6 ms·

Ask HN: Been toying with a model for running a company. Critique me please

12 points by harel 11y ago

I've been running a SAAS company for the last 13 years. Its successful but stale due to being too old. We're relaunching it from scratch now, using our experience from those years. All that is just background. I've been toying with an idea on how to run the new incarnation of the company, drawing from my 20 years experience launching and working with Internet start ups, and I've drawn up a set of ideas that I think could make this fun and successful. None are ground breaking or never been done before. 1. There is no office. Temporary shared space (e.g. WeWork and co.) can be arranged. Saves lease/rent etc. 2. No geographical boundaries. You can be anywhere on the planet. You can be traveling through India as much as I care. 3. No fixed working hours, but you do have tasks and those are measurable. I don't believe working 8 hours a day equates to 8 hours of productivity. Its half that at best. More important that a task is done by a agreed date. 4. Once or twice a year we can bring everyone together, to sync up and have some fun. 5. Foster an appreciation for work/life balance. 6. An employee's contribution to the company is directly related to these guidelines being successful. 7. Rules are important but rules that cannot be broken if needed are not worth having. Including those above. Pragmatism should always prevails. The ideas is that this requires the right people who can actually work under those conditions but when found, I believe they would like this arrangement to continue and will contribute just the best of their productivity to make this a success. I also think hiring should be done on as needed basis and not to accommodate some grandiose dreams of uber growth or without a solid requirement for the role. What do you think? I've been thinking about this so much I probably can't spot my own pitfalls here. Could this model work?

