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Our Connection to Content

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Last week at SXSW, I was invited to sit down with Jimmy Chamberlin, the original drummer of Smashing Pumpkins, and CEO of LiveOne to discuss the future of music. Excited both because I was an early fan of the Pumpkins and I wanted to hear his perspective of the music-tech relationship given his transition from a full-time musician to a software company CEO. 

Pepsi’s question to us (and the rest of the convention) was: what does the future of the music festival look like? 

Jimmy and the Smashing Pumpkins spent years touring, they lived for the audience. Live shows were where they gained their energy, from the hum of the crowd. Even if early on that meant playing the parking lot of a thrift shop. A chance to play to fans was a gig worth taking. As the band’s popularity grew, it was more about finding more ways to reach more people at live events: bigger venues, more stops on the tour or just more nights performing. 

They were constantly seeking ways to scale their reach and so it’s no surprise that he’s now running LiveOne, a livestreaming service that creates real-time connection for large events. Their crowdsurfing platform allows virtual attendees to join a chat room and connect with one-another while watching the real-time event. The goal is to help big names have a wider reach in real-time. 

“Livestreaming tools like @liveoneinc create a venue that accommodates millions & millions of people” @jccomplex #futureofthefest

He comes from the top, a world-famous band that made sure to perfect each album before releasing. He provided the view top-down, big artist wanting to reach more of their existing fans. Proven content was looking to connect wider. 

Given my time with USV’s portfolio companies SoundCloud, Splice, VHX and YouNow, I took the bottom-up perspective, the view of a creator who wasn’t well known but wanted to engage with new and existing fans. Unproven content looking to seed new connections.

There are of course cross-overs, Lorde got her start on Tumblr, Twitter, and SoundCloud. From self-publishing to international stardom in a year. Publishing, not with polish for her existing fans, but as a way to publish new creations. 

“This time last year I was making a soundcloud, and a twitter, and a tumblr, all in the name Lorde. I had no clue what was going to happen with the music. I hoped it’d be alright.
Last night I played to a room of people whose name I worship, breathe like fine gold smoke, reverent. I realise over and over every day just how lucky I am to be here, and that’s down to all of you as well - regular people in dumb towns who make me feel so loved and strong."— Lorde

What is our relationships to content and connection? 

Jimmy believes the fans come to a show for the music, an experience that isn’t lost when consumed digitally from your home or mobile phone because the music is what makes the experience. I agree, I spend my time going to concerts of bands I love to experience the music live. However, I also believe the medium of an in-person musical experience is worth pursuing, even if the music is unknown. 

SoFarSounds has an international following and volunteer base who put on 1,000s of concerts a year to sold-out crowds. The events are held in local spaces, not formal theaters, and the band is unknown to patrons until they arrive. It’s not for the band, it’s for the experience. Would guests attend a livestream of the event if they didn’t know the band? The content may matter less. 

Music and in-person concerts are cultural staples that have existing since the dawn of our time, but technology has made new ways to suss out what really provides the connection we want.

Attend a concert online only via LiveOne? Buy tickets to a show where the band is unknown via SoFarSounds? Participate in a real-time digital jam session in the days of Turntable.fm? Allow someone else to curate music to your mood via Songza? Remix with global artists in real time via Splice? 

There are surely a mix of ways these pieces can be remixed in music that we haven’t seen–experiences: digital and physical; content: exciting, anticipated or surprising; and group participation: solo, small group or global audience. We’ll continue to seek and find new ways to engage.

What the music industry will teach us is how to think about other forms of real-time engagement. Chatter around Meerkat, YouNow and Periscope were abuzz at SXSW and beyond. Real-time user-generated video, is it about the content or the connection? 

Direct access to content wins. High demand players like YouTube and SoundCloud provide on-demand services to consume a very particular piece of content on your own.

Broadcaster connection wins. Meerkat allows you to connect with a single creator in real-time, on the broadcaster’s time schedule. You get access to that one person, or no one at all. The broadcaster is the motivation. Content can range from a Q&A to a broadcast of someone eating lunch. 

Real-time connection wins. YouNow allows you to connect with anyone, whether you know them or not, just by visiting the site and seeking channels. The interaction with a live broadcaster, known or unknown, is the reason to be there. Content can range from music to conversation, watching someone sleep or connect with other broadcasters.

