4 ms·

>My guess is that you don't run a company and have never run one. You probably never risked it all to start a business in your garage and grow it to the point w

by nekopa 13y ago

>My guess is that you don't run a company and have never run one. You probably never risked it all to start a business in your garage and grow it to the point where you can employ dozens of people. Self funded, not with other people's money. There's a huge difference there as well. That guess is wrong. I have started, run and sold my own companies before, and I'm currently bootstrapping a new SaaS company right now. I don't know about using other peoples money, as I have always self-funded, I am a firm believer of organic growth, as I have never been too concerned with becoming mega-rich, I just like to fund my lifestyle. First company I started and sold was way back in 1989, when I was 18 years old, of my bedroom and using hotel meeting rooms to see clients. Nowadays I mostly consult and mentor SMEs, as I enjoy working with plucky entrepreneurs. the only reason I'm starting a new business is that I just had my second child, so I need extra funds for my lifestyle now :) >If you spoke to any one of my employees you'd quickly understand that the 18th. century mentality claim would be an insult... >That is far --VERY FAR-- from an 18th. century mentality. How dare you! How dare I? So it is fine for you to call people (experimenting with their own, so far successful, business) childish "OK, I'll be the grown-up in the room.Are you fucking kidding me? No, really." But if I politely say that you have an old fashioned view of business your hackles immediately rise and you get morally wounded. Let alone throwing around the word hippy to describe something you don't like. Why not just call him a commie-pinko-bastard and be done with it. Or do you use the term hippy to imply drug taking as well as loose morals? You could call him naive, inexperienced and so forth. I would call him brave and innovative. But those are just our respective viewpoints. Part of this is my fault, so let me clarify what I mean by 18th century mentality (I didn't mean to imply that you're an asshole or a slave-driver, I did read your comment all the way through, and you're one of my favorite commenters here on HN): "Business needs a hierarchical structure with one strong leader at the top, calling all the shots taking all the risks and profits, as this is the only way that works and without it fickle employees would destroy the company within a matter of months if left to their own devices." Patriarchal is another way at looking at this type of business mentality, and I associate it with what you said regarding being an adult and 'hippies'. You see yourself as the tough, but fair father figure of the company. There is nothing wrong with that, and a lot of successful software projects run under the auspices of a 'benevolent dictator for life'. Being ex-military I know first hand that this type of structure is necessary for successful battle operations. I just happen to think that there are also other valid models out there, and people shouldn't be attacked as acting childish or hippyish just because they try something different. Maybe for your industry the model you prescribe is they only way. That makes me sad as even you pointed out that a man died because of the stress, and you yourself went to hospital. Considering that business is an abstract model that we humans have invented, wouldn't you rather find a better way of doing business than to push yourself into an early grave? Business is often regarded as war, but that is a choice we make. >Understanding business economics is NOT something you can learn in two weeks. The idea that this can be taught to every employee in an organization, regardless of station and education is simply ridiculous. I am not being elitist here. It's just reality. The reality is that it has been done, and quite successfully. It may sound ridiculous, but it actually has been done. Of course, two weeks won't give you MBA level understanding of business economics (in all honesty, a lot of the MBAs I've worked with probably spent about 3 hours learning finance), but you can structure the information in such a way that they understand enough to be able to make informed decisions about their salary and so forth. I know that you're quite intelligent ere's a thought experiment for you: what information and at what level would you present to your staff if you only had 2 weeks to give them a solid foundations of money flows in and out of a company? Especially from a 'street MBA' viewpoint. I bet you'd come up with a pretty solid course. >You want employees at all levels working on what they were hired to do, and not busy trying to decipher states with faulty input information. Some of the world's most successful companies have employees who also know the bigger picture of what is going on in the company. It doesn't have to be the extreme that you're suggesting, where the janitor isn't mopping floors because he is busy on excel trying to figure out a 10% cost cutting maneuver. But would you be against the janitor who, knowing his departments cost impact on the company, tries to see if the floors would look better with 2 instead of 3 coats of wax, thereby cutting his wax costs by a third? >One example that comes to mind is that of sales people. This can be a really odd group. You're preaching to the choir here. I completely agree. I remember one salesman I worked with who didn't understand the differences between profit mark-up and profit margin. He kept wondering why he was losing money when he discounted something. All agreement aside, one of the best salesmen I knew talked his managers into canceling his salary completely, but paying him a higher commission rate. Needless to say the managers wished they had run through the numbers a little more before agreeing to