imperfect information and driving urgently to get, keep and grow customers to demonstrate traction before running out of cash. The 100-hour weeks that this typically demands creates an ideal setting to erode spare capacity.

I could say that there are ways to avoid the roller coaster altogether or quarantine spare capacity for the times that you really need it but that would be untrue.

The reality is that the unforeseen and unexpected, both good and bad, will happen most days. It’s what you sign up for when you opt-in to building something from nothing.

Here’s what I do and encourage my mentees to do to reduce the roller coaster effect:

1. Open your calendar and count the number of days since your last small win.

One of the greatest risks to a founder is the narrowing of their contextual awareness. That is to say that focus to achieve the next big milestone can often be at the expense of celebrating progress and reflecting on learnings. Often founders are closer than they think to achieving their next milestone but when spare capacity is in short supply maintaining a balanced view on the state of the venture is difficult so take the step to count (out loud!) when your last small win took place. Prepare to be reminded that it was more recent than you thought.

2. Go one step beyond a mentor, have an entrepreneur buddy.

I have both and a couple in each camp because these two groups play different roles. An entrepreneur buddy is someone who’s been a founder before or is at a similar stage to you and whom has empathy and compassion for your circumstance(s). Call them and vent. And don’t worry, they’ll return the favour soon enough. Sometimes it takes someone who’s been there before to help navigate through complexity.

3. Exercise. 

There is an enormous body of medical and psychological research that points to the positive effects that exercise has on brain chemistry. Help your brain perform at a new level by incorporating exercise at least once every two days.

4. Take time to think about a pet project.

At the risk of drawing criticism for not insisting you direct 150% focus towards your venture, be OK with thinking about other ideas that have piqued your interest. I’m not advocating for this to be a distraction, what I’m encouraging is to grant yourself permission to periodically think about ideas that free up creative mental horsepower, the exact ingredient that is likely to help you solve issues at your venture.

So, Is it easier for serial entrepreneurs?

To some extent, yes. There is benefit in relying on experience to help regulate the emotions and fatigue brought on by the roller coaster but no first-time or serial entrepreneur is immune to its effects. I say that after having one of those weeks.


start

AM I READY FOR START-UP?

Am I ready for start-up?

People asking this question have usually been thinking about it for a while. They are looking for validation, one way or the other, that they are going to make the right decision.

People in this situation are, quite reasonably, worried about change in income and lifestyle, the opportunity cost of not progressing along their existing career trajectory and the uncertainty of the outcome. The fear of the unknown and failure mixed with the exhilaration of creating a new order makes these considerations more complicated.

The irony about the level of emotional effort invested in considering the move to start-up is that a) it’s framed incorrectly; and b) makes soon-to-be first-time founders lose sight of what they’ll actually be doing in a startup (as if it will all become clear after the decision to move to start-up has been made).

Gone are the days where a company has to be incorporated in order to see if an idea is going to work. The reason people still do this (and engage lawyers and accountants and rent office space) is because these are the things they can instigate and control. It makes them feel as though they’re making progress. This is the wrong way to frame the decision to move to a startup because zero evidence exists that the idea has potential.

The right way to frame the decision is to put a hypothesis to the test quickly and cheaply to learn as much as possible. There are many ways to do this and most begin with a business model canvas and easy to establish experiments. The bottom line: Learn in safety before introducing risk.

At this point if you’re a soon-to-be first-time founder you’re probably thinking one of two things:

“Yes, that makes sense, I plan to learn in safety before introducing risk. I’m not entirely sure how but, yes, that’s my plan”. This is the blue pill. If you’re in this camp, your odds of success just went up a few points.

OR

“Yeah, yeah, I’ll be fine, I back myself”. This is the red pill and this is how it usually plays out:

  • You either have your idea perfectly mapped out in your mind (good luck with that) or have a long but well-formatted business plan that you’ve been angsting over for a while, it contains language that’s somewhat vague but it’s comforting knowing there’s words on the page, even if they only make sense to you; OR
  • You’re reluctant to send it to anyone because of the intellectual property it contains; OR
  • Your first moves to start your entrepreneurial journey have involved doing things you can control (like hiring an accountant to incorporate a company or engaging a lawyer to start drafting patent applications); OR
  • You’re aware that there are mountains of learnings from founders and VCs online but you’ll get to them later.

Thinking this way has significantly increased the risk of your idea failing. This was me in my first venture and this thinking very nearly bankrupted me financially and emotionally.

So how do you know when the time is right to start a new venture or jump into a start-up full-time?

The answer is when you have conviction and evidence that your idea has real potential and when you’re ready to hustle like never before.

Conviction

Conviction isn’t blind faith. It’s the capacity to be stubborn on vision and flexible on details and it’s essential. Conviction only gets more powerful when mixed with a thirst for continuous learning and ability to adapt. Collectively, these behaviours are the best armour against the invariable onslaught of setbacks that face every entrepreneur, the base layer of which is conviction.

Think back to a time where you overcame the odds to succeed. At the heart of that effort was conviction.

Take the red pill and conviction will take you a long way but only so far.

Evidence

Your mission is to prove that your idea has real potential to be an easily addictive convenience for people you don’t know (at all). The ‘what if’ around amassing evidence usually stops soon-to-be, first-time founders in their tracks.

What if no-one likes my idea? Yep, it’s possible but celebrate knowing that if well tested, you’ve not wasted time (your MOST valuable asset) on taking the idea forward. Move onto the next idea.

Alternatively, what if people like my idea? It’s a good problem to have, evolve the experiments to continue validating your hypothesis and start exploring how to gather resources to get version one of the product into the hands of customers.

‘Get out of the building’ is a suggestion often made to soon-to-be, first-time founders. It means to get feedback and evidence to back an idea. Nothing beats seeing how someone responds to your idea, one-on-one and face to face. Where that’s not possible I use javelin.com.

Take the red pill and you’ll be a rely-on-instinct, personal experience and desk research kind of person.

Getting a feeling for how the red pills play out…?

Hustle

To hustle means to capitalise on opportunity. Practically it also means acting on ‘you don’t ask, you don’t get’, knowing that when you’re told no, it means no at that point in time and being aware that there is always another option, another way, to solving an issue.

As a founder hustling is part of everyday and it goes well beyond selling. You hustle in developing partnerships, raising capital, corralling resources, hiring – everything. And it goes without saying that there is an authentic and an inauthentic way to hustle. The authentic hustler listens, exercises empathy and reads the play well in most if not all situations which allows them to know when and how to push for the outcome their team and venture needs.

The inauthentic hustler, the ones often associated with used car salesmen, is the direct opposite. They fail.

