Thinking about joining a family-owned company? Watch out for stormy waters! is a post from: Lean Startup Blog - rants and raves from the startup trenches.

Many wonderful small businesses around the world, from restaurants to product manufacturers, are run by families.  In my opinion, these companies have a lot of longevity built into them, because exit strategies rarely cross the minds of founders, and family ties keep the employee retention rate high. But, there is the caveat: family businesses are great… if you are a member of the family.
If you are an outsider, there are several dangers:

• Blood is thicker than water. If push comes to shove, you will be shoved.  Even if you are the most productive employee, you are not family, and fairness and professional treatment may not be extended to you.
• Family politics = major distraction. There is unavoidable family baggage on top of regular office politics. Are you politically savvy enough to survive?
• Nepotism. Merit is rarely a criterion. Enough said.
• Sibling rivalry. Even Baby-boomer founders can act like kids, and I have seen grown men get into pissing matches that even teenage siblings can’t top.  This can kill a company.
• Family traditions. Being an innovator (without the founders’ or major shareholders’ voting rights) is not an easy feat. Family ways can infiltrate the business and add an additional hurdle to innovation. Are you ready to push that boulder up the mountain? Have you heard of Sisyphus?

Just to be clear, there are some very good family-run companies that treat their non-family employees with absolute respect. If the company is run by a meritocratic matriarch or patriarch, you just may be in luck. I worked for my father when I was a teenager, and he did not cut me any slack for being his son. I have also heard of several examples of family-run companies that did reach an exit event (sales, merger, etc.) and shared the wealth with ALL their employees. So please don’t be discouraged if you get an offer from a family-run company, but do take the following safeguards into consideration to save your bacon:

• Cash is king! Get paid and don’t get enamored with equity BS. Now don’t take me wrong, I would never turn down equity, but I also know to value it like lottery tickets. A family-owned business provides job security to family members, so you are very unlikely to partake in any kind of juicy sale of the business?  Profit sharing trumps equity in this case.
• Who has how much of the pie? Pay special attention to the distribution of voting rights. The best situation is when the majority of the voting rights are held by one family member. If you have a parent and several siblings with equal rights, think twice, because decision making will take forever and tough choices may never be made.
• Do the job, deliver the value you are paid for… but don’t forget, you are not family. You can be the superstar, but it will not be enough. Keep your network fresh and eyes open and have a clear exit strategy in place.

If you have worked for a family-owned company, please share your observations in the comments section.Similar Posts:

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Companies that become unionized deserve it! is a post from: Lean Startup Blog - rants and raves from the startup trenches.

Back when I lived in Chicago, I had the pleasure of working with a really grounded and wise CFO. He was an “old dog” with a CV many would envy. During one of our conversations about work environments, he said something that stuck with me: “companies that get unions deserve them”. If you treat your people fairly, invest in them, and genuinely care about their future, no union or union mentality has any reason to exist in your company. So how do we make sure our employees are working for and not against us?

1. Shared pain & shared gain. The alarms are already sounding about an impending firestorm of talent defections. Retention is going to be hell for a large number of organizations that immediately turned to their employees when they needed to cut costs. Too late for them. But how can you ensure you survive the next up- and down-swings? Profit sharing is one of the best components of total compensation, and companies who adopt this strategy across the board retain and attract the best people. When the bad times strike, you can reduce or even eliminate the need for downsizing by sharing the pain across the board.
2. Keep an organization as flat as possible for as long as possible. Nobody needs dozens of VPs, when you have 30-40 employees (or even 100+). Doers are the best leaders because of their credibility. Red tape, meetings, hierarchy, and other org chart growing elements of an organization rarely improve efficiency. I don’t know about you, but I have a very high level of respect for the execs who pound the streets with the rest of their team.
3. You don’t have to be a mom or dad to your employees, but you do have to remember that you can improve an individual’s performance and value by helping them solve their problems. Example: if their spouse is also working and your employee has to worry about daycare, why not allow them to have a flexible schedule? If you help them get the problem off their shoulders, they will in invest that mental energy into their work.
4. Build a culture of constant growth. As a company grows, so should every member of your team (and if they don’t want to, then get someone who does). Nothing drives a successful team more up the wall than a couple of mediocre members. Some of the big consulting companies have a good policy – up or out!

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Beware of corporate cockroaches is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I was recently overheard a conversation on the T (Boston’s subway) between two coworkers who were scheming on how to take more “sick time” without getting caught, brown-nose their boss to get what they want, and stay under the radar. These two individuals were corporate cockroaches!

I have an allergy to corporate cockroaches that no EpiPen can cure. They are the spoon of crap that ruins a barrel of honey and the rotten apples in a bushel of good ones. Nothing makes me angrier than those who try to game the system – their actions hurt both their team and company. As long as we turn a blind eye to corporate cockroaches, they will thrive, so we need to take an active role in keeping these people out of our organizations. 

