There is no culture trait more important than your compensation philosophy. Team development, org structures, and off-sites are secondary to how you pay people.

Why?

Because your system of pay communicates how you think about the long term success of your company. Something rushed, complicated, and managed by someone else leads to a culture that follows suit.

How your compensation philosophy works is separate from how much you can pay people. In a perfect, cash rich world, you’d pay everyone above market rate. That’s not a reality for 99% of startups.

Instead what employees value most is having a clear understanding about why your philosophy exists, how it works, and how they can level up. It doesn’t need to be complicated. It just needs to be clear and consistent with a commitment to make it better over time.

I prefer to think about compensation philosophy like a product. You create versions and each one gets better over time as you learn what’s missing in your previous version. It also requires you to stay committed to improving it over time as you find flaws. Teams can tell when a product is improving. The same should be said for your compensation philosophy.

Moment is six years old and we’ve gone through three versions. The first was equal compensation for everyone on the team. The second was built around skills. And the current version is built around ownership.

It has taken me a decade to create a compensation philosophy. It has taken me some time, but i’ve come to realize that I can’t outsource it. I can get help to run it, but ultimately it’s up to me to create it and improve it as the company scales.

Two Compensation Methods

There are two ways to compensate people.

1. The Negotiated Method – Used in NFL, it’s you against the employee to determine their salary. Each person is treated differently and although you create some general guidelines, you bend to the request of your better players.

2. The Formula Method – Championed by Buffer, this method relies on a set formula where employees can self calculate where they stand and how to make more. This system doesn’t bend to the individual, but instead creates a set of rules that everyone can use.

The Negotiated Method

The negotiated method is how most of the world operates. It’s considered standard and therefore your investors, board, and team are used to it.

This methodology is based on trying to align compensation to each person. It’s a lot of work. You end up spending a lot of time trying to align financial incentives to performance with bonuses, commissions, and justification for why one person is worth more than another.

Your most vocal employees, including bosses, will dictate your compensation philosophy. This doesn’t always mean that your most talented employees are the most vocal. It means you have to consider both the vocal and the non-vocal.

An unintended consequence to the negotiated method is that it generally benefits men. There are several studies, demonstrating that men prefer jobs where there is room to negotiate. While women rarely negotiate. Bosses are supposed to offset this personality difference, but compensation is a very hard skill to teach. Even if you train your managers, compensation is not applied evenly across the company.

Reasons to consider this method…

• You are hiring very quickly. You have raised a lot of money and need to move quickly in deploying the capital. You don’t have to create anything different from the standard.

• Equity value is climbing. You have a currency that continues to go up in value with frequent capital raises. An increasing company valuation gives people confidence to stick around as they calculate the value of their stock options.

• First time ceo. Of everything you need to learn, developing a new compensation philosophy is much lower on the list to learning how to be a great ceo.

• Function Dependent. Your business success is driven by a few function types and therefore you need to win in having the best of that function. Engineering and sales talent comes to mind and the rate for the best talent is very expensive.

Specifics you need in place with this method….

• Explanation. The Netflix 2009 culture doc make it clear why and how they compensate the team. It makes it clear why some employees make more than others. This is for a highly funded, venture scaling business.

• As and Bs. This a simple structure but you need a way to rank your talent so the managers know who to pay and who not to pay. You need some uniformity other than the most demanding bosses getting the most compensation for their teams.

• Market rates. You need to refresh your compensation rates annually with the latest market rates, ready to negotiate with new hires and existing hires who are thinking of leaving. Within this you need red lines the team can not cross in paying people.

• Compensation training. You have to train managers on how to manage compensation. In the early years you will do this but that will cap out therefore you need to teach them how you want them to manage compensation. Someone on your team with a lot of experience here, is important.

• Robust talent pipeline. You are going to go through more people, therefore you need a robust pipeline of talent. It’s not a bad thing but hard charging, pay me more employees are going to move on if your growth or comp slows.

The Formula Method

The formula method is different. The most public version is Buffer and their open salary.

This method takes a lot more consideration up front. You have to decide what the core value is you financially reward people for. Then build a financial model that considers your different functions, how fast people want to move up, and where you need to be against market rates.

The biggest benefit is that once in place, it takes very little management. The team can easily add new people and existing employees have a clear path to earning more money based on how they develop. You turn the whole discussion around from..what are you going to give me…to how can I level up?

You still have to teach managers how to properly review employees against the skills they are working on. But they don’t have to be come expert negotiators. The stress of trying to align financial incentive to each person goes away.

Being different isn’t for everyone. Savvy employees can make more in the negotiated method by continuing to move jobs and asking for raises. Therefore you’ll miss out on the traditional style of talent.

Reasons to consider this method…

• Easier hiring process. It removes the awkward negotiating at the end of the hiring process because the model is provided up front, a project tells you what level they are at, and then people take it or leave it. It puts all of the energy into testing their level and removes the fear on both sides of the table.

• Skills vs Compensation. It changes the discussion from how much do people make, to what level are they at? It separates the financial insecurity and puts the focus on people getting better at set skills. Those skills result in a better company and more compensation.

• Transparency. Compensation is the scariest topic. Unmasking what people make is one of the most vulnerable things a culture can learn. You don’t have to publish salaries but people can do their own math on what everyone makes based on the level they are at.

• Less Overhead. This method runs itself. People know what level they are at, what skills they have to improve at, and have a clearer path to increasing their own salary. It puts development into the hands of the employees and not into an hr department.

What you need in place…

• A Model. You need a base comp for each function and multipliers for skills, location, and leadership.

• Salary Calculator. The result of your model is a salary calculator that current and potential employees can use to calculate how much they can make as they move up.

• Evaluations With Levels. A consistent way you evaluate everyone in the company. If these evaluations are function specific it takes a lot more work. Whatever you choose has to align to your levels so it’s clear what skills they are improving and therefore what level they are moving up to.

• New Hiring Process. You need to change your hiring process to see people work. Because the model is based on what level people are at, you need as many avenues as possible to make an accurate assessment before they join.

The Staples

Regardless of which method you select every pay system ALSO has extras that you need in place.

• Equity. This can be a whole post in itself, but you need to consider equity with both methods and have a clear policy about why it is / isn’t given and how people can get more of it.

• Documentation. This isn’t a handbook. It’s something anyone can read before they join the company to understand your compensation philosophy. It should be clear about why and how it works.

• Evaluations. You need a consistent way that you review and evaluate people. This can evolve over time as you move from generalists to functional expert. Regardless you need a score card employees can use to know where they stand.

• Review process. Separate from how you evaluate people you need a process with timing for when. Employees count on this in setting their personal goals so you have to be clear about when and how this happens.

• Time off. How are you going to handle people working more than and less than a full week? Often people put something in place concerned about when people miss days. If you are going to do that, you also have to think about the days they put in more than a full day or a full week. This even includes time off the clock they are just thinking about work.

• Parenting. Daily work is different from taking time off to be a new parent. This only makes sense once you have kids but you’ll need a policy for new parents. You can separate time for the primary care taker versus secondary. You can also adjust this over time as you have more resources.

• Equipment. What job specific equipment are you going to apply. The simple answer is nothing, instead provide some money for them to buy their own equipment. A more complex answer is a list of stuff that you will need to manage and keep track of.

Moment Compensation

Rather than interject Moment through out the post, I summarized what we do in our 2.0 compensation.

• Philosophy – the formula method. We use this for both salary and equity.

• Documentation – we have a 14 page doc about our compensation philosophy. It covers why, what, and a lot of how.

• Evaluations – everyone has a scouting report. Similar to a sports player scouting report, ours has 10 skills and 15 micro levels. As people take on more ownership and improve at their skills they get compensated more. We review scouting reports every four moths.