it, as he cleaned up. >That's how it works. Again, people are not analyzing business finances. Management puts a fork in the road in front of them. Two choices. Choice number one means you might lose your job. Choice number two, you don't. No brainer. In the above, of course it's a no brainer, people have no access to finances, and management lays out the options. One company I consulted with worked with their staff during the financial crisis to work out how to deal with the problems of lay-offs. Three of the youngest staff members came up with a novel idea, where they split one job between them. They had objective results that needed to be achieved each month, and they split the time and money according to who needed what each month. For example, when one of them needed to go on holiday he worked a whole month by himself, and took all the pay. I also had the pleasure once of consulting with a board minus 2 employee at a large insurance company. He had to lay off people in his department (the department with the largest revenue and profit) even though he was already short of staff. His main complaint was that the monthly car allowance for his boss would pay for 7 full time sales people which could bring in $Xmm per year. Luckily for management those numbers are well hidden. All of this came from the result of a three-quarter of a million dollar consulting project which came up with a hard to find outcome - lay-off 30% of the staff to cut costs. As for unions I don't like them or believe in them and I think they are also a part of the 18th century mentality I mentioned earlier. They are a knee jerk reaction to the way a lot of traditional companies treat their employees. This again harks back to the idea that business is war, only for the unions the enemy is the employer, which is downright dumb. And let's not even go into the levels of corruption present in unions. Business is there to make money. I just think that there are more ways to skin that cat, and that you shouldn't shout down someone who is trying a new method. The person who tried this seems smart enough, and with your experience you could probably give him some extremely useful tips about what to avoid, what problems may come, and see what he does with that. But why should he read past are you fucking kidding me you childish fucking hippy?!? To find he should follow your method of business that leaves people in hospital or dead?

robomartin 13y ago
I am glad your opinion comes from actual experience running a business. More often than not comments like these come from people who never have yet, for some strange reason, believe they understand business. > I didn't mean to imply that you're an asshole or a slave-driver Thanks for the clarification. That's exactly what I took from your 18th. century comment. Clearly that is not what you meant. > Business is often regarded as war, but that is a choice we make. A business, past a certain point, becomes a living organism. Sometimes you think you go into work every day with a plan and then the business ends-up telling you what you will be focusing on that day. Much the same, one can start with altruistic intentions with the full intent of having a communal and collaborative relationship with external entities (customers, associates, suppliers and even competitors). Then you learn that few play by those rules and business can devolve very quickly (and often does) into a war-like atmosphere. I have examples of this galore. Granted, different business segments behave differently. I have a sense that a lot of the SV startups exist in this innocent utopia they've created. There are industries where you don't dare share internals or technology details unless you are willing to be eviscerated by your competitors inside of a microsecond. Old world thinking? Maybe, but it is very real. Until such time as this changes you have to live and work within this reality. > you can structure the information in such a way that they understand enough to be able to make informed decisions about their salary and so forth You see, I view that as a total deviation from the mission. My job as a CEO isn't to try to figure out a way for every layer of the organization to have enough understanding of business finances to be able to vote for their own salary. What's that old saying about being up to your ass in alligators? That, to me, would be a major failure in fiduciary duties. It would also be a major failure in operating the business efficiently. I can't see a reality where I want my shipping clerk, graphics designer, electrical engineer, sales force, customer services folks and marketing manager to devote time to becoming familiar with company finances. It can also become a huge time and money sink. As employees come and go you now have to educate the new ones so that they can become part of their respective voting blocks. It just can't scale. I've stated that I can see this working in a small (5 to 10) company consisting of a very homogeneous group of similarly educated and capable people with compatible mindsets. I can see that. When things are going well everything can work just fine. If things take a turn for the worst you can have serious problems. The only way this can work well under all conditions is if all employees have, as their absolute top priority --and at the expense of their own livelihood--, the survival and well-being of the company. If you happen to put together a group like that then they'll make the right decisions during good and bad times. There's also another element to this. It takes a lot of intestinal fortitude to be an entrepreneur. Things can get very rough. Nearly every entrepreneur I know has horror stories to tell. Nearly all of them speak of stress, sleepless nights, tensions within family and relationships, neglect, reduced quality of live and more. It isn't always like that, of course, as a business becomes successful