Here’s how you can identify them.  Corporate cockroaches:

• Always ask “what’s in it for me?”
• Never show any initiative to take on anything new or even remotely risky
• Will never take responsibility for a mistake
• Spend more time brown-nosing the boss than genuinely helping the team
• Are exceptionally good at knowing office policies and play with loopholes all the time
• Never invest in bettering their knowledge
• Never work past 5pm and make excuses to leave early or take long lunch breaks
• Become the most political people during the hard times

Remember, an organization does not have to be large to have this infestation. Even a small startup can have scum on their team.

So what’s the cure? Be vigilant about the signs of an infestation and fire them without any mercy! Your organization needs to be filled with people who are passionate about their work!

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How to ask for help is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I was recently helping a good friend with some logistics for an event she was organizing and I got a little frustrated, because I knew I could have contributed more if she would have asked for my help earlier. This inspired me to say: “Emmi, I am going to write an article about how to ask for help!” In any business endeavor when resources are tight (e.g. money, time, sleep, etc), one must know how to ask for help or a favor.

So why am I using Emmi as an example? Let me start by saying that she is an absolutely fantastic business woman who has an impeccable pulse on her target market, takes care of her clients, and leaves a “wake” of raving fans. But Emmi hates asking for help, because she doesn’t want people to think that she is taking advantage of them. I used to hate asking people for help too. It was a mix of pride, ego, and inexperience that led me to act that way. So what made me change? Back when I was fresh out of school, my mentor set me straight and hammered a couple of things into my mind that helped me immensely with the issue:

1. Start by helping others as much as you can, so you have a savings account for goodwill. The more you deposit in it, the more you will have to draw upon when you need it. Start “depositing” early and often.
2. People love helping. If someone is your friend, he/she wants to see you succeed and will find the time to give you a helping hand. I personally garner great pleasure from helping my friends.
3. Put your ego and pride away! Asking for help does not make you look weak, stupid, unsuccessful, etc. Ask any serial entrepreneur, who has made it, and I have no doubt you will hear about the vast network of people they have supporting them.

So Emmi, are you going to hesitate to ask for a favor the next time you are putting together another one of your fabulous events?

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Leadership lessons I learned at my father’s funeral is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I previously mentioned that I was blessed to have a father who was a very powerful role model (see my article “12 rules of business I learned from my father” to read more about him).  He shaped my views on leadership, teamwork, and business, and I wanted to share a story with you about a very sad, yet inspirational, day in my life.

While I was a wide-eyed teenager, eagerly soaking up my dad’s business advice, my father always used to say that the best indication of how well you have done in your life and people’s lives you have touched is by how many people pay their respects at your funeral. Sadly, several years later his words came to fruition. We tried to keep the news of his death quiet, because that is what he would have wanted, but much to my surprise, the word spread like wildfire.  The next day we had droves of people streaming in to pay their respects at his wake. I was floored. As the oldest son in the family, and bearer of his name, I stood there for two days greeting every person who visited. To a twenty-something fresh out of college punk, this was almost too much to handle.

I heard hundreds of stories during those two days. One woman (his former employee) came up to me and told me how he pulled a lot of favors to get her son in to see one of the top doctors in the country.  Her son was standing next to her. Another man told me how my father hired him when no one else would. This man went onto become a well respected reporter. Many people also mentioned how my father all always had his door open and found time to talk to people about their concerns.

So what are the powerful lessons I learned from all of those stories?

• A good leader does not sit in an “Ivory Tower” and delegate. “The air is thin up there and brown-nosing is rampant”, my father used to say. A good leader is close to their “troops” and cares about every single one of them (no matter if he/she has 1 or 2000). They lead by example and are the first ones out on the battlefield.
• People either love or fear their leaders. You have a lot more impact if your employees admire your actions.
• Caring about your employees at a personal level builds loyalty and dedication, which will help you weather the storms.
• Being a business leader is not just about profitability, it is also about changing the lives of your employees for the better! Put your people first and the value your shareholders will follow!

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How Freecycle helped me bootstrap is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I have a confession to make. Thanks to having worked for only customer revenue funded startups, I have become somewhat of a frugal nut. I love free stuff and I cringe at paying asking or retail price for anything. Anytime I pay MSRP, I feel like I have committed a sin. Whenever I would run operations in a startup, my most common response to many purchase requests was:” and with what revenue are we going to pay for that?” To me (and many others) cash is king, queen, emperor, and the whole darn extended dynasty. The only way I like cashflow in our books is incoming.

Though being that frugal of a S.O.B. is not easy, there are many more resources available now than they were when I started my career. Today I want to sing my praises to the Freecycle Network. If you have a huge ego and have an issue with used stuff… you may want to just move on to another article. For those of you who don’t know what Freecycle is, it is a network of e-mail lists and sites where people and organization give away for free or look for “stuff”.