• Time Off – we have unlimited vacation. We don’t keep track of the times people work or don’t work.

• Parents – time off to be a parent is separate because we need to back fill resources that are gone for longer periods of time. We provide 60 days for the primary care taker and 30 days for the supporting care taker. After that we have part time options as parents ramp back up.

• Equipment – to do the functions of your job, we don’t provide any equipment. We provide an annual $500 credit for people to improve their own equipment. If they need specific equipment to do their function at Moment then we purchase it, such as a unique piece of software, a machine, etc.

Thanks for reading. If you have any questions email or dm me [@marcbarros]https://twitter.com/marcbarros

There are two ways to organize a team. One is by function, with sales, marketing, product, etc. The second is cross-functional, with each team having a mixture of functional roles.

The first company I built was organized functionally. I had never run a company before and the senior people around the table had never experienced anything other than the traditional structure.

A functional organization worked when we were small (sub 15 people) as it made the list of tasks easier to group. After fifteen it started to break down because in order for each team to deliver their goals they relied on other teams to deliver first. When a team missed their goals it created a downward spiral that looks something like this…

• One team misses, now the other teams miss their numbers and blame the original team. The non-miss teams assume they would have crushed their number if the original team hadn’t f’d up. The group starts to crack.

• Next quarter a different team misses, again repeating the cycle of other teams missing their numbers. Doubt starts to set in about your ability to lead.

• Next quarter people start sand bagging their goals and preaching about underpromise over deliver. They start assuming the other groups will miss so they build that into their plan. The team is now less aggressive. And you don’t know how to fix it.

• Soon a board member asks a functional lead how it’s going. If they are senior they understand the politics at play. They give the…well we’d be doing better if we could just do blah on time. Concern begins to set in with board member.

• Any sales people on the team start to leave or bitch louder about how your revenue growth is everyone else’s fault. They built their forecasts assuming the other teams delivered amazing new products on time with the best marketing. They increase your anxiety.

• The pressure builds as you can’t get each team to deliver their parts on time and you can’t figure out why the teams are blaming each other. You don’t have a deep bench of new executives you can call on. The clock continues to tick.

• You start spending more time with the functional leaders who can’t deliver. This takes away from time spent on winning the market. People see this. You know this. the pressure continues to build.

This cycle repeats itself as you end up firing, changing, and replacing the functional leads. If you don’t sort it out you too get replaced.

I no longer structure companies functionally. That might change with a larger organization but for now I’ve moved on to the Keith Rabois theory of barrels and ammunition.

The reason is because you can focus the entire organization around the largest problems you need to solve. Those problems always affect the whole company and are not function specific. You get a culture that wins and loses together vs functions that win and lose independently.

What Are Your Biggest Problems?

Start by listing out thee largest problems you need to solve.

When you start the company the list is very. Such as, ship a product and find customers. And over time your list will become more complicated as you need to reach new people, service customers, deliver new products, scale an organization, etc.

To figure out your biggest problems, start by making lists. Once you have a bunch of lists try to group them into 2-5 major problems. These major problems are the ones you organize your company around. They are often connected to how you win the market.

Who Owns What Problems?

Once you have your largest problems you find one owner for each. These owners will be obsessed the larger problem, identify several sub problems to be solved, and then build a team that can solve all of them. Keith calls these team leads barrels.

When looking for barrels I have found two types; creative or functional.

If the problem requires break through creativity you want someone who can make sure the group makes the right creative decisions. This works best when shipping new products or initiatives. The downside is that this person will soon need a functionally minded person on their team to make sure their creative direction can be delivered.

If the problem requires consistency then you want a functional leader, someone who is a strong system thinker that runs the trains on time. They have the opposite problem in that any creativity needed can suffer without the right creatives on their team.

It’s ok to start a team with a creative to solve a new problem then change that person for someone functionally minded who can scale the solution. You will need both creative team leads and functional ones.

Being able to move teams around is one of the biggest benefits to a cross-functional organization. The end result is more opportunities for new people to step up and lead.

Where Are The Hand-Off Points?

Once you have your problems identified and an owner for each, you can then check the hand off points between teams and within teams. We use a simple customer journey to figure out these points.

We do one set to figure out the hand off points between the teams and a second set within the teams so they know who owns what.

For example, to launch a new product across the teams…

Define the campaign -> creative direction -> messaging -> create assets -> launch -> convert customer -> ship orders -> service customer.

You would figure out what team owns what part of this journey so the hand-offs are clear.

We then do the same structure within teams to make sure people know who owns what. Taking the same product example a product team would have done the following just to make that new product…

Define the problem -> define solutions -> concepts -> prototypes – > test -> refine -> manufacture -> beta test -> refine -> ship -> measure -> fix.

This is a basic flow but it lets the team know who owns what phase of the journey. They then have their own problems to solve that ladder up to the larger problem at hand.

Checking these overlaps only takes a few minutes. It also provides you clarity on how to get from the large problems down to delivering on the subset of problems. It also makes it much easier for anyone who joins the company to know what problems the team is going after and what they own in that journey.

How To Scale The Teams?

We use a team sizes of 2-7 people. After 7 people we split the group into multiple teams. Why seven? Because after seven a team lead can no longer hold weekly 1:1’s with everyone on their team.

Looking at Moment we started with one team of 4. Over time we’ve organized and re-organized into what is now 3 main teams and 8 secondary teams. Some of those secondary teams will start as one person who launches a new discipline we then build around.

This has enabled us to teach new people how to run teams, while giving us the flexibility to rally around new problems.

Where This Falls Down

Every team structure has weak points. Ultimately the right structure will be based on your own preferences and how you like to run teams. The biggest warning I can provide is to forget about what functions you need and instead focus on what problems you need the company to solve.

But here are the biggest weak points with cross functional teams…

• Team Leads. It takes more time to develop barrels. They aren’t being developed in traditional companies so each one you put in place has to learn.

• Senior Functions. Functions are used to working for the best functional person in the company. So designers are used to working for the best designer, engineers the most technical engineer, etc. Therefore you can lose senior technical people who only want to work for a more senior functional leader.

• Reviews. You have to create a review and leveling up system based on the skills you need people develop within cross functional teams. When organized functionally your review and reward system can be built around how much they are improving at their function. When cross functional you need them to improve at how they deliver work across a mixed team.

• More Conviction. Old timers will tell you this is wrong and you should just do what everyone else does. Therefore you need more depth to why you are doing this and more conviction about how it can work.

If you have questions or need help dm me @marcbarros. Thanks for reading.

How does your team function?

Most team leads don’t how to answer this question. Most of the time they will give you job specific answers about vision, process, timelines, etc. Yes you need those for providing direction, but they are secondary to having a methodology for how a team functions.

If you run teams for long enough you’ll learn that what direction you ultimately send people (i.e. vision, process, etc) is secondary to how they function in getting there. The "how" ends up being more important than the "where" because the where can change, especially in a startup.

You see this exemplified in sports. The best lead teams can execute new formations and tactics on a per game basis, while poorly coached teams can’t. Why is that?

Because a change in strategy is the where, not the how. The how is about the consistent nature by which the team goes about their work on a daily, weekly, and annual basis. The best coaches are maniacally consistent about the how. They know that if the how becomes automatic, they have the freedom to change the where without disrupting the team.

I’ve been running teams for 15 years. Most of it, poorly done. I was too focused on changing the where without ensuring my teams were consistent in their how.

What makes this self discovery hard is there is no right answer. It takes a lot of practice in getting it wrong to figure out how to get it right. And in the end it takes self confidence to decide…this is how I like my teams to run.

