Blitzscaling 15: Diane Greene of VMware on Scaling Product & Culture

This is my 12th  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.

The previous blog related to Blitzscaling is here.

Diane Greene was a founder and the CEO of VMware from 1998 until 2008. Currently is senior vice president for Google’s cloud businesses. VMWare was the pioneer and the first successful company to provide software that can enhance the utilization of computer resources, called Virtualization.

  1. Organization culture is important when you scale your organization. And people whom you hire should be aligned with the organization culture.
  2. Help your people to leave if they are not culturally fit for your company. One way to check that is giving them the opportunity to be part of critical conversations early on and see if they are able to match with energies of people
  3. Hire ex-military people if you like them, as they are far more disciplined in their approach towards work
  4. How to bring discipline and reduce chaos in teams: Ask each team members of yours to share what’s going on in their teams by Sunday night. And as a manager, highlight what is important, collate all the notes and share it with everyone in the team.
  5. You can share the same notes with new hires so that they come to know what kind of things are going on in the team.
  6.  It is founder and leadership responsibility to put up a plan on how the team and individuals in the company should communicate with each other.
  7. When establishing your partner network, the strategy is NOT to give special preference to any one of them.
  8. If your salespeople are not giving results, its either you have a bad product market fit or your salespeople are NOT able to perform or messaging is NOT right.
  9. If you have a complex technical product to sell, put a team of 3 people in sales chasing same numbers. These 3 guys will be:
    1.  A guy, who is trying to sell product on phone
    2. A guy who is going & meeting clients and explaining things to customers from technical perspective(also called as solution’s guy)
    3.  And the third guy, who will be closing the deal. All these 3 guys should be chasing the same numbers.
  10. Establishing a partner network will act as your another direct sales channel, but make sure you have a win-win model with them. At VMWare, channel sales partners which are hardware vendors like HP & Bell, every VMware solution they sold, it leads to more hardware sales for extra storage and extra servers.
  11. To create a high-performance culture, hire people who are self-driven at all the levels in all the roles. Self-driven people who set high-expectations from themselves have high expectations from their team too.
  12. Appreciate the behaviors showcased by employees which as a founder you want them to display
  13. An advantage of under promise and overdeliver is not just it gives customers WOW, but also you decide your own pace.
  14. Best advice: “As CEO’s you never overcommunicate”

Blitzscaling 13: Shishir Mehrotra on Scaling YouTube and The 10 Things That Matter

This is my eleventh 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.Session 6 I haven’t covered. Session 7 notes can be found here. Session 8 notes can be found here. Session 9 notes can be found here. Session 10 notes here.  Session 11 notes here. Session 12 notes are here

In session 13,  Shishir Mehrotra, who helped guide YouTube through hyper growth shared 10 things that matter when you scale your early stage organization.