elviejo 11y ago
Isn't this how Auttomatic (wordpress.com) and 37signals already operate? You could learn from their success http://smile.amazon.com/The-Year-Without-Pants-WordPress-com/dp/1118660633 http://smile.amazon.com/The-Year-Without-Pants-WordPress-com... http://smile.amazon.com/Remote-Office-Required-Jason-Fried/dp/0804137501/ref=sr_1_1?s=books&ie=UTF8&qid=1457895700&sr=1-1&keywords=remote http://smile.amazon.com/Remote-Office-Required-Jason-Fried/d...
gpresot 11y ago
It seems to be working for Basecamp (formerly 37Signals, creators of the Basecamp project management software). Read their two books REWORK and REMOTE,where they explain how they did it. You can also find the basics reading around their founder's blog ( https://m.signalvnoise.com https://m.signalvnoise.com ), where they also lists some other companies that share this approach (buffer, zapier...)
Mz 11y ago
Assuming you have a reasonable means to peg pay to productivity and you hire people who are capable of hitting those marks within a reasonable time frame, I think this is a great idea. I worked for a Fortune 500 company that began allowing people to work from home. They decided people working from home should do an extra 20% or 30%. It was a number pulled out of thin air and based on nothing whatsoever. The result: People began working 10 or 12 hours a day to hit that number. Then they had to make some changes to the program because this was in violation of labor laws. So, my point is that if you have ridiculous expectations and want too much out of people, then what you propose is going to be a problem. But if you structure it well and hire the right people, this has a lot of positives to it. I do something similar. I make money doing "gig work" and I can work where I want, when I want, and this works far better for me than my corporate job did. But you will need to be careful that you aren't expecting too much for too little, basically.
- harel 11y ago
  My expectations are not unrealistic. I don't even care if someone who can achieve a task in 20% of his time is paid for 100% of his time. The task was completed, that's all I care about. That, and that the person is happy and s/he has done the task the best possible way. This is not a scheme to get more out of people - its an idea to get exactly what is really needed and at the best quality. This at least is how I work and I don't think I'm alone. I'm aware this has been done before though the examples of 37 signals and automatic are the only ones. I would have hoped the idea of a company where the needs of the company and the needs of its employees are of the same value, is not so rare that only those two companies come up...
  - Mz 11y ago
    Fwiw, I was not leveling an accusation. I think this kind of work is the wave of the future and I hope to blog more about it at some point. It can be done badly and cause problems. When done well, I think it gives ordinary people some of the perks usually only enjoyed by the jet set and well off retirees. I sincerely hope you pull it off and wish you the best.
seeing 11y ago
2. No geographical boundaries. Reading this always feels wrong to me. Face to face communication is higher bandwidth than text or video.
- harel 11y ago
  Yes, that is always an ideal but the right kind of people make it unnecessary. I've been involved with hiring for other companies as well as working with remotes. Its very hard getting the right people for both scenarios. In fact getting someone who is invested in your project half as you are is rare in my experience. Most of the time I see people are invested in their colleagues and environment more than the product itself (from my feedback post employment with those I stayed friends with).
brianwawok 11y ago
So I think all of this is good, and am all for work from home and work remote. I work remote, and don't see going back to an office ever. I assume by you posting this that you come from a more traditional setup? Office of a bunch of local people? I suspect the biggest surprise you will hit will be with > No geographical boundaries. You can be anywhere on the planet. You can be traveling through India as much as I care. If you get async communication down, you can work this. However for async communication to work well, I find you need to all be on the same page. If you start in an office with 6 people then go move apart.. you still have the same brain space and same goals. If you just hire 6 people in 6 random countries? You will all have VERY different worldviews and ways to work and end goals in mind. One guy may just want to make crap work. One guy may just paste stack overflow code. One guy may like to write really high performance code. One guy wants to write very concise code. etc. So I think your biggest challenge will be getting all people on the same brainwave. Even with a meeting or two a year in person, what keeps you looking for the same goals? In person we generally hire people very much like us. Which is good from the same brainwave view, but bad for a diversity point of view. Your worldwide company will have a lot of diversity and unique ideas, but also a lot of people fighting and clobbering each other as you head for disparate goals. So my best ideas is maybe start with 1-2 local guys, get a tight bond... and then use them to hire future guys, to try and keep the culture the same as you grow.
- harel 11y ago
  I actually come from multiple backgrounds. In the last 20 years I've done mostly startup environments and a bit of corporate in 3 countries/cultures. I've also done a fully remote startup which later evolved (and died) into a more traditional office based situation. I started thinking about it based on observations on how I work and how productive I am, as well as people around me. I never understood the 8 hour workday, not to mention those who go over it. Not that I didn't pull all nighters or the rare 48 hour work day but I never liked it. I worked with people for whom this setup would simply not work, and those who will find it liberating and will be hyper productive. I like the idea of starting local and expanding. Its a good point and it makes sense. Thank you.
sharemywin 11y ago
I guess the devil is in the details: 1. How is a task estimated? What if it's wrong? How many misses before you fire the person? what if that person is taking more risks and taking on more responsibility and challenging tasks? 2. Usually you need some kind of process and task dependencies. What if there is a total bottleneck of "progrmmaing tasks" or "QA tasks" does someone go a week with pay to "work" for you? 3. what about benefits? Is this 1099 or W-2 work? 4. What about team based contributions? I help team mate X out with something is that a task? Do I get any contribution from it? 5. Who pays for training and education time? reviewing code? 6. What kind of rate are you targeting? What would my monthly pay look like? 7. what about strategic types of contributions. I know guy or I want to take sub market and run with it? or did you ever think about xyz? If your piecemeal-ing the work is there an allowance for that? 8. is there an opportunity to "buy-in" via time or contribution or even real money and get % of the profits or company? 9. how does the system evolve over time? fix problems? do "workers" have a say? Sorry I'm really into the idea of marketplaces and using technology to build hyper-efficient eco-systems.
- harel 11y ago