It’s getting cheaper to create and distribute content but figuring out how to do it well or where to invest time is very much up for debate. This year’s SXSW seemed to conclude that content is still king, but incomplete without considering the opportunity for connection. Our conclusion on where Music Festivals are headed? They will continue to swell in size, like Coachella expanding to accommodate 200k people over 2 weekends, and to shrink to the size of your living room like those at SoFarSounds.

We’ll continue to see interesting ways to remix new experiences through technology: scaled, mass, small, famous, mundane. There is attention to spend, how do you think creators capture it next? 

Photo Credit: Sharing ideas about the future of music at @Pepsi’s #futureofthefest #SXSW (Thanks to Adam Posner).

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Travel startups & investor baggage

I was talking to an entrepreneur this week about fundraising plans for her business. I tried to encourage her, but also set expectations about building in a category that comes with a lot of investor baggage. I know because it’s one I built a business in too: travel. 

The travel industry has all of the makings of a great market. The last major innovation in flight planning planning is 10 years old when OTAs were fighting for eyeballs using tv commercials and SEO. Kayak was a huge success for organizing all of the information transparently in one place, but since being acquired in 2013, not much has changed. Even the mass adoption of mobile phones has had little impact in shaking up the incumbents. 

In 2012, the travel market was sized at $313 billion and has only grown with the addition of millions of new consumers online. There is a lot of potential in the market, so why aren’t more businesses being funded here? 

Trips, far off destinations and photos on beaches makes travel a fun industry to talk about. The product is something people like thinking about, vs say audit software, but it’s hard to grow a mass customer base. The challenges start with high costs for search, infrequency of purchase, large incumbents spending a lot on marketing, gaining customer mindshare, and division of business v. personal travel. It’s a hard industry to crack as scale, which has left many investors burned by investments in this space. 

Even trip-planning companies that have been successful in fundraising, haven’t had break-out growth. Hipmunk emerged as a contender to the traditional OTAs, but hasn’t found it’s breakaway growth even with $40M in investment. Gogobot raised $39M in funding but pales in comparison to TripAdvisor. 

Hipmunk vs. Kayak’s Alexa Ranking:

Gogobot vs. TripAdvisor’s Alexa Ranking: 

Growth for both of these companies is good, but it’s not likely enough to push those companies to a big exit for investors. The early and late money in those companies are still waiting for growth to set them up for an IPO or a large figure acquisition. 

Investors who’ve done travel deals in the past or are currently in one of these companies are likely more skeptical of the category than anyone. 

Yes, the consumer experience for planning a trip is still broken. Yes, there are ways to use data and UI improvements to fix these problems. Yes, there are opportunities in mobile. But no, no I’m not investing in travel. Even the smaller travel companies who have exited, they aren’t the 3x+ investors are looking for. The market is still out on what these companies are worth. 

So what will change investors minds? A good comp in the market helps. Yes, there are photo sharing apps that still get funded, largely because Instagram’s exit at $1B is a good comp. If you’re an investor who places a few small bets and one of them even has the potential to be worth $1B, that sounds like an attractive deal. Is that rational, no. Is that the way to make smart investments, likely not, but the facts add up. There is a market (and an exit strategy) for photo sharing apps. 

Travel doesn’t have that luxury, or at least not yet. 

The big company that may change people’s minds is AirBnB. Now AirBnB fits in the travel category of accommodations, but it’s business model is far from the average travel planning site. Instead of being a superior way to route customers to hotels, AirBnB is the new way to build hotels. They are utilizing real estate and the sharing company to compete with hotels, not just send traffic their way. So if they aren’t exactly a travel company, how does that help the sector? 

When AirBnB goes public, it creates a new player in the “travel industry acquisition” game. A Himpunk with a large valuation may be a small cost for AirBnB to better compete with OTAs earlier in the booking process. The tours, activities, and things to do component of Gogobot may fit into their extended hospitality services, and they could buy instead of build. If the largest players get acquired at large numbers, there will be a resurgence of interest from investors to find the next thing to disrupt the travel industry or sell to the incumbents who now feel threatened by AirBnB. 

