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If the Shoe Fits: a Tale of Two Startups

April 29th, 2016 by Miki Saxon

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mThis is a short post, because one of the linked articles is long and both are critical reading if you are, or planning at some point to be, a founder.

Founded in 2007, Powa Technologies is the perfect poster child for everything an out-of-control founder can do — from raising just over $200 million in debt and equity in less than three years, giving Powa unicorn status, to sending it down the drain.

At best, the collapse of Powa looks like a wildly overambitious attempt to force consumer behavior to match the ideas of a self-styled visionary. At worst, Powa seems to be a case of willful ignorance and a failure to acknowledge serious shortcomings, at a cost of hundreds of millions of dollars to investors and hundreds of jobs for staff.

NGINX (pronounced “engine X”) started as an open source project in 2002 and became an actual company in 2011. Today powers 49% of the top 1,000 busiest websites in the world, including NASA, GoGo Inflight Internet, WordPress.com and Wikipedia. Since then it has raised only $41 million in 4 rounds and although its core product is still open source, it is generating substantial revenue from its paid services.

To actually make money, Nginx has a few menu items. First, Nginx Plus, an actual paid-software product that goes beyond the free version and offers customers deeper tools for managing their web apps.
Second, it has a consulting business, where its team of experts go in and help customers install and manage their Nginx-based architectures. That’s especially important as companies move toward microservices, which can be a bold new world for companies used to building software the traditional way. That business is growing quickly, Robertson says, with 300% more revenue in 2015 compared to 2014, though Nginx doesn’t disclose specific financials and he declined to comment on whether it’s profitable.

However, neither the investment nor the revenues have led to the typical lavish, San Francisco startup style.

Still, Nginx is keeping things fairly lean. Even with all of those users, its headcount only broke 100 recently, Robertson says, and the company tries to avoid “bloat” by adding only those features that users really need.

Read the articles.

Understand the actions and reactions.

Absorb the lessons.

Just be sure to sort them correctly.

Image credit: HikingArtist

Entrepreneurs: HireAthena — On Demand, But Not 1099

April 28th, 2016 by Miki Saxon

HireAthena

Do you use or are you familiar with HireAthena? It provides professional services, such as HR, benefits, payroll, FSA and 401k management, accounting, bookkeeping, monthly financials, and taxes, using a subscription model priced according to size and needs, dominantly for startups, non-profits and other small biz.

However, unlike most on-demand providers HireAthena is not using 1099 contract professionals.

In a unique twist in the on-demand labor market, HireAthena offers its professional workforce the best of both worlds: they receive a competitive salary, 401(k), and medical/dental/vision insurance, but they can also work from home. (…) “We’re committed to the idea that employees are loyal if we’re loyal to employees, even if you’re part-time,” said Kristen Koh Goldstein, founder and CEO of HireAthena.

What’s more, HireAthena is specifically targeting professional stay-at-home moms and dads, which gives them a significantly under-utilized source of candidates.

And in case you think that HireAthena’s model only applies to higher-end professional, you have a short memory.

Last year on-demand cleaning service Managed by Q did the same with their staff.

Managed by Q hires its “operators,” as it calls them, as employees, offering full-time and part-time employment with benefits and stock options. The work is flexible, and Managed by Q works with operators’ schedules.

While HireAthena is a spinoff of Backops and Scalus, which have raised $12 million, it hasn’t taken any funding directly and expects to be profitable later this year.

“Our mission wouldn’t be taken seriously unless we were profitable. This is not a charitable organization. We’re employing moms and dads in order to provide a very affordable service to small businesses.”

No funding. Profitable. Employees, with benefits.

How old fashioned.

Image credit: HireAthena

Attention: California Residents

April 27th, 2016 by Miki Saxon

If you live in California and care about the environment you should know about OhmConnect.

OhmConnect is the intermediary that keeps your unwary actions from instigating the use of dirty energy sources and pays you for the privilege.

Shouldn’t we be allowed to influence those decisions that affect us all?
Now, we can. Every five minutes, OhmConnect reviews the electricity grid’s performance and calculates when our community can make the greatest positive impact on the grid. OhmConnect works directly with the energy markets to balance the grid by automatically adjusting thermostats, electric cars, and smart plugs. Best yet, the electricity grid pays OhmConnect for this service and we pass those dollars on to you.
We founded OhmConnect to make it simple to optimize our electricity, enable a sustainable energy future, and have fun while doing so.

