Summary The Great CEO Within: The Tactical Guide to Company Building - Matt Mochary
Here's a summary of the book:
The book is written for startup CEOs, especially first-time tech founders. It aims to provide a compendium of everything a founding CEO needs to know to build a successful company.
The book is organized into 8 sections: The Beginning, Individual Habits, Group Habits, Infrastructure, Collaboration, Processes, Other Departments, and Appendices.
The Beginning covers how to start a company and launch a team. It emphasizes deeply understanding customers and their problems, then solving those problems. It also recommends finding co-founders to share the emotional burden, but keeping the team small (under 6 people) until achieving Product-Market Fit.
Individual Habits covers key habits for any individual in a company, like productivity (GTD, Inbox Zero), effectiveness (Top Goal, On Time, Write it Down), and leadership (Gratitude, Appreciation).
Group Habits covers key habits for any group, like Writing vs Talking, Decision Making, Impeccable Agreements, Transparency, Conflict Resolution, Conscious Leadership, Customer Obsession, and Culture.
Infrastructure covers tools for company effectiveness, like Company Folder system, Wiki, Goal Tracking, Areas of Responsibility (AORs), Key Performance Indicators (KPIs), and No Single Point of Failure.
Collaboration reviews techniques for collaboration, like Meetings, Feedback, and Org Structure.
Processes covers systems for major company functions like Fundraising, Recruiting, Sales, Marketing.
Other Departments covers Executive, Product, Engineering, People, Finance, and Legal.
Appendices include Common Mistakes, Recommended Recruitment Process, Sample AOR List, Further Reading, and Personal.
The book provides a high-level overview of the many issues a CEO will face, recommended initial processes for each issue, and specific suggestions for handling common situations. It aims to give breadth and depth to help new CEOs get up to speed quickly.
To build a successful company, you need to hire experienced people in key functions like:
Recruiting and HR: To hire the right talent
Finance: To manage the money and fundraising
Legal: To handle contracts and compliance
Office admin: To run the day-to-day operations
Once your team grows beyond 15-20 people, you need to implement a formal management system with regular meetings and oversight. Otherwise, things will start to fall apart and you’ll end up doing most of the work yourself. Implementing this system will be painful but necessary for the company to scale.
As CEO, you need to develop good individual habits and productivity to lead by example:
Use the Getting Things Done (GTD) methodology to organize your tasks and priorities. Process your inboxes daily, organize items into lists like Next Actions, Waiting For, Someday/Maybe, Agenda, Projects. Review your lists regularly.
Achieve Inbox Zero by processing your emails and messages twice a day. Respond to items that take <2 minutes. For longer items, add them to the appropriate GTD list. Use Gmail's Multiple Inboxes feature to organize.
Focus on your Top Goal for 2 hours each day. Do important, high-impact work first before responding to messages or fires. Start with 30-60 minutes a day and build up. Protect this time and avoid distractions.
Use a calendar to schedule your GTD reviews, meetings, and Top Goal time. The more you plan and schedule, the more effective you'll be.
In summary, implement a management system, develop productivity habits, hire key talent, and focus on the important long-term goals. Do this and your startup will scale successfully.
Be on time for meetings or let others know you will be late. Being late wastes others' time and is disrespectful.
Aim to arrive 15 minutes early for outside meetings. End current tasks 5-10 minutes before in-office meetings.
Schedule meetings for 25 or 50 minutes to have buffer time.
Be fully present - leave your phone away, be prepared and focused.
If you find yourself repeating something, write it down. Share written communications to improve quality and save time.
Practice daily gratitude to improve your performance and outlook. Use triggers like notes or a journal to form the habit.
Express appreciation outwardly to others. It makes them feel good, connects you, and makes you view them more positively.
For group discussions, require issues to be written up ahead of time. This makes meetings more efficient by avoiding repetition and questions.
Either write very thoroughly initially or circulate a draft for comment before finalizing. Address all questions in the final write-up.
This written method, used by Jeff Bezos, has decision makers read the write-ups then make the decision or determine what's still unclear.
The decision-maker assigns one or more people to research and write a proposal for a decision. At the next meeting, a decision is made based on the proposal.
This method takes time but yields high-quality, well-thought out decisions quickly. Having one person do extra work upfront saves time for the whole group.
Implementing this process in a group can be challenging. Here is a way to ease into it:
Reserve the first 15 minutes of a meeting for everyone to write updates and issues. Spend 10 more minutes having everyone read each other’s updates. Then discuss and decide. Use this for 2-3 meetings.
Require everyone to write updates and issues before the meeting. Don’t allow new issues to be brought up if not written up first. Spend 10 minutes reading each other’s updates, then discuss. Use for 1-2 meetings.