Personally I focus on three elements…

1. The When

I start with the cadence of when the team works. Note this isn’t about 8-5, but about the rhythm of the team for when individuals work, teams connect, and the whole organization sets new goals.

In sports this is clearer with practice, games, and an offseason. In business it’s harder because everyone has their own personal schedule which can conflict with a team work schedule.

That aside I focus all of our energy around the following cadence.

• The Daily – Maximizing people’s peak hours and grouping calls / meetings to the middle of the day. This enables morning people and night owls to maximize their best hours.

• Weekly – Regrouping within teams so everyone is on the same page with what needs to get done by when.

• Trimester – I found quarters were too fast so we run our company cadence around trimesters. this means we bring everyone together every four months to review our results and set new goals.

• Bi-Trimester – Because four months is a long time we take a pause half way through a trimester to reflect, meet with the Board, and continue forward.

2. The How

This section is more business specific. It evolves based on the size and maturity of the team you’re running. The list below is for running a sub 50 person company.

In creating this list you want to make sure it aligns to the processes used against your stages of when. It gives the team confidence to know what we do at each stage.

• Daily – standup to keep everyone on the same page with chat and calls to move through issues during the day.
• Weekly – team sessions keep everyone on the same page and 1:1 sessions give individuals the feedback they need.
• Monthly – reviewing our financial results and updating our forecast, this lets us check in on the trajectory of the business.
• Bi-Trimester: we pause to review our progress half way through, while looking ahead to the trimester in front of us.
• Trimester: we review our results, discuss process improvements, and set new goals.
• Projects: how we define and ship work together. From small to large we use the same process to define, discuss, and run cross company initiatives.

3. The Where

I try to create consistent spaces the team can rely on to do their work. Back to sports, they have practice fields, training facilities, and a stadium for games. Within a company you need to create these artificial places so the teams know where to go to do what.

• Dashboard: a singular data dashboard per company and per team that enables them to understand how we’re doing against the goals we set and problems we’re trying to solve.

• Schedule: a simple, high level calendar with a list of dates that affect the whole company. Even at 40 this is still a simple google doc with a list of dates.

• Project Management: a tool the team can use to organize and plan their work both as individuals and as collective groups.

• Slack: our communication tool for chat and calls.

• Briefs: how we think and edit our most important work. Written down plans provide clarity and scalability for others to pick up the ball and help.

• Journeys: how we map out the steps in everything, from products to projects we use this tool to make sure we don’t miss anything.

• Docs: having one place we store and define everything. Yes folders can get cumbersome but how you label and organize them matters.

• 1×1: the weekly session between team lead and player to provide feedback and work on individual skills.

• Company Meetings: done every two weeks, this is our chance to review, brainstorm, and discuss cross company issues.

• Off-sites: where we do our big brainstorms and fix team process. This provides us the place to tackle the uncomfortable team subjects.

Conclusion

Figuring out the strategy (where) is much harder than developing a highly functional team (how). Even if you are unsure about the future direction of where the team needs to go, you can be very consistent about the methodology to get there.

A word of caution is if you are super creative developing a consistent how can be much harder for you. You assume that spontaneity is they key to your success. That might be true for a group of one, but that doesn’t scale to a group of two and beyond. Therefore if developing this methodology isn’t your thing then you should put someone on your team who can develop and execute it consistently.

If you have any questions dm me @marcbarros.

I was 16 at the time. It was early summer and we were training twice a day for a regional soccer tournament. Our coach was a former national team player. Old and out of shape I didn’t realize he was more than just a player during his day. He was the top US player by 19 years old, playing for the Cosmos with the likes of Chinaglia, Beckenbauer, Oscar, and Alberto. These are soccer legends.

Our drill wasn’t going well so he stopped it. He brought everyone over and explained something that would stick with me for a long time.

He said close your eyes and just listen. Bop…..bop..bop….bop….bop.bop.bop. It was the sound of a touch, a pass, and a few more touches. His advice wasn’t tactical to fix this or fix that. It was much more fundamental…the game has a rhythm. It has a style and when a team is connected, you can close your eyes and listen to how they play.

I remember just standing there. Dumbfounded by the simplicity I began to think about all the teams that I love to watch. He was right. My favorite teams had this smooth style to them. From the way they defended to the way they attacked they had an approach that looked effortless.

Fast forward 15 years and I believe this lessons translates to any team, especially startups. Because in a startup you’re bringing a new group of people together in an accelerated manner. Each person has their own approach and it’s your job to assimilate them into a single style of play.

This is harder than it looks. Most people just skip by it and get to work. That’s fine…when there are just a few of you. But as you start to add more people, a lack of cohesive style creates dysfunction which leads to miscommunication which leads to mistakes which leads to running out of money and the game being over.

My Own Style

It has taken me two startups and 15 years to be honest about my own style. It’s based on the following tenants.

1. Be consistent. GoPro kicked the s%*# out of us in my first company by being ruthlessly consistent. They stacked their entire culture and company around being the best in the world at one thing…marketing. Even with an average brand the found a recipe that worked and stuck with it from small to becoming a public company. It’s easy to change stuff, it’s harder to be consistent about it.

2. Play With Urgency. I believe that Paul Graham is right, speed wins. This doesn’t mean play dumb. It just means to be aggressive and play with urgency. I like to prototype and test the market before manufacturing. Ship and then improve. Publish and listen to feedback. I prefer my teams play quickly so we can learn faster. It’s a style that is hard to maintain with scale.

3. Make It Repeatable. If you are going to do something, then document it so others can repeat it. It’s more work upfront but documentation and basic templates enables everyone else to go faster in the future. I try to do this everything…briefs, hiring, company meetings, off-sites, etc.

4. Don’t Hide. This applies to everything. Take setbacks head on. Be transparent. Tackle everything that’s not working. And create a culture where people can’t hide. The more honest and direct you can be, the better a team plays.

Creating Your Style

You already have one. It started with your childhood and was shaped over time with your experiences. All you have have to do now is to be honest with yourself about what it is so you can figure out how to apply it to a group of people.

To figure out your style ask yourself…if I could start my company over tomorrow, how would it be different?

It’s so obvious that most people answer this question with an immediate list. Take that list and look at the core tenants. Your answer is in there.

Take my first company, Contour. I started it as a 21 year old just out of college and without any real work experience. Ten years later I built a culture that looked nothing like my soccer style. It was a disconnected team with people there for different reasons, each applying their own style. It lead to losing the market, me getting fired, and watching the culture that I had built go on to bankrupt the company nine months later.

Ultimately that was my fault.

So before starting Moment I made lists…

• What success looks like.
• What I want in co-founders.
• What I’m passionate about in a company.
• What’s important to my wife.

From those lists I was able to create my why, what, and how for Moment. I did that before making a product.

Applying Your Style

I’m a big believer in showing, not telling. People will watch what you do and it trumps anything that you say.

If you already built a culture and it’s not true to your style then this process is much harder. It might be easier to just start over then to try and fix it.

First you need a reason to change it, like a company set back. Second you’ll need to stop and address this with the whole company so they understand what you want to change and why. Third you’ll have to change people who don’t want to play with this new style. Fourth you will have to reinforce it on a daily basis over several months until you can change the bad habits you previously let form.

Otherwise here are some ways to instill a consistent style of play.

• Lead by example. Keith talks about this in his YC class on How To Operate A Company.

• Teach It. New initiatives are the best opportunity. They are a micro version of fresh start. From how you outline the project to run it to reflect on it, it’s a great way to demonstrate how you want your team to play.

• Discuss It. You can do this at off-sites or company meetings but run sessions about your personal style. It will help your team to understand the why behind what you are doing.