  1. Task estimation depends on the task really. I always thought a feature is debated, decided upon and the outcome speced to some degree, wireframed etc. Duration can be estimated by the developer. Over time people learn to estimate more accurately. I don't want people to overstretch. I want realism in estimation. Under those conditions, if I have to fire someone, I'd be pretty pissed off that they put me in that position after I'm really trying to make something that works for everyone. You'd have to take the piss quite blatantly for that to happen. 2. Some positions are task based, like development. Some are continuous like QA or admin etc. The flexibility on hours and deadlines is extended where it makes sense. Its unfortunately not 'every role gets same conditions' situation. Fairness is the keyword here. 3. Not sure about that part yet. I'm not American, but my partner is. This is to be figured out still. 4. You don't get paid by your contributions. You get paid your salary like you would in any full time job. But that salary doesn't buy your soul. 5. You're an employee as every other employee. You were hired when the role made sense to have. Training is part of the job. 6. I want to pay well. Above market rate. But I want to hire only when the money for that person is allocated and put aside a year in advance. If I need 1 developer and can afford one dev, I hire one dev. I've been in scenarios where I had a budget and was told to buy resources. Those end up with hiring more resources than you know what to do with and that's not good either. 7. One thing I want to stop is white labeling and and bending backwards because client X said they want a feature that makes sense only to them. sub markets etc. are built into this product. If it makes sense - why not. If it deviates the product too much, i rather not. 8. I guess share options would be a thing at some point. We're privately owned, never took a penny from anyone. Also something to be figured out. 9. I am open to evolution, hear what everyone has to say, fix what needs fixing. This is why I've posted this here. This plan has been in my head for a long time now. I'm not ready to go with it just yet ,and a lot is balancing on the relaunch and its success. But I rather be prepared for that eventuality. Thanks for all your points here. It gave me a lot to think about.
ZeroFries 11y ago
This sounds ideal to me. Where do I apply? :P
- harel 11y ago
  Unfortunately nowhere at this point. Its not ready just yet... :)
  - pixelfiesta 11y ago
    IMHO, there are a two things very critical for your plan — Finding people who are articulate and communicate really well. In remote teams this is very critical. Secondly getting people who share the same passion as you do. You should hire them only if they can be the CEO of your product/ company. Anything less, do not even think. You need a team with lots and lots of passion and self motivation. And there aren't many people out there actually. Let me know when you begin.
    - harel 11y ago
      Agreed. I'll ping when ready :)
sunkan 11y ago
Mokriya works this way. We work with companies like Intel, Google, Twitter, SanDisk, Salesforce etc, with workforce spread across the globe with no set timings and very little management or bureaucracy.
- harel 11y ago
  And what's your impression of this arrangement? What does your colleagues think?
dmarlow 11y ago
I like what you have, but feel something like this would be helpful for your employees to know how their contributions ultimately benefit them long term. http://slicingpie.com http://slicingpie.com
mihvoi 11y ago
The good thing is that you can find more easily good people at low work cost. However, it might be hard to evaluate the value of the contribution of each "employee". What if some people throw unreasonable estimates? One idea to overcome this is: you work by small increments of features. You put each feature on the table and people bid the time to complete it. You assign the task to the one with the best reasonable estimate and with good track on the delivery - depending on the risk of failure. People that don't offer reasonable estimates can be replaced. The thing is that you know that without understanding the code, because someone else will bid less time and do it. A variant is per-project, "last feature is free". After each feature, you pay the previous delivered feature, based on hourly time counted by the programmer. When you find the bill to be overcharged, you just pay the previous feature and close the collaboration. You might guaranty to pay a reasonable but fixed sum, in advance or at the end, to reduce the risk of the programmer to not be paid after too few tasks. People should also have some stock or bonuses by global performance, otherwise they would not be also team players. And more than this, they should share a minimum motivation to be proud of the global outcome, for example because of how their work is making the world a bit better. Money if not always enough for people to really want to make it work.
- prmph 11y ago
  > "The thing is that you know that without understanding the code, because someone else will bid less time and do it." This, one of the fallacies of programming project management. What if I avoid developing a good architecture and full testing, in order to make it appear I have done the same work in less time and cost? I see this all the time, the fact that something seems to "work" just now does not necessarily mean the job has actually been done.
- harel 11y ago
  I want to pay people a monthly salary - as normal everywhere else. I just don't want them to work HARD for it, just SMART. They can choose their hours, and if they don't need to communicate - there's no need to overlap with anyone else. If comm is needed, they'll have to sync up with others - its up to them and the task.
matt_s 11y ago
This sounds like a culture that prioritizes work-life balance, independence, and self-motivated employees. You're not aiming to measure butts-in-chairs time but delivery of working software as far as performance is concerned. Focus on those specifics when hiring and not something like specific technology stacks. Once you narrow your talent pool to that philosophy and then narrow it further by tech stack you may end up with so few people to choose from that you will end up with people that match the tech stack but not the philosophy and they won't work out long term. It's SaaS, which means web application, which means your tech stack really doesn't impact success||failure. So choose smart, agile learning people that match your work philosophy and they can learn whatever stack needed. You say "we" so maybe you already have a team - in which case they may not agree with your new philosophy or they may not want to change tech. Make sure the compensation, HR stuff like benefits, etc. match this philosophy. By that I mean make employee contributions tied to something like profit sharing, equity, bonuses, etc. That can help motivate and enforce the delivery of value priority over hours worked (aka here's a salary for 40 hour weeks). Also have legal/HR stuff figured out in case - employment laws differ by country and if someone decides to work/travel through Europe for a couple months, does that have tax/finance impacts on your company or employee? Do they need a work visa? How will internet be funded? How will pay be handled for work locations with different costs of living ... will it be "fair" if someone chooses to live in SF area and gets higher pay than someone in Belize? These are all rhetorical questions but if you have this stuff figured out, people might want to hear the approach.