To give you an understanding of how much generous folks participating in Freecycle have helped me, let me share with you things I have gotten off Freecycle: office supplies, whiteboards, tables, chair, storage cabinets, servers, printers, software, and various tech items. I estimate I did not have to spend in the area of about $20K-$30K, thanks to Freecycle. Sometimes we simply had no budget for a particular resource, so Freecycle helped us bootstrap. One particular case I remember very fondly. In one of my ventures I needed two servers for the office file serving, web development, and CRM. I quickly blasted out an e-mail to Freecycle network, though I thought it was a far shot. Same day I got two e-mails back. Both were from IT managers who had older decommissioned servers sitting on their shelves they did not want to trash. I quickly picked those up and found them both to be in a great shape. Yes, it did take me extra half day to clean them, update the firmware, find the older drivers, and purchase some extra memory and drives (which were dirt cheap on Ebay). But at the end I had two workhorses ready to save my day.

Now, please don’t misconstrue that I treat Freecycle in a “take only” manner. I believe in an environmental sustainability, conserving resources (which consequently also conserves the cash), and keeping my goodwill balance always in the positive. I have spared the landfills of boxes and boxes of computer components, PCs, furniture, books, etc. One man’s trash is sometimes another man’s treasure.

What is your favorite bootstrapping resource? Yes, I do plan an article on singing my praises to the opensource software.

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The biggest mistake of my career is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I made the biggest mistake of my career when I lived in Chicago – I rarely networked.  I went to maybe 1-2 events per year and made an occasional phone call. My excuse was that I was too busy for it. In retrospect, I cringe when I think about how many business opportunities and great talent I may have missed out on recruiting for my company, because I was too cooped-up in the office preventing “fires” and taking care of my people.

But I’ve changed my ways.  Ever since I moved to Boston, I’ve made sure to partake in at least one networking event each week, and I have a much larger network now than I ever had in Chicago.

But as I network, I have noticed a huge problem for someone like me, who is more valuable for mid to late stage startups/SMBs  – individuals, who need you and know how to value you, have been getting busier and busier in the last 3-4 quarters and now are too overwhelmed to network. This causes a catch-22: they need talented individuals to join their teams, so they can scale, but at the same time, in order to find those professionals, heavy networking is required.

I frequently find myself networking outside of my market “bull’s-eye”. Although I realize the time investment I have put into building relationships has a great long term payback, I still need to deal with the reality of building more relevant connections for the near term. However much I enjoy hanging out with the 1^st time entrepreneurs, most don’t know what they don’t know enough yet to be able to value my knowledge and experience (see my article on why 1^st time entrepreneurs don’t need consultants).

So what is the solution? I really don’t see having/attending more events solving the problem. If busy business leaders can’t get out of their offices, what is the point of having more events? But, we are blessed to have the Internet. I think the solution at this point is to “open source” and share your knowledge, and actively promote it, so it is easier for those business leaders to find you. Share what you know. Don’t worry about people “stealing” your ideas. It is all about execution and if you are really good at your craft, you have nothing to fear. For the more immediate term, concentrate your efforts in building a larger online footprint. It is time for us to pony up the money on a professional blog theme framework (Headway or Thesis can be had for about $87), stop using free poorly coded themes (especially if you can’t hack PHP or CSS), increase number of articles you write, and start contributing to other blogs. The market is saturated with snake-oil salesmen, fakers, and rookies. If you are a real seasoned pro, you need to bring up your volume. The right people know how to distinguish high quality and valuable content from “snake oil”, but first they need to be able to find you first.

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Random lessons from 12 years in startups is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I wrote a post several weeks ago about the many lessons I’ve learned from my entrepreneurial father.  Now I would like to share some tips from experience I have gained working in a startup world for 12+ years. These are things you definitely learn from rolling up your sleeves and working, not from a classroom or a textbook.

• Even one word in a 40-page contract can land you in a very bad situation. It does not matter how experienced or expensive your attorney is – learn how to read contracts yourself. Also, demand that your documents be written in “normal human” English because this helps both sides know what they need to do to be compliant with the contract. The language lawyers use serves only… lawyers.
• Family-run companies are great companies… if you are member of the family. Every organization has unavoidable office politics, but in family-run companies the office politics are at a whole new level. Again, there is nothing wrong with these companies, but you will only succeed if you are also politically savvy.
• If you hold substantial equity (read: anything more than 1/10^th of the company), require to see the books at least quarterly. Learn how to read financial documents and navigate QuickBooks. Many companies go under because those, who you thought were your partners and friends, mishandled money.
• In the startups world, those who flaunt their education or pedigree usually have nothing else to offer but their titles. I love people with proverbial dirt under their nails who were able to rise up through the ranks through their hard work. They are a very valuable asset to your company.
• A lack of adaptability is often confused with resilience. The big difference is: resilient leaders will navigate their companies around the storm, while others will drive right into the storm exclaiming they are “trailblazing” entrepreneurs (only to run out of steam and perish).
• Though I heavily advocate against using titles inside of the startups, if you are an employee, make sure you get one matching your contribution to the company (even if the company has a flat org-chart). All of us will move on someday and the outside world loves titles.
• A person with a highly complex coffee order who does not tip tends to be an egocentric and vain asshole.  If you are interviewing with senior level managers or executives, try to have at least one meeting in a coffee shop or restaurant and watch how your future boss treats their hard-working barista or waiter. Bob Sutton, author of “No Asshole Rule”, would definitely agree with this statement. He calls it “Asshole Metric: The Starbucks Test”.