Hustling is essential for one simple reason. You don’t have resources you need and hustling helps you get them. Make no mistake, having your hustle on continuously is tiring BUT here’s the thing: Being an always-on, authentic hustler helps you create your own luck because you make that last meeting that others wouldn’t, you send that well-crafted InMail to create a new LinkedIn relationship, you deliver your pitch one more time and you engage (at your most tired) with a stranger interested in your idea at a startup expo.

The bottom line is that being an authentic hustler pays.

Conviction, evidence and hustle are as essential as the need to, as Fred Wilson said recently, take risks, work hard and get lucky. At the end of the day, start with the end in mind and take the blue pill.


FRIENDS

MOVING FROM FRIENDS TO CO-FOUNDERS

Before pitch decks, product prototypes, marketing plans, company registrations or investors there is an intoxicating moment when you wholeheartedly believe an idea has game-changing merit.

The inevitable need to collaborate inspires conversations with people who complement your skills and share your excitement and vision. After what seems like countless late night Skype calls and the exchanging of ideas and business models, prospective co-founders begin to emerge from your list of friends and classmates.

It’s important to be real about what’s happening here. It’s one thing to share your vision as a means to solicit feedback, it’s quite another to engage with a friend or classmate on the basis that they may, sometime in the future, become your partner. The exchanging of ideas and business models during those copious Skype calls is helping you perform due diligence on them as a prospective partner. And they are doing the same with you.

This process usually adds a new dimension of trust and respect to the relationship which will prove essential if you collectively agree to pursue the vision. Equally, this process will also help determine early on whether a partnership is not going to productive.

Are they co-founder material?

It’s relatively easy to work out of if someone is well suited to being a partner. The reality is that achievements during their work history will tell you a lot about the quality and complementarity of their skills. And the all important capacity for industriousness and humour will become self-evident from working up the business model on Skype. The other essential ingredient in a partnership is trust and respect. If through the back and forward of Skype calls and the exchange of ideas your spider senses tingle because you’re detecting a lack of trust or respect, end the prospective co-founder conversation. Instinct usually prevails and you can almost guarantee that these behaviours will amplify when the going gets tough, and it will.

Combine these factors with your pre-venture relationship and you’ll quickly arrive at a decision about entering into a partnership. Using this approach made it a no-brainer to start AirShr with Opher and Gautam because they tick every box (and then some!). Remember that finding the right partner isn’t trivial and that’s why this activity is more or less an audition. And that’s OK because you might not find the right partner(s) immediately. It requires the seriously brilliant partners to create a great company. Don’t settle, keep looking if you need to.

Three events place your new venture at risk from day one.

No matter how much you think you’re in control, start-up chaos begins the day you and your new co-founders start working to validate your business model. This chaos can affect people in different ways and when you boil down the reasons why founding teams don’t survive the early stages of company building, it’s typically because a founder:

  1. discontinues their involvement due to personal circumstances; or
  2. discontinues their involvement due to a breach of an obligation or has irreconcilable differences with the other founder(s); or
  3. has been unable to perform duties due to prolonged ill health (or death).

Assume one of these scenarios will play out.

Be ready — In plain English.

The first step that co-founders need to take before starting to validate any business model is agreeing on the expectations they have of one another in plain English both operationally and in the face of the above scenarios.

Standard long-form shareholder agreements may address these issues but if you’re validating a business model, why would you already be incorporated (and therefore have a shareholder agreement)? In other words, you haven’t determined if there is value in the business model so spending money on forming a company, at this stage, is overkill and does nothing to help achieve traction.

Instead, use this.

This is the agreement we first used at AirShr and it served us well. It’s practical and easy to understand, sufficiently comprehensive to meet all early stage circumstances and its terms are transferable to long-form shareholder agreements at the appropriate time.

Many first-time founders have benefited from using this agreement and I hope it’s useful to you too.

Thanks also to Stephane Chatonsky, my venture capital professor at business school, for helping to create this document.


YOUR PURPOSE IS 2 CLUES AWAY

Purpose unlocks potential.

The evidence is anywhere you see people with a clear sense of resolve or determination. For these people, a weight has lifted from their shoulders because instead of trying to work out how they fit in the world, they can focus on optimising and being the best at their craft.

If you’ve discovered your purpose you know the feeling. It’s incredible!

If you haven’t, discovering your purpose isn’t as elusive as you think. It comes down to two clues, both of which hide in plain sight for most of us.

Let’s rewind. For years I felt lost. And there are few things more frustrating than knowing you have much to offer the world but remaining clueless about how to put that energy to good use.

Knowing what I know now, I’ve always been an entrepreneur. I started my first venture aged 10, organising kids in the neighbourhood (and ‘borrowing’ their parent’s gardening tools) to convince neighbours to pay $20 to ‘fix’ their garden. The model was simple. We spent about an hour tidying up the garden (and working out how to use the tools we had acquired) before moving on to the next house. All the money we made was split equally among the posse of kids who worked. Of course, at such an early age financial gain wasn't sufficient to the maintain the team’s interest and the model proved unsustainable.

When I put Reid’s advice and that of my daughter’s school principal to the test, this story served as early evidence of my purpose.

Clue 1: Where Your Mind Wanders When You ‘Zone-Out’

This clue is all about the themes you think about when you have a moment to yourself. Take a moment to be mindful. Where did your mind go when you zoned-out the last five or ten times?

There is a strong chance that thematic consistency connects each of these ‘zone-out’ events. These themes are important because this is your mind taking you to a place of natural curiosity and interest. Imagine if your mind could spend a lot of time there?

This clue, via Reid, is THE essential first step.

For me, my mind naturally goes to ‘what if we could…’, and business models and extends to the fascination of how we (as founders) can bring ideas to life that create habits to change the world and the lives of many.

Side Note — If the answer to the questions above is ‘lying on a beach’, ‘visiting the snow’ or ‘taking a year off to travel’, you need a vacation so take one! Don’t mistake your zone-out thoughts for where you would rather be at that particular point in time.

Clue 2: Your Heart Song

This beautiful phase comes from my daughter’s school principal. You know your heart is singing when you’re thinking or talking about a topic that makes your eyes light up, makes you stand a little taller and takes you closer to being the best version of yourself.

When was the last time you sang your heart song?

It won’t surprise you to know that thematic consistency usually connects each of these events too. Make a note of when this happens and the topic. It happened to me just yesterday as I talked product and market entry with the amazing Rhonda Brighton-Hall and the team at MWAH.

Next, Examine The Overlap.

Take the themes arising from where your mind wonders and when your heart sings.

Purpose can be found where these themes overlap.