AirBnB is not far from Kayak’s traffic:

The size of the travel industry will continue to attract entrepreneurs and investors, but it may take a few big exits to help former travel-investors to get back into the game. 

My advice for travel entrepreneurs, is to think about ways to serve specific markets, like the breakouts in the Indian and Brazilian markets; monetize early to rely less on investors; and serve a market need so well that people are willing to pay a lot of money for the service (not just affiliate fees). I’ll save my ideas on open opportunities for another post. 

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How to start talking to your team about diversity

This post is the second in our “Lessons from the USV Diversity Summit” series. In December, USV hosted our first Diversity Summit. Below are some of the most helpful insights we gathered about how to take action. If you are just joining the conversation, you can read the first post here.

Start somewhere

Who starts the conversation around diversity? Who will be the first one to say something, out loud, to your team? How do you start that conversation?

Talking about diversity can feel awkward. Many of our attendees found themselves  leading the charge at their companies simply because they were the first person to speak up about it. Others had their leadership role bestowed upon them because they happened to be the first person on their team to represent diversity.

A lot of our attendees told stories about how their company first “discovered” they had a diversity problem. Sometimes the team’s lack of diversity was pointed out by an outsider: “So how does it feel to be the only female engineer in your company?” Other times it was something people realized for themselves: I noticed I was the only black person  at our all-hands meeting of 100 people.” Occasionally, diversity came up because employees realized there was a mismatch between the team and its customers: “As a team of  ten white male engineers, we don’t represent the market or our customers.”

Most of the time, it was up to the diverse member of a team— whether they were a minority with regard to gender, race, or background—to take up the diversity initiative themselves. This can create the impression that diversity is important to that person simply because they want more representation for people “like them.”

We asked our attendees to tell us about their fears and concerns. Here are some of the sentiments that emerged:

  • “I’m a woman and I’ve never been discriminated against, but I know others have, so I’m making sure that behavior doesn’t continue for others.”
  • “I’m Latino, and I know a number of talented engineers of all backgrounds. I don’t want them to feel like an outsider like I did when I joined.”
  • “I’m the only male on my team, and I don’t want my opinion to be perceived as, ‘this is what all men think.’”
  • “I was the first female engineer, and I wanted to show other female engineers that they would not feel alone here, the way I felt alone when I was the only one.”

Waiting for minority team members to start the conversation themselves is dangerous, because if there is no diversity in your team, how will you ever start? So don’t wait. Start the conversation now.

If your goal is to be the best place for top talent to work, it should be the best place for anyone—even if they don’t work there yet.

We’re all in this together

No matter who or “what” you are, diversity belongs to all of us. To frame the discussion about diversity at our summit, we discussed unconscious bias early in the day.

We are all different from the next person. We all have biases that we use in our decision making, biases that come from  our upbringing, our life experiences, and our interactions with the culture and the world.

Leaving it to the professionals, we played a portion of Google’s video on unconscious bias. The video explains the importance of bias awareness in how a tech company successfully makes decisions. The video is worth watching in its entirety.

The concept of unconscious bias gives us a shared language to frame our personal experiences. Instead of saying “we,’” “them,” or “us,”—or using general statements like “men like to…” or “as Hispanics, we…”—we instead each framed our own thoughts around bias, conscious and unconscious.

Here are some examples: “I’m biased in favor of  iPhone users, since I’ve always used an iPhone and never an Android.” “I’m biased in favor of  NYU grads, people who grew up in North Carolina, and middle children.” It’s okay to have these biases, but letting them go unnoticed is where we get into trouble. If I only want to interview candidates who come from NYU, I’m letting my personal bias affect decisions for my company. If I believe that people who have been entrepreneurs just “fit the culture better,” I may not realize that I’m biasing a hiring decision. The idea might sound logical, but that doesn’t mean it’s true.

In your conversations, you may find it easier to talk to your peers about diversity if you have thelanguage to talk about differences, rather than generalizing. Instead of saying, “I only hire SVA grads,” you might try substituting, “In the past, I’ve had a bias toward hiring SVA grads.” Modifying the language you use in your mind can make the difference between weighing a decision and having your mind already made up.. It’s the difference between being open to discussion vs. being closed.