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How to build your startup core team is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I had a really fun conversation with a founder of a great company with fantastic potential today and we covered many topics, one of which prompted me to write this article. Securing money and investors are not always the biggest issue keeping startup founders awake at night. Assembling the right team from the very beginning can be a much bigger issue. I’ve previously talked about the traits you may want to look for in a possible co-founder and have covered the importance of a demographically and culturally diverse team. Today I will get down to the basics of how to start assembling your team from scratch. There are many perspectives on this subject, but I wanted to share with you what I have seen work.

Let’s start by debunking one common analogy – building a team is not like putting a puzzle together.  The number one rule I’ve learned from the best startup teams is that one trick ponies need not apply. In early to mid-stage startups, generalists should compose the majority of your team. There are two kinds of generalists: those who are Jacks-of-All-Trades and masters of one or two areas, and those who are masters of none (general management, which you don’t want).

Here are the rules of thumb I like for assembling a team:

• Until you reach a “comfortable” level of revenue, forget about specialists. (See my separate article on this issue). What makes one an asset versus a liability is the ability to step outside of the proverbial silo and competently get hands as dirty as needed. In addition, many times you can only afford one specialist for an area, which becomes a huge risk that I like to call “what if he/she gets hit by a bus?”.
• Don’t hire titles. Bring in people who are passionate about their areas of expertise and who love your industry. Passion for ones’ craft + love for mission of the company = talent worth their weight in gold. Plus, titles aren’t good for startups anyway.
• When building your team, take inventory of your strengths (even if it is just you), but more importantly, pay extra attention to your weaknesses. The best teams have members who complete each other. I like to build a matrix with the headings: “can do”, “can learn”, “can’t do” for each skill set and team member. Using this matrix allows me to keep better handle on areas we need to strengthen.
• Stay away from the “this is my baby” syndrome. Each member of your core team should be willing to build and hand off – you cannot grow your company if this is not the case. There is nothing worse than a person who micromanages or hogs an area of the business they consider “theirs”.
• Bring in people who have been at the level you want to be at in the next several years. There is no reason to bring on a big shot from a major multi-national corporation if you have no chance of being at the staffing, resource, revenue level that person is used to managing. If you are at $1MM revenue, get someone who has been at $50MM, but not $200MM or more. They will only get frustrated, cost you money, and leave before you know it.

Lastly, remember that there are always exceptions to every rule. I like to say that what makes you an expert is recognizing an exception for every best practice or rule of thumb.

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Customers, not shareholders, pay your bills is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I had to get several insurance quotes last week, since my current agent was not living up to my customer service expectations (especially considering the amount of commission they receive).  Only one of the three companies I contacted impressed me, and this prompted me to write this article and discuss how to better serve your customers.

I’m sure of one thing, archaic strategy of 9-5 customer phone-only support from agents who can not deviate from their scripts is live and well, but the companies practicing this strategy are on their way out. Why? We focus on maximizing the “shareholder value” and forget who pays the bills – the customer. People are becoming a lot more careful with their money and are starting to demand superior service. Companies like Zappos and NewEgg (to name a few) are setting a great example by taking the lead and focusing on their customers first. Just look at the fanatical following those companies get. You can’t stop their customers from raving about how great they have been served. Twitter, Facebook, Yelp, and countless blogs are full of glowing reviews.

I have been fortunate to work for two companies that were truly fanatical about their customers. Our accounts receivable at both organizations were great proof of what customers thought about us and the value we delivered, since we had no need to chase any bad payers. We simply had almost none. There were many instances where customers felt a bit embarrassed that they had forgotten to pay us, since we did exceed all of their expectations.  Here are several key lessons on how to provide the best customer service:

• Your business processes must allow your customer service and sales reps to have the freedom to behave in the best interest of the company. They are adults. Train them well and trust them.
• Communicate with your customers the way they want to. If they prefer to do an online chat, you better put that in place. If a team member does not feel comfortable with selling via e-mail, train them or replace them.
• Your customers will tell you how to up-sell them. You just need to listen to them. Customers actually love to be up-sold, as long as they don’t feel they are being taken advantage of and that the company is truly providing value that they need.
• Your angriest customers may be the ones who can provide you with the best feedback. Train your youngest team members on how to deal with the angriest of customers. I love customers who bring up weaknesses of the company – sometimes they will tell me things others won’t.

