Hiring, Motivations, Pay Structures & Rewards

Attended the last Unpluggd where the topic revolved around signing up folks for startups.

And then saw this:

Amazingly, was also thinking (during a bus ride today) about why we do some things despite severe odds, or hindrances, or the need for effort and learning curves, and certain others never get done irrespective of how easy, or 'within our scope' they are.

What is this motivation thingy ?

As a result of all of the above, here's some word/phrase groups to consider:

Reward, risk, compensation, appraisal, objectives, measurement, schedule, 1x1, incentive, weekly status report, stress, problems, constraints, roles, job descriptions, job, prove merit.

Dream, buy-in, belief, desire, effort, solution, honesty, freedom, fail fast and free, lateral thinking, boundlessness.

Of course one's made to sound rosier than the other. But pause and examine which of the above are the truths caused to/by/around you.

We buy ideas, rewards, philosophies at a level we never execute those at - its the day to day efforts and battles that its about. Its like honesty - unless you really really buy it - not as a 'good to follow' truth but somethings that part of you bloodstream - you'll slip here or there in the day to day.

So the stock options stop having any connection with the product features.
And marketing to the guy who's doing the appraisal is the be all and end all.

Would you not rather have people who were paid adequately, and then did stuff purely because they either love to, or they think its necessary to do it ? Would you rather not people have the guts, freedom, desire and authority to, say, pull the plug on something even if its 90% done if they really really get convinced it's no good.

Of course, thats not to say that you need to let chaos reign - but if you have free, smart people, they will listen to reason. They will learn and you will learn from them. Thats an orthogonal problem to solve - but having people who're "into it" can only help even there.

The video proves what I've always believed - creative, fuzzy-result-oriented work needs free minds. Don't try and pressurize these flows - either through incentives or through disincentives. In fact, incentives usually imply measurement/observation, which implies expectations. And sometimes, things that "being discovered" need to be done without those disincentives weighing them down. If the people involved are good, and they're really into it for belief/faith/interest/passion, something useful will evolve.

You cannot buy passion. Or creativity. Or ownership. You will surely lose it if the attempt is to coerce it using fear, however subtle. Do not try corelating risk-reward, probation, appraisal cycles with work directly. People need money to live, spend on nice things, secure their future. Not to work. Do that for them.

Enagage, and focus, on the usefulness, and marketability, and goal-appropriateness of the work they're doing. Not on the carrots and the sticks that those will lead to - thats so last-century.

Product Identity Crisis ?

[ Cross posting from the SlicedBread blog ]

Ashish wrote a post about the importance of recognizing exactly what business you are in.

This cannot be over-emphasized during the early days of a product, or a startup. You cannot be nebulous about exactly what problem it is you’re solving, and for whom. The trick is to tackle this at as fine grained a level as you can (and not just at a we’ve-built-a-tool-let’s-see-how-its-used-level). If you cannot answer clearly enough for the first guy who asks this question to understand, its unlikely that users will see easily that its for them!

One trick I’ve found useful is to think in terms of nouns and verbs first when describing use cases, and avoiding the adjectives and adverbs. Also, pick verbs that can be acted out immediately – say – in a dumb charades or pictionary game. Or at least something multiple can clearly visualize as the same action or activity. “Evaluate”, “enhance”, “express” are some words that could be too ill-defined to capture or communicate a use case effectively. “Add as friend”, “read the shared content”, “rate the movie” are much clearer. As you start capturing it clearly, you will start debating the value each brings to your core idea more clearly as well.

And – this is my favourite take on all things computer science – its all about inputs and outputs. So given all those verbs and nouns, what does your product ask for, and what exactly does it give ?

Who are you ?

Update: One of my friends tweeted this morning (that I'd RTd) about FB's identity crisis. Quite relevant!

Ownership Issues. Founders too!?

At first, there's an idea. There's some debates that follow, some iterations that help refine the idea. Then there's often a co-founder, some hectic activity and a prototype! The job is bid adieu to, the servers bought/rented, expenses planned for and the passion-of-the-founder has soon given birth to another startup.

Pitches are readied and made, and if you're onto something or an investor thinks you are, you get funded! Nirvana!

A year later, there have been hiring issues (people are so tough to find, or too expensive otherwise), development issues (its never as easy or as complete as you'd imagined), and issues with selling the product that you pushed off to 'once the product's ready' right from the beginning. The traffic hasn't taken off, and you take shelter behind the "alpha" tags, and in any case, the "full, matured" version with some critical pieces that will make all the difference isn't done yet. That will fix everything.

Iteration 2, and 3 and more come and go. Things don't look that great. You tire a little. There may be telltale signs, from a diffused market strategy that tried to please all, to multiple major projects running simultaneously - one of which will hopefully do it for you. You engage with a designer to fix UI, a mentor for advice, a PR firm to try and fix it on the marketing front, and maybe even get some big names on board to shake things up.

