Call me old fashioned, but I cringe every time I hear another claim about how we are moving into the age of “careerism” and “just in time staffing”. Why? Because we always hear about this fad right at the tail end of every downturn.  It’s like herpes spread by some “experts” who never had to operate a company.

I am yet to see a substitute for a loyal team – during bad and good times. Earned loyalty takes time to build, compared to need-based loyalty, so you must build a strategy to foster earned loyality long before you need to “cash it in”.

What do I mean by earned loyalty vs. need-based loyalty?  Many people are staying with their current companies right now because of need-based loyalty – they have mortgages and car notes to pay. But this type of loyalty has no longevity because the company did not earn it. Yes, I said it: earning the loyalty is completely the job of the company and its leadership.

Progress is a #1 motivator for knowledge workers (money is not even in the top 3) and I think it is what helps keep people loyal. Here are some methods that could help build that earned loyalty…

Read the rest of the article on The Operations Guy blog

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In 2007, I was interviewing with a later stage stealth startup in Boston. During my conversation with one of the co-founders, I asked about her title. Her answer has stuck with me to this day. She said: “if you are in a startup and have a title, you are not doing enough work“! This sentiment resonated with me and made me think about why big titles are so dangerous.

I have worked for several very innovative “flat hierarchy” companies, where titles were irrelevant, that had rapid growth fueled by passionate employees who always went above and beyond to make customers happy. It is no surprise that at one company we had a 95% customer referral rate and the most loyal customers I have seen in my entire career. I also made the mistake of joining several companies that developed org-charts before they fully figured out what their customers wanted. The result was an environment of heavy office politics, innovation-squashing dictatorships, and clients leaving not too long after discovering the dysfunction. No amount of effort could turn these companies around and two out of the three went out of business.

So why are big titles so dangerous? Read the rest of the article on The Operations Guy blog >>Similar Posts:

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I’ve recently been thinking about how I can further help the readers of this blog and earn even more good “business Karma”. Several of you have mentioned that you’d like a broader range of topics covered on this blog, so I have decided to take LeanStartups.com to the next level by expanding it and adding guest bloggers to my team. As we like to say in the world of startups – time to pivot.

I am actively looking for passionate practitioners of marketing, finance, accounting, recruiting, and staff development to share their expertise to help capital efficient lean startups increase the odds of surviving.

If you are interested in helping me, please shoot me an e-mail (see contact page) or just see me at one of the many events I attend.

In the meantime, I will be starting a separate blog covering startup and rapid-growth business operations, my favorite technology solutions, book reviews, and spotlights of the innovative stuff I see every day. The new blog is called The Operations Guy and you can find it at TheOperationsGuy.com .

Lastly, I have to thank everyone who has helped me brainstorm and work on my ideas. One is only as smart as people around him!

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Since an article I wrote in June of 2009 called “How a foosball table can kill your startup” is still sparking attention and conversation, I think the time is ripe for me to expand on the topic. Yes, I still believe that tchotchke “benefits” do nothing but waste money.  Instead, use your resources to attract new, retain your best talent, and improve your team’s happiness.

Here are additional issues for us to consider:

1. If we tracked the usage of Guitar Hero setups, foosball tables, pinball machines, etc., we would see that utilization of them is not really worth their cost and the rent we pay for the space they take up.
2. Often the toy/activity choice we make is driven by what we personally like. I highly doubt anyone actually thinks about how employees from other demographic groups perceive them. Therefore, we unconsciously create an environment of discrimination.
3. Innovation happens outside of the walls of our offices. Encourage your employees to get outside and network with their customers and spend more time with their families.
4. Employees are not stupid! We may be able to attract them with these “benefits”, but the novelty wears off quickly. The deeper we can tap into satisfying the needs of our employees, the more likely they will stay with us. Maslow’s hierarchy of needs is often ignored at our own peril.

So what do I suggest?

1. There is a MUCH higher ROI on well-being focused benefits. E.g. stock your office with free healthy snacks and drinks. Motivate staff to engage in group sports. Spend the budget on group company outings organized by the staff themselves. As an operations person, I always focus on keeping my team healthy, happy, motivated, and engaged.
2. Spontaneous rewards have tremendous ROI! Focus on rewarding exceptional performance the moment it happens (not months away during performance reviews). I have personally seen it do wonders to morale.
3. Enable your staff to be able to work in other locations from time to time and empower them to spend more time with customers (existing ones or prospects).  This takes a lot of planning and thinking through to execute well, but it has fantastic ROI and increases innovation and employee loyalty.

NOTE: the dynamics are a lot different in creative industries like industrial design, advertising agencies, marketing and communications companies, etc. Talent employed in these types of companies have different needs and motivations.

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

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Guest blogger Greg Strosaker

Guest blog post by Greg Strosaker As the Lean Startups blog grows, I want to start bringing in other subject matter experts to help better serve my readers. Therefore, I am very excited to introduce Greg Strosaker as my first guest contributor. Greg, who previously worked for 13 years with General Electric as an engineer, has spent the past four years heading up marketing at several small- to mid-size material and industrial equipment firms.  Greg also runs the Constant Cogitation blog, where he discusses marketing, strategy, and leadership topics.

