Avoiding Complacency

This past week I sent the email below (verbatim) to my leadership team, not as a critique, but as a challenge.   I really find my own personal motivation goes in cycles and I have to fight through this issue from time to time.  The title of the email was the same as this post, “Avoiding Complacency”.

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Guys, I wanted to share a simple technique I use every week to ensure I’m staying motivated and focused on the right stuff.  To be clear, this is not a critique on our/your work ethic, commitment or anything else other than my normal “challenging” the team to stay awesome.  I recognize everyone is working hard. 

Candidly, one of the issues I personally have to wrestle with is avoiding complacency, becoming “comfortable” in my role and most important, losing a sense of urgency and paranoia that I believe is critical for any startup to succeed – the leadership team simply has to feel an almost overwhelming sense of urgency and belief that if we don’t get better fast, someone else is going to kill us.
 
One of the things I do every Sunday night before the week begins is to answer the question, in writing “In addition to all the crap already on my calendar this week, what am I personally going to do, this week, to move the needle for the company?”
 
We should all take this view and we should push our teams to take this view.  On a weekly basis, its not sufficient for us to “move our existing, albeit important, workstreams closer to completion”.  We each must actually accomplish something, each week, that is foundational to our success, that we can all see as a big step forward, that those looking in (investors, press, customers) would say – yeah, that’s big.
 
Now, is this realistically going to happen each week?  No, but it HAS to be a goal, a focus that each of us holds each other accountable to.  I want us to ask each other this question and I welcome you saying “Rob, what did you do this week to move the needle?”

Toss Your Org Chart

Org charts suck in a startup.  While they provide clarity around who makes decisions, they also communicate hierarchy and “I’m more important than you” during a time when most of us are wearing many hats and need to be accountable for deliverables across functions.  And if you have less than 40-50 employees, reporting relationships and “who does what” is pretty obvious to everyone on the team, so my negativity towards org charts are really for companies at or below this threshold.

At an early stage, reporting relationships are far less important than defining the handful (most definitely 5 or less) key objectives or focus areas for the company in 90-180 day increments.  Meaning, the only thing the majority of folks should be focused on is what will drive success over the next 3-6 months.  I’ve written in a previous post about the need to focus much longer term and determine strategy in order to determine what those key near-term objectives should be, but let’s assume you know them and need to get everyone focused on what to do, who’s accountable for what objective and which employees work on which objectives.  I’m a big advocate of creating a “one sheet” that lists on one side key activities and who’s responsible and metrics on the other side.

However, one of our founders came up with an awesome visualization that completely replaces the need for an org chart and provides instant clarity on 1) the key focus areas for the company, 2) who’s ultimately accountable for each area (the lead), 3) who the team members are that will work on each focus area and 4) team members that may have more than one focus area (to ensure their time is allocated properly).  This is our visual for BlackLocus with the names and key deliverables scrubbed a bit.  Everyone in the company is assigned to one of these 4 key focus areas. It’s no coincidence, however, that Jesus is accountable for Revenue!

I absolutely love this approach.  Could our priorities and who is leading and working on each priority be any clearer?  Those of you who know nothing about our company know instantly what our near term focus areas are.  Great work Rodrigo!

What’s Next? Part 3: Moving to Austin, TX!

I am ecstatic to announce that I’ll be joining a promising young startup in Austin, TX called BlackLocus as their President effective November 1.  BL was founded at Carnegie Mellon University in 2009 by 3 incredibly smart and innovative individuals – Rodrigo, Francisco and Lukas.  They’ve built technology that enables retailers who sell products online to optimize pricing at the product level in an automated way and in real-time, based on what competitors are charging, internal margin requirements, profit goals, etc.  It’s clear from customer interest, even among large retailers, that they are on to something unique and valuable.  The broader mission is to simplify, automate and profit maximize eCommerce.  A lofty goal indeed and I love how these guys think big.  The team was recently funded by VCs Silverton Partners and DFJ Mercury.

My role with the company will be to run the day to day operations and go-to-market strategy and execution, including hiring the leadership team (Analytics, Product, PR/Marketing, Recruiting/HR, Support and Sales/BD), acquire customers, generate meaningful revenue and establish the company as a thought leader in its space.  I couldn’t be more excited to join Rodrigo, Francisco and Lukas to help them execute on their vision.