Require updates and issues by a deadline before the meeting (e.g. 9pm the night before). Require everyone to read and comment on the updates before the meeting. People prove they read them by commenting directly in the documents. Don’t allow new comments in the meeting.
To get buy-in for a decision:
The manager announces a decision and answers questions. Little time required but little buy-in.
The manager shares a written proposal, gets feedback, facilitates discussion, and determines a final decision. More time required but more buy-in.
The manager and team discuss options from scratch and try to reach consensus. Most time required but most buy-in.
For important decisions, use method 3. But as CEO, your voice will be the “loudest in the room,” so get others’ input before sharing your view to avoid influencing them.
To increase efficiency, make “impeccable agreements” that are precisely defined and agreed to by all. Put them in writing. Let others know as soon as you can’t meet an agreement, so they can adjust.
To resolve conflict:
Get person A to state their deepest, darkest thoughts about person B. Repeat and rephrase until they share raw feelings.
Get person B to restate what person A said, until person A feels fully heard and says “That’s right.”
Only then does person B share their perspective. Repeat steps 2 and 3 until both feel heard. This diffuses anger and leads to resolution.
Here is a summary of the key points:
- Focus on facts and feelings, not judgments. Express how certain actions make you feel without attacking the other person. For example:
Fact: “Yesterday when you spoke to me, your voice was loud.” Feeling: “When I notice that, I feel frustrated.” Request: “I request that you speak in a softer tone.”
Get the other person to confirm they understand by summarizing what they heard. Ask follow up questions until they can accurately summarize what you said. This ensures you feel fully heard and understood.
Share how you feel in return and go through the same process of sharing facts, feelings, and requests while ensuring the other person feels heard.
Continue sharing how you feel around the other emotions like fear, sadness, joy, and excitement. This can lead to a breakthrough moment of understanding. Seal this with a physical gesture like a hug.
Co-create a plan to avoid future misunderstandings and disagreements. Get the details in writing to make the agreement official.
Practice “conscious leadership” which means being curious to learn rather than needing to be right. Release negative emotions like fear, anger, and sadness and instead approach discussions with an open and creative mindset.
Build empathy by listening to customers and stakeholders to understand their perspectives and needs. Solve the problems they actually have, not what you assume they need. Instill this mindset throughout your company, especially in engineering and product teams.
Establish trust with customers by actively listening to their concerns and frustrations. Summarize what you hear to confirm your understanding. While address their needs, don’t prioritize every request as some may be impractical. Customers will trust you to determine the best solutions if you show you understand their pain points.
Your company culture consists of the unspoken rules that govern interactions between people in the group. It’s important to define your values and mission to shape your desired culture. Hire people who share your values and model the behaviors you want to see. Address people who don’t fit the culture or who are disruptive. Your culture has a huge impact on your success.
Company values are most effective when employees understand and share them. One way to determine values is by asking "The rest of you can make all the decisions about the company, as long as..." The answers are your values. Revisit this quarterly.
Examples of company values: Transparency, fun/playfulness, eager to understand others' perspectives.
Use your values to guide hiring and firing. Bring in people who want to live by these principles and let go of people who don't.
Fun is important for company culture. Host fun events, see if people hang out together outside of work. If so, you likely have good culture. If not, practice leadership to create buy-in for values.
For work hours, focus on output, not hours. Set clear minimums if needed. Have a core time when everyone's in the office to collaborate. Have a short daily stand-up meeting.
Offering meals allows for bonding and extending work hours. Meals are a pre-tax benefit. Encourage "being present" at meals - no electronics.
Avoid "politics" - lobbying for personal benefit. It's toxic. Have written policies for compensation, raises, promotions. Apply consistently. "Grade level planning" - detailed job descriptions and pay for each role - helps avoid politics. Start thinking about this around 25-50 employees.
Have a structured document folder system and company Wiki. Each department has a folder. All access most folders. Wiki links to key docs. Part of onboarding.
Use goal-tracking tools. For individuals, use Evernote or Omnifocus. For groups, start with Google Docs, then use Asana/Trello or Betterworks/15Five/Lattice as you grow. Be judicious to avoid overwhelming people. Get verbal/written agreement before assigning actions. Encourage simple personal systems too.
Assign "Areas of Responsibility" (AORs) to avoid "tragedy of the commons" where shared responsibility means lack of accountability. One person responsible for each area. Apple pioneered this.
Successful tech companies use a goal-setting and communication system to keep large teams aligned and productive. The system has four key functions:
Setting company, department, and individual goals quarterly.
Communicating those goals to all team members.
Tracking progress weekly.
Getting feedback on what's working and not working.