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Lessons learned from moving startups to new offices is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I recently read a great article “Entrepreneurs: Beware the curse of the new building” by Steven Blank, who is a down to earth and experienced entrepreneur I greatly admire. While the case he describes is a bit dramatic and partly stems from deeper issues, many of his points were definitely something I have seen. The one sentence summary of his article: brand new offices disrupted SuperMac’s culture, detracted from growing the company, caused excess politics, and gave competitors lead time. I will not discuss the benefits or detractions new offices create. At one time or another we will all need to move our companies.  Instead, I wanted to share what I have learned from my experiences.

I have moved two companies during my career. One was a small move, but the other was a major production that was complicated by the fact we were moving in the middle of busy season. As I have mentioned, though I mostly agree with Steve’s points, in my case it was a bit different situation because the companies were late stage startups (4- and 7-year-old companies).  I’d like to share my tips for moving, which I acknowledge are more applicable to organizations like software development or professional services companies, that are dominated by knowledge workers.

• Avoid giving anyone offices if you can.  Even your CEO should be in the midst of it. If the mayor of NYC does not need an office, you don’t need one either. Office walls help create a “bubble” effect and rob you of 18-25% of usable space, make you less flexible, create needless hierarchy and status, and most importantly – exponentially magnifies office politics. An open office creates better accountability.
• It is a myth you can’t control noise in an open office. Cubes work, but they are not flexible. Partitions are much cheaper, more flexible, and do the job. Plus, open office helps with employee etiquette (you know, the stinky food, cellphones, and other issues). If your fish dish just stank up the office, now you have an angry CEO. You want to bet you will not do that again?
• Don’t segregate sales from your developers or other folks who make the product. Sales folks need to know what is down the pipe (meetings don’t cut it) and product people should know how hard it is to sell. Now there are product folks who cannot handle distractions. The solution is to buy them the best darn noise-cancelling headphones on the market.
• Not all the conference rooms need to be enclosed. I personally see conference rooms as an expense one should avoid. They are a waste of money. Either make a deal with a neighboring office to use their conference room, or take the money you have saved from not having that room and hold your meetings in the restaurant. If you choose to add expensive furniture in those rooms, the numbers will be even worse. The best option is to have bunch of foldable rolling tables, so the teams can put needed setups together for group conversations. Everyone can roll up their chairs too (that is $100-$400 of savings per person right there, just in chair costs).
• Those who will service the infrastructure (like your ops and IT guys) should be part of every stage of planning. Some ideas might sound great for you, but may be a huge budget drain for your infrastructure folks. One badly placed power outlet or the lack of the right number of outlets in certain places could cause major headaches and needless retrofit costs.
• Don’t EVER ignore local building codes and laws. A fire marshal can shut down your entire office for one infraction he/she deems not safe. Back when I was in IL, the fire marshal could shut down your office even for one space heater your team member decided to bring in and use. Huge bonus points if your operations person knows the fire marshal on a first name basis.
• Don’t let marketing people anywhere close to layouts, color schemes, etc. Every time they look at it, your costs go up. Most first impressions about the company are made outside of the office walls. Invest in that, not garish color schemes that cause eye fatigue.
• Buy used office furniture. You can get impressive stuff for 1/3 the cost and no one will know. If you can buy it from another soon-to-move company directly, you will save even more. If you really have the funds, than go for quality IKEA type furniture (however much I love IKEA, I am convinced it is cheaper to get more quality stuff long-term).
• Make your building manager love you. Give gifts to them on their birthdays, occasional “just cause” cases of cookies, and gift certificates to restaurants. I found that an extremely cooperative building manager is worth their weight in gold.
• And the last one - be frugal but not cheap. Example: don’t ever be so cheap you use flat paint on the walls. Pay extra for at least eggshell or semi-gloss. You will be surprised how even the cleanest team creates endless scuffs and stains on the walls.

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5 ways to build diversity into startup teams is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I’ve had the pleasure of working for companies “as diverse as the United Nations” during my career. These organizations have greatly benefited from having very diverse teams and are doing well even in this horrid downturn. Why is diversity important?

1. Customers are diverse, so varied teams are much more likely to understand what your customers really want.
2. Teams with a diverse demographic makeup will have different ideas, broader viewpoints, and a more diverse experience base – this is a sure formula for better decisions.

So, it is no surprise that I get the following question from time to time: how do you build a diverse team?

Let me start with the #1 rule for building a diverse team: as a leader (founder, CEO, etc) you should always keep your personal religious, political, and other beliefs to yourself. I worked for a company where one founder was a devout Catholic and the other was not a fan of organized religion. If you never asked, you never would have known. It worked well, because we had almost every demographic group represented in the company.