you can begin to truly enjoy the fruits of the effort. Bringing employees into the sausage making innards of a business can be hugely distracting. You don't want your employees going home with the worries and stresses that upper management absorbs every day. A programmer who spends all day worried about the numbers she just saw is not likely to be able to focus on her job. Sometimes ignorance is bliss. Bad things happen in business every day. That does not mean that the business is up in flames. In order to ensure that employees don't interpret things the wrong way now you've added yourself the task of constantly having to educate them as to the minutiae of what is behind every balance sheet you release. That's a lot of work that is absolutely not necessary. That's not what a CEO is there to do. As for my comment style. Was I harsh. Probably so. I firmly believe that this is an utter waste of time, it is potentially dangerous and definitely counterproductive. It further feels like the CEO is trying to avoid the responsibility of having to deal with compensation. Employee compensation, particularly if you consider sales, is one of the toughest things I've had to learn about. I remember having a stack of probably ten books on compensation theory next to my bed for a while. Not easy work. Once you develop an approach it's easy. I can totally see a young CEO being totally overwhelmed by just this task. A CS curriculum teaches you little if anything about running a business. From that perspective it is easy to escape and justify the idea of letting the employees vote for their own compensation. The problem here is that you will, eventually, have to deal with making sausage. So I end up calling it a "hippie" solution. Yeah, OK, maybe harsh. It simply reflects my first level reaction to something I though was not running a business but rather trying to create a commune. > You're preaching to the choir here. I completely agree. I remember one salesman I worked with who didn't understand the differences between profit mark-up and profit margin. It's just amazing to me how everyone who's run a business with sales people has similar stories. When perplexed about how to hire good sales people I sought the advice of every CEO I could reach. Almost invariably the conversation started with them rolling their eyes and saying something like "Oh, boy! Let me tell you what I went through!". I just thought of something: Maybe there's opportunity for disruption here? > As for unions I don't like them or believe in them and I think they are also a part of the 18th century mentality I mentioned earlier. Now I know there's at least two of us on HN. > you shouldn't shout down someone who is trying a new method And you are right. I'll keep that in mind for future comments and see about coming off a little softer while delivering the same or a similar message. That said, there are things in business that are time tested. For example, it's hard to imagine someone inventing a new accounting method. If, for example, a CEO of a software startup was consumed with the idea of doing accounting differently and I was an investor in that company I'd fire them. They need to focus on the business at hand and not go off in tangents. My read on this business of "vote for your own compensation" was that this CEO is now devoting time to something that has nothing to do with the mission at hand. > your method of business that leaves people in hospital or dead? Well, to be fair here, it isn't the method of business that puts people in the hospital. Sometimes you can do everything exactly right and still end-up losing. The period of time I described (2008~2010) saw absolute carnage in businesses across nearly all industries. Lots of people were caught off guard. If you've invested ten, fifteen or twenty years growing a business only to see it implode in a few quarters due to external factors completely out of your control it will cause tremendous stress. Back then we all heard stories about people jumping out of buildings and walking in front of trains. I remember making a comment over email to a good friend of mine in December of 2009. When I read that email today it absolutely scares me. It reveals my mental state at the time. I had reached a very dark and ugly place due to what was going on with my business. I told him that I had reached a point where I understood, in no uncertain terms, why people committed suicide due to business and financial problems. I am mentally very tough and have always had a great support group in the form of friends and family. So, I wasn't thinking of taking my own life but I got a scary glimpse of how someone could very easily get there when things go really bad. Of course, my friend called me in panic as soon as he saw that email. We went out for dinner and he came out of it understanding where those comments came from (and was comfortable not chaperoning me). Again, the stress doesn't come from the business method but rather the every day goings on. The first time you get sued for something you are not going to sleep. Lose a good employee, same thing. A competitor takes away a good opportunity will create stress. A customer posts an ugly and unfair critique in an industry blog, not good. None of these things have anything whatsoever to do with a management style. They are simply realities of business. Incidentally, the reason I ended-up in the hospital was actually a combination of extreme dehydration and stress. On a very hot Sunday went out to kayak at the lake --peak of the summer-- and took plenty of water with me but no electrolyte drinks (gatorade). After that I rested a little and then decided to go back to the office and spend a few hours working on some code. Long story short, I ended up in the hospital. It turns out dehydration and stress are a bad combination. Nothing wrong with me. Just needed to rest and get my body back in balance.

