Having been in the tech industry for 13-14 years now, I’ve considered myself not just a straight tech worker but an entrepreneur. You have to be smart as a worker because getting the industry has a serious case of manic depression. That said, being the business-minded engineer, I’ve been a keen observer about how businesses operate, leading me to write this blog.
The main thing about building a great company is to understand the difference between terrible companies and good companies. You need to work in both environments to get an appreciation for both sides. Some people might be fortunate enough never to step foot in an awful working environment; they might be spoiled and take for granted all the things about their environment. Others might be trapped in a terrible environment. Yet because they do not know any better, they cannot get out and have no desire to leave.
I’ve worked in a very diverse set of working environments, big and small, great and awful. So I feel that I have a good blend of experiences to share with as well as my own ideas of what I feel have made those environments.
Some people might think little things are what make an environment great such as free food or certain perks. While these add to the environment, they aren’t the ultimate thing that a person should focus on when looking at building a great company. What’s more important to me is setting goals up, getting a sense of identity and establishing expectations. These three things are what should determine the lifeblood of a company more than anything because of how they work together in everything else.
You need to set goals up fast because you need to start looking at short and long term goals. Are you going to be a fly by night company? Are you only focused on profits? Do you plan for an IPO or get bought out? What’s your exit strategy? Or do you want to dominate the world? If you can’t answer these questions, there’s no point in forming a company. You need to know where you’re going.
This gets into developing your identity. Your goals work directly with this aspect because your identity partly is defined by how you perceive you will end up at a certain point in time. Take Google and Facebook. Both companies are in it for the long haul. So they have very lofty goals.
Lastly, you need to establish expectations. This is important not just for shareholders, but your employees, customers and future people who want to invest anything into the company (not just money). The other two will set the tone here. But you need to be transparent about the other two aspects so people will accept what your vision is. Let’s look at Blizzard gaming. I would say until the Activision buy out, Blizzard might’ve been the #1 gaming company in the world based on quality. Everyone would rave at how tight their games were compared to say EA or a Command and Conquer. These days, Blizzard’s games feel unpolished, lacking testing and just being pushed out too fast. Gradually, their public image has been degrading over the years. I feel customers have slowly lost their patience with the company and are now seeking alternatives like in the Diablo 3 disaster or the continual downturn of World of Warcraft.
So these are some main principles you need to establish quickly in developing a great company. I think more concretely, you really need to think long term with short term practicality. Meaning that you do need some vision of what you want to become. It should not just be profit. Profit is just a means to an end. It’s also the thing that ends up hurting the company, people, the world, etc.
What I mean by short term practicality though is you have to balance the curve balls you get thrown on occasion against your long term goals. I think ever since the tech bubble burst everything has become quarterly revenue reports. As a result, companies, the economy and the world have become completely unstable. The problem I see is that you let investors control the direction of the company as opposed to developing a sense of product vision. I’ve seen too many companies go in the direction of “flavor of the month” and spending excess money and resources to put in a project with no gain.
Of course, you always have to be mindful of expenditures. There’s no avoiding that unless you have significant funds. I do think that you can put effort into cutting cost and trying to operate efficiently. Some people I know want to focus purely on growth, but it might be wise to be flexible in this aspect.
The other thing is that when you have a long term vision it’s the thing that you will need to sell to other people who want to buy into your company. Take employees for instance. If everything is dollar figures, you’ll eventually end up focusing too much on people who are number driven. But is this the thing that you want for your company? Or take a look at how EA is perceived by hardcore gamers. I feel that a lot of gamers shy away from EA because of the stunts they pull like DRM or withholding content through paid walls. EA these days only looks at quarterly revenues, not really at producing high quality games. While they can churn and burn through titles relentlessly, it’s eventually going to chase off gamers once they catch on and inform their friends.
But having that long term vision is paramount for capturing good employees. You need your core team of people who can work together. They will work together if the basic premise for the company is a notion that they share. If you watch Pirates of Silicon Valley, you will see how the character Steve Jobs make references to Apple vs Macintosh within his own company. He does this to provoke people into a cause because he believed that those working for him missed “their Vietnam war.” Without that common sense of bonding, employees won’t have a sense of purpose outside of collecting their paychecks and possibly their next major career move.
Also, simply stated having a long term vision means that you’re planning for the future. Employees want stability. It becomes apparent quickly when you only exhibit short term thinking. People won’t want to stay nor put in the effort for being in a company like that. It communicates that just a limited number of people will be able to cash out, if at all possible. So what stake does that provide a normal employee? Those people’s eyes will start shifting around quickly and the environment won’t feel fun but quite the contrary.
The other thing I am a firm believer in is the grassroots movement. The reason why a company does well is not because you’re forcing it to grow. People gradually learn about a brand because of the service or product being offered. Classic example is Starbucks. If you watch a particular episode of Starbucks, they’ll reveal the secret, which also parodies the crazy, planless days of the dot com bubble.
On top of growing gradually, it’s just more manageable. Usually, companies that try to grow too fast are ones that have some sort of backer who wants to get their money quickly. I don’t know of any company historically who found their success like this. I think most successful companies fall into two patterns. One is through the solidness of a product and the other is those that managed to establish themselves before any others can. In both cases though, growth seemed more natural as opposed to forced. Take the search engine/portal wars back in the day. Yahoo was somewhat of the first in this area (although they really weren’t a “search engine” technology). You other companies like Excite, Alta Vista, Lycos, WebCrawler, AskJeeves, InfoSpace, iWon, etc. all competing in this area. It wasn’t until Google came in and quite frankly introduced a better product where Yahoo slowly was destroyed. But Yahoo managed to be one of the first and why it’s still around.
The other thing is when defining a product, you have to be original or improve drastically on existing ones to be viable. But again that’s all part of product and company vision as well as long/short term goals. I feel that short term companies tend to become clones because they feel they can make a cheap copy that can get some traction. It’s pretty tough though to beat an established company with some knock off. Everyone will be able to tell the difference. But defining something unique to a product is far harder.
In addition to these things, creating the right atmosphere is so critical. The most important thing is to make sure people can get along at work. For that to happen, you can give all the free stuff in the world away, but if people have issues, it won’t work. Processes and personalities take precedence here. While the personality aspect may seem obvious, the processes part might seem more draconian. But all it really means is the methods you use to operate efficiently. It could be as simple as declaring telecommute days once a week or having people use skype for chat. No matter what, the environment needs to feel comfortable for employees so that they can perform at their best.
Finally, I would say being patient is critical. Again this is all about setting expectations and goals. I feel that momentum in a company is driven by the emotions of the people involved in a company. Once you lose momentum for anything be it a project, product, etc., it’s really difficult to get that back. However, if anything you really need to be patient overall. You can’t expect things to fly from day one. Some people can get away with seeing instant results. But you can’t expect that for everything you do. Give yourself, the product, people and the company room to breathe.
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