Tag Archives: management

Buffing, Nerfing, and OP: What Video Games Can Teach Us About Talent Management

One of the more interesting, but less talked about, dynamics in the video games industry in the last few decades is that the product they initially ship to customers is no longer the final product. Because of online connections via mobile phones, PCs, and consoles alike, video game creators can push constant updates to their games to make them better over time in response to real-time player feedback and behavior. This makes their approach to development much more like other software in that it can be more agile and less like producing a film or a piece of hardware.

Like any change in the video game community, gamers notice, and a whole lexicon has been created based on these new abilities of game developers. One of the more common genres of video games that receive these changes over time are fighting games and shooters. If you grew up pre-internet like me, then examples include Street Fighter and Mortal Kombat and GoldenEye. If you’re, the youth, as they say, then you might be more familiar with Overwatch, Fortnite, and Call of Duty.

What these franchises do now is ship their initial products, watch the community play, and make adjustments over time. As the community plays, players and developers notice that certain characters or items are incredibly powerful, perhaps more so than the developers intended, or they change the game in some unexpected way. The community deems these OP for overpowered or OD for overdone/overdosed.

Before game developers could update their games over the air through the internet, that would mean certain characters would stay overpowered and make games lopsided if you didn’t use those characters. Players would create rules to adjust for these issues, like not allowing anyone to play as Oddjob in GoldenEye, or just blaming losses on your friend using a “cheap” character.


Oddjob was considered OP in GoldenEye because he was smaller than other characters, making him harder to hit.

What developers now do is notice these patterns and update the games over time to re-balance the game. When this occurs through over the air updates, serious gamers read through the patch notes to figure out who has been buffed and nerfed. Buffing is when a character or item is underpowered, and the developers do something to make it stronger. Nerfing is when a character or item is overpowered, and the developers do something to make it weaker. When these patches occur, the power dynamics change overnight in the game, leading to a lot of players trying new characters to see who they can gain an advantage with. This also can extend a game’s lifetime because it forces people to try new things in the game.


Cassie Cage was nerfed in the first major update to Mortal Kombat 11. Holy graphic improvements, Batman!

I find the concepts of buffing and nerfing fascinating and incredibly relevant to organizations, where employees are the players. All organizations are going to, intentionally or unintentionally, overpower people or areas of the company over time. Organizations need more tactful ways to adjust when these mistakes occur, and the buffing and nerfing of the video game industry is a concept I think can be applied successfully to organizations in this case.

So, how do founders and executives get good signal as to the current dynamics of their “players”? Video game developers watch play data and observe the community. Founders and other executives don’t usually have the same analytics video game developers have, so they need to rely on qualitative signals. Many organizations use business results and culture surveys as a signal into organizational success, and use performance reviews, 360’s, 1:1’s, calibrations, skip levels, Q&A’s, and all hands to build even more signal. If you’re not doing any of these today in your organization, start. Organizations usually know how to use these tools to identify who is doing well and needs to be buffed, and this can result in more scope, more resources, or official promotions. But our tools for nerfing are incredibly crude today, so I’m going to talk more about how to effectively nerf in an organization.

How To Execute a Nerf — Conditions for Play

One thing I want to call out about being overpowered. This is often the failure of an organization, not an individual or a team. We tend to treat OP situations in companies as a failure of the employee or team because it’s a lot easier, and we have mechanisms for those situations, such as demotions and firings. And this is typically the way organizations fix OP problems. To do a nerf effectively requires an organization to understand that it failed in structure or talent management, creating the OP situation. Talent management doesn’t just include performance management, but mentorship opportunities and career pathing. Only then, can it think about using these nerfing tactics effectively.

Nerf Tactic #1: Change the process

One way an employee or team becomes OP is because they manage a key process in some way that gives them undue influence over others. The easiest change then is to change the process to re-balance some of that power. In order to understand how to do this, you need to a) understand the process and b) understand the failings of it according to others. When members of your team that are OP manage a process, they seldom see the flaws in it because of how much control it gives them. So you have to seek out different people’s opinions in the organization as to what is going wrong. A signal that revisiting a process may be a good solution is when other senior team members complain, or if they have enough power, start opting out of certain other processes.

Nerf Tactic #2: Change the structure

Another way an employee or team becomes OP is the structure itself. This tends to happen when functions are grouped. For example, if a GM also has control of sales and marketing, they may become OP. Or if your CMO owns customer service, they may become OP. Neither of these are bad if they occur, but they may end up giving that executive too much power, so they can bully other teams, or they may not be as effective at managing either the scope or the function they’re less familiar with. In this case, the easiest path is to separate these functions or create more dotted line ownership to re-balance the teams.

