Chip Griffin: Pardon the Disruption

Don’t Be Afraid to Fire a Good Employee

One of the most difficult decisions in business can be to fire a good guy who performs well. Usually when we think of firing employees, we think about the incompetent or lazy workers. We envision people who are disrespectful, make mistakes, or alienate co-workers and clients.

The reality is, however, that sometimes people simply don’t fit their roles anymore – for a variety of reasons – and therefore must go. They may be great to be around and even do their jobs solidly, but they may not be the right person for the role anymore. Here are some reasons why:

When the Company Outgrows the Employee

A colleague of mind likes to say that employees need to grow at the same pace as the company. He’s right. Particularly in a startup environment it is vital for individuals to step up their performance and improve their skills at the same rate as the organization as a whole. Often that simply doesn’t happen.

Sometimes a growing company will sugarcoat a firing by “layering” an employee (bringing in a new person above them in the hierarchy) or by “promoting” the employee (what often is really happening when a founding CEO becomes Chairman suddenly). Call it what you will, the bottom line is the person has been fired from their current position because the company outgrew them.

When the Employee Can’t Seal the Deal

This topic came to mind for me because of the disastrous loss suffered last night by the University of New Hampshire men’s hockey team in the first round of the NCAA tournament. UNH came in as a #1 seed in their bracket and fell to a Notre Dame team that had managed to win just 4 of their last 13 games. Worse, they scored 7 goals after struggling to score throughout the past several months.

UNH has now lost in the first round in 4 of the last 5 years under respected Coach Dick Umile. They have never won a national championship, despite frequently being a Top 10 team in the country. Like coaches (and other employees) before him, it is time for Umile to go. Not because he isn’t a good coach, but because he can’t seal the deal by winning a championship. Sometimes when that happens regularly, it is time for new blood. There is a history of this in sports, including Mike Hargrove being fired as manager of the Cleveland Indians after 5 consecutive division titles (but no World Series victories).

In more traditional startup terms, think about the executive or salesperson who brings lots of deals to the table, but never gets a signed agreement. Whether or not it appears to be the employee’s fault, sometimes new blood is the best solution.

When the Company Changes Direction

If your startup changes direction, you may no longer have the right people in the right seats on the bus. Consider the case of a company that launched with a B2B focus, only to realize somewhere along the way that the technology might be better suited to a consumer application. The same people who may be great at enterprise skills may not be prepared to handle the new environment.

Of course, there are many reasons that a company may change direction. It could target new verticals, change the focus of a product, or invent some new technology. In any case, companies must not be afraid to make a change when the direction dictates it.

When the Employee Has Reached His Potential

It may seem odd to think that once an employee has reached his full potential he might need to move on. But the reality is that an employee who has no room to grow will often atrophy instead. This can be one of the trickiest situations to identify and act upon, but it can also be one of the most important decisions a startup will make.

Personal growth is incredibly important to the well-being of the individual and the company. When you have little left to learn, most individuals will fail to achieve the great things a startup needs from everyone. Worse, most solid performers will become bored in this state. The solution is to adjust the role to leave room for learning, or find the right time for the individual to move on to a new challenge elsewhere.

A Final Word

Knowing when to let a good employee go will help the company rise to the next level. You need not fire a good employee in the Donald Trump “You’re Fired!” manner. Though often difficult, especially in the startup world the decision can become a critical differentiator and impact future success.

(Hopefully UNH administrators will reach the same conclusion with Dick Umile. Though I admire and respect him as a coach, it is time for change in that hockey program.)

Don't Fear Failure, Learn from It

Next week I will join a panel of entrepreneurs talking to students in an entrepreneurship class at the University of New Hampshire on the subject of failure. This is a subject that numerous entrepreneurs and investors have talked about in the blogosphere in recent years. I'm certain I have even chimed in on occasion.

But in an effort to organize my thoughts to best convey my experiences, I thought it might be constructive for me to write about it first in some detail.

Different Kinds of Failure

Spectacular Collapse. When most people think of failure in an entrepreneurial sense, they likely conceive lots of money flushed down the drain, jobs lost, and doors shuttered. Indeed, these spectacular collapses often get well-reported. When companies raise millions of dollars in venture capital and go kaput, there are usually plenty of jealous folks who like to make an example of them, especially in these days of prolific social media. And it was less than a decade ago when the first bubble burst and nary a day went by without such a tale being told.

