Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive http://theoperationsguy.com Thoughts on business operations, leadership, human capital, talent development, productivity tools, and Boston business environment. Mon, 27 Jan 2014 04:34:51 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 Case For Not Taking Small Investments and Why Early Employees Are Unsung Heroes of Startups http://theoperationsguy.com/case-taking-small-investments-early-employees-unsung-heroes-startups http://theoperationsguy.com/case-taking-small-investments-early-employees-unsung-heroes-startups#comments Mon, 27 Jan 2014 02:05:27 +0000 http://theoperationsguy.com/?p=1603 The post Case For Not Taking Small Investments and Why Early Employees Are Unsung Heroes of Startups appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

It does not come as a surprise to anyone who knows me that I am not a stranger to getting into occasional passionate discussion. This weekend I made a statement which caused such discussion. Unfortunately, Twitter is the worst place to have a discussion. Arguments in 140 character format make people extremely susceptible to interpretation […]

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Early Employees - Unsung Startup HeroesIt does not come as a surprise to anyone who knows me that I am not a stranger to getting into occasional passionate discussion. This weekend I made a statement which caused such discussion. Unfortunately, Twitter is the worst place to have a discussion. Arguments in 140 character format make people extremely susceptible to interpretation and overreaction to the meaning of individual words. Does not help that often people, who were never part of the original conversation, end up getting involved half way without understanding original context. Unlikely a constructive or valuable conversation.

So what the heck did I say?

“Apparently in Boston you are an angel investor if you wrote measly $10K check. If that is the case, half startup employees are super angels”

Now if reading the following makes you pissed off, well I am sorry you feel that way. Having been in the trenches and seen things many of you may not have a chance, it has to be said. Only thing I would soften or change is the word “measly”. OK that is not the correct word. Maybe “insignificant” or “not as impactful as you make it sound” is more fitting. Besides the word choice, here are my points.

  • Maybe that friend or family member giving you $10K makes you feel eternally grateful, and you should. But if this person is not accredited investor and hence does not have the net worth to absorb the loss, I don’t believe you should be taking that money.
    • #1 reason, unsophisticated investors don’t truly understand the risks and require a disproportionate amount of handholding. You end up paying the price down the road in legal and administrative expenses for taking that money.
    • Odds of seeing that money back, let alone getting any kind of return, are in single percentage points. Plus those small money seed round folks get pummeled by investors in ongoing rounds. Unaccredited investor is better of putting that money in mutual funds. You have to assume you will lose investors money, and you will ruin the relationship.
  • Most take those small checks (and yes, I stand by my statement $10K is a tiny check, considering costs to administer it) are usually taken direct without going through professional angel group or Angel List syndicate. You are desperate. You need the money. You need someone to validate you by giving you money (c’mon, be honest). What you end up with is:
    • No proxy, no single point of management for those small investments, so you have to chase them down for documents, signatures, votes. This act of “herding cats” (as one of my friends puts it) detracts you from what you should be doing – developing product and finding early paying beta customers.
    • Then in later rounds you are bound to have most of these small investors sit out the rounds and they get diluted to heck. Now they are bitter and signaling a lack of confidence in you, though really they just can’t afford to pay to play. And since they are not behind an angel group or syndicate, they often naturally will attempt to wield more influence over your decisions than the percentage of ownership they represent. Not all of them do, but you are bound to end up with Carl Icahn, except their investment isn’t significant.
    • But most important: since when doing consulting work or projects on the side is so beneath us? Since when getting courage and asking for money from your 1st customers is such and insurmountable task? At almost every startup I was part of, that is how we paid for development of our products. In 2+ years of my current team building Robin, we’ve managed to get to respectable revenues by asking even early beta customers to pay and taking on projects not related to Robin to help pay the early bills.

Yes, there are rare cases you take in this small check from folks who are extremely useful to your fledgling young venture. These are folks who have succeeded before, have the means to lose that money they gave you, and bring in actual revenue and connections. Fact is that these individuals would help you as much, even if you did not take a dollar from them.

2nd part that was missed by most arguers was my statement about early employees of the company being the real early angel investors. It is not news to most successful founders that 1st 20 people to join your team can make or break your company. Our early teams are the unsung heroes. They are rarely publicly thanked, unlike early investors. That is just not right. Our early employees take higher risk and more abuse than most early investors.

  • Every person I had a chance to recruit, who chose to take huge pay cuts, often under heavy skepticism of their spouses. They are my heroes! They took the huge risk of having a blemish on their resume.
  • “But they get paid a salary!” To add to my statement above, not only they do end up with lower total compensation over time, but also their equity if even granted, is not proportionate to risk they took versus what later folks get. I am yet to hear about one company with anti-dilution clause for down rounds being applied to employees. Even in the case of the exit happening, many will not see the return commensurate to what they have put in.
  • Early employees endure constant changes in strategy, daily uncertainty, stress, failures, mistakes. They do what it takes to make the founders successful. I can’t stress enough the weight of this point, having seen 200+ of my startup brothers and sisters throughout my career serve their companies. Just look what most startups do to the health of early employees!

Like in my own case, we sometimes believe our founders and mission of the company so much, we go to the final day with them. My 1st company out of school landed me with $50K in credit card and other debt. I had to work three jobs to pay everyone back. Never even got a “thank you” or “I am sorry” from the founder who in the end blew it. I am definitely not the only one who had the “pleasure” of personal hell after investing myself in a startup.