Nerfing Mistakes to Avoid

#1: Don’t Wait Too Long to Nerf

The longer a power balance is allowed, the higher the chance that the organization will blame the strife on the person/team that is OP rather than the structure itself. Even when that person or team is nerfed, animosity will remain that may make the organization not want to work with the person or team, and continue to impair their performance. When you wait too long to nerf, you’re effectively destroying people’s careers in your organization, which may lead to them leaving. The worst situation is when you have to let go of someone who could have been great with a less powerful scope, but you waited too long to do it. In this case, firing or radically moving the person to something else is the only option.

#2: Don’t Change Titles When You Nerf, Especially Downward

As I said earlier, the most common way organizations nerf today is through demotions, which implies the employee failed instead of the organizational structure. If you absolutely have to change titles because the scope change is that significant, I prefer keeping the level the same, just changing the functional name of the role. Say, for example, you have a Director of Strategy, and they became OP, but you want to retain them. Changing their title to Director of Competitive Research is better than changing their title to Manager, Strategy. Why is this? The demotion indicates failure not only to them, but the rest of the organization. These people usually exit their organizations shortly after the demotion.

Organizational Mistakes That Prevent Effective Nerfs

#1: Inflate Titles

I was talking with a startup recently who hired someone to be their first product manager. They had made a mistake that happens commonly in startups — to make the role attractive or to reward performance once in the role, startups inflate the role title (to be more senior than what that role means on the market). One common example is calling your initial Product Manager a VP Product, or worse, a Chief Product Officer. When the company grows 3x and you’re now asking that product manager to manage people for the first time, these people frequently aren’t ready. Then, in order to fix your organizational mistake, you either have to change their title, which will look like a demotion to them and the organization to hire someone more senior, or try to seek out on the market effective mentorship for them to scale up their career progression faster than is normal.


In the words of Keith Rabois: Wrong.

It’s enticing to inflate titles to make people happy or to attract talent, but it removes your ability to nerf without demoting. In practice, I like to reserve C level titles for public companies and VP titles for managers of managers, though I will be the first to admit that impact is not defined by the number of direct reports. This is not always possible with companies that need their employees to do a lot of external to company work. “Head of” is a happy medium startups are starting to use, but it can still feel like somewhat of a demotion when that title is converted to, say, a Director, when a VP is hired.

#2: Confuse Being OP and Poor Performance

I want to be perfectly clear: do not nerf for poor performance! You nerf when someone was performing well, and a process or scope changed to unintentionally give them too much scope. If you have a good CMO, and you ask them to take Customer Service, and they don’t manage it well, you still have a good CMO. Change the scope, not your performance management strategy for the CMO.

What if you promoted someone to a new level, and they are not meeting it? Well, that is not following performance management best practices. You should be promoting someone when they are already performing at the next level for some time, which eliminates the risk of overpowering them. This is why you want to have career guides with clear levels and expectations for them, so you promote only when it is appropriate. Hired someone at too high a level? Do not nerf; demote or fire. Yes, they will most likely leave, which is why you want to be careful about the titles you give just based on interviews and not actual job performance. What if you have a big hole to fill in the organization and have to do it internally with someone who hasn’t demonstrated all the skills necessary? It happens, but recognize this should be more of a last resort situation.

What about people who move into new roles where they are not effective? This is also a situation I prefer not to have happen. I much prefer creating apprenticeship programs within organizations where individuals try the role for a while before they are permanently placed in that role. Apprenticeship is therefore the evaluation of whether the person can meet the expectations of the role. I recognize this is not always possible, but it’s a sound strategy nonetheless. We do this in product management at Eventbrite today. Those in other parts of the organization in good standing with their manager can work with a product manager on a project to see if they like it, and for the organization to see if they would be good at it.

Nerfing Best Practices

#1 Take the Blame

If you are nerfing an individual, it’s important to make sure they don’t feel like it’s a demotion. When announcing the nerf to your employee, make sure they know the reason for the nerf to occur, and that it is your fault, not theirs. You gave them too demanding a scope, and you’re fixing it. If you’re nerfing a team, this is usually less of an issue. Also, make sure that others in the organization that were affected by the OP individual or team know that you believe this to be your fault, and they should not hold animosity toward the individual going forward.

#2 Thank the Individual You’re Nerfing

Whether the change that made the individual or team OP was intentional or not, thank them for their effort to help the company, and say that the nerf is a way to make sure they can create a positive impact for the company with the right scope. People should not be penalized for trying to step up for the organization.


I think it’s incredibly important to manage performance of people and organizations. The gaming community has created a vocabulary that provides a solid analogy with corporations, allowing us to separate performance issues from structural mistakes. The more companies can separate those issues from each other and use different tactics to manage them, the stronger those organizations will be.

Currently listening to my 2019 playlist.