12 points by harel 11y ago

elviejo 11y ago

Isn't this how Auttomatic (wordpress.com) and 37signals already operate? You could learn from their success http://smile.amazon.com/The-Year-Without-Pants-WordPress-com/dp/1118660633 http://smile.amazon.com/The-Year-Without-Pants-WordPress-com... http://smile.amazon.com/Remote-Office-Required-Jason-Fried/dp/0804137501/ref=sr_1_1?s=books&ie=UTF8&qid=1457895700&sr=1-1&keywords=remote http://smile.amazon.com/Remote-Office-Required-Jason-Fried/d...

gpresot 11y ago

It seems to be working for Basecamp (formerly 37Signals, creators of the Basecamp project management software). Read their two books REWORK and REMOTE,where they explain how they did it. You can also find the basics reading around their founder's blog ( https://m.signalvnoise.com https://m.signalvnoise.com ), where they also lists some other companies that share this approach (buffer, zapier...)

Mz 11y ago

Assuming you have a reasonable means to peg pay to productivity and you hire people who are capable of hitting those marks within a reasonable time frame, I think this is a great idea. I worked for a Fortune 500 company that began allowing people to work from home. They decided people working from home should do an extra 20% or 30%. It was a number pulled out of thin air and based on nothing whatsoever. The result: People began working 10 or 12 hours a day to hit that number. Then they had to make some changes to the program because this was in violation of labor laws. So, my point is that if you have ridiculous expectations and want too much out of people, then what you propose is going to be a problem. But if you structure it well and hire the right people, this has a lot of positives to it. I do something similar. I make money doing "gig work" and I can work where I want, when I want, and this works far better for me than my corporate job did. But you will need to be careful that you aren't expecting too much for too little, basically.

harel 11y ago
My expectations are not unrealistic. I don't even care if someone who can achieve a task in 20% of his time is paid for 100% of his time. The task was completed, that's all I care about. That, and that the person is happy and s/he has done the task the best possible way. This is not a scheme to get more out of people - its an idea to get exactly what is really needed and at the best quality. This at least is how I work and I don't think I'm alone. I'm aware this has been done before though the examples of 37 signals and automatic are the only ones. I would have hoped the idea of a company where the needs of the company and the needs of its employees are of the same value, is not so rare that only those two companies come up...
- Mz 11y ago
  Fwiw, I was not leveling an accusation. I think this kind of work is the wave of the future and I hope to blog more about it at some point. It can be done badly and cause problems. When done well, I think it gives ordinary people some of the perks usually only enjoyed by the jet set and well off retirees. I sincerely hope you pull it off and wish you the best.

seeing 11y ago

2. No geographical boundaries. Reading this always feels wrong to me. Face to face communication is higher bandwidth than text or video.

harel 11y ago
Yes, that is always an ideal but the right kind of people make it unnecessary. I've been involved with hiring for other companies as well as working with remotes. Its very hard getting the right people for both scenarios. In fact getting someone who is invested in your project half as you are is rare in my experience. Most of the time I see people are invested in their colleagues and environment more than the product itself (from my feedback post employment with those I stayed friends with).

