What we learned in studying the most effective founders
blog.google
blog.google
We spend too much time focusing on survivors, when I feel like the best learning comes from looking at failure.
I'd be willing to be there's a lot of failed / failing companies out there doing the exact same thing as the "most effective founders", so what makes them different? I'd be interested to know.
Like that anecdote about the studying the WW2 planes that went down vs the ones that made it back to see where to add more armour.
I’d say examining survivors is useful and can provide information, but you need to be careful to correct for survivorship bias. But that’s not to say you cannot gain any information from examining cohorts of survivors.
I think most people probably under-correct for survivorship bias so it’s good general advice to highlight it.
“What is it the successful planes do? Well, they didn’t get shot here (points)”
The whole "25 things that successful people do" completely ignores the entire question of whether unsuccessful people also do those things, and therefore whether those things have anything to do with success.
Survivor bias is so prevalent in any thinking about "what makes someone successful?" that yes, it would be much more effective at this point to consider "what makes someone unsuccessful".
I'm willing to bet that the things we consider to be signs of success are actually table-stakes, in that both successful and unsuccessful founders do them, and the thing that actually marks the difference between successful and unsuccessful founders is luck.
Every company is unique and problems are different and in different domains at different external conditions.
Statistics would just be a sample size of 1 and std dev of infinity.
While controlled experiments are the ideal for hypothesis testing, as someone who does stats for a living it's worth point out observational studies do exist.
Entire fields, such as anthropology, depend entirely on observational statistics. The field has also come a tremendously long way in recent years with lots of very useful tools coming out of the Bayesian community (applying proper priors, multi-level modeling, inference on more complex models) and the causal inference community.
McElreath's Statistical Rethinking is a great text that deals mostly with what I would consider the current state of the art in observational techniques. Highly recommended if isn't already on your bookshelf.
There's a pretty established model regarding successful founders who then write books about themselves. The audience seems to be well known and if not presumably a successful founder could self-publish their way to success.
The model for mediocre founders talking about their failures is probably a tough sell to backers as the audience size is unknown and if the founder is unsuccessful they won't be able to self publish.
The best format would probably be a free podcast and where some host would invite other moderately/less than successful founders to talk about their ups and downs. The best bet for the host would be some VC funded moderately successful founder who's startup only 1.5x'd instead of 10x'd snd had to sell the company and now had free time.
[1] effective here is subjective and reported. They have a discussion of why they don't use other metrics like company valuations and it boils down to that data is harder to collect I think
I’d be very surprised if lots of failing companies are doing the _exact_ same as the most successful ones. Maybe cargo-culting all of the things, or actually doing _most_ of the same things but missing one necessary thing. There is an element of luck to it for sure, but the intangibles like business strategy, product market fit iterative discovery, hiring, managing, developing people, are all quite hard to pin down in pithy summaries. The best startups get these right either by meta-level luck of happening to have the right skill set for the problems they ended up facing (vs. rolling a natural 20 on a skill check with the same stats as other founders) or by actually working harder on acquiring the skills that they most need to develop. But doing these (hard, time-consuming) things well is uncommon.
This may well be true, but the factors for success are hyper-sensitive to the context of the time with a hefty dash of randomness thrown in. By the time we've observed the factors, the circumstances have changed so they're not entirely repeatable. Sticking to the formula may work, or may lead to wildly different results. But altering the formula is just as unpredictable. Context is critical.
- Treat people like volunteers vs treat people like paid employees
- Protect the team from distractions vs distract your team
- Minimize unnecessary micromanagement vs introduce unnecessary micromanagement
- Invite disagreement vs squash all disagreement
- Preserve interpersonal equity vs treat people arbitrarily
- Keep pace with expertise vs ignore whats going on around you
- Overcome discouragement vs succumb to discouragement
The ineffective founds list would probably be something similar, like "be a dick", "ignore your colleagues", "be volatile", etc.
Ie being a dick at right moment may allow you to push through situation that would make weaker / more moral ones fail. And about gazillions of other possible examples that may be counterintuitive.
"We will strive to make people happier and more productive".
Who would say they strive for the opposite?
"Invite disagreement". All hedge. "some studies have shown", "in tern it could mean more innovative and inclusive products". Not because you want to show respect for the opinions of others or that you listen to what people have to say but because it could lead to more innovative and inclusive products ie. "I don't really care what you have to say other than how it hits my bottom line but go on talking. I'll let you know if I think you say something worthwhile"
"Keep pace with expertise" This was nice until you get to the bottom of the actual report and find out that Josh has an undergraduate degree in Biology and an MBA. I'm not sure how that shows any expertise in what is being written about but please go on nor how that could possibly qualify you as Chief of Staff at Google Research but there it is.