• Hire It. Layer these traits into how the team filters candidates. If you find people who already share your same style it gets much easier to scale. Changing people isn’t realistic.

• Provide Feedback. Immediate feedback works best. This can be in chat, on the phone, or in person but look for every chance to provide bite sized pieces of feedback that reinforce your style.

Please realize that applying a style does not happen in days or weeks. It will takes you years to do well.

A Word Of Caution

Your style of play won’t be for everyone. And that’s ok.

In fact, it’s what you want. But if you do this right, you will create a core team that stays together for a long time. And the more time you get on the field together, the easier everything gets.

It’s important to note, this doesn’t mean everyone has to be the same. You want diversity of thought and opinions. You just want everyone to apply those differences with the same style of play.

If you have questions dm me @marcbarros.

When starting Moment we didn’t have a hiring process. We also didn’t have money to hire anyone, making it a moot point.

But we did need help with specialty skillsets that we didn’t have on the team. So we ended up carving up the work into micro projects and paying what we could. Thankfully friends and friends of friends were willing to help in those early days. I like to call this stage…a collection of bandits.

What we didn’t realize is at the time, was that our use of micro projects would be the basis for how we’d build the company. The process of scoping the project, costing it, and running it showed us everything about how someone works. It also quickly showed us who we should work with again and who we shouldn’t.

Fast forward five years and we’ve built a team of 40 using what we now call Project To Hire. It’s a hiring process that inverts the triangle from lots of interviewing and little work to little interviewing and lots of work. We found that you can interview people all day long, but until they bring their laptop and get to work, you have no idea if they are a fit.

At Moment we’ve had nearly 1K applicants. We’ve run about 100 projects, hired 55, and 40 still remain.

Before outlining how this work, it’s important to note this isn’t just a really long interview process where you use up people for free. This is a paid project to hire process that forces you to refine who you hire and why. When money is on the line you’ll be amazed at fast how teams narrow their focus.

Why Project To Hire

Project To Hire has been transformational in building Moment. Not only has it helped us to hire the right people but it’s enabled the team to see a lot more talent. This means everyone is better calibrated to thee differences between amazing and ok.

Most importantly, project to hire has pushed the team to think about scale from an early company age. In order to project people you have to have a tight brief, clear documentation, and a process to on-board and off-board people.

Getting this right has enabled us to focus all of our energy on the work and the people.

The benefit to your team…

• See More Talent. They get to work with a lot more talent. It helps everyone calibrate fit, while benchmarking themselves against the people they are projecting.
• Learn To Scope. A great project always has a tight brief. It takes a lot of practice to do this well so every project is another chance to learn.
• Process Documentation. The team gets very good at documenting their internal process because they can’t quickly on-board new people without it.
• Faster Starts. Once a new hire joins the company, the process to get them ramped is faster. Day 1 is really like their second week so people get shipping real work faster than a traditional, cold start interview process.

The benefit to employees…

• Self Select. Biggest value is that potential hires decide right away if a project to hire process is right for them. The people who don’t want to help on the side or weekends are the wrong fit anyways so it’s great if they opt out.
• Date The Company. The fear of changing jobs is lowered by doing real work with potential co-workers.
• Stress Free. They are paid for their time so they aren’t stressed about paying their bills. That’s in direct comparison to competing jobs where they don’t get paid to interview and are required to participate in multiple interviews.

Even if a project doesn’t work out I’ve found that our team gets better. It crystalizes the role, who we need, and why we need them.

How It Works (potential employees)

There are two flows you have to worry about.

1. Your Team – from posting the job to projecting to hiring.
2. The Employee – from applying, to projecting, to joining.

We’ll start with #2 as it’s simpler.

To create your process use a customer journey. Map out the potential employee’s experience before, during and after a project. The before starts at reading the job description and after ends with joining (or not joining) the company.

Their process generally looks like this…

• Apply. We post all of our jobs on Angel List and link from our careers page.
• Phone call. They receive back a yes lets chat or no thank you. The team generally uses Calendly.
• Email. Post call they get an email with the project brief and a doc called "Moment Projects (the why, what, and how)." It explains everything they need to make a decision about doing a project and joining the company. It’s important that BEFORE they do a project they have already internalized this doc and made a decision that Moment is the right place for them if the project works out. We include our compensation model so they already know what they will be paid based on what level we assess them at.
• Scope the project. If they are still interested they do the first part of the project by sending back a scope in the project brief that outlines their plan by phase and includes their time and hourly rate.
• Run the project. If the scope is approved they are added to a temp channel in Slack and are asked to lead the project. It’s their project to drive.
• Feedback. Once the project is done they are given feedback and told if we think it’s a fit or not. If it is, they send over three references. While waiting to connect with those references they also receive a personal review which outlines their compensation level and why.
• Paid. Regardless of outcome they are paid for their project as soon as it is over.

What you’ll find is that people either love or hate this process. We look for people who love it and jump in with two feet. We find that the best candidates…

• Reply quickly. They schedule calls as soon as available, complete the scope the first night, and wrap up their project within a week.
• Succinct writer. The scope is tightly outlined and they are direct in their communication.
• Drive. Once the the project they really drive in getting the team to help them, schedule their recaps, and post their work.
• Use Google Docs. You’d be shocked but being given a google doc and then not using it is the fastest sign that someone isn’t a fit. Especially if they send you back a pdf or presentation.
• High energy. Their calls have high energy and are engaging.

What’s amazing is that before they even ship their work you can already tell if they are on the right track or not. And if they aren’t we stop the project before it’s completed. There is no sense wasting their time or ours.

How It Works (your team)

The process you use with your team should start simple and evolve over time. We are on version 3.0 of our process. It’s written so that anyone can successfully run a project.

Our process has four stages.

1. Posting – write the job, write the project brief, and post the job online.
2. Filtering – reviewing, interviewing, and starting projects.
3. Projecting – the actual running of the project from kick off to final review.
4. Closing – process to conclude the project and close the candidate.

I will provide some additional context to each stage.

1. Posting The Job
In this stage the team completes the following.

• Writes the job description.
• Writes the project brief.
• Posts the job and starts the inbound funnel.

What’s important in this stage is that we expect the hiring lead to write the project brief BEFORE they post the job. It’s very important to know the core skill set you are looking for. Therefore by writing the project brief it forces you to dig in and clarify where this candidate has to be amazing.

The way to create the project brief is to ask yourself…what thing/skill do they have to unbelievably amazing at? Is it curating? Is it refining existing products? Is it prototyping? Is it creating from a blank piece of paper?

Once you know the area you then build the project around it.

Basic project rules…

• They need to ship something.
• Scope should be clear and tight.
• Total cost should be under $2K per project (usually under $1K)
• Total time is sub 15 hours of work.
• Ideally they complete the work within a week, maybe two.
• It should include at least one review meeting so you can see them in a group dynamic.

I made a Project Brief template for you.

2. Filter Candidates
In this stage the team completes the following.

• Reviews and filters resumes.
• Phone screen with candidates.
• Send project brief and process doc about doing a project.
• Review their scope and decide if the project should start.

This section looks a lot like a traditional hiring process, except instead of offering them a job you are offering them a project to try.

You can let different functions modify this stage to whatever they need in order to make a project decision. For example our technical teams want to review engineering samples to make that decision, which is fine. All you care about is that they are consistent in deciding who is and isn’t worth running a project.

The biggest benefit to this process is that you can test people you were on the fence about. Traditionally you have to say no as the risk of hiring someone on the fence is too high of a cost. It’s more more expensive to get a hire wrong vs a project wrong.

The most important step in this stage is reviewing their scope. Post phone call you send them the project brief. It’s on the candidate to send back a scope and the best ones do it quickly. This is the first time you’ve seen them work and it will tell you a lot.

