5 tips on managing teams

June 4, 2010

Many founders struggle through product development, fundraising, sales, and team building and think they’ve got it made. But when it comes time to lead and manage the troops, they find themselves clueless. Here are a few tips to consider:

1. Leading and managing are different. Leading is about sharing your vision for the future, and getting your team motivated to make it happen. Managing is about making sure everyone is doing what they should, the way they should, on a day-to-day basis. Every company needs both. That said, some founders are great at both, while others find they are better at one than the other, and a partner or key lieutenant to fill in the gap.

2. This is not something you can outsource. As a founder, you MUST be involved in leading, managing, or both. One of my clients loves to sell but hates to manage. The minute she gets to the office, she closes her door and picks up the phone. She lands a lot of customers, but not without a lot of headaches. Her operations aren’t running as smoothly and efficiently as they should. Several top employees recently left for other jobs. And she’s even missing new business opportunities because she’s not on top of the details of what happens on the front lines. My advice to her: Find a great person to run operations, and manage employees. Add visionary leader to your role. Go to every staff meeting and fire up the troops, sharing your view on where the business is going.

3. Get the right talent in place. Marcus Buckingham wrote two books on management I recommend, both based on information gleaned from The Gallup Organization’s study of over 80,000 managers. In Now, Discover Your Strengths, Buckingham argues that people in business should put themselves in roles where they can take advantage of their natural talents. Instead of trying to fix their weaknesses, however, they should assign responsibilities to others who have the right stuff. Keep his advice in mind as you screen new hires and assign roles.

4. Give your people what they need to excel. In another book entitled First, Break All the Rules, Buckingham explains that employees reporting to great managers answer yes to the following questions:

  • Do I know what is expected of me at work?
  • Do I have the materials and equipment I need to do my work right?
  • At work, do I have the opportunity to do what I do best everyday?
  • In the last 7 days, have I received recognition or praise?
  • Does my supervisor seem to care about me as a person?
  • Is there someone at work who encourages my development?
  • At work, do my opinions seem to count?
  • Does the purpose of my company make me feel my job is important?
  • Are my co-workers committed to doing quality work?
  • Do I have a best friend at work?
  • In the last six months, has someone at work talked to me about my progress?
  • This last year, have I had the opportunity at work to learn and grow?

If your employees feel the same way, you’ll probably find they do better work, share positive views of the company, and stick around for the long haul.

5. Look in the mirror. In Good Boss, Bad Boss, and his blog post here, Stanford Professor Robert Sutton makes a compelling case for the way good managers think:

  • I have a flawed and incomplete understanding of what it feels like to work for me.
  • Having ambitious and well-defined goals is important, but it is useless to think about them much. My job is to focus on the small wins that enable my people to make a little progress every day.
  • One of the most important, and most difficult, parts of my job is to strike the delicate balance between being too assertive and not assertive enough.
  • My job is to serve as a human shield, to protect my people from external intrusions, distractions, and idiocy of every stripe — and to avoid imposing my own idiocy on them as well.
  • I strive to be confident enough to convince people that I am in charge, but humble enough to realize that I am often going to be wrong.
  • One of the best tests of my leadership — and my organization — is “what happens after people make a mistake?”

Got a tip on managing? Please share.


4 tips on building an advisory board

June 4, 2010

This week, two UpStart coaching clients told me the same thing:  “It’s great having someone to help me think through tough issues.”  One is based in the middle of Manhattan; the other on a remote Pacific island. But they both effectively said “it’s lonely at the top.” Even the greatest athletes need coaches. The same is true for founders. That’s why I recommend that founders build advisory boards.

1. What an advisory board is, and isn’t. Don’t confuse advisors / a board of advisors with directors / a board of directors. As a CEO, the board of directors is your boss. Directors take a formal role in overseeing the business, often representing shareholders, approving budgets, and deciding who should act as CEO. In contrast, advisors work for the CEO. Advisors provide feedback, advice and introductions to investors, customers, and business partners – as needed.

2. Who to put on your advisory board. To establish an advisory board, start by picking three to five areas where you really need help. Maybe you want a person who has a “golden Rolodex” of industry contacts, another person who is great at sales, and/or a person with expertise in an area where you are weak, like finance or marketing. Then come up with a list of dream advisors in each group, and network your way to them. Make sure each advisor is the kind of person who will enjoy sharing her expertise and helping you build the business from the sidelines as a mentor or coach.