10things that matter

  1. Tailwind is an aviation industry term which means wind pushing the aircraft from its back; resulting in the higher speed of aircraft; opposite of tailwind is “headwind”, which means air is pushing the aircraft from its front, resulting in the slower speed. When applying this term to start-up world; “tailwind” means your start-up is or will be riding an existing wave of change, for example:-early stage businesses working in renewable energy which we taking advantage of society becoming sensitive about the environment.  “Highwind” means your start-up is or will be moving against a reluctance towards a change. for example:- Cloud based businesses 10 years ago was struggling to prove their point to CIO’s that cloud based hosting is way cheaper that on-premise server hosting. Success doesn’t matter whether your early stage business is tailwind or headwind. But being in tailwind, you can avoid many mistakes which headwind start-up businesses has done in past.
  2.  Purpose is one of the core dimensions that motivates people to do what they do. Mastery and autonomy are the other two dimensions. Purpose means connect what you do and why you do it. If you don’t communicate about your purpose, people will keep doing the transactions, which will never lead to WOW for your customers.
  3. Thesis matters means you have to focus on core & simple insights of your domain. Discovering those simple insights is going to take hell lot of time.
  4. Deciding which metrics to measure is very important. At Coca-Cola rather than measuring their market share vs Pepsi, someone at Coca-Cola suggested measuring Coca-Cola share in customer’s stomach. That measure resulted in Coca-Cola investing in packaged food products & drinking water. At YouTube, Shishir and team shifted measuring “Watch time Of YouTube” vs  “Watch time Of Television”. The previous metric that was measured at YouTube was the number of video’s uploaded to ad revenue to the quantity of ad’s coming to office. YouTube set a goal to increase its watch time from 100 million to 1 billion hours of watch time for Television. So setting the right type of metric to measure helps you to accelerate growth in the right direction. Pro tip: Use OKR to measure the progress on your business metrics
  5. Its often hard to make decisions in your business when you don’t have enough data. So you need more and more data to simplify your decision-making. The best decisions are those which simplify your life in making next 10 decisions.
  6.  Every business is a part of eco-system doesn’t matter how big you are. And there are set of people in that ecosystem on you have relied on to make you grow. And it’s very easy to presume their incentives if you don’t ask.Don’t presume things, collect data and/or ask hard questions, you might get more insights on this. For YouTube, their ecosystem is content producers. And YouTube worked hard to come up with the model on how to incentives the content producers.
  7. Value Matters as you grow. Think about your values well in advance before you become big enough that you can’t work on those & you can’t explain them or inculcate them in your employees.
  8. Talent matters alot for growing your organization. Divide your entire landscape of talent into 4 level as follows and compare them on their performance to decide who to take forward and whom to work with and who should be those who get out of the system.

Level 1) Executors: People who do day to day execution

Level 2) How to execute: People who give instruction on how to execute the things

Level 3) Solution to work on: These are the people who identify the solution to problems                       and priorities to execute

Level  4) Which Problems to solve:  These are the people who figure out which problems to solve

When you are starting a company having a small team, people do everything. And if you got a people, specially co-founders who cannot think at all the level, it’s not good. But as you grow, you need people specific for each level. Where companies go wrong is when they compare the performance of people at level 1 with level 2, this means you lack transparency in your organization about the roles. Define proper roles and measure the performance of people among same roles.

9) Your roles matters in an organization and if that role is impacting the work of many people in the organization, you better avoid micromanage your people, or become a dictator or become a one who over empathizes.

10) When you are setting up your goal’s & objectives, your team members should have exposure to the bigger picture. You as CEO have to align every individual with the higher purpose of the organization. This will result in high level of commitment within your organization.

CEO vs Post 2008 Workforce

“What’s wrong with the kids coming out of college, why they behave like by working for the company, they are doing a great service to you”, said the career banker, an entrepreneur and ex-CEO of one of the FinTech company, an arm of largest telco network in India. He continued “Don’t they realize that they should respect the job they have got and should be working hard to excel in their careers”. I can correlate with his pain. As a CEO or as an entrepreneur, you want to execute things faster.  And its people in your organization who can help you achieve that.

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I was looking at the issue of “getting work done” especially in Indian context. To analyze this, I have divided the workforce into 3 generations, from “1965 to 1998”, from “1999 to 2008” and “Post 2008”.

The generation who joined the workforce after 1965’s till 1998, their basic need was to put enough food on the table that family can have it the entire month.The government was the major job creator and India has started moving from socialist to a capitalist economy.

From 1999 to 2008, people who joined the workforce are interested in making sure family moves from lower middle class to upper middle class. And growing sectors like IT & IT enabled services, Banking and Pharma helped many people achieve this. The job priorities are to get more and more money, bonuses, and higher level roles in the company. In a way, this generation was high on extrinsic motivation than intrinsic motivations.