• Speed. How fast did they reply to your post call email? How fast did they send back a project scope?
• Communication. Beyond speed do they tell you when they will have the scope back? Are their emails succinct?
• Outline. How detailed is their outline? Is it even in the google doc you sent them or did they try to make a pdf, presentation, or a new doc?
• Time. Are their hours reasonable for the project scope? Were they clear with their time estimates for each section of the project?
• Costs. Was their hourly rate in line with the expected compensation?

Out of everything they send back you really want to look at the hourly rate. If they send back something too high this is your chance to re-address compensation before they start. I’ve often found people taking a pay cut isn’t a good fit and therefore you have to address this upfront and potentially stop the process.

Additional recommendations for this stage…

• Have a clear filtering criteria. Be very clear about either core experiences or passions that every hire has to have. In our case it’s publishing publicly and having a passion for photography. If they don’t have either then we move on. Photography are the problems we’re solving and publishing is the shipping culture we foster.
• Pre-write the followup email. Candidates will show as much interest as you do, which means as soon as your screening call is over send them the post call email.
• Group candidates in the same stage. I recommend you interview everyone the same week and try to run projects at the same time. This ensures candidates are at the same decision process and gives the team the optimal chance to compare multiple candidates.

3. Running The Project
In this stage the team completes the following.

• On-board the candidate.
• Kick off the project internally.
• Run the project.
• Provide feedback post project.
• Decide which candidate you want to hire.

You can run the project any way you want. Ideally it’s run like you would any new project at your company. We run the company in Slack, which makes it easier for spinning up and closing out temporary projects.

What we generally do is…

• On-boarding checklist. Have one and list either what function or who does what column. I made you an on-boarding template.
• Create a channel. The hiring lead makes a temp slack channel, adds the teammates needed, and writes a first post in the channel with everything the employee needs. It includes introductions and links to both the project folder and working brief.
• Candidate leads. We let the candidate lead the project, interacting with the team as they need. The best candidates are actively engaging the group as they see this as their own chance to validate the company is fit for them.
• Reviews. Projects can have multiple review sessions. Each is lead by the candidate so we can see how they do in getting a group to provide the feedback they need to keep going. A project always ends with a final review where work is presented to the team.
• Feedback. Once a project is over we give every candidate direct feedback on the project and why it was or wasn’t a fit.

Overall what matters is in this stage is consistency. That means everyone does the same project so you can compare apples to apples. It’s also important the project is run in a public channel so everyone can see how they work.

This consistency will help you better select who stands out from the group.

4. Closing The Candidate
In this stage the team completes the following.

• If not a fit, close the project and pay them.
• Review references.
• Write a candidate review.
• Verbal agreement.
• Sign the offer.

It’s important to show urgency at this point. The candidate is a few weeks into the process and there is always a risk that they go somewhere else.

The area we see the biggest break down in this stage finalizing their compensation.

At Moment we use a compensation formula. We provide our compensation philosophy before the project starts but it’s important to bring this back up and let the candidate know which level they are starting at and why. We do this through our 1:1 review template. Yes you are limited on data to provide a detailed review, but it’s a start and clarifies for candidates where they stand and why.

What Are The Issues

This process isn’t for everyone. We’ve used it from our inception which makes it easier to improve upon. But a big word of caution is to make sure you don’t half ass it or you won’t get team buy in.

Some things you have to watch out for….

• Talent not projecting. It will bother you that some people who look great on paper choose not to do a project. As painful as this appears, this is a good thing. You want people to love or hate the process so having them not even try a project is okay. You may think you are missing a chance at top talent but in reality you need people who are so stoked on the company they want to work on it in their free time.

• Rushing the process. You can go as fast as the candidate does the project. It’s hard but you have to avoid the…oh this person is amazing so lets skip the project to hire process because they are going to take another job. Don’t do this. If someone is in such a rush that they don’t have time to try out then you don’t want them. It means they will leave your company in the same hurry.

• Not being consistent. Most of our misses have come from not using our own process. We get excited about someone and skip steps or don’t analyze their project thoroughly enough.

• Single candidate projects. You want to avoid single candidate projects. It’s really important to run multiple candidates at the same time to create momentum and urgency. It takes time to get people into a project, therefore you don’t want to be starting over if your one candidate doesn’t work out.

• Candidate details. This project gives you a lot of candidate interactions so look at all of them. It’s easy to just jump to the work and assume you can teach the rest.

The Tools We Use

Here is a short list of the tools we use. I created some templates for you as examples.

• Angel List – where we post our jobs, filter candidates, and manage our pipeline.
• Calendly – candidates schedule a 30min call with the hiring lead.
• Slack – where we run the project.
• Google Docs – we make a project folder and brief for each candidate.
• Project Brief Template – an example outline for each project brief.
• Onboarding Checklist Template – what we use for on-boarding and off-boarding candidates.

There is a lot of startup advice that says you don’t have time to coach your team.

Ben is a legend and I don’t doubt his advice. A lot of what he says is right. You are hiring them for their ability and you do need them to scale their function without you. You also don’t have the experience to train them at their job.

All of that is true.

The part that isn’t true is that you’re building a team. Which means you care more about how the collective success over the individual pieces.

The best examples are in sports. As Malcolm Gladwell recently points out in this podcast…"But certainly, in this moment in basketball, it seems like it’s very coach-dependent. And when you see those..you then begin to wonder, how many players on basketball teams, who we consider mediocre, are actually really good but just in the wrong environment? Is Victor Oladipo an exception or is he part of a larger trend? I’m increasingly of the opinion that there must be lots of Victor Oladipos out there."

In the context of building a team, I agree with Malcolm more than Ben.

Granted, I don’t blitzscale. And in blitzscaling, Ben’s advice might be right on. You might not care about team performance. Instead you probably care about acquiring all-stars and assuming that they can play cohesively long enough to win.

Even if you aren’t blitzscaling you do need some all-stars on your team. It’s hard to build something great with zero talent. You just need to find the right all-stars that fit to your style of play.

Hiring A Leadership Team

I’ve built two leadership teams over 15 years.

The first time I followed the traditional, exec hiring process. I searched, met, sold, and hoped that they work out. I tried to set expectations and pretend that I knew what you’re doing in leading people more experience than myself. I even brought in an exec coach because that’s what happens when your own team complains about your immaturity.

The second time I built a team. I took a less experienced group of people and spent two years teaching them on how to become executives. They start as product owners, learning how to get a group to deliver. And over time you have to turn them into business owners that know how to make executive decisions about where to invest and why. The question now, is if they can continue to lead as the numbers become significantly larger than where they started.

Through it all I’ve learned a few things about hiring a leadership team.

1. You have to develop your team philosophy before you hire leaders. It’s on you to develop your own framework for how and when a team works together. You can’t ask a leadership team to build this for you. It has to be more defined than just…we’re succeeding.

2. You can hire well beyond your experience level, but it doesn’t mean you can coach it. People get confused in thinking that landing an all-star on the team means they have succeeded. It’s like saying that raising money means you’ve made it. Neither are true.

3. Melding experienced leaders to adopt your philosophy is much harder. When you hire a team leader they will say…oh yeah I believe in that same philosophy too. What you find, is that over time they really don’t change. They have their way of doing things and you need to know that is and understand how to manage it.

4. Don’t underestimate inexperience. Once people have success they forget that their inexperience was part of the formula to achieving success. Therefore don’t overlook inexperience as solutions to team leadership. Often times people just need a chance and direction to learn. And the hungriest can often outperform the experienced if given the right environment.

