Photo by Michael K
Time after time we are told that the best leaders lead with questions and put their team above all else. A selfless leader will be able to build a friendly, open company culture and thus his team will remain loyal to him. This is a lie.
The startup life is NOT a democracy; it is a dictatorship ruled by the CEO who has ultimate power and ultimate responsibility for the company.
Here are just a few lies you have been told about leading a startup company:
- Wrong: Your people come first | Right: Your company comes first
- Wrong: Find people to work for your for free and let them do as they please | Right: Selectively recruit people to work on your team for free and tell them exactly what they should be doing
- Wrong: Since a person is working for you for free, it’s ok if they half-ass their work | Right: Immediately fire anyone who is not producing 100% of what is required of them
- Wrong: Lead with questions and let your team members decide their best course of action | Right: Ask questions to get team member feedback, but you ultimately have the final say in all decisions and company direction
- Wrong: Include everyone in your company team meetings | Right: Only include people in a team meeting if it is absolutely necessary that they are there. Your Marketing Lead should be at the team meeting; NOT the marketing interns
I know what you’re thinking… does this mean I have to be a tyrant? Of course not. This just means that as the leader of your startup company, you must be strong enough to make crucial, timely decisions without hesitating and without having to brainstorm with your teammates.
Why the misconception of leadership?
As young entrepreneurs, we feel that we have a lot to prove and we feel lucky when people join our company. We’ll bend over backwards to make sure our team members are working on the projects that they want to work on and will give them the freedom to complete the project on their own time. After all, people work at a startup for the freedom and relaxed company culture.
We get off track because we feel that we have to make our teammates happy. We get off track because our inexperience makes us doubt our own ideas and vision.
How to become a great startup leader
The one thing you have to understand is that your team members, and even yourself, are secondary to your company. The success and survival of your company must always be at the top of your priorities. Because of this, you must lead like a dictator.
Follow these simple steps and you will not only have the respect of every single person in your company, but more importantly, every single person in your company will be fully committed to your company vision and to the success of the startup:
1. Give vigorous, insanely difficult interviews
People love prestige. The more difficult it is to get into a company, the more prestigious it seems. Destroy everyone during the interview process and be super selective about who joins the company.
When you do hire someone, they will feel very honored and truly believe that they earned a very difficult position. They will work extra hard to please you and to make sure they live up to the high expectations of their “prestigious” position.
2. Lay down the law from the very first team meeting
Welcome and embrace every single team member. At the same time, let them know that your company has a very strict policy toward results. Create a company culture of strict discipline and you’ll see how every employee works hard to accomplish every task to the exact detail.
Most importantly, reward those who go above and beyond what they’re supposed to do. Your team should know that you’re tough on those who don’t produce, but that you greatly reward those who produce above what is expected.
3. Split up team meetings according to management
Your core team should be fully committed to your company, have equal shares, and share the lead-like-a-dictator policy. [For this example, the core team is composed of the CEO, CMO, and CTO]
The CTO and CMO should each have individual meetings with their own teams. You will NOT sit in on these meetings. You have a CORE team for a reason, and these are the people you trust to go above and beyond and make the company successful.
Closely monitor all metrics. If a company division is under-performing, then you will have to step in and take the lead.
4. Create a team scoreboard
I am a huge fan of complete openness in a company. Everyone should know how much everyone else is getting paid and exactly how much work everyone is getting done. For this reason, my business partner Yu-kai Chou has created a brilliant team management strategy called the FD Scoreboard.
The FD Scoreboard is a fantastic way to publicly (within the company) track everyone’s accomplishments and progress. I won’t go into detail about the FD Scoreboard right now, but will save it for a later post.
5. Keep your firing gun ready at hand
My good friend Daren is ruthless when it comes to his company team. Unlike the FD team that has several CORE team members, Daren’s company only has 1 CORE team member – himself. Yu-kai and I know him as the guy who hires a developer, relocates him to his place, and after two days, fires him because he just didn’t fit his vision. Hardcore.
