Editor’s note: This is a guest post by Jay Fulcher; Fulcher is the CEO of Ooyala, a rapidly growing video technology startup that has more than 500 customers worldwide. You can follow him on Twitter @jbfulcher. His previous TechCrunch articles include “A Fistful of Streaming Media Dollars,” “Fear and Loathing in Online Video
Fred Wilson, co-founder of Union Square Ventures and investor in Tumblr, Foursquare, Twitter and Zynga, wrote a great post on his blog the other day about how startups can retain their best employees.
Reading his advice made me reflect on some of the lessons I’ve learned growing and building businesses over the years – from startups to Fortune 500 companies. I’ve managed large teams at PeopleSoft and SAP, and also grown smaller startups like Red Pepper and SkillsVillage. Finally, before joining Ooyala, I oversaw Agile Software and its eventual acquisition by Oracle.
The business principles outlined below aren’t constrained to a single industry, so whether you’re building an app, a SaaS business or a high-speed space elevator, these fundamentals should all apply.
Build a Winning Team & Culture
Of course, you must attract the best and the brightest people around. But simply recruiting a smart, successful group of employees is only half the battle. It’s important to find proven professionals as well as stars-in-the-making who will buy in to your vision while challenging and motivating one another.
To do that, you need to take your hiring process to excruciatingly diligent levels. Be exacting in evaluating talent. Then set the bar even higher. At Ooyala, we employ a multi-tier interview process that often begins with a phone screen, frequently requires live skills testing, and ends with several full-day interviews. We want to make absolutely sure that the people we bring on board can brush up against their potential, and we make sure during the recruiting process that their potential for greatness is high. This approach weeds the “passionate” from the “interested” and gives the candidates a healthy dose of our high-octane, intense culture.
Conversely, don’t be afraid of firing team members who aren’t holding their own.
I have never fired someone fast enough. The reality is that the only thing worse than a bad hiring decision is allowing another day to go by without addressing the problem. The whole organization is watching, and you set the tone for what type of performance is acceptable.
When you see someone underperforming or dragging down your organization, don’t waste time if it’s clear the problem is beyond repair. Swift action is ultimately best for everyone involved. An early stage start-up is slightly analogous to fighting a war. Make sure that your band of brothers (and sisters) are the sort you want in your fox hole, and that they believe in fighting your battles.
Make a plan and establish your vision of success, but don’t write it in stone. Tech moves fast – dauntingly so. If you become too attached to a certain way of doing things, or thinking, you might miss a tremendous opportunity.
Ooyala started as a computer vision company whose products would recognize objects within video and then create companion ads based on the images detected. But early on, we recognized a greater potential to apply our analytics technology to the challenges of personalizing and monetizing premium online video across all screens. We quickly shifted our focus to helping movie studios, TV networks and cable operators better engage an evolving audience and grow revenues from online distribution.
Changes in strategy take courage and conviction, and require early personal agendas and biases to be abandoned. Other people’s doubt is your ever-present enemy. Look for creative ways to achieve your goals, even if they may include a different approach, or a shift in your original thesis. Don’t be afraid to “pivot” to another strategy or business model, should the opportunity present itself.
Gather input from a variety of sources and listen more than you speak. Begin building an advisory board or shadow cabinet full of successful professionals in (and outside) your space. Use their advice and their contacts aggressively. I rely on these relationships regularly and know first hand how valuable they can be.
Choose advisors that help you reach new market segments, new geographies, and new business opportunities. For example at Ooyala our advisory board bolsters our contact with Telcos, film studios, television networks, consumer brands and publishers. Convene and speak with your advisors regularly, if only to use them as another sounding board. Their contributions can go a long way toward your success. You have to work at this, and be receptive to the feedback you get.
Just because you can buy a $500 office chair, doesn’t mean that you should. Ditto on expensive offsites and business trips. While it is tempting, in this age of entitlement and fierce competition for talent, offering absurd perks won’t attract or retain the best people. The reality is innovation, growth, and winning does more to galvanize employees than anything.
Find lean ways of rewarding your employees, like offering days off instead of cash bonuses. Spend an off-site doing charity work instead of throwing a lavish office party. Connect your company with a “nobler cause”, as your raison d’etre goes way beyond the P&L, or making money, or going public. Every stakeholder – employees, investors, customers – will appreciate this.
Embedding thrift into your corporate culture is a good thing to do. This is as true during the late stages of growth as it is in the beginning. Doing more with less is a strong core value.
Building a business is a marathon, not a sprint. At the risk of mixing metaphors, it is also an emotional rollercoaster, with plenty of highs, lows, and even a few loop-de-loops.
Your job as a leader is to remain as positive and focused as possible. You set the tone for your entire organization. If you are feeling beat down, tired, or frustrated (and you will feel all of these things at various points) don’t let it affect your attitude and the way in which you connect with employees and partners. Be transparent (nothing is more attractive to those you lead than authenticity), but be smart about how you convey the challenges you’re dealing with. Put your game face on, and lead by example. Just because you closed a round of funding doesn’t mean that it is time to slow down – it means that it’s time to get to work. Attack the job in a way that can be sustained.
Think Like a Customer
Not everyone has been obsessing over the details of your business for as long as you have.
Remember to take a step back every now and then and look at what you are creating from the outside in. Are you effectively communicating the big picture (answering questions like who are we, what do we do, why does it matter)? Are you speaking to the business pain and benefit that impacts your target customers? If you’re not, it won’t matter how revolutionary your tech is, because the people you want to reach won’t understand why it’s critically important to them.
Listen actively to your customers. Some of the biggest innovations at Ooyala are the result of close collaboration with customers like ESPN and PAC-12 Networks (to be launched in August) who demand second-to-none solutions and are continually pushing the envelope. You can never tire of delivering outrageously innovative solutions.
Multi-national behemoths and scrappy startups alike present unique opportunities for leaders to seize opportunities and drive results. In my mind, the challenge and thrill of taking a business from a risky idea to a bold reality is one of the most rewarding things you can do. These simple truths, while difficult to execute, will go a long way in getting your business off the ground and flying high.