To Understand Before Coaching

There is something you have to understand about coaching. It only works if your resume is more successful than theirs. And it only lasts if you continue to develop as a coach.

For example, I would love to coach Barcelona. Except I can’t because Messi would never meld to anything I’d put on the table. Forget my experience in playing college soccer, Messi has developed his way and unless my resume is better than his, he isn’t going to meld to my culture.

But Guardiola? They listened to him, at least for awhile. His championship resume was longer. Once it was shorter, his time was up. So what did he do? He moved to a club that needed his winning coaching. Until they too were too successful. He’s now on to his third club, teaching the next group how to win.

What you notice about the best sports coaches is they aren’t teaching each player how to be great at their function. They rely on the player to develop that on their own. Instead they focus their energy on the system, repeatable processes, and how the group works together. The more experienced your team is, the better you have to be at this.

Take Phil Jackson. He created a system and used psychology to keep his players motivated. The talent on his team was so great there wasn’t anything else he could do other than focus on their mental state.

How To Coach Your Team

There are lots of ways to do this.

I don’t believe you should outsource it. I’m doubtful that an exec coach shares your same team philosophy, which means what they teach could be in conflict to what you believe.

Instead I suggest learning how to coach it. The easiest place to start is in teaching your team how to run a business. Normally they get a lot of practice at their specific function but little experience translating their function into business speak, which is what is expected at a board level.

Here are a few ways I’ve coached my own team…

• Read Bezos annual share holder letters. Or have them read the annual letter from any public CEO they admire. Reading these teaches them business speak, which is a foreign language from their function speak. We talk about these in 1:1 sessions.

• Write business summaries. We hold six board meetings a year. At this point we don’t have that many strategic topics to fill six meetings, which means the reason for the meetings is to give the team more practice at a board level. Before every meeting they have to write a short summary. This isn’t a ppt deck, it’s a business summary in a google doc. They write it and I edit it. In the beginning you basically re-write it. But over time they get better and better where they don’t need your editing.

• Phone call before the board meeting. As part of their weekly 1:1 they will practice the meeting out loud. I’ll ask questions like a board member and then give them feedback on the structure of what they said. Generally what you are coaching is their language and how to succinctly summarizes their learnings. What you discuss at a board level is different from a daily team level so you need time to teach this.

• Learning how to win a market. Figuring out the quadrant you can win is hard and you need team leads that know how to do this. It’s not a skill that is taught and so I’ve run some sessions that teach them how to look at the existing market to then figure out how they could win it on a new paradigm.

• Tools they can use. Few executives have tools they use to break down problems, organize people, and communicate. I share my own tools and work with them to learn how to use them. Tools like a customer journey, a brief, and documentation. It gives them structure they can use with their own teams. It also make sure all of us are speaking the same language.

• Consistent 1:1 sessions. I call them workouts. They are an hour long, every week. And I do everything I can not to miss them. They set the agenda and although most of the time spent is on their projects they are a chance for me to provide coaching feedback.

In Summary

I believe you can coach your team.

If you are playing the long game, both at your company and as a member of the startup community then this work will pay back. Happiness is higher. Churn is lower. And team speed starts accelerating over time.

If you are looking to torch the earth and go fast, then coaching is a waste of time. You’d be better off learning how to manage and turn through all-stars. And as long as you are succeeding and stock value is rising, you can deal with the negative impact it can have on your culture.

If you have questions, email or dm me on twitter.

The first company I built didn’t have a cohesive culture.

We had amazing people and those people worked hard, wanted to win, and were passionate about beating our competitor…but we didn’t have a culture. That was my fault.

Everyone was there for a different reason and I didn’t know how to bring them together under one purpose. We had two co-founders with differing philosophies on just about everything. We had a Board and investors who didn’t like each other. We had Sr. execs from different planets who had different beliefs on how to shape a company.

In the end we had a group of people spread across two offices with varying levels of interest in the core customer problem we were solving. It was a mess.

There I was, a sub 30 year-old trying to pretend that I had any idea about what I was doing. I had never had another job before, let alone experience in creating a culture.

Fast forward and my second company has been different from the beginning. My own maturity has a lot to do with that, but like any new relationship you learn from the last one. I’m clearer about what I believe in and what I’m looking for, which makes culture building easier.

In company #2 you fix a lot of the cultural basics that were broken in your first company…communication, cadence, hiring, team process, etc. You do a better job of selecting people who share your passion for the same problem. And you are more consistent in your approach, which everyone appreciates.

Even with those improvements I never would have guessed that the single most important cultural ritual that we would develop would be our Off-sites. We’ve taken 17 of them over the first five years at Moment and they have changed everything.

What I’ve come to realize is that off-sites are serious. They aren’t bro time or hang out time. They aren’t random and they aren’t treated with…oh I should do one of those.

Ours are a week long and we hold them three times a year. That means we ask people to be away from their families for three weeks a year. Anyone with young kids they understand just how serious this is.

Therefore if you are going to include off-sites in your culture make them matter. Realize this is your chance to develop the team, fix issues, and get everyone on the same page. They are a big deal and if done right they will unlock a group of people to deliver the best work of their lives.

Everyone has their own structure, this is mine and it has scaled up to 40 people. I’m not sure how it’s going to scale to 100 people where frequency becomes a lot more expensive.

Set Your Offsite Cadence

Before you create off-sites it’s important to first set your company cadence. Off-sites are not random gatherings. Instead they should be timed based on the cadence by which you set goals.

We run Moment on trimesters. Therefore we have an offsite every four months to end the previous trimester and to start the next one. This allows us to dive deep into our recent performance, work on our team dynamics, and set new goals to sprint again.

A side note, but I found that business quarters are too fast. By the time you set goals you only have 10 weeks left to finish them. Having four month chunks gives the team more time to deliver meaningful work. It also better accounts for vacations and personal issues that arise during a trimester.

What Off-sites Are About

You should set a clear purpose for what your off-sites are about.

Our off-sites are about surviving together. They take us back to the basics in life with traveling, cooking, eating, exploring, talking, and connecting. Accomplishing these feats brings us closer together. It forces us to work as one in ways you just can’t accomplish during work hours.

All of our off-sites have these same elements…

• Travel – we started by caravanning to spots within two hours of Seattle and over time we’ve expanded that circle to the broader NW.

• One House – staying under one, shared roof is important. We started with camping and over time rented larger and larger homes. We’ve always tried to balance comfort with uncomfortable. Again it comes back to surviving together.

• Team Made Meals – we make our own food and clean our own dishes. It’s basic, but conversation happens in the kitchen that you’ll never get out of people any other way. What’s beautiful about shared meals is they require empathy. Not only do you have to consider everyone’s allergies, but you have to clean the mess someone else made.

• Adventure – accomplishing feats matters. It puts people outside of their comfort zone, but over the years we have seen people accomplish hiking feats they never thought they could do. These adventures don’t have to be expensive. Walking on your own two feet enables conversation. These adventures often become the stories people remember.

• Team Sessions – we deliberately work on the team. There is an agenda with pre-planned team sessions. I keep some of the session cryptic as surprise gets people to focus on the problem at hand. Most importantly this your chance to enable important conversation about the team and how it can run better. It will take practice but over time the team will begin to open up to one another.

Off-site Agendas

To get more granular about the week here is the agenda structure we use. It has stayed consistent over the years.

Pre-Read

Before you go, I give the team pre-read. It’s my job to give them context to where the company is today and where it needs to be in the future. The team needs this in order to set relevant goals. In the pre-read I try to include…

• Table of contents with how long to spend on each section.
• Review last trimester’s goals, to get them thinking about their own performance.
• Business recap for the last trimester, teaches them how to think about our business.
• Remind them about the bigger vision of where we are going.
• Remind them to re-read our annual plan.
• Provide context to what matters in the up coming trimester

In general I want most of their time spent thinking about the future and what goals we need to set to get there.