Do you have to be that hardcore as well? Well, you don’t have to be that intense, but you can definitely learn from Daren’s example. He’s been successful because he doesn’t spend any of his energy making sure that his team is happy; his sole purpose is to make sure his company is successful.
A leader is nothing without a successful company
I love my team members. I would do anything for them and would sacrifice my own cash to make sure they’re doing alright financially. However, I feel that at times I can care too much for them. At times I will sacrifice the well-being of my company to make sure my team members are nice and happy.
Love your team mates and make sure you treat them with the utmost respect. But always remember that your company must come before anything else. You may be the sweetest, most loyal leader that has ever lead, but if you don’t build a successful startup company, no one will remember your name.
People don’t remember “Bob, the amazingly nice leader.” People remember, “Bob, the successful entrepreneur.”
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What have been your experiences with leading a team?
About the author
Jun Loayza is the Co-Founder of RewardMe, a digital rewards program for restaurants and retailers. In his entrepreneurial experience, Jun has sold 2 internet companies and lead social media technology campaigns for Sephora, Whole Foods Market, Levi's, LG, and Activision.
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{ 19 comments… read them below or add one }
Jun, I’m going to have to disagree with you on this one. The reason people work at startups is because of the close knit culture and friendly environment. The pay at a startup is much less than at a corporate environment, so you really need to make up for it with company culture.
If you’re constantly ordering people what to do and ruling by fear, then your people will constantly leave your company.
What do you think? I am missing the point of this post? I’m thinking of starting my startup very soon, and I believe culture is one of the most important things to establish in the very beginning.
Your company team is the single most important factor in the success of your startup. As a young entrepreneur, you will have very little cash to play with and your goal is to get people to work for your company for free or equity.
This is where most young entrepreneurs drop the ball. They feel that because the person is working without monetary compensation, they should be thanked and allowed to do whatever keeps them happy.
I want to destroy this misconception with this post. Yes, you should have an open, welcoming, friendly company culture, but at the same time, the culture must be of discipline and respect. If someone is NOT producing, fire them immediately. Use them as an example of how you will put your company first above friendship or friendliness.
I use the word “dictator” so that you will pay attention. Be happy and put your team members above yourself, but put your company above your team members.
Jun – I’m not sure if I agree with this whole-heartedly. The way you explain the ‘ideal’ work environment sounds like a company I would think twice about working for. I don’t want to feel like I am in a dictatorship, with a required set of regulations and rules to abide by in an overly-structured environment. I don’t believe in striking fear in the people that work for you. Having the ‘firing gun’ in hand sounds a little harsh.
I think every startup has to have structure, but I tend to lean toward the side of building a strong community relationship within your staff. Of course, things need to get done and if someone is not being productive, that is a situation that would need dealing with. But I would rather create a work environment where my staff isn’t afraid of losing their job due to a lack of productivity – rather, I would strive to develop an environment where people WANT to go above and beyond, because they believe in the company and value their job. If someone isn’t behind an idea 100% – you’ll be able to sniff that out and most likely it will be mutual that they aren’t a good fit. I don’t think it’s so much about harsh interviewing, I think it’s about finding people who are genuine and passionate and support the ideals and goals of your startup.
Many people leave the ‘corporate’ lifestyle because the business is run like this. People grow tired of results driven business, in my opinion, and I wrote about this a few weeks ago – I don’t see business as ever being ‘just business’ and I think, at the core, a business has to be fueled by relationships – from within, and with partners and clients. It seems like, with the business mindset you’ve described, you are destroying that type of business atmosphere.
Maybe I’m missing the point here as well, or maybe we just have different core business philosophies (which is totally cool – there’s more than one way to run a successful business). What do you think?
Matt, I’m glad you chimed in on this conversation.
The business relationships and culture that you describe have to be there. I feel that most early stage startups get carried away with it though. When the startup is young, most people feel that they need to focus on creating that really fun atmosphere, which leads to people running wild and no accountability.