3. How to structure advisory board deals. Be specific about the role you want each advisor to play, and the amount of time and type of assistance you will want from then. I typically tell advisors I’ll need them to put in about one hour per week on average. In exchange for their help, I grant advisors equity options in the range of one percent of the company, vesting over three to four years. As always, run advisory board deals by your lawyer and accountant.

4. How to work with advisors. Advisors can function both as specialists and generalists. Give individual advisors specific requests for assistance (e.g. please see if you can help me get to the CEO of customer X). Then schedule a meeting or call at regular intervals (e.g. once per month or quarter), and use it as an opportunity to get feedback on general issues, like opportunities, threats, and major decisions. Keep in mind, you don’t have to follow their advice (but if you don’t, explain why).

Mo Koyfman interview: Startup teams

May 19, 2010

Moshe “Mo” Koyfman is a principal at venture capital firm Spark Capital, where he leads investments in Web services such as www.aviary.com. Prior to joining Spark, Mo spent six years at IAC, most recently as Chief Operating Officer of Connected Ventures, parent of CollegeHumor.com, Vimeo.com and BustedTees.com. Mo is a graduate of The Wharton School and The College of Arts & Sciences at The University of Pennsylvania.

UpStart: What do you look for in a startup team?”

Mo Koyfman: “A great team is the first thing I look for in an investment opportunity. Successful businesses are built by extremely talented people and that’s where my investigation begins. I specifically like to see great co-founders, as there seems to be a unique chemistry that develops with the right mix of leadership at the helm. If technology is an integral part of the product, I also like to see at least one of the founders with a strong technical background. It’s certainly ideal if they’ve had prior success, but not a prerequisite. And it’s important that they’re still hungry, no matter how successful they’ve been previously. I also look for a balance between tenacity and passion on the one hand and a willingness to listen and learn on the other, as many mistakes will be made and the company will undoubtedly have to hear their users / customers and pivot over time.”

UpStart:  “What do you like to hear from a team when they present their business plan?”

Mo Koyfman: “First, I like a business plan to be clear, informative and brief. If your PowerPoint is more than 20 pages, you haven’t done a good enough job of crystallizing your plan. In the team section of the plan, I like to know how the team came up with the idea. I tend to prefer ideas hatched from real needs, as opposed to ideas developed in top-down brainstorm sessions. I also like to know how the team knows each other, to get a sense for their shared vision, and to understand how their skills are complementary. I also prefer when teams come with a built product rather than just a plan—particularly for Internet service companies, where it’s become easier and cheaper to build basic products right out of the gate. I like to see a team scrappy enough to have built a prototype themselves, with the least amount of money possible.”

Tommy Hilfiger interview: Team, team, team

May 19, 2010

Tommy Hilfiger is the founder of Tommy Hilfiger Corporation. An entrepreneur from his earliest days, Tommy skipped college to run a string of retail stores in upstate New York. He later turned down highly sought-after fashion design job offers to start a company of his own. In 1995, Tommy was named Menswear Designer of the Year by the Council of Fashion Designers of America. Three years later Parsons School of Design named him Designer of the Year. By 2004 Tommy Hilfiger Corporation had over 5,000 employees and revenue of more than $1.8 billion. Private investment company Apax Partners acquired the business in 2006.

UpStart: What does it take to be a great entrepreneur?”

Tommy Hilfiger: “I think skills and personality traits are more important than background. I never went to college or design school, but I had passion, drive, and resourcefulness in droves. When I launched Tommy Hilfiger Corporation, I wasn’t trained in the conventional rules of business, but that worked to my advantage. I experimented. I made bold moves. And I adapted as I learned. I credit much of my success to my drive to win and my fear of losing.”

UpStart:  “To what degree was your team responsible for your success?”

Tommy Hilfiger: “I’ve always been aware of my strengths and also my weaknesses. Because I acknowledge my weaknesses, I’ve been able to surround myself with people whose skills complement mine. Building great teams has been essential to my success.”