Familiar story ?

Somewhere, the tiredness does bite, and the ownership starts to dim, and even entirely vanish. Why ? Its the same people who were madly optimistic about their idea at one stage, after all.

Carrot uncertain, stick missing ?

Human motivation has got a lot to do with either the pursuit of pleasure, or the avoidance of pain. In fact, more or less all actions could be linked to one of these. At first, the dream that the idea promised is big, possible and a huge motivator. But, especially during a turbulent phase that comes after multiple bad patches, the dream can, and does fade.

Unlike a home loan, though, there's nothing to pay back! So hardly any stick. Sometimes a little bit of a pressure does help to come up with smart solutions that make things work. Sometimes you do your best only when you come out fighting from a no-hoper. But there's little egging you to do that.

I'm hardly suggesting that VC funding be replaced by loans - but its also true that founding a startup, at least for some and at some stage, does become merely a sexier, and in fact more comfortable job. Sure there's more to do, but if you're looking for that sort of a thing, its a great, risk-free (once you get funded) opportunity to have a ball! Its not just the founders though - even potential employees often tend to look at startups at a no-loss-possible situation. Better salaries, cooler image, better work and responsibilities so why the hell not ? The "struggle" bit is more or less limited to the pre-funding stage. Once there, there's only an upside...

If I were a VC, I'd be working on models to change this. Or even if I were a founder working on a new idea. If nothing, to ensure that the wrong kind of motivations got weeded out.

Entrepreneur, share thy burden. The VC-Entrepreneur Story part II

After this post about the need for investors to get to, and continue to know their portfolio a little better, happened to have a chat with an investor on similar lines.

Apparently they sometimes run into what was described to me as a Chinese Wall, although the context was not potential insider trading, and for the purpose of this topic there is no conflict of interest. A few examples were shared that I obviously cannot talk about here, but boy, was that a revelation! I'd kinda assumed that being important stakeholders, and often with controlling stakes, they could breach any such walls that came up. But clearly, there are other dynamics at play, at least in some cases.

Some follow up thoughts:
  • If/once, as an entrepreneur, you ask someone to invest (and its a whole new topic whether, and when, you should), their interests are are your interests and their interests are ... you get the idea. The more you share, the more likely it is that you may get an decent perspective of your business that you can miss/gloss over while involved in the day to day running of it.
  • Tough questions are better asked early. If there are no tough questions, and no revenue, be worried. VCs can, and should play that role. And as an entrepreneur, it would do your business a lot of good to pester them for it. Your comfort zone is surely a bad place for your business to be in. The final call is still yours, and you need to treat the advice as an input, not a command, because even the best of VCs can miss aspects of the business that you may understand better. Yet, they do bring in a concerned outsider's viewpoint so seek it aggressively.
  • Trust. Its key to all startup activities. Be it with employees, partners, customers, investors, vendors. And this is even more true in India, where a ton of business happens in good faith and 'carrying people along'. There's also no ownership sharing without trust.
  • All the above is all great - but whether as an investor, or even as an entrepreneur, you'd still do well to have an "outsider" driven in-depth assessment of your business on a continuous basis. Not that you're sucking or that this will solve everything, but it brings in functional expertise with an unbiased viewpoint, and thats rarely a bad thing. Its also less dependent on maintaining relationships, worrying about appraisal cycles, and the like. In the finance world, auditors are almost always external, and I'm guessing they serve more than just a "external policing" role.
On a tangent, a question was asked about whether any business in India was VC fundable at all !?? Thats the topic of a future post, but at the outset, I'd wonder if the VC model is necessarily a static thing, or does it need to adapt to a different market, different set of rules, and success rates ? The endgame is to essentially provide a 25%+ return while promoting entrepreneurship, isnt' it ?

Online ? Who's online ? Get outa there....

... and be where the customers are!

Context : was pleasantly surprised to see this along with our morning newspaper a few days ago. And there was another one this morning.

Now everyone's been talking about hyperlocal, but guys like CommonFloor and Open2Save seem to be actually doing it.

I've believed for a while now that
  • Hyperlocal is big
  • The internet is a tool - it may not be the final consumer connect but can enable a lot of it
So its good to see both these players trying to connect online with existing channels, though not everything has been tried or figured out yet. Purely as an advertising play (some coupons are little more than plain ads) this serves a market which cannot afford and does not need city level visibility, but did not necessarily want to go with what was being offered by the guys who print and ditribute flyers on cheap paper. Given the "aggregation" of deals etc, there's also a better chance of the user being interested in one or more of the deals, and retaining the coupon, unlike single-business flyers.

There's a bunch of other ideas that can be tried in the web-as-a-tool for hyperlocal businesses space. But I'm pleasantly surprised to see efforts to look beyond the web and work with existing behavioural patterns and business flows to provide a better mousetrap within those. The changes can then be effected once some traction happens.

Who says its all about web 2.0 ?