When we started Venture Catalyst, we were only comfortable doing so because the founders had aligned values and agreed on basic principles for operating. We proactively discussed it to ensure we’d feel great about working together. You don’t just jump into marriage (or best friendship) on a whim without really getting to know someone. Well, you’re about to spend just as much time with your co-founders as you do with your significant other (and certainly more than your best friend).
Trust
Would you let your business partner borrow your car, date your sister, or stay at your apartment when you’re not there? Perhaps those go to the extreme, but do you trust them enough?
One of the most beloved professors at Stanford, Irv Grousbeck, who was an extremely successful entrepreneur taught the “newspaper test” – if whatever you or your partners/employees are doing showed up on the front page of the NY Times or Wall Street Journal, would you be proud and feel okay about it? A fairly simple concept, but one that’s easy for everyone to understand.
Trust is built over time, and as we know can be lost in an instant. Think about the decisions you make for your company and whether they are likely to build trust amongst your co-founders, partners, employees and customers.
Efficiency
Get more done in less time. Sounds simple enough but we all know it’s not. Here are a few ways to tackle this… [Please share your other ideas (& feedback on these!) below in the comments section.]
Focus on impactful, quality tasks. What is hidden behind this piece of efficiency is knowing how to prioritize the important work and do it first. Eg, Instead of tackling email first thing in the morning when you’re fresh, how about knocking out the most important item on today’s agenda?
Delegate tasks that aren’t vital to the core 2 parts of a business – solving a customer’s problem and making $. Eg, My first questions to founders are usually what are your main challenges and where are you spending most of your time? It’s mindblowing how often founders concentrate on backoffice crap that won’t move the company needle.
Empower your employees to make decisions on their own. They should know the company’s goals and values and understand the decision making process so when you’re not around, they can act in the best interest of the company. You can help them early on, but teaching them to fish as opposed to fishing for them will be key for long term success. Eg, you can start by giving your employees a dollar threshold to spend to keep a good customer happy such as customer service reps can give $50 off to keep a big customer without asking for approval (thanks, Tim Ferriss, for formalizing this idea in the 4-Hour Workweek!).
Create processes that can grow and be iterated easily. It is rare to get things right the first (or even second or third time). Making it easy to create efficiency in your processes and to easily modify them to improve them over time will go a long way. Eg, keep a playbook for things like frequently asked questions and the best answers in an FAQ section on your website that you can update easily.
Reuse your work products. Try to think holistically and think about institutional memory so whenever you’re working on a new project or task, try to think about how you can reuse your work and continuously improve upon it. Eg, If you don’t have a new employee guide, with the next hire, create one and then ask her/him to help build upon it for future new hires.
Don’t let perfect get in the way of (very) good. The 80/20 rule is applicable in most of business for a reason – it makes sense. You can get 80% of the way “there” with 20% of the effort. That last 20% to near perfection takes 80% of the time. That’s inefficient. So perhaps get to 85/90% there, but don’t waste time with the rest. As Seth Godin famously said, “Soon is not as good as now.” After you finish this blog post, just do it (thanks, Nike); what are you waiting for?
Attitude
Work is called work for a reason, I suppose, but it has such a negative connotation. It doesn’t have to be. It can be fun and more interesting a good portion of the time (though sometimes it really just is work!).
We have a few guidelines we live by in our work and personal lives and have worked with our clients to espouse, too.
Be positive. We have an optimistic view of the world. It makes the day-to-day grind of work better and more enjoyable. Sure, your controller or lawyer is probably not quite as positive, but that’s kind of in their job description. Otherwise, we know we’re often going to spend 10+ hours together on any given day; why not enjoy it!?
Try to have fun. Focus on the fun part of a task, even if that’s the feeling you’ll have of accomplishment once it is complete. Eg, To that end, celebrate little wins. Always keep a bottle of champagne in the fridge :)
Take a break. It’s ok to unplug sometimes, enjoy your surroundings, or go on a trip and relax. In fact, if you fail to do this it can be work against you.
