Harvard Innovation Lab Guide to Building an Enduring Startup

Harvard innovation lab : Michael J Skok : Startup Secrets : Company Formation
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#innovationlab @mjskok #startupsecrets www.mjskok.com
STARTUP
SECRETS
MICHAEL J SKOK
An insider’s guide to unfair competitive advantage
Hi Harvard innovation lab
Company Formation:
Building an Enduring Company
twitter: @mjskok mjskok.com
North Bridge Venture Partners

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Company Formation
• Agenda:
“Foundations for Building an Enduring
Company”
– Vision
– Culture
– People
• Hiring - our deeper dive for this class …

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Why?
Many, many reasons. Simplified:
• Ideas are worth little to nothing without…
– People to execute
– Culture to select the right people & empower them
– Vision to attract, retain & unify all stakeholders

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Value
Prop
Building an enduring company:
Startup

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Value
Prop
Peopl
e
Startup

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Value
Prop
Peopl
e
Executio
n
Startup

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Vision
Value
Prop
Peopl
e
Executio
n
Enduring
Compan
y
Startup

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Listen
Learn
Lead
Iterate
Pivot
Vision
Value
Prop
Peopl
e
Executio
n
Takes more than LLLIP service
Enduring
Compan
y
Startup

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Vision
Value
Prop
Peopl
e
Executio
n
Roadmap…
Cultural Consistency Enduring
Compan
y
Startup

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Simplification
Value proposition
Vision
People / Team
Culture
- starting point
- to aim for
- basis for execution
- underlying enabler

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Vision
Value
Prop
Peopl
e
Executio
n
Agenda: Vision / Mission
Compan
y
Startup

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Vision
• How the market will evolve?
• How will you will lead it?
• What is your roadmap?

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Mission
When your vision is fulfilled…
• Inspiring statement of intent
• Motivational driver to aspire to
“to organize the world's information and make it
universally accessible and useful”

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Roadmap
• Bridges your Value Prop and Vision / Mission
• Describe the road ahead and how you
imagine your journey
• What are the tangible steps?
• What are key Milestones along the way?
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Enduring
Compan
y
Agenda: Culture
Vision
Value
Prop
Peopl
e
Executio
n
Cultural ConsistencyStartup

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Why is culture important?
• Hundreds of decisions below the radar
• Dissipation vs. concentration of energy…

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Learn from the best?
FORTUNE Tech top 5
– Google
– SAS Institute
– NetApp
– Zappos
– DreamWorks
Impact
of
Culture
?

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FORTUNE Tech top 5
– Google
– SAS Institute
– NetApp
– Zappos
– DreamWorks
Culture
Impact

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FORTUNE Tech top 5
– Google
– SAS Institute
– NetApp
– Zappos
– DreamWorks
Culture
Impact
100 Best Company List
consistently outperform
major stock indices by
300%

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Culture
• Beliefs
• Values
• Guiding Principles

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Culture: Guiding Principles
• Example questions for you to ponder your
culture:
– Does the customer come first or your people?
– Do you judge yourself by results or effort?
– Management - is it a role or a hierarchy?
– How do you solve problems?

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Commyounikation

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How do you communicate?
• Formal / informal, cadence?
– Water cooler, Standup Scrums, Town Hall
• Plans, Progress, Results
– Do you have a Common Language eg
• VMGOSPA
• Acquia – GDP

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What do you celebrate & reward?
• Sales !!
• Marketing !
• Engineering
• Services ?
• Admin ??
• And HOW?
– Management and / or peer?
– Public or private

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Culture: Values
• Examples:
– Empowerment, enablement
– Proactive honesty and openness
– Respect
– Integrity
… what are YOURS – authentically?

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Startup Secret: Culture
• Comes from YOU
• Comes from the top
• Is modeled
CultureStartup Enduring
Compan
y

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Startup Secret: Culture
• Comes from YOU
• Comes from the top
• Is modeled
• Is valued by consistency
Cultural ConsistencyStartup Enduring
Compan
y

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Can culture have a physical
manifestation?
• Yes!
– Office layout
• (open plan vs. cubes vs. offices)
– Founders wall
– Mascots
– Etc

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Acquia
Acquia Ranks as the No. 1 Software
Vendor on the 2012 Inc. 500
“One of the hottest companies
on the planet” - VentureBeat
2012 “Best Places to Work” –
Boston Business Journal

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Acquia’s culture…
http://www.youtube.com/watch?v=XZm7Q71F83U

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Culture
• Define it early, authentically, thoughtfully so it
can endure
– Try to find things to reinforce it, rather than change
it
• Should be consistent
• Even when you’re
– Pivoting your business
– Making acquisitions
• It’s a good test for whether the acquisition is a fit…

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Vision
Value
Prop
Peopl
e
Executio
n
Agenda: People
Compan
y
Startup

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People
• Specifying
• Finding
• Hiring (our focus in this workshop)
• Developing, coaching, mentoring
• Retraining
… when things don’t work out ?

