My Top Ten Posts of 2015

Since I blogged much more regularly in 2015, my roommate suggested I should do a rundown of my most popular posts. This got me interested to see if there are any trends in the types of posts people want to read from me. Without further ado, here is the list:

1. How To Get A Job At A Technology Company After An MBA
2. A Primer on Startup SEO
3. More On Building Effective Relationships At Work
4. The Three Stages Of Online Marketplaces
5. Scaling Up, The Three Stages of a Startup and Common Scaling Mistakes
6. The Perils and Benefits of AB Testing
7. Loyalty Marketing Part I: Strategies and Segments
8. How To Build a Marketing Team at a Consumer Technology Company
9. First to Product-Market Scale
10. The Startup Marketing Funnel

I sort of expected one type of post to dominate, but the top ten list matches the breadth of the blog pretty well, with tactical (seo, loyalty marketing, ab testing), career advice (mbas getting into tech, relationship building), and company building (marketing teams, product-market scale, scaling up). So, this tells me not to change the breadth of the blog much.

I’d like to thank you all for reading. Onwards to 2016.

Currently listening to Periscope by D’arcangelo. If you’d like to hear my top music of 2015, you can listen here.

Don’t Let Salary Negotiations Leak

If you’re managing people at your company, one thing you will have to do is negotiate compensation packages with people you are bringing onto your team. These negotiations are never anyone’s favorite activity, but they’re necessary and it’s important for someone coming into your team that they feel like they are getting compensated fairly. As a manager, this is frustrating because you generally need someone to start yesterday, and these negotiations push that start date out, if the person accepts, which they haven’t. There is a tendency of hiring managers to vent their frustration of this process with other members of the team. This is a mistake, and I’ll explain why.

If you’re not a hiring manager inside the company, someone negotiating their compensation to join feels like they’re already misaligned with you. You’re inspired by the company’s mission, you’re trying to build something great, and when you hear someone delaying joining you in that because of money, it creates a stigma that they just care about him/herself. What then happens when that person joins is they already have a stigma around them that they won’t be a team player. I have seen this happen multiple times before. What is already interesting is that this is exacerbated when the person negotiating is a woman. Women already naturally negotiate less for fear of backlash, and their co-workers prove them right when they do negotiate.

So, what do you do as a hiring manager? Do not divulge any details about the negotiation process to other people on the team. If someone asks if the person is joining, just say that you are still working on it. If that same person asks what is taking so long, say that hiring is a process, and it’s better for both sides not to rush.

What’s Your Mobile Loop?

One thing that is true about internet visitation habits and even more true about mobile visitation habits is the loop. The loop is the sequence of places you visit when you sit down at your computer or pick up your phone. What’s so interesting about the loop is how short it is for most people. With billions of web and millions of apps, most people’s loop only consist of a select few destinations. So, if you’re building an internet business, to be successful, you need to become part of quite a few users’ loops, or find a way to inject your content into the destinations that are in their loops. For example my mobile loop generally looks like this:

Gmail app (only if new content pushed there)
Feedly app
Twitter app
ESPN website
Amazon Kindle app (currently reading Sapiens)

My web loop looks like this:
Gmail
Feedly
Twitter
Quibb
Pinterest
ESPN
some niche sites for music

If you’re capable of becoming a part of people’s loop, you have what I call destination appeal. You are where people want to go to when they are bored. There is another way to have destination appeal, and that is to be very successful at branding, or to have a frequency not at the level of “I’m bored”, but still pretty high e.g. searching. I set the barrier there at monthly. For the former, Airbnb might not be in any of my loops, but it is the first place I go when I need a place to stay. For the latter, I don’t check Google unless I’m searching for something, but I search for things very frequently. See here for more musings on mobile apps and frequency.

If you are not in many people’s mobile loops, even if you can build destination appeal, you probably need to focus a lot of attention on injecting your content into apps that are commonly in people’s loops (Facebook, Instagram, Twitter, Pinterest). For some of these apps, this can be done organically, but much of it comes in the form of arbitrage i.e. paying less to be in front of users on that site than you will make from getting in front of them.

So, examine your loops. Is your company in your loop? If not, are you injecting your company’s content into your loop effectively?