You don’t have to agree with me and I don’t expect you to, but I have been long enough in this game and paid my dues to have formed this view.

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Male Perspective on Lack of Women in Startups and What Women Can Do About It http://theoperationsguy.com/male-perspective-on-lack-of-women-in-startups-and-what-women-can-do-about-it http://theoperationsguy.com/male-perspective-on-lack-of-women-in-startups-and-what-women-can-do-about-it#comments Wed, 28 Aug 2013 16:31:03 +0000 http://theoperationsguy.com/?p=1582 The post Male Perspective on Lack of Women in Startups and What Women Can Do About It appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

This article has been brewing in me for a while. I credit some of the biggest wins in my career to the most diverse and smart people around me. Best decisions are made after hearing a broad range of perspectives. You can’t do that in an echo-chamber of people who are exactly same as you […]

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Diverse colorsThis article has been brewing in me for a while. I credit some of the biggest wins in my career to the most diverse and smart people around me. Best decisions are made after hearing a broad range of perspectives. You can’t do that in an echo-chamber of people who are exactly same as you and think like you.

As you have seen me tweet, post, and speak in public, I am just not OK with the low numbers of women we have in technical fields and in senior leadership ranks. Though there are more females than males graduating from colleges, browsing most “About” pages of startups, and especially tech companies, will still show you that white or Asian males dominate the teams. I admit my One Mighty Roar team is there too, and I am not OK with that. I am not willing to accept the status quo and frankly I believe I can do something to give my now 11-month old daughter more options for her career. Would not have joined One Mighty Roar team, if they didn’t feel the same.

For the last several years, I made it a point to gather information directly from two highly under-represented groups: males and female African Americans and females of any ethnicity and age group. I am still working on the 1st group, because I got to talk to maybe a handful so far. But where I feel very strongly that I am getting a very nice sample size of data and views is with the 2nd group – females. This is the collection of patterns I have noticed in hundreds of my conversations:

Lack of female role models is really hurting recruitment and retention of females in technical fields and leadership. I have long lost count of how many younger women I know who told me that they prefer to have male mentors and male bosses since many senior level females had been hostile to them. It is as if those ladies, who have made it, have no interest in helping the new generation of females. I have seen it myself first hand, and it bothers me. Battling through cultural and business norms/stereotypes is hard enough and it is beyond me why you would not want to help one who is walking down the same path you did. Fortunately, new generation of female leaders is emerging fast and they don’t seem to have same disdain for being a role models. They are not only willing to mentor, but they are setting up great organizations that teach the necessary skills.

Do not judge sentiment towards women in startups based on forums, article comments, Twitter, etc. Anonymously people always act like animals, male or female. Those most disgusting in their attitude are also those who are the biggest losers. I know of more companies, where men are huge advocates for women than those I call “sausagefests”. We got your message and you can help us build better companies that have gained undeniable strength in diversity. Join a company where founders have the maturity and foresight to hire adults (age has nothing to do with it, it is all about demeanor), and you WILL have great professional experience.

Stop accepting social norms and limitations! We, men, can’t do it for you! It really drives me up the wall, when I have a female I am mentoring, managing, or advising coming up with any excuse why she should not do something for herself. Not too long ago I was talking to a founder of a reputable company, who gave me bunch of reasons why she should not take credit for and be vocal about the success of the business. She only conceded when I asked her who would get all the blame if something massive failed. Same goes for asking for more responsibility, more help, better pay, different schedule, time off, etc.. If you don’t ask, you will not have a chance to get a yes. Speak up! Stand up! Get what you need! If you work with me, this issue will be the 1st one I will address and work to eliminate, because I want to work with an equal. Nobody should be in the business of mind reading.

Bottom line, though we have our share of misogynistic assholes in our midst, I believe the majority of us men were raised right and we want for you what we would want for our mothers, sisters, wives, and daughters – opportunity to succeed and respect.

 

Photo credit: Chris Metcalf

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On Being a New Father and the Struggles, Biases, Lessons Learned While Building a Business http://theoperationsguy.com/being-new-father-and-struggles-biases-lessons-learned-building-business http://theoperationsguy.com/being-new-father-and-struggles-biases-lessons-learned-building-business#comments Mon, 19 Aug 2013 17:00:52 +0000 http://theoperationsguy.com/?p=1575 The post On Being a New Father and the Struggles, Biases, Lessons Learned While Building a Business appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

For the past decade and a half, I have read countless articles on how it is impossible to build a successful company and be a good parent at the same time. I call bullshit! Yes, I know, I now owe money to the swear jar, but I’m happy to pay. Here is the TL;DR for […]

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Startup DadFor the past decade and a half, I have read countless articles on how it is impossible to build a successful company and be a good parent at the same time. I call bullshit! Yes, I know, I now owe money to the swear jar, but I’m happy to pay.

Here is the TL;DR for those of you with short attention spans – being a great parent AND running/building a company are complementary to each other. The “hustle” needed to run a successful startup multiples many fold when you have a little human depending on you to win. I had NO IDEA what focus, drive, and effectiveness were until I became a new parent. When you have a little child running at you with arms stretched out and big smile on his/her face AND you have payroll to meet and your colleagues’ livelihoods in your hands, you discover something in you that you never knew existed before.

