Don’t Get Left Behind As Your Company Grows

If you’re an early employee at a startup, one day you will wake up to find that what you worked on 24/7 for the last year is no longer the most important thing – you’re no longer the most important employee, and process, meetings, paperwork and managers and bosses have shown up. Most painfully, you’ll learn that your role in the company has to change.

I blogged about this earlier here and got the chance to talk about the topic at the Startup Grind conference.

Below is a video of the talk.

1:40: Having The Talk: How I lost my job after helping the company succeed
5:30: You need different skills as your company grows
6:47: A visceral blow: What just happened?
8:02: How I blew an opportunity
9:55: What you’ll feel if this happens to you
15:40: Why there should be no job titles at your startup
18:00: Why founders often come from dysfunctional families — and what that means for them as a company transitions
22:39: If you can see your future, you can change your future

How to Keep Your Job As Your Company Grows

I know a change is going to come

If you’re an early employee at a startup, one day you will wake up to find that what you worked on 24/7 for the last year is no longer the most important thing – you’re no longer the most important employee, and process, meetings, paperwork and managers and bosses have shown up. Most painfully, you’ll learn that your role in the company has to change.

I’ve seen these transitions as an investor, board member and CEO. At times they are painful to watch and difficult to manage. Early in my career I lived it as an employee, and I handled it in the worst possible way.

Here’s what I wish I had known.


I had joined MIPS Computers, my second semiconductor company, as the VP of marketing and also took on the role of the acting VP of Sales. During the first year of the company’s life, I was a fireball – relentless in creating and pursuing opportunities – getting on an airplane at the drop of a hat to fly anywhere, anytime, to get a design win. I worked with engineering to try to find product/market fit (big endian or little endian?) and get the chip designed into companies building engineering workstations – powerful personal computers, all while trying to refine how to find the right markets, customers, and sales process. I didn’t get much sleep, but I was having the time of my life.

And after a year there was good news. Our rent-a-CEO was being replaced by a permanent one. Our chip was nearing completion, and I had convinced early lighthouse customers to design it into their computers. I had done amazing things with almost no resources and got the company on the radar of every tech publication and into deals we had no right to be in. I was feeling 10 feet tall. Everything was great… until the new CEO called me in for a chat.

I don’t remember much about the details, but I do remember hearing him tell me how impressed he was with what I had accomplished so far, then immediately the visceral feeling of shock and surprise when his next words were that now the company needed to scale, and I wasn’t the right person to do that… Wait! What??

For a minute I couldn’t breathe. I felt like I had been punched in the gut. How could that be?  What do you mean I’m not the right person??? Hadn’t he just listed all the great work I had done? He acknowledged it was a lot of progress but offered that it was a flurry of disconnected tactics without a coherent strategy. No one knew what I was doing, and I couldn’t explain why I was doing it when asked. “You’re just throwing stuff against the wall. That doesn’t scale.” I was speechless. Wasn’t that what the first year of a startup was supposed to be like?

Scrambling to save my job, I regained the power of speech, and asked him if I could be the person to take the company to the next level. And to his credit (which I only appreciated years later) he agreed that while he was going to start a search, I could be a candidate for the job. And to top it off he got me a coach to help me understand what taking it to the next level meant. In preparation I remember buying all the management books I could find and reading what little literature there was at the time about how small company management transitioned into a larger one.

And herein lies the tale….
I vaguely remember going to lunch with my coach, a nice white-haired “old guy” who was trying to help me learn the skills to grow into the new job. The problem was I had shut down. Even as we were meeting, I was obsessively thinking about the change in my role, my title and my status. “I don’t get it, I did all this work, and everything was great. Why does anything have to change?”  But I never shared any of how I felt with my coach. To do this day I am really embarrassed to admit that I have no idea what my coach tried to teach me over multiple lunches and weeks. As we went to lunch, all I could think about was me and how I was being screwed. I literally paid zero attention. In my righteous anger I was unreachable.

I shouldn’t have been surprised, but yet again I was, when a month later the CEO said, that the report from the coach said, “I had a long way to go”. The company was going to hire a VP of Marketing. I was devastated.

I quit.

It’s Not About Change – It’s About Loss
If you had asked me a decade later what had been going on in my head and why I handled this so badly, I would have simply said, that: 1) I was resistant to change, and that 2) I had made this all about me and never once considered that our new CEO was rightAll true – to a point.

