9 ms·

Later Stage Advice for Startups

171 points by craigcannon 10y ago

a_small_island 10y ago
>"Announce Offers: Up to a few hundred employees, try announcing every potential job offer on an internal mailing list. If you do it, very often someone in the company will know something good or bad about the prospective employee." Does this actually happen?
- chollida1 10y ago
  It probably depends on how incestuous your chosen industry is. I'm going to guess that Sam went to a "top 10 school" and has only worked in Silicon valley. In this case I'm guessing that this advice seems self evident to him as you tend to run into the same people over and over again. The financial industry behaves very similarly where all other things being equal, its considered almost a negative if you can't find someone who actually knows a potential hire. This makes it easy to move around but tougher to break in. I'm not sure if this is good advice or bad advice but it is something that does happen so its best to follow the old advice and make friends/network. It doesn't have to be slimy, it can be as simple as emailing someone on hacker news who made a comment you learned something from to thank them for making it.
RKoutnik 10y ago
sama, if you're reading this, I'd love to hear more about > Senior People: In the early days, hiring senior people is usually a mistake. I know a lot of folks (including myself) are of the opposite opinion - it's a mistake to hire non-seniors to build the first round. Senior folks can often see pitfalls ahead of time and dodge them, saving valuable time while the company is pre-product/market fit. I can think of plenty of definitions of "Senior" that I _wouldn't_ hire (overspecialized, 'senior' in years only) though. Our disagreement may only be one of definitions [0]. I have seen startups die due to lack of talent early on (I worked at a startup that died due to technical debt, but that's another story). What scenarios have you seen that were caused by senior folks that causes you to see hiring them as a mistake? [0] More on my opinions on what 'senior' should mean: https://rkoutnik.com/2016/04/21/implementers-solvers-and-finders.html https://rkoutnik.com/2016/04/21/implementers-solvers-and-fin...
- emmett 10y ago
  There are multiple ways to be a "senior" employee. The first is to be a very experienced individual contributor. Amazing programmer with deep experience, world class designer, sales person who can get to the right person in any org. These people are gold. Hire the best and most experienced you can. The second way to be senior is to be great at hiring and building organization. These people are very valuable later, and will save you a lot of heart ache. Hiring them early is a mistake in general, because their instinct for solving problems is to hire great people and develop great process rather than to simply solve the problem themselves. For an early stage startup there are too many unknowns and this amounts to premature optimization. Later on this is the a critical skill set. Inexperienced managers are nearly universally terrible. Inexperienced individual contributors can often make up for it with raw talent, and you gain experience fast at a startup. Therefore early on experience is not at a premium, you should hire primarily for talent above everything else. Later on experience becomes increasingly valuable. Short version: Hire the best makers you can early even if they're junior, hire the best managers you can later which means more senior folks.
  - RKoutnik 10y ago
    > Short version: Hire the best makers you can early even if they're junior, hire the best managers you can later which means more senior folks. Interesting - this jives a lot better with my experience while still not contradicting what sama has to say. (I've worked under some abysmal managers...). I like to say "Hire for first derivative, not Y-intercept" and it sounds like you agree with that as well. Good thoughts, and thanks for replying!
  - mbesto 10y ago
    This is a strategy that has been proven to work, but history would state that it's not the only way. There are plenty of examples where senior people have started nice large growing software companies. In fact I'd dare to say that many more senior people have created more economic value from their startups then those who haven't...you just never read about them in TechCrunch. The valley specifically is littered with former Oracle/HP/Apple/etc execs (aka "senior people") that go on to create very big companies (Dave Duffield, Marc Benioff, etc).
hitr 10y ago
When I read this,I was verifying each point against the last startup I worked with and they don't follow many of the points discussed when I was there.But they have a very good seed funding.The thing going against them may be is growth.They are from 4 (including me) to 25+ (excluding me)employees in less than 6 months with no senior person in the team.One main Founder was trying to do micro management and delegating tasks poorly with poor communications.They have fired many people than I can imagine.And I am still hopeful that they succeed as my friend is still with them. I still think they may succeed as they are growing. I was ok with everything except the firing part!.This is an operational heavy business and not technical.
- the_watcher 10y ago