Yes, being a good parent is a hard job and building a company with all the risks and challenges involved sometimes feels incredibly hard, but here is a strategy to not only make things easier but also do a better job at both:

  1. It is about AND, not OR. Your choices between being a parent and a business builder is all about consciously deciding to build everything around the more positive “AND” choices. It can be done, it is done every day, and you can do it too. I’ve turned down my share of opportunities, because I had no confidence it was an “AND” choice. If you think it is “OR” choice – you won’t be able to make it happen. Seek “AND”!
  2. Without a strong partnership of equals between you and your life partner AND an alignment of values with your business partners, founders, executives, and team, it is a Sisyphean undertaking. When everyone is working towards the same goal at home and at work, you are unstoppable. But, if you can’t get both home and work aligned, you will probably not be successful.
  3. Forget your biases and don’t count on your experience or expertise, because every day will be filled with an endless number of lessons to learn. You will be learning as much as your child and your colleagues. Look at your child(ren) and draw inspiration from their unrivaled curiosity; mirror it and learn from it.  Overcoming the “curse of knowledge” makes you see opportunities and solutions where you thought there were none.
  4. You will make mistakes – lots of them. It will seem like there is no end to them, but just like your child had to fall on his or her bum a lot before learning to run, so will you. If you are learning and progressing, you are doing it right. Progress is the focus.
  5. Take care of yourself, treat yourself, and make sure you do “maintenance”, because it is a marathon and not a sprint. Eating properly, exercising (yes, you can find time with help of your spouse and colleagues), and making sure to take some days off are not an option, they are a prerequisite!

Lastly, remember you are not alone in this. Ever since I became a father, I have started discovering male and female founders and execs of young and rapidly growing, yet solid, companies who are also parents. Most mirrored the points I discussed above.

As a closing thought, I wish I could describe the amount of energy and drive this new journey is giving me. Even when sleep is nonexistent and I’m dealing with the almost unavoidable list of operational, financial, technical, etc work to be done in a rapidly growing business, every day is phenomenal!  I would not be able to do it without the support and understanding from my driven scientist wife AND partners at One Mighty Roar. This is the best time of my life!

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New Father, New Team, New Opportunities – Boston, Watch Out! http://theoperationsguy.com/new-father-new-team-new-opportunities-boston-watch-out http://theoperationsguy.com/new-father-new-team-new-opportunities-boston-watch-out#comments Tue, 19 Feb 2013 04:12:22 +0000 http://theoperationsguy.com/?p=1531 The post New Father, New Team, New Opportunities – Boston, Watch Out! appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

The past few months have been the most eventful ones in my adult life. Most importantly, I became a father! I have been in startups my entire career, but this new “startup,” my beautiful daughter Greta, has tested my planning, troubleshooting, and iterating abilities while providing me with an incredible amount of “fire”, clarity, focus, […]

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Greta SinkeviciusNew Father, New Team, New Opportunities – Boston, Watch Out!The past few months have been the most eventful ones in my adult life. Most importantly, I became a father! I have been in startups my entire career, but this new “startup,” my beautiful daughter Greta, has tested my planning, troubleshooting, and iterating abilities while providing me with an incredible amount of “fire”, clarity, focus, and zen-like calm. So, it is probably not surprising that this huge event has also served as a strong catalyst for several other changes.  I took two months off to be new dad and supportive partner (a luxury in the US) and also decided to leave Pixability for the next venture to scale.

My exciting news is that I am joining the One Mighty Roar digital experience agency as a Managing Director and COO. Their team of truly gifted people, stunning list of household name clients, and top secret stuff I can’t talk about just yet is an absolutely irresistible combination to someone who lives and breathes scaling companies! Zach, Sam, and Brian have built the foundation of a pillar Boston company, and I look forward to not only continuing making a name for ourselves here but also opening offices in other US and international locations.

P.S. Becoming a parent, especially in a marriage of equals, is something many people building companies haven’t experienced and therefore don’t truly understand. I will never look at parental leave the same ever again and, I believe having this experience makes me for a more compassionate executive. And yes, the 2 week leave most companies give fathers is cruel and unusual punishment – a separate article on this is coming.

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Talent Arbitrage, or How I Find the Best People You Would Likely Miss http://theoperationsguy.com/talent-arbitrage-or-how-i-find-best-people-you-would-likely-miss http://theoperationsguy.com/talent-arbitrage-or-how-i-find-best-people-you-would-likely-miss#comments Wed, 02 Jan 2013 20:08:58 +0000 http://theoperationsguy.com/?p=1515 The post Talent Arbitrage, or How I Find the Best People You Would Likely Miss appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

Admit it, it is hard finding talented people with a good attitude, who are not set in their own ways, and who are eager to improve their skills! Yes, we are already at a disadvantage since we don’t have the deep pockets of an IPOed company. But, we also tend to create several other self-inflicted […]

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Talent Arbitrage - HoneypotAdmit it, it is hard finding talented people with a good attitude, who are not set in their own ways, and who are eager to improve their skills! Yes, we are already at a disadvantage since we don’t have the deep pockets of an IPOed company. But, we also tend to create several other self-inflicted major disadvantages:

  • Using a fishing analogy, we “trawl” instead of using our line to fish for candidates. If your recruiting team complains about too many resumes, they either need to be re-educated or fired.
  • We look for “Mr(s) Perfect Fit,” which is just about the dumbest way to lose out on incredible talent. An unwillingness to hire people with the right foundations and mentor/teach them into their roles is about as malice as using the company’s funds on lavish personal expenses.