Post-2008 workforce is prominently the part of the knowledge economy. For them, enough food was already there on the table. For post-2008 workforce generation, their needs and priorities are bit different. They want the purpose of their life to be largely fulfilled by their work. They are delaying marriages so that they can attain a certain level of achievement in their career. Thankfully it will also help India in controlling the growing population. Young generation today are much more career-focused than the earlier generation and are much more demanding of their employers. They want to listen more from their CEO about the purpose of the organization, from their department heads and managers where they are heading to as a unit. They want more and more autonomy at work and coaching to attain the mastery.  The minute they see the purpose of this organization is not meaningful enough, they are not getting enough coaching & flexibility to attain the mastery they will switch to your competitor. And it’s not that they don’t want money, but they are far less greedy than earlier generation. They are still high on extrinsic motivation, but very high on intrinsic motivations. To get a detailed understanding on this, I will highly recommend you to read “Drive” by Daniel Pink.

As CEO and as an organization, you want to get work done. And to get that done with utmost excellence in execution and quality. And you want to identify people in your company who can take your vision & priorities to next level.  You are absolutely right in your ask. But the ways in which you want to get things done from post-2008 generation has just changed. The attention span of digitally enabled generation is far shorter than previous one. By

  • Communicating you purpose, beliefs and expected behaviors,
  • Defining right kind of performance metrics transparently,
  • Enhancing your managerial effectiveness and
  • by giving balanced flexibility, you will be able to take your organization to next level of growth.

The Younger generation doesn’t mind putting up extended hours of effort for your vision & purpose, only ask is to communicate that vision & purpose in a colloquial way and to make them feel the part of it.

Summary of Learnings:

  • Post-2008 work generation doesn’t want corporate emails from your PA’s about your organization purpose, progress, and expected behaviors.
  • Town Halls don’t work. Ask your leadership team to find a more colloquial way of communication.
  • Define performance metrics transparently.
  • Enhance your managerial effectiveness and help them become better coaches

Blitzscaling 12: Nirav Tolia on Growing Nextdoor and the Path to Monetization

This is my tenth 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.Session 6 I haven’t covered. Session 7 notes can be found here. Session 8 notes can be found here. Session 9 notes can be found here. Session 10 notes here.  Session 11 notes here

Nirav Tolia is  the Co-Founder and CEO of Nextdoor. In session 12, Nirav shared his insights into building Nextdoor and his insights on how to grow fast. Here are the session notes and my interpretations on the insights shared.

  1. The median time required to take your start-up to do break even, take it public has increased from 5 years to more than 7 yo 10 years(Stanford Research).
  2. The faster your product/app moves in ranking in app store, the faster it comes down. So slow, steady growth and consistency is still the success formula.
  3. Before scaling your way, do the manual dirty work yourself. This is to validate if what you are going to offer will work or not in offline mode. If it works in offline mode, then put in resources & money to automate the things.
  4. Initially, focus on the quality of your product that solves a problem. Then focus on scaling your product & then sales. Google calls this toothbrush test, which means “Can you create a product which people use at least once a day”.
  5.  Your interpretation & intuition about ‘what is working & what is not’ may be wrong. But if you can define the metrics to challenge your intuition, then you may find the correct path.
  6. Think of your start-up as treadmill where every morning you have to wake up & run on it. You won’t get any credit for the miles covered and remember that you have to run on it again every morning. And if you are not feeling like running a particular morning, and if this starts happening more, than its a serious problem.
  7. If you read the newspaper’s (especially English ones) today, you don’t know what is happening around you in your local communities. The best way to do that is crowdsourcing that news from people living in the local community. That’s what Nextdoor is helping local communities to achieve.
  8. You build user growth, then usage engagement and then revenue scale in that order. But user growth, user engagement & monetization, each of these problems are unique in their own nature & equally difficult. And the way to solve this problem is to divide this problem into stages. That’s the path Facebook, Linkedin, Twitter, & Whatsapp has taken.
  9. Five management objectives to focus on at any given point of time. Review these objectives quarterly or annually depending on the stage in which your company is. A framework to implement this is OKR. At qilo, we help organisations by implementing this.
    1. Growth
    2. Engagement
    3. Monetization
    4. Infrastructure
    5. People
  10. As you start to scale , have more and more people in your organisation, you have to start thinking about your people, the various career paths they will have and organisation structure to maximise people performance.
  11. Hire a great HR leader for your growing organisation. Because HR will eventually help you to execute those big goals backwards.
  12. It’s all about your people that will help you move the mountains. CEO’s job is to tell why people should move this mountain.
  13. Your title doesn’t make you leader or entrepreneur; your team and your people do.
  14. Get your mentor who has been there and done that. Ignore theory consultants who throw our jargon’s.
  15. Be extremely cautious about every penny going out of your company while you are on the path of earning revenue.
  16. The basic difference between Google and Facebook is demand fulfilment and demand generation.Google follow’s demand fulfilment model where you come up and search say “digital camera”. And it shows ads related to that. Whereas Facebook follows demand generation, where you see ads of “digital camera” which your friends have shown interested in. This will help you identify which platform suits you for digital marketing.

