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[00:00:00.400 --> 00:00:02.800] It's another episode of Startups for the Rest of Us.
[00:00:02.800 --> 00:00:17.040] I'm Rob Walling, and this week I talk to Yanov Bernstein, who has been both a founder and an executive at companies ranging from small startups up to very large orgs, including 10 years at Google.
[00:00:17.040 --> 00:00:18.640] He's been a VP of engineering.
[00:00:18.640 --> 00:00:20.320] He's been a COO.
[00:00:20.320 --> 00:00:21.840] He's been a consultant.
[00:00:21.840 --> 00:00:25.520] And he was a software engineering leader at Google.
[00:00:25.520 --> 00:00:31.520] And these days, he's been giving advice to founders that want to go from startup to scale up.
[00:00:31.520 --> 00:00:39.440] He's seen a lot of companies fail, as many of us do, as they try to get past that 1 million, 5 million, 10 million ARR phase.
[00:00:39.440 --> 00:00:52.160] And one of the big drags on a company as it grows is when a founder isn't able to make that transition from being the CEO of a 10, 20 person company up into the 50, 100, 200 person company.
[00:00:52.160 --> 00:01:01.760] And that's what we focus on today as we talk about going from scrappy to scalable, what it looks like to evolve your role as a founder as your company gets bigger.
[00:01:01.760 --> 00:01:08.720] And speaking of growing your company, I run a premium coaching program called the SAS Institute.
[00:01:08.720 --> 00:01:17.440] SAS Institute is a private coaching community designed for B2B and B2C SaaS founders doing a million in ARR or more.
[00:01:17.440 --> 00:01:24.880] There's one-on-one coaching, there are masterminds, and there is an amazing online community that will be meeting in person.
[00:01:24.880 --> 00:01:35.200] The idea is to get you the systems and the support you need to scale from a million or more up into the 10, 15, and $20 million marks.
[00:01:35.200 --> 00:01:41.280] We have some incredible coaches, including Jordan Gall, Taylor Hendrickson, and Mark Thomas.
[00:01:41.280 --> 00:01:43.280] And our first group is very small.
[00:01:43.280 --> 00:01:47.200] And that's amazing because you get a lot of one-on-one attention.
[00:01:47.200 --> 00:01:50.960] In addition, you get to chat with me and get my best advice.
[00:01:50.960 --> 00:01:53.040] SASINSTITUTE.com.
[00:01:53.040 --> 00:01:54.080] We'd love to have you.
[00:01:54.080 --> 00:01:57.520] And with that, let's dive into my conversation with Yanov.
[00:02:05.480 --> 00:02:06.760] Janev Bernstein.
[00:02:06.760 --> 00:02:08.440] Thanks for joining me on Startups for the Rest of Us.
[00:02:08.680 --> 00:02:09.240] Thanks, Rob.
[00:02:09.240 --> 00:02:10.920] I'm really excited to be on.
[00:02:10.920 --> 00:02:12.600] Yeah, it's been a long time coming.
[00:02:12.600 --> 00:02:19.320] I was on your podcast that you co-host called the Startup Podcast, Creatively Named.
[00:02:19.320 --> 00:02:23.720] I was on that a couple years ago, and I think we're talking about recording another episode soon.
[00:02:23.720 --> 00:02:27.640] So folks can go check out, certainly go check out that episode if they want to hear us.
[00:02:27.640 --> 00:02:30.600] We talked a lot about like bootstrapping versus raising funding, I think.
[00:02:30.600 --> 00:02:31.960] That's the one.
[00:02:31.960 --> 00:02:34.840] And you have been a founder.
[00:02:34.840 --> 00:02:37.000] You've been a COO.
[00:02:37.000 --> 00:02:39.800] You've been, I believe, a VP of engineering.
[00:02:39.800 --> 00:02:46.680] You have been a coach, advisor, and investor of a lot of startups.
[00:02:46.680 --> 00:02:50.840] So you have quite the gamut of experience.
[00:02:50.840 --> 00:02:52.360] Did I miss anything?
[00:02:52.360 --> 00:02:55.960] Yeah, well, the first 10 years of my career, I was a software engineer at Google.
[00:02:55.960 --> 00:03:09.320] So I started off at big tech, and I think over the course of my career, I've been going smaller and smaller, earlier and earlier stage, to the point now where I'm now the co-founder and chief technology officer of a very early stage company called Violet.
[00:03:09.320 --> 00:03:20.200] So I think one thing that has helped me to do, Rob, which maybe we'll touch on in this episode, is because I've come from later stages to earlier and earlier stages, I kind of know what comes next, right?
[00:03:20.200 --> 00:03:27.000] So when I'm an early stage founder, I know what it looks like to start to scale and then reach that really large, large stage as well.
[00:03:27.000 --> 00:03:28.920] Yeah, and that's what we're going to talk about today, right?
[00:03:28.920 --> 00:03:33.800] Is the role of a founder/slash CEO and how that changes.
[00:03:33.800 --> 00:03:47.120] And it changes profoundly as you go from listeners will hear Noah this phrase, you build a product, then you build a business, then you build a company, and probably even beyond that, then you do all kinds of stuff.
[00:03:44.760 --> 00:03:50.000] But the role of that founder has to change.
[00:03:50.160 --> 00:03:57.200] And this is where we see folks like myself where my last SaaS app got to 10 people and doing millions in revenue.
[00:03:57.200 --> 00:03:59.120] And I was like, this isn't very fun.
[00:03:59.520 --> 00:04:00.880] I just didn't enjoy that phase.
[00:04:00.880 --> 00:04:05.200] And so I had the decision of, oh, so do I raise funding and kind of hire a COO?
[00:04:05.200 --> 00:04:06.720] Do I replace myself?
[00:04:06.720 --> 00:04:08.800] And we were growing fast, but a lot relied on me.
[00:04:08.800 --> 00:04:09.680] Do I sell?
[00:04:09.680 --> 00:04:11.200] Do I, you know, I had all these options, right?
[00:04:11.200 --> 00:04:12.400] Of like, well, it's not fun.
[00:04:12.400 --> 00:04:14.240] And how long am I going to keep doing this?
[00:04:14.240 --> 00:04:14.400] Right.
[00:04:14.400 --> 00:04:20.640] And then there are other folks who make that great transition and really enjoy, I think, managing teams of 30, 40, 50 people.
[00:04:20.640 --> 00:04:24.640] I just talked to Braden Dennis, who's the founder of fiscal.ai.
[00:04:24.640 --> 00:04:28.000] And he, it was just him and three co-founders.
[00:04:28.000 --> 00:04:30.400] And now they raised a $10 million Series A.
[00:04:30.400 --> 00:04:35.120] They thought they were going to bootstrap and they just raised a $10 million series A and they're at 40 people now and they're going to scale up.
[00:04:35.120 --> 00:04:45.440] So you don't know what's coming down the pipe, except you kind of do because you, as you said, you have seen these later stage and you've coached and advised founders in these stages.
[00:04:45.440 --> 00:04:46.080] Yeah, that's right.
[00:04:46.080 --> 00:04:48.320] And Rob, you said it's completely true.
[00:04:48.320 --> 00:04:50.000] The role completely changes.
[00:04:50.000 --> 00:04:55.920] So you're still the founder and CEO or whatever it is, but the role is a completely different thing.
[00:04:55.920 --> 00:05:00.880] And you realize that and you also had the maturity to say, that's not for me.
[00:05:00.880 --> 00:05:02.480] Both of those things are actually quite rare.
[00:05:02.480 --> 00:05:08.160] I think the two biggest issues I see with people is firstly, they don't recognize that the role has changed.
[00:05:08.160 --> 00:05:10.800] They think that what got them here will get them there, right?
[00:05:10.800 --> 00:05:16.880] That they can keep doing the job the way they did it when it was just them and a co-founder or just them solopreneuring it.
[00:05:16.880 --> 00:05:19.520] And they actually become a liability to their business.
[00:05:19.520 --> 00:05:25.200] Or another common thing is they recognize that things have to change, but they don't know how to let go, right?
[00:05:25.200 --> 00:05:26.720] You said, okay, I'm going to sell my business.
[00:05:26.720 --> 00:05:31.240] A lot of people are like, well, I hate this, but I'm going to keep doing it anyway, right?
[00:05:29.920 --> 00:05:33.880] And of course, the whole company feels that as well.
[00:05:34.200 --> 00:05:39.720] So, yeah, you know, one comparison I like to make is: I love how you say you build the product, then you build the business.
[00:05:39.880 --> 00:05:43.960] We sometimes say you build the thing, which is a product, and then you build the thing that builds the thing.
[00:05:43.960 --> 00:05:50.760] But actually, for those who are parents listening here, I think it's actually a lot like having a kid, except Rob, that you can't sell your kid, right?
[00:05:50.760 --> 00:05:56.360] But you know, when you have a newborn, you are their parent, you have one job, right?
[00:05:56.360 --> 00:06:01.720] When they are five years old, 10 years old, 15, 30, your job is completely different.
[00:06:01.720 --> 00:06:05.480] If you wipe your 15-year-old's butt, you're not going to have a good time, right?
[00:06:05.480 --> 00:06:13.480] And so, you have to realize that even though your title hasn't changed, parent, your role has fundamentally altered, nearly reversed, right?
[00:06:13.480 --> 00:06:17.400] You're doing something completely different from what you were doing at the beginning.
[00:06:17.400 --> 00:06:24.920] And in your mental model of this, because I'd love to pick this apart and find out how you think about it, you've seen more later stage stuff than I have.
[00:06:24.920 --> 00:06:37.880] I see a lot of early stage stuff up to 10, 20 employees, and I see a handful that get into 30, 40, but it's like that's usually like, oh man, they're going to have a big exit or they're far beyond where I'm at.
[00:06:37.880 --> 00:06:46.360] But I'm curious if there are some particular stages that you have been brought in to advise or coach or consult that you see.
[00:06:46.360 --> 00:06:49.960] It's like, oh, it's usually at X revenue or X employees.
[00:06:49.960 --> 00:06:51.560] And then, and there's not just one, right?
[00:06:51.560 --> 00:06:55.480] There has to be kind of one at 10 to 15 and one at 30 to 50 or something.
[00:06:55.480 --> 00:06:57.400] Like, what's your mental model of all that?
[00:06:57.400 --> 00:06:59.720] Yeah, I mean, the funny thing is, this never changes, right?
[00:06:59.720 --> 00:07:05.720] Like, the first time I realized that this is a problem, that the founder role changes, it was actually my early time at Google.
[00:07:05.720 --> 00:07:07.720] I joined Google in 2006.
[00:07:07.720 --> 00:07:10.360] So, that was early-ish, but not very early, right?
[00:07:10.360 --> 00:07:13.480] We already had, you know, 5,000 employees or something.
[00:07:13.480 --> 00:07:27.920] And the founders, Larry and Sergey, who are some of the smartest people on the planet, used to run the company by basically walking into a room, asking a team what they did, put it on a whiteboard, and then they would use their superior knowledge and intelligence and context to give really great advice.
[00:07:27.920 --> 00:07:29.760] And you would take their advice and walk away.
[00:07:29.760 --> 00:07:33.200] By the time I was there, we had hundreds of teams, right?
[00:07:33.200 --> 00:07:34.640] And they would do that once every six months.
[00:07:34.640 --> 00:07:35.520] They had 15 minutes.
[00:07:35.520 --> 00:07:37.440] They come in, you tell them what you're up to.
[00:07:37.440 --> 00:07:38.640] They didn't really understand it.
[00:07:38.640 --> 00:07:40.080] They would give you some bad advice.
[00:07:40.400 --> 00:07:43.440] And then when that happened to me, I was, you know, straight out of college.
[00:07:43.440 --> 00:07:46.960] And I asked, what do we do with this bad advice that we just got?
[00:07:46.960 --> 00:07:49.360] And my tech lead said, oh, ignore it.
[00:07:49.360 --> 00:07:58.000] I thought, ignore the founder of one of the most successful companies in tech because those guys had not kept up with the scaling of their organization, right?
[00:07:58.000 --> 00:07:59.200] They hadn't adapted their role.
[00:07:59.200 --> 00:08:02.080] So this is sort of recurring.
[00:08:02.080 --> 00:08:07.520] But yes, I think the first time it happens is probably when you go past five or ten people, right?
[00:08:07.520 --> 00:08:13.440] Where you're not able to just sort of be all round a table, everyone knows everything that's going on.
[00:08:13.440 --> 00:08:16.640] You start to build some structure into things, right?
[00:08:16.640 --> 00:08:22.480] And if you build structure into things, Rob, as you know, without actually being thoughtful about it, you end up with silos, right?
[00:08:22.480 --> 00:08:24.720] You end up with different parts of the organization.
[00:08:24.720 --> 00:08:26.720] I guess maybe that's the way of thinking about it.
[00:08:26.720 --> 00:08:30.560] At around 10 people, you are now an organization, right?
[00:08:30.560 --> 00:08:35.520] You can't just have 10 people in every meeting, in every discussion, on every Slack channel.
[00:08:35.520 --> 00:08:37.040] You need to start differentiating it.
[00:08:37.040 --> 00:08:38.320] So you're organizing your team.
[00:08:38.320 --> 00:08:43.520] And organization maybe sounds like something that applies to a very large company, but no, I think it starts at 10.
[00:08:43.840 --> 00:08:48.800] Yeah, and that's, and I want to keep going with that and find out what the next one is, but I want to touch on a couple things first.
[00:08:48.800 --> 00:08:57.280] So many of us bootstrappers, folks who listen to this show, left big organizations because they're political or they're just to work for.
[00:08:57.280 --> 00:09:07.080] And so I know when I went out to start my company, I was like, either I'm going to be totally solo or I'm not going to have any of the cruft, the mission, vision, values, the process, because that's what makes it all bad, right?
[00:09:07.080 --> 00:09:14.280] And then it took me years to realize: oh, no, it's actually working with people who were unmotivated and bad hires, and I couldn't pick who I wanted to.
[00:09:14.280 --> 00:09:19.800] And if I actually hire amazing people, we do need a little bit of mission, vision, values.
[00:09:19.800 --> 00:09:22.040] Not too much, but as long as we're living up to it.
[00:09:22.040 --> 00:09:30.200] Like I say, my mission, the mission of this podcast, mission at Tiny Seed MicroConf is to multiply the world's population of independent, self-sustaining startups, right?
[00:09:30.200 --> 00:09:34.920] So we have a mission, and that's what we do, you know, and all of it does it in different ways.
[00:09:34.920 --> 00:09:38.680] Some of it's given away for free, and some of it is giving people money and investing.
[00:09:39.160 --> 00:09:43.880] But I had to come around to that realization of, oh, don't throw the, I threw the baby out with the bathwater.
[00:09:43.880 --> 00:09:45.320] And I think a lot of people do.
[00:09:45.320 --> 00:09:46.440] The other thing is Pell D.
[00:09:46.520 --> 00:09:53.640] Galzoni, he's the founder of Balsamic, did a talk at MicroConf that I think just went live on the YouTube channel, microconf.com/slash YouTube, if folks want to check that out.
[00:09:53.640 --> 00:09:59.880] And he talked a lot about how he made the mistake of he didn't want any process and he wanted a completely flat organization.
[00:09:59.880 --> 00:10:03.240] And that lasted until about, I don't know, 20, 25 people.
[00:10:03.240 --> 00:10:05.000] And he said it was just catastrophic.
[00:10:05.000 --> 00:10:07.800] And he had, he was trying to reinvent stuff.
[00:10:07.800 --> 00:10:10.600] And he's like, oh, no, there is prior art here, folks.
[00:10:10.600 --> 00:10:14.760] You know, 50, there are decades, if not centuries, of prior art around how to do this well.
[00:10:14.760 --> 00:10:19.640] Maybe not within a startup per se, but at least how to organize larger numbers of people.
[00:10:19.640 --> 00:10:24.440] Yeah, I think the common problem is not enough structure and process, which is a funny thing to say, right?
[00:10:24.440 --> 00:10:28.520] Because, but if you think about it, there are two pathways that a founder has gone through.
[00:10:28.520 --> 00:10:38.200] Either, like you say, they've worked with a really big company, they see all the process and all the cruft and the mission vision values on the wall that everyone ignores and everything like that.
[00:10:38.200 --> 00:10:39.560] And they say, that's crap.
[00:10:39.560 --> 00:10:41.080] The problem is all of the process.
[00:10:41.080 --> 00:10:44.520] I'm going to have something without process, which is a misdiagnosis, right?
[00:10:44.520 --> 00:10:49.840] Or they've never been at a big company and they've just never seen process or structure before, so they don't know what they're missing.
[00:10:50.160 --> 00:10:53.200] And so you end up with organizations that are under-scaffolded.
[00:10:53.200 --> 00:10:55.600] And I made this mistake as well, right?
[00:10:55.600 --> 00:11:00.960] But what you need is the right amount of process, or maybe we call it minimum viable process, right?
[00:11:00.960 --> 00:11:05.360] That it should be something that's there to support you, not to strangle you.
[00:11:05.360 --> 00:11:11.760] And I think people often give this negative view of it, which is it's bureaucracy, it's red tape, it gets in the way.
[00:11:11.760 --> 00:11:14.160] No, it's there to support you, right?
[00:11:14.160 --> 00:11:18.640] And if you think about, you know, I'm a software engineer, for those who are more technically minded, right?
[00:11:18.640 --> 00:11:26.480] If you think about building a large code base, you don't just write the same sort of spaghetti code that you would if you were just building a throwaway script.
[00:11:26.480 --> 00:11:28.720] No, you have tests, you have architecture.