Companies that are not truly innovative in their talent management and do not practice talent arbitration will likely shrink, if not go out of business, in 2013. Boston, NYC, Chicago, Austin, etc. do you hear me? The best products will never exist without the right people to build, sell, and maintain them.

So let’s talk about the crown jewel of business strategy – talent arbitrage. It is hard, it takes time, you have to learn a lot, and you can’t do it alone, but the return on the investment you get is phenomenal. And this is why I want to share with you how I do it! Let’s get to it!

The common views of talent are flawed! The best talent is never well-rounded.

As I have written before, you can’t be phenomenal at something and be well-rounded too. So let’s stop searching for unicorns! In the rare cases we come across a seemingly “perfect” individual, we tend to later discover he/she is a master of political games and cover-up and has more skeletons than the tunnels of Paris.

So instead of chasing unicorns, why not truly start recruiting for the talent strengths we need and can further develop. This is practicing talent arbitrage and you will be able to recruit those that you may have thought were out of your reach.

Candidates with a “chip on their shoulder” usually have an endless self-driven energy. Hook up this energy to your company!

What do these “chips” look like? You will know them when you come across them. For example, very seasoned individuals with a recent series of failure on their shoulders may want their good names next to some wins again and know they need a winning team to get there. If I don’t think these failures will be a problem to us, then I want to recruit these candidates, because they will hustle like no other and not give up easily. They just can’t afford to perform half-heartedly!

Another example is a parent who took an “extended” (in an American view) time off to raise their kids. My experience has shown that, if you were darn good before you took time off, then you will be back on top again soon since it is like riding a bicycle. But, most US employers and recruiters are extremely shortsighted, so my talent arbitrage opportunism gives me a massive competitive advantage! I want those who are determined. I want them to “ride” for my team! And I am willing to be flexible, because let’s be honest, I may only be able to afford such talent because they were off the market for awhile and I want them to stick with me for as long as possible. I’ve had several talent wins like this, but the case I like to mention is when I hired a bookkeeper/office manager who had four kids. I have NEVER seen anyone that efficient and present every minute of the 6 hours she spent with us every day. In 30 hours each week she would polish off the work of two full-timers I definitely could not afford. And both she and the company felt like we had a fair arrangement. This is talent arbitrage in action, because it isn’t ever 100% about money!

My secret weapon = talent honeypots!

This is actually a somewhat recent discovery of mine. In the last three years I have mastered talent honeypots. What are they? I look for candidates with a certain set of skills that are often not directly related to the job. My honeypots are usually in a series. Everyone is asking for X-years in certain stack for developer positions, or mastery of leadgen, segmentation, etc. for marketers. These signals are noise everyone else spews. I call it trawling for talent, and your “by-catch” will force you to deploy the most hated “blackhole” for candidate – the ATS (applicant tracking system).

 

Here are a couple of my sample honeypots (not going to expand into why, since that is a series of articles in itself):

  • For operations folks, I like to recruit people who speak 2+ languages, ideally 3+. And I like see at least a couple of years of experience as a server, busboy, pizza delivery person, or retail clerk (returns is my fave).
  • For inside sales folks, I like to see past call center experience (and the fact they hated it is a must). Having been a Girl Scout is a huge plus, and early experience making money (paper route, etc.) puts candidates right to the top of my list. If you have all these traits and have never sold on the phone before – PERFECT MATCH! If you have sold on the phone before, I must be sure I can “un-teach” you the bad habits most instill.
  • For junior marketing people, a psychology major with minor in English and at least a B+ in a statistics class are key (no statistics taken = no interest from me).

The most commonly used interviewing processes and techniques repel the best people!

Let me come right out and say that if you learned interviewing in your HR class or from a traditional HR person, discard these techniques like they are riddled with plague and infection! The best talent discovery process is one that immerses the candidate in the job they are interviewing for. You practice talent arbitrage by not engaging in outdated yet popular methods used by everyone else.

How else do you improve this process?

  1. Don’t just rely on resumes and cover letters. Always do an additional search on your candidates. I often reach out to back channels for references before I even contact candidates for the first time. The effort is worth it and keeps your “nose for talent” disciplined.
  2. Mind the context! Embrace introversion just like you would extroversion. Try to understand the candidate before you start judging them. If you have too many candidates, you did a poor job honeypotting – tweak the process continuously, until the flow is just right!
  3. Immerse your candidates in their potential role right after the initial pleasantries. It is your job to prepare problems you are actually facing and let the talented individuals show you how he/she would approach them.

And the most important part of talent arbitrage? Everyone mentors and teaches!

I have come across a few companies where members of the executive team have outright told me that they are either not interested or have “no time” for mentoring talent. Molding and mentoring your talented team members is the highest ROI activity. It not only should be expected of every knowledgeable member of the team, but also rewarded immensely. Mentor and teach your talent or your business is as good as dead, since smart companies will poach away every good employee you have.

 

This all said, I don’t hope, I KNOW what I shared with you in this article will help you find some incredible talent. Let’s go and improve our teams!