brianwawok 11y ago

So I think all of this is good, and am all for work from home and work remote. I work remote, and don't see going back to an office ever. I assume by you posting this that you come from a more traditional setup? Office of a bunch of local people? I suspect the biggest surprise you will hit will be with > No geographical boundaries. You can be anywhere on the planet. You can be traveling through India as much as I care. If you get async communication down, you can work this. However for async communication to work well, I find you need to all be on the same page. If you start in an office with 6 people then go move apart.. you still have the same brain space and same goals. If you just hire 6 people in 6 random countries? You will all have VERY different worldviews and ways to work and end goals in mind. One guy may just want to make crap work. One guy may just paste stack overflow code. One guy may like to write really high performance code. One guy wants to write very concise code. etc. So I think your biggest challenge will be getting all people on the same brainwave. Even with a meeting or two a year in person, what keeps you looking for the same goals? In person we generally hire people very much like us. Which is good from the same brainwave view, but bad for a diversity point of view. Your worldwide company will have a lot of diversity and unique ideas, but also a lot of people fighting and clobbering each other as you head for disparate goals. So my best ideas is maybe start with 1-2 local guys, get a tight bond... and then use them to hire future guys, to try and keep the culture the same as you grow.

harel 11y ago
I actually come from multiple backgrounds. In the last 20 years I've done mostly startup environments and a bit of corporate in 3 countries/cultures. I've also done a fully remote startup which later evolved (and died) into a more traditional office based situation. I started thinking about it based on observations on how I work and how productive I am, as well as people around me. I never understood the 8 hour workday, not to mention those who go over it. Not that I didn't pull all nighters or the rare 48 hour work day but I never liked it. I worked with people for whom this setup would simply not work, and those who will find it liberating and will be hyper productive. I like the idea of starting local and expanding. Its a good point and it makes sense. Thank you.

sharemywin 11y ago

I guess the devil is in the details: 1. How is a task estimated? What if it's wrong? How many misses before you fire the person? what if that person is taking more risks and taking on more responsibility and challenging tasks? 2. Usually you need some kind of process and task dependencies. What if there is a total bottleneck of "progrmmaing tasks" or "QA tasks" does someone go a week with pay to "work" for you? 3. what about benefits? Is this 1099 or W-2 work? 4. What about team based contributions? I help team mate X out with something is that a task? Do I get any contribution from it? 5. Who pays for training and education time? reviewing code? 6. What kind of rate are you targeting? What would my monthly pay look like? 7. what about strategic types of contributions. I know guy or I want to take sub market and run with it? or did you ever think about xyz? If your piecemeal-ing the work is there an allowance for that? 8. is there an opportunity to "buy-in" via time or contribution or even real money and get % of the profits or company? 9. how does the system evolve over time? fix problems? do "workers" have a say? Sorry I'm really into the idea of marketplaces and using technology to build hyper-efficient eco-systems.

harel 11y ago
1. Task estimation depends on the task really. I always thought a feature is debated, decided upon and the outcome speced to some degree, wireframed etc. Duration can be estimated by the developer. Over time people learn to estimate more accurately. I don't want people to overstretch. I want realism in estimation. Under those conditions, if I have to fire someone, I'd be pretty pissed off that they put me in that position after I'm really trying to make something that works for everyone. You'd have to take the piss quite blatantly for that to happen. 2. Some positions are task based, like development. Some are continuous like QA or admin etc. The flexibility on hours and deadlines is extended where it makes sense. Its unfortunately not 'every role gets same conditions' situation. Fairness is the keyword here. 3. Not sure about that part yet. I'm not American, but my partner is. This is to be figured out still. 4. You don't get paid by your contributions. You get paid your salary like you would in any full time job. But that salary doesn't buy your soul. 5. You're an employee as every other employee. You were hired when the role made sense to have. Training is part of the job. 6. I want to pay well. Above market rate. But I want to hire only when the money for that person is allocated and put aside a year in advance. If I need 1 developer and can afford one dev, I hire one dev. I've been in scenarios where I had a budget and was told to buy resources. Those end up with hiring more resources than you know what to do with and that's not good either. 7. One thing I want to stop is white labeling and and bending backwards because client X said they want a feature that makes sense only to them. sub markets etc. are built into this product. If it makes sense - why not. If it deviates the product too much, i rather not. 8. I guess share options would be a thing at some point. We're privately owned, never took a penny from anyone. Also something to be figured out. 9. I am open to evolution, hear what everyone has to say, fix what needs fixing. This is why I've posted this here. This plan has been in my head for a long time now. I'm not ready to go with it just yet ,and a lot is balancing on the relaunch and its success. But I rather be prepared for that eventuality. Thanks for all your points here. It gave me a lot to think about.