Thinking Outside the Job Title Box: How to Thrive in Undefined Roles

As a leader of a large team, the members of my team tend to have pretty well-defined roles, like designer, or product manager, or researcher. They also tend to interface with other employees of the company with pretty well-defined roles like engineers, analysts, data scientists, etc. Now, most of the time, these well-defined roles operate in cross-functional teams. But, what if you don’t operate within one of those roles, or don’t want to fit the mold of these well-defined roles? How do you work with teams? To answer that, it may first be helpful to understand how these teams form.

“In the beginning, there was an engineer.”

Most startups begin with an engineer building something from scratch. As the company scales, usually a designer is added next. Then, as keeping track of projects between the designer(s) and engineer(s) becomes onerous, a product manager is added. Then, as the team scales and problems become harder, the product manager and engineer(s) don’t have enough time to fulfill the analytical needs of the team, so they hire an analyst. Then, keeping up with users becomes too time consuming for the designer or product manager, so they add a researcher, etc. This is an overly simple example, but all cross-functional teams grow larger as the company scales, with more specialized roles over time. One issue you may have if you don’t fit into this model is that you want to perform a more specialized role than the company has scaled into needing yet.

The opposite can also be true. You may want to do bits and pieces of a well-defined role, but not all of it, or may want to combine some elements of a few different roles into your job. Either of these situations can be totally fine. But each require a more tactical, subtle approach to working with teams than fitting within well-defined roles. When people outside of the cross-functional teams want to work with these cross-functional teams, they frequently perceive friction. They interpret this as political, when in fact, it is structural.

By definition, when you don’t have a clearly defined role to others, they do not know how to work with you. The onus is on you to prove value so that they want to work with you, because they don’t have to. Usually, my advice when people come to me with these problems is to switch to a more defined role. There may be a valid reason to leave your role less defined though, and in this case, I propose a framework for finding a valuable fit within a cross-functional team.

While all cross-functional teams have well-defined roles on paper, in reality, for all the needs of a team, people within the cross-functional team trade off responsibilities based on skill set and interest. You may have a PM who’s better at execution, so the designer takes on strategic duties, for example. What you’re trying to find with a less defined role is a team that has a need for a skill set, and wants someone to fulfill that need.

What happens in each of these boxes? Well, if your role is not needed or wanted, then you don’t get an opportunity to help. If your role is wanted, but not needed, you tend to be superfluous and lowly leveraged. If your role is needed, but not wanted, you experience rejection. If your role is wanted and needed, that’s where the magic happens. You integrate into the cross-functional team well, help them achieve their goals, and likely are happy in what you’re doing.

Two Tips to Make These Roles Work

#1 Get a senior leader to sponsor your effort
It’s almost impossible to make this type of role if your manager and ideally someone very senior in the organization support it. If senior leaders are very strict about team formation, it just might not be the company where you can be successful in a non-uniform role. Also, if your manager doesn’t support the direction you’re targeting, there will be a big mismatch come review time that will stifle your career.

One way to be more successful with managers and senior leaders is to be very clear why you want to work this way and what value it adds to the company. I would not recommend going to managers and senior leaders suggesting you not fit a typical role in the organization, and then ask how you can be effective. You are not giving them two problems: 1) someone who won’t fit into the traditional organizational structure and 2) someone who doesn’t know how to help the company. For many managers, this would trigger them to ask why you’re at the company in the first place if you don’t know how to help.

#2 Approach teams with humility
Your approach to talking to managers and senior leaders about your role should be very different from how you approach teams. While with managers and senior leaders, you want to make a clear case of the value you can add and what you want to do, that can not work so well for approaching teams. A better approach gets across a few key points:

  • You’re interested in the problem they’re working on
  • You think they are doing interesting work
  • You’re just here to help in whatever way you can
  • These are the skill sets you have that may be valuable
  • Finally, the ask: What can I help with?

Whether you have a traditional or non-traditional role in a team, the first step is building trust, and that is usually earned by doing smaller tasks the team is not getting to and would like help on. From there, you earn the right to work on more critical tasks. It may take some time to get to the role you’re most interested in playing on the team, and that is normal.


At Eventbrite, we have multiple people who sit outside the traditional paradigm of well-defined roles who are thriving. They all found a way to add value to a team that was wanted and not competitive, and the team operates better for it. But this all happens on an opt-in basis. The teams chose to accept them. If you want to play outside the lines, you have to understand that other teams playing with you is entirely opt-in on their part. This is the risk of not participating in the structure the company operates in; you may find opportunities to help that the team isn’t welcoming to, and there’s nothing you can do about it.