We found that establishing a shared vocabulary empowered us to speak up, be empathetic, and encourage without turning the conversation into an “us vs. them” type argument. Unconscious bias training is a great way to kick off diversity discussions, but it is only the foundation of a larger conversation. There are more unconscious bias resources listed here

Allies and open conversations

The most cringeworthy stories we heard about at our summit came from people’s efforts to try to “get people talking about diversity.”

One company had held an all-hands meeting to discuss diversity. Anyone could weigh in, share ideas, and speak up about what they wanted changed. To ensure that employees were building off each other instead of battling, the facilitators required everyone to say “yes, and…” instead of “yes, but…” The conversation generated a lot of ideas but left everyone exhausted. At the end, everyone had to come up with one word to describe how they were feeling. Most people chose words like “uncomfortable,” “tense,” or “stressed.”

In hindsight, brainstorming sessions that have more than 50 people are rarely productive. Extroverts excel, introverts hang back. Leaders speak up while newer employees proceed with caution. It’s not the right forum for most topics, and it;s not a great forum for diversity discussions either. The meeting generated conversation, but nothing moved forward until a smaller group took the lead and started to make changes.

Starting with a small group proved to be a successful strategy for several other companies as well. Two different companies set up lunches to try to bring women in engineering together and ask: “What can we be doing better?” One company found that just creating a space to discuss the question already helped the attendees feel supported and heard. At the first meeting, only women were invited. Once the safe space had been established, the second lunch was open to anyone. Ultimately, the meetings led to several positive outcomes: (1) women in the company were encouraged to attend the Grace Hopper Conference, the leading conference for women in engineering (2) the company started requesting a Code of Conduct from conferences attended, and (3) the company pledged to have more diverse hiring panels.

Several companies advocated starting the process by assembling a small group of people to brainstorm about objectives, then bringing in more people only after the small group had a handle on what they wanted to accomplish. The small groups don’t need to be limited to one type of diversity. It’s enough to start with a small, diverse group of individuals who all share the same mission: to increase diversity on their teams.

Defining Diversity

Once you’ve gathered your small team of allies, the next step is to define what diversity means to your company.

The Equal Employment Opportunity Commission (EEOC) has an extensive (and evolving) list of classes who are protected from discrimination. Since discriminating against members of these classes is against the law , it’s probably a good place to start. But you don’t have to stop there.

Here’s Stack Exchange’s philosophy on diversity in the workforce. This statement can be found on all of their job listings:

Diverse teams build better products
Legally, we need you to know this:
Stack Exchange, Inc. does not discriminate in employment matters on the basis of race, color, religion, gender, national origin, age, military service eligibility, veteran status, sexual orientation, marital status, disability, or any other protected class. We support workplace diversity.
But we want to add this:
We strongly believe that diversity of experience contributes to a broader collective perspective that will consistently lead to a better company and better products. We are working hard to increase the diversity of our team wherever we can and we actively encourage everyone to consider becoming a part of it.

Another company defines it as “Diversity of Thought.” They built off the EEOC guidelines, but expanded it to include diversity of skillsets, education, and interests. They took what was required legally and added to it to make sure it felt authentic to their company culture and their existing team. Diversity belongs to everyone at the company, not just a subset of employees.

Start small, start today

One of the break-out sessions from our summit was “Talking about Diversity without Tension.” There were a few takeaways from that discussion. There will be always be tension, even in a small group. Trying to avoid tension may actually be counterproductive. It’s more important to have the conversation than to try to avoid it.

The best way forward is to start small. Assemble a small group of people to start the discussion in a safe space. Invite a professional trained in diversity or unconscious bias to join you. Or bootstrap early conversations with online resources. We’ve collected a few recommendations in the Diversity Hackpad here: Unconscious Bias Resources. Whatever the size your company, start your small group conversations today.

The next post in this series will explain how to take the small group conversations and extend them to the wider company culture.

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Lessons from the USV Diversity Summit

At USV, we often get our portfolio companies together to discuss topics of interest, as well as challenges and lessons learned. In 2014, we held 42 such portfolio get-togethers. In December, we hosted our first Diversity Summit. The focus of the discussion was to increase organizational diversity to gain competitive advantage.

At the event, we had 28 attendees from 13 different companies with a range of job functions: Engineering, People, Community, Sales, Business Development, Legal and Product. Everyone had the same goal: to increase diversity in their organization.