Photo credit: Shannon Holman

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Signs It Is the Right Time to Hire an Operations Executive (COO or VP of Operations) http://theoperationsguy.com/signs-it-is-the-right-time-to-hire-an-operations-executive-coo-or-vp-of-operations http://theoperationsguy.com/signs-it-is-the-right-time-to-hire-an-operations-executive-coo-or-vp-of-operations#comments Thu, 15 Nov 2012 21:51:20 +0000 http://theoperationsguy.com/?p=1478 The post Signs It Is the Right Time to Hire an Operations Executive (COO or VP of Operations) appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

The day-to-day execution and administration of a business often takes an excessive amount of time, so the primary reason to augment your team with an Operations Executive is to maximize your CEO’s and other co-founders’ contribution to the enterprise. I firmly believe that staying true to a vision is best achieved by having a founder […]

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Sign - NOW - Signs It Is the Right Time to Hire an Operations Executive (COO or VP of Operations)The day-to-day execution and administration of a business often takes an excessive amount of time, so the primary reason to augment your team with an Operations Executive is to maximize your CEO’s and other co-founders’ contribution to the enterprise.

I firmly believe that staying true to a vision is best achieved by having a founder as CEO. It is almost always preferable over “hired guns” that can help you execute on the vision but seldom understand it as well and are often too pragmatic. That said, a management hire can be very much a champion of the vision and a true partner with the founder. Good managers are seldom unreasonable, and it takes “unreasonable people” to do the sorts of great things that normal reasonable people wouldn’t consider until you showed them enough proof that it can be done. For that reason among others, boards should try as hard as possible to keep the founder in the No. 1 slot with a good president/COO or an otherwise strong execution team under him or her. This will preserve their instinctive feel for the new space and the new rules.

Legendary Silicon Valley investor Vinod Khosla, the founder of Khosla Ventures.”

Please also read my other articles in this series on what do operations people do and what the common myths are about Operations Executives.

In my experience, the overwhelming majority of the first time founders never knew they needed an Operations Executive. Usually either their investors, board of directors, or advisors were the ones who insisted they get one.

What are the signs that a company is ready for an Operations Executive?:

  • The company has started selling to formidable clients and these sales represented a major portion of the company revenues. Anything but an excellent execution and customer experience was just too high of a risk for the company.
  • Account management, customer service, and product implementation was becoming the reason customers stayed or renewed contracts. It was no longer enough for the product to be decent and for the founders to work their magic convincing a customer to stay.
  • The CEO spent more than 20% of his/her time on the day-to-day management of the business. Operational execution saps a lot of energy and takes away from the #1 job of the CEO – to set direction, run product vision, and be the face of the company. Operational execution also requires a skillset and related ultra-efficiency (and pattern recognition) that is often the polar opposite of what is required to create innovative/competitive products and lead the vision of the business.
  • The founders realized they were building a sky-scraper on a small house foundation. What was acceptable for a team of 5 was no longer working for 10, 15, 50, 100, etc. A good Operations Executive will bring the best practices, discipline, and a systematic approach to growing the company. He/she will also build a strong foundation without destroying the one the company was built on.
  • Investors or advisors realized a “professional pragmatist” was needed to help the CEO remove impediments on the path of growing the company. Some of the best CEOs and founders are eternal optimists. Even if hell is opening in front of them, they proceed with tireless optimism. But, this is really not a sustainable philosophy.
  • In cases where the company has several co-founders who are very passionate about their areas of expertise, they found themselves spending too much time in passionate conversations as the company grew. Therefore, they brought Operations Executive to add some balance.
  • There were concerns of plateauing or shrinking revenues, often coupled with shrinking profit margins.

This list could be much longer, but I wanted to focus on the most common reasons I experienced or heard most often.

How about timing?

As with any functional area, realizing that you will need a senior person in 6 – 12 months means you need to start recruiting for this role NOW and immediately snap up the person you think is right when you come across them. This is especially true when the market is hot. With senior level talent, the interview process, negotiations, and transition time your new hire may need to properly leave their current position often takes several months. For example, I have handed in 4-6 month notices before leaving and that was barely enough time for a graceful exit.

Note on the level of Operations Executive:

1. Hire for where you realistically will be in 5 years. Never ever hire someone who has mostly built companies way beyond where yours will be in 4-5 years. If you realistically will be a $10MM business, don’t hire someone from a $200MM revenue business. An Operations Executive with experience in that large of an organization is simply not equipped to help your company. If you find a lot of value in the “big kahuna”, then get him/her on your advisory team.

2. In-betweeners are the best value for your money, if you can find them. In-betweeners are the high-potential talents that are great for earlier stage ventures (pre 100-employee or ~$20MM in annual revenues). These are folks who may not have officially held a COO or VP of Operations title before but have very clearly handled responsibilities of this level.

3. Never hire relatives for any leadership role! Companies with spouses, siblings, cousins, etc. as executives tend to end up as dysfunctional and highly-political organizations.

What should you look for in an Operations Executive?

Please refer to the article I have written before: What To Look For In a Chief Right Hand Person (COO, VP of Operations)

Have questions or comments? Just hit me up on e-mail or connect with me on Twitter.