Centralization Vs. Decentralization in Marketplaces and Scaling Companies

First off, no, this is not a post about blockchain. Sorry to disappoint you. This is a post about structuring your teams, and structuring your business. A common problem I work with entrepreneurs on is where power should be held both inside and outside organizations. These entrepreneurs have heard the stories of how instrumental Uber’s local teams were in their success. They have also heard about marketplaces that have given all of the power to the supply, and also marketplaces where supply has no power. They struggle to understand for their particular business, how much power am I centralizing in HQ, or how much power am I centralizing inside the company vs. outside it.

These issues usually arise in two areas, which particularly, but not exclusively, affect marketplaces. One is around local expansion. When I enter a city or country, who is in charge of that market’s success? Is it a local GM or someone in HQ? The same questions emerge for satellite development offices and going international. Do I hire local managers? Or do people report into managers in HQ? Who owns a country’s growth? The second issue is around who controls the quality of the service. Do we let the supply side determine their level of service, or do we standardize it across all of our supply? Is there value in standardization or variety of service level?

Advice on these topics usually misses the main factors a company should be considering when making these decisions. That main factor is where does the expertise lie, and what enables the best execution. And both of these can change over time. Uber is a great example. Because of training and car inspections, supply side onboarding had to be decentralized to a GM in each market. And because each market needs to boot from scratch, it generally made sense to give the GM responsibility for the entire market. They could do scrappy things to drive supply and demand acquisition and brute force initial liquidity. Once Uber had initial liquidity in these markets though, it ran into decentralization problems. Uber started to build up world class acquisition teams in HQ that didn’t have full control on how to scale customer acquisition. Local teams were still doing scrappy tests that didn’t scale, and not managing budgets as efficiently. Uber eventually centralized a lot of this work, but most people will probably tell you they did it too late, causing a lot of political strife.

On level of service, however, Uber has always strictly standardized their level of service across markets. Uber is not interested in drivers creating their own style of service. Consistency is a key part of Uber’s offering to passengers. Uber decides if they want to introduce varying levels of service in markets in a standardized way, with Black, X, Pool, etc.

At Grubhub, we started with local responsibility for supply with outside salespeople and HQ (read: me) responsible for demand. The playbooks my team developed to drive demand with SEO, SEM, and offline marketing scaled equally well to new markets as long as we reached enough supply. For supply, we had to build knowledge of the local market, and the best way to do that was boots on the ground. Over time, as we refined our process to determine quality restaurant leads and which neighborhoods mattered, we started centralizing supply with an inside sales team in HQ as well. For market launches, we would paratroop salespeople into a market to get to a certain amount of liquidity, then retreat to inside sales to scale.

For level of service, variety matters a lot for a business like Grubhub because not everyone wants to order the same type of food. There is also demand across different price points, time of day, day of week, etc. Variability in the food from restaurant to restaurant is a feature, not a bug. Grubhub uses ratings from the demand side to determine if a restaurant is below a certain floor of quality it is willing to accept, and if it drops below that, they will remove the restaurant from the service. Where Grubhub has standardized more over time is the delivery experience. Grubhub used to outsource 100% of its deliveries to the restaurant, and now over 20% of orders are delivered by Grubhub couriers. I previously explored the variables in the food delivery space here.

Airbnb has evolved similar to Grubhub. At first, Airbnb let hosts define their level of service and encouraged them to express themselves and figure out their own pricing. As Airbnb grew, it developed a deeper understanding of what Airbnb guests want and what prices will be successful. It is now standardizing those pricing levels and amenities hosts are expected to give. Now, they are not booting hosts off the platform who choose not to adopt these strategies. Instead, they are promoting more aggressively the hosts who have specific designations (at first Instant Book and now Airbnb Plus) with higher rankings in search results and special filters. They expect most hosts will conform over time due to these incentives.

It is unclear if this is the right strategy for Airbnb. While baseline expectations for service are a good thing in hospitality, there is a possibility the service could lose some of the uniqueness that partially made it desirable as an alternative to hotels in the first place. Airbnb’s value propositions that made them grow so quickly were lower cost and more unique inventory (both more unique places to stay as well as in more unique locations like local neighborhoods). It will be interesting to see how professionalizing supply works for them in the long term.

Eventbrite is an interesting example of approaching decentralization. Eventbrite works with event creators, commonly known as promoters. What do event promoters know how to do: promote their event! So Eventbrite partially outsourced demand acquisition to its supply of event creators. Event creators knew how to attract ticket buyers better than Eventbrite did in many cases. As Eventbrite has grown though, it has gotten significantly better at helping event creators sell more tickets. It now has proprietary distribution channels the event creators do not have like its app and website, a strong SEO presence, and distribution partnerships.

Eventbrite also has development offices in many different countries now. When you hire a PM for a particular business unit, do they report to the local office leader, who may not have a product background, but knows what is going on in the office really well and knows how to hire locally? Or does the PM report to a product leader that may not even live in the same country but knows how to develop product managers and understands the product strategy? This was a recent problem we worked on. What we decided is that the PM would have a local leader that is in charge of making sure that PM is a happy and productive member of that local office and a functional leader that is in charge of making sure that PM is a happy and productive member of the business unit and product team.