Since my last post drew some attention from the marketing folks (and struck a nerve of those who refuse to grow and evolve), I wanted to bring in the perspective of someone in a different industry who makes a living from marketing.

An often-overlooked function for many start-ups and small businesses is Marketing.  Sure, you have a website, maybe some brochures, maybe a Google AdWords campaign.  But I’m talking about “capital M” Marketing – who are you, what are you all about, and how are you communicating that to your prospective customers?  Or, as Apollo pointed out in a previous post, how are you allowing your customers to shape who you become (while still maintaining your core mission)? Maybe you can stumble into some early successes while hacking your way through, but at some point you hit a wall, and you need to get serious to be able to scale.  Here are some basics to help you establish a brand and marketing strategy that you can build upon.  This post is about establishing and living your identity. If Apollo allows me back again for a future post, I’ll hit on more tactics, particularly in regards to inbound marketing.

One comment I frequently hear is that “anyone can do marketing”.  Sure, and anyone can do finance too, if it involves balancing a checkbook (OK, maybe there are some that can’t do even that).  And it is true that everyone in the organization should be involved in marketing, as your brand is more than your tagline – it’s the sum of your daily behaviors and decisions in the face of the customer.  I’m not saying you need to go out and hire someone “classically” educated in marketing. In fact, you may want to avoid that (said as someone not “classically” educated).  But you do need someone who at least pays attention to the topic, and has some basic sense of branding, listening to customers, and adopting strategies in response to market conditions and customer needs.  This may not be a dedicated role early on, but like any major initiative, you need a champion.

Just like raising a child, the marketing habits you establish early set the tone for later in your company’s life.  Here are the key elements to get right, to help establish good behaviors for when you need them most.

Establish your identity.  More than just your “brand”, you need to establish the values that your company offers, and how they differentiate you from alternatives.  You can’t build the rest of your marketing elements until you have a clear vision of who you are and what unique value you bring to customers.

Get consistent. Once you develop your branding elements (and there are many low-cost, even crowd-sourced, ways to do this on the web), you need to implement guidelines to make sure that all your communications incorporate these elements in a consistent manner.  I’m not just talking about logos, colors, and fonts. I’m talking about the tone of your communications, the message you offer, and the means by which you do it. This is the only way you can establish the necessary framework to maintain a genuine brand identity as your company grows, allowing each team member to “make the brand their own,” weaving it into their daily behaviors and decision-making.

Develop a framework for everything. To help enforce the consistency and avoid going out for expensive help every time you need a new publication, invest in templates and guidelines that you can then use to create your own material.  A little bit of upfront investment here will save you time and cost later, and speed your ability to put out new content.

Focus on testimonials. The proof of your value is best offered by the customers you have satisfied, so spend your time on building stories around your successes.  This type of content is flexible for use in a range of forms and media, from web pages to full articles, and carries far more credibility than internally generated “me too” type literature or web content. One potential low-cost use of such content is through application success profiles.

Be agile, but focused. Early on in your business ventures, you’ll find that you have to make “tweaks” to your message based on what you learn from your customers.   Don’t just “allow” for this – relish it.  But don’t let it take you too far from your core vision or message, unless you find that you were completely wrong in your initial business plan. If that’s the case, you have more problems than what smart marketing can solve.

This isn’t rocket science, but it takes discipline and focus. So stop yielding to the temptation to view marketing as just “glossing up” your website, and start thinking more strategically.  While seemingly mundane at first, only by getting things right initially can you possibly hope to continue growing your company into the future, without breaking the bank today.Similar Posts:

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I wasn’t able to make it to LaunchCamp Boston today, but was still able to virtually participate via the live video and Twitter streams. During a discussion on Twitter with two great marketing folks, Bobbie Carlton and Rachel Levy, I made several remarks:

1. Seasoned marketing pros should realize that “marketing” is becoming a dirty word (right behind PR) and evolve.
2. Marketing pros should stop fighting the fact that branding, PR, communications, content creation, “websites”, etc. are no longer being recognized as part of the marketing silo.
3. Businesses don’t need marketing teams, they need customer listeners/conversationalists who are deeply involved in customer anthropology.

Why is this my opinion?

1. Much has changed over the last decade with how customers interact with brands. A deeper transparency and conversation are now required to engage customers.
2. 2. The marketing silo is gone. Branding, listening, and communicating activities have transformed into something that engages the entire company – customer development. Customers define your branding, help you with content and product development, and provide your company with the publicity.
3. The marketing model of broadcast, analyze, and broadcast again is on its way out. Customers no longer tolerate being talked at – they demand that you listen to them. This new model is a constant loop of indentifying early adopters, developing products with the continuous feedback of the early customers, engaging mainstream customers with the help of those early adopters, and empowering mainstream customers to promote the brand. Rinse and repeat!
4. CUSTOMER ANTHROPOLOGY is the future. Strategies have changed and it’s no longer effective to have a traditional marketing model of yelling/broadcasting through the biggest proverbial bullhorn a company can afford (expensive launch events, advertising, PR, etc.). It is all about getting into your customers’ psyche, anticipating their reactions, and truly satisfying customers’ real needs. School-taught squeezing of customers into demographics, verticals, etc. is no longer adequate.