It took me another decade to realize if I had been really honest with myself it wasn’t about fighting change at all. Heck every day something new was happening at our startup. I was agile enough to keep up with innumerable changes and I was changing lots of things myself. It was actually about something much more personal I wouldn’t admit to myself – it was that these changes made me fear what I was losing;

  • I felt a loss of status and identity – I had been judged inadequate to continue in my role and my stature and the value of my skills and abilities had dropped.
  • I felt a loss of certainty – I was now competing to hold a job I thought was mine forever in the company. At least that’s what I thought my business card said. Now I was adrift and didn’t know what the future held.
  • I felt a loss of autonomy – Up until now I used my best judgment of what was needed and I was doing what I wanted, when I wanted it. I was fine making up a strategy on the fly from disconnected tactics. Now we were going to have plans and a strategy.
  • I felt a loss of community – we had been a small tight team who had bonded together under extreme pressure and accomplished amazing things. Now new people who knew none of that and appreciated little of it were coming in. They had little trust and empathy with us.
  • I felt the process lacked fairness – no one had warned/told me that the job I was doing needed to change over time, and no one told me what those new skills were.

What was going on?
Researchers have found there’s a link between social connection and physical discomfort within the brain. “Being hungry and being ostracized activate similar neural responses because being socially connected is necessary for survival. Although a job is often regarded as a purely economic transaction, the brain experiences the workplace first and foremost as a social system.”

Looking back over the decades it’s clear that the new CEO was right. Even though these losses triggered something primal, I did need to learn discipline, pattern recognition, time management, separating the trivial from the important and the difference between tactics and strategy. I needed to learn to grow from being a great individual contributor to being a manager and then a leader. Instead I walked away from learning any of it.

I probably added five unneeded years to my career.

What should I have done?
Today it’s understood that all startups go through a metamorphosis as they become larger companies. They go from organizations struggling for survival as they search for product/market fit, to building a repeatable and scalable business model, and then growing to profitability. And we are all hard-wired for a set number of social relationships. This mental wiring defines boundaries in growing an organization – get bigger than a certain size, and you need a different management system. The skills needed from employees differ at each stage.

What I wish I knew was that if you’re an early company employee, it’s not likely that the skills you have on day one are the skills needed as the company scales to the next level. This sentence is worth reading multiple times as no one – not the person who hired you, the VC’s or your peers -is going to tell you when you’re hired that the company will likely outgrow you. Some (like your peers or even the founders) don’t understand it, and others (the VCs) realize it’s not in their interest to let you know. The painful reality is that products change, strategies change, people change…things have to change for your company to stay in business and grow.

What should my CEO have done?
When my CEO was explaining to me how the company needed to change to grow, he was explaining facts while I was processing deeply held feelings. The changes in the organization and my role represented what I was about to lose. And when people feel they’re going to lose something deeply important, it triggers an emotional response because change feels like a threat. It’s not an excuse for my counterproductive behavior, but explains why I acted out like I did.

Startup CEOs need to think about these transitions from day one and consider how to address the real sense of loss these transitions mean to early employees.

Loss of status? It’s almost impossible to take away a title from someone, give it to someone else and still retain that employee. Think hard about whether titles need to be formal (VP of Engineering, VP of Marketing, VP of Sales, etc.) before the company finds product/market fit and/or tens of people – as you can almost guarantee that these people won’t have those roles and titles when you scale.

Loss of Certainty? Startups and VC’s have historically operated on the “I’ll deal with this later” principle in letting early employees know what happens as the company scales. The common wisdom is that no one would want to work like crazy knowing that they might not be the ones to lead as the company grows. I call this the Moses-problem – you work for years to get the tribe to the promised land – but you’re not allowed to cross over. The company needs to give formal recognition for those individuals who brought the tribe to the promised land.

Loss of Autonomy? This is the time you and your employees get to have a discussion about the next steps in their career. Do they want to be an individual contributor? Manager of people and process? Special projects? These shouldn’t be random assignments but instead, offer a roadmap of possible choices and directions.

Loss of Community? Your original hires embody the company culture. Unless you have them capture the unique aspects of the culture, it will become diluted and disappear among the new hires. Declare them cultural co-foundersHelp them understand the community is growing and they’re the ambassadors. Have them formalize it as part of a now needed on-boarding process as the company grows. And most importantly, make sure that they are celebrated as the team that got the company to where it is now.

