This weekend this tweet appeared in my timeline and it deeply resonated with me:
Over the past several years I have noticed a trend that people are starting companies for the sake of starting companies. I am a big proponent of entrepreneurship and believe it is a very positive thing for more people to feel empowered to start companies. It’s how we make more progress faster. But I do not think it’s a good thing to be a founder simply for the sake of being a founder. And this tweet characterizes how most people who fall into that bucket go about it. Because the gravity of wanting to start something is so strong, people do tons of research across a variety of different problem spaces until they land on something they think may have potential. And they do this without a deep passion and vision for the problem they are trying to solve.
I think this is a sub-optimal and time-wasting path of entrepreneurship. In my experience, the best founders start with a bold vision of how something in the world should work and what the end-state of the problem they are trying to solve looks like. They have a strong product vision and relentlessly pursue it. They are obstinate about what success looks like, but pragmatic enough to know that they may need to modify the course of their journey in order to succeed. Stubborn about vision, strongly opinionated about where to start, and flexible enough to make modifications once learnings are accumulated.
Loading up on research and constantly pivoting based on feedback before taking a first step can be a negative indication that a founder lacks conviction. And it also deprives founding teams of developing the most important muscle they need when getting something from zero to one and beyond: shipping things. Talking to potential customers is important, but shipping is better. Sometimes you need to will something into existence, and there’s zero substitute for a strong vision coupled with the ability to ship. No amount of customer research can compensate for a lack of this.
This doesn’t just apply to the earliest stages. In companies that have reached product market fit, I have seen customer research become a substitute for vision + shipping. It leads to inertia. Again, research is important, but if you truly have conviction about something, the best way to test it is to build it. There’s no right way to build a company, but I have a strong bias towards doing the things that will generate the momentum you need to accomplish ambitious goals.
For technology companies, the market has drastically shifted from prioritizing growth above all else to the quality of the underlying business and its growth. This is healthy and grounded relative to the irrational exuberance over the better part of the past decade.
One of the things I have been thinking about recently are the parallels between this market correction and the way we think about the broader economy. So much of our capitalistic orientation over the past century has been focused around growth: “Growth in GDP equals good.” It’s a simplistic point of view that doesn’t account for underlying flaws, medium and long-term instability, and negative externalities associated with that growth. It was significantly more good than bad by any measure of progress, but we are beginning to see the objective measures of its limitations.
As more of the global population comes around to the consequences of the perils of the climate crisis, economic inequality, and the rapid attack against democracy, it is incumbent upon us to reevaluate our growth at all costs mindset and begin to value the quality of growth above arbitrary measures of it. We (i.e. Western Civilization) have operated like a company that spends money to grow top line without accounting for the health of the underlying business and its constituents. And that is now completely unsustainable.
While I am no fan of presenting problems without solutions, I do believe this is a critical concept to collectively wrap our heads around in the decades to come. We have an entrenched set of behaviors and way of life that is comfortable, but not healthy. We produce significantly more foods than we need, and as a result there is an obesity epidemic. To our hearts’ content, we manufacture and buy an unfathomable amount of shit we do not need and let much of it go to waste. We partake in activities daily that are enjoyable, but detrimental to long term health and sustainability of virtually every natural and human made system.
When I first dug into the upcoming energy transition, it became obvious just how much and how quickly we need to improve the way we produce energy in order to continue to flourish as a civilization. There is a profound difference in scaling energy and scaling quality energy. We are entering an era where the quality of growth matters exponentially more than growth in and of itself. While this is admittedly a rather highfalutin and subjective musing, I do think there is merit to it and I am particularly energized by the concept and think that not only is it a good thing in the long run, but it is absolutely necessary. More than anything, I am committed and excited to support entrepreneurs and causes that share this sentiment to make it a reality.
Most managers hate giving performance reviews. They require tons of effort to do well, and people are usually terrible at giving feedback frequently so they end up surprising their direct reports with things that are delivered for the first time in a formal review. Even worse, some managers will try to avoid tough and awkward conversations by any means, so they just provide a dull and useless review. I’ve been guilty of this myself, and it took me a long time to get my act together and find a way to deliver performance reviews that are helpful for everyone.