I wanted to share the insights we learned and what we found helpful to take action.  

Why is diversity important?

To prepare for our event, I connected with Lisa Lee, Pandora’s Head of Diversity. She shared the importance of setting context around the topic in a professional setting, especially since conversations can easily drift into discussions on social justice, privilege and entitlement. Those topics are worthy to inspect, but they detract from the organizational conversation of increasing diversity for business success.

To set context, she advised addressing two key questions early in our discussion:

  1. Do you want your company to increase your company’s competitive advantage? Extensive research has proven that more diverse perspectives leads to more innovative ideas and better financial returns.
  2. Do you want your company to one day serve millions of people? It helps if you know how different people in the population think. If companies want to last, they need to think about this early.

Grounding the discussion in these questions early on will help ensure a productive conversation about diversity in your organization, both in strategy and in practice. The topic is vast, but you don’t need to be an expert to start making changes. If you want to learn more, go find experts willing to help.

To help get up to speed quickly, here are the most cited research studies around the benefits of organizational Diversity. The research can be summarized into the following:

  • If you want to create the most innovative ideas, you will benefit from diversity of perspectives within your workforce.
  • If you want to increase the financial returns of your business, encourage gender diversity on your executive team and board.
  • If you want to build a massive company that serves a global population, consider the diversity of your workforce in order to best serve those customers. 
  • Having diversity of perspectives can create more innovative ideas, but will likely expand discussions and debate.

Because diversity is such an important topic, it must be prioritized early in a company’s life.  As Lisa put it, “I’m a believer that you have to start thinking about diversity early, otherwise it just becomes really, really difficult the bigger that you grow. What you want is to grow your company where diversity is one of your core principles and core values, because trying to inject it later on is inorganic and it’s off putting to people.” Start today.

Challenges of making change

One of the biggest challenges of successful diversity initiatives is simply opening the discussion.

Google, Facebook, Yahoo, Intel and HP shared their workforce diversity numbers publicly after Tracy Chou, a Pinterest engineer, called for more transparency about their diversity efforts. Even though these companies are making progress, the media and social media reactions are largely negative. There is media finger pointing at what isn’t achieved yet, not focus on what is being done.

Diversity challenges are across the tech sector, from startups to venture capital. At USV, we know we’re far from diverse. Fortunately, we have learned a lot and we want to continue to encourage progress internally, within our portfolio, and the broader tech community.

Diversity initiatives are currently happening behind closed doors. Best practices are siloed and we’re not learning from each other.

An open diversity conversation lifts all boats. It’s what the tech community embraces: transparency, failing out loud, sharing strategies, cheering on those who are making changes, and using post-mortems to learn from things that didn’t pan out.

Diversity at work

Even within the walls of a single organization, it can be difficult to raise the topic of diversity. When asked amongst our summit attendees, the challenges raised were: discussing and defining diversity, creating a plan, and prioritizing initiatives to move forward.

To address these challenges, our group came away with a number of different approaches that I’ll expand on in more detail in this blog series. These include:

  • Getting Started: having the discussion, language, and online tools
  • Company Culture: embracing diversity, inclusive mission vision values, and performance
  • Recruiting: tactics, expectations, interviews, job postings, resources, and external organizations
  • Constant Evolution: Feedback, measuring success, training, and materials

Diversity is an urgent and important issue; the best time to start is now. Let’s open the door on this topic.

Diversity is never done

To wrap up our day, we had Maximo Patiño, Associate Director of Admissions and Diversity Strategist, join us from CUNY Graduate School of Journalism, bringing 14+ years of diversity leadership and advocacy. He answered the questions left open from our discussions and affirmed we were heading in the right direction. His most profound advice, however, was this: “diversity is never done”.

Just as innovation is not something you “achieve” it’s something you constantly strive for and try to inspire, diversity is never done. Both a relief and an inspiration, diversity is an initiative that will constantly be part of your company. The goal then is not to “fix” or “solve” diversity, it’s to encourage it.

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For the full list of Diversity Resources, including the research mentioned above, you can view the list here


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Maturity Map- Dunbar Stage: 150+ employees

The most common questions I hear from startup founders and team members are, “What are the best practices? What lessons have others learned? What’s coming next?”