I think what's more interesting about stuff like this is not what they're saying but what they're selling. I can only guess that the real research Google did was that they needed more startups to get started using their products and that they would continue to use and expand their use of Google services as they grow.
Other than that I completely agree with you
I'd pay for a reputation mapping service with a specific point of view. I'd pay for several of them if they were different enough.
Could have said that and left out the rest. Most tech blogs I come across are thinly veiled sales pitches, and the trope is to take some more or less obvious subject and put a TEDx style spin on it.
In an alternative universe, ZCW101 is complaining that they said "eliminate micromanagement" and that person is arguing that sometimes you simply have to micromanage and eliminating it is unrealistic but they should have said something about minimizing it. And then someone complains that some is necessary and you should only minimize the unnecessary parts.
Anyway, my real point is that the summary necessarily only captures the data in an inexact manner and if you are interested you can dive in. The real point is that some % of people feel micromanaged and it is a large point.
By the way, even that point is a summary. https://static.googleusercontent.com/media/startup.google.co...
All of us want the right "resolution" of management. Some people might say the right level of micromanagement (in your example, the goldilocks micromanagement). You may say anything that is "too detailed" is "micromanagement" by definition.
I am not saying you are wrong, but I am saying that as long as we agree on the underlying reality, I don't much care what you call it.
The article is about "effective founders", not about "nice persons". If being an insensitive cunt made you a better founder, then that would be an important datapoint worth knowing about. So I don't know why you're criticizing this part of the article.
I was with you until this comment. Unnecessary ad-hominem, as well as a misguided premise. It looks like Josh has worked specifically in the "startup success" space for several years now. A lack of formal education does not preclude someone from being an expert. Not even sure what a formal education in this context would entail.
An MBA. This is exactly the sort of material MBAs study and there really isn't any other formal educational credential that qualifies someone to evaluate strategies for making a business succeed. Making this particular ad hominem criticism especially ridiculous.
The person OP was talking about does have an MBA, since you mentioned it.
Either way, I am hard pressed to believe that an MBA makes someone an expert on this subject, or that someone can't become an expert in 'business' without a degree.
But you're right, not an ad hominem, just a very angry, mis-guided rant.
This article is written from a corporate pov, judging founders and founding teams, which are fundamentally different animals, from the wrong angle.
The pattern I’ve seen all effective founders had in common from my experience were 2
1. Building something people want. Usually they started with something crappy, focussing on product market fit first. Almost always have paying customers.
Then
2. Tirelessly working 24/7 on product & telling more people about their product.
All the managerial things mentioned in the article are important at some point. But it’s not what will make or break a startup.
- expertise or at least competency related to the domain
- social currency, ability to influence/convince people
- stamina and fortitude
Most of the points in the very short article are about "don't be an asshole to your employees", which is certainly a good thing and what people should be doing. But I can think of quite a few outrageously successful founders who have been insufferable dickheads.
I think my second point above might be the single most important one. I have no data to back it up, but I feel like if you can just make people do what you want in some way or another (and that includes customers, workers, partners etc.) then you're set up for success. At least short or midterm (a few years).
I think this is a bad thing because it is quite arbitrary and stupid. I say that in a loving way. I wish we (humans) were not that dumb.
When you work at trillion dollar company that likes to think of itself as a small nimble startup, you write articles like this… the point isn’t to help startups, it’s to influence people in the organization to behave in a certain way by attributing the behavior you want to another group you admire.
Google doesn’t care about creating a successful startup.. they do care about how their employees work together.
A slightly less cynical take is that when Google "studies" startups, they dont recognize problems like you describe because creating a startup isnt a problem they are faced with. But cultural issues exist everywhere, and so those are the problems that the person sees and addresses in their writeup.
The result is the same either way. You're not going to get startup lessons from one of the largest companies in the world.
Edit: Couple minor typos.
https://www.cnbc.com/amp/2021/05/27/super-founders-median-ag...
Most significant property of billion dollar startup founders is that they're more likely to have founded a multi million dollar startup before. That doesn't necessarily mean that they're super talented, but more that they've got the good qualities as well as the required experience. Anyway the book has loads of great insights.