  > But they have a very good seed funding This implies that they aren't at the stage that this article is aimed at.
  - hitr 10y ago
    Yes probably. Article is largely aimed at 12-24 Months but at the same time 20-40 member team. But if you team is big, you need lot of things in control no matter how old you are as detailed in the article. Otherwise they are inviting chaos
wfoweoi 10y ago
Any advice on setting the top three goals for your startup? Do founders actually create "SMART" goals or are they more general like "growth"?
hacknat 10y ago
I think really good advice to late stage companies, before any of this stuff, is, "Have you actually found product/market fit?" If so, what is the product, what is the market? I have spent a lot of time with startups (as an employee), and I have never seen this question answered properly, at least up close. Very often product/market fit becomes "We've solved all these peoples' problems and they pay us money." The problem? The problems and the people are all different. I've witnessed so many companies turn themselves into specialized consulting companies thinking they've built the product that's going to take them to the finish line, when all they've really done is networked their way into solving a bunch of separate business problems for their network. A product should be so good that your users are almost embarrassed to file support tickets. IMO, sama is wrong to suggest founders take their eye off the product ball at all (even just a little) until they are 1000% sure they've built a machine that will scale, and now all they have to do is scale it.
- cl42 10y ago
  While I really appreciate the intent of what you're writing, "product/market" fit is also really difficult to concretely define and understand. I think this is particularly true in B2B and enterprise sales -- you can easily scale to 20-30 people without feeling like you've found product/market fit even if you have users, customers, and are profitable. Whenever I hear the focus on product/market fit I worry that people are seeking a romantic ideal that happens to very few companies (i.e., a product that sells itself, has no churn, and scales easily). There are many companies that grew well beyond 40 people without having the above. Happy to debate it though, as I'm not even sure I'm right, so would love to hear people's thoughts.
  - hacknat 10y ago
    I completely agree, and it's my main concern. The outline that you present is completely acceptable, and even great, for a lifestyle business, it really isn't acceptable for a VC funded startup though. I honestly wish more founders had the guts to admit when they haven't succeeded, even when they've made a bit of money. I've seen so many founders go out on funding rounds pitching scale in their market that the employees know isn't possible (and often they know too). We all learn from failure, but a lot of people in this industry sort of half-succeed and don't have the guts to admit their idea didn't work. They plug along on the fumes of a bloated funding scene that is all to prepared to throw good money after "meh" money. I don't really have an answer either, but this all makes the founders who have high burn rates actually look smart, IMO, because at least they're failing faster than everyone else.
chris_7 10y ago
> Do Offsites: Take your best people outside the normal workspace for a weekend where everyone has time to just talk and think through the bigger picture. That sounds horrid. My weekends are mine, they're not to be used to improve the company's performance. If you're doing this, do it during the work week.
- harryh 10y ago
  That's great. You should never take a senior position at a startup. Or, for that matter, probably a senior position at most any company. Which is fine. Different strokes for different folks. But some people prioritize career advancement over free time on the weekends.
  - bacongobbler 10y ago
    Typically offsites (for me, as a senior level engineer) happen during the work week, not during a weekend. I feel that people are more productive and creative at offsites during regular work hours because they're not thinking about what they could be doing instead (like going on a camping trip with friends, for example). I agree that my weekends are mine, and there needs to be a work/life balance no matter what position you are in.
    - chris_7 10y ago
      Yes, all of my offsites have happened during the work week, as they should. The idea that senior engineers should ever be expected to work 12 days straight (5+2+5) is absurd. Yes, it's still a work day if it's an "offsite".
  - aidos 10y ago
    I upvoted you by accident. This seems like a pretty snarky comment. I've worked with some incredible senior people who had nothing to do with the company out of hours. I think equating hours spent with career advancement is a mistake. In my more junior days (in which I include senior roles) I gave far more hours to my job than I should have. In the scheme of things that was a mistake and I could have advanced my career much more by approaching it differently. Your comment feels like something that might have made sense decades ago, but is not necessarily great advice these days.
sytse 10y ago
Very good advice, I love every since part of it and added it to our leadership documentation https://about.gitlab.com/handbook/leadership/ https://about.gitlab.com/handbook/leadership/