[00:11:28.720 --> 00:11:32.080] Maybe once you reach more than a few people, you document it, right?
[00:11:32.080 --> 00:11:34.080] You're not doing that to make your life harder.
[00:11:34.080 --> 00:11:38.880] You're doing it to make your code base maintainable and to maintain a certain level of velocity as you go forward.
[00:11:38.880 --> 00:11:45.520] And I've always taken that software engineering way of thinking, and I'm like, okay, if you've got a system of people, right?
[00:11:45.520 --> 00:11:46.640] You're building a system of code.
[00:11:46.640 --> 00:11:48.240] Now you're building a system of people.
[00:11:48.240 --> 00:11:49.360] How do you architect it?
[00:11:49.360 --> 00:11:54.800] How do you actually think about making sure it works efficiently and is robust and maintainable?
[00:11:55.120 --> 00:11:59.120] Have you read anything or seen any type of resource that talks about this?
[00:11:59.120 --> 00:12:01.280] We are going to get back to your next phase, right?
[00:12:01.280 --> 00:12:02.320] We got to 10 employees.
[00:12:02.320 --> 00:12:03.280] I want to hear the next one.
[00:12:03.280 --> 00:12:06.800] But have you done any writing on it or talking or seen?
[00:12:07.120 --> 00:12:07.680] Is there a book?
[00:12:07.680 --> 00:12:11.440] Is there something we recommend that kind of talks more in depth?
[00:12:11.440 --> 00:12:16.720] Because you and I will just touch on these things of like, oh, at 10, we should, you know, you said introduce more process.
[00:12:16.720 --> 00:12:20.160] And I'm imagining someone listening to that and being like, what does that mean?
[00:12:20.160 --> 00:12:21.040] Well, it's funny.
[00:12:21.040 --> 00:12:24.240] I actually have a blog or newsletter that is dormant.
[00:12:24.240 --> 00:12:29.040] I haven't written in it for years, but it's called People Engineering, precisely for the reason I mentioned, right?
[00:12:29.040 --> 00:12:33.480] It's a software engineering approach to running systems of people.
[00:12:29.840 --> 00:12:35.000] So there are a number of articles in there.
[00:12:35.160 --> 00:12:45.080] You know, I wrote that when I first became a COO, which really is about, I think, when done right, is you are the chief architect of the organization, right?
[00:12:45.080 --> 00:12:52.520] And so, yeah, like I said, I haven't been on it for years, but if you subscribe, you never know, I might start writing in it again.
[00:12:52.520 --> 00:12:56.840] Otherwise, please take a look and it might provide some useful pointers.
[00:12:56.840 --> 00:12:57.880] Yeah, you have an archive there.
[00:12:57.880 --> 00:13:01.960] It's at newsletter.people, E-N-G, like peopleengineering.com.
[00:13:01.960 --> 00:13:05.480] And there's an archive link in the top of, I'm presuming all your stuff.
[00:13:05.640 --> 00:13:06.360] Awesome.
[00:13:06.360 --> 00:13:07.560] Let's talk about the next phase.
[00:13:07.560 --> 00:13:12.040] So someone's at 10 employees and they're putting in a little bit of process, just a little bit.
[00:13:12.040 --> 00:13:14.440] I used to tell people this just-in-time process.
[00:13:14.440 --> 00:13:16.280] I don't want to ratchet up too much.
[00:13:16.280 --> 00:13:19.560] Where is the next phase that you see folks stumbling?
[00:13:19.560 --> 00:13:22.360] I think the next phase, probably around 50.
[00:13:22.360 --> 00:13:27.880] Like it really does depend on a few factors, anywhere between 30 and 100, let's say.
[00:13:27.880 --> 00:13:30.840] But I'd put the mode at 50, right?
[00:13:30.840 --> 00:13:34.360] Where you are now doing more than one thing at a time.
[00:13:34.360 --> 00:13:42.600] You have multiple teams that are each operating autonomously, maybe not quite independently, but that's the point, right?
[00:13:42.600 --> 00:13:45.560] You can't just say, again, look at some of the bigger teams, right?
[00:13:45.560 --> 00:13:48.840] You've got your engineering team or you've got your sales team.
[00:13:48.840 --> 00:13:53.560] You can't just say, oh, everyone in engineering is just doing one thing or everyone in sales.
[00:13:53.720 --> 00:13:55.560] So maybe that's one way of thinking about it, Rob.
[00:13:55.560 --> 00:13:59.080] When you get to 10, you can't just have everyone in every meeting.
[00:13:59.080 --> 00:14:02.200] You might start to say, well, not every engineer attends the meetings.
[00:14:02.200 --> 00:14:05.160] You start to get maybe a bit of a functional breakdown.
[00:14:05.160 --> 00:14:09.480] By the time you get to 50, you're having cross-functional teams, let's say, right?
[00:14:09.480 --> 00:14:11.280] You've got the team that's doing your marketplace.
[00:14:11.400 --> 00:14:13.480] Oh, sorry, I know you don't like marketplaces for Bootstrapping.
[00:14:13.560 --> 00:14:14.680] I was going to say marketplace.
[00:14:15.120 --> 00:14:20.080] You've got a team that's doing your mid-market and a team that's doing enterprise or whatever it is, right?
[00:14:20.080 --> 00:14:22.400] And they've got different roadmaps.
[00:14:22.640 --> 00:14:24.240] They've got different processes.
[00:14:24.240 --> 00:14:27.360] And if you're not careful, then things really start spinning apart there.
[00:14:27.360 --> 00:14:30.720] On the sales team, you might also divide things up by market size.
[00:14:30.800 --> 00:14:35.200] You might say, oh, look, we've got our customer success teams and our, you know, BDRs and SDRs and all of that.
[00:14:35.200 --> 00:14:36.800] You're putting more of that structure in.
[00:14:36.800 --> 00:14:48.480] And so I think every time you're in a situation where you upgrade the complexity of your structure, because it's important, you're changing your architecture, you then need to change your way of working to match that.
[00:14:48.800 --> 00:14:53.200] Yeah, not only your way of working, but really your way of thinking, right?
[00:14:53.200 --> 00:14:59.600] It's like you, your role is, your job title stays the same, but your role completely transitions.
[00:14:59.600 --> 00:15:09.680] Do you have a thinking, like when I think about going from zero to 10 employees as let's say a single founder, and let's say the founder maybe is a developer who, you know, it's SaaS and they built the product.
[00:15:09.680 --> 00:15:13.600] So they're like, they run product, they probably manage the engineers.
[00:15:13.600 --> 00:15:20.240] Usually they have something to do with marketing, although they don't want to, and they had to hire all the people, you know, and they're kind of getting stuff in.
[00:15:20.240 --> 00:15:26.000] So they're just right now still a utility player and they're probably managing everyone or they maybe have one manager, right?
[00:15:26.000 --> 00:15:31.840] But let's say you're at, what is it, what should it look like at 30 people or 50 people?
[00:15:31.840 --> 00:15:33.280] Let's just pick a number somewhere in there.
[00:15:33.280 --> 00:15:41.360] You know, I have 30 employees, 50 employees, and I'm still that founder CEO, but the org is there and it's healthy.
[00:15:41.360 --> 00:15:51.120] Because it could easily be, I'm the founder and this is a big flat org and everyone still reports to me, you know, a little bit like the Larry and Sergei story you told earlier, which is like, well, that sounds like a catastrophe.
[00:15:51.120 --> 00:15:56.560] So, like, what's a better way to maybe structure the org and to think about what things might we want in place?
[00:15:56.560 --> 00:15:58.560] Because we probably need some vision values.
[00:15:58.560 --> 00:16:04.520] We probably need an HR handbook, you know, probably need some other stuff that I'd love to give folks an idea about.
[00:16:05.000 --> 00:16:07.880] Yeah, I think that there are a couple of things to this, right?
[00:16:07.880 --> 00:16:12.600] So, maybe one way of thinking about it, and again, this is very much similar to having a young baby, right?
[00:16:12.600 --> 00:16:15.240] At first, you are the person doing everything, right?
[00:16:15.240 --> 00:16:18.680] You are writing the code, you're doing the sales calls, everything like that.
[00:16:18.920 --> 00:16:20.040] You're basically solo.
[00:16:20.040 --> 00:16:24.280] Then, up to about 10 people, like you said, everyone reports to you.
[00:16:24.280 --> 00:16:32.680] You are still the person who knows everything, who can hold the complete context of the business in your head, who everyone reports to directly.
[00:16:32.680 --> 00:16:34.520] And so, you can be quite directive, right?
[00:16:34.520 --> 00:16:43.720] Maybe you're not actually writing every line of code, maybe you're not taking every call yourself, but you tell people what to do, and what you tell them is good, is right.
[00:16:44.040 --> 00:16:49.160] It's a better decision than they could make themselves a lot of the time because you have that superior context.
[00:16:49.160 --> 00:16:53.880] And both at the high level, but also all the way down to the granular details.
[00:16:53.880 --> 00:16:56.120] At 50, that's no longer possible, right?
[00:16:56.120 --> 00:17:02.520] You can't have 50 people reporting to you directly, so you don't know all the people as well as other folks in the company.
[00:17:02.520 --> 00:17:06.120] You cannot know every granular detail of what's happening in your company.
[00:17:06.120 --> 00:17:10.520] And it's funny, and maybe this is when I say it's between 30 to 150 people.
[00:17:10.520 --> 00:17:19.240] There are a number of things that affect that number, but one of them is how capable the founder is of just hoping, of holding vast amounts of context in their head, right?
[00:17:19.240 --> 00:17:30.280] And it's one of those classic cases of a strength turning into a liability or into a weakness, which is the more you can hold in your head, the further you can go before it all starts crashing down around you, right?
[00:17:30.280 --> 00:17:38.040] Maybe you can hold 100 folks' worth of context in your head because you're very clever and very hardworking, but every person hits their limit, right?
[00:17:38.040 --> 00:17:42.600] Larry and Sergey, maybe they could handle a thousand-person org, but they couldn't handle 3,000.
[00:17:42.600 --> 00:17:44.040] And so, there is that as well.
[00:17:44.040 --> 00:17:46.960] And so, you've got these increasing levels of indirection.
[00:17:44.840 --> 00:17:50.240] And perhaps to a certain extent, it does follow reporting structures as well.
[00:17:50.800 --> 00:17:54.480] First, you're writing the code, then you're managing the people who write the code.
[00:17:54.480 --> 00:17:58.800] And then once you get to 50, you need another layer of management in between, right?
[00:17:58.800 --> 00:18:03.760] And like you said, every person who has had that idea of, oh, I don't need managers.
[00:18:03.760 --> 00:18:07.120] We can have a flat structure, learns that they were wrong.
[00:18:07.120 --> 00:18:18.240] You know, it might seem that, again, management gets a bad name from big companies where you've got pointy-head bosses just wasting space, but good management is essential to a growing organization.
[00:18:18.240 --> 00:18:22.000] And so then you've basically, as a founder, you've got an exec team.
[00:18:22.000 --> 00:18:32.640] I know, Rob, before the call, we were talking about this, and you said, well, bootstrappers don't necessarily like that term executive, but I actually want to bring it up anyway because I think that's another limiting thought, right?
[00:18:32.640 --> 00:18:41.600] Because what you're saying is, as a founder, not only, you know, I'm now acting through my leaders, and that team is my team, right?
[00:18:41.600 --> 00:18:42.720] They are executing.
[00:18:42.720 --> 00:18:45.280] That's what they're called, executives, right?
[00:18:45.280 --> 00:18:48.080] And you are there to run that team.
[00:18:48.080 --> 00:18:52.560] So first, you're writing the code, then you're managing the people who are writing the code.
[00:18:52.560 --> 00:18:57.280] Now you have a team who manages the people who write the code or do the sales calls or whatever it is.
[00:18:57.280 --> 00:19:01.360] And that's why you talk about mission, vision, values, and process and so on.
[00:19:01.360 --> 00:19:02.480] You're not in every room.
[00:19:02.480 --> 00:19:03.600] You don't have all the context.
[00:19:03.600 --> 00:19:06.560] So as a founder, you still want to be in control, right?
[00:19:06.560 --> 00:19:10.240] You still want the company to grow and evolve the way that you want it to.
[00:19:10.240 --> 00:19:20.080] And so now you need to say, how can I make sure that the decisions that are made, the conversations that are happening, are the ones that I would want to happen even when I'm not in the room?
[00:19:20.080 --> 00:19:24.960] Because there are a whole lot of meetings, there are a whole lot of rooms that you are no longer in, because you can't be everywhere at once.
[00:19:24.960 --> 00:19:28.160] And so, you're actually talking about scaling yourself as a leader.
[00:19:28.160 --> 00:19:35.880] And I think when you think of it that way, it seems a lot more appealing than saying, Oh, we've got a bunch of processes and standards and mission, vision, values.
[00:19:35.880 --> 00:19:40.200] It's saying, This is how I get to be in the room, even when I'm not in the room.
[00:19:40.200 --> 00:19:44.280] And that is actually the work that you start doing as a founder.
[00:19:44.280 --> 00:19:45.800] That is a really good point.
[00:19:45.800 --> 00:19:59.320] And it's something that I encountered at, well, I guess it was a little bit after Selling Drip where I started managing managers, but even more with Tiny Seed as I've promoted folks who become managers.
[00:19:59.320 --> 00:20:02.680] And the thing that I've struggled with is I learned how to manage.
[00:20:02.680 --> 00:20:04.280] And I feel like I'm a good leader.
[00:20:04.280 --> 00:20:07.400] You know, I'm not phenomenal, but I paint the vision.
[00:20:07.400 --> 00:20:08.840] I get us in a direction.
[00:20:08.840 --> 00:20:17.080] Milton bolts-wise of a lot of things I don't are not my favorite, but I know how I manage and I know how I think about managing.
[00:20:17.080 --> 00:20:25.320] So then when I promoted someone on our team to become a manager, and they said, Okay, like help me, how do you think about management?
[00:20:25.320 --> 00:20:26.280] Help me think about this.
[00:20:26.280 --> 00:20:27.000] What should I read?
[00:20:27.000 --> 00:20:27.800] What resources should?
[00:20:27.800 --> 00:20:34.440] And I was like, Oh, I've never trained someone, not never, but I have not trained anyone recently in becoming a manager.
[00:20:34.440 --> 00:20:39.080] And I had to then think about what is my, what was my process, and how do I actually think about this?
[00:20:39.080 --> 00:20:45.080] Because you can, you can kind of be natural with something and if it works, good, but you may not know what really what makes you good.
[00:20:45.080 --> 00:20:46.040] What are you doing that's right?
[00:20:46.040 --> 00:20:47.400] And what are you doing poorly?
[00:20:47.400 --> 00:20:49.720] Usually you have blind spots if you aren't examining it.
[00:20:49.720 --> 00:20:57.880] And so that was a big realization for me: like, oh, yeah, if I don't, if I'm not deliberate about this, it's going to be a mess.
[00:20:57.880 --> 00:21:06.520] If I'm not deliberate about making sure that A, the people that get on the bus are the right ones, but also that the managers are really dialed in and doing this well.
[00:21:06.840 --> 00:21:15.280] Suddenly, it felt like I was losing control of things because there are folks now in, you know, in Microcom Tiny Seed who like don't report to me, right?
[00:21:15.280 --> 00:21:18.000] And I only see them every six months at an event.
[00:21:14.760 --> 00:21:19.360] And that's, we're not even a huge team, right?
[00:21:19.600 --> 00:21:20.640] We're 10 people.
[00:21:20.640 --> 00:21:28.240] But that realization alone that you just said of you're kind of, I think you said like duplicating yourself or replicating yourself.
[00:21:28.240 --> 00:21:30.480] That blew my that's a tough one.
[00:21:30.480 --> 00:21:31.120] It's a tough one.
[00:21:31.120 --> 00:21:32.400] And I think it blows a lot of people's mind.
[00:21:32.400 --> 00:21:33.440] Do you want to talk more about that?
[00:21:33.440 --> 00:21:36.240] Like, how can one think about doing that well?
[00:21:36.560 --> 00:21:37.920] Yeah, I mean, absolutely.
[00:21:37.920 --> 00:21:44.160] And it starts with that realization that you are highly, highly dependent on your managers, right?
[00:21:44.720 --> 00:21:46.800] Again, I'll use that child analogy, right?
[00:21:46.800 --> 00:21:49.440] When you have a baby, you basically own them.
[00:21:49.440 --> 00:21:53.520] Like, what you want them to do, that's what they do, except for crying.
[00:21:53.520 --> 00:21:57.280] As they get older, as they become teenagers, Rob, well, you're no longer in control, right?
[00:21:57.280 --> 00:21:59.120] But you can only influence, right?
[00:21:59.120 --> 00:22:06.720] You can create rules and guardrails and set values and so on because you are no longer their complete like dictator, right?
[00:22:06.720 --> 00:22:08.320] And it's the same with the company.
[00:22:08.320 --> 00:22:10.560] So you have this team and you can say, yo, this is my company.
[00:22:10.560 --> 00:22:11.360] You're a bootstrapper.
[00:22:11.360 --> 00:22:12.800] Maybe you own 100% of it.
[00:22:12.800 --> 00:22:24.640] But just because you own 100% of it does not mean you're in 100% control because you have got people and people have their own needs and their own ways of thinking and their own levels of autonomy, right?
[00:22:24.640 --> 00:22:30.720] And so when you have managers, yes, you need to train them well to be managers, but you also need to keep them very close.