Don’t work with jerks. No, really. There are enough challenges in this world both personally and in business, why put yourself in a situation where the people around you are the challenge. It’s just not worth it. Challenge each other internally, but in a positive constructive way. (Semi-related, this internal idea was partly covered by a classmate Tod Sacerdoti - who sold his startup for $640M - after which he discussed how externally in the market can be a bit different). On a related note, hire slowly, fire fast (though legally). Create a culture where people love going to work and each others’ company. We’ll cover this in a future post.
What does this spell?
TEA: Trust, Efficiency, Attitude. At Venture Catalyst, the TEA criteria is important to us. We use it to constantly evaluate our work, assess our clients, and guide us.
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How Venture Catalyst works with clients:
We maximize the odds for venture success. How exactly do we go about doing that? We ensure that all our projects and the work we do with clients is guided by three things.
Alignment
If there’s one word we say most, it’s probably alignment. We ensure we are internally aligned and we want to be aligned with our clients from start to finish.
If we need to, we play devil’s advocate and take alternative approaches/views in order to avoid group think; but at the end of the day we want to be ‘on the same page’ and ‘in the same boat.’
If our clients do well, we do well; and visa versa. All of our projects and client work is structured this way (and there are concrete ways to do this). Often, we find that this is an area where our clients are the most relieved and encouraged by our approach (it helps to build trust as discussed above!)
Results
We cringe when we hear a lot of talk about projections. What are the results achieved up to this point? What are you achieving right now?
We’re ambivalent when we hear talk about all the hours put into something; sure it’s semi important. What matters more than time in a seat/office (or the dreaded “face-time”), is what you accomplish.
We are all about results.
GSD (Get “Stuff” Done). Commit to doing something, and do it. It doesn’t have to be perfect (80/20 discussed above), but it needs to be done. We love working with ‘doers.’
MSH (Make “Stuff” Happen). Create a path when there wasn’t one before. Find a workaround to get to the endpoint you need to get to. Be scrappy, be resourceful. We think there are solutions to virtually all the problems we see clients face (btw, those solutions are often borne from either creativity or perhaps money).
Quality over quantity. A few quality wins and accomplishments demonstrate real capabilities and that ‘point of excellence’ that you can show customers and investors to convince them you are the real deal. Too many small and low quality things don’t really add up into the best stories. It also tends to suck all your time and put you on the wrong trajectory.
We apply the results mantra to our work. We base our contracts around results and what we jointly achieve with our clients. It keeps us aligned, builds trust, and creates efficiency. It’s really important.
Communication
Keeping open lines of communication is key. We like to have:
Regular updates. Keeping on top of who needs to know what, and making sure they are up to speed on a regular basis is critical to working in teams, and working with clients.
Set phone calls to keep people informed and accountable. It helps people plan better, and contributes to building trust. There are times when they are short and sweet too, which could be on account of everything going as planned.
In person meetings when possible. This is important when starting or completing a project or deliverable, or when multiple people really could tackle something quickly and more efficiently in person.
Email updates to various constituents is key. Savvy investors know that when a CEO goes dark for longer than expected, it usually portends bad news. CEOs should send a regular email update to employees, investors, partners, and clients. Each one can differ in terms of the content, but opening the kimono can be extremely helpful to engage people, stay top of mind, keep focused, engender goodwill, and encourage creativity and helpful introductions.
Goal check-ins (every 6 months or so) to discuss professional and personal goals and ensure we are still aligned. These are more strategic conversations and focus on the big picture, allowing the time and space to take a step back.
Open door policy. It’s important to create a culture where anyone can bring up issues or things that are of concern, or random ideas (you can also set aside time during the regular check-ins to do this).
Online materials to keep updated docs. That way everyone knows where something is and can act quickly in case a project owner is out sick or traveling. Use technology to create efficiency rather than a burden.
What does this spell?
ARC: Alignment, Results, Communication. At Venture Catalyst, ARC is how we operationalize our work to provide real and measurable value for our clients to help them grow and succeed.
Conclusion:
Be it TEA or ARC, however you lead your company, put it down on “paper” and ensure you and your employees actually live by it to maximize your odds of venture success.
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