Photo credit: Tom Magliery 

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Your Past Restaurant Job May Be Worth More Than Education http://theoperationsguy.com/why-for-startups-your-past-restaurant-job-may-be-worth-more-than-your-education http://theoperationsguy.com/why-for-startups-your-past-restaurant-job-may-be-worth-more-than-your-education#comments Sun, 04 Nov 2012 19:52:14 +0000 http://theoperationsguy.com/?p=1467 The post Your Past Restaurant Job May Be Worth More Than Education appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

Ever since I was a talent agent in the entertainment industry, I have been developing and continuously improving my patterns for detecting gifted people who are more talented than they know. One of my mentors used to say: “catch them before they have a chance to destroy themselves with swollen egos and visions of grander”. […]

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For Startups Your Past Restaurant Job May Be Worth More Than EducationEver since I was a talent agent in the entertainment industry, I have been developing and continuously improving my patterns for detecting gifted people who are more talented than they know. One of my mentors used to say: “catch them before they have a chance to destroy themselves with swollen egos and visions of grander”. After all of these years observing what kind of people do well and what kind end up bitter with their tails between their legs, I can bravely say that I got the pattern down pat. Yes, when I am seeking great people to join my teams, I use methods and patterns to be efficient.

So what are the methods to my madness?

1. I want to know if you have ever worked in retail or as a waiter, waitress, busboy, or delivery driver. Why? Those who have tasted what it is like to be disrespected, stiffed on tips, underpaid, and otherwise poorly treated, tend to exude higher levels of humility, patience, frugalness, and “hustle”. These personality traits make them good team mates, managers, and executives. It does not matter if we are talking about an entry-level marketing person, software developer, or Chief Revenue Officer – the mentioned traits help them unite the team and get past some incredible obstacles.

2. I don’t care what school you went to! I mostly ignore that part of your resume.

Why is education not getting any love? Don’t get me wrong, there are still some schools like Northeastern, Babson, Grinnell, WPI, RISD, DePaul, and Wellesley, to name a few, that have educated folks who have stunned me with their abilities. But I need “stuff” done and “book knowledge” often leads to needless over-thinking, lack of action, and unearned “expertise”. Most of what is taught today in non-science degrees is outdated by the time you are out in the “real world”. And since you were likely already smart before you entered college, you probably learned more applicable skills as a waitress to be say an account manager, than any business or marketing degree you may have gotten. College may help you mature and develop social skills, but it will no longer land you a good job. So, roll up your sleeves and do something.

One caveat is that I do not ignore education with science majors.

There are also certain combinations that work well, for example, psychology for UX and recruiting or arts and journalism for inside sales. There are some others, but you can’t expect me to spill all my “magic”…

So, if you are reading this and are interested in working for one of my teams, please do not hide your service industry job – it may just help you land a position with my team.

Photo credit: Kirk Siang

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7 Rules for How to Sell to “Darth Vader” http://theoperationsguy.com/7-rules-for-how-to-sell-to-darth-vader http://theoperationsguy.com/7-rules-for-how-to-sell-to-darth-vader#comments Tue, 30 Oct 2012 17:39:31 +0000 http://theoperationsguy.com/?p=1453 The post 7 Rules for How to Sell to “Darth Vader” appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

We all know there are a lot of bad sales people, just like there are a bunch of lousy artists. I therefore have a great appreciation for excellent sales professionals. Plus, being an operations executive is truly a sales job, and I have to get a buy-in on any larger initiative. I also have been […]

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DarthyDollar - 7 Rules for How to Sell to "Darth Vader"We all know there are a lot of bad sales people, just like there are a bunch of lousy artists. I therefore have a great appreciation for excellent sales professionals. Plus, being an operations executive is truly a sales job, and I have to get a buy-in on any larger initiative. I also have been in sales myself, built many systems to make “sales hunting” easier, and recruited my share of sales people.

So where does Darth Vader come in? Blame it on one of the Boston’s best sales masters - Matthew Bellows, founder of Yesware, which is a really useful e-mail tool for sales. I recently went to see one of Matthew’s stellar presentations. Unfortunately, the video isn’t available online yet, but one part of his presentation really resonated with me – his description of the two personality types you have to work with to close a sale – Champions and Darth Vaders. Champions will guide you through the organization and sell your product to others in the company, because they genuinely like you and the product you sell. Darth Vaders, on the other hand, will question you and be skeptical, most likely because they have been screwed before. You see, “Darth Vaders” get hit up by sales pitches every day from the early morning until late at night. They are jaded from sales tricks and are there to make your job very hard. Every business has to have both Champions and Darth Vaders.

I am usually a “Darth Vader” so I totally understand how many of my counterparts think and feel too. We usually handle the money in the company and guard the organization. It is our job to be skeptical and temper the Champions’ enthusiasm, because we will have to own the mess if anything goes wrong. But, we do buy and we buy a lot! It is our job to procure resources and tools for our team. I’m guessing I’ve spent millions of dollars in services and products.

So how the heck do you sell to us? Here are the 7 rules you should never ever break or risk being blacklisted or having an extremely short relationship with our businesses:

7. Do not waste our CEOs’ time! Clogging the email or voicemail box of our CEOs gets you nowhere. Not only is their box probably full, half the time our CEO may have no idea about what you are selling. If we told you “no” and you decide to go over us to our CEO, even if you get lucky with one sale, you will now be on our blacklist and will regret it.