Giving and Receiving Email Feedback at a Startup

If your startup is anything like Pinterest, you receive a lot of email. Sometimes, that email is feedback on the things you’ve worked on. Since email only communicates 7% of what face to face communication does (with 55% of language being body language and 38% being tone of voice), email feedback can sometimes be misread. Email feedback can be given especially directly in a way that can be hurtful to the team it’s given to, making them defensive instead of receptive, because they fill in a tone and body language that isn’t there. I liken some kinds of email feedback I’ve received to someone walking in your house uninvited and starting the conversation like this:

“Man, what’s up with your door? You need to get that fixed. Oh man, those curtains are awful. Why on earth did you pick those? Is that your wife? You could have done better.”

Startups are making tradeoffs all the time. Everything is harsh prioritization with very limited resources. Employees at startups know this because they live and breathe it. But quite often, when startup employees give feedback to other startup employees, they forget that those people have to make the same kind of hard tradeoffs they do, and that might lead to some of the issues they’re emailing feedback on in the first place.

If you’ve gotten in the habit of giving this type of email feedback, a better way to give email feedback is to ask questions:

“Hey, I came across this experience today. Is it on your roadmap to take a look at this? If now, how did you come to that decision? Is there a experiment/document that explains this because I’m happy trouble understanding why this experience is this way? Here were some things I didn’t understand about it.”

If you’re on the receiving end of harsh email feedback, there are generally two things to think about. Firstly, if the email is to you personally, what I tell myself is to divorce the content from the tone, because the tone is in my imagination. A thought out response to the details of the email and why things are the way they are may seem to be annoying, but it’s worth it. What would be even better is if you point the person to a place they can learn about these things in the future.

If the email is sent to other members of your team, long term, you want to train your team on divorcing the tone as well. If you haven’t, you might need to use the email response to defend the team. Otherwise, they think you are not sticking up for them. What I do in this case is send an email defending the decisions as well as explaining them. Then, I will follow up with the email sender in person and tell them “Sorry for the harsh email. You really put my team on the defensive with the perceived tone of the post, and I felt I had to defend them. Next time, can you word your email a bit differently so we can focus on the issues instead of the team feeling like we have to defend ourselves?”

Currently listening to Sold Out by DJ Paypal.

Building Up Respect For a Product Team

An under-appreciated challenge in a tech company is creating a new product team and building it up from scratch into a valuable, high functioning, and well respected team. Having seen it done well and done poorly, much of what will make a team successful in doing this is pretty counter-intuitive. There is a well established sequence to doing this successfully in a high percentage way. There are two key components to optimize for:

  • team health
  • organizational understanding of the purpose of the team and its progress

Team Health
Team health is about trust between the individuals of the team and confidence of the team. It’s amazing how much of this is solved by having the team collaborate on a few successful projects out of the gate. It is tempting for a team to go after a huge opportunity right out of the gate, but this is typically a mistake as the team isn’t used to working with each other and won’t do its best work on its first project.

The right approach is to find small projects that have a high probability of success to start. This gets the team comfortable with each other, and they build up confidence in each other as well as the mission of the team as they see things ship that impact key metrics. How I like to prioritize projects is to forecast impact, effort, and probability of success. These can be guesses, but ideally a new team has quite a few high probability of success projects with low effort it can start with.

If you’re a team leader or product manager building a roadmap, you should be upfront that you’re prioritizing low effort, high probability of success projects to start for team building purposes. Otherwise, the team will be itching to start on high impact projects they might not be ready for. What happens when you start with one of those types of projects is that is by definition they are less likely to succeed, and with a new team working on it, that increases the project’s probability of not being successful. If the project isn’t successful, the team starts to doubt the mission of the team in general as that was supposed to be one of the highest impact projects for the team.

Organizational Understanding
Once a team is working well together and has some victories under its belt, it is time for the team leader to evangelize the team and its mission. I have seen high performance teams not do this second step as well, and it leads to things like organizational distrust and inability for the team to increase its headcount, which then impact overall team health.

So, how do you optimize for organizational understanding of a team? This depends a lot on the culture of an organization. What’s important to remember is that you need to optimize this understanding both above you and across from you. So, this means you need to increase understanding not just at the senior leadership level, but also to other peer teams of yours. This is not easy. I advise you start with senior leadership and optimize communication for whatever the way that team works. Do they like long strategy documents? Then write one. Do they have status updates? Leverage those.