Death of a Thousand Cuts. More often a startup simply runs out of steam, the victim of a series of small failures over time. Perhaps the product never really came to fruition, the market never quite gelled, or the sales process didn't work. Regardless, eventually the company runs out of money or the founders run out of energy trying to make it succeed, or both.

The Land of Lost Opportunity. This last form of failure may not be viewed as such by many, but to my mind it is far more common than you may think. It integrates some of the same small problems that contribute to the first two types of failure, but the venture may actually survive and even make money. But it never rises to its full potential. Perhaps it was the deal that was never done -- or a deal done too soon. More likely it was a failure to invest time and/or money resources at the right time. It's like the baseball team that wins 95 games and finishes just out of the playoffs anyway. While the team played well, it is no less a failure to fall one game short than twenty.

Lessons from My Failures

I have never experienced a Spectacular Collapse, probably because I have always eschewed "vulture capital" (a phrase I picked up from a VC friend) so it has contained the fallout. Nevertheless, I have learned a great deal from the other two kinds of failure I describe above.

Get a (Business) Spouse. To my mind, it is nearly impossible to be a successful solo founder of a company. Sooner than later, you need to join up with someone just as passionate about the business as you are. Having someone to bounce ideas off of, to keep your emotions in check (never getting too high or low), and to complement your skills and personality are absolutely critical. And don't delude yourself into thinking you can get this out of an employee. No matter how good an employee you have, it's different than having a partner in the business committed to total success. To put it in crass terms to help you understand: who stood by Elliot Spitzer's side in his final hours in office? The woman he married, not the one he hired.

Your Startup Needs to be a Daily Passion. As a serial entrepreneur, this is one of my biggest shortcomings. I have professional ADD and it has probably hurt my ventures more than anything else over the years. Trying to juggle multiple startups at the same time can be a big mistake, especially if nobody is focused on each startup for the better part of every day. A startup isn't a part-time gig, even though you may need to take on side work to bootstrap your venture. At least one of the founders needs to wake up every day asking how they can move the ball forward -- and then doing so.

Trust Your Gut Instincts. I never had my heart in one of the companies I co-founded. I actually argued with one of my partners about it for months before I finally relented and agreed to start it up. I saw too many likely pitfalls and too little long-term upside. What made me change my mind? Dollar signs. The one sign you should almost always ignore. It clouds your judgment and makes you do stupid things. All that said, the business actually did darn well for a period of time, and I made decent money off of it. But ultimately it wasn't a viable ongoing business. Thus, still a failure in my book.

Fish or Cut Bait. I like to say that my first consulting business petered out because I got too busy with CustomScoop's success. And that's partly true. But what really held that company back was my unwillingness to plunge deep into the risk pool by growing it into a "real" business. I insisted on growing through the use of freelancers (and I had no partner). Had I bit the bullet and hired my first employee, that company might well still be going strong right beside CustomScoop. Ultimately, I walked away from it at its peak, and I still wonder what might have happened if I had looked to convert it from a simple sole proprietor doing consulting into something more.

A Final Word

Don't fear failure, learn from it. Whether your own mistakes or those of others, there's lots to learn. Unless you are extraordinarily lucky, you will experience failure just as I have. Treat it as an education rather than a disaster and you'll be that much stronger for it.

Not All News is Chronological

It's not just about time. That’s the point that Dave Winer and Scott Karp are missing. Nor does every – or for that matter probably many – readers visit news sites repeatedly throughout the day. Once again, this seems like it might be a case of those of us in the echo chamber believing we are the norm.

Scott and Dave both basically argue that news sources should provide a chronological view of their news. They both frame it as an option, but clearly press for it to be the default view.

But this overlooks the fact that not all news sites are like the AP news wire providing breaking news. In fact, for many years I had access to the raw AP feed for my job and I found it to be a sometimes interesting, but often frustrating, way to view the news. It was chronological – which was great when it was a hot story I was following, but not so useful for the vast majority of news stories.

Good reporting does more than simply regurgitate the facts as quickly as possible. A powerful news article will actually have a shelf-life of more than a few minutes until the next story is published.

When the New York Giants won the Super Bowl, was that any less newsworthy at 3 pm than it was at 11 am the day after? Of course not. Did the facts change at all to merit a new story being written in the meantime? Nope. So shouldn’t it still play high up on a sports web site or a New York newspaper web page? I think so.