Right now OhmConnect only works with California electricity providers, i.e., PG&E, SCE, and SDGE; hopefully it will spread further as time passes.

Welcome to OhmConnect from Ohmconnect on Vimeo.

So whether you do it because you care or you are too busy/cynical/self-absorbed/unbelieving and do it for the money, or a combination thereof doesn’t matter.

Just do it!

Video credit: OhmConnect

Ducks in a Row: Culture Needs Teeth

April 26th, 2016 by Miki Saxon

 

https://www.flickr.com/photos/claudiogennari/3282846730/It’s pretty well accepted these days that culture eats strategy in terms of moving a company forward.

It’s also a given that you need to take time to consciously build your culture, whether for company, group or team, since culture will happen regardless.

However, your cultural structure won’t stand long without some very pragmatic infrastructure.

In other words, culture needs to have teeth.

If you’re counting on an honor system where nothing happens to those who violate the culture then, over time, it will erode.

Not because you hire “bad” people, but because you hire humans and humans often tend to do what is convenient, instead of what they should do.

They also tend to follow a “monkey see/monkey do” pattern, so if a new hire sees an old hand cut a tiny corner here and skirt a little something there and nothing happens, then expect her to think it’s OK.

Teeth aren’t about bureaucracy they’re about the obvious repercussions that happen when the culture is violated.

They aren’t sneaky or hidden; they don’t demean or embarrass.

Above all, teeth don’t bite selectively; they apply equally to everybody—which is why they work.

Their purpose is to strengthen your culture, not undermine it — which is what happens the moment someone becomes exempt.

Flickr image credit: Claudio Gennari

Golden Oldies: Ducks In A Row: Culture Creation

April 25th, 2016 by Miki Saxon

It’s amazing to me, but looking back over the last decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

Last Monday we looked at both an oldie and current info showing that all generations want pretty much the same things from work. What has changed is the patience factor in getting some of them. There’s also no question that the the intangibles need to be part of the culture and embedded deeply in the company’s DNA. The one thing I would add to Read other Golden Oldies here.

ducks_in_a_rowA Hollister poll of 1000 people, employed and unemployed, in Massachusetts last summer asked them what factors contributed the most to their job satisfaction; the majority of responses in order were

  •     Company Culture;
  •     Opportunities for Growth;
  •     Employee Appreciation;
  •     Work/Life Balance;
  •     A good Benefits Package; and
  •     Competitive salary/pay.

Notice that pay is dead last.

As I’ve always said, “The person who joins for money will leave for more money.”

The interesting thing about this is that numbers two through four are all parts of number one, good culture. Even benefits are a function of the culture, since they reflect the company’s attitude towards its people.

Still more interesting is that the top three are totally free—they cost the company no money—rather, they are a reflection of the corporate and/or manager’s MAP. Even number four is more about management attitude than dollars and any dollars that are spent typically offer substantial ROI.

There are tons of words that you’ll hear are important in creating a good culture, but I believe that it’s a function of two basics, one a belief and the other an action resulting from it.

Belief: People are intelligent, motivated, and they genuinely want to support their company in achieving its objectives. When people know more about their job, company, industry, and how they interact, they perform their own duties better and more productively because they understand the objectives and care about the results.

Action: People are most productive when they have all the information needed to do their job efficiently. This means that all managers, from CEO down, have both the ability and willingness to produce appropriately clear communications as to where the company is going, how it’s going to get there, what’s expected of them and how it all fits together and then disburse it accurately and completely so people can do their work in a timely manner.

If you believe that

  • a key ingredient for success is a culture that recognizes employees as its most valuable (and least replaceable) asset and
  • that people are required to act with initiative and their performance is directly impacted by the quality and quantity of the information they receive
  • then you’ll understand that people seriously resent communication failures that cause them to perform unnecessary, incorrect or wasted work.

Technically, communications is an IBB (infrastructure building block) and we’ll be talking more about them later.

If I was writing this today the one thing I would add is a sense of mission; a belief, based in reality, that what they are doing has a great purpose/meaning than just generating revenue.

Flickr image credit: zedbee

Entrepreneurs: Emulating Nature

April 21st, 2016 by Miki Saxon

Today you get a lesson from Nature on never giving up.