by nekopa 13y ago

robomartin 13y ago

I am glad your opinion comes from actual experience running a business. More often than not comments like these come from people who never have yet, for some strange reason, believe they understand business. > I didn't mean to imply that you're an asshole or a slave-driver Thanks for the clarification. That's exactly what I took from your 18th. century comment. Clearly that is not what you meant. > Business is often regarded as war, but that is a choice we make. A business, past a certain point, becomes a living organism. Sometimes you think you go into work every day with a plan and then the business ends-up telling you what you will be focusing on that day. Much the same, one can start with altruistic intentions with the full intent of having a communal and collaborative relationship with external entities (customers, associates, suppliers and even competitors). Then you learn that few play by those rules and business can devolve very quickly (and often does) into a war-like atmosphere. I have examples of this galore. Granted, different business segments behave differently. I have a sense that a lot of the SV startups exist in this innocent utopia they've created. There are industries where you don't dare share internals or technology details unless you are willing to be eviscerated by your competitors inside of a microsecond. Old world thinking? Maybe, but it is very real. Until such time as this changes you have to live and work within this reality. > you can structure the information in such a way that they understand enough to be able to make informed decisions about their salary and so forth You see, I view that as a total deviation from the mission. My job as a CEO isn't to try to figure out a way for every layer of the organization to have enough understanding of business finances to be able to vote for their own salary. What's that old saying about being up to your ass in alligators? That, to me, would be a major failure in fiduciary duties. It would also be a major failure in operating the business efficiently. I can't see a reality where I want my shipping clerk, graphics designer, electrical engineer, sales force, customer services folks and marketing manager to devote time to becoming familiar with company finances. It can also become a huge time and money sink. As employees come and go you now have to educate the new ones so that they can become part of their respective voting blocks. It just can't scale. I've stated that I can see this working in a small (5 to 10) company consisting of a very homogeneous group of similarly educated and capable people with compatible mindsets. I can see that. When things are going well everything can work just fine. If things take a turn for the worst you can have serious problems. The only way this can work well under all conditions is if all employees have, as their absolute top priority --and at the expense of their own livelihood--, the survival and well-being of the company. If you happen to put together a group like that then they'll make the right decisions during good and bad times. There's also another element to this. It takes a lot of intestinal fortitude to be an entrepreneur. Things can get very rough. Nearly every entrepreneur I know has horror stories to tell. Nearly all of them speak of stress, sleepless nights, tensions within family and relationships, neglect, reduced quality of live and more. It isn't always like that, of course, as a business becomes successful you can begin to truly enjoy the fruits of the effort. Bringing employees into the sausage making innards of a business can be hugely distracting. You don't want your employees going home with the worries and stresses that upper management absorbs every day. A programmer who spends all day worried about the numbers she just saw is not likely to be able to focus on her job. Sometimes ignorance is bliss. Bad things happen in business every day. That does not mean that the business is up in flames. In order to ensure that employees don't interpret things the wrong way now you've added yourself the task of constantly having to educate them as to the minutiae of what is behind every balance sheet you release. That's a lot of work that is absolutely not necessary. That's not what a CEO is there to do. As for my comment style. Was I harsh. Probably so. I firmly believe that this is an utter waste of time, it is potentially dangerous and definitely counterproductive. It further feels like the CEO is trying to avoid the responsibility of having to deal with compensation. Employee compensation, particularly if you consider sales, is one of the toughest things I've had to learn about. I remember