6. Treat our gatekeepers like they are the CEO of our company! Not only are they our eyes, ears, and hands, but they are also the reason we can work through an enormous mountains of issues. If you are disrespectful to them, you will have no chance at a sale. Don’t just focus on getting past our gatekeepers, instead recruit them to your side and turn them into your Champions.

5. Be honest! If you tell us nonsense, like you have no competition, or you are not able to tell us where your competitors are better, you lose any chance of a positive report. We are very loyal to honest vendors. Every vendor we have in our go-to contact list is there, because they either sent us to their competitor or told us we should not be buying yet. That goes for both commodities and premium products/services.

4. Over-scripted = rookie! Since we get hit up with cold calls and emails all day long, we can tell who had what sales training. Consultative selling, AIDA, AIDCA, Sandler, etc. – we know when you are running each technique on us, we likely paid for same sales training for our teams. Letting script take over natural conversation just gets you labeled as a rookie, and we care about our companies too much to let rookies touch them. Sales should be a conversation with lots of listening – you can’t script and rehearse that.

3. Keep your word! This is one very common complaint! Don’t forget to call when you say you will, send us the information we requested, deliver scopes and quotes on time, etc.

2. Listen a heck of a lot more than you talk! Ask us the kind of questions that set the context first, then delve deeper into our needs/pains. Your consultative perception of our need/pain is likely nothing like our real one. If you yap too much about your “benefits”, you may just miss the sale.

1. Do your homework! Look at our websites, media articles, D&B (which has more info than we want out there), and social media presence. It is unlikely you will get to talk to the “Vaders” until you a vetted by gatekeepers, so you should know a lot about our organizations. The more you know about us before you call, the more we will feel you invested in us, and this does make us want to talk to you. In addition, if you were respectful to our gatekeepers, they may have already provided you with a lot of very relevant information.

BONUS MATERIAL: If you are a female, for the love of anything sacred you have, please do not think a short skirt or a stuffed bra will get you a real sale. This is not college frat house. We have businesses to run, so please show some class! The same goes for men trying to flirt with female employees in our companies – save it for the bar scene! We see stuff like this every day and consider it a liability to our company – we want nothing to do with it.

Photo credit: Helmut Edlmayer

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Myths Why Startups Don’t Need COOs and Operations Executives http://theoperationsguy.com/myths-why-startups-dont-need-coos http://theoperationsguy.com/myths-why-startups-dont-need-coos#comments Mon, 29 Oct 2012 05:24:43 +0000 http://theoperationsguy.com/?p=1430 The post Myths Why Startups Don’t Need COOs and Operations Executives appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

As my regular readers know, I am a startup operations veteran with “battle scars” from 9 startups (co-founder in 2 and early employee in most). I have acquired a PhD in operations from the school of hard knocks after years of being around some very smart people and working on difficult problems. Today, I am […]

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Myth unicorn - Myths Why Startups Don't Need COOs and Operations ExecutivesAs my regular readers know, I am a startup operations veteran with “battle scars” from 9 startups (co-founder in 2 and early employee in most). I have acquired a PhD in operations from the school of hard knocks after years of being around some very smart people and working on difficult problems. Today, I am going to address some common misconceptions about startup operations executives. Let’s get to it!

First and foremost, let’s get the lingo and caveats out of the way, since many myths start and won’t die because of a substantial lack of clarity.

  • What’s the difference between a COO, VP, Director of Operations, or GM?

– Depending on where your company is based, how it is organized (LLP, LLC, Inc., etc.), and/or what industry you are in, one or most of these titles may be used. They’re basically the same role, so for the purposes of this article, they will be rolled into up into the title, “Operations Executive”.

  • What’s the Definition of “startup”?

- Since there is no consensus of how long a company gets to call itself a startup, let’s just leave it at that. I do, however, make a distinction between early stage pre-product/market-fit and sustainably scalable startups and rapidly growing startups, since the problems that need to be solved are often very different between them.

  • What does an Operations Executive do?

- Though this may differ slightly company-to-company, he/she is often responsible for and is reported to by finance, sales, marketing, business development, IT, DevOps, and people operations (including HR).

Now that all our bases have been covered, here are the most common myths I come across:

MYTH #1: A CEO should be able to handle all business execution alone.

In a truly early stage startup, before product/market fit and while the company is operationally simple, a founder-CEO absolutely should be able to handle everything. However, once the company starts hitting milestones that make the company more operationally complex (see the next article in the series: Signs It Is the Right Time to Hire an Operations Executive), the personal capacity and attention of the CEO and/or co-founders becomes overcrowded with “trees” rather than “forest” issues.

In this analogy, the “forest” issues are high level goals like setting the direction for the company, the culture, and the product. These areas always start suffering first, because the day-to-day operations (“trees”) issues have a tendency to suck up a lot of attention.

Just like a seasoned developer can create a better product in less time, a great Operations Executive can recognize patterns you may not; we have armies of specialist vendors, and networks of subject matter experts we excel at tapping into, which can make the company noticeably more efficient and effective while also giving the CEO time to focus on what they do best (leading and setting the vision).

MYTH #2 Having a CFO is enough.

Investors in your seed and A rounds often require your company hire a (usually part-time) CFO as a condition of their investment. Investors either want someone with a much stronger financial skillset or a non-founder overseeing their money. But this is something that happens mostly in early pre-product/market fit startups where an Operations Executive is not needed yet. Once the company starts getting traction and needs to scale, it is easy to fall for this myth, since Myth #1 has probably already taken hold.