Once senior leadership has a good understanding of why you exist, you need to address peer teams. For this, you need to understand how information diffuses at your organization. If product managers or engineering managers are hubs, start there. Email them directly with your strategy saying you wanted to give them a heads up as to what is going on with your team. Send them documents. Occasionally ask for feedback even if you don’t need it. Have a notes list? Over-communicate via that. Don’t be afraid to send emails about significant wins the team has had either. You also need to remember new employees and optimize for how they learn about things at the company.

There can be a tendency to just want to move fast with your team if you’re gelling and not invite feedback from other parts of the organization. This is a mistake. Lack of clarity for your team’s role outside your team can kill your progress if you’re not careful. You need to have the entire company on board with what your team is doing, or their lack of awareness could lead to distrust or roadblocks in the future. Addressing both team health and organizational understanding is the only way to have long term progress with a team in a growing organization.

Currently listening to Bizarster by Luke Vibert.

Scaling Up, The Three Stages of a Startup and Common Scaling Mistakes

One of the biggest mistakes I’ve seen management make at startups is mis-managing how their startups scale. There are distinct stages of a startup. Early on, you prioritize speed over precision. Later on, you will trade off speed for understanding exactly what makes the numbers move. Early on, you prioritize self-managers and weed out employees that need a lot of support to be successful. Later on, you have to expand into developing people and training as most employees do not thrive being thrown into the deep end right away. I’ll talk about these stages, the right way to think about how you manage processes, teams, and rigor during these times, and some mistakes to avoid.

The Early Stage
“What are lemons? Okay, I’ll go find some.”

When you are early in a startup, you need to have a bias toward getting stuff done. Strategic thinking doesn’t matter a whole lot. You need to try things and see what works. You do not have a lot of data, so when you try things, you are looking for huge, noticeable gains in aggregate data. You’re not doing any AB testing. Your analytics investment is small, and you pay attention to a small number of metrics. Every investor question requires you to get back to them because you’ve never done that analysis before, or you don’t have enough data yet. You’re also looking to hire entrepreneurial, self-starting jack of all trades. These are people that spot opportunities and just immediately go work on them even if they don’t have much experience. They don’t ask for permission; they just go try to figure it out. Whether it’s manning the phones, pulling data, optimizing an Adwords account, they’ll do it. You use the cheapest tools you can find to achieve your needs. In the early stage, you also want to do as few things as possible, especially from a product perspective. The CEO is deciding many things on a day to day basis and manages almost everyone. The early stage is defined by a few rules:

  • Speed > Precision
  • Jack of all trades > Specialist
  • Done > Perfect
  • Focus > Breadth
  • Execution > Strategy
  • Hungry > Seasoned
  • Cheap > Robust
  • Teamwork > Process
  • Doers > Managers

The Middle Stage
“Let’s make some lemonade.”

In the middle stage, the things that were easy for jacks of all trades to cover with a few thousand visits or a few customers become impossible to maintain with more customers and more visits. So, you start to hire more specialized people, but still relatively hungry and more junior, and people are still doing multiple jobs. You bring in a few or promote some people to managers so the CEO doesn’t have tons of direct reports. The CEO isn’t aware of all the decisions being made, but keeps the company still very focused. The manager’s job is mainly to clear roadblocks for the executors, and they generally still do individual contributor work themselves. The managers handle some of the what is now cross-functional communication gaps, and put in some lightweight process to organize what’s going on. Focus is still extremely important, but you start to think about some expansion opportunities. You typically have over a year’s worth of data at this stage, so you expend some effort understanding seasonality, maybe making some projections. You have more metrics and formalize things like LTV, CPA, runway, and can generally answer investor questions when they are asked. You still mostly rely on SQL and Excel for detailed analysis instead of full dashboards or analytics suites. You do start to invest in some better tools since you have scaled beyond some of your initial choices. The new rules:

  • Speed with some precision
  • Specialist = Jack of all trades
  • Doers with some doer-managers
  • Focus > Breadth
  • Execution > Strategy
  • Hungry > Seasoned
  • Cheap and robust are more closely traded off
  • Some process
  • Done > Perfect

The Late Stage
“Screw your lemons. We ain’t going anywhere until I get 5 apples, ten oranges, and some kiwi”.