Keep trying and you will flourish

where theres a will

No matter how hard…

no matter how hard

You can push through

breaking through

And the result will be beautiful

still be beautiful

That said, don’t be so impressed with your power to overcome obstacles that you prove Immanuel Kant’s observation that possession of power inevitably spoils the free use of reason to be true.

Internet images from Anonymous

Ducks in a Row: Wally Bock Reviews “Winning Well”

April 19th, 2016 by Miki Saxon

https://www.flickr.com/photos/44412176@N05/4197328040/A couple of years ago, in a post citing Robert Sutton’s comments on scaling, I said,

A company isn’t an entity at all. It’s a group of people all moving in the same direction, united in a shared vision and their efforts to reach a common goal. (…)Yes, it’s the people. It has always been the people all the way back to our hunter ancestors.

And it will always be the people.

Years before that I wrote about creating a Good Culture in a Toxic Environment.

My e-buddy Wally Bock says bosses need to have a duel focus to be truly successful.

One is to accomplish the mission, make your numbers in business. The other is to care for your people, keep them safe and help them grow.

To that end, I thought I’d share Wally’s review of a book offering guidance on carrying them out.

Winning-WellBook Review: Winning Well

Several years ago at a party, I was approached by a young man who had just assumed his first management job. His name was Carl and he had a simple question: “Is there any company I can go to where I don’t have to choose between getting good results and treating people right?”

I answered Carl’s question with one of my own: “Why not stay where you are and do the job right?” I told him what I learned in the Marines, that you really have two jobs. One is to accomplish the mission, make your numbers in business. The other is to care for your people, keep them safe and help them grow.

It can be done. There are managers all over the world doing it every day. Carl and I talked some more. I tried to give him the basics of doing it right. If we were having that conversation today, I’d suggest that Carl read Winning Well.

An Overview of Winning Well

The promise of the book is in the full title: Winning Well: A Manager’s Guide to Getting Results–Without Losing Your Soul. Karin Hurt and David Dye have written a book that goes way beyond my discussion with Carl. Here’s the premise of the book, taken from chapter one.

“Winning Well means that you sustain excellent performance over time, because you refuse to succumb to harsh, stress-inducing shortcuts that temporarily scare people into ‘performing.’ You need energized, motivated people all working together. Your strategy is only as strong as the ability of your people to execute at the front line, and if they’re too scared or tired to think, they won’t. You can have all the great plans, six sigma quality programs, and brilliant competitive positioning in the universe, but if the human beings doing the real work lack the competence, confidence, and creativity to pull it off, you’re finished.”

The book is divided into four sections. The first covers the basics of Winning Well. Section two is about accomplishing the mission, getting the job done. Section three is about caring for the people, covering how you “Motivate, Energize, and Inspire Your Team.” The fourth and final section is practical advice for getting started, even if your boss doesn’t care about your soul or your team doesn’t care about the work or each other.

Who Should Not Read Winning Well

There are people who believe that all of this caring for the people stuff is nonsense. If that’s you, don’t even bother to pick up Winning Well. Wait until you think there might be something to the caring part of being a manager, then, when you’re looking for the “how to do it” part, buy the book and read it.

Who Should Read Winning Well

You should read Winning Well if you want practical advice for the real problems of getting results without losing your soul. Here are three kinds of people who can benefit from this book.

If you’re a working manager

If you’re a working manager and you want to learn the how’s of Winning Well, you can use this book in two ways. Read it straight through, making notes as you go. Then create an action plan for becoming the manager you want to be. There’s plenty of help in the book and online.

You can also read individual chapters to help you with a thorny issue at work. Dip into the book, get some just-in-time learning, and meet the specific challenge you’re facing today.

If you are a leader of managers

You’ll get a lot from this book and it’s also a great book to share with your managers. Winning Well is about rich, long term success. This would be a great book to stimulate discussion at team meetings or for a book club.

If you think you might want to be a manager

If you’re considering becoming a manager, Winning Well can help you in two ways. You’ll learn how you can be the kind of boss who gets results and builds relationships. As a bonus, the many stories and examples will give you insight into what a manager’s job is all about.

Bottom Line

If you’re a manager who wants to get great results and still have a good relationship with your people, or if you want to become that kind of manager, Winning Well will give you the insight, information, and inspiration to achieve those goals.

You can find out more about this book and how it got written by reading The Story of Winning Well on my writing site.

