Tag Archives: team building

The Present and Future of Growth

Quite a few people ask me about the future of growth. The idea of having a team dedicated the growth in usage of a product is still a fairly new construct to organizations. More junior folks or people less involved with growth always ask about the split between marketing and growth. More senior folks always ask about the split between growth and core product. Growth butts heads with both sides.

Why do more senior folks tend to turn to the difference between core product and growth than marketing? For this I’ll take a step beck. Now, I’m a marketer by trade. I have an undergraduate degree in marketing and an MBA with a concentration in marketing. So I consider everything marketing: product, growth, research, and I’ve written about that. I used to see what was happening in tech as marketing’s death by a thousand cuts. I now more so see it as marketing’s definition has gotten so broad and each individual component so complicated that it can by no means be managed by one group in a company.

So if marketing is being split into different, more focused functions, growth teams aren’t really butting heads with the remaining functions that are still called marketing over responsibilities like branding. They are butting heads with the core product team over the allocation of resources and real estate for the product.

So how do growth team and core product teams split those work streams today, and what does the future look like? The best definition I can give to that split for most companies today is that growth teams focus on getting the maximum amount of users to experience the current value of the product or removing the friction that prevents people from experiencing current value, and core product teams focus on increasing the value of the product. So, when products are just forming, there is no growth team, because the product is just beginning to try to create value for users. During the growth phase, introducing more people to the current value of the product becomes more important and plays in parallel with improving the value of that core product. For late stage companies, core product teams need to introduce totally new value into the product so that growth isn’t saturated.

My hope is that in the future, this tradeoff between connecting people to current value, improving current value, and creating totally new value is all managed deftly by one product team. That team can either have product people naturally managing the tradeoffs between these three pillars, or three separate teams that ebb and flow in size depending on the strategic priorities of the organization. All three of these initiatives – connecting people to current value, improving current value, and creating new value – are important to creating a successful company, but at different stages of a company, one or two tend to be more important than another.

We should evolve into product organizations that can detect which of these three functions adds the most value at a particular point in time naturally, fund them appropriately, and socialize the reasons for that into the organization so these different functions don’t butt heads in the future. I believe that is the product team of the future. I now believe this is more likely than marketers evolving to manage branding, research, performance marketing, and product effectively under one organization.

Currently listening to Good Luck And Do Your Best by Gold Panda.

Hiring Startup Executives

I was meeting with a startup founder last week, and he started chatting about some advice he got after his latest round of investment about bringing in a senior management team. He then said he spent the last year doing that. I stopped him right there and asked “Are you batting .500?”. Only about half of those executives were still at the company, and the company promoted from within generally to fill those roles after the executives left. The reason I was able to ask about that batting average is that I have see this happen at many startups before. The new investor asks them to beef up their management team, so the founders recruit talent from bigger companies, and the company experiences, as this founder put it, “organ rejection” way too often.

This advice from investors to scaling companies is very common, but I wish those investors would provide more advice on who actually is a good fit for startup executive roles. Startups are very special animals, and they have different stages. Many founders look for executives at companies they want to emulate someday, but don’t test for if that executive can scale down to their smaller environment. There are many executives that are great for public companies, but terrible for startups, and many executives that are great at one stage of a startup, but terrible for others. What founders need to screen for, I might argue about all else, is adaptability and pragmatism.

Why is adaptability important? Because it will be something that is tested every day starting the first day. The startup will have less process, less infrastructure, and a different way of accomplishing things than the executive is used to. Executives that are poor fits for startup will try to copy and paste the approach from their (usually much bigger) former company without adapting it to stage, talent, or business model. It’s easy for founders to be fooled by this early on because they think “this is why I hired this person – to bring in best practices”. That is wrong. Great startup executives spend all their time starting out learning about how an organization works so they can create new processes and ways of accomplishing things that will enhance what the startup is already doing. When we brought on a VP of Marketing at GrubHub, she spent all her time soaking up what was going on and not making any personnel changes. It turns out she didn’t need to make many to be successful. We were growing faster, had a new brand and better coverage of our marketing initiatives by adding only two people and one consultant in the first year.

Why is pragmatism important? As many startups forgot over the last couple of years, startups are on a timer. The timer is the amount of runway you have, and what the startups needs to do is find a sustainable model before that timer gets to zero. Poor startup executives have their way of doing things, and that is usually correlated with needing to create a very big team. They will want to do this as soon as possible, with accelerates burn, shortening the runway before doing anything that will speed up the ability to find a sustainable model. I remember meeting with a new startup exec, and had her run me through her plan for building a team. She was in maybe her second week, and at the end of our conversation I counted at least 15 hires she needed to make. I thought, “this isn’t going work.” She lasted about six months. A good startup executive learns before hiring, and tries things before committing to them fully. Once they know something works, they try to build scale and infrastructure around it. A good startup executive thinks in terms of costs: opportunity costs, capital costs, and payroll. Good executives will trade on opportunity costs and capital costs before payroll because salaries are generally the most expensive and the hardest to change without serious morale implications (layoffs, salary reductions, et al.).

Startup founders shouldn’t feel like batting .500 is good in executive hiring. Let’s all strive to improve that average by searching for the right people from the start by testing for adaptability and pragmatism. You’ll hire a better team, cause less churn on your team, and be more productive.

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.

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.