Published in UT San Diego, February 24, 2014
Advice! You can’t live with it and you can’t live without it.
“The U.S. is addicted to advice … but things haven’t worked out the way the Web’s early evangelists proclaimed — people still smoke, people still text while driving, people still vote Republican,” Joe Queenan recently wrote in The New York Times.
So even though most of us do not take advice — even good advice, I am going to offer some more of it courtesy of the team from First Round Capital, which is one of the smartest gangs of early-stage startup investors in the country. Herewith some of their rules (not direct quotes) along with some of my comments.
- Check references for real. I know the lawyers will tell you to never say anything bad about anybody but your job as CEO is to get to the truth. Ask the reference for other people who might know the candidate. Probe harder.
- You don’t have to be first to win. Personally, I am up to here with the phrase “first-mover advantage.” Google trounced Alta Vista and Northern Light and Yahoo, and they were last to the party. Dropbox was not the first to use the cloud for storage.
- Use equity stock grants to create real loyalty. While everyone gets the idea, most of us get it wrong. The big idea is be careful with the “cliff” concept in vesting. Give stock based on performance and give frequently. You do not want everyone running to the door at four years and three days after all of their stock has vested.
- To inspire a team, tell a good story. I subscribe to this one with passion. I believe that the CEO’s job is to become an actor, to learn how to stand in front of your audience and mesmerize them with a combination of reality and fantasy. My favorite line is, “Let’s pretend.” It moves people past telling you that can’t happen because you’re saying just indulge me for a moment and pretend.
- Pay attention to people, not problems. Wander the halls and listen. If there is conflict, find a safe place and hash it out. No festering.
- Share everything. Hide nothing. Yes, I believe in transparency, but I am Jewish and at Passover, we hide the matzoh. So maybe there is a middle ground.
- Make decisions fast and early. I take a slightly different tack here. Make decisions at the last minute that you have to. Optionality is critical. I vote for the double straddle unless it is obvious.
- Avoid jerks, heroes and zealots. No more need be said here.
- You need a mission and a vision. Vision disconnected from what it means and to whom is myopic. Get glasses.
- To discover great talent, give rookies a chance. Yes and yes. I love this. Now, it also has a bit of arrogance because I believe I can inspire the rookie. But I want to hire the guy who might hit .330, not the guy who just did it (because I probably can’t afford him).
- Let good be good enough. “Done is better than perfect. There does not exist a time when no product is better than product.” We all know the mantra — the perfect is the enemy of the good.
More advice will follow in later columns courtesy of better thinkers than me. In the end, be careful because seeking advice is also a way to shift responsibility. It allows you to deflect some of the ownership of the decision. It splits the difference. Remember, the ultimate decision and responsibility is yours. Finally, good advice, once taken, does not always remember who gave it. Or said another way, success has many fathers, failure has none.