AndrewKemendo 10y ago
I guess I don't understand why there is "later stage startup advice" on the internet. Ostensibly if you are later stage you have a bevy of advisers, investors, mentors, peers etc... that would be in a much better position to give you advice about your specific - end even general - issues. Who is this advice really for?
- CPLX 10y ago
  There's also lots of people on the internet giving advice to the President. Maybe giving unsolicited advice is a thing people do on the internet.
  - AndrewKemendo 10y ago
    I think that nails my point.
- the_watcher 10y ago
  > Ostensibly if you are later stage you have a bevy of advisers, investors, mentors, peers You do. But Sam (and the rest of the YC team) have seen a lot of startups at every size and make an effort to share it, as more successful startups (whether YC or not) is something they believe is a net good (I agree)
semerda 10y ago
Some great points in there! "Communication" should be right up the top in bold. Bad communication has ties to many disasters like founder breakups, team disconnect, ownership & performance issues, company direction et al. However one that stands out as unnecessary: "Senior People: In the early days, hiring senior people is usually a mistake." The best people I hired in the past were senior. Ton more experienced and older than I. Of course they didn't come from corporate backgrounds but from fast paced tech cultures/environments. With all the equality talk in the valley around gender and ethnicity I'm surprised age discrimination is still so loosely thrown around. The key here should be "hire experienced people fit for the stage of growth". Burning time teaching / hand holding inexperienced people is a drag on the company's speed to execute and culture. Any views on holacracy?
- fuhrysteve 10y ago
  The traditional argument against hiring senior people in a young company is usually a mistake because cash is precious and senior people are usually too expensive to fully utilize since at a startup everyone ends up having to do bitch work anyways, so it might as well be cheaper hands doing it. Senior people aren't always old.. this has nothing to do with age discrimination
  - semerda 10y ago
    "Senior people" is an age reference. "Senior role" is a reference to the actual position. Maybe semantics. If I have to pay say 2x junior rate for 1 senior role that can move/execute faster than 2+ juniors, then I will. Apart from having someone that hits the ground running I'm also sending a strong business message to the market and investors that I can bring in top hires to execute faster than the shop down the road that's still learning business fundamentals.
dworin 10y ago
>> Good HR means three things: a clear management structure, a way for people to talk about workplace issues and concerns, and pathways for people to evolve in their careers. I've seen a number of startups who think the only part of HR where they need to invest resources is recruiting, right up to the point where the wheels start coming off. Once you're feeling the pain points - disgruntled employees, people leaving, communication problems, etc... - it takes a lot more time to get things working again. It's hard because these issues aren't the things recruiters are good at solving, so they need more specialized knowledge, but at 20-50 people don't have the capacity to bring on the right expertise.
the_watcher 10y ago
I'm at a startup that has product-market fit, and are currently at the early end of what it seems like the target company is. Interesting to see how much of it has already been implemented or is in the process of being implemented (onboarding is a somewhat iterative process right now, but it's steadily improved), as well as what we haven't yet gotten to.
kriro 10y ago
Wouldn't it be simpler so identify which size worked well for you without thinking about management much (probably up to 20ish) and then splitting the company into teams of max. that size? Sure for some types of businesses that won't work but it'll work for a lot of them. As an aside: my gut feeling is that many startups tend to over hire as it's sort of a status symbol to have more employees. I mean look at how many people were needed to build and scale WhatsApp. Is your startup really doing something that is technically more complicated or harder to scale?
sandGorgon 10y ago
about compensation bands - how does one correlate this with experience ? Because in an early stage startup, this may fluctuate drastically based on what the startup really needs. For example for a fintech startup, a 5 year devops guy may be making market salary... but a 2 year, talented data science guy may be offered market++ salary. So how do you really structure bands ? And does bands really solve the problem of not pissing people off in this case ?
untilHellbanned 10y ago
The 12-24 month timeframe seems off. The % of startups who after 12-24 months should have 25 employees and do all the other things that sama mentioned has got to be very small to the point of making this blog post seem out of touch with reality. Tell me a startup that went anywhere within one year? Now count the startups that went nowhere. That ratio has to 1/1000 or greater. I actually question how many YC startups this really applies to. 10 or less? How many really have market fit?