The system requires several types of meetings:
Quarterly goals meetings - Set vision, goals, roadmap. Two days.
Weekly team meetings - Department updates, review goals, address issues. Three hours at first, ideally down to 30 minutes.
Weekly one-on-one meetings - Manager meets with each direct report.
Company-wide meetings - Update all employees.
Office hours - For employees to meet with managers.
Managers should spend one day a week in meetings. If a manager can't do all needed meetings in one day, their team is too big. Meetings ensure information flows out (goals) and in (feedback).
The quarterly goals meeting sets the 10-year vision and quarterly OKRs (Objectives and Key Results). The 10-year vision imagines the company's dominant position. OKRs have three objectives per company/department. Objectives state "where we want to go." Key Results state "how we know we're getting there."
To be effective, all input for the weekly meetings must be submitted in writing beforehand. This allows discussion to focus and meetings to be more productive. Verbal-only meetings can take 3 hours. Written + verbal meetings take 30 minutes.
The system requires overhead (20% of work week) but is essential for team productivity and CEO feedback. It should be implemented by an experienced COO or interim CEO. The details are hard to convey in writing, so seeing the system in action at another company is helpful.
Hire 5 additional Customer Success agents.
Hire a Sales Operations person to manage the sales team.
Use your Quarterly Goals Meeting to establish near-term actions and assign each action to someone. At your weekly meeting, check if everyone completed their assigned action.
Weekly Team Meeting:
Report whether everyone accomplished their weekly actions. Say YES/NO and why/not. Propose a habit to avoid the issue from happening again.
Report department updates (metrics).
Bring up any issues and propose solutions.
Set goals for next week.
Provide feedback to the team leader and members.
Weekly One-On-One Meetings:
Goals: Discuss successes, setbacks, how to avoid setbacks again.
Updates: Share KPIs and new info about customers/products.
Issues: Discuss any tools/resources needed.
Feedback: Share feedback for the manager/company and receive feedback in return.
Ask for negative feedback and resolve issues quickly.
Compliment the team member's good work.
Review and update the team member's goals and actions.
Company-Wide Meeting: Share results from leadership meeting. Allow time for feedback.
Contrarian Office Hour: An open hour for anyone to discuss issues with managers. Limits time required but ensures everyone can be heard.
Meeting Leads: Each meeting has a designated lead to keep the meeting on schedule. The lead ensures everyone submits updates/issues in advance and stays on topic.
Ask for feedback, especially critical feedback. Explain that it won't be punished.
Listen without interrupting or making excuses. Repeat the issues back to show you understand.
Act on the feedback immediately. Take next actions to build trust that voices are heard.
Giving Feedback: Use 2-way communication so you can address any defensiveness. Say your intent was to be helpful. Avoid 1-way communication where you can't see the reaction.
• Don't give feedback via 1-way communication (email, text, voicemail) unless it's 100% positive. There is an exception if the person is open to critical feedback.
• Ask for permission before giving feedback. Say something like "I have something to communicate to you, is now a good time?"
• State the specific behavior or event that triggered the need for feedback. Be factual, not interpretive.
• Say how that behavior made you feel. This is hard but crucial for the other person to understand your perspective.
• Aim for a resolution. Have an open conversation, then agree on a new way to behave or interact.
• Giving and receiving frequent feedback is painful at first but improves team happiness and productivity in the long run.
• In early stages (6 or fewer people), an org structure and CEO role are less important. Once achieving Product-Market Fit and scaling, identify a CEO and org structure based on team meetings.
• The Leadership Team typically includes: CEO, Head of Product, Engineering, Sales/Marketing, Customer Success, and Operations. Each department head manages their team.
• Fundraising, recruiting, and sales are similar processes, just exchanging different things: equity for capital, employment for work, solution for money. In each, build trust to get the "customer" to invest in you.
• For fundraising, choose an investor partner, not just a firm. Get intros from people who know them. Use the "triangulation method" by having multiple people recommend you, to show your worth before meeting.
• There are two methods: Traditional (pitch deck) or Relationship (build trust first). Relationship is better, as people invest in who they like.
• To build trust: Ask about them, listen, and repeat back what they say. Appreciate their time. Say you want to build a relationship, not pitch yet. Short casual meetings are fine. Once they like and trust you, they'll want to invest - then you can pitch.
• The four keys are: 1) Ask about them 2) Prove you listened by repeating what they said 3) Appreciate them 4) Build relationship before pitching
•Build a relationship with prospective investors by:
Asking questions and listening
Reflecting back what they say
Remembering what they said and following up
Expressing appreciation for them
•Once you have a relationship, strengthen it by continuing to show interest in them and appreciation. Send messages to stay in touch and build goodwill. Share details about yourself and your life to build trust.