Blitzscaling 10: Selina Tobaccowala on Building a Global Business at SurveyMonkey

This is my eighth 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.Session 6 I haven’t covered. Session 7 notes can be found here. Session 8 notes can be found here. Session 9 notes can be found here.

Selina Tobaccowala was President and chief technology officer at SurveyMonkey. She has contributed alot in taking Survey Monkey global. In session 10, she shared the insights on how she managed the technology and tech people @ SurveyMonkey.Here are the session notes and my interpretations on the insights shared.

  1. When you architect your software application, not only it should scale on handling traffic, but it should also be able to handle more developers working on it. This basically means that if tomorrow you have to add more technology people in the team, they should be able to work on your code.
  2. Even if you have ended up with software code base which is monolithic( All software layers are mixed), rather than re-creating the system in new technology, pick up the part of the system which is most difficult and try to rearrange and refactor those blocks in existing architecture.
  3. When you have to take your SaaS platform globally
    1. Localisation- which means displaying data and numbers in local language, number system, and currency
    2. Integrating different payment gateways
    3. Your messaging
    4. More technology and customer support people
  4. A/B testing is important part to validate & improve the user experience of your web and mobile app
  5.  For subscription-based businesses like SurveyMonkey, important metrics to measure is (a) Number of free subscribers (b) Number of subscribers converting from free to paid
  6. While hiring, focus on behavioural interviewing to reduce bias in selecting candidates. The question in behavioural interviewing aims at learning about your past behaviours in specific work situations. In a traditional interview, you ask general questions such as “Tell me about yourself.” In behavioural interviewing, questions will be like “How would you handle XYZ situation?” Try this in your next interview. At qilo, we have adopted this and it has helped me pick up really good team members.
  7. Finding up people who can help you scale up the things is damn hard. Pick up people who have both start-up and big company experience.As your company grows, keep people motivated, focused on their role/job & engaging them for the next level of the journey is a challenge.
  8. To reduce the churn rate, look at the insights from the data produced by your customer. And present that on the continues basis to right stakeholders in your company.
  9. A tech engineer looks for following qualities before joining a technology lead company:
    1. The product(s) should excite them as they will be spending many years in building and maintaining it.
    2. They will be getting the right mentor or people there to work with.
    3. Other that engineering, what other things they will learn their.
  10. Anything that is critical to run your business should be in-house. If its outsourced, bring it in-house as soon as possible
  11. Once you have money, hire a BI analyst who looks at the data and tells you: “what you have built”, “how well it was doing” and “how well its is doing”
  12. Service oriented architecture helps you to scale the software system. And as well as helps you to strcture your backend and frontend engineering teams in the proper way.
  13. People management is not for everyone. Put only those people to managerial positions who can serve their teams by acting as servants. For people who want to remain technical, define a roadmap so that they can see how they will grow in your company.
  14. Successful manager’s get satisfaction by influencing people. Technology people get satisfaction by deliverng the product.
  15. Plan every quarter what you want to achieve. And track the progress on that every week.If you don’t do it when you are small, adopting that when you will scale will be much more difficult. On tool to implement this is OKR.
  16. Reduce the time it takes to take your code from keyboard to production. To achieve this automate the deployment process.