[00:22:30.720 --> 00:22:32.160] They are your eyes, your ears.
[00:22:32.160 --> 00:22:35.280] They're also your arms and legs, right?
[00:22:35.280 --> 00:22:37.280] You work through your managers.
[00:22:37.280 --> 00:22:41.200] One of the things I've seen, it's a very common mistake, and it can be so hard.
[00:22:41.200 --> 00:22:42.720] This is part of the letting go.
[00:22:42.720 --> 00:22:52.640] Is if I've got a team that is reporting to a manager who is reporting to me, and I want that team to do something, it can be so tempting just to talk to someone on that team and say, hey, could you please do that for me?
[00:22:52.640 --> 00:22:55.680] But then this is the example of, you know, this is like a teenager, right?
[00:22:55.680 --> 00:22:57.280] That person's going to go do it.
[00:22:57.280 --> 00:23:02.200] That manager is going to feel that you've undermined them in their role managing that team.
[00:23:02.200 --> 00:23:03.080] They're going to be pissed off.
[00:23:03.080 --> 00:23:03.800] They're going to come to you.
[00:22:59.840 --> 00:23:05.160] The team's going to get confused.
[00:23:05.800 --> 00:23:10.600] So again, how do you get things done when you don't get to just tell people what to do anymore?
[00:23:10.600 --> 00:23:10.920] Right?
[00:23:11.160 --> 00:23:13.000] You know, it's AI time at the moment.
[00:23:13.000 --> 00:23:18.200] Everyone's talking about context, which is great because I think it actually helps you realize how important it is.
[00:23:18.200 --> 00:23:21.480] You only get good responses from AI if you give them the right context.
[00:23:21.480 --> 00:23:22.840] It is the same with people.
[00:23:23.080 --> 00:23:33.240] So your managers and your teams more broadly, you need to give them the right context in order, again, to make those decisions that you would make if you were in the room.
[00:23:33.240 --> 00:23:41.960] And so that's when it comes down to, you know, all of these big company concepts, Rob, that get a bad name because they're done poorly at big companies or whatever.
[00:23:42.120 --> 00:23:44.920] You can call it context or internal communications or whatever.
[00:23:44.920 --> 00:23:49.320] Your job is to say, this is what you need to know in order to make the right decisions.
[00:23:49.320 --> 00:23:51.880] And that is both principles, right?
[00:23:51.880 --> 00:23:53.960] That's when you talk about the mission, vision, vision, values.
[00:23:53.960 --> 00:23:55.560] This is what we're trying to achieve.
[00:23:55.560 --> 00:23:57.080] This is how we achieve it.
[00:23:57.080 --> 00:23:58.200] This is what matters to us.
[00:23:58.200 --> 00:24:01.720] This is what good looks like to us as a company, right?
[00:24:01.720 --> 00:24:05.480] It is also certain process things, and there's context, right?
[00:24:05.800 --> 00:24:13.240] You start to be a person whose job it is to make sure everyone in the business knows what they need to know about the business in order to make good decisions.
[00:24:13.240 --> 00:24:17.720] If they make bad decisions because they don't have the right context, that's on you, right?
[00:24:17.720 --> 00:24:19.480] And so that's the hardest thing.
[00:24:19.480 --> 00:24:22.280] And like you said, I actually think a lot of founders don't like it.
[00:24:22.520 --> 00:24:25.960] To your point, you sold drip because you realized you didn't like it.
[00:24:26.120 --> 00:24:28.360] A lot of founders aren't able to let go.
[00:24:28.360 --> 00:24:37.000] And then, at least as well, you have to realize your job is now context-setting process or structure creation, let's say.
[00:24:37.000 --> 00:24:42.920] If you're actually doing the thing itself, then you become a liability to your own company.
[00:24:42.920 --> 00:24:48.240] And that's a very painful realization, I think, for a lot of folks, but it's just the reality of it.
[00:24:44.520 --> 00:24:49.520] Yeah, that makes sense.
[00:24:49.840 --> 00:24:52.800] I did want to add, by the way, that we sold drip.
[00:24:52.800 --> 00:24:56.080] Part of it, I was unhappy with the fact that I was managing 10 people.
[00:24:56.080 --> 00:24:57.280] I would have kept doing it.
[00:24:57.360 --> 00:25:02.160] The other part is that we had a bunch of inbound interest and then we got an offer that we kind of couldn't refuse.
[00:25:02.160 --> 00:25:06.400] So that helped grease the wheels, so to speak.
[00:25:06.400 --> 00:25:06.960] Of course.
[00:25:06.960 --> 00:25:09.200] It wasn't just like, oh, I don't want to manage the 11th person.
[00:25:09.200 --> 00:25:10.160] I'm going to sell this thing, right?
[00:25:10.400 --> 00:25:12.080] It was more to it than that.
[00:25:12.080 --> 00:25:13.840] Okay, so context.
[00:25:13.840 --> 00:25:16.800] How do we communicate that to people?
[00:25:16.800 --> 00:25:18.400] Is it status meetings?
[00:25:18.960 --> 00:25:22.000] Is it an orientation of this mission, vision, values, principles?
[00:25:22.160 --> 00:25:23.920] This is how I make this how we make decisions.
[00:25:23.920 --> 00:25:24.720] This is how we operate.
[00:25:24.720 --> 00:25:26.320] This is how we treat our customers.
[00:25:26.320 --> 00:25:30.800] And then it's keeping them in the loop with weekly meetings or bi-weekly.
[00:25:31.200 --> 00:25:31.760] What is that?
[00:25:32.320 --> 00:25:35.280] How do you get that into, especially your managers?
[00:25:35.280 --> 00:25:38.640] How do you get that into their system?
[00:25:38.960 --> 00:25:47.920] Well, I think this is how I personally say, this is how you can still keep it fresh and feel that sense of control is you get to choose, right?
[00:25:47.920 --> 00:25:53.120] This is a design exercise where you say, okay, and again, come back to that people engineering thing.
[00:25:53.120 --> 00:25:55.120] There is more than one way to get this done.
[00:25:55.120 --> 00:25:58.800] What is a way that you as a founder resonate with?
[00:25:58.800 --> 00:26:00.640] Are you good at all-hands meetings?
[00:26:00.640 --> 00:26:02.240] Or are you good at writing emails?
[00:26:02.240 --> 00:26:06.560] Or, you know, are you good at having one-on-one conversations?
[00:26:06.560 --> 00:26:07.840] That's up to you.
[00:26:07.840 --> 00:26:19.840] The end result is everyone in your organization needs to understand the ground rules, the protocols for making decisions and for getting things done, what matters, and what's happening in the company that affects them, right?
[00:26:19.840 --> 00:26:23.040] That affects their ability to make the right choices.
[00:26:23.040 --> 00:26:24.560] I talk a lot about decisions, right?
[00:26:24.560 --> 00:26:29.040] Because ultimately, every bit of work that you do is a series of smaller and bigger decisions.
[00:26:29.040 --> 00:26:35.560] It's fractal all the way down to, you know, what do I name this variable, or, you know, how do I talk about my company?
[00:26:35.560 --> 00:26:39.960] But it comes down to you need to tell them, otherwise, they will figure it out for themselves.
[00:26:39.960 --> 00:26:42.920] And what they figure out for themselves may not be what you want them to.
[00:26:42.920 --> 00:26:45.240] I like an all-hands meeting, right?
[00:26:45.240 --> 00:26:46.680] But other people might like writing.
[00:26:46.680 --> 00:26:54.200] I've seen leaders who, even from quite an early stage, communicate effectively to their teams with a weekly newsletter, right?
[00:26:54.200 --> 00:26:54.920] And that's great.
[00:26:54.920 --> 00:26:57.400] That scales really well as the company grows.
[00:26:58.040 --> 00:27:04.920] But actually, I think the biggest one, Rob, and my favorite book in this whole area is Five Dysfunctions of a Team by Patrick Lencione.
[00:27:04.920 --> 00:27:07.240] It's quite a famous book.
[00:27:07.240 --> 00:27:13.160] And what it is actually about is it's about managing managers, ultimately, right?
[00:27:13.160 --> 00:27:19.800] And the point that they make is, as a leader, the managers who report to you, they are your team.
[00:27:19.800 --> 00:27:22.040] And you are their team, right?
[00:27:22.040 --> 00:27:28.440] So if I'm the head of customer success and you ask me as a head of customer success, who is your team?
[00:27:28.440 --> 00:27:32.280] It's tempting to say, oh, my team is the customer success team, all the people who report to me.
[00:27:32.280 --> 00:27:36.200] No, your first team is the leadership team that you're a part of, right?
[00:27:36.200 --> 00:27:38.840] You are running the company together.
[00:27:38.840 --> 00:27:45.000] And so you need to be thinking, okay, that's as a leader, that is your vessel for pushing context, right?
[00:27:45.000 --> 00:27:49.320] That's your main control mechanism is we've got a team and it makes it a lot less lonely, right?
[00:27:49.480 --> 00:27:51.240] I know, not quite the main topic of this episode.
[00:27:51.240 --> 00:27:52.760] Being a founder is really lonely.
[00:27:52.760 --> 00:27:54.680] Being a CEO is really lonely.
[00:27:54.680 --> 00:27:58.360] But if you realize you have a team, so when you have a problem, you don't say, what do I do?
[00:27:58.360 --> 00:27:59.400] We say, what do we do?
[00:27:59.400 --> 00:28:01.320] How do we solve this problem as a team?
[00:28:01.320 --> 00:28:19.040] It makes it so much less lonely, but it also means you're able to push your message, your context, so much more effectively across everybody in your, let's say, your 50-person organization, because all of your leaders are on the same page because they are part of one team.
[00:28:19.040 --> 00:28:20.720] Yeah, I like that.
[00:28:20.720 --> 00:28:29.680] The other thing that we haven't touched on, but I think should be completely obvious, but it might not be, is it's not just the things that you've said.
[00:28:29.680 --> 00:28:47.840] It's that you have to be really careful about hiring the right people because no amount of context or no amount of everything we just said will save you if you hire someone who is a manager or is bad with people or has is too scared to ever disagree with the boss and is hiding.
[00:28:47.840 --> 00:29:03.760] Like there's all these types of real kind of weaknesses, I will say, or issues that someone can bring that you can't get around just by being again, just by being the perfect boss and the perfect communicator and the perfect founder.
[00:29:03.760 --> 00:29:05.120] Yeah, strong agree, right?
[00:29:05.120 --> 00:29:12.560] Like I think one of the lessons in humility, again, going back to a parent, being a parent, right, is you don't get to dictate how your kid turns out.
[00:29:12.560 --> 00:29:15.600] If you hire somebody, you have a limited control.
[00:29:15.600 --> 00:29:23.440] Even if you're the best manager in the world, you have a limited ability to influence how effective that person is at their job, right?
[00:29:23.440 --> 00:29:32.160] So I think, you know, this is not about saying you shouldn't do absolutely everything you can as a manager, as a leader, to help a person, but ultimately it's up to them.
[00:29:32.400 --> 00:29:34.480] It's about who they are and what they can do.
[00:29:34.480 --> 00:29:42.000] And so, yes, hiring well and firing well, which is the unfortunate part of the job, but also a really important one.
[00:29:42.000 --> 00:29:46.800] And, you know, you don't ever have to love it or even stop hating letting people go.
[00:29:46.800 --> 00:29:53.440] But I hesitate to think that it's possible to do a really great job of running a company without letting people go sometimes.
[00:29:53.440 --> 00:29:55.680] So, hire carefully.
[00:29:55.680 --> 00:29:59.880] And for me, you know, that's really about, there are two things for me.
[00:30:00.040 --> 00:30:02.600] I'm very interested in your thoughts on hiring.
[00:29:59.680 --> 00:30:05.480] One is starting with formulating the role.
[00:30:05.800 --> 00:30:11.240] The way I think about it is people are very again, this is a bad habit that they do learn from big companies.
[00:30:11.240 --> 00:30:16.920] It's like, let's write 15 bullet points on five years of experience with this or that technology or doing that.
[00:30:17.080 --> 00:30:21.160] I'm like, no, okay, let's start with the problem we're trying to solve.
[00:30:21.160 --> 00:30:22.840] Same as the startup itself, right?
[00:30:22.840 --> 00:30:27.880] What is the shape of the hole in my organization that I'm trying to fill or in my team?
[00:30:27.880 --> 00:30:33.720] And then reverse engineer that to this is the type of person who is the right shape for that hole.
[00:30:33.720 --> 00:30:46.600] And so I think if you do it that way, you have a much better shot at actually attracting the sort of people that you're looking for, but also evaluating them accurately rather than against their accomplishments or particular skills.
[00:30:46.600 --> 00:30:48.680] It's like, what is the shape of the hole?
[00:30:48.680 --> 00:30:50.920] Are they the right person for that?
[00:30:50.920 --> 00:31:01.800] And then the other thing is, no matter how good your interview process is or your decision-making process is, I've learnt the humility to realize that there's still a lot of noise, there's a lot of error around that.
[00:31:01.800 --> 00:31:07.720] So you need to think: what is the way to get, to defer the decision as long as possible?
[00:31:07.720 --> 00:31:08.120] Right?
[00:31:08.120 --> 00:31:12.440] Which means, can you have that person on a contract for a while, do a trial?
[00:31:12.440 --> 00:31:19.240] If you're in a country where you can have, you know, at-will employment or probation periods, make sure you actually structure that in.
[00:31:19.240 --> 00:31:24.120] You won't know for sure if someone's really great until three or six months of working together.
[00:31:24.120 --> 00:31:28.040] And so, you know, how do you get to that point that you have that?
[00:31:28.040 --> 00:31:33.400] If you can't do that, then you are going to end up carrying people who are not right for your team.
[00:31:34.040 --> 00:31:39.720] It's an important point to drive home: most people wait, almost everybody waits too long to fire.
[00:31:39.720 --> 00:31:51.520] And making a decision of who to bring on your team based on a cover letter in two or three one-hour interviews, that's kind of how we do it, but it's tough.
[00:31:52.480 --> 00:31:53.760] You're not going to be right all the time.
[00:31:53.760 --> 00:31:55.360] Yeah, I think that's the point.
[00:31:55.600 --> 00:31:59.120] I used to obsess over the perfect interview process.
[00:31:59.120 --> 00:32:01.280] Like, what is the ideal interview process?
[00:32:01.280 --> 00:32:08.640] And again, I still think it's important, but I also recognize the limitations of any set of three one-hour interviews.
[00:32:08.640 --> 00:32:13.760] By the way, actually, one thing that is valuable is reference checking, again, which I think nearly everybody gets wrong.
[00:32:13.760 --> 00:32:25.200] Either people don't bother checking references or they do these kind of bland milquetoast sort of reference checks where everyone just says, oh, yeah, you know, I worked with him and, you know, she was great or whatever.
[00:32:25.200 --> 00:32:27.360] And you don't actually get to know anything about them.
[00:32:27.360 --> 00:32:29.280] I treat reference calls as an interview.
[00:32:29.280 --> 00:32:33.520] I'm basically interviewing the person on behalf of the other one, right?
[00:32:33.520 --> 00:32:34.640] I'm like, tell me about them.
[00:32:34.640 --> 00:32:35.760] You know, what are their strengths?
[00:32:35.760 --> 00:32:36.880] What are their weaknesses?
[00:32:36.880 --> 00:32:39.360] That can actually give you a big leg up.
[00:32:39.360 --> 00:32:41.280] But like I said, there is no process.
[00:32:41.280 --> 00:32:42.720] There's no perfect process.
[00:32:42.720 --> 00:32:46.320] Like you said, people always wait too long to let people go.
[00:32:46.320 --> 00:32:50.880] You know what I've never heard in my career is I regret letting that person go.
[00:32:50.880 --> 00:32:53.680] You know what I hear all the time is, we should have done it sooner.
[00:32:53.680 --> 00:32:59.680] And so by the time you're wondering whether you should let that person go, my advice is you've probably already waited too long.
[00:32:59.680 --> 00:33:02.560] Yeah, and it's tough because nobody likes to do it and it's not fun.
[00:33:02.560 --> 00:33:03.280] Nobody likes to do it.
[00:33:03.520 --> 00:33:07.440] Unless you're a psychopath, but you know, this is not the podcast for psychopaths.
[00:33:08.000 --> 00:33:08.560] No, it's not.
[00:33:08.560 --> 00:33:12.640] There's a few of those in the startup space, but not well.
[00:33:12.640 --> 00:33:18.160] Yanov, I get the feeling we could talk for hours about this topic, but we are at time.
[00:33:18.160 --> 00:33:20.400] Your name is Yanov Bernstein.
[00:33:20.400 --> 00:33:27.440] Folks can find you on LinkedIn, as well as, since they're listening to this podcast, of course, they might like your podcast.
[00:33:27.440 --> 00:33:32.520] It's called the Startup Podcast, and they can find it wherever greater podcasts are served.
[00:33:32.520 --> 00:33:33.800] And on YouTube as well.
[00:33:33.800 --> 00:33:35.080] And on YouTube, there it is.
[00:33:35.080 --> 00:33:35.480] Yeah, thanks.
[00:33:35.480 --> 00:33:36.360] Thanks for joining me today.
[00:33:29.840 --> 00:33:37.160] Thanks so much, Rev.
[00:33:37.320 --> 00:33:38.840] I really enjoyed the chat.
[00:33:38.840 --> 00:33:41.160] Thanks again to Yanov for joining me on the show.
[00:33:41.160 --> 00:33:43.720] It's been great having you this week and every week.
[00:33:43.720 --> 00:33:47.640] This is Rob Walling signing off from episode 790.