In my experience, good performance reviews start before someone accepts a job or new role. It begins with a document that clearly articulates the mission of the role and the outcomes you expect the person to deliver in that role. I stole this fromWho: The A Method for Hiring by Geoff Smart. It’s a good book I recommend to most Founders and People Leaders. (Here’s a synopsis with an example of the MOC form I referenced.) In the book, the document serves as a mechanism to better recruit and screen candidates, but I actually think it’s even more useful as a tool for ongoing management and aligning expectations for what success looks like. It also solves for the problem of someone accepting a job thinking it’s one thing, but it’s really something entirely different (mismatched expectations are frequently a reason why employees do not make it). Here’s an example of a scrubbed version of a Head of Business Development expectations document:
Now you and your direct report have a source of truth you can continually reference to understand how they’re performing. The cadence that I think works best for performance reviews is two formal ones per year, and informal ones every other month in between (ie four informal reviews throughout the year and two formal reviews). Monthly is too frequent and doesn’t allow enough breathing room to get things done. During the informal check-ins the manager and direct report should take this document and mark every outcome as either Green (on track or exceeding), Yellow (behind plan), or Red (Code Red!). The informal check-ins are also an important time to recalibrate the document. Company priorities shift and the outcomes should change over time, and sometimes the mission of the role evolves as well.
If this process is happening at least two times before a formal performance review, nothing should be a surprise. As a manager you are clearly articulating how you think someone is performing in the role relative to your mutually agreed upon expectations, and as a direct report you know where you stand and what you need to improve upon to flourish.
Before the formal performance review, I take this document and go to town. I’ll start with a 1-2 paragraph high-level assessment of the person’s performance. This is the synopsis of key takeaways from the previous two quarters. Then I will go through the Outcomes and highlight each bullet as green, yellow, or red, and provide commentary (usually 1-3 sentences) with my reasoning. Sometimes an outcome may be Red but it’s not the person’s fault (eg a pandemic eviscerated your market). Sometimes it may be green but it’s because something happened in the market and can’t be attributed to the work that was done (eg a pandemic created unforeseen tailwinds). It’s important to call these out in the commentary.
After this I will highlight several things that the person did well since the last performance review in a What else did Person do well? section. These might be tactical wins that are worth calling out, or specific things the person has been working to level up for some time. It’s an opportunity to articulate the things that stand out that are special about the performance and person. After this section comes the What can Person improve? Here’s an opportunity to dive into 2-4 elements of the job that are not listed in the Outcomes section. It can range from “being cognizant of burnout” to “being more succinct while speaking in public” and “getting in the weeds to build better knowledge of the function.”
Then I will link to a document containing the person’s 360 Feedback from their peers and direct reports. Their direct reports feedback will be anonymized and organized thematically, but feedback from their peers should not be anonymous if the person is an executive (this is one of the hallmarks of a high-functioning leadership team). Under the link I will write a paragraph of my takeaways from the 360 feedback. Does it align with my assessment? Where is it different? What is surprising? Do not read the 360 feedback before writing your review otherwise it will bias you and you will cheat by using other people’s feedback to inform your own! And lastly, I create a Next Steps section that has a list of questions for the person to reflect on that serves as the agenda for conversation during the review. To better visualize this, here’s what a document would look like for someone who has been with the company for at least one performance review cycle:
This entire document is delivered to the direct report before the scheduled performance review, ideally 2-3 days. If you’ve done your job right, there really should not be any surprises outside of what they may read in the 360 feedback. Now when you meet for the formal performance review you aren’t reading through a document or notes on feedback, you are having a conversation about your report’s reaction to the feedback you so thoughtfully and thoroughly crafted. Almost every time I’ve done this, the conversations have been short and sweet. No surprises makes for easy, constructive, and delightful performance reviews. That’s right, delightful. This strengthens your relationship with your direct reports. Most managers they’ve worked with over the course of their career haven’t put in half the effort or thought to develop real professional relationships that you just delivered in a single performance review cycle.
Sometimes, there are surprises. Sometimes there’s just a total disconnect between you and your report. You may have poorly articulated feedback in an informal review beforehand. They may strongly disagree with your assessment, especially subjective ones (this happens, and it’s part of the conversation and this can be very healthy). Agreement on the objective outcomes should be clear unless something is very off between you and your report, in which case someone will likely head towards the exit soon.