What a journey its been over the past 4 months.  And I really do mean journey.  You can read the two previous installments of this process, Part 1 and Part 2.  I have actually really enjoyed the process, re-connecting with folks and meeting really interesting people in the various geographies I was pursuing.  It has been refreshing to take an external view and build some meaningful relationships after being so heads down at TrueCar for the past 4 years.  I’m looking forward to keeping that external focus and really getting involved in the Austin tech community.

This was a really tough decision given that there were multiple opportunities and they were all quite different – different geographies (Boulder, Austin, LA, SF), different roles (CEO, President, COO) and different stages of development (Seed, Post A-round, Pre-IPO).  An oversimplification, but it came down to two primary criteria for me – 1) the quality of the idea and absolutely huge market potential and 2) the team at BL, including the investors at Silverton and DFJ.

And, it will be great to be located in Austin with my brother and his family.  The Taylor caravan departs Los Angeles for Austin in just a few weeks.

Thanks to all my friends, family and others who were supportive and helpful along the way.  Let the new adventure begin!

Where’s Your Operating Plan?

Every business needs a 12-month operating plan, even startups at the earliest stages.  The only major difference between a startup Operating Plan (OpPlan) and a mature OpPlan is that the startup OpPlan will inevitably be wrong.  Then why do it?  Because it represents a stake in the ground, your living metrics, targets and milestones so that when targets are either missed or exceeded, it forces an internal review of “why” and then “how” to make adjustments to keep the business performance on track.  I’m going to focus here on the importance of OpPlans for early stage businesses.

First, what is an OpPlan for an early stage or emerging business?  Probably the most common mistake I see is equating the OpPlan to the 3-5 year financial projections spreadsheet that every startup creates to raise money.  While these projections are incredibly useful and contain many of the assumptions that go into the OpPlan, the OpPlan requires an extraction of key assumptions in written form that is easily communicated to everyone in the organization and certain external stakeholders (investors, Board).  Specifically, the 12-month OpPlan contains the following – think of it as an outline for a powerpoint presentation to share with employees:

  1. Statement of Vision, Mission and Strategy.  At the highest level, these should be really clear and posted on a few walls in the office.  How can you know what to do today if you don’t know where you are going and why?
  2. Core 12-month Objectives.  This should be 5 or fewer major objectives for the business that, if achieved, will define success over the next 12 months, at least based on what you know now.  They ought to be completely consistent with point #1 above.  These are not activities or tasks but rather major objectives (ie, “Achieve 5% market share in our category”).  They don’t describe the “how”, just the “what” and since there’s only 5, key stakeholders (Board, investors) should view the achievement of these objectives as a highly successful month/quarter/year.
  3. Key Initiatives and Priorities.  For the current quarter and in order to meet the Objectives, what are the key Priorities and Initiatives that the team will focus on?  We are now breaking down the Objectives in #2 into a manageable set of Initiatives, answering the “how”.  This list becomes the ultimate arbiter when resource conflicts arise (and they will).  Completion of these Initiatives should absolutely result in performance against the Key Metrics (discussed below).  These corporate Key Initiatives then drive more detailed plans within each functional area – Sales and Product priorities drive the product roadmap, which in turn helps to prioritize the Technology, Analytics, Support and Marketing/PR initiatives.
  4. Key Metrics, Target Values and Accountability.  For each Objective in #2, what must be measured (Metric) and what are the Target Values for each Metric that ensure the Objectives are met?  And who is responsible for achieving each Target Value?  Important to track Metrics monthly, understand why there are variances and, most important, take decisive action to address under-performance.  Examples of corporate metrics might be # customers, average revenue per customer, visitor conversion to sale %, hire 10 people, etc.  Ultimately, each functional area (sales, tech, marketing, support) will have their own set of Metrics and Targets that roll up into achieving the overall corporate Targets.
  5. Financial Projections / Budget.  To include Revenue and Expense targets and assumptions.  There are really two methods for determining Revenue projections – “Top Down” and “Bottoms Up” – and I think its important to have a view into both because they often tell different stories.  Top Down approaches begin with understanding the potential market size, assuming some penetration or market share to determine Revenue growth.  Bottoms Up, on the other hand, starts with understanding the sales cycle, product development complexity and available capital to determine a more “reasonable” picture of Revenue scale.   Another way to think about it – Top Down shows “what’s possible” in a world of few constraints and Bottoms Up is more in line with “what’s achievable” being more realistic about resource constraints.  But having a view into both allows for some analysis to answer the question “What additional resources would it require (money, people, technology) to scale the business faster?”