Certainly a chronological feed would have value to true newshounds – and as Dave points out for editors themselves. But given that most readers don’t spend all day reloading the New York Times, CNET, or BusinessWeek, let’s not get too carried away.

Providing Fresh Value by Reporting on Reporting

Fred Wilson is right. There’s lots of good information on blogs. Sometimes it is better than traditional media, sometimes not. The bottom line is that to get the best perspective on news and events, one needs to take advantage of a blend of old and new media.

Scott Karp is right. His concept of “link journalism” has a lot of merit in today’s environment. There’s no reason not to extend coverage by taking advantage of what other people are already creating.

Jeff Jarvis is right as well. He preaches the need to avoid commoditized news coverage and instead provide something that nobody else is creating. By serving up new and useful information, rather than the 432nd version of the same coverage, old and new media alike can find a winning formula.

The problem is that these three smart people all have slightly different visions, even though they are somewhat complementary as well. So how do we make sense of it and take advantage of what they are seeing? Simple. Blend the concepts.

It would be great to create a service that digests information from a variety of different sources, old and new, in order to deliver information consumers a product that isn’t commoditized, incorporates the best existing coverage, and offers new perspectives that might otherwise have been overlooked by the reader.

It will take a combination of solid technology and excellent human editing in order to create something that truly delivers real value. Ultimately it is more than simple links, but rather "reporting on reporting."

Will it be traditional media who embraces this first? Or will it be a new media entity? Time will tell.

You Can Convince Yourself of Anything

Overheard while sitting in Union Station in Washington, DC this morning:

"If someone says not to use money they give me for booze, I don't do it. I put it in a separate place and only use it for good things. That's just the kind of guy I am. I'm an honest bum and honest thief. If you leave $20 on the table, I'm going to tell you. Some guys would just take it for themselves. Not me. I'm not going to hurt a guy trying to make an honest living. I only steal from companies ... Safeway, Giant, CVS ... I take them big. I hit them hard. I take thousands of dollars from companies, but never individuals. I'm just an honest guy."

Shel Israel and Josh Bernoff are Both Right -- And Wrong

Purist versus corporatist. That's what Shel Israel and Josh Bernoff are arguing about right now. Josh says that neither side will prevail, but rather some hybrid of the two will result.

So it is no sin to conceive, create, and deploy a corporate social application. If you have a clear objective and can measure it, you are even likely to succeed. Just recognize that you must start from authenticity, it's a dialogue, and that the social world cannot be controlled. The companies I work with are starting to do this. It's not impossible -- in fact, it's the beginning of an incredible transformation. And their participation won't kill the groundswell, it will make it richer.

Likely so, though I think he overlooks the most compelling reason which I will discuss below. But my friend Shel disagrees:

If his implication is that corporations can treat social media as another traditional brand extender, as another place to push messages into the foreheads of people who do not want them, I agree that companies are free to try.

But I think it's bad advice. It just will not work. It's not about purism. It's about pragmatism. 

And he's right, too ... except only as it applies to people like us. What all of us who effectively act as social media evangelists must understand is we are not normal. An absurdly small minority of the American public has any desire to join in the "naked conversations" popularized by Shel and Robert Scoble.

That doesn't mean that authenticity and listening aren't important. Clearly they are. But a significant portion of consumers are just fine with marketing. They may say they dislike it, just as they say they hate "negative" political advertising, but the bottom line is that both work. And that isn't going to change anytime soon.

Look beyond your immediate circle and find out how many people you know regularly participate in the "conversation" by posting reviews, commenting on blogs, or creating social media themselves. It just isn't that large a number. What we all create will certainly be read by a number of people, but it is likely that corporate marketing messages will continue to be seen by more people for the foreseeable future.

Think about your own activities. Do you turn to social media before buying cereal or shampoo or clothing? Or are you more likely to respond to advertising and other corporate messaging? Chances are, you respond to marketing yourself on a daily basis, perhaps without even knowing it.

And despite the distaste so many proclaim for TV advertising and the proclamations that the medium is dead thanks to Tivo and other DVR's, the fact is that we all still hear and often discuss advertising marketing messages. They still seep through.