It might reveal the unexpected. It might be confronting. It might challenge your lifestyle or the investment you’ve made in your career and education to date. However, if you discover your purpose a weight will lift from your shoulders. And now, instead of trying to determine how you fit in the world, you can focus on optimising and being the best in a potentially different craft.

So as you reflect on the year that was and perhaps your purpose, I hope these two clues help provide you with the same potent clarity I enjoy.


I'm joining inkl!

Today I’m hugely excited to announce that I’m joining Gautam Mishra at inkl as the Senior Vice President of Business Development. I’m charged with generating revenue across inkl’s news and payments products around the world.

I’ve been fortunate to gain an intimate understanding of this revolutionary venture before accepting this role. In co-leading inkl’s recent financing, I’ve had a unique opportunity to pitch this business to investors around the world and more importantly, understand Gautam’s vision.

Take a moment to think about the volume of information we consume each day. It’s never been higher and whether we comprehend it or not, consciously and subconsciously, it drives the decisions we make.

Fake and sensational information in news is as unhelpful as the way online information and content is currently valued. And as a father and leader I want my children and people around the world to access information which affords them the opportunity to make well-informed decisions.

Inkl’s vision is to create the infrastructure for a new value exchange for online information and content. And the opportunity and positive implications of delivering on this vision are incredibly significant.

This is a major reason I’m bringing 110% to inkl. It’s also a wonderful chance to work shoulder-to-should with some of the best minds in technology, product and journalism that the world has to offer.

So if you want a better information diet, get inkl. And if you write on WordPress, learn about inklPay. These two products are just the beginning so if you’d like to know more, please reach out.

Time to get back to work.


IS YOUR PARTNER AN ENTREPRENEUR'S WIDOW?

Here’s the punchline: The single most important action you need to take to avoid turning your partner into an entrepreneur’s widow(er) is to over-communicate with them.

This principle is remarkably simple but at first, it might seem counter-intuitive. You might think that entrepreneurs are somehow naturally gifted communicators given the constant practice they have at pitching and selling.

Well, looks can be deceiving. As a first time founder in 2008 I struggled immensely with communicating the challenges I faced each day in building my company to my loved ones and in particular my partner.

Some challenges were petty, others were significant and at the end of each long day, exhausted and with traction and capital waning, I often didn’t have the words to describe the current state, let alone strategise a way thought it. And at the end of the day, I didn’t want my partner to be burdened with my challenges.

I started this venture.

These were my issues to solve.

I was also convinced that she wouldn’t understand, not because she wasn’t capable or thoughtful, but because she wasn’t in the trenches. How could she possibly understand and even if she did, where would I start?

Read more


death

7 NEAR DEATH EXPERIENCES YOUR VENTURE WILL FACE BEFORE IT'S 2ND BIRTHDAY

If by reading the title you thought: “We’re different, these near-death things won’t happen to us”, that’s hope talking and it’s time to stop kidding yourself.

1. A key team member will leave unexpectedly

This will be a dark day whether you see it coming or not. And the darkness will be dialled up if the person leaving carries a disproportionate load of one discipline in the company.

The common story here is the CTO moving on and leaving the non-technical co-founder(s) flailing. The same is also true if the business development founder leaves and all that remains is the technical lead.

Speaking from experience, the stress on the day this happens (and days following) is immense.

What will the team think?

What will I tell investors?

What does that mean for traction? 😳 …

Here’s the good news; the age-old adage that “everyone is replaceable” is true. It may take weeks or months to make the replacement but it’s completely doable.

How to minimise fallout:

The immediate action is to negotiate a handover (if possible) and communicate the departure to the team as quickly as you can. Rumours help no one.

Step two is to maintain continuity of mission critical tech with other team members or freelancers until a replacement is found.

Then use this experience as a catalyst to get off your ass and level up your approach to talent. This includes having processes and procedures in place to central store code and other important intellectual property. And from the very, very beginning of each relationship at the company form an alliance with every team member including co-founders.

Proceed without individual alliances at your own peril.

2. Your runway will come within inches of ending

We’ve all been here. But the reality is that you should know months in advance if your burn rate will end in disaster.

However, if your runway is perilously close to ending you’ll need to think seriously about ‘putting everything on ice’ (read: letting your team go) while you get the house in order.

This option will keep you awake at night because you’re responsible for feeding team members and their families. It’s also an option because there will be alternatives like bridge finance from investors, bringing on new investors or on-boarding new customers.

Your mission is to keep the lights on. If that unfortunately means the team needs to move on and the founders need to get paid work elsewhere while continuing to build the company, that’s also an option.

This conundrum is universal to business and it’s tough but rest assured, it won’t happen once, it’ll happen a number of times.

How to minimise fallout:

No one likes surprises in business so maintain regular, high-candour communications with you team and investors about traction and runway. And ensure this is a conversation. It’s essential that founders understand and respond to the concerns of team members, even if they don’t have all the answers.

It’s also important to remember that team members will be trusting founders to navigate through adversity. If it comes to moving team members on, founders should take a leading role in creating conversations and opportunities for each team members’ next play.

3. A cornerstone customer will cancel their contract

This is a bitter blow. This might also feel at the time like it’s game over.

As difficult as it might be, do whatever it takes to understand the dynamic that led to the customer’s decision and what role your team played and could have played differently.

How to minimise fallout:

  1. Rush to understand and document the learnings from engaging with the customer. This includes each milestone that was achieved and each issue that may have led to contract cancellation
  2. Feed ☝ knowledge straight into product and business development team members to help fine-tune the proposition
  3. Try to renegotiate different terms as a means to recover the contract
  4. Report this event to shareholders with a plan to navigate through the uncertainty which they can weigh in on and evolve with you — they are there to help.

4. Key infrastructure that supports your product(s) will fail

It’s bad enough when your website or service goes down. You shouldn’t be left to find out about it from a user.

Always be on the front foot and set up alerts for each online product that you use so you can be ready to proactively reach out to users when the shit hits the fan.

Don’t pretend they won’t notice. They will.

This is as simple as following the support twitter accounts of services you use and making sure notification alerts are turned on (e.g SquareSpace Help if you use them). You can then use insight from these alerts to drive your responses to users. Or it might involve a service like StatusPage which helps you communicate updates on issues directly to people’s inboxes.

How to minimise fallout:

It’s pretty simple. Communicate proactively and consistently until the issue is resolved.

5. A competitor will appear (and freak out your team)

Competitors validate market opportunities. They also force marketplaces to become more efficient. These are the words of a rational person.

Try telling that to a fledgling team who are emotionally tied to their product, fatigued by working 100-hour weeks and who think they are the first to see and capitalise on an opportunity.

