Lessons Learned: 0-$10m Revenue

Have an unfair advantage

An unfair advantage, also known as a 'moat', is normally some sort of patent, regulatory position, community, network effect, lock-in, or, in some cases, brand. First mover advantage often contributes to this but not always.

Vision

People need to hear the vision seven times before they really hear it for the first time. Human beings have short attention spans and are a little jaded when it comes to new messages. As a good leader, you must remain consistent in your message. The first time they hear it, they’ll roll their eyes and say, “Here we go again.” (Remember, you created this culture through past inconsistencies.) The second time, they’ll still roll their eyes a little. But by the fourth and fifth time of hearing it, they’ll realize this is for real. By the seventh time, they’ll be on board. You’ll have to adjust your outlook from “I’ve told them three times—this is so frustrating!” to “I’ve told them three times—only four more to go!” Be patient, and remember that this is a journey. LMA stands for leading, managing, and holding people accountable. Anyone in the Accountability Chart who has people reporting to him or her has a vital responsibility of LMA. This requires time, energy, and Unique Ability®.

Hiring well

Go deep on questions that are pertinent to the job. If the person has never worked in that role before, then go deep trying to figure out their critical thinking skills. If they work to McDonald's pouring milkshakes… Ask them if they ever had any ideas on how to improve the process.

Don't project or be optimistic about people…. Look for possible shortcomings and be ruthless during probation. This is probably the most the employee will ever try.

What do managers do?

Managers use a budget to hire people and deliver an outcome. They need to be accountable and hold the team accountable. They should simplify, delegate, predict, systemize, and structure. Deal with change. And inspire people.

Ideally a manager should manage 6 - 8 team members.

A manager is not judged by their effort but by their output. To improve that they need to leverage their capabilities. Leverage does not mean ‘use’. It means disproportionately get a result compared to effort - like a mechanical lever.

Building process, delegating effectively, encouraging and retaining the team are key.

Get out of the way

Particular founders that are bootstrapped or very hands-on.

I've also struggled with not doing the actual work, first as a manager, then as a manager of managers, and as I get more senior it continues to be the same. I've realised that actually this is where I am most valuable (i.e. coaching others, making strategic decisions) but I miss the satisfying tick on a check list. This is compounded by the strategic work having a much longer timeframe with which to see results. If I make a code change, I see it immediately. If I manage a project, I see that over a month or two. If I manage a business, I am steering a tanker that might take 6 - 18 months to be where I want it to be.

Good employees

Good employees are force multipliers. They make problems go away. They take initiative. That communicate things you need to know.

Don’t be left with monkeys

Envision all of your direct reports’ responsibilities, problems, and issues as monkeys. When your direct report walks into your office with a problem, he or she is trying to leave his or her monkey with you. At the end of the day, after multiple people have walked into your office with their problems and left them with you, you end up with 20 monkeys jumping around your office. If someone walks in with a monkey, he or she needs to walk out with it. If he or she can’t or won’t, you’ve hired the wrong person.

What do employees want?

Well, obviously they want to be paid and we should be at the market rate unless you want them to leave. If they're especially good, you should pay above market.

But More importantly , they want to progress their career, which means doing a great job of what they’re doing now but also keeping an eye on which opportunities beckon next. Promising employees that want to progress need to have a clear path within the company.

And finally, having a place of work where they like they belong is of course crucial.

Cut Complexity, Uncertainty and Ambiguity

Professions and people that are insecure give themselves away by making things overly complicated. Simplify.

How ‘much’ to manage people

Trust, but verify. That’s the key. And the level of your involvement will come down to what Andy Grove called Task Relevant Maturity (TRM).

• If your team member has high task-relevant maturity, managing them should come down to setting objectives and checking in.
• Medium-high task-relevant maturity means dialogue - helping the team member find their way to the next level using your own experience.
• Low high task-relevant maturity means your one to ones are likely to be very task orientated and very specific in what needs to happen.

This is all normally on the continuum of junior-mid-weight-senior but it’s important to remember that a senior team member doing a ‘new’ thing may have low TRM and require close guidance.

Not only will this be a more effective use of your time (more leverage) but managing people by focussing on their strengths is fantastic for motivation.

Meetings

My feelings on meetings have changed a lot over the years. In the age of agents and AI, I think this needs considering, but in general one-to-ones are crucial.