having a stack of probably ten books on compensation theory next to my bed for a while. Not easy work. Once you develop an approach it's easy. I can totally see a young CEO being totally overwhelmed by just this task. A CS curriculum teaches you little if anything about running a business. From that perspective it is easy to escape and justify the idea of letting the employees vote for their own compensation. The problem here is that you will, eventually, have to deal with making sausage. So I end up calling it a "hippie" solution. Yeah, OK, maybe harsh. It simply reflects my first level reaction to something I though was not running a business but rather trying to create a commune. > You're preaching to the choir here. I completely agree. I remember one salesman I worked with who didn't understand the differences between profit mark-up and profit margin. It's just amazing to me how everyone who's run a business with sales people has similar stories. When perplexed about how to hire good sales people I sought the advice of every CEO I could reach. Almost invariably the conversation started with them rolling their eyes and saying something like "Oh, boy! Let me tell you what I went through!". I just thought of something: Maybe there's opportunity for disruption here? > As for unions I don't like them or believe in them and I think they are also a part of the 18th century mentality I mentioned earlier. Now I know there's at least two of us on HN. > you shouldn't shout down someone who is trying a new method And you are right. I'll keep that in mind for future comments and see about coming off a little softer while delivering the same or a similar message. That said, there are things in business that are time tested. For example, it's hard to imagine someone inventing a new accounting method. If, for example, a CEO of a software startup was consumed with the idea of doing accounting differently and I was an investor in that company I'd fire them. They need to focus on the business at hand and not go off in tangents. My read on this business of "vote for your own compensation" was that this CEO is now devoting time to something that has nothing to do with the mission at hand. > your method of business that leaves people in hospital or dead? Well, to be fair here, it isn't the method of business that puts people in the hospital. Sometimes you can do everything exactly right and still end-up losing. The period of time I described (2008~2010) saw absolute carnage in businesses across nearly all industries. Lots of people were caught off guard. If you've invested ten, fifteen or twenty years growing a business only to see it implode in a few quarters due to external factors completely out of your control it will cause tremendous stress. Back then we all heard stories about people jumping out of buildings and walking in front of trains. I remember making a comment over email to a good friend of mine in December of 2009. When I read that email today it absolutely scares me. It reveals my mental state at the time. I had reached a very dark and ugly place due to what was going on with my business. I told him that I had reached a point where I understood, in no uncertain terms, why people committed suicide due to business and financial problems. I am mentally very tough and have always had a great support group in the form of friends and family. So, I wasn't thinking of taking my own life but I got a scary glimpse of how someone could very easily get there when things go really bad. Of course, my friend called me in panic as soon as he saw that email. We went out for dinner and he came out of it understanding where those comments came from (and was comfortable not chaperoning me). Again, the stress doesn't come from the business method but rather the every day goings on. The first time you get sued for something you are not going to sleep. Lose a good employee, same thing. A competitor takes away a good opportunity will create stress. A customer posts an ugly and unfair critique in an industry blog, not good. None of these things have anything whatsoever to do with a management style. They are simply realities of business. Incidentally, the reason I ended-up in the hospital was actually a combination of extreme dehydration and stress. On a very hot Sunday went out to kayak at the lake --peak of the summer-- and took plenty of water with me but no electrolyte drinks (gatorade). After that I rested a little and then decided to go back to the office and spend a few hours working on some code. Long story short, I ended up in the hospital. It turns out dehydration and stress are a bad combination. Nothing wrong with me. Just needed to rest and get my body back in balance.