171 points by craigcannon 10y ago

>"Announce Offers: Up to a few hundred employees, try announcing every potential job offer on an internal mailing list. If you do it, very often someone in the company will know something good or bad about the prospective employee." Does this actually happen?

chollida1 10y ago
It probably depends on how incestuous your chosen industry is. I'm going to guess that Sam went to a "top 10 school" and has only worked in Silicon valley. In this case I'm guessing that this advice seems self evident to him as you tend to run into the same people over and over again. The financial industry behaves very similarly where all other things being equal, its considered almost a negative if you can't find someone who actually knows a potential hire. This makes it easy to move around but tougher to break in. I'm not sure if this is good advice or bad advice but it is something that does happen so its best to follow the old advice and make friends/network. It doesn't have to be slimy, it can be as simple as emailing someone on hacker news who made a comment you learned something from to thank them for making it.

RKoutnik 10y ago

sama, if you're reading this, I'd love to hear more about > Senior People: In the early days, hiring senior people is usually a mistake. I know a lot of folks (including myself) are of the opposite opinion - it's a mistake to hire non-seniors to build the first round. Senior folks can often see pitfalls ahead of time and dodge them, saving valuable time while the company is pre-product/market fit. I can think of plenty of definitions of "Senior" that I _wouldn't_ hire (overspecialized, 'senior' in years only) though. Our disagreement may only be one of definitions [0]. I have seen startups die due to lack of talent early on (I worked at a startup that died due to technical debt, but that's another story). What scenarios have you seen that were caused by senior folks that causes you to see hiring them as a mistake? [0] More on my opinions on what 'senior' should mean: https://rkoutnik.com/2016/04/21/implementers-solvers-and-finders.html https://rkoutnik.com/2016/04/21/implementers-solvers-and-fin...

emmett 10y ago
There are multiple ways to be a "senior" employee. The first is to be a very experienced individual contributor. Amazing programmer with deep experience, world class designer, sales person who can get to the right person in any org. These people are gold. Hire the best and most experienced you can. The second way to be senior is to be great at hiring and building organization. These people are very valuable later, and will save you a lot of heart ache. Hiring them early is a mistake in general, because their instinct for solving problems is to hire great people and develop great process rather than to simply solve the problem themselves. For an early stage startup there are too many unknowns and this amounts to premature optimization. Later on this is the a critical skill set. Inexperienced managers are nearly universally terrible. Inexperienced individual contributors can often make up for it with raw talent, and you gain experience fast at a startup. Therefore early on experience is not at a premium, you should hire primarily for talent above everything else. Later on experience becomes increasingly valuable. Short version: Hire the best makers you can early even if they're junior, hire the best managers you can later which means more senior folks.
- RKoutnik 10y ago
  > Short version: Hire the best makers you can early even if they're junior, hire the best managers you can later which means more senior folks. Interesting - this jives a lot better with my experience while still not contradicting what sama has to say. (I've worked under some abysmal managers...). I like to say "Hire for first derivative, not Y-intercept" and it sounds like you agree with that as well. Good thoughts, and thanks for replying!
- mbesto 10y ago
  This is a strategy that has been proven to work, but history would state that it's not the only way. There are plenty of examples where senior people have started nice large growing software companies. In fact I'd dare to say that many more senior people have created more economic value from their startups then those who haven't...you just never read about them in TechCrunch. The valley specifically is littered with former Oracle/HP/Apple/etc execs (aka "senior people") that go on to create very big companies (Dave Duffield, Marc Benioff, etc).

hitr 10y ago

When I read this,I was verifying each point against the last startup I worked with and they don't follow many of the points discussed when I was there.But they have a very good seed funding.The thing going against them may be is growth.They are from 4 (including me) to 25+ (excluding me)employees in less than 6 months with no senior person in the team.One main Founder was trying to do micro management and delegating tasks poorly with poor communications.They have fired many people than I can imagine.And I am still hopeful that they succeed as my friend is still with them. I still think they may succeed as they are growing. I was ok with everything except the firing part!.This is an operational heavy business and not technical.