• One to ones - monthly with team members about their objectives and growth
• Staff meetings - regular meetings to coordinate activities of a team, not a status update but a discussion of key issues and ideas to improve performance
• Operational reviews - a team presents to a wider group on performance
• Mission-Oriented meetings - one-off meeting (or series) to solve a specific problem
• All hands - ideally once a week for 30 mins with company news, recent wins, and praise for demonstrations of excellence

I keep my default meeting time to 30 mins, but sometimes stretch to an hour and often try and finish early.

Performance reviews

Performance reviews generally happen at the same time as compensation conversations. For that reason your team is listening the most at this point so make use of that. Go through what worked well and didn’t and figuring out together how the employee can improve.

Every so often you have to give someone a hard time until they're not performing.

Nothing in the performance review should be a surprise. If it is, then you're doing management wrong.

Retention

Retention (or lack of) is always your fault. Either you wanted to keep the employee and they left, in which case you failed. Or you wanted them to leave and they left, in which case they were a bad hire or their role outgrew them.

It doesn’t mean we have to panic but it’s generally best as a manager to stoically begin from a position that everything is your fault. It doesn’t mean you are a “bad” manager. It means you are imperfect, like everyone.

Poor retention can be down to strategic issues that are beyond your control alone but that you can improve as a management team.

If someone has resigned, my beliefs have shifted closer to the US model where they should exit the company ASAP so we can all move on, although in client-facing roles it’s better to have more time for a full handover to the replacement.

Exit interviews

Exit interviews are crucial because the power-dynamic of boss-worker has dissipated. It's probably the most honest feedback you're going to get about the manager and the company themselves.

Find out if a job was expected. What people think of leadership and what can be improved.

Stages of CEO

I like this summary from Brent Beshore

• <$5MDoer + firefighter
• $5M-$10MStandardizer + player-coach
• $10M-$30MExec talent recruiter + coach
• $30M - $100MCulture guard + head of strategy
• $100M+Stakeholder ambassador + cheerleader

Stay focused

When things start running smoothly, if you're a typical entrepreneur, your mind is going to start to wander or get distracted by other opportunities. If this is going to be helpful in the long run, then that's fine, but be aware of it and consider that it may be worth going and getting your own business and looking for areas of improvement that might be right under your nose.

Document

Every business has these 6 processes:

HR - how you find, banish and/or nurture talent

Marketing - how you generate interest from your target audience

Sales - how you turn a prospect into a customer

Operations - how you actually deliver your service

Accounting - reconciling the business with its finances

Customer-retention process - how you keep customers and turn them into promoters

Describe each of these in a few bullet points in a ‘universal process’, That is at the top level of your shared documentation.It's one of those things that everyone in the company should understand.

Burnout

If you have a working business model (or not) The next thing that will get you is burnout.

Take your vacations.  Unwind as much as you can on the weekends, etc.

Join peer groups.

But the only long-term answer is hiring a great management team

Luck

I will start with the most depressing at all , though don’t let it hold you back. It colours my poltical views, those on the right here in the USA seem to believe that everything is possible with hard work. Hard work is necessary but not sufficient, a key idea that comes up time and again. It could be said for most of these things. It’s important because we shouldn’t blame people that haven’t made it, are struggling, not born in to privilege and so on. Anyway back to how to make millions.

Luck is crucial in any career. It’s depressing, but true, and it is possible to become ‘luckier’ by getting out there and increasing your ‘luck surface area’  e.g. attending as many events as possible, trying multiple avenues, taking random meetings that you won’t know where they’ll go, living in new places. However - at the stage I’m at my career now I’ve pulled back on a lot of this stuff (it’s usually people wanting something from me, which I do enjoy doing but can’t fill my time too much), I’m much more selective, but in the early days I wasn’t and that was the right thing to do

There is an element of ‘being in the right place at the right time’. I worry about this with my next business. I think you need to be ‘treading water’ in the right place when the wave comes.