This happened at AirShr as we designed a bluetooth button for an in-car use case. When news broke about the Amazon dash button (below) our email went nuts. 

The majority of emails included a link to a press release from people who developed an instant anxiety about AirShr’s future due to Amazon’s new product.

As we moved beyond the headline and image and read the press release, it became clear that there wasn’t a overlap.

How to minimise fallout:

Determine if there is in fact competition.

  • IF competition equals no, THEN keep pursuing the vision.
  • IF competition equals yes, THEN keep pursuing the vision.

There is next to zero chance that your company is an isolated first-mover and even if you are, expect competition because it’s already on its way.

And before you think there’s a typo in the second IF THEN statement, remember that copying another company’s value proposition will, at best, result in price-based competition and that rarely ends well.

6. Pursuing ‘interesting scale opportunities’ will compromise the core product

Distraction kills. This is as true for texting while driving as it is when building a company. Founders of early stage ventures are exposed to countless suggestions that promise the discovery of product / market fit and scale.

Without a discipline to design, deploy and assess experiments that drive this discovery, valuable time and resources get chewed up, often with very little return on investment. And before long, the core thesis and product gets neglected in favour of ‘interesting opportunities’ to grow.

Less about minimising fallout, more about focus from the outset:

  1. Remind your team to continually ask: ‘Does this activity help us validate [insert core hypothesis]’. If the answer is NO, kill it and move on.
  2. Monitor metrics that reveal the true health of your core product. These aren’t measures only accessible by running a database query that focus only on cohort size or active usage. They are metrics that are one click away and show breadth and depth of revenue, engagement and growth over time.
  3. Share the initiatives you’re pursuing with advisors as a sense-check and listen to their feedback. Given their relationship with you they are likely to call you out on efforts that seem counter-productive.

7. Pivoting a business model will take longer than expected

To ‘pivot’ means to pursue a vision using an alternate strategy. This is simple to say and relies on founders having space to properly reflect on progress and assess pivot options.

The reality is very different.

Pivoting usually happens after the market has responded unfavourably to a version of the product. The almost taboo issue at play in these circumstances is that the organisation has been geared towards a specific strategy for many weeks, months and potentially years. Moving to a different strategy amidst a decreasing supply of capital, increased pressure to achieve traction and fatigue clouds clear decision-making.

The bottom line is that pivoting takes time.

How to minimise fallout:

Ask your team to embrace the idea of pivoting. Give them and yourself a few days to decompress and reflect away from the office. In the meantime, open conversations with advisors and investors to increase your perspective on the situation.

Although early-stage investors and advisors don’t like surprises, there’s a good chance they’ve seen similar situations before. And don’t worry about asking for their perspective and support. They are also incentivised to help you navigate through tricky issues. Remember, you’re not expected to have all the answers all of the time, just most of the time 😉.


3 STATEMENTS ARE SECRETLY DERAILING YOUR BUSINESS

Every business has its own language. It’s a mashup of people's past experiences, desire to contribute or a need to exert authority.

In most cases, team members communicate with a clear intent to move their organisation forward. In doing so they look to their CEO or founding team members to calibrate their communication style.

This subconscious exercise takes cues from the tones used in emails to gestures seen in stand-ups to the emoji’s used in Slack. And this is an ongoing process. These recalibration events can occur many times a day as teams focus on iterating quickly in the pursuit of product/market fit.

Unfortunately, a high level of team interaction isn’t a proxy for clarity of mission. In fact, rapid iteration often exposes more questions than it does answers and the reality is team members look to their leaders for clarity (whether they have it or not).

If they don’t have the answers or more importantly a strategy to guide their team through the uncertainty, a leadership vacuum inevitability appears. In these circumstances, it’s not uncommon for team members to project their past experiences into the vacuum as a means to help stabilise the conversation and regain momentum.

I’ve often seen these past experiences manifest as three statements and it’s important to understand why their inadvertent use is potentially destructive.

The first reason is that these statements tend to generate more uncertainty.

And the second is that if these statements become re-used in periods of uncertainty, it becomes more likely that the team will begin using them more liberally or by default in other conversations.

If you’re in a startup more uncertainty is the last thing you need so keep an ear open for statements that begin with…

1. “If we believe…”

There are few statements more destabilising than those which open with “If we believe…” because it contains a troubling undertone of uncertainty.

The very nature of this statement questions the belief system of the team. And whilst the intent is usually positive and designed to elevate the team’s thinking back into the macro, it often precipitates questions which are equally difficult to answer.

The reality is that by the time a product or sales team is sitting in the office they’ve already bought into a belief system around the customer pain-point they are there to solve.

So it’s not about if you believe.

You already believe! You’re sitting around the table!

You just need to negotiate the product or sales challenge that’s in front of you at the moment.

What’s an alternative?

When a team strikes uncertainty try reconnecting them with the experience you’re trying create for someone in your target market.Try briefly discussing how the immediate challenge fits with the company vision and mission. This anchors the team back to purpose and provides perspective on the size of the issue.

Try briefly discussing how the immediate challenge fits with the company vision and mission. This anchors the team back to purpose and provides perspective on the size of the issue.I’ve seen this approach help teams realise that the challenge they were trying to solve was far smaller than first thought. And when more material issues are at play, a reconnection with the big picture has made an issue much more negotiable.

I’ve seen this approach help teams realise that the challenge they were trying to solve was far smaller than first thought. And when more material issues are at play, a reconnection with the big picture has made an issue much more negotiable.

2. “It would be useful if…”

The activity-generating potential of statements that start with this is enormous (and not in a good way). This is because these statements are often opaque information requests that may or may not serve as an input to a future decision.In an effort to gather and make sense of data to support these types of requests, a significant amount of effort and energy can be consumed with little or no payback, not to mention the impact on

In an effort to gather and make sense of data to support these types of requests, a significant amount of effort and energy can be consumed with little or no payback, not to mention the impact on morale of those chasing the answers to ground.

The reality is that it’s up to leaders to be mindful of the effort that can be consumed on opaque requests. Team members can also shortcut these situations by digging a little deeperto understand the request in order to add value.

What’s an alternative?

If you’re a leader who’s contemplating “it would be interesting if…”, reframe it to include the decision you’d like to make. If you can’t articulate why you need the information, hold back from asking until you know.

If you’re on the catching end of a vague information request, share that you’re keen to help nail the request and that by knowing more about the decision, you’ll be able to gather the needed data more efficiently.

3. “From [X]’s perspective…”

If you’ve ever been part of a conversation that starts with “From a [customer / user / supplier]’s perspective…” and ends with vague or confusing observations, this will resonate.