Companies should continue to take social media seriously, however, because those who have chosen to join the conversation are likely to be more vocal and cultivate an important audience for or against a product. But the significance of these conversations are still at their very earliest stages. Despite widespread dissatisfaction with Wal-Mart and its policies online, millions of people still shop there and the company remains successful. Strong disapproval of Target's approach to bloggers brought some calls to boycott the company, but I don't see the lines getting any shorter there. When I used to frequent woodworking message boards, there was great disdain for Home Depot (referred to frequently as the BORG -- big organge retail giant) yet it, too, keeps on selling to the vast majority of consumers.

For smaller brands, the impact can be more immediate. Certainly in my own companies I have seen the value of participating in the social media conversation. And the significance will likely grow over time, even for the larger brands. But ultimately there will still remain a place for more controlled marketing.

The Reality of Zuckerberg-Lacy at SxSW

I finally got a chance to watch video of the Mark Zuckerberg Q&A style keynote from SxSW. His interviewer, Sarah Lacy of BusinessWeek, has been almost uniformly excoriated for her performance. We are led to believe that the audience turned on her quickly, ridiculing her on Twitter, walking out of the keynote, and heckling from their chairs.

The Firestorm of Criticism

Candidly, I didn’t think it was even half as bad as a number of well-respected bloggers and commentators seem to believe. (Not surprisingly, Jeff Jarvis offers one of the most well-considered critiques.) The most common criticisms about Lacy seem to have been that she interrupted too much, focused attention on herself, acted too “flirty,” and didn’t ask questions of interest to the audience (specifically she focused on business more than technical aspects of Facebook).

The Reality as I Watched It

Lacy’s interruptions frequently added value to the interview. Zuckerberg was meandering his way through a story about Colombian guerilla fighters when she interjected a question about whether he ever thought Facebook would be used for that when he created the company. It was a good effort to get him back on track. Many saw it as an attempt for her to step on his story, but I saw it as her attempt to fill her role of keeping the Q&A lively and interesting.

Remember that the reason why someone like Zuckerberg gives a keynote in Q&A format is because he isn’t comfortable giving a solo speech. The interactivity is designed to overcome the deficiencies that he likely recognizes in himself. Perhaps she was a bit too conversational at times, but it appeared to me that she was trying to loosen him up and get him to forget the audience in front of him.

She did err in making the announcement of a French language version of Facebook rather than bringing it out in a question. That’s an easy mistake to make since the two had spoken prior to the keynote in an attempt to figure out what the discussion would focus on. Should she have been more careful? Of course.
Was it a mortal sin? Hardly.

As to the mix of questions, it seemed like she took a reasonable approach to the discussion. Sure, the audience was full of creative types, but the business philosophy behind a company as important (at least as of today) as Facebook should be of interest. Designers and developers who ignore the business realities do so at their own risk.

At no point did I sense that Zuckerberg seemed uncomfortable with Lacy’s interview style. He seemed relatively relaxed, at least as compared to his reputation. The few occasions where he seemed to “give it” to Lacy, it struck me more as an attempt on his part to be flippant and conversational himself, rather than an effort to express outrage or discontent.

I should also note that the audience did not seem as agitated as the coverage led me to believe. There were occasional shouts from the crowd, but nothing that would overtly signal to the people on the stage that the audience was extremely restless and discontented. That suggests either the outrage has been exaggerated or the crowd controlled its animosity well.

The Disconnect With Reality

Throughout, Lacy seemed respectful of Zuckerberg and Facebook, something that I didn’t sense from the Twitter and blog coverage. She was aware of the hostility from the audience over Beacon and attempted to get Zuckerberg to discuss it and have the crowd listen before they reacted.

For others defending Lacy, check out Mike Arrington and Brian Solis.

Beware the Mob

This is simply the latest incident where the social media mob rushed to judgment and sucked many of us in along the way. Until I finally had a chance to watch the video, I was left with the impression that the Q&A had, in fact, been an utter disaster. Fortunately, social media brought us the video to dispel that notion.

The best and worst thing about the blogosphere and Twittersphere is that everyone is empowered to share an opinion. The more vigorous (or perhaps vicious) the opinion, the more likely it is to get noticed.

As a community, we must all be careful not to rush to join the mob -- or believe everything it says. Further, there is a clear need for balance and reason in order to encourage more of the mainstream media, major brands, and average Internet users to join the conversation.