That all said, I may get a lot of flack for this article from my old-school marketing friends. Sorry, but a bit of constructive criticism is always good.  Please chime in the comments or send me an email. I want this to be start of the conversation, not just a one-sided article.

Photo credit: Carol Browne

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

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I can’t claim I was early social media adopter, but I have been on Twitter, Facebook, and LinkedIn for a while now and built a following.  I have met the majority of my followers in person. I am also not shy about reviewing businesses on Yelp and other sites, because I believe both positive and (especially) constructive negative feedback can improve businesses.

We have seen some massive changes in the last decade as the impact of word of mouth has grown exponentially as each new communication platform became mainstream. While a story of poor customer service experience used to rarely travel beyond a close circle of family and friends, everything has changed now that we have entered the age of social media. The tables have turned and the transparency and the accountability levels of the businesses are way up (intended or unintended). If you screw up, there will be video parodies of your business on YouTube and Yelp reviews containing the gory details – your (now former) customers will freely share their displeasure with thousands of their friends and followers before the dust has settled. Talk about a ripple effect!

But, as many companies are discovering, these are great times to turn customers into brand evangelists/promoters. The positive ripple effect aided by social media can be massive! Just look at Zappos, Amazon, Jet Blue, Virgin America, Apple, and etc,

So what can we, as business leaders, do to take advantage of this change?

1. Customer service should be the first place we invest in.  No more outsourcing! No more poorly trained and poorly paid script-reading robots!
2. Listen listen listen! Social media monitoring tools are available in every complexity and price range. Use them!
3. No, it is not fair, but the reality is that you need to take care of the “squeaky wheels” on public channels (like Twitter, blogs, etc.) first. Turn angry customers into rabid fans with a proverbial bullhorn. If it takes a CEO’s apology to satisfy an angry customer, then so be it.
4. All feedback channeled to your sales and product teams should be unfiltered! We tend to think our stuff does not stink, which is why I always advocate that sales people should also be doing collection on their accounts and developers, engineers, product managers should be answering customer support calls. Our dislike for unpleasant interactions makes us sell and develop products better.

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Since I don’t allow anonymous comments on my blog*, sometimes I get e-mails with long diatribes on why I am wrong. Some are quite extensive and come from people who take my critiques to heart (sometimes taking things too personally). Not only do I love these e-mails, but if you send one, be ready to have a dialog!

I am absolutely honored to hear comments in person or via social media. I enjoy knowing when my answers to a question on LinkedIn (or Answers.onstartups.com) or another blog helps someone. But the world would not advance anywhere if everyone agreed! Therefore, I also highly value feedback from those who disagree with me (as long as it is presented in civilized manner). My critics and detractors keep me on my toes! No one is right all the time and I often advocate that being wrong often helps us move our companies forward faster.

Here’s why I love my critics and why you should too:

• People who agree with you are much less likely to point out your weaknesses. Critics love to latch onto your weak points! Observe, listen, and improve!
• Without critics, one starts “drinking” too much of their own Kool-aid and believing their own BS.
• If no one is pointing out your weaknesses or predicting your failures, it means you are so insignificant that you are not worth someone’s effort to react to what you do.
• Critics are the cheapest way to get consulting. It is free advice you can use to your advantage.
• If no one in your company is criticizing your decisions as a leader, you have hired the wrong people! If no one has the testicular/ovarian fortitude to help you, you may be suffering from Napoleonic syndrome and surrounding yourself with brown-nosers.

* In my opinion, part of freedom of speech is accountability for your words. Since my blog is a conversation, I apply the same rules that I do in real world – if you have a comment, you can’t be a chicken and hide behind the anonymity of the internet.Similar Posts:

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Everywhere you turn, someone is typing away on their Blackberry or iPhone.  While more and more of us are plugged in 24/7, since smartphone technology has become easier to use and cheaper to acquire, you’d think people would be responding more quickly to all their emails.  But, I’m actually not surprised that one of the most searched terms on my blog is: “boss does not respond to e-mails,” because the person sending the message often forgets that they are responsible for making sure the message AND the method of delivery encourages the receiver’s response. I have already written an article on how to write e-mails to your boss or an executive, but now want to focus on a different angle, because many times it is not the message, but in the way it was delivered that keeps it from being read.

Here’s what you can do:

• Not everyone cares for technology. Just because you have seen your CFO with a Blackberry, does not mean he/she uses the darn thing for anything but phone calls. How do you find out? …ASK!!! It’s important to find out how he/she prefers to receive their information. Some just want that contract, proposal, or report printed and handed to them.
• Time your messages! If they do prefer e-mail, ask them when they read most of their messages. One of my former execs was a morning person, so I would time my e-mail program to fire out all e-mails for him at 6AM, because that is when he would fire up Outlook. If I sent him my e-mails at the time I prefer (I am a night owl), my message would be buried at the bottom of his mailbox.
• If all else fails… Some people are just overloaded and you will have to get creative. Don’t get frustrated – ask! The oddest direction I ever received from one of my former executives was to catch him on the way out of the bathroom before he walked back into the office. Anytime I needed a quick executive decision, I would just wait for him to pass my office on the way to the bathroom and I would be right behind him waiting in the hallway for him to walk out.

