brianwatson:

Jeff Bezos recently published his latest Amazon shareholder letter, which discusses an interesting management tactic called Pay to Quit.

Pay to Quit is a program that offers associates at Amazon Fulfillment Centers a $2k (and up to $5k) cash bonus to quit their jobs with the goal to…

After reading Tony’s culture book I’ve loved the idea of paying people to quit.

betashop:

It has now been 150 days since Fab completed its 2013 restructuring which saw us cut our operating expenses by two-thirds and go from more than 750 employees to around 300 today.

Since then, armed with tens of millions of dollars, a great brand, loyal customers, a passion for design, an…

10 qualities of great leadership

1. They speak plainly and simply so people can understand.

This was the most common skill that these leaders look to improve. Communication skills are highly malleable. For many leaders, improvement is less about learning new skills than about using the skills they already had more often and with more people. (When we talk to groups of leaders and ask, “Who here communicates too much?” we see very few hands rise.) We have also found that when struggling leaders spend time improving presentation skills, the effort can produce an immediately payoff.

2. They make an effort to share what they know.

Poor leaders tend to be stingy with information and know-how. By sharing their knowledge more frequently and teaching people what they know how to do they can simultaneously impress and develop their direct reports.

3. They encourage others to do more and to be better.

Some leaders believe that if they minimize challenges to their team and expect less of their people, subordinates will see them as better leaders. This is wrong! Fewer challenges is the opposite of what a work group or organization needs. When leaders challenge their direct reports to do more and be better they thought they could be, the leaders are actually perceived to be better themselves.

4. They developed a broader perspective.

It’s easy for leaders to become preoccupied with work demands and internal politics and become oblivious to what’s happening in the outside world. Getting leaders to stop and look at the bigger picture can help them see potential problems sooner and focus more on strategic and less on tactical issues. This leads to constructive change and innovation.

5. They recognized they’re role models and needed to set a good example.

It frequently happens that leaders unintentionally (or unknowingly) ask others to do things they don’t do themselves. This never works. Many of our 71 leaders were surprised to discover that they were perceived as hypocritical. They learned to walk their talk (or at least to “stumble the mumble”).

6. They champion their team.

Many of our 71 leaders were also surprised to learn that their teams considered them to be the “Abominable NO man (or woman).” When they shifted from discouraging new proposals to encouraging and supporting innovative ideas and thinking, positive changes occurred.

7. They recognize when change is needed.

More generally, our successful leaders were those who learned to willingly support and embrace change, and encourage others to do so, as well. How? Essentially, by becoming more proactive — that is, by doing a better job of spotting new trends, opportunities, and potential problems early.

8. They inspire and motivate others.

Practically all of the actions we’ve already mentioned create a more inspirational environment. In addition, there were two notable things these leaders did to inspire others. First, they did a better job keeping people focused on the highest priority goals and objectives. Second, they made a special effort to stay in touch with the concerns and problems of their teams. When a leader is the last to know that an employee is having difficulties, others interpret that as a lack of concern. Providing support and assistance to an employee in difficult circumstances not only helps that employee, but also reassures others they can expect to receive the same treatment.

9. They encourage cooperation rather than competition.

Many leaders come out of school believing that work is a zero-sum game that creates winners and losers, and so they compete, in an effort to get ahead. Battles are costly and consume a great deal of resources. In the long run, internal competition causes every participant to lose. When leaders look for ways to encourage cooperation and generate common goals, they become more successful.

10. They are humble.

“When evaluating your priorities ask; are your choices emulating a manager with a team or a team with a leader.”
“Never waste people’s efforts, skills, talents or passions. They are the most valuable assets and resources you can be entrusted with.”

Every Start-Up Needs a Well-Articulated Strategy

I recommend you read Fred Wilson’s recent blog post about the need for a well articulated business strategy before pushing a particular business model.

Since Arrested Development is back, I thought I’d resurrect Gob Bluth’s answer when he was told he needed a “business model” — he quickly figured out that he was missing one so he asked Starla, the Bluth company secretary, if she would be his business model.

He then brought her to board meetings so nobody could accuse him of not having a business model.

I guess this is the ultimate definition of implementing a business model when you’re not clear on strategy!

I found myself in violent agreement with Fred’s blog post(s).

My take on his argument is this:

1. You need to first create a compelling product.

Compelling in the sense that you solve a real problem a target group of potential customers has with a product that is significantly better than the alternatives on that market.

In my opinion, no amount of clever marketing or chest beating at conferences can create a market if you don’t have an amazing product to begin with.

My most read post on marketing tips highlights this — please pay attention to tip number four — you can’t have great marketing for bad or mediocre products.

2. You need product / market fit.

Put simply — you need enough users in a segment who care about what your doing to dictate investing further in the product or in sales and marketing resources.

If you solve a deep problem for a niche user group but not enough users have the problem you won’t achieve product / market fit.