Prompt 2: Key Takeaways

Now please extract the key takeaways from the transcript content I provided.

Extract the most important key takeaways from this part of the conversation. Use a single sentence statement (the key takeaway) rather than milquetoast descriptions like "the hosts discuss...". 

Limit the key takeaways to a maximum of 3. The key takeaways should be insightful and knowledge-additive. 

IMPORTANT: Return ONLY valid JSON, no explanations or markdown. Ensure:
- All strings are properly quoted and escaped
- No trailing commas
- All braces and brackets are balanced
Format: {"key_takeaways": ["takeaway 1", "takeaway 2"]}

Prompt 3: Segments

Now identify 2-4 distinct topical segments from this part of the conversation.

For each segment, identify:
- Descriptive title (3-6 words)  
- START timestamp when this topic begins (HH:MM:SS format)
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Most important Key takeaway from that segment. Key takeaway must be specific and knowledge-additive.
- Brief summary of the discussion

IMPORTANT: The timestamp should mark when the topic/segment STARTS, not a range. Look for topic transitions and conversation shifts.

Return ONLY valid JSON. Ensure all strings are properly quoted, no trailing commas:
{
  "segments": [
    {
      "segment_title": "Topic Discussion", 
      "timestamp": "01:15:30",
      "key_takeaway": "main point from this segment",
      "segment_summary": "brief description of what was discussed"
    }
  ]
}

Timestamp format: HH:MM:SS (e.g., 00:05:30, 01:22:45) marking the START of each segment.