MYTH #3: There are tons of companies with $10M + revenues that don’t have an Operations Executive.

When this happens, it’s usually because the CEO is the Operations Executive and thus the company operator. However, this also means that innovation, product, and vision is likely handled by (other) co-founders who wanted to take roles that did not require being the face of the company with associated PR duties and an endless barrage of attention and scrutiny. One person can’t lead operations, while also leading vision and product, because one or all of those areas will suffer from lack of proper attention and focus.

MYTH #4: If a co-founder already has the COO title, you don’t need an Operations Executive.

Often, when there are 2+ co-founders, the most extroverted, best in sales, and/or most dominant co-founder takes the CEO title, and the more inside-of-the-business-focused one takes the COO title. Unfortunately, in most cases this COO tends to be an expert in other areas and may not only lack the experience and skillset needed, but also abhors the duties of an Operations Executive. Those of us who head operations are used to these situations, which is why you see us take the VP or Director of Operations title. In the end, these aforementioned COO co-founders end up taking a new title more in line with their expertise and passions.

MYTH #5: Your valuation will be lower if you have a COO.

This myth has nothing to do with Operations Executives, but rather is rooted in co-founder/investor politics. I have heard this myth with CMO, CTO, CRO, and other leadership titles. Yes, investors will stay away from or reduce valuation of a company if they see that founders, who currently hold the mentioned executive titles, show an unwillingness to give up their leadership roles to better qualified non-founder talent. That said, Operations Executives actually increase the valuation of the company, because they are experts in three major company value drivers – the ability to recruit, develop, and retain the best talent, optimize profitability/revenues, and scale the company sustainably.

Whatever the myths and misconceptions are, every company that is sustainable and profitable has an Operations Executive on their team.

It may take the founders realizing their revenues are flat or shrinking no matter the effort or a major traumatic event to get an Operations Executive, but they all do in the end. As one of my CEO friends likes to say: “just like behind every great king there is a great queen, behind every great CEO is a COO covering his/her back”.

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Better Solution to Outdated One Time Employee Referral Bonuses http://theoperationsguy.com/better-solution-to-outdated-employee-referral-bonuses http://theoperationsguy.com/better-solution-to-outdated-employee-referral-bonuses#comments Sat, 27 Oct 2012 19:22:53 +0000 http://theoperationsguy.com/?p=1418 The post Better Solution to Outdated One Time Employee Referral Bonuses appeared first on Chief Business Hacker blog - Apolinaras "Apollo" Sinkevicius - Boston Startup Executive.

One time employee referral bonuses need to go the way of the dodo. They are an antiquated reward system that motivates the wrong things. Yes, some of the most well known companies use them, but these companies end up hurting both themselves and also the business community. Even the biggest morons can waste investor/company money, […]

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One time employee referral bonuses are outdated and motivate wrong actionsOne time employee referral bonuses need to go the way of the dodo. They are an antiquated reward system that motivates the wrong things. Yes, some of the most well known companies use them, but these companies end up hurting both themselves and also the business community. Even the biggest morons can waste investor/company money, so enough with these one time referral bonuses!

Before I suggest a solution, let me tell you why one time referral bonuses are a waste of money:

  1. One time large rewards do not work! The effect of the bonus wears off by the next paycheck. I’ve seen this happen many times – it is often like flushing thousands down the toilet.
  2. The person referring the candidate does very little to really earn the bonus. An employee looking at their contact list and having a couple of conversation is not exactly worth $2000, $4000, or even $10000…because their responsibility ends there. The person referring the candidate, along with the operations team, should also be involved with on-boarding, teaching company culture, retention, and continued satisfaction with the company.

But we all need help in recruiting talent for our teams, and the people operations team needs assistance helping new employees settle in and do well, etc. So here is a better way:

Institute a substantial employee referral dividend. It takes about $10K-$15K in resources and cash to replace each employee who leaves the company. On top of that, since often a new hire may get higher compensation, you may need to hire one full-timer and one part-timer to replace the lost output, etc. So why not increase the stakes and give a $5K annual bonus per employee referred for as long as both the referrer and the referee are employed with the company. The bonus should be paid each year on the anniversary date that the referred employee joined the company. Why such a large bonus? Because $20K over a 4 year tenure is a small price to pay. I estimate you will get a 3X ROI on that money.

Why 3X ROI?

  1. Your talent funnel is going to be much fuller without paying any outsiders. I like to keep money in the company. Plus, outsiders send you mediocre people for a much higher fee.
  2. Employees are more motivated to make sure their fellow employees are the right people to join the company and that they are productive and happy after they join. The company saves money because less operations people need to be hired.
  3. Your own people become talent managers and help catch performance problems or dissatisfaction with the company before operations or management does. The earlier you discover a problem, the cheaper and easier it is to solve.

What are the risks?

  1. There is a risk for company diversity since the friends and acquaintances of your employees may all belong to the same demographic, alumni group, etc. The way you mitigate this is with a strong company culture and value, and education on the undeniable power of diverse teams.
  2. There may be resentment if an employee’s buddy gets fired and that employee loses his/her bonus. This risk is minor though, since a higher quality talent pool will reduce the need to fire for lack of performance.

What do you think? Connect with me on Twitter.

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