Finally, I highly recommend creating a “One Sheet OpPlan”, a 2-sided but one page document that has Key Initiatives and Priorities for the current period (quarterly) on the front and Key Metrics and Target Values on the back.  This document gets distributed to ALL employees so everyone is fully informed and aligned on what drives success and, more importantly, how individual efforts tie directly or indirectly to certain Objectives that drive that success.

This important process and document really forms the basis for instilling a Performance Based Culture within the organization by tying individual performance and compensation to company Objectives.

Detractors may say that this is all too much structure and process for a startup where you are simply trying to get the product right and achieve some customer traction.  I would agree that putting too much effort into planning when you are a team of 2 or 3 is probably not the highest and best use of time.  However, while the need for this level of thought into the business may vary, certainly by the time you are taking external capital into the business its important that everyone is aligned on where the business is going and what defines success in the near term, even if success is defined by “get 2 paying customers”.  Even an objective this simple requires sales, a product, technology reliability and scale, support, design, analytics, etc. such that each department has a list a mile long of things they can’t get accomplished due to resource constraints.  A well constructed OpPlan helps to coordinate priorities across departments and keeps everyone’s eyes on the prize.

So What’s Next? Part 1: My Search Criteria

Now that the cat is out of the bag on my departure from TrueCar, lot’s of folks have been asking what’s next for me professionally.  So I thought I would share my process and how I’m thinking about what I want to do next in a series of posts.  I actually began this process several months ago, it’s been a challenging journey with emotional highs and lows but has also been rewarding having met some incredible people and re-connected with others.

Bottom line, there are a number of potential paths to take and criteria to examine – company size, role, geography, my risk appetite, work/life balance – and there are pros and cons to each of the many combinations.  The good news for me?  I’m not ready to make a decision and I’m in no hurry.  And I’ve been blessed with a unique opportunity to have a professional transition at the exact time that my child is born and I plan on taking advantage of simply being a dad and staring at my son for a few months.  I’m extremely thankful for that opportunity.

So how am I going about my search for the next big thing?  There are really two high-level components to the process.  First, being clear about my search criteria and second, executing a process for uncovering opportunities and ultimately choosing one.  I’ll talk about the first component in this post – my ideal search criteria.  Important to note that “ideal” implies a willingness to compromise and evaluate tradeoffs, which in turn requires that criteria are ranked in priority importance.  Here are mine, in order:

  1. I’m not going to start my own company from scratch.  So, I’m looking to partner with a Founder or Founding team.
  2. Chemistry with and complementary skills to the Founder(s) is an A-1 priority.  Alignment on strategy, roles, values, culture, team building among others is important.
  3. I have a strict “No Asshole” rule.  Meaning I won’t work for one, I won’t be one and I won’t participate in a culture that rewards being one.  It’s toxic and threatens both morale and productivity.
  4. I’m looking for an early stage, venture-backed business post Series A.  As opposed to a pure garage startup with limited traction and no funding.
  5. I want to build a company with balance – work / life / pursuits.  I have enough experience to know that working 80-hour weeks just because your “supposed to” in a startup is bunk.  A culture of work hard, smart and leaving some juice for personal pursuits is far more productive.  I’m also not suggesting that clocking a 40-hour week is the right answer either.  You work harder in a startup, period.  But balance is possible.
  6. I’m considering four geographies.  Boulder, Austin, Bay Area and Los Angeles.
  7. I don’t care about industry vertical, but…
  8. I want to focus on a huge industry with a large addressable market.  Even better if the industry is fragmented with limited established brands.  But it needs to be a big idea.
  9. I’m targeting CEO roles, but will consider COO roles.  This is really a function of the experience/strengths of the Founder, back to chemistry.
  10. I want to build a company that solves a real problem and helps people in some meaningful way.
So, have I narrowed myself out of sufficient considerable opportunities?  Maybe, but that’s why its important to create and priority rank a list of criteria, so I fully understand the tradeoffs to be made and which of them can be compromised to create a broader set and volume of opportunities.
These are, at a minimum, guideposts for targeting companies, roles and geographies.  In Part 2, I’ll talk about the process of uncovering, narrowing and choosing which roles to pursue.