General Best Practices

Out of these examples some best practices emerge. If you’re thinking about these questions for your business, I would ask the following questions:

Am I launching a new market? If so, how much of a replicable playbook do I have on how to launch successfully?

The earlier the stage of the market you are expanding into and the less of a playbook you have for this, the more likely you want a local owner in charge of figuring out how to make the market work. Their job, however, is not to own the market long term. It is to get to liquidity as fast as possible so that subject matter experts in HQ can take over parts of the growth of the market.

If you have a refined playbook like Grubhub eventually did, you may find you don’t need local expertise for supply or demand.

Once a market has launched, who is in charge of the growth of the market?

Once a market has found liquidity, or product/market fit, it depends on how much of what drives that market’s success is shared with the rest of the company. If the market is fairly unique, a GM with control may make sense. However, most markets have a fairly similar growth playbook once the market finds liquidity. Usually, this means, if a GM exists, they should not own the growth of the market. Instead, they control growth levers that cannot be managed effectively from HQ, such as training and local partnerships and local feedback to HQ teams. They also frequently are an execution layer for HQ strategies such a PR, content marketing, etc. A lot of companies make the mistake of keeping the onus of growth on a local person even after it is revealed most of the levers for growth are controlled by HQ, creating a very frustrating role for that GM.

Is supply variability a feature or a bug?

Does the demand side of your marketplace have homogeneous needs? If so, can you standardize that into different products or not? If not, you will allow your supply more control over what services they provide until needs become more homogenized or are cleanly separated into different products that can be standardized.

Who manages local team members?

If they are operations focused on local needs, they are usually best managed by some sort of operational team. At Pinterest, these team members were managed by a Head of International in HQ. At Grubhub, since all of our local people were salespeople, they were managed by a VP of Sales in HQ. If, however, you have local development teams, those teams have different management needs that typically need to be managed by different people. They need a functional manager that can tie them into the HQ’s strategy. Because of the size of the team though, they also need a local manager that can recruit them and make sure they are a happy and effective local employee that an HQ manager won’t have visibility into. As teams scale, they usually add local management layers that report into functional managers in HQ. For product, for example, that might be a Product Lead in a satellite office reporting into a Director or VP of Product in HQ. If you don’t have enough product managers to have a local manager, they usually dually report into the HQ Head of Product and the satellite office manager.

Most companies centralize decision-making over time in their main office. They do this not because they are hungry for control, but because they start to build up more expertise than either their local offices or their suppliers. It is not actually the leadership team centralizing the decision-making, but the subject matter experts in HQ. The real question to ask when you are managing these problems yourself is where is the expertise for this problem, and is it changing, and how does execution need to occur for this problem.

An Alternative Approach to Re-Orgs At Your Company

Re-orgs are an essential part of scaling a team at a company. The organizational structure of the company six months ago may no longer align to the needs of the company or its customers today. While most people would agree with the statement above that insists re-orgs are necessary, everyone hates them. They almost always make some people unhappy, cause employee departures, and stifle productivity both before and after they are executed.

I’ll start with a story of how this works in practice. Grubhub had a fairly stable structure for most of the time I worked there. While it was stable, it certainly wasn’t traditional. While we had crafted large sales, marketing, and customer service teams, we had a very small engineering team for our size and no official product and design teams. The latter two we de facto managed by marketing and a combination of executive leadership. While most companies at the time had a clear product manager role, Grubhub did not. We had product strategy led by marketing and the co-founders, and project managers within engineering that worked with those stakeholders to build effective software. I hired a member of my team to build a loyalty program. This meant that they would do user research, build models that project impact and costs, and work with engineering to launch experiments that would increase frequency of ordering on Grubhub. The person we hired was, in short, awesome. She did a bunch of great research partnering with our UX researcher, built detailed financial models that projected impact, brainstormed many ideas with our designers, and built good rapport with our project managers and engineers when it came time to finally build something.

Around this time, we started discussing as a leadership team if it made sense to start building a product management function for Grubhub. Being privy to those conversations, as I was having my quarterly review with this member of my team, I suggested product management would be a good avenue for her if we create that function, but she would probably need to leave my team to do it. We talked through the details of why I felt that made sense given what she was doing, and she was very open to it.

Fast forward three months, and as I’m on my way to work, I receive an email from my manager the VP Marketing asking to meet when I get in (she always got in super early). When I did, she announced that we were creating a product management function, and that as they thought about what the members of that team should look like, they felt like this member of my team was a perfect model of what a product manager should be at Grubhub. So, effective immediately, they were moving her off my team to be the first consumer product manager. The co-founder of the company was meeting with her when she got in to explain the move, and email would go out right after, and my 1:1 was with her later in the day.