If Google considers this quality content, is it really surprising their search results increasingly return non substantive answers to questions?
Probably the meaning of survivorship bias.
- strong will to make the vision a reality
- humility to update the vision when appropriate
- natural ability to motivate people to work toward the vision
- the ability to focus and to keep the team focused
- the ability to explore and to keep the team exploring
- the ability to present and fundraise effectively
- luck
All but the last item are not very scarce characteristics (roughly 1 in 200 people has them all in sufficient quantity to succeed as a founder).
The last one is where it gets difficult, and at every iteration the impact of luck gets amplified, to the point where it is actually the signal that everyone is looking for to "pile on" to an early stage endeavor.
This was good to know. I constantly feel that imposter syndrome, especially as we grow and I am trying to keep my leadership skills at pace with our team size.
It’s refreshing to see mention of the DK effect linked to a more recent paper, one where the original authors are amending (contradicting) their original work. But I have never ever seen the DK effect mentioned in a context where it actually works as a reasonable explanation of human behavior, this post included. For example, if we take these papers at face value, one of the few things they actually do show is that there is a positive correlation between confidence and what they call “performance”; the more confident someone is in themselves, the more likely they are to be right about it. The most common (mis)conception of DK is the opposite of that. Being confident and then having reality set in is not what DK measured. Really, the only use DK has is a way for the speaker/author to position themselves as smart & authoritative by citing their awareness of it, often as if knowing of it helps you avoid it.
The original paper just did not measure anything even remotely close to startup success by founders, and thus it’s conclusions simply do not carry into this context. The paper did not measure any kind of job performance by any professionals. It didn’t measure complex tasks either. The tasks were basic and academic, e.g., a little grammar, ability to get a joke (seriously!), and the primary statistics they gathered were based on people ranking themselves against others whose performance they didn’t know, not primarily on isolated or objective self-evaluation. The sample of people was a tiny(!) set of Cornell undergrads(!) volunteering(!) for extra credit. There are just so many things wrong with assuming this work represents real human behavior, and the paper was misleading and is so completely misunderstood that I wish references to it would just stop: they’re never correct and never useful.
It's okay to have boring work. It's challenging to _only_ have boring work.
In this case, a volunteer is a nice mission-less proxy. Is some work engaging for the owning employee, or do you need to get someone else on it, or even switch to outside staff for it?
Like in those sweatshops in third world countries. (Although sweatshops dont give equity)
So 60-70 hour weeks.
Does this work in Silicon Valley?
It's about treating people like they have personal interest in the mission of the organization and working towards a common purpose. And not to treat them like your personal wage servants.
I had to write this long introduction because you started name calling. Apparently everyone who doesnt want to work in sweatshop like conditions only works for a salary. Maybe this is news for you, but most people want an easy job that treats them well. But treating employees well (e.g. fancy office in trendy part of town, cool company swag with logos) is not really aligned with the priorities of a cash starved startup. The startup probably should try to cut its expenses to the bone and focus on necessities - by for example running first from a garage, or a home. It is very likely that the startup will pivot its business model few times before it becomes cash positive, so it should try to limit cash outflows as much as possible (even just to survive for the next round). Yes, there are startups that become cash positive fast (what is probably great way of doing business), but it is relatively rare. Most start ups need to survive few lean years. Although there are obviously companies made to grow as much as possible and sell the bag (of shit) to some bagholders - their CEOs focus most on marketing than building a product that actually works. Every start-up is after all a promise - we need your cash now, that we will translate into a successful equity later.
But coming back to the alignment between what companies/start-ups wand and what employees want - they want different things. Companies mostly want to generate cash (or the owners want to sell the bag to someone else if they cannot generate cash), while employees want a nice salary. Yeah, some want to do impressive stuff, but most people dont. Those people who want a salary probably dont fit the start-up crowd anyway, but can you really tell? Squeezing some fresh grads like lemons in a start-up happens all the time. They just dont know better and accept the biggest sin of sweatshop-like companies: overtime.
Startups are known for overtime. If the leader can get some cult-like group who will sit 70 hours per week, then there is a bigger possibility of success than a start-up where workers work 40 hours. Although this is not an easy subject, because hours spent probably not always translate to effective hours. Someone can do 30 effective hours out of a 40 hour work week, while someone can have 50 hours out of 70. It is also possible that someone has 10 out of 70. But generally the overtime is sort of productive, even if this leads to burnt out employees, as I wrote before - those fresh grads are fueled by enthusiasm and dont know better. So a sociopath who will exploit them makes a great leader.