Prompt 4: Media Mentions

Now scan the transcript content I provided for ACTUAL mentions of specific media titles:

Find explicit mentions of:
- Books (with specific titles)
- Movies (with specific titles)  
- TV Shows (with specific titles)
- Music/Songs (with specific titles)

DO NOT include:
- Websites, URLs, or web services
- Other podcasts or podcast names

IMPORTANT: 
- Only include items explicitly mentioned by name. Do not invent titles.
- Valid categories are: "Book", "Movie", "TV Show", "Music"
- Include the exact phrase where each item was mentioned
- Find the nearest proximate timestamp where it appears in the conversation
- THE TIMESTAMP OF THE MEDIA MENTION IS IMPORTANT - DO NOT INVENT TIMESTAMPS AND DO NOT MISATTRIBUTE TIMESTAMPS
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Timestamps are given as ranges, e.g. 01:13:42.520 --> 01:13:46.720. Use the EARLIER of the 2 timestamps in the range.

Return ONLY valid JSON. Ensure all strings are properly quoted and escaped, no trailing commas:
{
  "media_mentions": [
    {
      "title": "Exact Title as Mentioned",
      "category": "Book",
      "author_artist": "N/A",
      "context": "Brief context of why it was mentioned",
      "context_phrase": "The exact sentence or phrase where it was mentioned",
      "timestamp": "estimated time like 01:15:30"
    }
  ]
}