In the late stage, you have a large team, and you need full-time managers and a senior leadership team that can filter communication up and down. The CEO is approving large, strategic decisions made below him rather than driving every decision. Every individual contributor has a specialized role, is much more seasoned than before, and you’re appropriately staffed for every job you’ve prioritized to get done. You create a good amount of process to streamline work between teams. Shipping changes in product and marketing are hard to measure for effectiveness, and could have significant negative effects, so you rely on experiments to measure impact of your work and prevent catastrophe. You invest in analytics tools to easily understand the high level and detailed metrics without having to do custom work. You start to work on expansion opportunities as you max out your initial product and market’s value. You invest in sophisticated forecasts so you can understand if you’re off track and what causes are for fluctuations. You buy or build enterprise level tools to help specialists do their jobs better, whether that’s advanced analytics packages, marketing software, sales CRM systems, etc. You also start to codify specific strategies before executing instead of just trying different things and seeing what works. This is valuable to make sure you’re going in the right direction, and to build organizational confidence in different teams who don’t work so closely together anymore. The new, new rules:

  • Precision > Speed
  • Specialist > Jack of All Trades
  • Managers + Specialists
  • Breadth traded off with focus
  • Strategy just as important as execution
  • Seasoned > Hungry
  • Robust > Cheap
  • Process first
  • Perfect vs. done more clearly traded off

The Common Mistakes: Not Scaling and Scaling Too Early
The biggest mistake I see startups make is staying in the early stage longer than they should, or adapting the policies of the late stage too early. The former is typically led by the CEO. In this case, the CEO loves being hands-on and can’t let go to help the company scale. What this actually does is keep the company in the early stage and prevent it from growing. I’ve seen it happen. The best way to help the CEO realize he is entering a new stage is to have a board shepherd that process or former CEOs as mentors who have gone through this transition. It isn’t easy.

Conversely, many CEOs see what the best companies do and assume their company should do that, not recognizing the difference in stage between them. These companies invest in robust analytics and testing solutions before they have enough data to use them, hire full-time people managers too early who need to justify their existence by hiring big teams, invest in too much process that inhibits growth, and have a team of too many strategists and too few doers. Their burn rates are high, and their growth rates are low, and they typically need to raise huge rounds to continue operating. The best way to prevent companies from doing this is to have them recognize the stage they’re in and hire people appropriate for that stage. A too late stage of hire in an early company will cause massive distraction, culture shock, and an increased burn rate. These CEOs need to let the problems of their business guide them to scale up in stage, not emulate other companies at later stages. It isn’t about where you want to be, but where you are today that should judge how you run the company.

Currently listening to Hallucinogen by Kelela.

Branding Gives Your Company the Benefit of the Doubt

People tend to assume the worst, especially about companies. So, when companies screw up, and they inevitably will, consumers (and partially as a result, the press) are ready to pounce on you and your vile type of corporate evil. Every company has this moment, and some companies are more prepared for it than others. Yes, being prepared does mean having a crisis PR strategy and all that tactical jazz, but what’s more important is to have a brand people know. I’ll explain a bit why.

The brand of a company tells the consumer what it stands for, what it promises, and what it can deliver. Most companies invest handsomely in their brand and for good reason. Brand building can increase loyalty and command higher prices. But a crucial piece of brand building is that since consumers know what you stand for, and many of them have already identified with that, they give you more leeway in how you do business and when you make mistakes. Another word for this is trust. In really great brand building examples, a consumer will say, “That can’t possibly be right. I want to hear what they have to say about it.” In absence of this work, a brand is just identified as the product experience, which means when the product has issues, the brand has issues. Companies should try to elevate their brands to mean something beyond the product experience, and bad things happen when they don’t.

Brand building also crystallizes what you stand for inside a company, making your company less likely to make a strategic mistake against what you stand for. In absence of a strong brand, different departments optimize for different things, typically creating both a Frankenstein experience for the consumer, but also distrust among departments. When a core engineering team sees a new signup flow that seems particularly aggressive, they might be inclined to curse the growth team instead of saying, “I know what that team is about. Let me go talk talk to them to see why things seem amiss here.”

