David Cummings on Startups

Category: Corp Culture

  • The Broken Windows Crime Theory Applies to Startups

    Every detail counts. It isn’t that every detail needs to be planned in advanced but that every detail needs to be addressed. According to Wikipedia, the Broken Windows Theory says the following:

    Monitoring and maintaining urban environments in a well-ordered condition may stop further vandalism and escalation into more serious crime.

    For startups, it isn’t about further decay but rather about setting the tone organization-wide that details matter. Details in the product, details in the corporate culture, details in the office, and details in how people are treated matter. You can still launch a minimum viable product and have the details for the feature set covered, even if it is sparse.

    People are smart and pick up on what’s acceptable and what’s not acceptable. It’s hard to set the tone that some details matter and others don’t. A better approach is that all details matter, like the broken windows theory implies, and some details have a higher priority than others. The next time you see an issue or a detail not addressed, consider the implications and organizational approach.

    What else? What are your thoughts on the broken windows theory for crime applying to details in startups?

  • Strong Corporate Culture Doesn’t Mean Everyone is Best Friends

    An entrepreneur was asking me questions about corporate culture and why I thought it was so important. After my usual lines about it being the only sustainable competitive advantage within our control, he said that they were having challenges with certain people getting along even though they meet their corporate culture standards. I thought about it for a second and realized he was right — a strong corporate culture doesn’t mean everyone is best friends. In fact, even with a strong culture, everyone isn’t going to like hanging out with every other team member.

    A strong culture doesn’t mean everyone likes everyone else. A strong corporate culture does mean the following:

    • Common values
    • Mutual respect
    • Alignment and clarity of purpose

    Of course, it’s great when people are good friends with their co-workers, and we actively want that, but personality styles don’t always mesh and we’re most interested in smart people that get things done and have our same core values.

    What else? What are your thoughts on the idea that a strong corporate culture doesn’t mean everyone is best friends?

  • Bringing ‘B’ Players in to Scale Fast

    Recently a VC, when asked how to scale fast after a large funding round, said the solution was to bring in ‘B’ players and have a process and structure to make them successful. Of course, you want all ‘A’ players, but when raising institutional money you have a mandate to grow as fast as possible — and that often means hiring faster than you can find ‘A’ players.

    There’s a saying that ‘A’ players recruit ‘A’ players and ‘B’ players recruit ‘C’ players, not knowing any better. The thought of lowering your standards in order to hire people fast enough to meet investor expectations sounds bad to me, but I understand the pressure. Some startups, with a focus on corporate culture. know that they are sacrificing growth, while maintaining long-term organizational health, by sticking to their hiring standards throughout high-growth periods. One of the biggest challenges is not getting frustrated with hiring for key positions such that you accept someone that has domain expertise but isn’t a good corporate culture fit — don’t do it.

    What else? What are your thoughts on bringing ‘B’ players in to scale fast?

  • 3 Unconventional Steps for the Hiring Process

    Hiring great talent that’s a strong corporate culture fit is one of the top responsibilities of a CEO, regardless of being a startup or established company. As part of hiring great talent there are three main areas to think through: casting a wide net to get candidates into the recruiting pipeline, assessing their culture fit and ability to do the job, and finally convincing the select few to join the team. For many types of positions there are plenty of quality candidates and the hiring process becomes the challenging area.

    Here are three unconventional steps for the hiring process:

    1. Written essays for all positions – a candidate’s ability to write correlates with the ability to do the job, regardless of position, more than anything else
    2. Culture checks by the founders and/or culture team – have people in the hiring process that are exclusively assessing corporate culture fit to build the strongest culture possible and to add checks and balances for hiring managers that get anxious to fill a position
    3. Unanimous approval – require 100% yeses from everyone involved in the hiring process regardless of seniority or position

    The idea isn’t to make the process as burdensome as possible but rather to build the best team. Spending more time in the hiring process makes sense considering the extensive amount of time you’ll spend with the person once they’re hired.

    What else? What are some other unconventional steps for the hiring process?

  • Consider Hiring Speed When Raising Money

    Many times over the past two years I’ve been asked why we haven’t raised money from VCs. There are a number of answers to that question but one of the big reasons is that once money is raised it has to be put to work as the goal is to grow revenue as fast as possible. For us, that involves hiring tons of people and spending more money on lead generation. It’s easy to spend money on lead generation but much harder to significantly increase our hiring rate and still maintain our corporate culture standards, which we’re going to maintain at all costs.

    Startups need to consider their hiring speed when raising money and building an expected budget for investors. Too often the model shows hiring numbers for each department (e.g. X engineers, Y sales people, Z support people, etc) with too short of a time horizon to hire the right people. A financing round is often viewed as raising enough money to last 18 months with the idea that 12 months will be for reaching the next milestone and the final six months will be used for raising the next round. Well, if the round is large, and you plan on hiring 50 new people, and it’ll take at least six months to find those people, six months for them to ramp up, and then six months to see results, you’re already 18 months out, thus you need to adjust the model and expectations with investors.

    Entrepreneurs need to consider their hiring speed when raising money, especially when raising money from institutional investors.

    What else? What are your thoughts on paying more attention to hiring speed when raising money?

  • Think of Startup Employees as Volunteers

    Earlier today I was having lunch with an entrepreneur and we were talking about corporate culture when she said something that really stuck with me: the newest generation of employees are best thought of as volunteers like at a non-profit. Now, this isn’t volunteers in the sense of not getting paid but rather volunteers in the way they want to be treated and the way they approach things.