ZeroFries 11y ago

This sounds ideal to me. Where do I apply? :P

harel 11y ago
Unfortunately nowhere at this point. Its not ready just yet... :)
- pixelfiesta 11y ago
  IMHO, there are a two things very critical for your plan — Finding people who are articulate and communicate really well. In remote teams this is very critical. Secondly getting people who share the same passion as you do. You should hire them only if they can be the CEO of your product/ company. Anything less, do not even think. You need a team with lots and lots of passion and self motivation. And there aren't many people out there actually. Let me know when you begin.
  - harel 11y ago
    Agreed. I'll ping when ready :)

sunkan 11y ago

Mokriya works this way. We work with companies like Intel, Google, Twitter, SanDisk, Salesforce etc, with workforce spread across the globe with no set timings and very little management or bureaucracy.

harel 11y ago
And what's your impression of this arrangement? What does your colleagues think?

dmarlow 11y ago

I like what you have, but feel something like this would be helpful for your employees to know how their contributions ultimately benefit them long term. http://slicingpie.com http://slicingpie.com

mihvoi 11y ago

The good thing is that you can find more easily good people at low work cost. However, it might be hard to evaluate the value of the contribution of each "employee". What if some people throw unreasonable estimates? One idea to overcome this is: you work by small increments of features. You put each feature on the table and people bid the time to complete it. You assign the task to the one with the best reasonable estimate and with good track on the delivery - depending on the risk of failure. People that don't offer reasonable estimates can be replaced. The thing is that you know that without understanding the code, because someone else will bid less time and do it. A variant is per-project, "last feature is free". After each feature, you pay the previous delivered feature, based on hourly time counted by the programmer. When you find the bill to be overcharged, you just pay the previous feature and close the collaboration. You might guaranty to pay a reasonable but fixed sum, in advance or at the end, to reduce the risk of the programmer to not be paid after too few tasks. People should also have some stock or bonuses by global performance, otherwise they would not be also team players. And more than this, they should share a minimum motivation to be proud of the global outcome, for example because of how their work is making the world a bit better. Money if not always enough for people to really want to make it work.

prmph 11y ago
> "The thing is that you know that without understanding the code, because someone else will bid less time and do it." This, one of the fallacies of programming project management. What if I avoid developing a good architecture and full testing, in order to make it appear I have done the same work in less time and cost? I see this all the time, the fact that something seems to "work" just now does not necessarily mean the job has actually been done.
harel 11y ago
I want to pay people a monthly salary - as normal everywhere else. I just don't want them to work HARD for it, just SMART. They can choose their hours, and if they don't need to communicate - there's no need to overlap with anyone else. If comm is needed, they'll have to sync up with others - its up to them and the task.

matt_s 11y ago

This sounds like a culture that prioritizes work-life balance, independence, and self-motivated employees. You're not aiming to measure butts-in-chairs time but delivery of working software as far as performance is concerned. Focus on those specifics when hiring and not something like specific technology stacks. Once you narrow your talent pool to that philosophy and then narrow it further by tech stack you may end up with so few people to choose from that you will end up with people that match the tech stack but not the philosophy and they won't work out long term. It's SaaS, which means web application, which means your tech stack really doesn't impact success||failure. So choose smart, agile learning people that match your work philosophy and they can learn whatever stack needed. You say "we" so maybe you already have a team - in which case they may not agree with your new philosophy or they may not want to change tech. Make sure the compensation, HR stuff like benefits, etc. match this philosophy. By that I mean make employee contributions tied to something like profit sharing, equity, bonuses, etc. That can help motivate and enforce the delivery of value priority over hours worked (aka here's a salary for 40 hour weeks). Also have legal/HR stuff figured out in case - employment laws differ by country and if someone decides to work/travel through Europe for a couple months, does that have tax/finance impacts on your company or employee? Do they need a work visa? How will internet be funded? How will pay be handled for work locations with different costs of living ... will it be "fair" if someone chooses to live in SF area and gets higher pay than someone in Belize? These are all rhetorical questions but if you have this stuff figured out, people might want to hear the approach.