Drive/ambition/insecurity

Kind of dark but certainly the case that in my late 20s I went through a lot, worked a lot (I didn’t even know where Hyde park was in London because I never did stuff on the weekends, except get drunk ofc) and all to prove something

It’s strange now because I am really glad for feeling like that - but at the time it felt like something was always eating at me. Well I’ve had a lot of therapy since then and all that energy, late nights, always wanting to be in the middle of the action etc… it worked, to some degree (see postscript)

I was highly (too?) organised, that’s the OBCD, again, I had it all planned out, I had a weird mix of arrogance and insecurity. The first thing I told Soph when I met her was “I am learning French to live near Annecy because  am going to be a millionaire when I’m 30”, well I was a few years late, but still, imagine thinking (or needing) that. Then again it’s hard to know how much of this is something that can’t be changed in a person, e.g. when I see how someone like Michael Jordan or Max Verstappen lives, totally focussed on winning, that must be a hard existence. I had an ounce of that. And in most successful people I know that was present, especially in their 20s.

Perfectionism (and controlling it)

I firmly believe that perfectionism Should be treated as a mental health problem. It's not something to boast about. As a sufferer…

On a similar note, I think a lot of founders are obsessively passionate about getting things right. Doing work that is ‘up to scratch’ should be a given competency, so I’m not going to talk about that. But most things don’t warrant the amount of effort you put in to get them perfect.

Don’t perfectly word emails or spend forever on presentations that are going to be heard once. There’s not enough time in the day.

“Don’t let perfect be the enemy of good.”

Discomfort

I've realised I craved this, and that I get 'bored' when things are going too smoothly and everytime this happens I shake things up (e.g. start a new business or project, move city, choose a new role at work). Thankfully I've always found this discomfort to be a great place to be, it means you're progressing, and looking back every so often I always think how glad I was I persevered... I think all of what we've both described is a part of that i.e. navigating a new experience, tolerating the discomfort and ultimately growing through it.

The black hole of validation

I've - thankfully- had enough milestones at this point to realise that I'm never going to get to a point where I feel 'good enough' because of work/external achievements. I'm past a threshold where I feel I have 'something to prove' (I think?!) tho I still crave the next success. The problem is, each new one just goes into a blackhole and is forgotten about days later. So I've realised the key thing is to enjoy the work, find a state of flow etc.... it's the oldest lesson in the book, journey not the destination. If I want to feel 'good enough' the answer is elsewhere (i.e. dealing with core beliefs etc etc)

Stress

Can definletely see how not managing people directly and being further away from the day to day would help with stress. I've found that the problem then is what happens when I see managers handling things in a way I disagree with. Either tactically, or because it's not true to (in my opinion) our company values. Still struggling with the balance between staying out of it and diving in to try coach... most of the team is receptive to this but some of them I find it a struggle with. That's what stresses me most about work right now.... which brings me to...

Identity

...  i really liked your observation about detaching identity from the company... I realised that actually this is quite liberating, I can begin thinking about other work and non-work activities that mean a lot to me (noticeable: volunteering, playing piano, new startups, investing) and that actually it could be good to be making headspace for "what's next" (without living in the future, see black hole above...)

Find balance

My philosophy is that running a successful business that employs people at a bloody lovely place is a nice job to have.

This means I can work to my own schedule, take holidays and (finally) have weekends. Granted - it wasn’t always like that, and many days off were lost in front of a laptop. But now it’s getting easier because Piers and I have built something that.... seems to be working... most days...

Relationships are what count. Spending time with those who make you feel good about yourself.

And know, you will never be satisfied. But you can often be happy, with moments of satisfaction. It's a fleeting feeling that you get when you put yourself in healthy situations.

Find a way of 'switching off' that isn't drinking 5 pints on a Friday (though that does work). Find a hobby or learn a foreign language. Get a therapist.

Also, you'll never regret taking a vacation. Sometimes, if you're busy, it's hard. But try to squeeze in a weekend away. It makes a world of difference.

So, there you go. They’re the first 10 that come to mind. Ask me tomorrow, they might well be different.

Books that stayed with me

I haven’t read a business book in years, but these had an effect on me…

• The Lean StartupYour business is a machine to find product/market fit
• The E-mythWork on your business, not in it.
• Built to Sellagency-specific but plenty of general lessons
• EOS TractionTemplate operating system you can apply to any SME.
• Measure What Matterscommunicate and deliver on strategic initiatives
• Managing Humansdown to earth advice for technical managers
• AntifragileNot so much a business book but an important book.