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When the word “lawyer” or “attorney” is mentioned, most business people either make a joke about how lawyers belong in hell, or complain about how their attorney recently overcharged them. As the head of operations for several companies, I had to deal with attorneys almost every day.  I was also part of a law firm at one point in my career, so I have developed a very intimate and unique perspective of the inner workings of the legal industry.

So why am I writing this open letter to lawyers? Like many others, I have a love and hate relationship with attorneys. I don’t expect I can change much, since many bad practices become engrained during law school.  But, us business people will always need lawyers, so I have a vested interest in helping attorneys understand our perspective.

95% of attorneys are guilty of almost every item on this list. My intent is to show you what you can do better. Let’s get started:

• We pay you for legal, not business, advice. Even if you have an MBA, you are not qualified to council us on business strategy. Unless you had extensive business experience before you went to law school, you are not capable of thinking like a businessperson. Your value is in figuring out how we CAN do what we want to do within the confines of the law. You should act like the safety net of a tightrope walker.
• Like doctors, you are a specialist and are not good at everything. If you don’t know how to approach a certain problem, please look for guidance from another attorney. The Socratic oath should be part of your Bar admittance.
• Hourly billing promotes YOUR inefficiency. Billing 15 minutes to listen to the voicemail we left you is ridiculous!  At least do a mix of some per-project and some hourly billing. I personally refuse to work with any attorney who wants to do straight hourly billing. The internal structure and compensation practices of your law firm are not our problem.
• Be human. An obsession with billing every minute of your life has turned some of you into very unpleasant and fake people. Attaching “Esq” to your name should not turn you into a pompous a-hole. The biggest part of business development is building a relationship. We are not stupid, we know that lunch we just had with you will show up on our bill. Set yourself apart by genuinely getting interested in our businesses and what we are about. You just may build a business relationship with some longevity in it.
• Stop posturing. Through the years I have learned one thing about lawyers of both genders - the fancier the suit, the less experienced attorney and the bigger the BSer behind it. I know a worthless attorney who owns over 70 suits and has an ego the size to match. What a joke! Blowing a large amount of money on school, a wardrobe, and a car does not give you credibility. It may be OK in court, but in the business world, playing a poser does not work. Many of you are extremely smart. Skip the BS and titles and let your work shine!
• Give before you take! I realize your industry is full of rules and that you are scared of them, but grow a pair and genuinely share your expertise with the community. You will be surprised at how many new clients you will obtain this way. If you brag about your connections, make a connection or two as a sign of goodwill.

So dear attorneys, I don’t hate you. You are very valuable guns in my arsenal. I just want the experience of dealing with you to be less like the one I have with proctologists and more like the one I have with fellow business people.

1/14/10 Update: Scott Edward Walker from Walker Corporate Law Group posted a great article on Venture Hacks with his take on the issue – “Top 10 reasons why entrepreneurs hate lawyers“. Admission of a problem is the first step to curing it!

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One of the top five issues I’m passionate about is the need to increase the number of women executives, techies, scientists, and entrepreneurs. Why does this subject get so much of my mental energy?

• Progress is too slow! We are raising the next generation in an environment where women are still impeded by their gender.  Parents only want the best for their children, and we need to make sure our girls are judged on their merits.
• There is extensive scientific proof demonstrating that male-dominated teams are less efficient and less innovative than those with a healthy dose of ladies to break up their groupthink and egos. My favorite example is this paper by The London Business School – “Innovative Potential: Men and Women in Teams” (PDF)
• By failing to bring more women on board in visible roles and making sure their voices are heard, we are missing an incredible pool of talent since we’re only really tapping into 50% of the market.
• The biggest issue is when female executives, entrepreneurs, techies, and scientists have to waste mental energy dealing with the crap caused by misogynistic behavior.  Men consciously and/or subconsciously create barriers and discourage women from joining their teams. E.g. VCs not investing in female-led companies, professors discriminating against their pregnant female students, techie men looking down on their female counterparts, etc.

Here are my three biggest calls for change:

• Child rearing is the responsibility of both parents. Written and unwritten policies and expectations keep men away from truly participating in parenting. Time off, flex schedules, day care, etc. need to be highly promoted to male employees. I have seen plans like these in action and I know the results are spectacular. Without this change, other efforts have no chance.
• Any educator who dares to say women aren’t good at sciences or technology should be fired. We’ve been tolerating this hate speech for too long. We have missed out on great minds due to this garbage.
• Scandinavian countries are on the right track and have made changes through legislation (check out this article on Norwegian and Danish progress). We are behind the times and should also implement legislation. Since tax-paying women comprise 50.7% of this country, this should be reflected in the makeup of senior leadership teams of companies receiving any government business. Time to do an executive rank check or there will be no federal dollars for you. No effort by a school to attract women into fields heavily dominated by men? No federal funding for you either. Enough carrots, it’s time for sticks!

What else can we do?