If no media is mentioned, return: {"media_mentions": []}

Full Transcript

[00:00:00.400 --> 00:00:02.800] It's another episode of Startups for the Rest of Us.
[00:00:02.800 --> 00:00:17.040] I'm Rob Walling, and this week I talk to Yanov Bernstein, who has been both a founder and an executive at companies ranging from small startups up to very large orgs, including 10 years at Google.
[00:00:17.040 --> 00:00:18.640] He's been a VP of engineering.
[00:00:18.640 --> 00:00:20.320] He's been a COO.
[00:00:20.320 --> 00:00:21.840] He's been a consultant.
[00:00:21.840 --> 00:00:25.520] And he was a software engineering leader at Google.
[00:00:25.520 --> 00:00:31.520] And these days, he's been giving advice to founders that want to go from startup to scale up.
[00:00:31.520 --> 00:00:39.440] He's seen a lot of companies fail, as many of us do, as they try to get past that 1 million, 5 million, 10 million ARR phase.
[00:00:39.440 --> 00:00:52.160] And one of the big drags on a company as it grows is when a founder isn't able to make that transition from being the CEO of a 10, 20 person company up into the 50, 100, 200 person company.
[00:00:52.160 --> 00:01:01.760] And that's what we focus on today as we talk about going from scrappy to scalable, what it looks like to evolve your role as a founder as your company gets bigger.
[00:01:01.760 --> 00:01:08.720] And speaking of growing your company, I run a premium coaching program called the SAS Institute.
[00:01:08.720 --> 00:01:17.440] SAS Institute is a private coaching community designed for B2B and B2C SaaS founders doing a million in ARR or more.
[00:01:17.440 --> 00:01:24.880] There's one-on-one coaching, there are masterminds, and there is an amazing online community that will be meeting in person.
[00:01:24.880 --> 00:01:35.200] The idea is to get you the systems and the support you need to scale from a million or more up into the 10, 15, and $20 million marks.
[00:01:35.200 --> 00:01:41.280] We have some incredible coaches, including Jordan Gall, Taylor Hendrickson, and Mark Thomas.
[00:01:41.280 --> 00:01:43.280] And our first group is very small.
[00:01:43.280 --> 00:01:47.200] And that's amazing because you get a lot of one-on-one attention.
[00:01:47.200 --> 00:01:50.960] In addition, you get to chat with me and get my best advice.
[00:01:50.960 --> 00:01:53.040] SASINSTITUTE.com.
[00:01:53.040 --> 00:01:54.080] We'd love to have you.
[00:01:54.080 --> 00:01:57.520] And with that, let's dive into my conversation with Yanov.
[00:02:05.480 --> 00:02:06.760] Janev Bernstein.
[00:02:06.760 --> 00:02:08.440] Thanks for joining me on Startups for the Rest of Us.
[00:02:08.680 --> 00:02:09.240] Thanks, Rob.
[00:02:09.240 --> 00:02:10.920] I'm really excited to be on.
[00:02:10.920 --> 00:02:12.600] Yeah, it's been a long time coming.
[00:02:12.600 --> 00:02:19.320] I was on your podcast that you co-host called the Startup Podcast, Creatively Named.
[00:02:19.320 --> 00:02:23.720] I was on that a couple years ago, and I think we're talking about recording another episode soon.
[00:02:23.720 --> 00:02:27.640] So folks can go check out, certainly go check out that episode if they want to hear us.
[00:02:27.640 --> 00:02:30.600] We talked a lot about like bootstrapping versus raising funding, I think.
[00:02:30.600 --> 00:02:31.960] That's the one.
[00:02:31.960 --> 00:02:34.840] And you have been a founder.
[00:02:34.840 --> 00:02:37.000] You've been a COO.
[00:02:37.000 --> 00:02:39.800] You've been, I believe, a VP of engineering.
[00:02:39.800 --> 00:02:46.680] You have been a coach, advisor, and investor of a lot of startups.
[00:02:46.680 --> 00:02:50.840] So you have quite the gamut of experience.
[00:02:50.840 --> 00:02:52.360] Did I miss anything?
[00:02:52.360 --> 00:02:55.960] Yeah, well, the first 10 years of my career, I was a software engineer at Google.
[00:02:55.960 --> 00:03:09.320] So I started off at big tech, and I think over the course of my career, I've been going smaller and smaller, earlier and earlier stage, to the point now where I'm now the co-founder and chief technology officer of a very early stage company called Violet.
[00:03:09.320 --> 00:03:20.200] So I think one thing that has helped me to do, Rob, which maybe we'll touch on in this episode, is because I've come from later stages to earlier and earlier stages, I kind of know what comes next, right?
[00:03:20.200 --> 00:03:27.000] So when I'm an early stage founder, I know what it looks like to start to scale and then reach that really large, large stage as well.
[00:03:27.000 --> 00:03:28.920] Yeah, and that's what we're going to talk about today, right?
[00:03:28.920 --> 00:03:33.800] Is the role of a founder/slash CEO and how that changes.
[00:03:33.800 --> 00:03:47.120] And it changes profoundly as you go from listeners will hear Noah this phrase, you build a product, then you build a business, then you build a company, and probably even beyond that, then you do all kinds of stuff.
[00:03:44.760 --> 00:03:50.000] But the role of that founder has to change.
[00:03:50.160 --> 00:03:57.200] And this is where we see folks like myself where my last SaaS app got to 10 people and doing millions in revenue.
[00:03:57.200 --> 00:03:59.120] And I was like, this isn't very fun.
[00:03:59.520 --> 00:04:00.880] I just didn't enjoy that phase.
[00:04:00.880 --> 00:04:05.200] And so I had the decision of, oh, so do I raise funding and kind of hire a COO?
[00:04:05.200 --> 00:04:06.720] Do I replace myself?
[00:04:06.720 --> 00:04:08.800] And we were growing fast, but a lot relied on me.
[00:04:08.800 --> 00:04:09.680] Do I sell?
[00:04:09.680 --> 00:04:11.200] Do I, you know, I had all these options, right?
[00:04:11.200 --> 00:04:12.400] Of like, well, it's not fun.
[00:04:12.400 --> 00:04:14.240] And how long am I going to keep doing this?
[00:04:14.240 --> 00:04:14.400] Right.
[00:04:14.400 --> 00:04:20.640] And then there are other folks who make that great transition and really enjoy, I think, managing teams of 30, 40, 50 people.
[00:04:20.640 --> 00:04:24.640] I just talked to Braden Dennis, who's the founder of fiscal.ai.
[00:04:24.640 --> 00:04:28.000] And he, it was just him and three co-founders.
[00:04:28.000 --> 00:04:30.400] And now they raised a $10 million Series A.
[00:04:30.400 --> 00:04:35.120] They thought they were going to bootstrap and they just raised a $10 million series A and they're at 40 people now and they're going to scale up.
[00:04:35.120 --> 00:04:45.440] So you don't know what's coming down the pipe, except you kind of do because you, as you said, you have seen these later stage and you've coached and advised founders in these stages.
[00:04:45.440 --> 00:04:46.080] Yeah, that's right.
[00:04:46.080 --> 00:04:48.320] And Rob, you said it's completely true.
[00:04:48.320 --> 00:04:50.000] The role completely changes.
[00:04:50.000 --> 00:04:55.920] So you're still the founder and CEO or whatever it is, but the role is a completely different thing.
[00:04:55.920 --> 00:05:00.880] And you realize that and you also had the maturity to say, that's not for me.
[00:05:00.880 --> 00:05:02.480] Both of those things are actually quite rare.
[00:05:02.480 --> 00:05:08.160] I think the two biggest issues I see with people is firstly, they don't recognize that the role has changed.
[00:05:08.160 --> 00:05:10.800] They think that what got them here will get them there, right?
[00:05:10.800 --> 00:05:16.880] That they can keep doing the job the way they did it when it was just them and a co-founder or just them solopreneuring it.
[00:05:16.880 --> 00:05:19.520] And they actually become a liability to their business.
[00:05:19.520 --> 00:05:25.200] Or another common thing is they recognize that things have to change, but they don't know how to let go, right?
[00:05:25.200 --> 00:05:26.720] You said, okay, I'm going to sell my business.
[00:05:26.720 --> 00:05:31.240] A lot of people are like, well, I hate this, but I'm going to keep doing it anyway, right?
[00:05:29.920 --> 00:05:33.880] And of course, the whole company feels that as well.
[00:05:34.200 --> 00:05:39.720] So, yeah, you know, one comparison I like to make is: I love how you say you build the product, then you build the business.
[00:05:39.880 --> 00:05:43.960] We sometimes say you build the thing, which is a product, and then you build the thing that builds the thing.
[00:05:43.960 --> 00:05:50.760] But actually, for those who are parents listening here, I think it's actually a lot like having a kid, except Rob, that you can't sell your kid, right?
[00:05:50.760 --> 00:05:56.360] But you know, when you have a newborn, you are their parent, you have one job, right?
[00:05:56.360 --> 00:06:01.720] When they are five years old, 10 years old, 15, 30, your job is completely different.
[00:06:01.720 --> 00:06:05.480] If you wipe your 15-year-old's butt, you're not going to have a good time, right?
[00:06:05.480 --> 00:06:13.480] And so, you have to realize that even though your title hasn't changed, parent, your role has fundamentally altered, nearly reversed, right?
[00:06:13.480 --> 00:06:17.400] You're doing something completely different from what you were doing at the beginning.
[00:06:17.400 --> 00:06:24.920] And in your mental model of this, because I'd love to pick this apart and find out how you think about it, you've seen more later stage stuff than I have.
[00:06:24.920 --> 00:06:37.880] I see a lot of early stage stuff up to 10, 20 employees, and I see a handful that get into 30, 40, but it's like that's usually like, oh man, they're going to have a big exit or they're far beyond where I'm at.
[00:06:37.880 --> 00:06:46.360] But I'm curious if there are some particular stages that you have been brought in to advise or coach or consult that you see.
[00:06:46.360 --> 00:06:49.960] It's like, oh, it's usually at X revenue or X employees.
[00:06:49.960 --> 00:06:51.560] And then, and there's not just one, right?
[00:06:51.560 --> 00:06:55.480] There has to be kind of one at 10 to 15 and one at 30 to 50 or something.
[00:06:55.480 --> 00:06:57.400] Like, what's your mental model of all that?
[00:06:57.400 --> 00:06:59.720] Yeah, I mean, the funny thing is, this never changes, right?
[00:06:59.720 --> 00:07:05.720] Like, the first time I realized that this is a problem, that the founder role changes, it was actually my early time at Google.
[00:07:05.720 --> 00:07:07.720] I joined Google in 2006.
[00:07:07.720 --> 00:07:10.360] So, that was early-ish, but not very early, right?
[00:07:10.360 --> 00:07:13.480] We already had, you know, 5,000 employees or something.
[00:07:13.480 --> 00:07:27.920] And the founders, Larry and Sergey, who are some of the smartest people on the planet, used to run the company by basically walking into a room, asking a team what they did, put it on a whiteboard, and then they would use their superior knowledge and intelligence and context to give really great advice.
[00:07:27.920 --> 00:07:29.760] And you would take their advice and walk away.
[00:07:29.760 --> 00:07:33.200] By the time I was there, we had hundreds of teams, right?
[00:07:33.200 --> 00:07:34.640] And they would do that once every six months.
[00:07:34.640 --> 00:07:35.520] They had 15 minutes.
[00:07:35.520 --> 00:07:37.440] They come in, you tell them what you're up to.
[00:07:37.440 --> 00:07:38.640] They didn't really understand it.
[00:07:38.640 --> 00:07:40.080] They would give you some bad advice.
[00:07:40.400 --> 00:07:43.440] And then when that happened to me, I was, you know, straight out of college.
[00:07:43.440 --> 00:07:46.960] And I asked, what do we do with this bad advice that we just got?
[00:07:46.960 --> 00:07:49.360] And my tech lead said, oh, ignore it.
[00:07:49.360 --> 00:07:58.000] I thought, ignore the founder of one of the most successful companies in tech because those guys had not kept up with the scaling of their organization, right?
[00:07:58.000 --> 00:07:59.200] They hadn't adapted their role.
[00:07:59.200 --> 00:08:02.080] So this is sort of recurring.
[00:08:02.080 --> 00:08:07.520] But yes, I think the first time it happens is probably when you go past five or ten people, right?
[00:08:07.520 --> 00:08:13.440] Where you're not able to just sort of be all round a table, everyone knows everything that's going on.
[00:08:13.440 --> 00:08:16.640] You start to build some structure into things, right?
[00:08:16.640 --> 00:08:22.480] And if you build structure into things, Rob, as you know, without actually being thoughtful about it, you end up with silos, right?
[00:08:22.480 --> 00:08:24.720] You end up with different parts of the organization.
[00:08:24.720 --> 00:08:26.720] I guess maybe that's the way of thinking about it.
[00:08:26.720 --> 00:08:30.560] At around 10 people, you are now an organization, right?
[00:08:30.560 --> 00:08:35.520] You can't just have 10 people in every meeting, in every discussion, on every Slack channel.
[00:08:35.520 --> 00:08:37.040] You need to start differentiating it.
[00:08:37.040 --> 00:08:38.320] So you're organizing your team.
[00:08:38.320 --> 00:08:43.520] And organization maybe sounds like something that applies to a very large company, but no, I think it starts at 10.
[00:08:43.840 --> 00:08:48.800] Yeah, and that's, and I want to keep going with that and find out what the next one is, but I want to touch on a couple things first.
[00:08:48.800 --> 00:08:57.280] So many of us bootstrappers, folks who listen to this show, left big organizations because they're political or they're just to work for.
[00:08:57.280 --> 00:09:07.080] And so I know when I went out to start my company, I was like, either I'm going to be totally solo or I'm not going to have any of the cruft, the mission, vision, values, the process, because that's what makes it all bad, right?
[00:09:07.080 --> 00:09:14.280] And then it took me years to realize: oh, no, it's actually working with people who were unmotivated and bad hires, and I couldn't pick who I wanted to.
[00:09:14.280 --> 00:09:19.800] And if I actually hire amazing people, we do need a little bit of mission, vision, values.
[00:09:19.800 --> 00:09:22.040] Not too much, but as long as we're living up to it.
[00:09:22.040 --> 00:09:30.200] Like I say, my mission, the mission of this podcast, mission at Tiny Seed MicroConf is to multiply the world's population of independent, self-sustaining startups, right?
[00:09:30.200 --> 00:09:34.920] So we have a mission, and that's what we do, you know, and all of it does it in different ways.
[00:09:34.920 --> 00:09:38.680] Some of it's given away for free, and some of it is giving people money and investing.
[00:09:39.160 --> 00:09:43.880] But I had to come around to that realization of, oh, don't throw the, I threw the baby out with the bathwater.
[00:09:43.880 --> 00:09:45.320] And I think a lot of people do.
[00:09:45.320 --> 00:09:46.440] The other thing is Pell D.
[00:09:46.520 --> 00:09:53.640] Galzoni, he's the founder of Balsamic, did a talk at MicroConf that I think just went live on the YouTube channel, microconf.com/slash YouTube, if folks want to check that out.
[00:09:53.640 --> 00:09:59.880] And he talked a lot about how he made the mistake of he didn't want any process and he wanted a completely flat organization.
[00:09:59.880 --> 00:10:03.240] And that lasted until about, I don't know, 20, 25 people.
[00:10:03.240 --> 00:10:05.000] And he said it was just catastrophic.
[00:10:05.000 --> 00:10:07.800] And he had, he was trying to reinvent stuff.
[00:10:07.800 --> 00:10:10.600] And he's like, oh, no, there is prior art here, folks.
[00:10:10.600 --> 00:10:14.760] You know, 50, there are decades, if not centuries, of prior art around how to do this well.
[00:10:14.760 --> 00:10:19.640] Maybe not within a startup per se, but at least how to organize larger numbers of people.
[00:10:19.640 --> 00:10:24.440] Yeah, I think the common problem is not enough structure and process, which is a funny thing to say, right?
[00:10:24.440 --> 00:10:28.520] Because, but if you think about it, there are two pathways that a founder has gone through.
[00:10:28.520 --> 00:10:38.200] Either, like you say, they've worked with a really big company, they see all the process and all the cruft and the mission vision values on the wall that everyone ignores and everything like that.
[00:10:38.200 --> 00:10:39.560] And they say, that's crap.
[00:10:39.560 --> 00:10:41.080] The problem is all of the process.
[00:10:41.080 --> 00:10:44.520] I'm going to have something without process, which is a misdiagnosis, right?
[00:10:44.520 --> 00:10:49.840] Or they've never been at a big company and they've just never seen process or structure before, so they don't know what they're missing.
[00:10:50.160 --> 00:10:53.200] And so you end up with organizations that are under-scaffolded.
[00:10:53.200 --> 00:10:55.600] And I made this mistake as well, right?
[00:10:55.600 --> 00:11:00.960] But what you need is the right amount of process, or maybe we call it minimum viable process, right?
[00:11:00.960 --> 00:11:05.360] That it should be something that's there to support you, not to strangle you.
[00:11:05.360 --> 00:11:11.760] And I think people often give this negative view of it, which is it's bureaucracy, it's red tape, it gets in the way.
[00:11:11.760 --> 00:11:14.160] No, it's there to support you, right?
[00:11:14.160 --> 00:11:18.640] And if you think about, you know, I'm a software engineer, for those who are more technically minded, right?
[00:11:18.640 --> 00:11:26.480] If you think about building a large code base, you don't just write the same sort of spaghetti code that you would if you were just building a throwaway script.
[00:11:26.480 --> 00:11:28.720] No, you have tests, you have architecture.