Loss of Fairness? Just telling employees “a change is going to come” it is not sufficient. What are the new skills needed when you scale from Search to Build to Grow – from tens to hundreds and then thousands of people? How can your existing employees gain those new skills?

Lessons Learned

  • VC’s, Founders and CEOs now recognize that startups grow through different stages: Search, Build and Grow
    • They recognize that employees need different skills at each stage
    • And that some of the original employees won’t grow into the next stage
  • But while these changes make rational sense to the CEO and the board, to early employees these changes feel like a real and tangible personal loss
    • Loss of Status and Identity
    • Loss of Community
    • Loss of Autonomy
    • Loss of Certainty
    • Loss of Fairness
  • CEOs need to put processes in places to acknowledge and deal with the real sense of loss
    • These will keep early employees motivated – and retained
    • And build a stronger company
  • For employees, how you handle change will affect the trajectory of your career and possibly your net worth

This post appeared in AngelList

Why Founders Need a Moral Compass

I’ve been thinking why the ethical boundaries of todays founder/VC interactions feel so different then they did when I was an entrepreneur. I’ve written about the root causes in an HBR article here and an expanded version here. Worth a read.

Stanford eCorner captured a few minutes of what I’ve been thinking in the video below.

If you can’t see the video click here

This 1 Piece of Advice Could Make Or Break Your Career

There’s no handbook on how to evaluate and process “suggestions” and “advice” from a boss or a mentor. But how you choose to act on these recommendations can speed up your learning and make or break your career. Here’s what to keep in mind:


I had a team of students working on an arcane customer problem. While they were quickly coming up to speed, I suggested that they talk to someone who I knew was an expert in the area and could help them learn much faster. In fact, starting in the second week of the class, I suggested the same person several times – one-on-one, in class and in writing. Each time the various team members smiled, nodded and said, “Yes, we’ll get right on it.”  Finally, eight weeks later when they were about to fly across the country to meet the customer, I reminded them again.

When they returned from the trip, I asked if the advisor I suggested was helpful.

I was a bit surprised when they replied, “Oh, we’ve been trying to connect with him for a while and he never responded.”  So, I asked:


Team,
As per our conversation about the lack of response from your advisor John Doe -please forward me copies of the emails you have sent to him.

Thanks

Steve


The reply I received was disappointing — but not totally surprising.


Dear Steve, 

Unfortunately, I believe our team has painted the wrong picture due to miscommunication on our part. It was our responsibility to reach out to John Doe, but we failed to do so.

We did not attempt to reach out to him up until Week 8 before our flight, but the email bounced. We got caught up in work on the trip and did not follow-up. What we should have done was to clarify the email address with our Teaching Assistant and attempt to contact him again.

Best regards,

Taylor


Extra credit for finally owning that they screwed up – but there was more to it.

Combine Outside Advice with Your Own Insights
Upon reflection I realized that this student team was missing a learning opportunity. They were soon heading for the real world, and they had no idea how to evaluate and process “suggestions” and “advice.”  Ironically, given they were really smart and in a world-class university, they were confusing “smart” with “I can figure it all out by myself.”

Throughout my entrepreneurial career I was constantly bombarded by advice – from bosses, mentors, friends, investors, et al. I was lucky enough to have mentors who took an interest in my career, and as a young entrepreneur, I tried to pay attention to what they were trying to tell me. (Coming into my first startup from four years in the military I didn’t have the advantage of thinking I knew it all.) It made me better – I learned faster than having to acquire every bit of knowledge from scratch and I could combine the data coming from others with the insights I had.

Have a Process to Evaluate Suggestions and Advice
Here was my response to my student team:

Dear Team:

Throughout your work career you’ll be getting tons of suggestions and advice; from mentors – people you don’t work for but who care about your career and from your direct boss and others up your reporting chain.