(By the way, kudos to Nick O'Neill for getting the complete video online so those of us not at SxSW could see the reality.)

Extending Coverage Through "Link Journalism"

Scott Karp of Publishing 2.0 lately has been extolling the virtues of linking as part of professional media coverage. Hardly a new concept in social media, but one that still hasn't gained complete traction as traditional media migrates online.

He dubs it "link journalism" and recently touted the efforts of one of his company's clients, Knoxville News Sentinel, in using it. I happen to agree with his overall outlook, but I think the devil is in the details. First, read his original post for context and then the comment I left on his post:

I agree that “link journalism” is something that more media outlets should explore. But notice what you did differently with your post than the paper did with its own. You included excerpts from the original sources rather than just raw headline links.

Headlines like “Snow” or “More Snow!!!” don’t tell me much about what to expect from the post, so therefore don’t entice me to click over. To be successful, I think that such journalism needs to provide added value beyond simply linking, by helping to guide the reader to the best content or at least setting expectations on each link.

It’s much like creating a news story. The reporter must decide what facts to include in writing the story rather than simply publishing a bulleted list of facts.

Making Sense of All This Startup Advice

Many bits and bytes have been spilled over the past few days about how to curb costs and get the most out of your startup team. The never-shy Jason Calacanis launched the discussion when he rattled off a series of tips for startups to make money, including some controversial ones like firing non-workaholics, buying an expensive espresso machine, and enticing employees to stay in the office longer by catering food. Most of his advice focused on saving money, however.

The Critics and Supporters Weigh In

Christopher Hawkins takes issue with Calacanis' desire for workaholics. On the 37 Signals blog, he writes that you should "Fire the people who are workaholics!" He goes on to share a number of specific reasons for his view and concludes: "If your start-up can only succeed by being a sweatshop, your idea is simply not good enough. Go back to the drawing board and come up with something better that can be implemented by whole people, not cogs."

Venture capitalist Fred Wilson offered his two cents, largely agreeing with many of Jason's points but adding one that really resonates with me: "hire utility infielders" he says. In other words, find some good jacks-of-all-trades for your startup team where you can't afford lots of specialists.

TechCrunch founder Michael Arrington says its not just about saving money, but also about hiring the right people.  Billionaire big mouth Mark Cuban (whom I admire despite the moniker) serves up his own take, focusing in part on the need for the founder to be passionate about the startup and not focused on an exit strategy. He also wisely suggests zeroing in on how to make money.

Pat Phelan chimes in from across the pond and suggests that startups look to the suburbs for cheaper office space and curb event and travel costs. (In other words, no trips to visit him in Ireland unless you can really justify it!)

Does Anything But the Product Really Matter?

Dave Winer, often a contrarian, offers up an important observation of his own, however, when he speaks of companies he has watched succeed and fail over the years.

the difference is the ones that succeed have a hot product that lots of people want, and the ones that fail don't. I don't think whether you savor every penny makes much of a difference, in fact if you pinch them too hard your people are going to hate you, and they have to love the founder, just as the customers must and the press and even the competitors.

I often find my own views at odds with Dave's but this time I have to admit I'm in agreement more than disagreement.

So What's Important Here?

Take all of this advice with a grain of salt. If you read the suggestions of all of these individuals, you will see that they disagree as much as they agree. Yet most of them have been quite successful in the startup world themselves.

You can find an expert or a successful person who will tell you that anything you believe is the right way to go. Pick up a stack of business books and some will argue for meetings and some against. Others will advocate work-life balance and some will exhort you to make work your passion.

Ultimately, you need to figure out what works for you and your startup. You will make mistakes. And others will tell you you're doing it all wrong, while some will say you "get it" (only because you agree with them, by the way).

The good news is the bad news. There's no playbook to follow. You'll be making the rules up as you go along but you'll be judged by others who may view the rules differently. Go forth, build a great product, and have fun while you do it. What happens, happens.

PhotoWalking DC

I spend a lot of time in Washington, DC for business and keep an apartment there. I happened to be in town over the weekend on my own, so I took some time to go photowalking around the monuments. The photo above is of the Washington Monument just as the sun was setting. I liked the way the Reflecting Pool did its job, so I captured the moment.

Later in the evening I liked how the Lincoln Memorial was lit and popped out, silhouetting the crane and Virginia skyline in the background. You can see all of my DC photos here.