[00:11:28.720 --> 00:11:32.080] Maybe once you reach more than a few people, you document it, right?
[00:11:32.080 --> 00:11:34.080] You're not doing that to make your life harder.
[00:11:34.080 --> 00:11:38.880] You're doing it to make your code base maintainable and to maintain a certain level of velocity as you go forward.
[00:11:38.880 --> 00:11:45.520] And I've always taken that software engineering way of thinking, and I'm like, okay, if you've got a system of people, right?
[00:11:45.520 --> 00:11:46.640] You're building a system of code.
[00:11:46.640 --> 00:11:48.240] Now you're building a system of people.
[00:11:48.240 --> 00:11:49.360] How do you architect it?
[00:11:49.360 --> 00:11:54.800] How do you actually think about making sure it works efficiently and is robust and maintainable?
[00:11:55.120 --> 00:11:59.120] Have you read anything or seen any type of resource that talks about this?
[00:11:59.120 --> 00:12:01.280] We are going to get back to your next phase, right?
[00:12:01.280 --> 00:12:02.320] We got to 10 employees.
[00:12:02.320 --> 00:12:03.280] I want to hear the next one.
[00:12:03.280 --> 00:12:06.800] But have you done any writing on it or talking or seen?
[00:12:07.120 --> 00:12:07.680] Is there a book?
[00:12:07.680 --> 00:12:11.440] Is there something we recommend that kind of talks more in depth?
[00:12:11.440 --> 00:12:16.720] Because you and I will just touch on these things of like, oh, at 10, we should, you know, you said introduce more process.
[00:12:16.720 --> 00:12:20.160] And I'm imagining someone listening to that and being like, what does that mean?
[00:12:20.160 --> 00:12:21.040] Well, it's funny.
[00:12:21.040 --> 00:12:24.240] I actually have a blog or newsletter that is dormant.
[00:12:24.240 --> 00:12:29.040] I haven't written in it for years, but it's called People Engineering, precisely for the reason I mentioned, right?
[00:12:29.040 --> 00:12:33.480] It's a software engineering approach to running systems of people.
[00:12:29.840 --> 00:12:35.000] So there are a number of articles in there.
[00:12:35.160 --> 00:12:45.080] You know, I wrote that when I first became a COO, which really is about, I think, when done right, is you are the chief architect of the organization, right?
[00:12:45.080 --> 00:12:52.520] And so, yeah, like I said, I haven't been on it for years, but if you subscribe, you never know, I might start writing in it again.
[00:12:52.520 --> 00:12:56.840] Otherwise, please take a look and it might provide some useful pointers.
[00:12:56.840 --> 00:12:57.880] Yeah, you have an archive there.
[00:12:57.880 --> 00:13:01.960] It's at newsletter.people, E-N-G, like peopleengineering.com.
[00:13:01.960 --> 00:13:05.480] And there's an archive link in the top of, I'm presuming all your stuff.
[00:13:05.640 --> 00:13:06.360] Awesome.
[00:13:06.360 --> 00:13:07.560] Let's talk about the next phase.
[00:13:07.560 --> 00:13:12.040] So someone's at 10 employees and they're putting in a little bit of process, just a little bit.
[00:13:12.040 --> 00:13:14.440] I used to tell people this just-in-time process.
[00:13:14.440 --> 00:13:16.280] I don't want to ratchet up too much.
[00:13:16.280 --> 00:13:19.560] Where is the next phase that you see folks stumbling?
[00:13:19.560 --> 00:13:22.360] I think the next phase, probably around 50.
[00:13:22.360 --> 00:13:27.880] Like it really does depend on a few factors, anywhere between 30 and 100, let's say.
[00:13:27.880 --> 00:13:30.840] But I'd put the mode at 50, right?
[00:13:30.840 --> 00:13:34.360] Where you are now doing more than one thing at a time.
[00:13:34.360 --> 00:13:42.600] You have multiple teams that are each operating autonomously, maybe not quite independently, but that's the point, right?
[00:13:42.600 --> 00:13:45.560] You can't just say, again, look at some of the bigger teams, right?
[00:13:45.560 --> 00:13:48.840] You've got your engineering team or you've got your sales team.
[00:13:48.840 --> 00:13:53.560] You can't just say, oh, everyone in engineering is just doing one thing or everyone in sales.
[00:13:53.720 --> 00:13:55.560] So maybe that's one way of thinking about it, Rob.
[00:13:55.560 --> 00:13:59.080] When you get to 10, you can't just have everyone in every meeting.
[00:13:59.080 --> 00:14:02.200] You might start to say, well, not every engineer attends the meetings.
[00:14:02.200 --> 00:14:05.160] You start to get maybe a bit of a functional breakdown.
[00:14:05.160 --> 00:14:09.480] By the time you get to 50, you're having cross-functional teams, let's say, right?
[00:14:09.480 --> 00:14:11.280] You've got the team that's doing your marketplace.
[00:14:11.400 --> 00:14:13.480] Oh, sorry, I know you don't like marketplaces for Bootstrapping.
[00:14:13.560 --> 00:14:14.680] I was going to say marketplace.
[00:14:15.120 --> 00:14:20.080] You've got a team that's doing your mid-market and a team that's doing enterprise or whatever it is, right?
[00:14:20.080 --> 00:14:22.400] And they've got different roadmaps.
[00:14:22.640 --> 00:14:24.240] They've got different processes.
[00:14:24.240 --> 00:14:27.360] And if you're not careful, then things really start spinning apart there.
[00:14:27.360 --> 00:14:30.720] On the sales team, you might also divide things up by market size.
[00:14:30.800 --> 00:14:35.200] You might say, oh, look, we've got our customer success teams and our, you know, BDRs and SDRs and all of that.
[00:14:35.200 --> 00:14:36.800] You're putting more of that structure in.
[00:14:36.800 --> 00:14:48.480] And so I think every time you're in a situation where you upgrade the complexity of your structure, because it's important, you're changing your architecture, you then need to change your way of working to match that.
[00:14:48.800 --> 00:14:53.200] Yeah, not only your way of working, but really your way of thinking, right?
[00:14:53.200 --> 00:14:59.600] It's like you, your role is, your job title stays the same, but your role completely transitions.
[00:14:59.600 --> 00:15:09.680] Do you have a thinking, like when I think about going from zero to 10 employees as let's say a single founder, and let's say the founder maybe is a developer who, you know, it's SaaS and they built the product.
[00:15:09.680 --> 00:15:13.600] So they're like, they run product, they probably manage the engineers.
[00:15:13.600 --> 00:15:20.240] Usually they have something to do with marketing, although they don't want to, and they had to hire all the people, you know, and they're kind of getting stuff in.
[00:15:20.240 --> 00:15:26.000] So they're just right now still a utility player and they're probably managing everyone or they maybe have one manager, right?
[00:15:26.000 --> 00:15:31.840] But let's say you're at, what is it, what should it look like at 30 people or 50 people?
[00:15:31.840 --> 00:15:33.280] Let's just pick a number somewhere in there.
[00:15:33.280 --> 00:15:41.360] You know, I have 30 employees, 50 employees, and I'm still that founder CEO, but the org is there and it's healthy.
[00:15:41.360 --> 00:15:51.120] Because it could easily be, I'm the founder and this is a big flat org and everyone still reports to me, you know, a little bit like the Larry and Sergei story you told earlier, which is like, well, that sounds like a catastrophe.
[00:15:51.120 --> 00:15:56.560] So, like, what's a better way to maybe structure the org and to think about what things might we want in place?
[00:15:56.560 --> 00:15:58.560] Because we probably need some vision values.
[00:15:58.560 --> 00:16:04.520] We probably need an HR handbook, you know, probably need some other stuff that I'd love to give folks an idea about.
[00:16:05.000 --> 00:16:07.880] Yeah, I think that there are a couple of things to this, right?
[00:16:07.880 --> 00:16:12.600] So, maybe one way of thinking about it, and again, this is very much similar to having a young baby, right?
[00:16:12.600 --> 00:16:15.240] At first, you are the person doing everything, right?
[00:16:15.240 --> 00:16:18.680] You are writing the code, you're doing the sales calls, everything like that.
[00:16:18.920 --> 00:16:20.040] You're basically solo.
[00:16:20.040 --> 00:16:24.280] Then, up to about 10 people, like you said, everyone reports to you.
[00:16:24.280 --> 00:16:32.680] You are still the person who knows everything, who can hold the complete context of the business in your head, who everyone reports to directly.
[00:16:32.680 --> 00:16:34.520] And so, you can be quite directive, right?
[00:16:34.520 --> 00:16:43.720] Maybe you're not actually writing every line of code, maybe you're not taking every call yourself, but you tell people what to do, and what you tell them is good, is right.
[00:16:44.040 --> 00:16:49.160] It's a better decision than they could make themselves a lot of the time because you have that superior context.
[00:16:49.160 --> 00:16:53.880] And both at the high level, but also all the way down to the granular details.
[00:16:53.880 --> 00:16:56.120] At 50, that's no longer possible, right?
[00:16:56.120 --> 00:17:02.520] You can't have 50 people reporting to you directly, so you don't know all the people as well as other folks in the company.
[00:17:02.520 --> 00:17:06.120] You cannot know every granular detail of what's happening in your company.
[00:17:06.120 --> 00:17:10.520] And it's funny, and maybe this is when I say it's between 30 to 150 people.
[00:17:10.520 --> 00:17:19.240] There are a number of things that affect that number, but one of them is how capable the founder is of just hoping, of holding vast amounts of context in their head, right?
[00:17:19.240 --> 00:17:30.280] And it's one of those classic cases of a strength turning into a liability or into a weakness, which is the more you can hold in your head, the further you can go before it all starts crashing down around you, right?
[00:17:30.280 --> 00:17:38.040] Maybe you can hold 100 folks' worth of context in your head because you're very clever and very hardworking, but every person hits their limit, right?
[00:17:38.040 --> 00:17:42.600] Larry and Sergey, maybe they could handle a thousand-person org, but they couldn't handle 3,000.
[00:17:42.600 --> 00:17:44.040] And so, there is that as well.
[00:17:44.040 --> 00:17:46.960] And so, you've got these increasing levels of indirection.
[00:17:44.840 --> 00:17:50.240] And perhaps to a certain extent, it does follow reporting structures as well.
[00:17:50.800 --> 00:17:54.480] First, you're writing the code, then you're managing the people who write the code.
[00:17:54.480 --> 00:17:58.800] And then once you get to 50, you need another layer of management in between, right?
[00:17:58.800 --> 00:18:03.760] And like you said, every person who has had that idea of, oh, I don't need managers.
[00:18:03.760 --> 00:18:07.120] We can have a flat structure, learns that they were wrong.
[00:18:07.120 --> 00:18:18.240] You know, it might seem that, again, management gets a bad name from big companies where you've got pointy-head bosses just wasting space, but good management is essential to a growing organization.
[00:18:18.240 --> 00:18:22.000] And so then you've basically, as a founder, you've got an exec team.
[00:18:22.000 --> 00:18:32.640] I know, Rob, before the call, we were talking about this, and you said, well, bootstrappers don't necessarily like that term executive, but I actually want to bring it up anyway because I think that's another limiting thought, right?
[00:18:32.640 --> 00:18:41.600] Because what you're saying is, as a founder, not only, you know, I'm now acting through my leaders, and that team is my team, right?
[00:18:41.600 --> 00:18:42.720] They are executing.
[00:18:42.720 --> 00:18:45.280] That's what they're called, executives, right?
[00:18:45.280 --> 00:18:48.080] And you are there to run that team.
[00:18:48.080 --> 00:18:52.560] So first, you're writing the code, then you're managing the people who are writing the code.
[00:18:52.560 --> 00:18:57.280] Now you have a team who manages the people who write the code or do the sales calls or whatever it is.
[00:18:57.280 --> 00:19:01.360] And that's why you talk about mission, vision, values, and process and so on.
[00:19:01.360 --> 00:19:02.480] You're not in every room.
[00:19:02.480 --> 00:19:03.600] You don't have all the context.
[00:19:03.600 --> 00:19:06.560] So as a founder, you still want to be in control, right?
[00:19:06.560 --> 00:19:10.240] You still want the company to grow and evolve the way that you want it to.
[00:19:10.240 --> 00:19:20.080] And so now you need to say, how can I make sure that the decisions that are made, the conversations that are happening, are the ones that I would want to happen even when I'm not in the room?
[00:19:20.080 --> 00:19:24.960] Because there are a whole lot of meetings, there are a whole lot of rooms that you are no longer in, because you can't be everywhere at once.
[00:19:24.960 --> 00:19:28.160] And so, you're actually talking about scaling yourself as a leader.
[00:19:28.160 --> 00:19:35.880] And I think when you think of it that way, it seems a lot more appealing than saying, Oh, we've got a bunch of processes and standards and mission, vision, values.
[00:19:35.880 --> 00:19:40.200] It's saying, This is how I get to be in the room, even when I'm not in the room.
[00:19:40.200 --> 00:19:44.280] And that is actually the work that you start doing as a founder.
[00:19:44.280 --> 00:19:45.800] That is a really good point.
[00:19:45.800 --> 00:19:59.320] And it's something that I encountered at, well, I guess it was a little bit after Selling Drip where I started managing managers, but even more with Tiny Seed as I've promoted folks who become managers.
[00:19:59.320 --> 00:20:02.680] And the thing that I've struggled with is I learned how to manage.
[00:20:02.680 --> 00:20:04.280] And I feel like I'm a good leader.
[00:20:04.280 --> 00:20:07.400] You know, I'm not phenomenal, but I paint the vision.
[00:20:07.400 --> 00:20:08.840] I get us in a direction.
[00:20:08.840 --> 00:20:17.080] Milton bolts-wise of a lot of things I don't are not my favorite, but I know how I manage and I know how I think about managing.
[00:20:17.080 --> 00:20:25.320] So then when I promoted someone on our team to become a manager, and they said, Okay, like help me, how do you think about management?
[00:20:25.320 --> 00:20:26.280] Help me think about this.
[00:20:26.280 --> 00:20:27.000] What should I read?
[00:20:27.000 --> 00:20:27.800] What resources should?
[00:20:27.800 --> 00:20:34.440] And I was like, Oh, I've never trained someone, not never, but I have not trained anyone recently in becoming a manager.
[00:20:34.440 --> 00:20:39.080] And I had to then think about what is my, what was my process, and how do I actually think about this?
[00:20:39.080 --> 00:20:45.080] Because you can, you can kind of be natural with something and if it works, good, but you may not know what really what makes you good.
[00:20:45.080 --> 00:20:46.040] What are you doing that's right?
[00:20:46.040 --> 00:20:47.400] And what are you doing poorly?
[00:20:47.400 --> 00:20:49.720] Usually you have blind spots if you aren't examining it.
[00:20:49.720 --> 00:20:57.880] And so that was a big realization for me: like, oh, yeah, if I don't, if I'm not deliberate about this, it's going to be a mess.
[00:20:57.880 --> 00:21:06.520] If I'm not deliberate about making sure that A, the people that get on the bus are the right ones, but also that the managers are really dialed in and doing this well.
[00:21:06.840 --> 00:21:15.280] Suddenly, it felt like I was losing control of things because there are folks now in, you know, in Microcom Tiny Seed who like don't report to me, right?
[00:21:15.280 --> 00:21:18.000] And I only see them every six months at an event.
[00:21:14.760 --> 00:21:19.360] And that's, we're not even a huge team, right?
[00:21:19.600 --> 00:21:20.640] We're 10 people.
[00:21:20.640 --> 00:21:28.240] But that realization alone that you just said of you're kind of, I think you said like duplicating yourself or replicating yourself.
[00:21:28.240 --> 00:21:30.480] That blew my that's a tough one.
[00:21:30.480 --> 00:21:31.120] It's a tough one.
[00:21:31.120 --> 00:21:32.400] And I think it blows a lot of people's mind.
[00:21:32.400 --> 00:21:33.440] Do you want to talk more about that?
[00:21:33.440 --> 00:21:36.240] Like, how can one think about doing that well?
[00:21:36.560 --> 00:21:37.920] Yeah, I mean, absolutely.
[00:21:37.920 --> 00:21:44.160] And it starts with that realization that you are highly, highly dependent on your managers, right?
[00:21:44.720 --> 00:21:46.800] Again, I'll use that child analogy, right?
[00:21:46.800 --> 00:21:49.440] When you have a baby, you basically own them.
[00:21:49.440 --> 00:21:53.520] Like, what you want them to do, that's what they do, except for crying.
[00:21:53.520 --> 00:21:57.280] As they get older, as they become teenagers, Rob, well, you're no longer in control, right?
[00:21:57.280 --> 00:21:59.120] But you can only influence, right?
[00:21:59.120 --> 00:22:06.720] You can create rules and guardrails and set values and so on because you are no longer their complete like dictator, right?
[00:22:06.720 --> 00:22:08.320] And it's the same with the company.
[00:22:08.320 --> 00:22:10.560] So you have this team and you can say, yo, this is my company.
[00:22:10.560 --> 00:22:11.360] You're a bootstrapper.
[00:22:11.360 --> 00:22:12.800] Maybe you own 100% of it.
[00:22:12.800 --> 00:22:24.640] But just because you own 100% of it does not mean you're in 100% control because you have got people and people have their own needs and their own ways of thinking and their own levels of autonomy, right?
[00:22:24.640 --> 00:22:30.720] And so when you have managers, yes, you need to train them well to be managers, but you also need to keep them very close.