Solving a person’s pain point IS the main game. HOWEVER it’s one thing to make data-driven product and marketing decisions. It's quite another to rely on a vague recollection of insights to make the same calls. The challenge with the latter is that people’s recall is generally poor and when it fails, it often becomes supplemented with people’s own experiences. And this leads to a distraction as the team reorients to solve a different (and unjustified) intent.

What’s an alternative?

The only way to make a compelling statement on behalf a customer, user or supplier is to have corroborating evidence. So the next time someone starts a statement with “From a [X]’s perspective…” ask for the data that supports the point of view and avoid making decisions without it.

Closing thought

There’s little doubt that these statements bring value when testing hypotheses, designing business models and evolving strategy. Outside of these

Outside of these times, their nearly random use creates uncertainty. Don’t underestimate the latent impact this has on your team.


golden rule

ONE GOLDEN RULE MAKES OR BREAKS FOUNDER REPUTATIONS

People nod in agreement when they hear this rule. It’s because the underlying notion is obvious. In fact, it’s almost expected that people follow this rule to the letter.

But of all the things you need to focus on as a founder — shipping product, generating revenue, managing capital, hiring talent and forging partnerships — this rule is much more difficult to consistently live by.

And it’s difficult for two reasons. The first is that founders are busy and as much as that’s true, it’s a small part of the equation. The second reason relates to the psychology of communicating company progress.

I can tell you from experience that communicating the status of a company involves continuously resolving a mix of competing priorities, the desire to maintain the positive trajectory of their company story, the fear of communicating ‘bad’ news and to some extent, procrastination.

All of this while ensuring that the golden rule is never broken.

golden rule
☝️

The intent of this rule is to preserve transparency on strategy and operations. To investors, this means regularly communicating with high-level candour to the people who have a vested interest in your success.

It’s not rocket science. For the most part, this means sending a quarterly email that provides updates on milestones and progress relating to:

  1. Product Development
  2. Sales and Distribution
  3. Partnerships
  4. Capital and Runway
  5. Team and Hiring
  6. Issues and Risks
  7. 3-Month Activity Forecast

This isn’t fancy, it’s an email using Arial font, basic headings and bullet points. And a distilled version of these messages should also be shared with teams, key partners and suppliers because they’ve also bought into helping build your vision. This approach helps avoid this type of question:

“Why am I only finding out about this now?”

If you’re on the receiving end of this question, there’s a good chance you’ve broken the golden rule. And here’s the thing, there’s no reason to be in this position.

In the last decade enough companies have been founded and invested in (and lessons learned and documented) that founders should know what’s expected of them and if they don’t, investors should set that tone.

I’m still surprised when I learn of founders who don’t just break the golden rule but smash it into a million pieces by acting in ways that leave team members and investors unexpectedly scrambling to save a venture. These events damage reputations, sometimes irreparably, and are completely avoidable.

When a founder confides that they’re experiencing challenges in communicating the progress of their company I offer this advice.

In response to: “I need to keep this story positive”

Positive momentum is important but there is no place on earth where a company story is only ever positive. In fact, people grow suspicious when the story is only ever positive.

Investors and entrepreneurs understand that solving big problems involves riding a rollercoaster of wins and setbacks so communicate them regularly in the context of the company mission and strategy. It’s part of the journey.

In response to: “I’ll get around to writing the update”

Bad idea. Just do it and then stick to a quarterly update tempo. At the speed at which circumstances change in startups, a lot can happen in a short time and the longer you procrastinate, the more you’ll need to explain.

This might not seem like a big deal when times are good but that will inevitably change. When it does and you’re left having to explain a series of potentially complex and interconnected events, you may come close to breaking the golden rule. It’s avoidable, so avoid it.

In response to: “But it’s hard delivering bad news”

Yes, it is. It sucks and no-one likes doing it. It also goes without saying that delivering difficult news in a forthright and productive manner is an essential leadership skill and one that gets better with practice.

It’s natural to think that people will be upset on receiving bad news. But what makes the situation worse is a lack of context for why the situation went from normal to ‘bad’.

The clearer people are on context, the more prepared they are to work through challenges with you.

Closing thought

I think about maintaining the golden rule as being as much about respect as it is strengthening trust with allies. Respect and trust with allies is a potent combination. Without them, you’ve got nothing.


It’s Never Been More Important To Ask ‘Why?’ 5 Times

We have a BIG problem.

It affects just about every facet of our lives, from the ideas we foster, to the family we love, to companies we build and to the stories we tell.

We’re losing our grip on the importance of context.

That’s the punchline. And here’s the background.

The circumstances that form the setting for an event (i.e. context) are essential to how we make decisions that affect our family, our teams and many others, in some cases the lives of millions of people. Unfortunately, context gets lost and can disappear altogether when our attention is diverted from diving deeper into an important topic at hand. And it’s easy to add colour to this issue. In 2015 a study conducted by Microsoft’s Consumer Insights division identified that digitalised lifestyles have contributed to the diminishing attention span of humans from 12 seconds to 8 seconds.

Today, nearly two years on, the fight to gain our attention even for a second is fierce. Each day we’re bombarded with ‘headlines’ that feature in news, social media, powerpoint presentations and even in stories told by a friend or family member. Some we believe, some are confusing and some defy belief (and there have been plenty of those lately!).

So what happens when people move away from understanding context and begin scanning and accepting ‘headlines’ as reality?

The answer is many things, none of them good.

And it happens A LOT.

But here’s the good news, there’s a simple way to reconnect with context…

Ask ‘why?’ 5 times.

If this suggestion conjures up a vague link to a motor vehicle you’re on the right track. The idea of asking ‘why?’ five times originated in the 1950’s from the pioneer of the Toyota Production System, Taiichi Ohno. This guy is also considered the grandfather of continuous improvement. Whenever an issue cropped up he encouraged his team to explore problems first-hand until the root causes were found.

“Observe the production floor without preconceptions,” he would advise. “Ask ‘why’ five times about every matter.”

This is powerful for one simple reason: Each time you ask ‘why?’ more surfaces about the circumstances that form the setting for an event (i.e. context). And this leads to a clear understanding of the root cause.

Use it anytime but especially when your spider senses tingle.

Asking ‘why?’ 5 times is very useful when something is counter-intuitive or confusing. And while you can do this easily, you should also encourage your team (in particular new hires) to do the same to you. It will help them achieve a similar, if not equal, level of contextual understanding as your own and it might also expose chinks in logic that until this point have been hiding in plain sight.