Day 1

In the first day I want to get the group connected talking. In order to go deeper the rest of the week I need to get the broken shit on the table. This is the chance for people to both celebrate and vent.

• Arrive by 4pm.
• Session 1: team(s) review their last trimester goals. They go goal by goal, scoring each cool between 0-1 based on how much they accomplished. They then list out why they did or didn’t hit the goal.
• Session 2: company recap. Each team shares their score and the trends behind why they did or didn’t hit them. We also go around the room and give individual props. This is really important.
• Session 3: if there is time I have teams break down what is broken. It’s their chance to vent and get stuff on the table they are frustrated about that we need to fix. I write these down and I figure out how / when to work on them during the week.
• Dinner: this is the first chance we get to connect as people instead of co-workers.

Day 2

The second day is about exploring and thinking big. Depending on the time of year we either get out first thing for a half day adventure or we run some team sessions and explore in the afternoon. Looking at our winter off-sites the day looks like…

• Breakfast: We have found cold, self serve breakfasts work the best.
• Adventure: During the winter we try to be out early to maximize the light. We’ve done everything from snowshoeing to snow bike riding to skiing / snowboarding. We make sure each adventure accomplishes something together.
• Session 3: The first session is always about thinking big. Generally I’ll run a session about how we grow 3-4x in revenue or team size. Below are notes on how to run a growth session but this lets the team think about scale without constraint.
• Break
• Session 4: This is a follow on to session 3 where we go more tactical to idea generation. These can be ideas to hit the growth we talk about in the previous session or can be tactical to our next 12 months. These are always in cross functional teams to get new relationships started. It also forces people to learn how to present their results in front of the whole company.
• Dinner: Deliciousness.

Day 3

The third day we get tactical to what we need to culturally fix. This is where I bring in issues from Day 1 or issues I know we need to work on. The structure of the day is similar to Day 2, but instead we hit a series of short culture related topics. The key is keeping the energy high during the sessions.

• Breakfast
• Adventure: We do a second adventure, again with some form of accomplishment.
• Session 5: In 60 minutes we’ll cover the most important cultural topic. That can be anything from compensation to communication to process, etc. It’s always about…how could we do "blah"? Or how could we fix "blah"? Again done in cross functional teams.
• Session 6: This is the second most important topic.
• Session 7: This is the third most important topic.
• Dinner: Followed by drinks and hanging out.

This topical patter continues until we’ve spent about four hours together. After that the quality of the sessions begin to drop off.

Day 4

This is the hardest day. It takes a lot of mental concentration to crank out four months of goals and tactical objectives to hit these goals. Over time this day has gotten easier as team leads have done pre-offsite planning.

• Breakfast
• Session 8: I bring the whole company together and we go over the pre-read. This is my chance to make sure everyone understands where we’re going and why. We move from the big picture to the annual plan to the trimester plan.
• Session 9: Teams split apart and start setting goals. Generally teams end up with 3-7 goals depending on their scale and maturity. Each goal is measurable as an end result or measurable in progress (i.e. development stage of a new product).
• Lunch: Often self-serve the teams eat and keep cranking.
• Session 10: Once goals are set they work through the tactics to hit their goals. Then they map out what they are going to work on and in what order. This is tedious work.
• Snacks: everyone needs a break by the afternoon.
• Session 11: We bring the whole company together to go over goals by team and review these against a company calendar. Our calendar is very basic, but includes any cross team initiatives we all need to know about. This session has gotten better over time as the teams have improved at saying what they need from other teams.
• Closing: This completes our off-site. All sitting together this is a chance to congratulate the group on an amazing week. It’s also a chance to get feedback on the week while it’s fresh.
• Dinner + Relax: The rest of the night is just about hanging out together. We share a last meal, connect, and sometimes a dance party breaks out.

Day 5

We pack up and go home. Everyone cleans the house together and we caravan it back to the airport or the Seattle studio.

Recap

After every off-site I document it on a private web page. It becomes our company history and provides reading context for new teammates. Understanding where a team came from is really important to understanding where they want to go.

• Collect photos from everyone on the team.
• Write a day by day recap with notes form every session.
• Drop in photos as they happened so the reader gets a sense of what it was like.
• Post it to a private page for your team that links to a master Off-sites website.
• Make this page part of pre-read before next off-sites so people can remember what we did last time.

Immediately Fix What’s Broken

After an off-site it’s important to immediately fix the broken items you. Any simple ideas or changes to process I try to fix before people start work on Monday. That way people can see a direct impact to the feedback they provided.

This builds trust and carries your momentum from the off-site into the trimester.

If you go into the next offsite with the same foundational issues then you’re doing something wrong.

Off-site Exercises

I wanted to break out a few exercises you can use with your teams.

Session – Review The Past

We have done this a few ways over the years. As the group has gotten larger we’ve moved from doing this company wide to doing this by teams and then recapping with the whole company.

Our general process is…

• Review the goals. Here we go goal by goal. We score each goal from 0-1 depending on how much of it accomplished. With each goal we list a few why’s. This helps us learn how to set better goals.

• Highs and Lows: Each person goes around and shares their personal highs and lose from the last four months. We now do this within teams but we used to do this company wide. It was very powerful as it pushed people to be open with others.

• Props: Public acknowledgement matters. We have each person go around the room and give props to their teammates. You can see how body language changes immediately when this happens.

What’s important during this session is you take notes. You are looking for threads for things you need to fix. Working through these issues is very, very important.

Session – Think Big

I’ll write a post about this but on Day 2 I run a series of sessions that teach the team how to think big. People aren’t taught how to scale teams or revenue and so these exercises give the team a chance to learn how. I’ve run this exercise in terms of revenue and/or team growth.

You post a questions…How would we get to $X in revenue?

You have them for cross functional teams (4-7 people) and they get 20 minutes to do this exercise. After 20 minutes they will come back and present their brainstorm. Generally what you get are a list of tactics.

This is your chance to teach. First you let them know you only gave them 20 minutes on purpose which means there was no way to get into tactics. You were looking for the "how" which means they have to start at the highest level and then break down your path into smaller details…

• Start with the most basic unit in your business. In ours, it’s customers.
• Map out how many you need to get to answer the $X question.
• Once you know how many customers break down what percent comes from new versus repeat.
• Once you know the mix you need a framework for how you get there.

….a very efficient group can maybe get this far in 20 minutes.

You then send them back to do the exercise again this time having them come back with a framework for how. They return with something that’s closer on number of customers but the how goes back into tactics versus outlining a strategic framework for how.

You then would show them that in order to get growth you either need to go wide (more offerings to the same customer), go deeper (more customers with the same offering), or expand distribution. You send them back to better outline a framework for "how" they are going to get $X from new and $Y from existing customers.

After 20 minutes they are closer. They have made some assumptions about what would work in order to reach those customers.

Depending on how much time you have, you continue to repeat this process until they have a rough plan of how to get to $X in revenue.

In doing this kind of exercise you quickly realize that you need to understand the process in order to teach it. Secondarily you realize this kind of strategic thinking is not taught.

You can run this type of exercise at every off-site, you just increase the revenue scale of the initial question to make it harder.

Session – Role Playing

These sessions are my favorite. I’ve run different role playing scenarios to get the teams thinking about topics they would never expect. Generally I’m creating scenarios so they can see elements of a shitty culture. This helps them clarify what they want in our culture.

An example would be…I wanted to teach people how to quit. No one teaches this and whenever someone quits it’s terribly done, which leaves the existing team in a bad spot. Therefore while doing a team hike we had a 30 minute break to run this session.