    Here are a few reasons why startup employees should be viewed as volunteers:

    • Mission and purpose is more important than the money
    • The best work is done when you care deeply about something
    • Volunteers often need praise and encouragement to feel appreciated
    • Length of tenure is shorter

    Treating startup employees as volunteers makes sense as the employer is beholden to the creative, mobile, sought-after employee. With the creative class, the volunteer mindset is very prevalent.

    What else? What are some other reasons why startup employees should be viewed as volunteers in the non-profit sense?

  • Culture Checks to Help Scale a Startup

    One of the changes we made recently was to put in culture check teams to help us scale our interviewing process. As we add more and more team members it becomes difficult for the founders to personally interview everyone (although we still do it currently). Here’s how the culture check idea works:

    • Teams of two people do culture checks together (we have two teams for a total of four people)
    • People on a culture check team strongly embody our culture and can identify culture fit with candidates
    • The culture check interview is only done at the very end of the process when the candidate is in the finalist stage
    • The culture check interview isn’t for assessing domain expertise but for fit with core values (candidates that don’t make it through are great people that just don’t quit fit our culture)

    Culture checks are working out well and we plan on expanding the number of teams as the number of people we’re hiring grows.

    What else? What are your thoughts on culture checks for scaling in a startup?

  • Costs of Amazing Startup Benefits and Perks

    Earlier this week I was talking to an entrepreneur and he exclaimed that we must be spending a fortune on the amazing benefits and perks that we offer. After pausing for a minute I thought about and realized that I didn’t know how much it cost for an individual employee for benefits and perks.

    Here’s the cost for the different monthly items we pay for for each employee:

    • Full individual-only health and dental benefits – $270/month
    • Full short term and long term disability insurance – $20/month
    • Free lunch Fridays – $30/month
    • Catered daily breakfast – $60/month
    • 401k with 50% match up to 6% off salary with $3,000 max – $150/month (avg across company)
    • Unlimited drinks and snacks – $60/month
    • Weekly Friday massages – $15/month
    • Month car wash and detailing – $25/month
    • Free Braves tickets (2 per season) – $5/month
    • Total: $620/month direct expense of benefits and perks for the standard employee

    Yes, ~$7,500 per year is a fair amount extra on top of the 10% employer tax on wages but in the grand scheme of things it’s priceless to have such a great team of people with an awesome corporate culture.

    What else? What are your thoughts on the costs of amazing startup benefits and perks?

  • Two Requirements for Success from The Advantage

    Patrick Lencioni’s most recent book, The Advantage, is one of the best business books published in the past year. Early on he argues that there’s two requirements for success in business:

    1. Smart – strategy, marketing, finance, and technology
    2. Healthy – minimal politics, minimal confusion, high morale, high productivity, and low turnover

    Most executives focus on the “smart” side of the equation because it is easier to deal with, taught in school, and believed to be the differentiating part of running a successful business. The reality is that the “smart” requirement is now much more of a given due to the availability of information, educational background of executives, and competitive nature of most markets in the Internet age.

    The “healthy” side of the equation is the one that isn’t given enough attention and over the next 10-20 years will become just as top-of-mind and worked on as the “smart” side. Entrepreneurs and executives that don’t embrace the “healthy” side will have more limited lifespans and outcomes compared to those that do. Some people will deride it as being fuzzy and a corporate culture ploy but in the end a strong corporate culture is the only sustainable competitive advantage completely within the control of the company’s leaders.

    What else? What are your thoughts on the two requirements for success from Patrick Lencioni’s book The Advantage?

  • Thoughts on Pardot as AJC #1 Best Place to Work

    Yesterday the Atlanta Journal Constitution named Pardot as the #1 place to work in the small business category (50 – 149 employees) — we couldn’t be more honored, humbled, and thrilled by the recognition. It truly is our greatest accomplishment as an organization and is also external validation of our goal to be the best place to work and the best place to be a customer. Our guiding purpose is to be a platform for good work, good people, and good pay with the people side being the most important. Good people to us are ones that are positive, self-starting, and supportive. Yes, it’s really that simple.

    Are we perfect? No, not in the slightest. We still have significant work to do around team member alignment, clarity of career paths, and leadership development. We do know some of our weaknesses and we’re working hard to make them better.

    Here are some of the things that we do well and that contributed to us being named the best place to work in Atlanta:

    • Amazing people that fit our culture (most important!) — we hire people that already fit our style and recognize that the way we operate isn’t for everyone
    • Great benefits — we pay full health, dental, short term disability, long term disability, and 401k with match for all employees combined with catered breakfasts daily, catered lunches on Fridays, all you can eat and drink snacks throughout the week, and free massage therapists on Fridays
    • Encourage work/life balance — we work standard 40 hour weeks, in fact, most people work from home a couple days a week to avoid traffic, run errands, etc
    • Constant communication — we aren’t afraid of meetings, but we do them with a purpose and consistent rhythm between daily check-ins, weekly tacticals, monthly strategics, and quarterly off-sites
    • Celebrate success — every quarter we have a big company-wide off-site event where we celebrate as a team
    • One page strategic plan — a simple one-sided document has everything

    One of the hardest things about this approach is that it limits our growth. We’re confident we could grow revenue much faster but we’d have to sacrifice our hiring standards and we’re not going to do it. Our long term bet is to build the best company, not the largest company. We’re going to do everything in our power to achieve that goal.

    The amazing people on our team deserve all the credit and I’m extremely proud of what we’ve built. We’re just getting started.

    P.S. We’re hiring!