  1. Treat advice and suggestions as a gift, not a distraction
    • Assume someone has just given you a package wrapped in a bow with your name on it.
    • Then think of how they’ll feel when you ignore it and toss it aside.
  2. When you’re working at full speed just trying to get your job done, it’s pretty easy to assume that advice/suggestions from others are just diversions. That’s a mistake. At times following up on them may make or break a career and/or a relationship.
    • The first time your boss or mentor will assume you were too busy to follow up.
    • The second time your boss will begin to question your judgment. Your mentor is going to question your willingness to be coached.
    • The third time you ignore suggestions/advice from your boss is a career-limiting move. And if from a mentor, you’ve likely damaged or ended the relationship.
  3. Everyone likes to offer “suggestions” and “advice.” Think of these as falling into four categories:
    • Some bosses/mentors offer “suggestions” and “advice” because it makes them feel important.
    • Others have a set of contacts or insights they are willing to share with you because they believe these might be useful to you.
    • A few bosses/mentors have pattern-recognition skills. They’ve recognized the project you’re working on or problem you’re trying to solve could be helped by connecting with a specific person/group or by listening to how it was solved previously.
    • A very small subset of bosses/mentors has extracted some best practices and/or wisdom from those patterns. These can give you shortcuts to the insights they’ve taken years to learn.
  4. Early in your career it’s hard to know whether a suggestion/advice is valuable enough to spend time following up. Here’s what I suggest:
    • Start with “Thanks for the suggestion.”
    • Next, it’s OK to ask, “Help me understand why is this important? Why should I talk to them? What should I learn?” This will help you figure out which category of advice you’re getting.If it’s a direct boss and others up your reporting chain, ask, “How should I prioritize this? Does it require immediate action?” (And it most cases it doesn’t matter what category it’s in, just do it.)
    • Always report back to whoever offered you the advice/suggestion to share what you learned. Thank them.

If you open yourself to outside advice, you’ll find people interested in the long-term development of your career – these are your career mentors. Unlike coaching, there’s no specific agenda or goal but mentor relationships can result in a decades-long dialog of continual learning. What makes these relationships a mentorship is this: you have to give as good as you are getting. While you’ll be learning from them – and their years of experience and expertise – what you need to give back is equally important – offering fresh insights to their data.

If your goal is to be a founder, having a network of mentors/advisors means that not only will you be up to date on current technology, markets or trends, you’ll be able to recognize patterns and bring new perspectives that might be basis for your next startup.

Lessons Learned

  • Suggestions/advice at work are not distractions that can be ignored
    • Understand the type of suggestions/advice you’re getting (noise, contacts, patterns, insights)
    • Understand why the advice is being given
    • Agree on the priority in following it up
  • Not understanding how to respond to advice/suggestions can limit your career
  • Advice is a kickstarter for your own insights and a gateway for mentorship
  • Treat advice and suggestions as a gift, not a distraction

Why Entrepreneurs Start Companies Rather Than Join Them

If you asked me why I gravitated to startups rather than work in a large company I would have answered at various times: “I want to be my own boss.” “I love risk.” “I want flexible work hours.” “I want to work on tough problems that matter.” “I have a vision and want to see it through.” “I saw a better opportunity and grabbed it. …”

It never crossed my mind that I gravitated to startups because I thought more of my abilities than the value a large company would put on them. At least not consciously. But that’s the conclusion of a provocative research paper, Asymmetric Information and Entrepreneurship, that explains a new theory of why some people choose to be entrepreneurs. The authors’ conclusion — Entrepreneurs think they are better than their resumes show and realize they can make more money by going it alone.  And in most cases, they are right.

I’ll summarize the paper’s conclusions, then share a few thoughts about what they might mean – for companies, entrepreneurs and entrepreneurial education. (By the way, as you read the conclusions keep in mind the authors are not talking just about high-tech entrepreneurs. They are talking about everyone who chooses to be self-employed – from a corner food vendor without a high school diploma to a high-tech founder with a PhD in Computer Science from Stanford.)