That 1:1 was awkward. While this was ultimately what I wanted for her, and she was nervously happy about it (it’s nice having the co-founder of the company say your behavior is a model of behavior they want at the company), things still felt off. What is supposed to happen to her current projects? What new projects is she picking up? She at one point during the meeting said “oh, you seem sad”. And I wasn’t, just more caught off-guard, and thinking even though we’re making the right decision, are we making it in the right way?

This I find is usually the best case scenario for re-orgs. VPs and C level execs are attuned enough to make the right calls, but execute it top down without director, middle management or IC involvement or feedback on their ideas, leading to a change that is good on paper and may be good in practice too, but seems to strip the team of control. And far more common is the flip side of this scenario: when VPs and C level execs think they know what is good for the people and the team, don’t seek out necessary feedback, and make the wrong call for both the organization and people’s careers who are affected by the re-orgs.

For one of my the companies I advise, going into 2019, for one our business units we knew we likely had to change our organizational structure. Trying not to repeat re-org mistakes, we started working on a structure that would make the re-org act like a feedback-fueled progress driven by the teams instead of by people above them. The first thing we worked on as a leadership team was the objectives for 2019. What did we need to achieve next year to be successful? We then went to the product managers, designers, and engineering managers and explained the objectives. We then tasked them to propose the organizational structure that would help them with these objectives.

They worked directly with their teams to make sure everyone understood the objectives, everyone’s interests and career aspirations, and then they proposed the structure to the leadership team. After this presentation, we worked more to understand the constraints that led to this recommendation, worked through some of those constraints so the team didn’t need to make as many compromises on what they wanted, and then solidified the structure. The product managers, engineering managers, and designers talked through the changes with the rest of the teams, and organically the teams started planning with the new structure in mind. They then set their own team objectives to the align to the business units, as well as their roadmap and key results.

By involving the team members that would be effected from the beginning and making it their decision, we avoided a lot of the awkwardness or bad calls of many re-orgs I have participated in. The teams are happy and working on the new objectives seamlessly. Now, there will certainly be re-orgs that can’t be this inclusive, such as those that involve the transitioning out of an executive, or with teams that would not be capable of tying the objectives to an effective team structure. The former will never be seamless when people’s managers leave. The latter indicates a separate problem of lack of team responsibility that needs to be addressed first. But if you are not facing one of these scenarios, here are some things I have learned you may want to incorporate into your next re-org.

  1. Start with making sure the objectives of the company/team/business unit, etc. are clear, and that the executive team is aligned on them.
  2. Inform the teams affected that the new objectives create an opportunity for them to re-organize to be more effective at achieving these objectives.
  3. Empower the teams to propose a new structure that would better allow them to achieve the objectives
  4. When these teams present their proposals, make sure they focus on talking through the constraints that led to their proposal. These are frequently resourcing e.g. not enough Android engineers, cross-department collaboration or lack thereof e.g. no SRE support next quarter, technical or design debt, et al., They can be relationship based or based on location for distributed teams.
  5. Resist the urge to edit the choices directly as a leadership team. Instead, focusing on editing their constraints.

The Right Way To Set Goals for Growth

Many people know growth teams experiment with their product to drive growth. But how should growth teams set goals? At Pinterest, we’ve experimented with how we set goals too. I’ll walk you through where we started, some learning along the way, and the way we try to set goals now.

Mistake #1: Seasonality
Flash back to early 2014. I started product managing the SEO team at Pinterest. The goal we set was a 30% improvement in SEO traffic. Two weeks in we hit the goal. Time to celebrate, right? No. The team didn’t do anything. We saw a huge seasonal lift that raised the traffic without team interference. Teams should take credit for what they do, not for what happens naturally. What happens when seasonality drops traffic 20%? Does the team get blamed for that? (We did, the first time.) So, we built an SEO experiment framework to actually track our contribution.

Mistake #2: Only Using Experiment Data
So, we then started setting goals that were entirely based on experiment results. Our key result would look something like “Increase traffic 20% in Germany Q/Q non-seasonally as measured by experiments” with a raw number representing what a 20% was. Let’s say it was 100K. Around this time though, we also started investing a lot in infrastructure as a growth team. For example, we created local landing pages from scratch. We had our local teams fix a lot of linking issues. You can’t create an experiment on new pages. The control is zero. So, at the end of the quarter, we looked at our experiments, and only saw a lift of around 60K. When we look at our German site though, traffic was up 300%. The landing pages started accruing a lot of local traffic not accounted for in our experiment data.