• Our ranks will not become more diverse until we men genuinely open our networks and make a conscious effort to include more women in them. Connect outside of your usual “fishing grounds”.
• 99.99% of “diversity” efforts HR creates are BS because the vast majority of these policies are garbage just designed to keep the lawyers away. Our frat boy culture needs to be changed by the participants first – it starts with you! We built the “glass ceiling” and we can’t expect women to dismantle it on their own.
• Due to our upbringing or egos, we men create an environment that keeps civilized women away, because many of us deep inside know they can do anything we can do as well, if not better. This attitude needs to go!

I have to give credit to several others who have highlighted this subject recently.  Jeff Bussgang addressed why there are not enough female VCs (see his article The VC Gender Gap – Are VCs Sexist?) and the sharp-tongued Scott Kirsner of the Boston Globe addressed networking for women (see this article). I hope that by the time the next generation of girls comes of age that things will be much improved.

UPDATE 1/15/10: Jason Evanish (co-founder of Greenhorn Connect) pointed me to a great resource on their site – Resources for female business women, executives, and entrepreneurs in Boston area.

UPDATE 2/20/10: I have recently found a great whitepaper with research by Illuminate Ventures. Defintiely a worthy read. Here is a quote: “Organizations that are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers – and research shows gender diversity to be particularly valuable where innovation is key.”

UPDATE 2/28/10: I have to mention a fantastic article Eric Ries has posted on his blog called: “Why diversity matters (the meritocracy business)” Eric does a great job explaining why diversity is a great measure of how meritocratic your organization is.

Photo credit: ayeshamus

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

Similar Posts:

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Back when I lived in Chicago, I had the pleasure of working with a really grounded and wise CFO. He was an “old dog” with a CV many would envy. During one of our conversations about work environments, he said something that stuck with me: “companies that get unions deserve them”. If you treat your people fairly, invest in them, and genuinely care about their future, no union or union mentality has any reason to exist in your company. So how do we make sure our employees are working for and not against us?

1. Shared pain & shared gain. The alarms are already sounding about an impending firestorm of talent defections. Retention is going to be hell for a large number of organizations that immediately turned to their employees when they needed to cut costs. Too late for them. But how can you ensure you survive the next up- and down-swings? Profit sharing is one of the best components of total compensation, and companies who adopt this strategy across the board retain and attract the best people. When the bad times strike, you can reduce or even eliminate the need for downsizing by sharing the pain across the board.
2. Keep an organization as flat as possible for as long as possible. Nobody needs dozens of VPs, when you have 30-40 employees (or even 100+). Doers are the best leaders because of their credibility. Red tape, meetings, hierarchy, and other org chart growing elements of an organization rarely improve efficiency. I don’t know about you, but I have a very high level of respect for the execs who pound the streets with the rest of their team.
3. You don’t have to be a mom or dad to your employees, but you do have to remember that you can improve an individual’s performance and value by helping them solve their problems. Example: if their spouse is also working and your employee has to worry about daycare, why not allow them to have a flexible schedule? If you help them get the problem off their shoulders, they will in invest that mental energy into their work.
4. Build a culture of constant growth. As a company grows, so should every member of your team (and if they don’t want to, then get someone who does). Nothing drives a successful team more up the wall than a couple of mediocre members. Some of the big consulting companies have a good policy – up or out!

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I was recently helping a good friend with some logistics for an event she was organizing and I got a little frustrated, because I knew I could have contributed more if she would have asked for my help earlier. This inspired me to say: “Emmi, I am going to write an article about how to ask for help!” In any business endeavor when resources are tight (e.g. money, time, sleep, etc), one must know how to ask for help or a favor.

So why am I using Emmi as an example? Let me start by saying that she is an absolutely fantastic business woman who has an impeccable pulse on her target market, takes care of her clients, and leaves a “wake” of raving fans. But Emmi hates asking for help, because she doesn’t want people to think that she is taking advantage of them. I used to hate asking people for help too. It was a mix of pride, ego, and inexperience that led me to act that way. So what made me change? Back when I was fresh out of school, my mentor set me straight and hammered a couple of things into my mind that helped me immensely with the issue:

1. Start by helping others as much as you can, so you have a savings account for goodwill. The more you deposit in it, the more you will have to draw upon when you need it. Start “depositing” early and often.
2. People love helping. If someone is your friend, he/she wants to see you succeed and will find the time to give you a helping hand. I personally garner great pleasure from helping my friends.
3. Put your ego and pride away! Asking for help does not make you look weak, stupid, unsuccessful, etc. Ask any serial entrepreneur, who has made it, and I have no doubt you will hear about the vast network of people they have supporting them.

So Emmi, are you going to hesitate to ask for a favor the next time you are putting together another one of your fabulous events?

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I have a confession to make. Thanks to having worked for only customer revenue funded startups, I have become somewhat of a frugal nut. I love free stuff and I cringe at paying asking or retail price for anything. Anytime I pay MSRP, I feel like I have committed a sin. Whenever I would run operations in a startup, my most common response to many purchase requests was:” and with what revenue are we going to pay for that?” To me (and many others) cash is king, queen, emperor, and the whole darn extended dynasty. The only way I like cashflow in our books is incoming.