#2. Let diversity happen. You can’t force diversity in your organization by selecting people like M&Ms in a candy store: some green, some brown, some red, some yellow, some blue. That is not diversity that is “diversiwashing”.

#3. Diversity starts during your selection process. You must judge people based on their skills, ability to learn, and fit in the organization. If you want to use tests for these characteristics, then use only the ones that will not stifle diversity (cognitive and technical skills tests). Predictive Index, Devine Inventory, and many other tests that predict your personality based on word associations (or other language-based methods) are very bad for your company if you want any kind of diversity. There is a reason why sales people for PI, DI, etc, will never provide you with real peer-reviewed scientific studies and demographics used to evaluate these studies.

#4. Let your team vet the candidate, but don’t let them make final decisions on fit. As a leader of a company, you are entrusted with the vision and the path. Sometimes even the most well-intentioned teams will pick people just like them. Other times they will not be able to see how that person could be a great fit, but you know he/she will.

#5. Celebrate and educate! I am always a big fan of introducing policies that include at least X days per year for “personal reasons” and letting people work during holidays they may not be celebrating.  Example: everyone gets Independence Day and New Years off, but if you don’t celebrate Christmas, why should I force you to take a day off? On the subject of celebrations, always look for ways to include everyone. If it is Chinese New Year, why not congratulate your team members who celebrate it!  Another thing I like to do (since I am a foodie), is to bring my team together through food.  Have a company lunch where everyone brings their favorite dish, with bonus points for something most restaurants don’t serve, and extra bonus points if no one ever tried it before.

In my experience, it is never too early or too late to make sure you are thinking about diversity.  You can be a 9 or 120+ person startup and still be diverse.

Photo credit: Quinn DombrowskiSimilar Posts:

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Delegate work, not responsibility is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I am a firm believer that delegation is key to building a business. We can bring in all the technology in the world, but if we can’t delegate properly, our companies have no chance of scaling well. I have had the pleasure of spending many years in very rapidly growing companies and have made the following observations:

• Delegating work does NOT absolve you of responsibility. In the case of a failure, the blame is all yours. Investors will go after the CEO, even if a network admin made the mistake that hurt the company.
• If a failure occurs due to a person lacking skills, it is your fault for delegating work to the wrong person.
• If you have to say “if you want it done right, do it yourself”, you may want to get some education on leadership and the art of delegation.

Delegation is something leaders need to master, because you can’t scale your organization without it. Without delegating well, you are bound to flat-line or even drive your company into decline.

So here are the rules of delegation I like to use:

• Do not assume team members (even experienced ones) are clear on what needs to be done. Go into detail until YOU are confident the other person will execute the work as specified.
• Micromanaging is not delegating. You must have trust your team member and not hover. If you must hover, re-evaluate if the task is delegable or if you need to readjust your management style.
• Communicate any and all pitfalls, points of caution, and other negatives that may affect the delegated work. Also share any best practices, sources of additional information, or personal tricks of the trade. Part of delegation is teaching.
• When it comes to communications, it does take two to tango, but you need to take the lead.
• If you can’t trust someone to take on delegated work and are not willing to invest in their personal development, than you need to replace that employee. This kind of person just drags down your organization.

If you have any other rules of delegation you practice, please share them in the comments section.

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Is the startup world a refuge from age discrimination? is a post from: Lean Startup Blog - rants and raves from the startup trenches.

As I network heavily, a common topic of conversation that comes up is how “older” workers feel that they are being discriminated against in this market due to their age. I will not argue this point, but there are three points I would like to bring light to:

• It is not your age that turns off companies – it is the staleness of your skills. If you are a marketing/PR person and have not mastered social media, a business analyst stuck in Waterfall, a developer stuck in Perl and COBOL, etc., than your age has nothing to do with it. No one is entitled to a job anymore. Bring value to the table! Gray hair and general experience is only 50% of the equation. You actually have an advantage – your experience allows you to pick up skills faster, because you already know many common elements. Do it!
• Startups LOVE experienced people. Stop wasting your time in big corporations. All the youth in startups need a healthy dose of “gray hairs” for balance. If you have up-to-date skills and a positive attitude – you are darn irresistible.
• Entitlement days are over, stop talking about the past. What keeps some people from talking to you is negativity. Times are hard for everyone. Pensions, guaranteed lifetime employment, and overly-generous benefits are gone due to evolution of the business. Such is life, move on, adapt, and thrive!

Here is a great example from my experience. I worked in a software development company where we had a couple 50+ year young developers who handled projects and code like masters. In a way, their maturity gave them the superior ability to handle the inherent stress of the industry and VIP clients. They were fun too, because the stories from their days at IBM, Digital, Arthur Andersen, etc. were great lunch conversations. They became the highest valued employees in the company, and if there was a hot new technology coming up somewhere, they were the first ones to know about it.

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12 rules of business I learned from my father is a post from: Lean Startup Blog - rants and raves from the startup trenches.