The purpose of the Maturity Framework Series is to help startup founders and teams to anticipate what is coming next. This post will specifically look at the Dunbar Stage, when a company grows beyond 150 employees.

Company Stages by Number of Employees

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Links to full posts detailing the Early Stage, Momentum StageExpansion Stage, Growth Stage, and Scale Stage.

Dunbar Stage:  150+ employees

I’ve intentionally left no limit to the capacity of the next stage, no end state or upper bound. It starts at 150 employees and grows from there. I’ve done this for two reasons. First, the density of the USV portfolio companies hover between 30 – 150 employees, we have the most network knowledge in this company size. Second, there are changes that need to happen at this size of an organization that will continuously be required. I intentionally did not include pre-IPO company requirements here as it has less to do with employee headcount, and more with other factors. If you’re interested in what’s required of a pre-IPO company, you can read more here.

Now, what is the Dunbar number and how will it influence our company structure once we have over 150 employees?

“Dunbar’s number is a suggested cognitive limit to the number of people with whom one can maintain stable social relationships. These are relationships in which an individual knows who each person is and how each person relates to every other person. This number was first proposed in the 1990s by British anthropologist Robin Dunbar, who found a correlation between primate brain size and average social group size.[7] By using the average human brain size and extrapolating from the results of primates, he proposed that humans can only comfortably maintain 150 stable relationships.[8] Proponents assert that numbers larger than this generally require more restrictive rules, laws, and enforced norms to maintain a stable, cohesive group.” (Read more on Wikipedia)

The TL:DR version is, our brains can only sustain 150 meaningful relationships at one time. Now, there are many questions as to whether the actual limit is 150, look at Facebook or LinkedIn connections, with some users maintaining 250+ contacts, but when we focus on individuals within an organization, all working together, this number is a typical break point. Fast growing startups may feel this break point between somewhere between 125 and 225, but we’ll use 150.

Before we get into the specifics of the Dunbar stage, let’s take one minute to step back to think about the scale of 150 people. Think about sitting in your living room with 15 people, and let’s say they invite 15 more people. You’re now standing because you don’t have seating for 30. Now the party next door comes over with their 30 people, people are clumping in smaller groups to have a conversation and you’re worried about the line for the bathroom but with 60 people, you can still look around the room and recognize faces. Now imagine the restaurant down the street invites all 75 of their guests to your party. People are elbow to elbow, it’s impossible to hear the person next to you because the noise of the crowd is so loud. You now have 135 people at your house and your 15 best friends just showed up. You let the chaos bubble around and hope that no disagreement occurs. At one point you try to make a toast, but your attempts at quieting the crowd leads nowhere. Time to make room for the new guests soon on their way.

150 people is a large group, that requires a certain physical amount of space to be comfortable, and that doesn’t touch on the social constructs required. As an employee, even if you know everyone’s name still, you can no longer know exactly what everyone is working on, and when. The politics of each team are now local, not team-wide. You have blind-spots. Just like at a party, you can’t see how everyone is interacting at once. That’s okay. That’s the point, to scale with trust and distributed decision-making.

A successful organization requires new structures, policies and organizing principles to build the trust required to function at this size. As a CEO, you need to trust your management to drive their part of the business, take care of their teams, escalate any issues, and provide feedback as a whole. Your organization will be a collection of smaller organizations working together, not just a collection of individuals. It’s a society now, be mindful as to whether you’re building it like a democracy or a dictatorship.

Depending on the business model, early success, and senior leadership, the scales may be working in your business unit’s favor. For example, in an engineering-focused company, the early team might be 50-75% engineers. Resources, headcount, and positioning efforts always favored engineering. As the company grows, the demand for additional engineers may slow, but the demand for sales may grow. At 150, the team may be 50% sales people, 30% engineering. Resources will flow accordingly.

Shifts in team focus are not a good or bad thing, just a shift that should be addressed, acknowledged and not ignored. Folks on those respective teams will see that shift in power and it may ruffle feathers. Ex:

“Why does marketing get more resources now?”

“I want to work on the sales team instead of BD, they have more engineering resources since they’re bringing in revenue.”