Though being that frugal of a S.O.B. is not easy, there are many more resources available now than they were when I started my career. Today I want to sing my praises to the Freecycle Network. If you have a huge ego and have an issue with used stuff… you may want to just move on to another article. For those of you who don’t know what Freecycle is, it is a network of e-mail lists and sites where people and organization give away for free or look for “stuff”.

To give you an understanding of how much generous folks participating in Freecycle have helped me, let me share with you things I have gotten off Freecycle: office supplies, whiteboards, tables, chair, storage cabinets, servers, printers, software, and various tech items. I estimate I did not have to spend in the area of about $20K-$30K, thanks to Freecycle. Sometimes we simply had no budget for a particular resource, so Freecycle helped us bootstrap. One particular case I remember very fondly. In one of my ventures I needed two servers for the office file serving, web development, and CRM. I quickly blasted out an e-mail to Freecycle network, though I thought it was a far shot. Same day I got two e-mails back. Both were from IT managers who had older decommissioned servers sitting on their shelves they did not want to trash. I quickly picked those up and found them both to be in a great shape. Yes, it did take me extra half day to clean them, update the firmware, find the older drivers, and purchase some extra memory and drives (which were dirt cheap on Ebay). But at the end I had two workhorses ready to save my day.

Now, please don’t misconstrue that I treat Freecycle in a “take only” manner. I believe in an environmental sustainability, conserving resources (which consequently also conserves the cash), and keeping my goodwill balance always in the positive. I have spared the landfills of boxes and boxes of computer components, PCs, furniture, books, etc. One man’s trash is sometimes another man’s treasure.

What is your favorite bootstrapping resource? Yes, I do plan an article on singing my praises to the opensource software.

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I had a really fun conversation with a founder of a great company with fantastic potential today and we covered many topics, one of which prompted me to write this article. Securing money and investors are not always the biggest issue keeping startup founders awake at night. Assembling the right team from the very beginning can be a much bigger issue. I’ve previously talked about the traits you may want to look for in a possible co-founder and have covered the importance of a demographically and culturally diverse team. Today I will get down to the basics of how to start assembling your team from scratch. There are many perspectives on this subject, but I wanted to share with you what I have seen work.

Let’s start by debunking one common analogy – building a team is not like putting a puzzle together.  The number one rule I’ve learned from the best startup teams is that one trick ponies need not apply. In early to mid-stage startups, generalists should compose the majority of your team. There are two kinds of generalists: those who are Jacks-of-All-Trades and masters of one or two areas, and those who are masters of none (general management, which you don’t want).

Here are the rules of thumb I like for assembling a team:

• Until you reach a “comfortable” level of revenue, forget about specialists. (See my separate article on this issue). What makes one an asset versus a liability is the ability to step outside of the proverbial silo and competently get hands as dirty as needed. In addition, many times you can only afford one specialist for an area, which becomes a huge risk that I like to call “what if he/she gets hit by a bus?”.
• Don’t hire titles. Bring in people who are passionate about their areas of expertise and who love your industry. Passion for ones’ craft + love for mission of the company = talent worth their weight in gold. Plus, titles aren’t good for startups anyway.
• When building your team, take inventory of your strengths (even if it is just you), but more importantly, pay extra attention to your weaknesses. The best teams have members who complete each other. I like to build a matrix with the headings: “can do”, “can learn”, “can’t do” for each skill set and team member. Using this matrix allows me to keep better handle on areas we need to strengthen.
• Stay away from the “this is my baby” syndrome. Each member of your core team should be willing to build and hand off – you cannot grow your company if this is not the case. There is nothing worse than a person who micromanages or hogs an area of the business they consider “theirs”.
• Bring in people who have been at the level you want to be at in the next several years. There is no reason to bring on a big shot from a major multi-national corporation if you have no chance of being at the staffing, resource, revenue level that person is used to managing. If you are at $1MM revenue, get someone who has been at $50MM, but not $200MM or more. They will only get frustrated, cost you money, and leave before you know it.

Lastly, remember that there are always exceptions to every rule. I like to say that what makes you an expert is recognizing an exception for every best practice or rule of thumb.

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I had to get several insurance quotes last week, since my current agent was not living up to my customer service expectations (especially considering the amount of commission they receive).  Only one of the three companies I contacted impressed me, and this prompted me to write this article and discuss how to better serve your customers.

I’m sure of one thing, archaic strategy of 9-5 customer phone-only support from agents who can not deviate from their scripts is live and well, but the companies practicing this strategy are on their way out. Why? We focus on maximizing the “shareholder value” and forget who pays the bills – the customer. People are becoming a lot more careful with their money and are starting to demand superior service. Companies like Zappos and NewEgg (to name a few) are setting a great example by taking the lead and focusing on their customers first. Just look at the fanatical following those companies get. You can’t stop their customers from raving about how great they have been served. Twitter, Facebook, Yelp, and countless blogs are full of glowing reviews.