Objectives and key results: For executing your CEO’s priorities

The best way to achieve excellence in execution is a ongoing debate. But the discussion is becoming more and more relevant as every industry is on the verge of being disrupted by new age companies, digital solutions and fourth industrial revolution of AI and robotics. In this article, we will discuss OKR, one such tool to achieve excellence in execution.

The major challenge for any CEO is to manage short-term objectives based on long term plans. As organizations grow, the speed of execution decreases. And at a same time duplication and inefficiencies around planning and resource allocation increases.

“As Andy Grove, Intel’s former CEO said, “I have seen far too many people who upon recognizing today’s gap try very hard to determine what decision has to be made to close it. But today’s gap represents a failure of planning sometime in the past.”

Objectives and Key Results (OKR) is a management tool that brings in the discipline to achieve excellence in execution aligned with organization and CEO’s priorities. OKR is a goal setting framework originally created by Intel and later adopted by Google in the way back in 1999 when it had had not even celebrated its first birthday. OKR has supported Google’s growth from 40 employees (when it first started using OKR) to more than 60,000 today, proving that it can be used by small organizations as well as large corporations. Today, both technology and non-technology companies are moving fast to leverage OKRs to enable a high-performance work culture.

What is OKR?

OKR_Image_1_recyie

Here are a few examples of what could be objectives:

1)  Reduce the variable cost in production by 2.5 %.
2)  Increase revenue from product X by 10%.
3)  Become a more effective sales machine.
4)  Move to the new office by December end to provide a happy environment to employees.
5)  Solidify brand and position as market leader.

And following are some example of ‘Key Results’ with respect to above-stated objectives. There can be more than one key result(s) that can define how one will achieve one’s objectives.

1)  Hire a consultant to review and improve the six-sigma process.
2)  Ensure at least 75% of the sales team members achieve their quota.
3)  Hire three sales managers by end of June.
4)  Identify an office that facilitates company and employee growth for 250+ employees.
5)  Hire a new branding agency by end of Q1.

Benefits of OKR

OKR improves alignment with organizational priorities and helps business leaders identify what is important to be achieved and how to achieve it. It brings in accountability and ownership among employees and helps in achieving operational excellence.

Implementing OKR

OKR_Image_2_mmpsjm

Once you are convinced that OKR can help you get to the next level of business growth, the question that you should be answering is, ‘What is the best approach to implement OKR in my company?’

One of the biggest challenges in implementing OKR is not having a clear approach to implementation. You can’t adopt what worked for Google or Intel or Twitter or Sears. Your organization is unique and your challenges are different from another. You need to understand that OKR is not a methodology, there is no step-by-step guide that you can follow. Instead, OKR has a set of practices that you should understand and customize according to what works for you and your company.

Usually, OKRs are set on a quarterly basis and progress is measured weekly or monthly. But again, it depends on your business priorities and you can set them at a calendar that works for you.

You can start implementing OKR in incremental steps, one role or one business unit at a time.And research shows that it makes more sense to start the implementation at the top of the organization. Start creating objectives (what needs to be achieved) on a monthly basis. Don’t create individual objectives at the start of the implementation. Once that is done, start creating Key Results (how you will achieve the objective) involving team members from same or different business units. This will also help in breaking organizational silos and enhance business communication.

You probably will fail at first attempt, don’t stop there. It takes 2 to 3 quarters to understand how you should structure the objectives for your organization and how it can help you achieve your organizational priorities. The effort spent is worth as it gives the organization and leadership visibility on where the organization is going on their priorities, every week. Teams and individuals will adopt this because it’s linked to their day to day work, and help them see the big picture of their work.

At the end, please remember that OKR is not a tool to measure employee performance. It’s a management tool to align execution with organizational priorities and track the progress of execution for those priorities. As Intel’s Andy Grove, wrote, ‘It is not a legal document upon which to base a performance review, but should be just one input used to determine how well an individual or a team is doing.’