The new team structure is not bad, but the change from how ‘things were’ won’t go unnoticed. Address them, communicate and react accordingly. The danger occurs when this information is passed only in back-channels and it creates uncertainty. You will have uncertainty, be open about it in order to align on what is actually uncertain. Like a rumor, if you let it out of your hands, you lose control of the message.

Leadership needs to err on the side of more communication and teams need to build more process. I can hear it now, “Process? Yuck! That’s only for big companies, that’s why I joined a startup, to get away from process.” You will face this, the default for most startup companies is to reject process in favor of innovation. The often overlooked point is that good process enables faster innovation.

Early companies have process, they just don’t label it that way. An engineer may build a prototype on their own, bring it to lunch to get some feedback, and make improvements afterwards. That is a process. There aren’t many parts to it, but it is a process, something that doesn’t sustain over time, or just gets sloppy. Imagine 10 engineers all clamoring for feedback on their prototypes each day at lunch. It’ll get noisy, you’ll need to double the length of lunch. It’s sloppy process.

Scaling a company requires elegant process, the kind that is barely noticeable. If you are a fan of watching Apple Keynotes or engineering talks, you’ll notice the phrases like, “We looked at the landscape of what was out there and decided…”, and “Our team spent a year developing this new product” These individuals are describing their process in it’s elegance. They aren’t saying:

 “We had 2 PMs that prioritized this item in Jira for 4 months, we had to get feedback from engineering and senior management to push it forward in Q4. We had input from marketing, customer support, and HR to ensure we weren’t having any conflicts with external events that may delay or change our timeline. Then, we brought the idea back to the team, created sprint cycles for the next 6 weeks, making sure our backlog wasn’t creating roadblocks. Oh, and we also had to kill a lot of other things along the way to make it happen, there were disagreements and back-and forth emails among sales, product and engineering. Our CEO believed in it but actually wanted it 6 months earlier. But hey, here we are now.”

Process can be daunting to setup, as it’s never done. New components will come up that change what you need to do. App store review timelines have changed a number of times, each time it happens, everyone who has a mobile app has to consider the impact to their process. It used to take 24 hours for an app review and now it takes 7 days? Time to make sure you let communications know, so they know the press release will go out a week later. Don’t let the need for flexibility, stop you from putting process into place.

The advantage startups have over other companies is that change is part of the DNA. Building iterative products to serve customers is core to how the team works. Leverage that mindset for process, that it’s iterative, great products make people happy and things easier. Positioning critical process as  ‘internal tools’ or ‘business products’ can change the perspective. These are products that serve customers, those customers just happen to be employees of this company. As you did with the company, make sure you’re staffing correctly to enable internal tools teams to successfully deliver.

So how does a company at 150 or 300 evaluate their success? Take a look at three things:

  • How do decisions get made?
  • How does positive information flow?
  • How does negative information flow?

These will help identify some of the largest organizational challenges as you scale. You will iterate on the ‘ideal’ outcome for each of these questions constantly. Build the communication and processes to make it easier to identify challenges and improve over time.

Current state of the organization:

  • You know what you stand for
  • Stable, but constantly changing

Things you’re doing for the first time:

  • Hiring Executive coaches for your leadership team
  • More management tiers
  • Expansion in new markets or languages
  • Reaching or settling into profitability
  • Building teams that take care of your teams, like a learning and development team
  • Introducing support roles in Sales or HR that are more focused on execution
  • Build roles that are deeper, less wide.
  • Increasing the strength of your finance and security teams.
  • Thinking about IPO or late stage financing.
  • Paying market rates for talent, once you’ve evaluated title-fit

What you’ve already solved:

  • Better knowledge of your company’s ‘core focus’
  • You know what you’re doing, your title may actually reflect what’s expected
  • You continue to double down on profit generating parts of your business: engineering, product or sales.
  • Expectations that team structure will change
  • Right-sizing titles to fit the teams

If you have something to add to this list, please share in the comments or send me a line on Twitter.

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Footnotes:

*Please note, this outline is based off of trends I’ve seen in venture-backed startups. It very easily could apply to bootstrapped or non-venture funded companies, but not necessarily. In this outline I assume the company has taken funding.

**We’ve invested in a number of companies mentioned in this note. For a full list, visit our Portfolio Page or find opportunities with them through the USV jobs page.