Blitzscaling 07: Session Notes[Mariam Naficy on The Dot Com Days and Knowing When To Blitzscale]

This is my fifth blog on the notes and my interpretations on the Blitzscaling sessions. In the fall of 2015, Reid Hoffman began taking session called Technology-Enabled Blitzscaling at Stanford University.Blitzscaling is what you do when you need to grow really, really quickly. It’s the science and art of rapidly building out a company to serve a large and usually global market, with the goal of becoming the first mover at scale. And its also about why organization culture is important for Blitzscaling Because when you’re growing an organization very fast, you have to make people accountable to each other on a horizontal or peer-to-peer basis, and not just vertically and top-down through the hierarchy.

Session 2 notes can be found here. Session 3 notes can be found here. Session 4 notes can be found here.Session 5 notes can be found here.

Mariam Naficy is an American entrepreneur who is founder and CEO of Minted, an online design marketplace. In 1998, Naficy co-founded, the first major online retailer of cosmetics. In session 07, she shares her journey and challenges while building marketplaces/ecommerce start-up.

  1. Always think long term when taking decisions from building product to hiring to raising money
  2. Get mindshare of the customer as soon as possible when you are into defining a new category
  3. It will always take more money & more time than what you think as founder to achieve all those things from launching MVP, to getting your first customer, to raising money
  4. Marketplaces are about people on both sides of the platform. Leverage the power of community to get competitive power for your marketplace start-up.And to leverage community power, more than focusing on money, focus on giving value or personal growth.
  5. Taking point 4 forward, the Internet and digital tools have and will keep enabling creative talent to earn more money & praises. Giving a platform to these creative people to earn money and build their reputation is how your marketplace will become successful.
  6. When your start-up is growing and you need people to handle operations at the larger level, your first preference should be people who joined you initially. They are the one’s who understand your core business in much better way than outside hire.
  7. You need capital to survive and grow your start-up, because you are bound to make mistakes. So focus on making money and not just raising money.
  8. To make employees more accountable and more skilled, make peer feedback work in your growing start-up.
  9. When your start-up is small, you will focus on getting the product right, getting numbers and customers. But as you become more growth-hungry and scaling up, you need not know everything that’s going on in your company. Don’t micromanage or get into every detail. Instead, delegate and focus on building ownership and accountability for your teams.
  10. To achieve focus on execution and on building ownership and accountability, get data/metrics on the table and review them every week. Here the key is to decide what kind of metrics is applicable for your business. For example:- At qilo, on technology end, we focus on (a) time taken to deliver new functionality or defect (b) Number of defects detected in delivered functionality in production. At sales end, we focus on (a) number of outbound prospects to reach every month(b) no of conversation going on with prospect & demo’s given (c) revenue numbers
  11. Keep reviewing your metrics till you get them right. Invest in technology that gives you dashboards about those metrics. Otherwise, it will impact the decision making and performance of your team’s.
  12.  To create a marketplace, make sure that you have much more diversity in your product line.
  13.  Advice for women entrepreneurs
    1. Start as early as possible as life will start putting trade off’s to you very soon.
    2. Get male mentor’s as much as female mentor’s
    3. Focus on earning revenue and VC’s will have no reasons to chase you as they also want to make money from you
  14. Reaching out to VC’s, best way is to reach out through reference by someone they already trust.
  15. In a marketplace, focus on supply and demand side at the same time. Focusing on supply side will more revenue and value from your platform and focusing on demand side will help you get customers.

Moving from performance measurement to enablement (Part 1)

If an organization is spending 2 million hours of effort on measuring performance, an annual activity that’s doesn’t make sense to anyone, we have strong reason to relook at the cost and effort spent on this activity. The countless number of hours spent on filling self-reviews, manager review forms, meeting, arranging and collating performance data is certainly not justified.

During my corporate career, my team and I always expected two outcomes from performance review (mid-year and annual):

  1. Feedback from my manager on how I have done
  2. What will be the increment in my salary

While both the reasons are strong enough to hold my team’s and my interest in performance reviews, it was always disengaging. You have to follow up endlessly with people is a strong enough proof that people are not looking forward to this. A study by Willis Tower Waston says that only 20% of employers believes that merit pay is effective in driving higher levels of individual performance in their organizations.  Here are the top 5 reasons of dis-engagement with performance review process:-

  1. Performance review process is not employee centric: The process and system are designed to get top 10, average 70 and bottom 20 percentile of people to facilitate C&B (Compensation & Benefit). In achieving that activity, organization and HR’s have lost focus on employees and managers (now day’s it’s also called as design thinking). As an employee, if I know that outcome of this activity is money, my projections about my performance will always be high. And the manager will be more focused on justifying the hike(and/or rating) rather than giving feedback on how a team member can improve the performance in future.
  2. Measurement on KRA/KPI/questioners which doesn’t make sense: KRA’s are static in nature; today’s business world is way too dynamic. Team’s priorities and targets keep changing on day to day, month to month and quarter to quarter basis. And team members are not able to correlate their day to day work with assigned KRA’s and KPI’s. And even if they are able to correlate, who much progress they have done to achieve that KPI cannot be measured quantitatively and qualitatively. Don’t believe me, ask your employees. At the end, the current process leaves the judgment of how well I have performed on the KRA/KPI to individual and then on the manager.
  3. Lack of clear communication on expectations and what should be done to grow: – When was the last time your organization has clearly communicated to your employee on competencies they need to excel in the current role. And which competencies they need to acquire to grow to next level. Team members often come up with an assumption that they are ready for next role, without realizing whether they are even ready for that or not. And managers don’t have enough wisdom and data to tell the team member that why they are not getting promote to the next level.
  4. Recency bias in evaluation: – How many times you have observed that when performance reviews and appraisals are approaching, team members suddenly become more proactive, disciplined, showcase best of their behaviors and start delivering things on time beyond expectations. I still remember one such incident: One of my team members who was sitting in different office location started sharing the status update on time without follow-ups, was calling me on regular basis to tell me how lucky she is being in this project and in this team. As a manager, you will tend to take the decision based on recent events and perceptions.
  5. No transparency: – Organizations lacks transparency in the entire performance review process with too much dependency on manager’s decision. While manager’s role cannot be denied in the process, it’s the employee peer’s who know how the team member has performed throughout the year and whether the team member was a good team player or not. Further to this, though increment has always been dependent on the how a company has performed and on macroeconomic conditions, managers give feedback to justifying the bell curve rating or to justify the rating communicated to her from the top down.

The way you measure performance defines the core culture of your organization and it will define how your people will perform in the future. In part 2 of this post, I will share how you can take the journey of moving your organization from performance measurement process to performance enablement process.