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Hiring
It’s all in the listening…

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Hiring
• EKS: Experience, Knowledge, Skills
• IQ: Intelligence Quotient

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Startup Secret: Hire for CQ
• CQ: Cultural Quality
– FIT with your values etc
“the fit between personalities was so much more
important than just finding people who were very
good” Dick Costolo, CEO Twitter
Wasserman, Noam (2012-03-25). The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup
(Kauffman Foundation Series on Innovation and Entrepreneurship) (p. 216). Princeton University Press

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Startup Secret: Hire for CQ do QC
• CQ: Cultural Quality
– FIT with your values etc
• QC: Quality Control
– Is each hire Additive or Dilutive?
– Is each hire Multiplying or Dividing culture?

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Hiring A+ players
• What does that really mean?
• How can you apply it in practice?

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Startup Secret: Hire 3As
• Attitude
• Aptitude
• Ability
Attitude
Aptitude
Ability

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Startup Secret: Hire 3As, 3+s
+ Aware (self)
+ Authentic
+ Athlete
Attitude
Aptitude
Ability

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Hiring:
Ultimately, assess 3 key things …
Can they be successful at the
job?
Will they really love the job?
Will they fit and reinforce?
EKS IQ
CQ
Attitude
Aptitude
Ability

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Hiring:
3 key things lead to the “Golden Triangle”
Can they be successful at the
job?
Will they really love the job?
Will they fit and reinforce?
EKS IQ
CQ
Attitude
Aptitude
Ability

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Hiring: The tools
• EKS
– Resume
• Interviews
• IQ
– Proof, eg
• Problem solving
– Eg Engineers – code
• CQ
– Interactions, observation
• Trust the process
EKS IQ
CQ
Attitude
Aptitude
Ability
REALReferences

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Example Interview Questions
• EKS
– What is the most relevant experience, knowledge
or skill you bring to this job?
• IQ
– What is your favorite example of a problem you’ve
solved?
– How did you solve it?
• CQ
– What have you most enjoyed in your previous
jobs?
– What do you value most?

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My first interview question?
What are you passionate about?

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My first interview question?
What are you passionate about?
– sometimes my ONLY question!

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Summary – Hiring
• Hire for CQ: Cultural Quality of fit
– Do QC: Quality Control for additive vs. dilutive
• Look for 3As: Attitude, Aptitude, Ability
+++ Aware, Authentic, Athlete
• Golden Triangle
– All the above: confirm they love it,
will be successful and fit

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2 practical startup hiring tips
Because I hear these questions all the
time…

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Tip 1: hiring known quantities…
Just hire people you know & have worked well with
in past?
YES
– proven teaming, fit
NO
– every situation is different
» “vs. it worked like this in the past!”
– diversity of background can be good
» “think different”

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in past?
YES
NO
“startups that relied relatively heavily on the founders’
personal networks received valuations that were
37% higher than those received by startups that
barely tapped the founders’ networks”
Wasserman

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in past?
YES
NO

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Tip 2: balance youth and experience
Youth or Experience? YES!
Youth what’s possible?
+
Experience what to consider
=
Success balance

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+
=
Success balance

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+
=
Success balance

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+
=
Success balance

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Acquia: Hiring
• Create great reasons to work at Acquia
• Internships & Acquia U
• Fun environment & great benefits

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• Wherever possible, and particularly early on,
choose ALL your stakeholders carefully
– Employees
– Customers
– Partners
– Investors
Startup Secret:
Choose ALL your stakeholders

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Team …

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Teaming
• Self awareness:
– Strengths
– Weaknesses = areas to get Team support
• Openness
• Willingness to learn
• Give & Receive Constructive feedback

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Acquia:
• Foundation to build amazing teams:
– Emphasis on cultural fit
– Diverse experiences & skills
– Competitive by nature
• Structuring Teams to maximize output:
– Sprints
– GDPs (cross-functional)

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Startup Secret: Teaming
“Building a great company is not a
sprint,
it is a marathon.

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Startup Secret: Enduring Teams…
“Building an enduring company is not a sprint,
it is a marathon.
Work as a team and you can win it in stages,
as a relay”

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FORTUNE Tech top 5
Google
SAS Institute
NetApp
Zappos
DreamWorks

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FORTUNE Tech top 5
Google
SAS Institute
NetApp
Zappos
DreamWorks
100 Best Company
List consistently
50%
Less turnover
100 Best Company
List consistently
50%
Less Turnover

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Vision
Value
Prop
Peopl
e
Executio
n
Summary:
Building an Enduring Company – it’s all possible
Compan
y
Startup
Listen
Learn
Lead
Iterate
Pivot

Hi
69
START UP
SECRETS
MICHAEL J SKOK
An insider’s guide to unfair competitive advantage
Hi Harvard innovation lab
Company Formation
twitter: @mjskok mjskok.com
North Bridge Venture Partners

Harvard Innovation Lab Guide to Building an Enduring Startup

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