The authors’ research came from following 12,686 people over 30+ years. They found:

  1. Signaling. When you look for a job you “signal” your ability to employers via a resume with a list of your educational qualifications and work history. Signaling is a fancy academic term to describe how one party (in this case someone who wants a job) credibly conveys information to another party (a potential employer).
  2. Capable. People choose to be entrepreneurs when they feel that they are more capable than what employers can tell from their resume or an interview. So, entrepreneurs start ventures because they can’t signal their worth to potential employers.
  3. Better Pay. Overall, when people choose entrepreneurship they earn 7% more than they would have in a corporate job. That’s because in companies pay is usually set by observable signals (your education and experience/work history).
  4. Less Predictable Pay. But the downside of being an entrepreneur is that as a group their pay is more variable – some make less than if they worked at a company, some much more.
  5. Smarter. Entrepreneurs score higher on cognitive ability tests than their educational credentials would predict. And their cognitive ability is higher than those with the same educational and work credentials who choose to work in a company.
  6. Immigrants and Funding. Signaling (or the lack of it) may explain why some groups such as immigrants, with less credible signals to existing companies (unknown schools, no license to practice, unverifiable job history, etc.) tend to gravitate toward entrepreneurship. And why funding from families and friends is a dominant source of financing for early-stage ventures (because friends and family know an entrepreneur’s ability better than any resume can convey).
  7. Entrepreneurs defer getting more formal education because they correctly expect their productivity will be higher than the market can infer from just their educational qualifications. (There are no signals for entrepreneurial skills.)

Lemons Versus Cherries. The most provocative conclusion in the paper is that asymmetric information about ability leads existing companies to employ only “lemons,” relatively unproductive workers. The talented and more productive choose entrepreneurship. (Asymmetric Information is when one party has more or better information than the other.) In this case the entrepreneurs know something potential employers don’t – that nowhere on their resume does it show resiliency, curiosity, agility, resourcefulness, pattern recognition, tenacity and having a passion for products.
This implication, that entrepreneurs are, in fact, “cherries” contrasts with a large body of literature in social science, which says that the entrepreneurs are the “lemons”— those who cannot find, cannot hold, or cannot stand “real jobs.”

So, what to make of all this?
If the authors are right, the way we signal ability (resumes listing education and work history) is not only a poor predictor of success, but has implications for existing companies, startups, education, and public policy that require further thought and research.

Companies: In the 20thcentury when companies competed with peers with the same business model, they wanted employees to help them execute current business models (whether it was working on an assembly line or writing code supporting or extending current products). There was little loss when they missed hiring employees who had entrepreneurial skills. However, in the 21stcentury companies face continuous disruption; now they’re looking for employees to help them act entrepreneurial.  Yet their recruiting and interviewing processes – which define signals they look for – are still focused on execution not entrepreneurial skills.

Surprisingly, the company that best epitomized this was not some old-line manufacturing company but Google. When Marissa Mayer ran products at Google the New York Times  described her hiring process, “More often than not, she relies on charts, graphs and quantitative analysis as a foundation for a decision, particularly when it comes to evaluating people…At a recent personnel meeting, she homes in on grade-point averages and SAT scores to narrow a list of candidates, many having graduated from Ivy League schools, …One candidate got a C in macroeconomics. “That’s troubling to me,” Ms. Mayer says. “Good students are good at all things.”

Really.  What a perfect example of adverse signaling. No wonder the most successful Google products, other than search, have been acquisitions of startups not internal products: YouTube, Android, DoubleClick, Keyhole (Google Maps), Waze were started and run by entrepreneurs. The type of people Google and Marissa Mayer wouldn’t and didn’t hire started the companies they bought.

Entrepreneurship. When I shared the paper withTina Seelig at Stanford she asked, “If schools provided better ways to signal someone’s potential to employers, will this lead to less entrepreneurship?”  Interesting question.

Imagine if in a perfect world corporate recruiters found a way to identify the next Steve Jobs, Elon Musks, or Larry Ellisons. Would the existing corporate processes, procedures and business models crush their innovative talents, or would they steer the large companies into a new renaissance?

The Economic Environment. So, how much of signaling (hiring only by resume qualifications) is influenced by the economic environment? One could assume that in a period of low unemployment, it will be easier to get a traditional job, which would lead to fewer startups and explain why great companies are often founded during a downturn. Those who can’t get a traditional job start their own venture. Yet other public policies come into play. Between the late 1930s and the 1970s the U.S. tax rate for individuals making over $100,000 was 70% and 90% (taxes on capital gains fluctuated between 20% and 25%.) Venture capital flourished when the tax rates plummeted in the late 1970s. Was entrepreneurship stifled by high personal income taxes? And did it flourish only when entrepreneurs saw the opportunity to make a lot more money on their own?