•Raise money at inflection points when your company’s value has increased. Use SAFEs and convertible notes for small raises, and priced equity rounds for larger amounts. Always have a SAFE open for opportunistic smaller investments.
•Issue voting shares to maintain control, and FF shares to provide founder liquidity without raising the valuation for employee options.
•For recruiting, spend little time with candidates you don’t hire, and lots of time building a relationship with candidates you want to hire. Share a 90-day roadmap for the role.
•Offer compensation at the market rate for the role in a combination of cash and equity. Provide enough cash for a comfortable standard of living, and the rest in equity. Increase equity for exceptional candidates.
At the next meeting, you could say:
The last time we talked, you advised focusing on building strong relationships with investors and recruits by listening, reflecting, remembering details about them, and expressing appreciation. You also recommended efficient recruiting by minimizing time with undesirable candidates and maximizing time building a connection with ideal candidates, including sharing concrete goals for the role. For compensation, you suggested determining market rates and candidates’ basic living needs in cash, then offering the rest in equity, with higher equity for outstanding candidates.
The amount offered should be: (no less than the amount needed to live comfortably), plus equity to bridge the difference.
For example, if a role pays $300K at Google and requires $120K to live comfortably, calculate the difference ($300K - $120K = $180K). Multiply that by 4 years ($180K x 4 = $720K). Divide that amount by a factor of 1 to 2 to account for equity growth (e.g. $720K / 1.5 = $480K). Offer that amount in equity options vesting over 4 years.
Present 3 options with different mixes of cash and equity. Have the candidate choose what they prefer. Make the offer once you know they will accept.
Onboard new hires thoroughly. Share information and set clear expectations. Assign them a buddy to help them acclimate.
To fire someone:
Create a written performance improvement plan with clear milestones.
Meet regularly to check progress.
Let them go if milestones are missed at 30, 60 or 90 days.
Help them find a new job by giving severance and helping them network.
Reflect on how you can improve your recruiting and management.
● Start by building trust and understanding the customer’s situation. Ask for a short call or meeting.
● Develop the customer by asking questions to understand their goals, challenges, and ideal solutions. Guide the conversation towards your solution and repeat their key points to build trust.
● Focus on the results and solutions you provide customers, not your product features. Paint a vision of how you fulfill their needs.
● Avoid overselling. It damages your reputation, stresses your team, and creates a dishonest culture. Build trust instead.
● Only hire a sales team when you have initial product-market fit and a defined target customer and solution to sell. Salespeople can’t sell better than founders initially and require direction. Hiring them too soon wastes resources.
● Define your sales process and team structure. Establish objectives, territories, compensation, tools, and messaging to align the team. Provide training and share knowledge.
● Build your sales pipeline by researching target accounts, networking, hosting events, content marketing, and referrals. Move prospects through a multi-stage process to close deals.
● Work with your sales team as a partner. Go on calls together, share feedback and experiences, hold regular meetings to review the pipeline and challenges. Support them fully.
Here is a summary of ir contracts:
Define what you are selling and who your customers are. As your sales grow, make sure your infrastructure can support the new demand including onboarding new customers, providing customer support, etc.
Aaron Ross proposes splitting a sales team into:
Qualifiers/Lead Generators: Responsible for generating leads. Compensated based on number of qualified leads generated. Split into inbound reps handling incoming leads and outbound reps proactively reaching out to prospects.
Closers/Account Executives: Responsible for closing deals from qualified leads. Compensated based on commissions from closed deals.
Customer Success/Account Managers: Responsible for customer success and renewal. Compensated based on retention rates and account growth.
- Common mistakes when hiring salespeople:
Overlooking integrity and culture fit. Salespeople still need to fit the company culture.
Not investing in training. Even experienced salespeople need training on the company's industry, product, and processes.
Must hire senior account executives with a track record. While experience matters, the right qualities like relationship-building skills, attention to process, and commitment to company vision are more important.
Thinking the best salesperson will be the best manager. The skills required for closing deals and managing a sales team are very different.
- There are three types of leads:
Seeds: Referrals and word-of-mouth. Grow into best customers but hard to generate proactively.
Nets: Inbound leads from marketing like events, content, and ads. Aim for quantity over quality. Need to be qualified.
Spears: Outbound leads from proactively reaching out to prospects. Aim for quality over quantity. Require dedicated outbound reps. Best for companies with high average deal sizes.
Use outsourced lead generation and tools like Reply.io for outbound outreach at scale.
Segmenting the market involves brainstorming potential markets, narrowing down to top markets, and conducting primary research to pick a target market (Segment). Promote to the target market by identifying where decision makers pay attention and placing content there (Promote).