I have been fortunate to work for two companies that were truly fanatical about their customers. Our accounts receivable at both organizations were great proof of what customers thought about us and the value we delivered, since we had no need to chase any bad payers. We simply had almost none. There were many instances where customers felt a bit embarrassed that they had forgotten to pay us, since we did exceed all of their expectations.  Here are several key lessons on how to provide the best customer service:

• Your business processes must allow your customer service and sales reps to have the freedom to behave in the best interest of the company. They are adults. Train them well and trust them.
• Communicate with your customers the way they want to. If they prefer to do an online chat, you better put that in place. If a team member does not feel comfortable with selling via e-mail, train them or replace them.
• Your customers will tell you how to up-sell them. You just need to listen to them. Customers actually love to be up-sold, as long as they don’t feel they are being taken advantage of and that the company is truly providing value that they need.
• Your angriest customers may be the ones who can provide you with the best feedback. Train your youngest team members on how to deal with the angriest of customers. I love customers who bring up weaknesses of the company – sometimes they will tell me things others won’t.

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I recently read a great article “Entrepreneurs: Beware the curse of the new building” by Steven Blank, who is a down to earth and experienced entrepreneur I greatly admire. While the case he describes is a bit dramatic and partly stems from deeper issues, many of his points were definitely something I have seen. The one sentence summary of his article: brand new offices disrupted SuperMac’s culture, detracted from growing the company, caused excess politics, and gave competitors lead time. I will not discuss the benefits or detractions new offices create. At one time or another we will all need to move our companies.  Instead, I wanted to share what I have learned from my experiences.

I have moved two companies during my career. One was a small move, but the other was a major production that was complicated by the fact we were moving in the middle of busy season. As I have mentioned, though I mostly agree with Steve’s points, in my case it was a bit different situation because the companies were late stage startups (4- and 7-year-old companies).  I’d like to share my tips for moving, which I acknowledge are more applicable to organizations like software development or professional services companies, that are dominated by knowledge workers.

• Avoid giving anyone offices if you can.  Even your CEO should be in the midst of it. If the mayor of NYC does not need an office, you don’t need one either. Office walls help create a “bubble” effect and rob you of 18-25% of usable space, make you less flexible, create needless hierarchy and status, and most importantly – exponentially magnifies office politics. An open office creates better accountability.
• It is a myth you can’t control noise in an open office. Cubes work, but they are not flexible. Partitions are much cheaper, more flexible, and do the job. Plus, open office helps with employee etiquette (you know, the stinky food, cellphones, and other issues). If your fish dish just stank up the office, now you have an angry CEO. You want to bet you will not do that again?
• Don’t segregate sales from your developers or other folks who make the product. Sales folks need to know what is down the pipe (meetings don’t cut it) and product people should know how hard it is to sell. Now there are product folks who cannot handle distractions. The solution is to buy them the best darn noise-cancelling headphones on the market.
• Not all the conference rooms need to be enclosed. I personally see conference rooms as an expense one should avoid. They are a waste of money. Either make a deal with a neighboring office to use their conference room, or take the money you have saved from not having that room and hold your meetings in the restaurant. If you choose to add expensive furniture in those rooms, the numbers will be even worse. The best option is to have bunch of foldable rolling tables, so the teams can put needed setups together for group conversations. Everyone can roll up their chairs too (that is $100-$400 of savings per person right there, just in chair costs).
• Those who will service the infrastructure (like your ops and IT guys) should be part of every stage of planning. Some ideas might sound great for you, but may be a huge budget drain for your infrastructure folks. One badly placed power outlet or the lack of the right number of outlets in certain places could cause major headaches and needless retrofit costs.
• Don’t EVER ignore local building codes and laws. A fire marshal can shut down your entire office for one infraction he/she deems not safe. Back when I was in IL, the fire marshal could shut down your office even for one space heater your team member decided to bring in and use. Huge bonus points if your operations person knows the fire marshal on a first name basis.
• Don’t let marketing people anywhere close to layouts, color schemes, etc. Every time they look at it, your costs go up. Most first impressions about the company are made outside of the office walls. Invest in that, not garish color schemes that cause eye fatigue.
• Buy used office furniture. You can get impressive stuff for 1/3 the cost and no one will know. If you can buy it from another soon-to-move company directly, you will save even more. If you really have the funds, than go for quality IKEA type furniture (however much I love IKEA, I am convinced it is cheaper to get more quality stuff long-term).
• Make your building manager love you. Give gifts to them on their birthdays, occasional “just cause” cases of cookies, and gift certificates to restaurants. I found that an extremely cooperative building manager is worth their weight in gold.
• And the last one - be frugal but not cheap. Example: don’t ever be so cheap you use flat paint on the walls. Pay extra for at least eggshell or semi-gloss. You will be surprised how even the cleanest team creates endless scuffs and stains on the walls.

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I’ve had the pleasure of working for companies “as diverse as the United Nations” during my career. These organizations have greatly benefited from having very diverse teams and are doing well even in this horrid downturn. Why is diversity important?

1. Customers are diverse, so varied teams are much more likely to understand what your customers really want.
2. Teams with a diverse demographic makeup will have different ideas, broader viewpoints, and a more diverse experience base – this is a sure formula for better decisions.

So, it is no surprise that I get the following question from time to time: how do you build a diverse team?

Let me start with the #1 rule for building a diverse team: as a leader (founder, CEO, etc) you should always keep your personal religious, political, and other beliefs to yourself. I worked for a company where one founder was a devout Catholic and the other was not a fan of organized religion. If you never asked, you never would have known. It worked well, because we had almost every demographic group represented in the company.