Post and image credit: Wally Bock; Duck image credit: gorfor

Golden Oldies: Coming or Going?

April 18th, 2016 by Miki Saxon

It’s amazing to me, but looking back over the last decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

I was reminded of this particular post when I read two Harvard articles, How to Hire a Millennial and What Do Millennials Really Want at Work? The Same Things the Rest of Us Do. It’s been such a joke to me ever since the Millennials hit the marketplace. Reading/hearing and working with clients, all freaking out on how to attract a workforce so different from the Boomers and Gen X. Ha! I said it then and Harvard says it now — people of any age pretty much want the same things from their employers; nothing new except how long they’ll wait to get them. Read other Golden Oldies here.

http://www.flickr.com/photos/shinazy/7310391140/Bosses across the spectrum are wringing their hands and worrying about creating an environment that will attract and retain young workers, while still motivating and retaining the rest.

It would be amusing to watch them try and jump through the required hoops if it wasn’t so sad.

Sad because so many of the required behaviors aren’t new.

The Millennials are demanding what people have wanted all along.

Yes, there are differences between what Millennials, Gen-X and Boomers want, but the important cultural basics are the same.

The biggest difference is patience, i.e., how long they will stay when not getting what they want?

Millennials want their work to matter; they want to be heard, recognized, challenged, mentored and grow.

Correcting for descriptive language, there is nothing new on that list from what good workers have wanted for decades.

So what changed; why is it so imperative now?

Partly the numbers.

In America its staff are young: 62% are from Generation Y, 29% are from Generation X and just 9% are baby-boomers.

But mostly the impatience. The young vote with their feet far more easily than older workers because they have less to lose—no mortgage, no kids and responsible only for themselves—and the economy improves Gen-X and the Boomers will also vote more quickly with their feet.

Google is often portrayed as the embodiment of millennial-friendly work practices. But Laszlo Bock, a human-resources chief at the internet firm, points out that it has workers as old as 83. And he argues that the only thing different about Generation Y is that it is actually asking for the things that everybody else wants.

The improving economy is a sword over every boss who considers talent replaceable and, therefore, expendable.

Bosses don’t need Google-style perks to hire and keep great talent, but they do need to create a culture that provides the intangible wants, whether in synergy with or in spite of what their company does.

Flickr image credit: Bitchin’ Ol’ Boomer Babe

 

If the Shoe Fits: Talent — Expendable or Dependable

April 15th, 2016 by Miki Saxon

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

5726760809_bf0bf0f558_mIt’s a short post today, because there are a number of links well worth reading.

Way back in 2008 I wrote It’s the People, Stupid, about the value of taking care of your people, as exemplified by Zappos, Costco and Trader Joe’s.

I’ve written many posts citing Walmart’s chew-them-up/spit-them-out lack of care and how banks, Yelp, HubSpot and Nest, among others, are following the Walmart model.

Dan Lyons, who spent two years at HubSpot, has written a book about his experiences called “Disrupted: My Misadventure in the Start-Up Bubble.”

You can get a sense of how HubSpot chews and spits from his opinion piece in the NY Times.

The upshot of all this is that you, as a founder, have a choice as to which model you’ll emulate.

Walmart or Zappos.

Just understand that you can’t switch from one to the other based on the employment market or your mood.

Image credit: HikingArtist

Entrepreneurs: Caveat Emptor

April 14th, 2016 by Miki Saxon

https://www.flickr.com/photos/sterlic/5507406859/

“Brian” is an entrepreneur — an entrepreneur whose company just shut down after burning through $140K friends and family cash.

He burned through it as the result of a combination of overconfidence and ‘underdiscipline’.

It’s not the first time.

Nor the second.

His uncle, “Connor,” is a friend of mine and I asked why he keeps investing.

He said that he the ideas and plans sound solid and he does in depth due diligence, but something always happens.

Connor’s wife thinks Brian is a con artist.

Connor disagrees; he says there is a fundamental difference between the two.

“The difference between entrepreneurs and con artists is that entrepreneurs truly believe in the dreams they are selling — con artists are focused on the money.”

I told him so did pathological liars, who usually  exhibit above average verbal skills as opposed to performance abilities.

Which sounds exactly like Brian.

The takeaway is caveat emptor, whether the entrepreneur with the vision is family, friend, warm intro or cold.

Flickr image credit: Scott Akerman

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