It has been almost a decade since I lost my father to cancer, but the lessons I learned watching him run large companies, creating startups, and turning around languishing businesses are still fresh in my mind. I credit him for my business ethics, “workaholism”, leadership style, and pragmatic yet optimistic outlook. He was a man of few words, but when he opened his mouth, everyone listened. In this post I will share some of the rules of business he taught me.

• Run from those who think they are smarter than everyone else and those thinking that all of their ideas are “hot”.
• The best relationships are those built in bad times.
• There is no age limit to having a mentor.
• If you feel like you are surrounded by a-holes, maybe it is you who is making people act that way.
• B.S. always floats to the top and people will find out who it belongs to.
• Youth gives you ideas, but age allows you to sense which ones are B.S.
• Air is thinner at the top, so don’t build high mountains. (Less layers of management are better)
• Be wary if no one is criticizing you anymore or if all you hear is praise. They either drank too much of your “Kool-aid” or they are looking to pull wool over your eyes.
• Only morons don’t make mistakes, because all they do is a mistake. (I know, this does not translate too well from Lithuanian)
• Let your competitors waste money on “rainmaker” salespeople. Hire the best customer service team you can afford and make best product you can.
• It is hard to swim in a wake of a big ship. Don’t follow big competitors, outmaneuver them.
• Loyalty and dedication to the company must start from the top. So do sacrifices to keep the company alive.

I would love to hear about any business rules you learned from your mom or dad. Please share them in the comments section.Similar Posts:

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Why early stage startups don’t need business consultants is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I chat with many consultants during my busy events schedule.  Boston boasts a large number of consultants who are true experts in their areas. But, we also have snake-oil salespeople who love to call themselves business “coaches”, “gurus”, etc. If you are smart, you just smile at them, look for an excuse to run away, take their card, and chuck it the next moment you find a trash can. But, some early stage entrepreneurs fall prey to these vultures. That is part of learning process and natural selection. This article is for those of you with solid expertise and experience getting ready to start your startup consulting career.

Though being an “execution guy” is more of my cup of tea, I do enjoy occasionally performing consulting or advisory work.  I decided to write this article to share what I have discovered about startup consulting. I want to save you some time and frustration, so you can focus your talent and efforts on those who truly need and value it.

So, let me make a statement that many seasoned startup consulting pros will agree with: founders in early stages of startups don’t need your help. Why?

• Vast majority of true 1^st time entrepreneurs don’t know what they don’t know. With luck, they will start a startup in the area of their expertise. Problem is, just because you are an absolute genius software developer, does not mean you are a great business manager. Unfortunately, you can’t help someone who doesn’t want help.
• Attitude of “let’s wing it” is something that is required for survival in an early stage startup, especially if you are self-funded /bootstrapped. It is many times more expensive to fix the mistakes down the road that are being made in this stage. But, as the saying goes: “the first pancake is always burnt”. I never “chase” first time entrepreneurs in the early stage. Until you have burnt yourself, you will not know the value of good advice or execution.
• Excitement of starting his/her first venture is something that takes over someone’s entire mind. Early stage is a highly emotional stage for vast majority of 1^st-timers. It is like that high-school crush. You need to let it pass. In order for them to run their business properly, they need to learn how to control their adrenaline and emotions. Entrepreneurs in this stage need mentors and not consultants.

Bottom line: focus your efforts on people who know the value of your work. There are times when it is not worth it to educate your customer – this is one of those times.

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Difference between “My CEO” and “Our CEO” is a post from: Lean Startup Blog - rants and raves from the startup trenches.

Being in operations, I’m usually the right-hand-man for the CEO (and CFO), and have worked with some fantastic ones and a few who should have let someone else pilot the company. Not everyone is cut out to be a CEO and nowhere is this as evident and crucial as in startups. A good CEO can take the company anywhere he/she dreams it to go.

As I search for a head of operations position and talk to employees and founders of startups, one of the key phrase I am listening for is “my CEO [insert the rest of the sentence]”. That is what I want to hear. Yes, many will say “our CEO”, but there is a difference when someone adds emotion to their alliance and proclaims he works for his/her CEO.

So what is the difference? If I hear someone refer to their CEO as “my CEO”, I can ascertain people on his/her team will walk through fire for the company. Passionate trust in the leadership of a company builds resilient startups.

Here’s my table of the most common reasons people may call the head of the company “my CEO” versus “our CEO”:

I want to hear what makes you proud of your CEO.

Photo credit: Mark Kobayashi-Hillary

Note: statue in the photo is of one of the greatest dukes Lithuania ever had – Gediminas.  This statue is located in Katedra square, Vilnius – Lithuania.Similar Posts:

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How a foosball table can kill your startup is a post from: Lean Startup Blog - rants and raves from the startup trenches.