You can absolutely be successful without building a strong brand outside of the core product experience, but it is harder, and you’ll have more bumps along the road. I’ll give one example that comes to mind. The first is Netflix. Netflix is undoubtedly one of the most well known brands in the U.S. It is also a brand that has grown entirely through its product experience and direct response advertising. All of its marketing is tied to signing up for Netflix. Its TV ads, display ads, pop unders, etc. eschew brand building to attract direct signups. This worked very well to grow Netflix into a powerhouse, but when they inevitably made some major and minor mistakes, consumers, the press, and the public markets went after them. In 2011, Netflix announced a price increase and then after that a split of their DVD and streaming business, including a new name. Netflix is an amazingly valuable service at an incredibly affordable prices, especially compared to cable. But, because they lacked a strong brand, consumers associated a lot of their brand with the price. Furthermore, separating the two businesses was clearly a case of not having a strong understanding of their brand internally. The result: 800,000 subscribers lost in one quarter and a 77% drop in stock price.

Now, Netflix recovered from this, but it took years and a pretty radical change in strategy toward original content. While this provides Netflix more of a brand than “cheap access to tons of movies and TV shows” and pushes that branding more so to “quality content that I sometimes can’t get anywhere else”, it still associates the brand entirely with the product experience. If they go a few seasons without a hit show, or need to raise prices again, they may be in the same situation in the future.

Currently listening to Panda Bear Vs. The Grim Reaper by Panda Bear.

Entering Marketing at a Startup

With software eating the world, many marketers are deciding to enter startup organizations for the first time. CEOs, being told they need a brand, or to spend on paid acquisition or insert X marketing activity here, are trying to find marketing talent in a industry that has a dearth of it, so they’re happy to accept people from other industries or larger technology companies. Sounds like a win-win, right? Not exactly. The culture shock as a marketer from switching to a startup from almost any other type of company is hard to over-estimate. The switch chews up and spits out as many, if not more, people than it accepts. I’ll talk a bit why that happens and what marketers can do about it to be more successful.

The first thing you need to accept is that marketing is not understood as a function at most startups, and therefore it is not respected. These are organizations that have gotten to where they are without marketing, have probably never read a definition of marketing, and whose connotation of marketing is the seediest of snake oil sellers you can imagine. Starting from a position of distrust in a new position in a new company is never a fantastic option, but it’s where almost all startup marketers start. And they are not prepared for it. I remember a meeting my first week at GrubHub where one of the co-founders suggested firing me (referring to me in the third person even though I was there) to the other co-founder and just growing organically. The following week, I proposed doing email marketing to retain users after their first purchase and was met with a flat out “no, that’s not a good use of time.”

No one tells you to expect these types of barriers before you join, and many marketers never get past it. Marketer’s first instinct typically is to rely on the best practices argument. “But, every other company does this.” I can say from myself and watching several other marketers try it that it’s pretty much a worthless argument. If it’s a best practice in marketing, but your company thinks marketing is bullshit, then your argument doesn’t hold water. So, if best practices won’t work, you need to find arguments that will.

In the past, I’ve recommended AB testing with people, and I still do. In this scenario, there is one strategy that is almost guaranteed to work, and that is relying on data. Entrepreneurs live and die by metrics, and with most startups being founded by engineers, they trust data above all else. So, marketers first need to think about how they can generate data on their activities. AB testing is generally the best way, even if it’s pretty crude. The other is to write out a clear strategy. If something is a best practice, it’s because it’s logical. Breaking down the logic in detail can be the right way to help those not familiar with your craft why something is the right course of action. I prefer to write clear “because A causes B, and B causes C, and we want C, we should do A” type papers, but feel free to adopt your own style. In the email marketing example, I started sending emails manually and built the campaign up to drive thousands of orders before I proposed a technical solution again. It was much clearer the value then, and the project was accepted. In the Pinterest case, one of our marketers just started sending emails without telling people, and it’s now a significant re-engagement channel for us.

One caveat: don’t manipulate data for your own gain. This is a mistake I see many marketers make. In the absence of data, you need to work to generate reliable data, not appropriate available data to try to explain your impact in a way that is forced. For example, when you see a lift in metrics, I’ve seen many marketers jump in to grab credit e.g. “That’s because of our Mother’s Day campaign on Facebook!” when the campaign was only seen by a couple hundred people and only had a dozen likes. This further deteriorates credibility, as startup employees see through it. Only claim credit when you’re confident and have the data to back up your claim.

Currently listening to 6613 by DJ Rashad.