the_watcher 10y ago
> But they have a very good seed funding This implies that they aren't at the stage that this article is aimed at.
- hitr 10y ago
  Yes probably. Article is largely aimed at 12-24 Months but at the same time 20-40 member team. But if you team is big, you need lot of things in control no matter how old you are as detailed in the article. Otherwise they are inviting chaos

wfoweoi 10y ago

Any advice on setting the top three goals for your startup? Do founders actually create "SMART" goals or are they more general like "growth"?

hacknat 10y ago

I think really good advice to late stage companies, before any of this stuff, is, "Have you actually found product/market fit?" If so, what is the product, what is the market? I have spent a lot of time with startups (as an employee), and I have never seen this question answered properly, at least up close. Very often product/market fit becomes "We've solved all these peoples' problems and they pay us money." The problem? The problems and the people are all different. I've witnessed so many companies turn themselves into specialized consulting companies thinking they've built the product that's going to take them to the finish line, when all they've really done is networked their way into solving a bunch of separate business problems for their network. A product should be so good that your users are almost embarrassed to file support tickets. IMO, sama is wrong to suggest founders take their eye off the product ball at all (even just a little) until they are 1000% sure they've built a machine that will scale, and now all they have to do is scale it.

cl42 10y ago
While I really appreciate the intent of what you're writing, "product/market" fit is also really difficult to concretely define and understand. I think this is particularly true in B2B and enterprise sales -- you can easily scale to 20-30 people without feeling like you've found product/market fit even if you have users, customers, and are profitable. Whenever I hear the focus on product/market fit I worry that people are seeking a romantic ideal that happens to very few companies (i.e., a product that sells itself, has no churn, and scales easily). There are many companies that grew well beyond 40 people without having the above. Happy to debate it though, as I'm not even sure I'm right, so would love to hear people's thoughts.
- hacknat 10y ago
  I completely agree, and it's my main concern. The outline that you present is completely acceptable, and even great, for a lifestyle business, it really isn't acceptable for a VC funded startup though. I honestly wish more founders had the guts to admit when they haven't succeeded, even when they've made a bit of money. I've seen so many founders go out on funding rounds pitching scale in their market that the employees know isn't possible (and often they know too). We all learn from failure, but a lot of people in this industry sort of half-succeed and don't have the guts to admit their idea didn't work. They plug along on the fumes of a bloated funding scene that is all to prepared to throw good money after "meh" money. I don't really have an answer either, but this all makes the founders who have high burn rates actually look smart, IMO, because at least they're failing faster than everyone else.

chris_7 10y ago

> Do Offsites: Take your best people outside the normal workspace for a weekend where everyone has time to just talk and think through the bigger picture. That sounds horrid. My weekends are mine, they're not to be used to improve the company's performance. If you're doing this, do it during the work week.

harryh 10y ago
That's great. You should never take a senior position at a startup. Or, for that matter, probably a senior position at most any company. Which is fine. Different strokes for different folks. But some people prioritize career advancement over free time on the weekends.
- bacongobbler 10y ago
  Typically offsites (for me, as a senior level engineer) happen during the work week, not during a weekend. I feel that people are more productive and creative at offsites during regular work hours because they're not thinking about what they could be doing instead (like going on a camping trip with friends, for example). I agree that my weekends are mine, and there needs to be a work/life balance no matter what position you are in.
  - chris_7 10y ago
    Yes, all of my offsites have happened during the work week, as they should. The idea that senior engineers should ever be expected to work 12 days straight (5+2+5) is absurd. Yes, it's still a work day if it's an "offsite".
- aidos 10y ago
  I upvoted you by accident. This seems like a pretty snarky comment. I've worked with some incredible senior people who had nothing to do with the company out of hours. I think equating hours spent with career advancement is a mistake. In my more junior days (in which I include senior roles) I gave far more hours to my job than I should have. In the scheme of things that was a mistake and I could have advanced my career much more by approaching it differently. Your comment feels like something that might have made sense decades ago, but is not necessarily great advice these days.

sytse 10y ago

Very good advice, I love every since part of it and added it to our leadership documentation https://about.gitlab.com/handbook/leadership/ https://about.gitlab.com/handbook/leadership/

AndrewKemendo 10y ago

I guess I don't understand why there is "later stage startup advice" on the internet. Ostensibly if you are later stage you have a bevy of advisers, investors, mentors, peers etc... that would be in a much better position to give you advice about your specific - end even general - issues. Who is this advice really for?