Goal Setting and My Happiness Project, Part 1

I’ve been thinking a lot lately about the age old question, “Where do I want to be in 5 years, personally & professionally?”  Like I said before, impending fatherhood has a tendency to make you think about all sorts of stuff that is typically “easy” to avoid.  That, in combination with some changes likely in my professional world, is leading me to dig a bit deeper in this area.  Some of my thinking on this subject has also been influenced by a book I recently completed titled The Happiness Project by Gretchen Rubin.  It’s a tedious read, but its a story of her 1-year project to identify and document those things that bring her happiness, joy, satisfaction and engagement in life and also to identify those things that bring anger, guilt, boredom and remorse.  Out of this exercise comes a set, again documented, of resolutions to pursue and principles that guide her actions broken into monthly objectives over a 1-year period.  Gretchen is quick to point out that you don’t have to be unhappy to embark on a Happiness Project, rather its an explicit and written attempt to identify and focus on those things that already bring happiness in your life and to minimize those things that don’t.  I’m at a great place in life right now with a new and wonderful wife, a baby boy on the way, but this seems like an interesting experiment and a way to get committed to some life planning.  In fact, by sharing my plans to do it here, I’m already committed!

I posted recently about training for a difficult cycling event in May that is requiring a disciplined, daily approach to executing against a documented plan in order to successfully achieve the goal.  For this type of fitness or event training, I’m typically very diligent, disciplined and ultimately successful.  Interestingly, I don’t always apply this same goal-oriented approach to other things in life, both personally and professionally.  But is it any different?  Having a goal or objective, no matter what its nature or time frame would likely benefit from this type of planning, right?  When I tell people that I’ve completed an Ironman Triathlon, they often say “I could never do that” and I always respond that ANYONE can do it, not tomorrow or the next day, but six months or a year from now with a detailed roadmap that starts easy, yes you can.

So this post is a setup to several more  in this series –

1. My process for identifying 5-year personal goals

2. My development of a professional plan to achieve 5-year career objectives

3. My Happiness Project

As Yin to my Yang, Renee reminded me after reading a previous post that life shouldn’t only be about planning for the future,  but also living in the moment and enjoying life as it comes.  Yes, brilliant, I agree!  So I’ll commit to “Living in the Moment” being one of my Happiness Project resolutions.

Bear with me, there’s work to do here!

It’s About the Journey

Ever since our cycling trip to France last year (600 miles and 60,000 feet of elevation gain in 9 days), I’ve missed the commitment, preparation and sense of personal accomplishment that training for a strenuous physical event brings.  To prepare for France, I trained for about 6 months, riding 4-5 days per week on a pretty strict schedule of mileage & elevation gain.  As other priorities have now taken over, I’ve not spent much time on my bike, maybe one decent ride per week since we returned from the Tour de France last July.  In fact my fitness in general has taken a back seat.

Recognizing this “training” void in my life for the past 8 months, Renee for my birthday offered to drive the support vehicle so I could ride 2 stages of the upcoming Amgen Tour of California.  This is an 8-stage, pro-cycling tour event that is gaining in popularity and now competes directly with the major European tours, taking place May 15-22 along the California coast.  Amateurs have the ability to ride stages in the morning before the riders begin.

I’ll be riding Stages 6 & 7 of the Tour, the first being a relatively easy time trial through the Santa Ynez wine country outside of Santa Barbara.  The second is the defining stage of the race – Claremont to Mt. Baldy, twice!  It will be a 75 mile stage with over 10,000 feet of elevation gain during the day.  If I had to do it tomorrow, I wouldn’t make it.  That’s what makes the training journey so important and rewarding – there’s no way the objective could be achieved tomorrow, but with a detailed plan, broken into manageable and achievable components, success is all but guaranteed.

So I have roughly 6 weeks to get my cycling legs and have laid out DAILY training objectives between now and May 20.  I know precisely what I have to do tomorrow to prepare, and the next day, such that on May 20 the objective will be achieved.

Many endurance athletes would agree that the training journey, the hours, the pain, the discipline are what makes the actual race or event special.  It’s an adrenaline payoff for a lot of hard work, but many would also agree that training itself is enjoyable, even addictive.  We don’t do the training solely for the event, we do the training because it is rewarding all by itself.  The event or goal is simply what helps us stay on track, an additional motivator.

Why not apply these principles to most things in our lives – professional and personal?  I can see lot’s of opportunities in my own life to be better about setting stretch or aspirational personal goals instead of living life day to day.  Or perhaps being more diligent about my career objectives 2, 3 or 5 years from now to ensure I’m on my DAILY path to get there.

What objectives have you been putting off defining?  Maybe, just maybe the journey to reach them will be as rewarding as reaching the objective itself.

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