And mission of the organization is just to earn as much cash as possible for its owners and employees. Most companies dont have any real vision, it is some marketing bullshit (for start-ups), or something done by consultants on a corporate retreat. Even in a startup most employees probably dont know the vision. Or they are smart enough to know it, but do they believe in it? If your start-up is rewriting Excel pivot tables in Rust, is there really some grand vision? "We are building revolutionary product that will ease up lives of many people". Seriously, take the vision of one company and apply it into another - often it works. And I dont say that lack of vision is bad. But most companies just want to make the top product that is the first choice for customers. This means happy customers and money for the company. Rest of this is just marketing trying to build some sort of a cult. Unless your startup plants trees in Amazon or cures cancer, the vision is just to be a successful company. Obviously you cannot tell that to people, a good CEO is supposed to do the dance and create a whole brand (preferably out of nothing - because there is no money for marketing). Probably easier to sell bullshit if you believe in it, but at the end of the day is still bullshit. I also have to sell bullshit from time to time (everyone who manages people does), but at least I know that it is bullshit. And yeah, I know the mission of my organization, it actually makes a lot of sense, but still it is just bullshit used to hide the real reason why the company operates - to earn cash for owners and (to some degree) employees. If you earn doing something that is good, then even better, but come on - how many Jupiter notebooks can you rewrite in Go and will your C++ uber for pets will be really revolutionary?
If you take CEO A, who builds this hypothetical uber for pets and sells some bull that makes the employees work 70 hours per week and compare to CEO B, who makes them work 40 hours, the first one will probably be more successful. At the few year time frames (life before a start-up succeeds or fails), the employees from company A will probably not burn out, while company B can burn out its cash reserves and have no product.
Not all start-ups are made equally; some probably have the abusive culture that you describe while others are more fair to their employees and have a more win-win outcome.
In what context are volunteers treated like that?
- have energy
- have a goal, the why?
- surround yourselves like the people you want to be
- launch something crappy
- keep doing something, anything.. one day it will all accumulate
- be good at finding people who know instead of learning yourself
I do not see it being specific to founders or startups.
In my book, you can actively have both. Protecting from distractions often means helping the team feel like they can say no to anything that isn't the most critical work. Inviting disagreement simply means that you tell your team you want dissenting opinions.
For example, if you feel like the team is working on a few unnecessary projects, you can help them say "no" (protect from distractions). However, you shouldn't just do it blinding. That project may actually be valuable, but not in the way you anticipated on the surface.
And I think it's already pretty obvious what to do.
But what it's difficult is always the grey area. "Let's support Bitcoin as payment gateway". And this two tenets become contradictory.
Has anything big come out of Google's Area120 incubator?
2. Corollary of #1: never take a client providing over 10% of your annual revenue, or table personal assets to grow
3. keep your legal positions clear: talk with contract, copyright and trademark lawyers early
4. keep your tax strategy clear: talk with regional corporate accountants, and customs brokers early
5. Prioritize revenue: without a profit-mode your project is not a business
6. Corollary of #5: provide _paying_ customers value they are happy with, or cull the project
7. Manage or be managed: you are running a business, and not a charity. There are several styles for doing this, and no way is perfect. Often hiring friends is a mistake, as when serious money starts to flow people often revert to their primordial rodent brains.
8. Marketing: your conversion rate is below 1.7% ? than adapt/cull the project…
9. low hanging fruit is usually rotten: if it is something some kids can _appear_ to copy to make a quick buck, than the market will quickly fragment. a.k.a. “chasing the long tail” of market distributions is financial suicide
10. admit you can’t know every scam, and accept as a business there are always losses. As a small entity you are vulnerable to all sorts of legal, technological, and personal attacks. Technical people often think being smart somehow immunizes them from cons some sociopaths mastered... it doesn’t... talk with people, and you will see this is a very common bias.
11. With shareholders one must acknowledge the structures of power: https://www.amazon.com/Dictators-Handbook-Behavior-Almost-Po...
12. post failed projects on your website as bait, so when the business-intelligence people show-up looking for soft-targets... they too can enjoy the losses... nothing more enjoyable than watching irrationally competitive opportunists go bankrupt pumping money into something you wisely abandoned. ;-)
I wouldn’t call my entities successful by “startup” standards, but they have remained profitable for over 14 years... and they are mine.