When the meeting is over, ask your report to come to your next 1-1 with a draft of updated expectations and their own version of their Areas of Improvement. This is a critical point: for senior people, expectations are driven by you at the point of hire, but thereafter it is most useful for the employee to take the lead on this themselves. Over the next week work with them to mutually agree on the updated expectations and the areas of improvement that are most important between that day and the next formal performance review. Then in your next informal and formal performance reviews you should revisit the Areas of Improvement with your commentary on their progress.
Voila! The amount of effort that is required to do this reasonably well may seem daunting, but it’s worth it. Good management is hard work, and the price of failing here means you won’t be able to assemble and retain the high-performing team you need to succeed. In my experience, it makes life an order of magnitude easier and more enjoyable.
It took me years to get to this process which is by far the best one I’ve used in my career. It is largely geared towards working with executive and leadership teams (ie people that should be further along in their career and have real professional maturity). Many mentors helped me get there, and I owe a lot to my executive coach Jason Gore in helping me to flesh this out (especially the green, yellow, red assessment cadence and the Next Steps section) and Cody Forrester who would continuously give me feedback on how to improve my performance reviews over many years. It’s an always-evolving process, but I do hope you find this as helpful as I have.
Today we drove back from Maine concluding a family trip and an 11 year anniversary to cap off the summer. On the ride home we put on Animal Collective’s Merriweather Post Pavilion. It’s a perfect album, and it did the thing to me that only music can do. It transported me back to 2009 in the East Village. I love how a song or album can do that. Whenever I hear The Eagles’ Hell Freezes Over, A Day in the Life, or Your So Vain I find myself driving in a car with my dad on a ski trip in Arizona at some point in the mid ‘90s. Unlike anything else, music conjures memories in the most beautiful way.
Listening to MPP I looked back on that time in my life fondly. I remember our 6 story walk up at 418.5 East 9th Street. Lugging bags of laundry and luggage up the flights of stairs. I remember walking a lot around the East Village. The Mud truck I’d grab morning coffee at while grabbing the 6 train at Astor Place on the way to work at tumblr. Brunches at the Mud restaurant and the egg and avocado dish I used to order. Buying groceries at Commodities Natural Market on 1st Ave. Walking the Tompkins Square Farmers Market on the weekends with Carrie and buying flounder from the fish monger who would advise, “butter, parsley and a pinch of salt.” Whitman’s hamburger that was filled with a molten ball of cheese on the inside. Passing momofuku and always telling myself I should eat there more. Slowly but surely becoming an adult with the person I’d get married to shortly thereafter, and with whom I’d have two beautiful children.
Music can do wonderful things. Happy anniversary, Carrie.
I oftentimes hear tropes like these from early-stage startup founders:
Customer acquisition is slow right now, but we just hired an amazing head of marketing who is going to fix it for us.
Our upcoming release has the right feature set that will improve virality and kickstart growth.
We will start scaling and hit our targets when we hire our new VP Sales.
The rebrand work we are doing is going to change the game for us.
When we launch this BD partnership things are going to skyrocket.
There are endless permutations of these. Entrepreneurs gravitate towards the optimistic outlook that a new hire, feature launch, redesign, etc., will miraculously solve the most pressing problems, course correct the startup, and catapult it into the stratosphere. I have been guilty of this myself many times over.
This wishful thinking is dangerous. Most senior hires do not work out, especially at the early-stage. An overwhelming majority of launches (90%+), whether it’s a new feature, product, distribution partnership, or rebrand, do not have the desired or intended impact. Things go wrong way more often than they go right.
On the quest to achieving product-market fit, which I think of as having a product that 1) solves a real problem for customers with a 2) clear path and trajectory towards reaching the upward bound of the first S-curve, entrepreneurs delude themselves into thinking there are silver bullets. The fact of the matter is the only silver bullet that exists in these early stages is raw grit and ingenuity. This means all hands on deck, trudging through the weeds, wringing out every drop of trial-and-error progress you can to optimize for the lucky but well deserved breakthrough that gives you line of sight to a bigger and brighter future. Grit and ingenuity. That’s it.