Mistake #3: Not Factoring In Mix Shift
In that same quarter, we beat our traffic and conversion goals, but came up short on company goal for signups. Why did that happen? Well, one of the major factors was mix shift. What does mix shift mean? Well, if you grow traffic to a lower converting country (Germany) away from a higher converting country (U.S.), you will hit traffic goals, but not signup goals. Also, if you end up switching between page types you drive traffic to/convert (Pin pages convert worse than boards, for example), or if you switch between platform (start driving more mobile traffic, which converts lower, but has higher activation), you will miss goals.

Mistake #4: Setting Percent Change Goals
On our Activation team, we set goals that looked like “10% improvement in activation rate.” That sounds like a lofty goal, right? Well, let’s do the math. Let’s say you have an activation rate of 20%. What most people read when they see a 10% improvement is “oh, you’re going to move it to 30%.” But that’s not what that means. It’s a relative percent change, meaning the goal is a 2% improvement. With this tactic, you can set goals that look impressive that don’t actually move the business forward.

Mistake #5: Goaling on Rates
Speaking again about that activation goal, there’s actually two issues. The last paragraph talked about the first part, the percent change. The rate is also an issue. An activation rate is two numbers: activated users / total users. There are two ways to move that metric in either direction: change activated users or change total users. What happens when you goal on rates is you have an activation team that wants less users so they hit their rate goals. So, if the traffic or conversion teams identify ways to bring in more users at slightly lower activation rates, the activation team misses their goal.

Best Approach: Set Absolute Goals
What you really care about for a business like Pinterest is increasing the total number of activated users. At real scale, you also care about decreasing churned users because for many business re-acquiring churned users is harder than acquiring someone for the first time. So, those should be the goals: active users and decrease in churned users. Absolute numbers are what matter in growth. What we do now at Pinterest is set absolute goals, and we make sure we account for seasonality, mix shift, experiment data as well as infrastructure work to hit those goals.

Currently listening to RY30 Trax by µ-ziq.

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.

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.

How to Build a Marketing Team at a Consumer Technology Company

I receive many questions about how to build marketing at technology organizations. New entrepreneurs hear terms like growth, user acquisition, and positioning, and don’t know where to start. This should be a handy guide on how marketing looks for a healthy technology organization and why. To start, I’ll re-iterate the definition and explanation of the definition of marketing from my The Incredible Unbundling of Marketing post to understand how we cover everything that is traditionally considered a marketing activity.

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
Source.

Since that’s a mouthful, marketers tend to shorthand with a series of P’s (four to seven depending on who you ask). For products, those are product (the creating part of the definition), price (the exchanging part of the definition), promotion (the communicating part of the definition), place (the delivering part of the definition), positioning (the value part of the definition), people (the people who do the activity), and packaging (another part of the communicating piece of the definition). For services, those are product, price, promotion, place, people, process, and physical evidence.

At technology companies, the product piece is typically carved out as a separate team, and various approaches exist for carving up the rest of the P’s. The most typical is to have a CMO in charge of marketing, and two VP’s that split two types of marketing that tend to require different skills (change that to VP’s and directors if you like).

Brand Marketing
Brand marketing typically includes the strategic and soft skills of marketing. These include the positioning, the target market, packaging, and physical evidence. Positioning primarily transitions to what the brand represents for its target, which is why the group is traditionally called Brand Marketing. They also tend to include the promotional elements that are less quantifiable: PR, content, social, community management, events, campaign building, etc. To be successful in positioning and identifying target markets, market research tends to be in this group.

Growth Marketing
Also known as performance, internet, digital, or online marketing due to its heavy reliance on those areas (sometimes also acquisition and retention marketing), growth marketing typically includes price, process and the parts of promotion that are quantifiable. These include SEO, email marketing, loyalty programs, landing pages, paid acquisition in almost all forms (not just online), referral programs, direct mail, and analytics about marketing and product performance.

How does Growth Marketing work with Brand Marketing?
These two organizations need to work hand in hand, Brand marketing determines who the product is for, and Growth Marketing is primarily responsible for getting people to start and to continue using the product. Growth Marketing determines the best ways to find the target market and reach them, and they work with Brand Marketing to receive appropriate creative that reflects the positioning. Growth Marketing should see branding as increasing the conversion rate on all of their activities. Brand Marketing should see Growth Marketing as the distribution engine for their message.

What about the product?
As we saw in the marketing definition above, product is one of the key P’s that does not seem to be owned by marketing. Also, what is typical in many technology companies is that some of the best opportunities to get people to start using the product come from the product itself (SEO, virality, and landing pages are the main ones), and marketers typically lack the authority as well as the technical skills to make these changes. Product and engineering organizations own these areas. So, what has become common is creating cross-functional teams where growth marketers, engineers, and product managers work together to help growth the product. Depending on which distribution methods work best for the product, the product manager and growth marketer can be indistinguishable or the same role.