To start with:
The sole necessary condition of a business is to have paying customers. You may have an incredible 10 year vision or a groundbreaking technology, but unless you figure out how to market these, you wil have no business.
To figure out how tomarket your vision or tech, you must put yourself in your customer’s shoes and see the world through their eyes.The goal of this section is to brainstorm all the potential market applications of your vision or your technology. To do so, ask yourself “who would benefit from my vision/technology and would pay to have access to it?” Yourproduct may require some updates for customers to pay for it, that is OK.What we are trying to identify here is an unmet need among customers strong enough that they are eager to buy your product.
Give yourself the freedom to brainstorm and flow. The key is to think of all the possible markets, we’re not trying to find the right one just yet.Now that you’ve brainstormed a list of potential markets, we wil work on picking out the top 5-10.The ideal market is one where the cost of acquiring a new customer is low, the lifetime value of the customer is high, and the total number of addressable customers is large. We like to ask the following questions of each market segment:- What is the estimated cost of acquiring a customer from this market (CAC)? Take into account the competition, both direct and indirect, and how difficult these people are to reach (F500s are harder to sell than SMBs, offline is harder than people who are online).- How much do you estimate a customer in this market would pay for your product over time, their lifetime value (LTV)? This is generally a factor of the customer’s total spending power and how much they feel the pain that your product solves.
What is the TAM (Total Addressable Market) of this segment?
Are they aligned with your values? Signing up a customer is very similar to hiring an employee. You wil have to interface with them regularly, and they wil represent you to the greater market. Choose customers and markets that you and your co-founders are personally aligned with.
The ideal market is one where the LTV of each customer is higher than the CAC, and where you estimate that the TAM is enough that you can reach $10M-$100M in ARR. Based on this initial secondary research-based exercise, pick 5-10 markets that seem the most promising. Now, we wil perform primary research on these markets.Primary market research is key because it wil provide you the critical information that you cannot get from online research. As a matter of fact, if there is already a whole library of research on the exact market and application you are trying to go after, it is probably too late.
When talking to customers from primary research, your goal is to gain context on your target customers and to uncover the problems they regularly face. It is not to sell a solution and neither is it to hope that your customer wil generate asolution for you. The more open you can encourage the flow of ideas, the more data you wil be given to work with. If you try to sell a pre-existing idea, you wil cause the customer to shut off and limit their responses. It is imperative to split the research phase from the testing/selling phase.One of our favorite resources for performing market research is The Mom’s Test, by Rob Fitzpatrick.Think about it this way: let’s say you have an idea for a new cooking recipe app. You’re super excited about it so you bring it up at the dinner table. After pitching the idea, you ask “Mom, do you like the app?” Do you think that she wil ever say “no”? The problem is that even if she says yes, because of the way you asked your question, that yes is unreliable.The problem is that you asked for her opinion rather than about her usage patterns from the past.People may love the idea of your app, but that does not mean that they wil use it. How can you predict if they wil use it then?
Instead of asking about their opinion, ask them about their past behavior. For instance, instead of asking: “what do you think about this app?” ask: “when was the last time you faced this problem?And what did you do about it?”. Instead of asking: “how much would you pay for this app?” ask: “how much does this problem cost you?”.Make sure to document all this market research meticulously, as it wil serve you well in the future.Now that you’ve completed your market segmentation, you must pick your beachhead market.Generally it’s best to stay away from the largest TAM at first. This is because you wil learn while doing and the largest market is generally the one with the strongest competition. Also, you may find that the markets you originally segmented can be segmented further - do that.The definition of a market is one where all the customers in it buy similar products, they have similar needs and sales cycles, and there is word-of-mouth among them.
While paying customers are the foundation of a business, be careful not to be led astray by them.There are 3 common pitfalls that founders regularly fall into.1. Sell to everyone that comes through the door. We discuss the costs of this in the previous section on Crossing The Chasm.2. Be blinded by TAM without giving enough weight to the difficulty of acquiring new customers or the value from each individual customer. This mistake is often known as the “China Syndrome” and goes like this: “The Internet says China has over 1.3 bil ion people. If they all have teeth, the market size of building a toothbrush company is 1.3 bil ion customers. If we just get 0.1% market share and each person buys 3 toothbrushes a year, we could sell 3.9 mil ion toothbrushes per year. At $1 each, we could be making $3.9 mil ion!”3. Customize your product for every individual customer because they offer to pay you more. While this strategywould seem like it would generate more revenue, very soon you wil find your resources, particularly your engineers, stretched thin, and your customer request insurmountable. Your growth rate wil slow.