There have been a number of times when I’ve been asked ‘why?’ 5 times and on the fourth or fifth ‘why’ I’ve had no other option but to say ‘I really don’t know’. This admission has often turned out to be the beginning of very product collaborations because those involved can now start pursuing an opportunity based on shared understanding.

I ask ‘why?’ 5 times:

  • In product development and sales conversations
  • When I learn about Trump’s latest executive order
  • As I forged partnerships at AirShr and today, at Inkl
  • When I learn about Trump’s latest latest executive order
  • In mentoring founders
  • When I learn about Trump’s latest latest… (ok, you get the point)

Knowledge and wisdom do not exist without context. If you feel as though you’ve become good at skimming ‘headlines’ but still feel uninformed, try asking ‘why?’ 5 times and get the context and answers you need. You’ll be surprised at what you learn.


SETBACKS

COMMUNICATING SETBACKS WITH YOUR TEAM

Setbacks come thick and fast in startups.

They can range from minor delays in product development to major issues when key people leave or large customers move on.

At the heart of each setback is an ugly mashup of angst and uncertainty.

The larger the setback, the greater the angst and uncertainty.

In any case and no matter their size, setbacks destabilise teams and the big and unexpected ones can paralyse a young venture.

There’s only one productive way to communicate setbacks

For the most part, experience plays a large role in managing setbacks. The more you see it, the easier it is to manage.

But there are times when large and unexpected setbacks can catch even the most experienced operators off guard. Answers aren’t (usually) immediately obvious in these situations and the pressure on founders increases quickly when teams expect their leaders to have some, if not all, the answers.

Here’s the thing. Unlike wine, angst and uncertainty don’t age well with time.

And I cannot tell you the number of times I have been faced with the frustrating irony that I need more time to discover a path forward. If like me you were born impatient, this situation is particularly testing because as a leader you feel like it’s your job to have answers for your team.

You have three options at times like this:

  1. Present an answer to your team that creates certainty based on what you hope will happen (Pro Tip: Hope isn’t a tactic), or
  2. Say you don’t know what’s going to happen and tell the team you’ll get back to them (which might inspire them to embrace your honesty but it might equally end up costing you credibility), or
  3. Talk with your team about the setback!

I can assure you that the third option is by far the best and here are the three steps I follow to communicate setbacks with teams as soon as possible after they happen.

1. Reintroduce context

In the cut and thrust of building a business, it’s easier than people realise to forget about what attracted them to work together in the first place.

And when stress-induced angst and uncertainty hit a team, they can become myopic and lose sight of the big picture and how much has been achieved.

So open the conversation by reminding them of their collective purpose and how far they’ve come. In these situations, I work hard to position messages in such a way that makes team member’s smile as they reflect on the journey to date.

2. Present the news

The next step is to objectively introduce the events that have led to this conversation. It could be the reasons why a key team member has decided to depart or the change in circumstance that led to the end of a business partnership. Make this a candid and high-level explanation.

Then, present the news.

3. Talk scenarios

There are usually 3–5 scenarios that can play out off the back of any setback.

It’s up to the CEO or founders to come up with, present and discuss the first draft of each scenario with the team.

This part of the conversation lays the groundwork for a path forward and invites engagement from the team to evolve existing scenarios or introduce new ones.

This is THE most important step in short-circuiting angst and uncertainty and in my experience, it’s this step that team members appreciate the most.

The bottom line is that can setback hurt. A lot.

As each setback becomes known always remind the team that they are the same collective of talented and resilient people they were the day before the setback happened. And they will be those same people tomorrow and the next day and the day after that.

The reason this approach works is that it acknowledges team members can sense and be affected by the same angst and uncertainty felt by their leaders.

Facing into setbacks using this approach has been very useful in the past. I hope it’s a big help to you too.


One Sleep Decision That Made Me a Better Entrepreneur

In the early days of a new venture and for some years afterward founders cover every base from building product to selling to hiring and everything in between. And there’s no doubt that getting to market and growing is intoxicating. It’s also physically and emotionally demanding.

Is sleep important? Absolutely, but I didn’t used to believe that. I was the guy waking at whatever time my children woke (anywhere just after 5AM) and then would find my way back into bed at ~2AM. A full agenda demands long days. At least that’s what I told myself and it was folly.

I also knew there were no awards for being awake for 19 hours each day yet trying to crack the cycle of long days seemed like a real challenge.

Irony

As founders we create and execute on plans to build and ship products, to acquire customers, to hire great people and to create our own luck. We dedicate 100+ hour weeks to this pursuit to the point of exhaustion and as much as it pains me to admit it, we’re not 100% in control of the intended timing of these strategies. Yet, when it comes to sleep, we compromise.

The irony is that we can control when we sleep. We don’t control much else.

So I made a change. And it worked much, much better than expected. Here’s what I did.

“Hi team, my availability is about to change”

I shared this news with my team during a standup. I reinforced that I was accessible whenever they need me but if that meant a late night product call with our distributed team it would be an exception rather than the rule. I also shared that if they tried to contact me after 9pm they would receive a response the next day.

In bed at 9pm, up at 3am.

Whoa! Hang on, what?

I know. The wakeup time can seem jarring but after the third day of doing this, the change in energy levels was extraordinary. I tried this approach because I wanted to road-test the idea that one hour of sleep before midnight is worth two hours of sleep after midnight. As current sleep research maintains this is a myth I am at a loss to explain the kick in energy. However, the result was that I could power through three hours of work with hyper-productivity (read: I get 2x done) before 6am, spend time with family and then head to the office.

This is a Sunday to Thursday routine which helped me break a cycle that was unsustainable and impacting my ability to be an effective leader, husband and father. It has well and truly changed the game for me.

Closing Note

The life of an entrepreneur is all in and at the end of the day it comes down to choices. Long hours are part of the job but there’s no accolade for staying up the longest.

Reverse the day to get up early instead of going to bed late. It’s a simple and effective strategy, and one that’s worked well in a household with two young children.


OCCAM

OCCAM'S RAZOR, RIGHT?

Let’s deal with the context first. William of Occam was an English philosopher and theologian from the 14th century. Building on the ideas of others he formed a razor (a philosophy) that essentially says that when faced with competing hypotheses, select the one that makes the fewest assumptions. In other words:

The simplest explanation is usually the correct one.

It’s a phrase. Use it to remind people that simplicity rules.

Opher was the first person to use this phrase with me. I was sharing a half-formed thought and he capped off his reflection by saying “Occam’s Razor, right?”. Needless to say my half formed thought wasn’t one of my best. I’d forgotten about a product that would do exactly what we needed, there was no need to build it. It saved us a ton of time and effort and it made life simple.

Here’s why you need it more than you think.