CPLX 10y ago
There's also lots of people on the internet giving advice to the President. Maybe giving unsolicited advice is a thing people do on the internet.
- AndrewKemendo 10y ago
  I think that nails my point.
the_watcher 10y ago
> Ostensibly if you are later stage you have a bevy of advisers, investors, mentors, peers You do. But Sam (and the rest of the YC team) have seen a lot of startups at every size and make an effort to share it, as more successful startups (whether YC or not) is something they believe is a net good (I agree)

semerda 10y ago

Some great points in there! "Communication" should be right up the top in bold. Bad communication has ties to many disasters like founder breakups, team disconnect, ownership & performance issues, company direction et al. However one that stands out as unnecessary: "Senior People: In the early days, hiring senior people is usually a mistake." The best people I hired in the past were senior. Ton more experienced and older than I. Of course they didn't come from corporate backgrounds but from fast paced tech cultures/environments. With all the equality talk in the valley around gender and ethnicity I'm surprised age discrimination is still so loosely thrown around. The key here should be "hire experienced people fit for the stage of growth". Burning time teaching / hand holding inexperienced people is a drag on the company's speed to execute and culture. Any views on holacracy?

fuhrysteve 10y ago
The traditional argument against hiring senior people in a young company is usually a mistake because cash is precious and senior people are usually too expensive to fully utilize since at a startup everyone ends up having to do bitch work anyways, so it might as well be cheaper hands doing it. Senior people aren't always old.. this has nothing to do with age discrimination
- semerda 10y ago
  "Senior people" is an age reference. "Senior role" is a reference to the actual position. Maybe semantics. If I have to pay say 2x junior rate for 1 senior role that can move/execute faster than 2+ juniors, then I will. Apart from having someone that hits the ground running I'm also sending a strong business message to the market and investors that I can bring in top hires to execute faster than the shop down the road that's still learning business fundamentals.

dworin 10y ago

>> Good HR means three things: a clear management structure, a way for people to talk about workplace issues and concerns, and pathways for people to evolve in their careers. I've seen a number of startups who think the only part of HR where they need to invest resources is recruiting, right up to the point where the wheels start coming off. Once you're feeling the pain points - disgruntled employees, people leaving, communication problems, etc... - it takes a lot more time to get things working again. It's hard because these issues aren't the things recruiters are good at solving, so they need more specialized knowledge, but at 20-50 people don't have the capacity to bring on the right expertise.

the_watcher 10y ago

I'm at a startup that has product-market fit, and are currently at the early end of what it seems like the target company is. Interesting to see how much of it has already been implemented or is in the process of being implemented (onboarding is a somewhat iterative process right now, but it's steadily improved), as well as what we haven't yet gotten to.

kriro 10y ago

Wouldn't it be simpler so identify which size worked well for you without thinking about management much (probably up to 20ish) and then splitting the company into teams of max. that size? Sure for some types of businesses that won't work but it'll work for a lot of them. As an aside: my gut feeling is that many startups tend to over hire as it's sort of a status symbol to have more employees. I mean look at how many people were needed to build and scale WhatsApp. Is your startup really doing something that is technically more complicated or harder to scale?

sandGorgon 10y ago

about compensation bands - how does one correlate this with experience ? Because in an early stage startup, this may fluctuate drastically based on what the startup really needs. For example for a fintech startup, a 5 year devops guy may be making market salary... but a 2 year, talented data science guy may be offered market++ salary. So how do you really structure bands ? And does bands really solve the problem of not pissing people off in this case ?

untilHellbanned 10y ago

The 12-24 month timeframe seems off. The % of startups who after 12-24 months should have 25 employees and do all the other things that sama mentioned has got to be very small to the point of making this blog post seem out of touch with reality. Tell me a startup that went anywhere within one year? Now count the startups that went nowhere. That ratio has to 1/1000 or greater. I actually question how many YC startups this really applies to. 10 or less? How many really have market fit?