The Segment framework is just as useful if you haven’t started a company. You can simply pick an emerging technology and outline the major markets that wil find value from that. For example, you can pick “solar energy” and outline all the major stakeholders involved who would be potential customers of emerging solar energy technology.What to do if you are building a two-sided marketplace or have multiple customers in your business?Do the analysis for both sides of the marketplace and you wil over time find out that one side is more crucial than the other. For instance, while guests (demand-side) are crucial for Airbnb to work, in the early days the hosts (supply-side) were the key to their growth.
In this section, we wil explore the following:
Customer buying unit.
User Persona- User Life Cycle/User JourneyNow that you’ve picked your beachhead market, it’s time to flesh out your target end user within that target market. The result of this section is that you wil have a crisp understanding of the real people that you are targeting.
Your customer consists of an end-user and decision-making unit. Sometimes (generally in B2C) this is the same person, at other times they may be distinct individuals (generally in B2B).
● End-user: The person that actually uses your product. ● Decision Making Unit: This is the group of people who decide whether to purchase your product. ○ Champion: This is your greatest ally within the group. They are the person championing you. Usually they are the end-user. ○ Primary Economic Buyer: This is the person who has the economic power to purchase your product. Can be your end user, their manager, or their parent.
○ Influencers, Veto, and others: These are the other people involved who can sway the primary economic buyer.
While all the individual roles above play an important role in the purchasing decision, the End-User should be your primary interest. They are the person who have the most to win from your product, they are the ones that wil go out looking for your product, they are the ones that wil champion your product.
In order to gain a crisper understanding of exactly who this End-User is, we use a Persona. A Persona is a write-up about a person that best represents your primary customer for your Beachhead market. To create a good Persona, thePersona must be tangible and definite: you are describing the individual that best represents your customer in all of his/her living detail. The goal is for you and your team to start empathizing with this Persona, as it wil guide your marketing and sales efforts. That being said, don’t focus on making it perfect the first time around, make your best bets and you can re-assess moving forward.
To gather information for this fact-sheet, you must talk to actual or potential users. If you already have customers/users, pick those that are the best representatives of your overall customer group. If you don’t have customers/users, make sure you talk to people who wil actually purchase/use your product, not just those who are verbally interested.While some companies, like 2-sided market
Your product: The product or service that your company sells.
Buys your product: Your customers purchase your product.
Uses your product: Your customers use or consume your product.
Buys more of it: Your repeat customers purchase more of your product over time.
Spreads the word: Your happy customers recommend your product to others.
Having a Full Life Cycle is crucial to understand your users/customers and properly address their needs. A Full Life Cycle shows the journey of a customer from becoming aware of a problem to using your product to spreading the word about it. It provides insights into a customer's motivations, requirements, and pain points at each stage.
A Full Life Cycle should be based on primary research by talking to existing or potential customers. It is usually shown as a flow chart and addresses questions like:
How does the customer determine they have a problem or need?
How do they find out about your product?
How do they evaluate your product?
How do they purchase your product?
How do they start using your product?
How do they use your product?
How do they determine the value from your product?
How do they pay for your product (if applicable)?
How do they get support for your product?
How do they purchase more or spread the word about your product?
For each step, you need to understand the customer's key motivations, requirements, and concerns. You also need to identify other people involved in the buying process.
Focus on product-market fit before growth. Don't "fake it until you make it." Make sure you have achieved product-market fit and tested your target customer segment before moving to the Promote stage.
In the Promote stage, base all decisions on your target customer analysis. Tie all marketing spend to quantitative results and metrics. Select marketing channels based on your target customer, e.g. Facebook and Google Ads, industry conferences, influencer marketing.
Regularly analyze your competitors. Use their product and talk to their customers to identify what they do better. Add key features and messaging to your own product and sales materials. Understand their pricing model. Competitors can teach you a lot.
You have achieved product-market fit when your repeat customers renew, buy more, give referrals, and high satisfaction scores. Keep teams small, around 3 to 6 people, until you have clear product-market fit. Then you can scale.
For PR, don't hire an agency. Do it yourself. Think like a journalist to craft stories that excite their audience. Aim for 3 articles in a week rather than 1 per month. Use tools to scale outreach to many journalists. Become a contributor to relevant publications.
For advertising, identify where your target customers pay attention, e.g. the TV shows and content they consume. Create ads that speak to their interests and place them in the media they access.
Here's a summary of the departments in a startup:
CEO: The top executive, responsible for overall company vision and strategy.
Chief of Staff (COS): Helps the CEO by taking on administrative tasks and managing their schedule. Usually very organized and handles day-to-day operations.
- Product Manager: Responsible for understanding customer needs, defining product features, and guiding engineering and design teams. Technical background preferred but not always required. Reports to CEO.
