by • May 28, 2011 • FoundersComments Off46

How Ill manage my next founding team

Since all four co-founders had equal equity, it seemed rational that we should all be democratically involved in the daily news, drama, and decisions surrounding the company’s future. If this sounds familiar, you probably know it’s a bad idea. External influences grind the whole team to a halt — the results of an investor or sales meeting would waste the whole team’s day on either celebration or mourning.

In the name of preserving our collective sanity and productivity, we decided that I would be the business buffer so everyone else would focus on product.

Compared to the previous communal structure, this was a dream. Instead of all feeling conflicted about whether to empty our inbox or meet the product milestone, we knew where our individual priorities lay. We were shipping more. It was good.

And then a key team member quit. Among other reasons, he felt that decisions were being made willy-nilly and that if we kept changing direction, we were never going to launch a product. I had taken the buffer too far, and he was now seeing the decisions without understanding what they were based on (daily conversations with customers). From his perspective, weren’t gathering data until the product had launched, although, unbeknownst to him, customers had already invalidated it.

When information is too open, falls victim to the whims of external forces. When it’s too hidden, you lose the benefit of your team’s insight and risk a disconnect between product and customers.

How I’ll manage the next [founding] team

The team still needs to be buffered, especially during fund raising and big sales.

But instead of the business founder coming to conclusions on his own, I think he should be responsible for the development kill switch. It’s like the big red button that halts the assembly line in a factory. You fanatically gather evidence from customers, research, analytics, and anywhere else. And then, once you’re confident that the current direction is flawed, you press the button and halt development. You then get everyone relevant in a room and present all the evidence about why our current direction is doomed.

(Note that this is only possible if you actually have evidence and if you are absolutely maniacal about writing it down. You need that body of data to get the team up to speed.)

What this means

You protect the team for as long as things are going according to plan. Once you have sufficient evidence that something bad is happening, you get everyone involved. Leaving them buffered at that point is meaningless, since you know that more work on the current product is wasted labour. The current milestones are red herrings.

Your executive decision is to press the big red button and halt the assembly line. But you should leverage the help of your co-founders and team to decide where’s next. You’ll come to a better decision and keep the key people involved in the strategic inflection points without bogging them down for the in-between times.

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