Back when I was working in Chicago at a late stage startup, I used to have great conversations with the president of the company about our various approaches to managing businesses. We shared war stories, ramblings about taxation in US and EU, and the software developers’ versions of Maslow’s hierarchy of needs. But one thing that stuck with me was his statement: “this company will never own a foosball table, because every company I have seen own one went under months after purchasing it”. The conversation that ensued is worth thinking about. When considering what is “cool to have” for employee morale and what they really need, we really need to distance ourselves from our egos.

• First and foremost – as leaders of companies we need to think about how to make our people more efficient and not about how much longer can we keep them in the office. Long hours do not equal good work product. If someone is tired and needs a distraction, they need to go home and recharge.
• This leads me to the next point – inefficiency caused by your team members. In the case of a foosball table, or anything else that involves more than just one person to “blow off steam”, it is bad judgment to enable an environment where one person could drag another one to “play” and therefore drag down the efficiency of the team. How do you help people not get distracted? Simple – don’t provide them with the temptation to do so.
• Last point – “cool stuff” might be something your recruiter will talk about when wooing someone to join the company, but beyond that it is a waste of time, money, and operational efficiency. It is also bad for employee morale and work-life balance. Perks like 401K matches, more days off, encouragement of the staff to get physicals, telecommuting, etc, are what matters and will make your employees stick around. All those “tchotchke” benefits have the same value as the cheap promotional items you get from vendors – cool to talk about for maybe 15 seconds.

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Why not let your customers tell you how to sell is a post from: Lean Startup Blog - rants and raves from the startup trenches.

A problem we’ve all seen too often is when a product or service is dreamed up, and no one wants to buy it. Most of us can list four or five examples of this right away. These duds should have been abandoned before too much time and money was invested.
What are the two major causes of this problem?

1. Family and friends. The people closest to you are actually the worst at helping you develop a product or service customers will pay to use. F&Fs are there to support you in your endeavors and not to act as your product development team.
2. Faux customers. Many of us nod in approval of some idea… until we have to pay for it. The feedback with the highest value is that from someone who will whip out their checkbook to become your first customer.

How do we solve this problem and avoid becoming another failure statistic? The solution is extremely simple: never develop anything by yourself; pick up the phone, get face to face, and go pound the streets.

Here is a quick example about how I approached my personal marketing challenge and how “customer listening” not only led me to a “Eureka moment”, but also saved me tons of time. I was running out of business cards and working on developing my business card 2.0. I did not want to merely tweak what I had, I wanted something new. My big issue with business card 1.0 was that very few people could tell what I did for a living by looking at it. I rushed into designing it and did not bother to ask my customers for their input.
So I got feedback from the general public (via Twitter), close friends in professional circles (via Facebook and e-mail), and perspective customers (face to face) that I knew would tell me their true opinion. People told me how to sell myself to them, what they really valued, and what they really did not like. The “Eureka moment” I mentioned above occurred when I realized that the vast majority of people are much more likely to tell you what you really need (not want) to hear, if you establish trust and enable/reward candor.

I case you are wondering, here is how the finished business card looks like.

Front

Back

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How to hire and KEEP overqualified people is a post from: Lean Startup Blog - rants and raves from the startup trenches.

I read a Wall Street Journal article today, titled The New Résumé: Dumb and Dumber - Job Seekers Play Down Their Credentials to Avoid Looking Overqualified,” that really struck a nerve with me. This issue is not exclusive to Baby Boomer and reaches all the way into Generation X. We talk about how it is hard to find the right people for our companies, but we are not willing to think just a little bit outside of the box. Here is a novel idea, why don’t we stop forcing overqualified individuals to hide their qualifications and try to make a deal with them, while the demand is low.

Here is my recipe for hiring and keeping overqualified professionals:

1. Set the proper context in your mind. As a hiring manager, be appreciative that someone with superior skills is willing to take a position “beneath them.” This shows how well their ego is controlled. Keeping this context in mind will set you up to have a more successful conversation. Focus on making sure the candidate really fits the corporate culture and is genuinely interested in your company.

2. Show your excitement that you’re able to have someone with a high level of talent come in and help you solve your current needs and have them willingly take the compensation in line with their current value to the company. Reassure the candidate that as their value to the company increases, so will their compensation.

3. Invest time in showing “overqualified” candidates the roadmap and milestones you want to reach. Think about how this person could contribute to your team in the future, and how he/she could earn their way to the position and compensation more fit to their level. This is how you take care of your future today and ensure you have a good team member.

People have a very good memory. It is an absolute myth that top grade talent can always find a job. Usually this BS is sold by inexperienced recruiters who need to cover up the fact that their candidate pipelines are skimpy. Don’t believe the hype! Find that “overqualified” talent and do the best darn job you can selling them on joining you now! By helping someone in bad times, he/she is much more likely to be loyal to you. Just think about the money and resources you will save once things bounce back up and your competitors will not have the chance to grab that cream of the crop individual!

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