Architect: Responsible for overall system design and ensuring different components work together.
Project Manager: Manages engineering projects, timelines, resource allocation, etc.
Individual Contributors: Software engineers, designers, etc. who do the actual building.
Use project management tools like JIRA to coordinate once team grows beyond 3-4 people.
Hire experienced engineering managers to lead the team. 3-4 strong engineers often better than 7-8 average ones.
- Responsible for reaching out to prospects, demonstrating product, negotiating contracts, and closing deals. Tracking metrics like calls, meetings, opportunities created and closed essential.
- Responsible for brand, website, content creation, advertising, and lead generation to attract new potential customers.
People (Human Resources)
Use a Professional Employer Organization (PEO) like Sequoia One to handle HR, payroll, and benefits until ~100-150 employees. They take on employee liability and can negotiate better benefits.
Once large enough, hire in-house HR specialist and move HR functions in-house, though can still use PEO for payroll and benefits.
Offer benefits that employees truly value, like healthcare, meals, retirement plans, commuting allowance, etc. Factor cost into total compensation.
Use accounting software like QuickBooks and outsourced accounting firms to handle bookkeeping, financial statements, payroll, etc. until large enough to hire full-time staff. Onsite staff can coordinate more closely with executives.
Underinvesting in hiring and training is a common mistake. Founders expect new hires to be productive immediately without proper training.
Not delegating is another common mistake. Founders try to do everything themselves and get bogged down in busy work instead of focusing on important problems. Delegating and empowering teams is key.
Delegating can be hard for younger founders or those from disadvantaged backgrounds. Some tips:
Understand that money and smart people can solve many problems. Do an experiment delegating a set of problems to someone for a week with a budget and see how much gets done.
Only keep control of product, fundraising, and team management. Everything else can potentially be delegated.
Ask yourself how much you could have accomplished alone vs with delegation. You'll learn what's "good enough".
Look for fantastic hires who can take vague directions and run with them. This is a turning point.
- Summary: avoid underinvesting in people and learn the art of delegation. Let go of controlling everything and focus on the highest priorities. Build systems and find good people to empower.
The recruitment process at _____ focuses on hiring only A players - superstars who can excel at the job and fit the culture. They use a scorecard to define the outcomes, competencies, and metrics for success in a role. They source candidates through referrals, recruiters, and researchers. They then conduct a rigorous 4-stage interview process to evaluate candidates against the scorecard:
Phone Screen: A 30-minute call to weed out unqualified candidates. They evaluate career goals, strengths, weaknesses, and performance reviews from past managers.
Topgrading Interview: Focused interviews diving deep into the candidate's experience, skills, motivations, and work style. Looking for a history of strong performance and career growth.
Focused Interview: Interviewers from various teams evaluate the candidate for specific competencies and outcomes outlined in the scorecard.
Reference Checks: Speaking with former managers and colleagues to verify strengths, weaknesses, and performance. Looking for consistently high reviews.
The goal is to be highly selective and only proceed with candidates who are definitively A players after each stage. It's better to miss out on a good candidate than waste time on a mediocre one. With rigorous sourcing and screening, they can spend more time with the best candidates.
Competencies and outcomes they evaluate for include:
Startup hours - able to work hard and handle pressure.
Technical skills - able to complete a programming test for developer roles.
Using the latest technologies and methodologies.
Organized and able to focus on priorities.
Sense of urgency - motivated to achieve key outcomes and help the company succeed.
Innovative - always improving processes and systems.
Collaborative - works well with managers, peers, and reports.
Persuasive - able to convince others and gain buy-in.
Coachable - open to feedback and continuous improvement.
The goal is to translate the company's key objectives into measurable outcomes for each role so that everyone is working together towards the overall strategy and success of the organization. By being highly selective in hiring, _____ is able to build a team of only the most qualified, motivated, and culture-add candidates.
Giving and getting feedback
Intellectually curious- studying their craft
Selling: Fit, Family, Freedom, Fun, Fortune.
- Share the Company Roadmap, Department Roadmap and their Individual Roadmap. Show how where they want to go is a match for where _____ is going.
“What can we do to make this change as easy as possible for your family?”
Ask about their family. Get to know their names, ages, etc. Ask what concerns and needs they have. Meet those needs.
Ideally, meet their family in person, discover their needs directly, and meet those needs.
“The Individual Roadmap allows you freedom to make decisions. I will not micromanage you.”
Encourage the candidate to do reference checks on you to see what you are like to work with.
- “If you accomplish your objectives, and we as a company accomplish ours, you will likely make x over the next 5-10 years.”
- Here is what we do for fun at _____ ...