#2. Let diversity happen. You can’t force diversity in your organization by selecting people like M&Ms in a candy store: some green, some brown, some red, some yellow, some blue. That is not diversity that is “diversiwashing”.

#3. Diversity starts during your selection process. You must judge people based on their skills, ability to learn, and fit in the organization. If you want to use tests for these characteristics, then use only the ones that will not stifle diversity (cognitive and technical skills tests). Predictive Index, Devine Inventory, and many other tests that predict your personality based on word associations (or other language-based methods) are very bad for your company if you want any kind of diversity. There is a reason why sales people for PI, DI, etc, will never provide you with real peer-reviewed scientific studies and demographics used to evaluate these studies.

#4. Let your team vet the candidate, but don’t let them make final decisions on fit. As a leader of a company, you are entrusted with the vision and the path. Sometimes even the most well-intentioned teams will pick people just like them. Other times they will not be able to see how that person could be a great fit, but you know he/she will.

#5. Celebrate and educate! I am always a big fan of introducing policies that include at least X days per year for “personal reasons” and letting people work during holidays they may not be celebrating.  Example: everyone gets Independence Day and New Years off, but if you don’t celebrate Christmas, why should I force you to take a day off? On the subject of celebrations, always look for ways to include everyone. If it is Chinese New Year, why not congratulate your team members who celebrate it!  Another thing I like to do (since I am a foodie), is to bring my team together through food.  Have a company lunch where everyone brings their favorite dish, with bonus points for something most restaurants don’t serve, and extra bonus points if no one ever tried it before.

In my experience, it is never too early or too late to make sure you are thinking about diversity.  You can be a 9 or 120+ person startup and still be diverse.

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I am a firm believer that delegation is key to building a business. We can bring in all the technology in the world, but if we can’t delegate properly, our companies have no chance of scaling well. I have had the pleasure of spending many years in very rapidly growing companies and have made the following observations:

• Delegating work does NOT absolve you of responsibility. In the case of a failure, the blame is all yours. Investors will go after the CEO, even if a network admin made the mistake that hurt the company.
• If a failure occurs due to a person lacking skills, it is your fault for delegating work to the wrong person.
• If you have to say “if you want it done right, do it yourself”, you may want to get some education on leadership and the art of delegation.

Delegation is something leaders need to master, because you can’t scale your organization without it. Without delegating well, you are bound to flat-line or even drive your company into decline.

So here are the rules of delegation I like to use:

• Do not assume team members (even experienced ones) are clear on what needs to be done. Go into detail until YOU are confident the other person will execute the work as specified.
• Micromanaging is not delegating. You must have trust your team member and not hover. If you must hover, re-evaluate if the task is delegable or if you need to readjust your management style.
• Communicate any and all pitfalls, points of caution, and other negatives that may affect the delegated work. Also share any best practices, sources of additional information, or personal tricks of the trade. Part of delegation is teaching.
• When it comes to communications, it does take two to tango, but you need to take the lead.
• If you can’t trust someone to take on delegated work and are not willing to invest in their personal development, than you need to replace that employee. This kind of person just drags down your organization.

If you have any other rules of delegation you practice, please share them in the comments section.

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Back when I was working in Chicago at a late stage startup, I used to have great conversations with the president of the company about our various approaches to managing businesses. We shared war stories, ramblings about taxation in US and EU, and the software developers’ versions of Maslow’s hierarchy of needs. But one thing that stuck with me was his statement: “this company will never own a foosball table, because every company I have seen own one went under months after purchasing it”. The conversation that ensued is worth thinking about. When considering what is “cool to have” for employee morale and what they really need, we really need to distance ourselves from our egos.

• First and foremost – as leaders of companies we need to think about how to make our people more efficient and not about how much longer can we keep them in the office. Long hours do not equal good work product. If someone is tired and needs a distraction, they need to go home and recharge.
• This leads me to the next point – inefficiency caused by your team members. In the case of a foosball table, or anything else that involves more than just one person to “blow off steam”, it is bad judgment to enable an environment where one person could drag another one to “play” and therefore drag down the efficiency of the team. How do you help people not get distracted? Simple – don’t provide them with the temptation to do so.
• Last point – “cool stuff” might be something your recruiter will talk about when wooing someone to join the company, but beyond that it is a waste of time, money, and operational efficiency. It is also bad for employee morale and work-life balance. Perks like 401K matches, more days off, encouragement of the staff to get physicals, telecommuting, etc, are what matters and will make your employees stick around. All those “tchotchke” benefits have the same value as the cheap promotional items you get from vendors – cool to talk about for maybe 15 seconds.

UPDATE (2/15/10): Please see the part two of this article: How a foosball table can kill your startup – part two

Photo credit: Helen Cook

About the author:
Apolinaras “Apollo” Sinkevicius is a business operations leader with 12-year track record of building scalable and capital-efficient operations for technology and professional services companies.
He specializes in business operations, corporate culture, human capital, and technology issues.
To learn more about Apolinaras “Apollo” Sinkevicius please visit his site TheOperationsGuy.com

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