Or if you solve a problem for a big segment but your solution isn’t significantly better than alternatives — you won’t have a fast-growing, successful business. I often call this “going a mile wide and an inch deep.”

The answer to either problem may mean simply refining your product to solve deeper problems or expanding the product scope to meet a larger group of customers’ needs.

Product / market fit is everything.

I see many companies these days that just race to raise capital. They see capital raising as the success validator. Sometimes they rush to raise cash because they don’t have a well articulated product / market fit and they think having more money will help them have more time to prove the business.

I know what is going through their collective heads, “The more money I have, the more time I have to figure things out.”

True.

On the other hand, sometimes, “mo’ money, mo’ problems.”

Raise yours wisely. Spend it wisely. Figure out the appropriate time to step on the gas with more funds. There is no right answer.

***

I know that the acronyms or business sayings change over time. But the search for product / market fit has been around in various form for a long time.

A. CROSSING THE CHASM

In the 90’s, we all talked about “Crossing the Chasm" in which Geoffrey Moore encouraged us to think about solving really deep problems in a particular customer set and then using that satisfied customer set to move on to tangental markets.

The idea of “going deep” with customers has always shaped how I think. Shallow and superficial and racing from segment to segment in search of some take up has never been a strong strategic plan for me.

B. INNOVATOR’S DILEMMA

Second, I was then influenced greatly by Clayton Christensen’s work, “The Innovator’s Dilemma" in which he argued that "disruptive technology" came from companies who offered products that were significantly cheaper and less functional that the existing market and ended up capturing the needs of customers who previously couldn’t buy products due to price / complexity.

He calls this competing with “non consumption.”

It was the most profound business strategy book I had read and greatly influenced how I thought about company building and certainly how I think about investing.

I have written this up before if you’re interested — I call it Deflationary Economics.

But when you create a product for a large segment of users who previously couldn’t afford products due to price or complexity and if that product can work at “Internet scale,” you have the chance to do something truly amazing.

Like DeviantArt.

With 30 million registered users on a global basis. 65 million monthly actives. 2.5 billion monthly page views.

All totally free. It has become the largest art community on the web with huge pockets of global users who never had a website in which to express themselves amongst peers and also find ways to monetize their talents on a global basis.

C. LEAN START-UP MOVEMENT

And finally there is the most modern spin on these concepts by two individuals who have built tech start-ups and have done an excellent job at describing the process. In Steve’s case, it is “going in search of a business model.”

He wrote two legendary books, “Four Steps to Epiphany" and more recently "The Start-up Owner’s Manual.”

And Steve’s desciple (or as Steve will tell you, “He’s way past me now!” is Eric Ries who wrote the must own, “The Lean Start-up.”)

***

I think all of these great works (all must reads) scratch at the same thing — the search to solve a real problem a market has by creating features that add compelling value to your customer such that they will do what customers hate to do — change behaviors (i.e. use your product).

And in the words of my friend Bill Gross, “Your product has to be 10 times better than what exists in order to be a success.”

If you don’t want to click through to the link, I’ll tell you the answer — if you’re in a competitive market and you aim to solve problems assume you’ll have strong competitors so if you need to aim for 10 times as much innovation to end up being three times as good as the market and you need to be three times as good as the market for rapid adoption. But if you have time later — please watch video with Bill. He’s awesome to learn from.

3. Business Model

Fred’s third argument is that you need to be careful not to try and scale up your operations (sales staff, marketing, etc.) until you feel clearly you’ve achieved product / market fit.

He published another MUST READ post about being careful not to confuse early revenue traction with product / market fit.

The money quote:

One of the things I have observed over the years is that a hard charging sales oriented founder/CEO can often hide the defects in a product.

Because the founder is so capable of convincing the market to adopt/purchase the product, the company can get revenue traction with a product that is not really right.

And that can hide all sorts of problems.

That’s Sofa King true.

The Need for Strategy

It’s something I worry about with companies.

Are we winning because we create compelling marketing materials and have hard-driving sales people that get customers buying product or are we solving a deep-seated customer need?

If it’s the former, your company will definitely start to top out at some point.

It’s why I never get too excited about sales unless I can scratch the surface of the elusive “why.”

  • Why are they buying from us?
  • What are their alternatives?
  • What problem are we solving?
  • How will it benefit them financially (more sales, fewer errors, reduced customer churn, etc.)?
  • How will it save them time /drive productivity?

If you’re not solving a deep seated problem you’ll become “shelfware" and won’t have a repeatable, scalable business.

So that’s why I believe companies need a well articulated strategy. Not a mission statement, mumbo gumbo bullshity, groupthink happy clappy statement to be published on your website.

But a clear, crisp articulation of:

  • What problem are you solving for today’s users of your product? (Really. Why did they buy? No spin.)
  • What in your product is truly differentiated in the market to solve this problem? (Where do you believe you are strong against the competition in functionality or delivery? Note: This is not a statement about strengths / weaknesses in marketing. It is about product.)
  • Where do you think your customers’ needs will evolve to based on your world view of changes in the marketplace in the next two to three years? (i.e. changes in computing devices, regulations, end user adoption of technologies such as wearable computers, watching online video, whatever.)