Topgrading Interview (2 hours): Understand the candidate’s story and patterns. They are predictive of their future performance. Go through jobs chronologically.
Focused Interview (3 x 50 minutes): Involve other team members. Discuss outcomes and competencies from the scorecard. Use “What? How? Tell me more” framework.
Reference Interview: Do not skip! Call at least 4 references: 2 bosses, 1 peer, 1 subordinate. Use “What? How? Tell me more” framework. Listen for faint praise or hesitation.
Rating: Skill-Will Bull’s Eye. Rate candidate’s skill and will for each item on the scorecard. Only rate A if 90%+ confidence they can and will meet all outcomes and competencies.
Candidate does not mention past failures.
Cannot give specific examples.
Blames others for failures or shortcomings.
Avoids difficult questions or becomes defensive.
Makes exaggerated claims. Lacks supporting evidence.
Provides lukewarm or qualified references.
Reference feedback does not match candidate's claims.
Here is a summary of the key points:
Candidate exaggerates answers or takes credit for others’ work.
Candidate speaks poorly of past employers or cannot explain job changes.
Candidate’s family does not support the new job.
For management roles, candidate has never hired or fired anyone.
Candidate cares more about money and title than the work.
Candidate tries too hard to seem like an expert or is self-absorbed.
The recommendations are:
Update all scorecards and rate each candidate.
If no top candidates, restart the sourcing process.
If one top candidate, hire them. If multiple, rank and hire the best.
Put yourself in the candidate’s shoes to determine what they care about, like job fit, freedom, money, or work-life balance. Address their needs to sell them on the role.
Sell the role at key points: sourcing, interviewing, between offer and acceptance, between acceptance and start date, and the first 100 days. Provide frequent contact and information.
Avoid discrimination by focusing on qualifications, using standard and non-discriminatory processes, and not asking illegal questions.
Announce, train on, and implement the system. Put “source 1 great candidate” on everyone’s goals.
The appendixes provide further reading on productivity, management, sales, recruiting, culture, and work-life balance. Key recommendations are getting enough sleep, limiting distractions, exercising, spending time with loved ones, and practicing mindfulness or gratitude.
Your mind will not need to remember tasks recorded in your GTD system, allowing you to rest better.
As your company succeeds, you may become equity rich but cash poor. Create liquidity by selling some of your shares. A good rule of thumb is having no more than 25% of your net worth in illiquid assets. For most founders, over 95% of their net worth is in their company shares.
Two milestones that create a sense of financial safety are $10M and $100M in liquid net worth. At $10M, people feel relieved from financial risk. At $100M, catastrophic scenarios fade and a sense of abundance emerges.
Although $10M is enough for a good life, aim for $100M to satisfy the mind. After $100M, more money likely won't improve your life and may become a burden.
Once your company's equity has significant value, sell shares to reach $10-100M liquid net worth.
Don't keep this money in commercial or investment banks, who use it for their gains while you bear the risks. Use a brokerage firm instead, where your assets remain in your name and control. Brokerages are safer but can still fail, except for US Treasuries which are sent directly to you.
Invest through low-cost index funds and rebalance often, as recommended by David Swensen. This approach is difficult for individuals but tools like Wealthfront can help.
The author thanks many people who coached and supported him, including friends, family, and CEOs he coached. Helping others has been deeply satisfying.
The author went to Yale and Kellogg, started and sold a tech company, made movies, and co-founded a foundation helping ex-convicts find jobs. He began coaching CEOs to apply lessons learned and improve their performance.
The author did 1-day/week stints as CEO at 3 companies to directly teach his methods. He continues coaching CEOs and investors.
An important problem: Formerly incarcerated people struggle finding jobs due to background checks. Most employers won't hire them, leaving few legitimate ways to earn money, though they still have needs.
Ex-convicts often struggle to find jobs after being released from prison and end up reoffending in order to survive.
The author believes providing short vocational training programs for in-demand, high-paying jobs is a solution. He has personally seen this work by training ex-convicts to become commercial truck drivers. They are then able to get jobs paying over $50,000 per year.
These vocational programs can be self-funding because trucking companies will pay recruiter fees to find drivers.
The author has done this on a small scale but does not want to build a large organization to do it nationwide. He is looking for someone interested in creating vocational training programs and job placement for Americans with a strong work ethic.
Such a program could be a healthy business by collecting placement fees from companies hiring the trained workers.
In summary, the key points are:
1) ex-convicts struggle to find work and often reoffend,
2) short vocational training for in-demand jobs can help,
3) the author has seen success training ex-convicts as truck drivers,
4) these programs can be self-funding but the author only wants to operate small-scale, and
5) he is looking for someone to take this concept nationwide.
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