I paired everyone up and gave them one of two cards.

Card one said you had to quit. Each card was a slightly different version of quitting. I had the passive aggressive quitter, the angry quitter, the I don’t give a shit quitter, the over apologetic quitter, etc.

Card two said you had to fire the person. I again came up with different versions of firing someone from passive aggressive to direct to excuse filled.

It doesn’t take too long for people to catch on to what is going on. They can somewhat overhear other teams, which makes it funnier. This ran for about 20 minutes and then I brought the whole group together and let them share what they liked and didn’t like about the person they interacted with.

In the end I was able to teach that what matters in the business world is your legacy. Therefore if you are quitting, here is how you do it.

If you get creative you can come up with all kinds of role playing scenarios like this. They are fun and give you a chance to teach something often missed in startups.

Starting your next company is easier. It’s still just as hard to win a market, but the way you’d start is completely different from how you started your first company.

The path to starting something, especially your first, is often random. My own path began through a college roommate who entered a business plan competition and needed help. I said sure and somehow that yes became a 12 year journey from the competition, to starting a different company, to building it, to being fired, to watching someone else crash it.

I never could have planned that path. It was organic, amazing and painful.

It was also chaotic. A lot of energy was wasted on the wrong things. because I had no methodology for how to build a company. I was reading everyone’s philosophy and trying to patch my own together.

The end result was a culture with massive disconnect in why they were there, what they were interested in, and how they worked. From the startup vets on the team to the kids just out of school. From the sales team who thought the retailer was our customer to the rest of us who wanted to serve the end consumer. From the lack of operational process to the dysfunction on our board. What I had built was a reflection of myself.

It turns our I was learning. You can take it one step further, I turns out I was discovering who I was. I was just doing it while trying running a multi million dollar company…not realizing that the end result would be a dysfunctional company.

I left that journey with less money than my friends who just got jobs out of school. I had no debt. But at the same time I had nothing, just a decade of learnings and a bankrupted startup on my resume.

If I had to do it again there is no change I could have or would have made. I had to struggle. I had to get my heart broken. And I had to pick myself back up.

In everything I learned from Contour there is one lesson that I’m building the rest of my startup life around…to succeed in building a startup you need a philosophy.

You need your way of working, making, and building teams. There is no other way that is going to work for you. There is just your way. Which means you have to discover it.

I’m now 17 years into creating my own startup philosophy. I spent 12 years absorbing and the last five years writing it. It’s not perfect, but it’s mine. It’s not even clear it will scale past $50M in revenue, but that’s ok. I trust that over time it will continue to evolve.

My inspiration are successful coaches. Yes sports is an easier analogy because the season starts over every year, but it’s also clear the best have a methodology that brings success no matter where they go. They create a system of play and then develop, teach, and empower their players to succeed with it. John Wooden, Pete Carrol, and Johan Cruyff have published theirs. I’m looking forward to Pep Guardiola publishing his.

I’m now documenting mine. It’s still functional as I practice the pieces, but over time I hope to make it as simple as those further along.

I hope by publishing my own philosophy helps others to discover, make, and document theirs. I believe the world is a better place with new, well run startups.

My Startup Philosophy ->

Thanks to everyone who has been a part of a company i have started. you have shaped me and my beliefs along the way.

Being a CEO is different from being a founder.

Not all CEOs are founders. But all founders have to learn how to become a CEO. You may learn it and decide you don’t like it. But none the less there is this progression in a startup lifecycle where it can no longer be run with a founder mentality.

One of the struggles you learn as a CEO is what I call the "CEO said" syndrome. As a founder it doesn’t make any sense. As a CEO it makes a lot of sense.

It goes like this…Someone comes up and asks if they can get your feedback on their work. You say yes and like any passionate human being you can’t help but immediately respond to what you see.

Without asking them what kind of feedback they need you start talking out loud…"Why is this like this?" "Why is this piece here or that piece there?" "Why aren’t we doing it like this or like that?"

Unintended, but a simple request for feedback becomes a mandate…oh the CEO (insert your name) didn’t like it and said we should do blah and blah. That isn’t actually what you said, but it’s too late now.

What you come to learn is that everything you say matters. If you like to make, this sucks. Your feedback as a maker gets weighted heavier in the creation process, which isn’t always good.

The Effect Of CEO Said

They won’t say this on the surface but your feedback has a ripple effect. The person who hears the feedback takes it to their team…"oh the CEO didn’t like that and thought we should…" This causes the rest of the team to now hesitate in their conviction.

Over time this practice compounds itself. It injects a small amount of doubt that weakens all future decisions that group of people will make. They will began to wonder…is the CEO just going to change my work in the end?"

It’s important to understand…

• People weight what you say, no matter what it is.
• People struggle to separate you the user from you the CEO.
• The more feedback you provide the more often they come back. It creates a negative cycle where teams don’t learn to decide anything on their own.
• They don’t always want your feedback. They are really just looking for approval that they are headed the right direction.
• This is a really hard habit to break.

Tip 1 – Who Else Has Reviewed The Work?

If people are asking your opinion before interacting with their peers you have a problem. It means you are not building a team, instead you are building a dictatorship where approval from the boss is all that matters.

You want to correct this quickly otherwise they will not develop the peer network they need to go faster.

Tip 2 – Is It 30% or 90% Complete?

The type of feedback you give at 30% versus 90% is very different. But more importantly the reason you care about the answer to this question is because this provides direct feedback on how strong or weak your team process is.

If you see work that is 30% complete with foundational pieces that are in alignment with the company’s strategy then you are on the right track. If not, you need to re-address with the team how/why the foundation of the project is so off course.

If you see work that is 90% complete and tightly coupled to the company strategy then your team process is really working. If not, you have a deeper problem with your process, an immediate risk in derailing the project, and the opportunity to further weaken the future confidence of the team.

Tip 3 – Don’t Give Your Opinion.

When people ask for your feedback they aren’t really asking for your opinion. You may think this is the case, but they really aren’t.

This means the words "I think" should never leave your mouth as they get turned into, please do. Instead you want to talk through the problem with them to help them make a better decision.

You can do this by asking questions…"what problem are you trying to solve," "what decisions are you trying to resolve," or "what are you struggling with?" Or you can talk out loud to what you experience when looking at their work…"this confuses me," "I don’t understand this," or "I was surprised by this."

They key to this interaction is being able to create a dialogue without telling them how to solve the problem. As soon as you give a "suggestion" for how to solve the problem you have given your feedback.

It’s a very hard discipline to practice, but it’s a subtle difference to building a culture that learns how to make decisions.

Tip 4 – Use Briefs

What you care more about than the work they show you, is to understand how they got there. You want to understand what problem they are solving, how they measure success, and their approach to delivering on it.

A brief lets you understand that.

Page one of a brief is where you can provide the most value to ensure they are on track in solving a problem that stacks up to our goals. The actual execution is secondary to solving the right problem.

Tip 5 – Consistency Matters More

It’s hard to let the detail go. Sometimes they really matter, but what matters more is ensuring that your team is consistent. This consistency can show up in message or in their approach. Regardless what you are looking for in their work is that consistency. It’s a simple place to go when they ask for your opinion.

I learned this lesson when getting punched in the face by GoPro. To their credit they were incredibly consistent. The proved that consistency mattered then nailing the last 20% of the details.

Tip 6 – Explain Your Hats

It helps to say what hat you are wearing when you talk to your team. Sometimes your feedback is from the CEO and sometimes it’s from an every day customer. It’s important to clarify this for people. It might seem annoying but it does help.

If you have more questions send me an email or dm on twitter.