Early on in a technology company, there is so much opportunity with product driven growth, that just product managers and engineers work on growth marketing. Growth Marketing tends to emerge as product managers become too busy with core product features, when expertise becomes more of a necessity, and when channels that are less product driven (paid acquisition, email,etc.) become more important. Paid acquisition is usually only tried once a lifetime value can be established, so that growth marketers can be sure to spend significantly less than that to acquire a customer.

How should the Growth cross-functional team work with Growth Marketing?
Growth Marketing needs to become a key stakeholder in the cross-functional growth team in key areas. I have spoken of cross-functional teams before, and the key elements. As we grow, we need to expand a three to four person group to include a growth marketing lead. Not every sub team needs a lead to start. You should never hire to fill org charts, only to add additional value. It should only be where they add value, and the cross-functional team adds value to them. In many of these areas, the product manager is also the growth marketing expert in the area, so the position would be redundant. The first area where Growth Marketing should fit typically would be on paid acquisition or email marketing, depending on the company. This person would get support from the team on the infrastructure to make paid acquisition or email successful (tracking, landing pages, etc.), and this person would bring in knowledge on success from these channels that can be applied to organic channels.

How does Brand Marketing work with a Core Product team?
Brand Marketing should be an early voice in the core product development process helping to mold who the new products is for and how it is positioned. Once development is kicked off, typically the Product Marketer becomes a project manager designed to maximize launch impact of the feature and ongoing adoption, coordinating between the rest of the Brand Marketing team (PR, social, content, events, campaigns,etc.) and the Core Product team. It’s important a Product Marketer has short and long term metrics for adoption.

What does the org chart look like typically?

Building Cross-Functional Teams

Frequently people ask me how our growth team is structured at Pinterest. In our case, it is a cross-functional team. Engineers, product managers, analysts, and designers all work together on shared goals. Pinterest believes the best results arise when people from different backgrounds work together on a problem. I’ve thought a lot about how to develop effective cross-functional teams in an organization, and I’d like to show how to do that successfully. These, in some ways represent how Pinterest is structured, and in other ways, don’t.

Step 1: Define Metrics
In order for a cross-functional team to be successful, it needs a North Star metric. If you’re creating one broad team, it’s a broad metric, like MAUs or revenue. I prefer creating multiple, smaller cross-functional teams that carve a piece out of the main goal, like signups or new user revenue. Then, you can create another small team for something like retained users, or repeat user revenue.

Step 2: Build the Team
A core team for cross-functional team trying to impact a metric is usually:
Engineer
Designer
Product Manager
Analyst
Potential other members:
Marketer
QA person
Researcher

Depending on the goal, you may not need many of these, or the product manager can be the catch all for analysis, research, etc. One person should be the owner of the team. Usually, this would be the person with the most context. At Pinterest, it’s either an engineer or a product manager. Ownership should seem arbitrary as the team should organically align on initiatives over time, deciding between short and long term projects, based on a shared understanding of what is likely to move the key metrics. So, ownership is more so management has one person to go to with questions than anything related to authority.

Step 3: Re-train Managers
There shouldn’t be any managers on cross-functional teams. Managers are the glue between different cross-functional teams, making sure all the teams align to the global strategy, and don’t improve their metrics at the cost of another team’s metrics, which is easy to do. Here is what some managers roles will look like in this scenario:
Design Director: align visual style across the entire application
Director of Analytics: align use of tools across teams for easy translation of data back and forth and sharing of pertinent data across teams
Marketing Director: allocate budget effectively, communicate how teams’s activities affect each other and balance
Director of Product: ensure product opportunities on one team can be leveraged by other teams, prevent disjointed product experience

Benefits of Cross-Functional Teams:
1) Improvement of cross-departmental communication: You would be amazed at how quickly individual contributors of different teams start to understand other department’s needs once they sit with them for a while and work on a shared goal. The marketer starts to understand why having dozens of tags firing is bad for the engineer. Once designers internalize the metrics from analysts, they start to work differently, and get satisfied by moving metrics instead of how beautiful their design is. The engineer sees how hard it is for the analyst to measure impact and starts to design better tracking systems and design better database storage.
2) Better ideas: The best ideas typically come from the intersection of people with different backgrounds working together on a problem. Designers, engineers, marketers, analysts et al. think differently. They solve problems differently. They have different strengths and weaknesses. Having them work together on problems almost always ensures a more optimal result.
3) Better prioritization: Instead of a product manager getting a list of requests from various teams, all those stakeholder are actively brainstorming together and measuring projects on potential impact to the metrics.
4) Increased speed: When teams aren’t spending time coordinating with other teams, disagreeing on goals and priorities, and struggling with inefficiencies, they produce results much faster.

Currently listening to Through Force of Will by Torn Hawk.