The Startup Operations Gap

5850.WorkingSocialThe startup world is full of visionary and often technical founders. We can stay up all night cranking on code, quickly bring a minimum viable product to market, and passionately pitch to customers and investors, fueling early traction.

Suppose all of that early stuff actually works: we have a product, people want it, we raised some money, and we hired our first few employees. The challenges of building the product, fixing bugs, going through the lean process with early customers and quickly iterating are overwhelming. However, I’ve noticed that the most painful problems for early stage startups more often include:

  • Team misalignment
  • Unclear goals and metrics
  • Confusion over who to hire first
  • Unclear timelines
  • Unstable engineering priorities
  • Miscommunication amongst the team

As I dug into the root causes of these most common issues, two quickly bubbled up to the surface: lack of organizational structure and poor focus.

This isn’t wildly surprising. Typically the ultra-early days of a startup are chaos. We are constantly testing, figuring out what works and then “doing stuff that doesn’t scale.” The problems of lack of focus and organization really come into play when we first hire employees. Suddenly, it’s not just founders operating in our own world. Instead, other people are now in the mix who require training, resources and definition of how they succeed in their role. Creating this definition is where folks at the early stage often struggle.

This struggle represents the startup operations gap, and it’s a hump that most companies go through. There are seemingly two solutions:

  • The Founder/CEO ramps from product to operational-focused leader
  • The company hires an operational leader (COO) that can organize chaos

The right solution depends on the personality and skillset of the Founder/CEO. Let’s start with some basic steps that an early stage team can take to operationalize:

1. Create a rhythm

In the early days of my last startup, we had a massive engineering roadmap, and set out on a 3 month “sprint” over the summer to complete this laundry list of items. Since we just showed up every day with a huge to-do list and a seemingly enormous timeline of 90 days, we didn’t focus weekly on making progress step by step. Some weeks were total losses, and we didn’t have any way to know that because we weren’t properly measuring.

Startups need to find a balance that enables creativity and free flowing ideas, while also providing a structure that allows people to be comfortable and paced. It is very stressful for employees to show up each day with a seemingly never ending list of to-do’s with unclear priorities plus a nebulous timeline and delivery date. However, most early stage startups operate exactly that way. This is why the introduction of employees mandates a rhythm.

A rhythm refers to a cadence of weeks, months, quarters and years. What do we need to accomplish this week versus this month? How do we measure if this month was a success or failure? Start to think in terms of time-blocks and allocate tasks and measurable goals within those defined time-blocks, ideally at the weekly and monthly level. This is quite simple and it alone is incredibly impactful for organizing chaos.

2. Scope strategic objectives, goals and tactics

Once we are thinking in terms of rhythmic weeks, month and quarters, we need to create our objectives, goals and tactics. Objectives are our highest level strategy, goals are how we measure our progress and tactics are the actions we take to execute our strategy. These might be simple in the early days, but they serve as our guiding light to keep us focused and ensure we don’t veer off course. Let’s break these down:

Annual Strategic Objectives

If we had to categorize everything our team is going to do this year, how would we do it? Suppose we have to group every project and every priority into just 3 buckets. Some might include:

  • Complete next round of funding to ensure an 18 month runway
  • Reach product-market fit
  • Determine scalable manufacturing in China
  • Hire additional leadership so the founder/CEO isn’t doing everything
  • Launch real sales and marketing

These are all big objectives with lots of smaller tasks and goals within them. We want to select 3 that are most important and relevant to our business this year.

Annual Goals

Since the objectives are hard to measure by themselves, they each need to be made up of measurable goals and projects that are properly organized and focused. For example, let’s pick 3 of the objectives we listed above and within them add several tactical goals:

  1. Complete next round of funding to ensure an 18 month runway
  • Create list of top target firms and partners to reach out to
  • Meet with all target firms from the list
  • Solidify commits and close round by March 30th for at least $5M
  1. Hire additional leadership so the founder/CEO isn’t doing everything
  • Define role descriptions for VP Sales, Marketing, Product and Engineering
  • Source candidates and engage with recruiters to close by June 30th
  • Create roadmap plan for Sales, Market, Product and Engineering
  1. Reach product-market fit for the X industry
  • Complete building features X, Y and Z that are known must-haves
  • Scale technical infrastructure to handle approximately 300,000 new users
  • Acquire 50 new customers at an average price of $5,000 ARR each

Now we have 3 core objectives and 9 measurable goals within them. Many of these goals will take months to accomplish and include dozens of sub-tasks and a lot of work. This simple list of 9 items could very easily equal a year of very positive productivity for a startup. Consider how organized we will be if we have a summary of our entire year in 9 bullet points.