When you have an exciting new idea for a feature or product (or anything else for that matter) not only is it half-formed, your mind will naturally start playing out how it will look and feel. Before you know it, and in the space of only a few seconds, a series of assumptions and biases based exclusively on your experience has informed how this ‘thing’ will work. And it’s not only the characteristics of the feature or product that you’ve mentally designed, it’s how you would use it. And let’s not kid ourselves, we also foresee how millions of other people would use it every day.

In this vacuum opportunity is limitless. Existing conventions and constraints don’t feature. The historic profile of the idea (who’s tried and failed or succeeded and what they learned) doesn’t feature either. And even more surprising (or not!) is that the language we use to describe the idea is derived from our own experiences.

But here’s the thing; The true value of an idea (read: new business model) is based on the speed at which it can be validated.

The quicker you move to validate, the faster you learn. The faster you learn, the quicker you can grow OR the quicker you can kill the idea and move to the next one.

Tremendous energy and compounding momentum comes from validating ideas and there’s only one reason why people don’t do it: Fear of rejection and judgement.

It takes courage to present an idea and it takes a mix of compassion and radical candour to effectively respond to one. Here’s how Occam’s Razor fits:

When you present an idea…

Be courageous. Present the idea to five people closest to you. Make sure you give them permission, to be honest about what they think because their first instinct will be not to hurt your feelings.

Here are four additional tips:

  1. The ideal format for presenting an idea is face-to-face/voice. Don’t do this in writing, too much intent can be lost in written exchanges,
  2. Begin the conversation with the expectation that what you’re about to discuss is a half-formed thought,
  3. Pre-reads are not essential but they work. I like receiving a link to the one-page business model canvas — this one, and
  4. Listen and listen carefully. Listen out particularly for this question in response to your idea, “Isn’t this like [insert product name here]?” and don’t dismiss it or provide an explanation that talks around why your idea is different. Acknowledge it and when the conversation is over, look into the product. This is important because your experience with [insert product name here], unless you used it comprehensively an hour ago, is dated. Go back and re-examine it. There’s a reason why this person thinks your idea and [insert product name here] are similar. It’s your challenge to understand why.

When you receive an idea…

Be compassionate and seek to understand the context with which this idea was formulated. It’s also essential to recognise the vulnerability and courage that comes with presenting a new idea, so:

  1. Acknowledge that you know the idea is a half-formed and that you’re excited to listen,
  2. Present analogue products that you think overlap with the idea and ask how the idea differs,
  3. If you don’t see value in the idea, tell them but do so with sound reason e.g. “I don’t think I fit the demographic for this product idea because…”, HOWEVER (and if you’re open to it) offer to be ready to receive and talk about the next idea. and
  4. If you do see value in the idea, ask how you can help.

Remember, the simplest explanation is usually the correct one.


3 Principles To Inspire Teams To Go ‘Above And Beyond’

Despite your best efforts the structures and processes used for hiring, on-boarding, developing product and driving growth for a small founding team will begin to flex and break under the strain of an expanding one.

Accomplished people and culture specialists usually have an armoury of philosophies to deal with organisational growth. Do you have a people and culture specialist in your business?

If you’re ‘high growth’ you may not. If you do there’s a good chance that their day-to-day doesn’t allow them the time to properly design and build processes to cope with growing teams because they’re too busy hiring!

And even if they do have this time, it’s not their job to create the conditions for teams to do their life’s best work. That’s our job as leaders and here are three principles that will help.

1. Once purpose and strategy is established, leaders have one job – creating more leaders.

Inspiring others in order to achieve shared objectives – this is leadership. This is as much about coaching and developing people to help them move closer to their hopes and dreams as it is about empowering team members to make high-quality decisions to achieve company objectives.

I’ve seen and led teams of different sizes and one reality has always remained true; A CEO, like leaders at all levels of an organisation, can only be effective when they have a maximum of eight direct reports. It’s difficult to focus the attention to detail needed to properly coach and develop a larger team, just ask any leader.

There are few exceptions to this rule and as a company grows quickly, the true test of the CEO and her/his direct reports is their ability to create environments where team members at all levels can be effectively coached and developed. The achievement of their hopes and dreams and the companies shared objectives relies on it.

Consider speaking to a leadership development specialist like Melissa Rosenthal if coaching is relatively new to your company. It may prove a critical first step in helping you create more leaders. By the way, you can contact Melissa here.

2. Acknowledge the employee-employer relationship is based on a dishonest conversation. And change it.

This is probably the single greatest people and culture revelation in today’s networked age. Reid Hoffman presented this in The Alliance, a book he co-authored which also presents the idea of employees and employers entering into ‘tour of duty’ agreements as a means to reframe the working relationship.

The underlying philosophy of The Alliance is extremely powerful.

In addition to helping leaders move away from today’s archaic methods used to engage with employees, it sets the groundwork for developing incremental trust between employees and employers no matter what level they enter or grow within the company. This is the essential ingredient to turning employees and employers into allies where they can develop a relationship based on adding value to each other.

3. Create a great culture through routines and rituals

Children learn through routines and rituals. Why? Because they create certainty as they start to understand what life is all about.

Routines and rituals have identical effect in growing companies. In the face of competing opportunities, resource constraint and evolving information routines and rituals provide a basis for certainty, for things to look forward to.

The idea of introducing routines and rituals is very compelling. The simple truth however is that they’re easy to craft but require stubborn tenacity to maintain. After all, life is busy and there will always be an excuse to postpone a routine or ritual. The bottom line is that once agreed, they are non-negotiable and leading by example is the only way to ensure habit is formed around each one. I’ve had positive experience with these:

All Hands — Fortnightly on Fridays with all team members

All Hands meetings are nothing new. It’s the opportunity for all team members to receive an update from the CEO and key others on strategy and operations and for team members to ask questions on any topic.

This is also the ideal setting for leaders to celebrate wins and share their thinking on scenarios if the company is undergoing a change in operating environment like expanding into new markets, acquiring a company or being acquired, to name a few.

This is a relatively simple exercise when a company is small and all team members are co-located. As this changes to include different cities and time zones, consider recording each All Hands on a platform like Zoom and publish each session on your team’s internal SoundCloud account. This ensures team members on leave can catch up on each meeting when they’re back on deck.

Head Space — Monthly on a Friday for all team members

Having time to reflect and decompress is important to each of us. The idea behind Head Space is to provide each team member with time to do whatever they want that helps them reflect and decompress and the vision is that everyone takes advantage of this unique time each month.

Everyone.

This is not like Google’s 20% time. The idea is that every team member is paid to not work for the second half of one day each month.