Your CORE team must have the family relationship. Your core team should be comprised of people who have equity in the company and are fully committed to the vision.
You describe creating a company that people WANT to work for and strive to go above and beyond. Do you know how difficult that is? As a young startup, you have very little cash flow to offer an employee. What you can offer is a learning experience and a fun-filled atmosphere. But what if you don’t have an office? How can you maintain that fun filled atmosphere (hmmm… this sounds like a future post).
Lets take this further. Lets say your company is all virtual. People only meet once a week on skype and everyone is in charge to complete their own tasks on their own. How do you keep the friendly culture then? Are you going to call your team members everyday to ask them how their day went?
What if you don’t have a development team and you have to recruit a team of out-of-state developers to work for your company? How will you embrace them into your company culture?
You bring up some really good points Matt. The point I’m making is that we focus too much on a fun-filled, freedom type culture at startups. Early stage, non-funded startups don’t have accountability, and because of it, people roam wild within the company and do as they please. They do what they love to do, but what they love to do may not necessarily be what the company needs right now.
Do people grow tired of a “results oriented” business? If your company is producing results, then this means that each team member is producing at optimal capacity. This means no one is slacking and no team member is annoyed at another for “being dead weight.” If the company is producing results, this means you can get an office, pay employees a hire salary, have office trips, take your employees to web conferences, and have an overall awesome experience.
I do have the same point of view as you Matt. However, I am currently trying to bring light on a new way of startup leadership. Focus on the company first and everything else should be second.
Let me be clear that I don’t think the startup life should be all play and no work. It’s not about having fun and slacking off – not at all. Work has to be done, productivity is key, etc. I just think the way you presented it in your post here comes across as harsh, cutthroat, and uninviting. However, in your replies, I can see that you show compassion and value the ‘nurturing’ side of running a business.
I especially agree with your response to Tony. Give the person a task that needs completing, but let them be creative and come to a solution – as long as they ARE being productive, ARE getting their job done, and ARE going above and beyond, there is no reason to put them in front of the firing squad and strike fear in them.
There has to be a balance – I think we agree on this point. And there should be ‘flexibility within the discipline’ as you put it. I feel like the initial post was cold and showcased a ruthless attitude, but through comments and discussion, you have shown that there has to be balance. As a CEO of a startup company – I wouldn’t focus entirely on all fun without results. But focusing ONLY on results is unappealing (in my opinion). Optimal results can be achieved without acting as a dictator – I think leadership should be clear, but I also would encourage a more ‘democratic’ way of thinking, and would more than welcome suggestions and new ideas from my staff.
Focus on the company is crucial – but focusing on the people who work for you and the company CULTURE is equally important.
idea work environment should be such where people can feel like if they are in home
Hey Annie,
What do you mean by home? Does that mean that they can be themselves. I highly encourage all employees to be themselves.
Do you mean an environment where they can walk in with their slippers and wear their PJs? Hey, if they’re doing their work, they can wear whatever they want.
Do you mean an environment where they feel every coworker and team member is like family? I highly encourage you to treat your team members like family. Love them, reward them, and most of all, make sure that they are happy with the company.
If you give them a vigorous interview from the very beginning and lay down the law in terms of your disciplined company culture, then they’ll know what they’re getting into when they sign up. I want people on my team that are imaginative, creative, and can take ownership of their position; at the same time, they must be disciplined and always strive to accomplish the company goal.
There should be flexibility within the discipline.
Hey Jun,
I think there needs a balance.
As you know I always lead with questions and try to empower people. I always make sure everyone has a say and I let everyone challenge anyone if they disagree. I want to create an environment where everyone loves being there and they can grow and contribute as they see fit and do what they are passionate about.
However, as you also know, because of that, sometimes things become less efficient. Because we give a lot of leeway, people start taking advantage of it and start slacking off. They also start prioritizing other things in life over the company development. Some people need very direct steps and a kick in the butt to become productive, and they might not even dislike it.