[00:22:30.720 --> 00:22:32.160] They are your eyes, your ears.
[00:22:32.160 --> 00:22:35.280] They're also your arms and legs, right?
[00:22:35.280 --> 00:22:37.280] You work through your managers.
[00:22:37.280 --> 00:22:41.200] One of the things I've seen, it's a very common mistake, and it can be so hard.
[00:22:41.200 --> 00:22:42.720] This is part of the letting go.
[00:22:42.720 --> 00:22:52.640] Is if I've got a team that is reporting to a manager who is reporting to me, and I want that team to do something, it can be so tempting just to talk to someone on that team and say, hey, could you please do that for me?
[00:22:52.640 --> 00:22:55.680] But then this is the example of, you know, this is like a teenager, right?
[00:22:55.680 --> 00:22:57.280] That person's going to go do it.
[00:22:57.280 --> 00:23:02.200] That manager is going to feel that you've undermined them in their role managing that team.
[00:23:02.200 --> 00:23:03.080] They're going to be pissed off.
[00:23:03.080 --> 00:23:03.800] They're going to come to you.
[00:22:59.840 --> 00:23:05.160] The team's going to get confused.
[00:23:05.800 --> 00:23:10.600] So again, how do you get things done when you don't get to just tell people what to do anymore?
[00:23:10.600 --> 00:23:10.920] Right?
[00:23:11.160 --> 00:23:13.000] You know, it's AI time at the moment.
[00:23:13.000 --> 00:23:18.200] Everyone's talking about context, which is great because I think it actually helps you realize how important it is.
[00:23:18.200 --> 00:23:21.480] You only get good responses from AI if you give them the right context.
[00:23:21.480 --> 00:23:22.840] It is the same with people.
[00:23:23.080 --> 00:23:33.240] So your managers and your teams more broadly, you need to give them the right context in order, again, to make those decisions that you would make if you were in the room.
[00:23:33.240 --> 00:23:41.960] And so that's when it comes down to, you know, all of these big company concepts, Rob, that get a bad name because they're done poorly at big companies or whatever.
[00:23:42.120 --> 00:23:44.920] You can call it context or internal communications or whatever.
[00:23:44.920 --> 00:23:49.320] Your job is to say, this is what you need to know in order to make the right decisions.
[00:23:49.320 --> 00:23:51.880] And that is both principles, right?
[00:23:51.880 --> 00:23:53.960] That's when you talk about the mission, vision, vision, values.
[00:23:53.960 --> 00:23:55.560] This is what we're trying to achieve.
[00:23:55.560 --> 00:23:57.080] This is how we achieve it.
[00:23:57.080 --> 00:23:58.200] This is what matters to us.
[00:23:58.200 --> 00:24:01.720] This is what good looks like to us as a company, right?
[00:24:01.720 --> 00:24:05.480] It is also certain process things, and there's context, right?
[00:24:05.800 --> 00:24:13.240] You start to be a person whose job it is to make sure everyone in the business knows what they need to know about the business in order to make good decisions.
[00:24:13.240 --> 00:24:17.720] If they make bad decisions because they don't have the right context, that's on you, right?
[00:24:17.720 --> 00:24:19.480] And so that's the hardest thing.
[00:24:19.480 --> 00:24:22.280] And like you said, I actually think a lot of founders don't like it.
[00:24:22.520 --> 00:24:25.960] To your point, you sold drip because you realized you didn't like it.
[00:24:26.120 --> 00:24:28.360] A lot of founders aren't able to let go.
[00:24:28.360 --> 00:24:37.000] And then, at least as well, you have to realize your job is now context-setting process or structure creation, let's say.
[00:24:37.000 --> 00:24:42.920] If you're actually doing the thing itself, then you become a liability to your own company.
[00:24:42.920 --> 00:24:48.240] And that's a very painful realization, I think, for a lot of folks, but it's just the reality of it.
[00:24:44.520 --> 00:24:49.520] Yeah, that makes sense.
[00:24:49.840 --> 00:24:52.800] I did want to add, by the way, that we sold drip.
[00:24:52.800 --> 00:24:56.080] Part of it, I was unhappy with the fact that I was managing 10 people.
[00:24:56.080 --> 00:24:57.280] I would have kept doing it.
[00:24:57.360 --> 00:25:02.160] The other part is that we had a bunch of inbound interest and then we got an offer that we kind of couldn't refuse.
[00:25:02.160 --> 00:25:06.400] So that helped grease the wheels, so to speak.
[00:25:06.400 --> 00:25:06.960] Of course.
[00:25:06.960 --> 00:25:09.200] It wasn't just like, oh, I don't want to manage the 11th person.
[00:25:09.200 --> 00:25:10.160] I'm going to sell this thing, right?
[00:25:10.400 --> 00:25:12.080] It was more to it than that.
[00:25:12.080 --> 00:25:13.840] Okay, so context.
[00:25:13.840 --> 00:25:16.800] How do we communicate that to people?
[00:25:16.800 --> 00:25:18.400] Is it status meetings?
[00:25:18.960 --> 00:25:22.000] Is it an orientation of this mission, vision, values, principles?
[00:25:22.160 --> 00:25:23.920] This is how I make this how we make decisions.
[00:25:23.920 --> 00:25:24.720] This is how we operate.
[00:25:24.720 --> 00:25:26.320] This is how we treat our customers.
[00:25:26.320 --> 00:25:30.800] And then it's keeping them in the loop with weekly meetings or bi-weekly.
[00:25:31.200 --> 00:25:31.760] What is that?
[00:25:32.320 --> 00:25:35.280] How do you get that into, especially your managers?
[00:25:35.280 --> 00:25:38.640] How do you get that into their system?
[00:25:38.960 --> 00:25:47.920] Well, I think this is how I personally say, this is how you can still keep it fresh and feel that sense of control is you get to choose, right?
[00:25:47.920 --> 00:25:53.120] This is a design exercise where you say, okay, and again, come back to that people engineering thing.
[00:25:53.120 --> 00:25:55.120] There is more than one way to get this done.
[00:25:55.120 --> 00:25:58.800] What is a way that you as a founder resonate with?
[00:25:58.800 --> 00:26:00.640] Are you good at all-hands meetings?
[00:26:00.640 --> 00:26:02.240] Or are you good at writing emails?
[00:26:02.240 --> 00:26:06.560] Or, you know, are you good at having one-on-one conversations?
[00:26:06.560 --> 00:26:07.840] That's up to you.
[00:26:07.840 --> 00:26:19.840] The end result is everyone in your organization needs to understand the ground rules, the protocols for making decisions and for getting things done, what matters, and what's happening in the company that affects them, right?
[00:26:19.840 --> 00:26:23.040] That affects their ability to make the right choices.
[00:26:23.040 --> 00:26:24.560] I talk a lot about decisions, right?
[00:26:24.560 --> 00:26:29.040] Because ultimately, every bit of work that you do is a series of smaller and bigger decisions.
[00:26:29.040 --> 00:26:35.560] It's fractal all the way down to, you know, what do I name this variable, or, you know, how do I talk about my company?
[00:26:35.560 --> 00:26:39.960] But it comes down to you need to tell them, otherwise, they will figure it out for themselves.
[00:26:39.960 --> 00:26:42.920] And what they figure out for themselves may not be what you want them to.
[00:26:42.920 --> 00:26:45.240] I like an all-hands meeting, right?
[00:26:45.240 --> 00:26:46.680] But other people might like writing.
[00:26:46.680 --> 00:26:54.200] I've seen leaders who, even from quite an early stage, communicate effectively to their teams with a weekly newsletter, right?
[00:26:54.200 --> 00:26:54.920] And that's great.
[00:26:54.920 --> 00:26:57.400] That scales really well as the company grows.
[00:26:58.040 --> 00:27:04.920] But actually, I think the biggest one, Rob, and my favorite book in this whole area is Five Dysfunctions of a Team by Patrick Lencione.
[00:27:04.920 --> 00:27:07.240] It's quite a famous book.
[00:27:07.240 --> 00:27:13.160] And what it is actually about is it's about managing managers, ultimately, right?
[00:27:13.160 --> 00:27:19.800] And the point that they make is, as a leader, the managers who report to you, they are your team.
[00:27:19.800 --> 00:27:22.040] And you are their team, right?
[00:27:22.040 --> 00:27:28.440] So if I'm the head of customer success and you ask me as a head of customer success, who is your team?
[00:27:28.440 --> 00:27:32.280] It's tempting to say, oh, my team is the customer success team, all the people who report to me.
[00:27:32.280 --> 00:27:36.200] No, your first team is the leadership team that you're a part of, right?
[00:27:36.200 --> 00:27:38.840] You are running the company together.
[00:27:38.840 --> 00:27:45.000] And so you need to be thinking, okay, that's as a leader, that is your vessel for pushing context, right?
[00:27:45.000 --> 00:27:49.320] That's your main control mechanism is we've got a team and it makes it a lot less lonely, right?
[00:27:49.480 --> 00:27:51.240] I know, not quite the main topic of this episode.
[00:27:51.240 --> 00:27:52.760] Being a founder is really lonely.
[00:27:52.760 --> 00:27:54.680] Being a CEO is really lonely.
[00:27:54.680 --> 00:27:58.360] But if you realize you have a team, so when you have a problem, you don't say, what do I do?
[00:27:58.360 --> 00:27:59.400] We say, what do we do?
[00:27:59.400 --> 00:28:01.320] How do we solve this problem as a team?
[00:28:01.320 --> 00:28:19.040] It makes it so much less lonely, but it also means you're able to push your message, your context, so much more effectively across everybody in your, let's say, your 50-person organization, because all of your leaders are on the same page because they are part of one team.
[00:28:19.040 --> 00:28:20.720] Yeah, I like that.
[00:28:20.720 --> 00:28:29.680] The other thing that we haven't touched on, but I think should be completely obvious, but it might not be, is it's not just the things that you've said.
[00:28:29.680 --> 00:28:47.840] It's that you have to be really careful about hiring the right people because no amount of context or no amount of everything we just said will save you if you hire someone who is a manager or is bad with people or has is too scared to ever disagree with the boss and is hiding.
[00:28:47.840 --> 00:29:03.760] Like there's all these types of real kind of weaknesses, I will say, or issues that someone can bring that you can't get around just by being again, just by being the perfect boss and the perfect communicator and the perfect founder.
[00:29:03.760 --> 00:29:05.120] Yeah, strong agree, right?
[00:29:05.120 --> 00:29:12.560] Like I think one of the lessons in humility, again, going back to a parent, being a parent, right, is you don't get to dictate how your kid turns out.
[00:29:12.560 --> 00:29:15.600] If you hire somebody, you have a limited control.
[00:29:15.600 --> 00:29:23.440] Even if you're the best manager in the world, you have a limited ability to influence how effective that person is at their job, right?
[00:29:23.440 --> 00:29:32.160] So I think, you know, this is not about saying you shouldn't do absolutely everything you can as a manager, as a leader, to help a person, but ultimately it's up to them.
[00:29:32.400 --> 00:29:34.480] It's about who they are and what they can do.
[00:29:34.480 --> 00:29:42.000] And so, yes, hiring well and firing well, which is the unfortunate part of the job, but also a really important one.
[00:29:42.000 --> 00:29:46.800] And, you know, you don't ever have to love it or even stop hating letting people go.
[00:29:46.800 --> 00:29:53.440] But I hesitate to think that it's possible to do a really great job of running a company without letting people go sometimes.
[00:29:53.440 --> 00:29:55.680] So, hire carefully.
[00:29:55.680 --> 00:29:59.880] And for me, you know, that's really about, there are two things for me.
[00:30:00.040 --> 00:30:02.600] I'm very interested in your thoughts on hiring.
[00:29:59.680 --> 00:30:05.480] One is starting with formulating the role.
[00:30:05.800 --> 00:30:11.240] The way I think about it is people are very again, this is a bad habit that they do learn from big companies.
[00:30:11.240 --> 00:30:16.920] It's like, let's write 15 bullet points on five years of experience with this or that technology or doing that.
[00:30:17.080 --> 00:30:21.160] I'm like, no, okay, let's start with the problem we're trying to solve.
[00:30:21.160 --> 00:30:22.840] Same as the startup itself, right?
[00:30:22.840 --> 00:30:27.880] What is the shape of the hole in my organization that I'm trying to fill or in my team?
[00:30:27.880 --> 00:30:33.720] And then reverse engineer that to this is the type of person who is the right shape for that hole.
[00:30:33.720 --> 00:30:46.600] And so I think if you do it that way, you have a much better shot at actually attracting the sort of people that you're looking for, but also evaluating them accurately rather than against their accomplishments or particular skills.
[00:30:46.600 --> 00:30:48.680] It's like, what is the shape of the hole?
[00:30:48.680 --> 00:30:50.920] Are they the right person for that?
[00:30:50.920 --> 00:31:01.800] And then the other thing is, no matter how good your interview process is or your decision-making process is, I've learnt the humility to realize that there's still a lot of noise, there's a lot of error around that.
[00:31:01.800 --> 00:31:07.720] So you need to think: what is the way to get, to defer the decision as long as possible?
[00:31:07.720 --> 00:31:08.120] Right?
[00:31:08.120 --> 00:31:12.440] Which means, can you have that person on a contract for a while, do a trial?
[00:31:12.440 --> 00:31:19.240] If you're in a country where you can have, you know, at-will employment or probation periods, make sure you actually structure that in.
[00:31:19.240 --> 00:31:24.120] You won't know for sure if someone's really great until three or six months of working together.
[00:31:24.120 --> 00:31:28.040] And so, you know, how do you get to that point that you have that?
[00:31:28.040 --> 00:31:33.400] If you can't do that, then you are going to end up carrying people who are not right for your team.
[00:31:34.040 --> 00:31:39.720] It's an important point to drive home: most people wait, almost everybody waits too long to fire.
[00:31:39.720 --> 00:31:51.520] And making a decision of who to bring on your team based on a cover letter in two or three one-hour interviews, that's kind of how we do it, but it's tough.
[00:31:52.480 --> 00:31:53.760] You're not going to be right all the time.
[00:31:53.760 --> 00:31:55.360] Yeah, I think that's the point.
[00:31:55.600 --> 00:31:59.120] I used to obsess over the perfect interview process.
[00:31:59.120 --> 00:32:01.280] Like, what is the ideal interview process?
[00:32:01.280 --> 00:32:08.640] And again, I still think it's important, but I also recognize the limitations of any set of three one-hour interviews.
[00:32:08.640 --> 00:32:13.760] By the way, actually, one thing that is valuable is reference checking, again, which I think nearly everybody gets wrong.
[00:32:13.760 --> 00:32:25.200] Either people don't bother checking references or they do these kind of bland milquetoast sort of reference checks where everyone just says, oh, yeah, you know, I worked with him and, you know, she was great or whatever.
[00:32:25.200 --> 00:32:27.360] And you don't actually get to know anything about them.
[00:32:27.360 --> 00:32:29.280] I treat reference calls as an interview.
[00:32:29.280 --> 00:32:33.520] I'm basically interviewing the person on behalf of the other one, right?
[00:32:33.520 --> 00:32:34.640] I'm like, tell me about them.
[00:32:34.640 --> 00:32:35.760] You know, what are their strengths?
[00:32:35.760 --> 00:32:36.880] What are their weaknesses?
[00:32:36.880 --> 00:32:39.360] That can actually give you a big leg up.
[00:32:39.360 --> 00:32:41.280] But like I said, there is no process.
[00:32:41.280 --> 00:32:42.720] There's no perfect process.
[00:32:42.720 --> 00:32:46.320] Like you said, people always wait too long to let people go.
[00:32:46.320 --> 00:32:50.880] You know what I've never heard in my career is I regret letting that person go.
[00:32:50.880 --> 00:32:53.680] You know what I hear all the time is, we should have done it sooner.
[00:32:53.680 --> 00:32:59.680] And so by the time you're wondering whether you should let that person go, my advice is you've probably already waited too long.
[00:32:59.680 --> 00:33:02.560] Yeah, and it's tough because nobody likes to do it and it's not fun.
[00:33:02.560 --> 00:33:03.280] Nobody likes to do it.
[00:33:03.520 --> 00:33:07.440] Unless you're a psychopath, but you know, this is not the podcast for psychopaths.
[00:33:08.000 --> 00:33:08.560] No, it's not.
[00:33:08.560 --> 00:33:12.640] There's a few of those in the startup space, but not well.
[00:33:12.640 --> 00:33:18.160] Yanov, I get the feeling we could talk for hours about this topic, but we are at time.
[00:33:18.160 --> 00:33:20.400] Your name is Yanov Bernstein.
[00:33:20.400 --> 00:33:27.440] Folks can find you on LinkedIn, as well as, since they're listening to this podcast, of course, they might like your podcast.
[00:33:27.440 --> 00:33:32.520] It's called the Startup Podcast, and they can find it wherever greater podcasts are served.
[00:33:32.520 --> 00:33:33.800] And on YouTube as well.
[00:33:33.800 --> 00:33:35.080] And on YouTube, there it is.
[00:33:35.080 --> 00:33:35.480] Yeah, thanks.
[00:33:35.480 --> 00:33:36.360] Thanks for joining me today.
[00:33:29.840 --> 00:33:37.160] Thanks so much, Rev.
[00:33:37.320 --> 00:33:38.840] I really enjoyed the chat.
[00:33:38.840 --> 00:33:41.160] Thanks again to Yanov for joining me on the show.
[00:33:41.160 --> 00:33:43.720] It's been great having you this week and every week.
[00:33:43.720 --> 00:33:47.640] This is Rob Walling signing off from episode 790.