5 tips for finding the right partner

May 6, 2010

Taking on the right partner can make or break a startup. Here are a few questions to ask yourself and your potential partner:

1. Goals and commitment levels. What do you each of you hope to get out of the business, financially and otherwise, over the short term and the long term? Do you need to get paid? How much, and when? Are you shooting for a big payout upon exit? What would make you happy? How much time are each of you willing to commit to the venture? What are your goals for work-life balance? How much travel are you willing to do? Are you prepared to make investments, or take on personal debt to finance the business?

2. Baggage. Have you been in partnerships before? If so, what worked out well for each of you? What failed? What baggage are you each bringing to the potential partnership as a result? What would previous partners say about you?

3. Strengths and weaknesses. What are each of your talents? Where are there gaps in your skill sets and experiences? Are there classic tradeoffs in your skills? For example, a product developer who is great at building, but poor at selling, or great at producing quality products but not so great at hitting tight deadlines? How about a sales-oriented person who is great at closing deals but not at delivering results for customers? Being aware of these differences can be helpful. Identifying deal-breakers before it’s too late: Priceless.

4. Workstyles. How do each of you like to lead and manage? Do you prefer doing or delegating? Would you rather work with large teams or small teams? What types of people do you like to work with? How do you handle conflict? Do you confront it directly, or let it fester until it blows up? Do you have issues that light your emotional fuses? Blind spots that get you in trouble from time to time? Have you taken the Myers-Briggs test, or an equivalent (e.g. humanmetrics.com), and compared your results?

5.Trial runs. Have you worked together in the past? If so, what went well and what didn’t? If not, can you find an opportunity to do a consulting project together? Can you work together on a temporary basis to see what it’s like before you commit for the long-term?

Got tips for finding the right partner(s)? Please share.

5 thoughts on whether to take on a partner

May 6, 2010

Deciding whether to take on a partner is one of the toughest choices a founder can make. Having recently gone through the process, I thought I’d share some tips (Note: I’ll get to how to find the right partner in an upcoming post):

1. Two beats one. Many founders choose to go it alone, at least at first (see below). Then again, adding a partner to your startup has many benefits. Two partners have more contacts, which can lead to more investors, employees, and customers. Likewise, two partners may have more cash, or at least more credit. Two founders working for free can get more work done, faster, with less cash outlay for employees or vendors. Lastly, don’t discount the softer side of partnerships. Startups are emotional roller-coasters, and having a partner can smooth out the loopdy-loops.

2. Consider a warm-up. Startups rarely find success with their initial strategies. More often, they switch to a “plan b” along the way. That means the ideal partner today may be dead-wood tomorrow. I’ve found it helpful to go solo for a few months. That gives me a bit of time to get feedback on my idea, tweak my strategy and approach, and then zero-in on what I really need from a partner.

3. Take stock. What are the major tasks that will be required to operate the business once it’s up and running (Note: Don’t make the mistake of choosing a partner to help with work you’ll only need to get started)? Are there logical groupings of those tasks, like one person selling and another executing? While two person teams tend to be easier to manage than three, you might find that there are three logical groupings of tasks, such as with an ad-supported website (One person gets people to the site, another generates content, and a third sells access to marketers).

4. Mind the gaps. Which of the logical task groupings are you best-suited to oversee? Once you carve those out, what gaps are left?

5. Profile your co-founders. The most common partnership mistake I see is when people choose their friends or relatives as partners, just because they are available. That leads to mismatches in skills/roles, goals, motivations, etc. Instead, follow the process above, and use it to develop a profile of your ideal founder, the way you would develop a job specification. Then go out and find the right person for the role.

Got tips of your own for founders deciding whether to take on partners? Please share.

Startup Diary: Entry 4. I think I’m gonna need a bigger boat.

March 10, 2010

About two months ago, the thought hit me like a frying pan over the head: I needed a partner to help me build and run my school for startups. At the time, I was managing six freelancers, each in a different state. I was bootstrapping, so I had taken a pass on the expensive project managers, and I was running everything myself.

But tasks were slipping through the cracks. There were just too many details, many of which were outside of my primary areas of expertise. What I needed was a Mr. / Mrs. Inside to my Mr. Outside. Someone to run product development and operations. Someone who had done it before, and done it well.

Deciding you need a partner is of course only part of the challenge. Next you have to find someone with the right stuff, make sure you are a good fit, negotiate a deal, and learn to work together well. Over the next few posts, I’ll explore each of those issues.

Got any tips or stories about partnering? Please chime in.