There has been times when I feel people are taking advantage of me as being a “weak” leader since I give so much freedom. Usually when that happens, I talk to them about it, and if their passion is not truly with the company, we end the relationship on good terms.
So in essence, I let people do whatever they want, and then keep the ones who continue to contribute excellent work. I’m not sure if my method is the best, but there definitely needs a balance between freedom and discipline.
I think the best way to do it is to give people “A”, and let them figure out how to do it. In this way, the goal is accomplished, but the team member has the opportunity to complete it and way she sees fit.
Fascinating discussion here. I can see the difference between your and Yu-Kai’s leadership styles.
The example you gave of your friend Daren relocating someone and then two days later firing him is pretty extreme and I think illustrates a failure on Daren’s part. I definitely dig your idea of having insanely rigorous interviews. It sounds like Daren might have hired someone who wasn’t a slam dunk. It’s good that he cut his losses quickly, but it seems like he could have saved everyone some valuable time and effort if he more effectively communicated his vision during the interview. Hrmm
I agree. One should never have to go to the extreme of firing someone only after 2 days after relocating them. Way to extreme for me, but proves a point.
Vigorous interviews are good because you will instantly weed out those who are not fit for you company and make your company seem more prestigious.
Good article. You’re only as strong as your weakest leg. If you get one mediocore person in the company, the rest will start to align with him/her.
Love your people, but never forget that your company comes first. Not bad Jun. (btw that used to be my CS name).
Does CS stand for Counter Strike?
I’m going to challenge an assumption everyone everyone in the discussion so far seems to have made. I don’t think that discipline and fun are opposing ideas. Instead of a continuum from 0% fun and 100 discipline to 100% fun and 0% discipline, I think the two are more like independent variables. You can have no discipline and still be bored out of your mind (coach potato) and you can have high discipline and while still having lots of fun. The latter is exactly what you’re advocating in your post, but you say that discipline should be a higher priority.
The key, I think, is to strive to kill two birds with one stone. If you can create a culture where results are what everyone in the company gets pleasure out of, that’s ideal.
I know that I personally do my best work when someone is on my ass pushing me hard. The strange thing is that I enjoy working hard and accomplishing things, but it’s hard for me to motivate myself without external pressure and high expectation. But of course, not everyone is like me…
Yup, you definitely get my point Tony. It’s not about being 100% on either side; it’s about having a good balance. This post is to kick startup in the butt and stop leaning so much on the “fun” and “freedom” side.
The best way to lead is to give a person “A”, and have them accomplish it in any way that they see fit. In this way, the task is accomplished, and the person has the freedom to do it however he or she wants to.
Scary title…
Great advice!
What can I say Matt? You make a very strong point!
My goal was to open up the eyes of startup leaders. Hopefully I have been able to do that.
Discipline and culture. Keep it happy, fun and free, but at the same time, make sure that people are producing results.
Yes, I will now say that Company and Culture are equally important.
Thanks for the awesome comments.
Jun. I just want to be clear that I’m not trying to debunk or disprove your business theory here. There is always more than one way to run a business – and being a 23 year old recent college grad, I don’t have the ‘real world’ experience to back up my thoughts. But, I do have experience under my belt in the ‘corporate’ environment – and I know that as a startup entrepreneur, I would want things to be much different. The way you described it here sounds all to familiar from past and current experiences – it’s something I want to escape from.
That being said, I am fully aware that there has to be balance, there has to be discipline, and that the success and results of the company are of primary importance. I would make that clear to my staff/peers, but I would also encourage an environment that left things “open” enough for individuals to thrive and develop personally while working for the benefit of the overall company.
You’re a smart guy Jun – anyone can see that through your writing and work ethic – so don’t take any of this as an attack on your beliefs, it’s not at all. You rock dude!
Thanks bro. Looking forward to bringing you on as a guest on Awesome Bloggers. Lets shoot for the week of April 6th.