Based on the problems you are solving in today’s customer base, your unique skills in solving these problems and where you see the market going, the big question becomes …

In which direction should your company evolve?

Admitting that you will have limited resources and strong competition both in today’s market and in the markets you want to enter is the right start of the conversation.

You need to pick wisely because whatever you do, you must do better than other people staring at the same information as you. (Also known as your competitors or future competitors)

I work with many companies.

In some — like Maker Studios — we have a very clear and shared purpose for what makes us unique, why we are growing so rapidly and where we think the market is heading (and thus how we must evolve). The team has stated it and has built metrics around key goals for future success.

At other companies, we have very strong revenue growth and an intuition on why we’re doing well but a less well articulated case for why people love us today, where we stand relative to alternative options and where we want to evolve as we perceive our customers requirements will evolve.

What I can tell you is this.

I don’t work with a single team that isn’t trying to pull together a stronger case for our strategy.

In the early days of the company, it’s ok to launch a product that you believe will solve a customer problem with a strong intuition about where the value will lie. That can be your “going in strategy” but you know it will need to evolve.

And as you know, the initial product strategies are like war plans, “they never survive first impact with real customers.”

Customer Use

That’s when you learn. That’s when you must reflect on how your customers are using your product. That’s where you must cull or refine features people aren’t using. That’s where you need to separate out your market spin from your internal reality of how customers are (or are not) using your product.

It’s why in early-stage teams I personally invest in strong teams not in strong product strategy.

I sometimes see VCs debate ad finitum about a company’s strategy. They think they know “here’s how your product will be adopted, blah, blah, blah.”

I don’t mind having the debate but a VC who thinks early on that he/she REALLY knows what is going to happen in the market his fooling him/herself. Markets decide. We simply have a ring-side seat and hopefully make our next moves based on market signals.

From customer feedback, you need to define your company’s strategy.

When you know the value of what you provide to a constituency (either your end users or somebody who will pay to interact with your end users) then you can begin to define a strong business model.

Hopefully one more scalable than Gob Bluth’s.

This post originally appeared on the blog Both Sides of the Table. 

“I don’t believe leadership is defined by the size of the team you’ve managed but the size of the challenge you’ve faced.”
“Only an individual who feels invigorated by the success of others can become an effective leader.”

What is Leadership?

I was recently asked, “What is leadership and is it the same thing as management?

I think most of people are confused to the difference between leadership and management because good management is foundational to good leadership. So much so that leadership and management often look to be one in the same.

To contrast the differences I chose to focus on just 5 of the many attributes that make up the DNA of a great leader.

Purpose

As a manager I ask “How do I get things done?” As a leader I ask “Where do I want to go?” That is the the most fundamental difference between management and leadership; the how vs. the why. As leaders, we need to know where we want to be and why we want to be there.

Integrity

The great leaders I have worked with are often good managers. However, it doesn’t automatically make someone a good leader because they are a great manager. I see the role of management as acting with ritual predictability. A see a good leadership as knowing when to challenge the rules and ignore rituals, and as importantly, when not to. Leaders place the task of “what need to be done” before the “how it is done” while always remembering the importance of “why it is done”.

Courage

A good leader will walk unknown paths with purpose and tenacity. How we face challenges and deal with uncertainty is at the heart of true leadership. Leadership requires courage and courage is the highest form of leadership, no matter where it is exercised.

Simplicity

We are facing an increasingly complex and interconnected world. Cutting through complexity, reducing questions down to the essentials and providing orientation is how leaders establish and communicate purpose. I believe that an unrelenting quest for simplicity is key. It is though plain and simple language that people find purpose and a reason to follow.

Calmness

Technology has speed up the pace of decision making. Because the speed of life has increased for everyone, as leaders, we needs to be careful to not replace sound decisions with just quick decisions.

This post has made the rounds over the last week. I expect most everyone who is connected has read it. Still, it is good enough that I wanted to pass it along as well.

In summary, Mike Kane outlined 5 key attributes of successful entrepreneurs. They are:

  1. Vision. 
  2. Confidence.
  3. Work Ethic.
  4. Self-reflection.
  5. Willingness to change course.

In my opinion these are all core attributes of faith. Not the religious type of faith that conjures images of radical intolerance often associated with the media’s portrait of faith.  It is the simple kind of faith exemplified by people such as Gandhi, MLK, Steve Jobs and even George Washington.  

They all had the ability to sell a shared vision of something new on the horizon. The courage to face the long road ahead. The work ethic to tread that challenging road of change. The introspection to recognize when the road continues on and when the road turns . Finally the ability to put pride aside and accept when road dead ends and backtrack when so much has already been invested. 

The leaders and visionaries who express such qualities are very rare indeed. It takes a unique person to be the first to walk a road when there is no road.