Obviously there may be instances from time to time when this is interrupted due to mission critical activities. If that ever happens the intent is that the company does everything it can to make up that time in the future.

How can you tell if people are taking Head Space seriously? 1. The CEO takes Head Space time and 2. There is no activity on Slack.

Stand ups — Monday, Wednesday, Friday with direct team members

I really enjoy stand ups. They’re a potent way to update each team member on work in progress at the beginning of the day. Each person has 3–5 minutes to provide an update or let a team mate know that they might need their help during the day or week.

There are some teams that do this daily, as a matter of course or when in intensive pre-launch preparation of a new product. My preference is to have stand ups on Mondays, Wednesdays and Fridays and to reserve Tuesday and Thursday to get shit done.

A closing note about “off-sites” or “retreats” where teams visit a different location to do team building activities. These are not routines or rituals. They are important and complementary but certainly no substitute for a routine or ritual. It’s a mistake to believe that big bang experiences will energise teams to ensure they stay on the same page and excited about the future beyond the short term.

By the way, this post builds on How Well Do You Know Your Team and Ever Hired An Intern?


EVER HIRED AN INTERN?

Me: Hey Kevin, quick question. On a scale of one to ten, one being ‘not at all’ and ten being ‘a lot’, how much would you say you’ve learned during your internship?

Kevin: Eleven.

This was a conversation I had with one of AirShr’s interns just before he finished up and it made my day. Kevin graduated with Honours in software engineering from the University of New South Wales, applied online for an intern role and was extremely nervous during the interview process. Since then we witnessed the development of his industriousness, sense of humour and point of view and under Opher and Luke’s expert guidance, Kevin completed his tour of duty having engineered and shipped an impressive product called Search Radio.

Joyce, another AirShr intern, joined us while studying advanced mathematics and computer science at the University of Sydney and she brought an unexpected research and prototyping capability to our business. She couldn’t thank us enough for bringing her on board. The truth is we couldn’t thank her enough for joining us!

I don’t often use AirShr to surface examples in order to make a point. This case is a little different because it highlights a practical challenge that founders often face when trying to hire interns as a means to accelerate the momentum of their ventures.

I’ve heard founders say countless times, “we’ll just get some interns”, as if 1) that task requires no more effort than flicking a switch, and 2) interns come pre-loaded with all the context, knowledge and alignment to strategy and vision required to execute on the milestones they’d be hired to achieve.

This is the strange perceived romance associated with recruiting interns. It’s true that interns are available. They’re typically motivated by an intrinsic desire to learn and gain experience or the need to fulfil a condition of study or a combination of both. However, the supply of interns in no way correlates to how many will be suited to work in your company. In other words, the strategy you employ to hiring the best talent available in terms of ‘fit’, capability and ambition must extend to how you hire interns.

Of course, internships are a different style of employment. Functionally they serve as a time-bound experience to help furnish the future talent pipeline of a company but the reality is that whilst ‘fit’ and ambition can be understood from the outset, the same cannot be said about capability. Why? Because interns usually arrive with no practical experience.

These five steps help address the issue of limited experience and help you understand if your company is intern-ready.

1. Have Coaches and Hire The Coachable

Each intern needs a coach. Period. Look around your organisation. Are your co-founders and team members good at coaching? Which is to say are the people you work effective at building trusted relationships, helping others to elevate self-awareness, and good at challenging thinking and assumptions, being supportive and encouraging to then helping others drive to desired outcomes? Besides the crucial point that a culture of coaching is essential to building a resilient organisation, if the answer is NO, then put simply your organisation isn’t intern-ready. Despite the highest levels of intelligence or motivation interns require regular coaching with teams to understand the context and receive help to focus their developing skills.

If the answer is YES, then determining if an intern is coachable is straightforward for two reasons. Being coachable is somewhat binary. You either are, or you’re not (and yes, I expect that to be controversial). The second reason is that being coachable boils down to whether a person can accept whether they are/were wrong. Understand this in interviews by exploring experiences in the interns past where they accepted they were wrong and they acted to resolve the situation. If you’re convinced of the candidate’s ability to be coached and they do start with the organisation, it’s always prudent to continue looking for signs that support initial point of view. Needless to say, discontinue the hiring conversation if you believe an intern not to be coachable. The unfortunate reality is that this issue will be problematic in the future.

2. Always go paid

If you don’t pay interns and then at some point (inevitably) they start adding value to the company, you’ve just crossed the line into exploitation. It’s as simple as that and in many countries, this is the principle that drives industrial relations law relating to paid versus unpaid work. Beyond this, there are two important and very human reasons to ‘go paid’. The first is that everyone needs money to live. If an intern is going to deliver value, help them create value in their life so they can live and have fun — simple. And the second reason is based on the old adage that you value what you pay for. An intern not receiving the coaching they need to thrive during an internship because they are a ‘free resource’ simply isn’t right. You’re wasting their time and in any case, paying an intern reminds the company that every investment should come with a return. In this case, the return starts with coaching.

3. Expect the internship scope to change

There is only so much you can learn about someone through interviews. As trust and a sense for what an intern is truly capable of become clearer, there is every chance the scope of the internship will change. This might be less true in large organisations with structured intern programs but in new ventures, this is almost always true. Set the expectation with intern candidates that this might happen. Also, be open to guidance from interns on what they think they can work on after being with the company for a couple of weeks. Kevin and Joyce came to AirShr with very different initial scopes compared to what they ended up working on (which was largely driven by them). It was a win : win, they thrived and we benefited!

4. Have an intern interview an intern candidate (if possible)

In every interview process involving high calibre candidates there comes a time when the conversation turns from interrogation to sales. The company becomes convinced there is value in the candidate joining their team and now it’s time for the company to its best to bring them onboard. This ‘selling’ often focuses on remuneration, career development opportunities and the promotion of culture and sense of purpose. It’s expected that company leaders do this each day and do it well but there is nothing more authentic than an intern candidate having a candid conversation with a future peer, intern to intern.

Obviously, this is potentially a double-edged sword.

However, if leaders have created an environment where team members are inspired to do their life’s best work, this conversation will not only demonstrate the trust you have in your intern and empower them, it will take your intern value proposition to the next level.

5. Understand how interns want to grow during their internship

I recently wrote about knowing your team which focused on understanding the hopes and dreams of your team. This philosophy applies to all team members, interns included.

One last thing...(that doubles as a red flag)

If the solution to an issue is just hire interns, the issue isn’t well understood which means the solution will be ineffective. Be real about whether you’re intern-ready or not.

Hiring interns is about creating value, for you and for them. Do it poorly and consequences await. Do this well and it’s win : win.