Quarterly Tactics

We’ve scoped what the year looks like into very big strategic objectives and then some lofty, measurable goals. How do we pace our execution? This is done by breaking the goals into quarterly tactics. For example, in Q1 of this year we might:

  • Complete all research and meetings for the next funding round
  • Write all job descriptions and spend 1 hour per day sourcing for VP roles
  • Develop product design and begin coding Feature X
  • Close 10 new customers, including Customer X that is already in pipeline
  • Add 3 servers and upgrade memory by 30% for additional user scale

These are smaller, more bite-size projects that can be taken on in a quarter. Within these, we might break it down weekly or monthly as well. Consider how simple the process can be by starting at the highest level (3 strategic buckets) and breaking it down into mid level (annual goals) and low level (quarterly tactics). This is what every startup needs to do to stay organized and focused. We should meet weekly, monthly, quarterly and annually to remind the team of the objectives, tactics, and goals. Additionally, they should be printed out and displayed around the office so they are always top of mind.

3. Introduce weekly reporting

How often do we wonder “what did she do all week?” The projects that your co-founders and early employees are working on should never be a mystery. Clear communication in writing is critical to keeping everyone organized, collaborative and on the right path. To facilitate this, we need weekly reporting.

Weekly reporting is simply having each member of the team fill out a Google Form at the end of each week with a summary of what they worked on, results, concerns and general items to share with the team. Each form submission should be emailed to everyone on that team. This simple process is amazing for keeping everyone aligned. Here is the form my team uses:

Screen Shot 2015-12-17 at 6.59.20 AM
 

There may be a small group of team members that are not highly motivated to fill out the form regularly. It’s critical that everyone participates, so completing the reporting form each week must be a mandate from the CEO.

4. Create a formal meeting schedule

Meetings typically suck. The best way to make them not suck is by ensuring that they are rarely used for updates, and instead only used for strategic discussion. Here’s the difference:

  • Update meetings involve people communicating what is happening on a project. That should be done in writing using the weekly report form.
  • Strategic discussion meetings involve a group debating ideas, brainstorming, analyzing data and drawing conclusions and action items.

Leadership Meeting

A good cadence is to have everyone submit their weekly report by end of the weekend. The CEO can then review the reports and plan for a strategic discussion meeting on Monday morning with the leadership team to review concerns, resource challenges or re-focusing noted in the reports.

These meetings should always be at the same time on the same day so everyone can build their schedule around them. It’s imperative in the early days when everyone is working so closely that this meeting doesn’t get constantly shifted or cancelled.

All Hands Meeting

As a company grows, having an All Hands meeting becomes important. This is when we have enough employees where each department functions on its own, and everyone has ceased wearing every hat.

When we get to this stage, we should have an all hands meeting once per week, typically for 30 minutes, where each functional leader walks through strategy and tactics that they are executing over the next week. Yes, this counts as an Update meeting but at that size for the entire company, one of those each week becomes acceptable.

5. Organize your people

A sign that a startup desperately needs organization and focus is when I ask a founder who one of their employees reports to and he doesn’t know. Nobody wants to have 3 bosses, and everyone wants to understand how they are being measured to succeed in their role. Even if we are small, we need to have a basic org chart that shows what and who each member of the team is responsible for. This chart should be in a shared folder, transparent for everyone in the company to see.

Some roles on that org chart may appear similar. For example, what is the difference between our CTO and VP Engineering? How about between our Product Manager and Product Marketing Manager? As we start to hire more people, we must clearly designate the difference in their roles and responsibilities, otherwise chaos will ensue. Everyone wants to understand what they are responsible for and what they can rely on their teammates to do. Consider producing side-by-side charts for any similar roles to effectively communicate this. For example:

Screen Shot 2015-12-18 at 6.19.06 AM

In this example, we defined very clearly the difference between what the CTO and VP Engineering are responsible for. Each company is different so it is important that we define each chart uniquely for us. This chart should be reviewed by the CTO and VP Engineering, and then be shared with the entire team so everyone understands the division of focus.

Once all of our roles are clearly defined and communicated, to help add structure for each person’s role, consider creating a “People Roadmap” for them. This is a “super job description” that outlines each team member’s core responsibilities, measurable goals, potential path for advancement, strengths and weaknesses. These should be created for every member of the team and walked through together with new hires. I wrote more about how People Roadmaps work here.

Next Steps

All of the tactics listed here are relatively low barrier to entry: easy to create and deploy. Every founder and startup leader needs to be thinking about how to organize the business to scale. It’s amazing how many painful problems can be avoided by implementing these tactics and keeping a sharp organizational focus.



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