Leaving a Company. Some new ventures are started by people who leave big companies to strike out on their own – meaning they weren’t trying to find employment in a corporation, they were trying to get away from it.  While starting your own company may look attractive from inside a company, the stark reality of risking one’s livelihood, financial stability, family, etc., is a tough bar to cross.  What motivates these people to leave the relative comfort of a steady corporate income and strike out on their own?  Is it the same reason – their company doesn’t value their skills for innovation and is just measuring them on execution? Or something else?

Entrepreneurial Education. Is entrepreneurship for everyone? Should we expect that we can teach entrepreneurship as a mandatory class? Or is it calling? Increasing the number of new ventures will only generate aggregate wealth if those who start firms are truly more productive as entrepreneurs.

Lessons Learned

  • Entrepreneurs start their own companies because existing companies don’t value the skills that don’t fit on a resume
  • The most talented people choose entrepreneurship (Lemons versus Cherries)
  • Read the paper and let me know what you think

 

The Difference Between Innovators and Entrepreneurs

I just received a thank-you note from a student who attended a fireside chat I held at the ranch. Something I said seemed to inspire her:

“I always thought you needed to be innovative, original to be an entrepreneur. Now I have a different perception. Entrepreneurs are the ones that make things happen. (That) takes focus, diligence, discipline, flexibility and perseverance. They can take an innovative idea and make it impactful. … successful entrepreneurs are also ones who take challenges in stride, adapt and adjust plans to accommodate whatever problems do come up.”


Over the last decade I’ve watched hundreds of my engineering students as well as ~1,500 of the country’s best scientists in the National Science Foundation Innovation Corps, cycle through the latest trends in startups: social media, new materials, big data, medical devices, diagnostics, digital health, therapeutics, drones, robotics, bitcoin, machine learning, etc.  Some of these world-class innovators get recruited by large companies like professional athletes, with paychecks to match. Others join startups to strike out on their own. But what I’ve noticed is that it’s rare that the smartest technical innovator is the most successful entrepreneur.

Being a domain expert in a technology field rarely makes you competent in commerce. Building a company takes very different skills than building a neural net in Python or decentralized blockchain apps in Ethereum.

Nothing makes me happier than to see my students getting great grades (and as they can tell you, I make them very work hard for them). But I remind them that customers don’t ask for your transcript. Until we start giving grades for resiliency, curiosity, agility, resourcefulness, pattern recognition, tenacity and having a passion for products and customers, great grades and successful entrepreneurs have at best a zero correlation (and anecdotal evidence suggests that the correlation may actually be negative.)

Most great technology startups – Oracle, Microsoft, Apple, Amazon, Tesla – were built by a team led by an entrepreneur.

It doesn’t mean that if you have technical skills you can’t build a successful company. It does mean that success in building a company that scales depends on finding product/market fit, enough customers, enough financing, enough great employees, distribution channels, etc. These are entrepreneurial skills you need to rapidly acquire or find a co-founder who already has them.

Lessons Learned

  • Entrepreneurship is a calling, not a job.
  • A calling is something you feel you need to follow, it gives you direction and purpose but no guarantee of a paycheck.
  • It’s what allows you to create a missionary zeal to recruit others, get customers to buy into a vision and gets VC’s to finance a set of slides.
  • It’s what makes you get up and do it again when customers say no, when investors laugh at your idea or when your rocket fails to make it to space.

Leadership is More Than a Memo

I just read Brotopia: Breaking Up the Boys’ Club of Silicon Valley. It was both eye-opening and cringe-worthy. The book explores the role of gender in the tech industry – at startups and venture capital firms – and the interaction between men and women in the two. While Silicon Valley has grown to have global influence, in many ways the cultural leadership from the venture community has dramatically shrunk in the last decade. Chasing deal flow has resulted in many VCs leading the race to the bottom in startup ethical behavior.

Among other things the book reminded me how important leadership is in setting startup culture – both consciously and implicitly.

Here was the day I got that lesson.

—-

With the reckless and naïve abandon of founders who had no clue what they were about to tackle, we had just started Ardent, a supercomputer company. Ben Wegbreit, the VP of Engineering (one of my mentors and then co-founder of Epiphany), broke his foot skiing just as the company started. So every day Ben hobbled into our very small office nattily dressed in his suit but wearing sneakers over his cast. (Yes, in the dim past of Silicon Valley the execs really wore suits.)

At first the company just consisted of the founders, but Ben soon started to hire his engineering team. Since this was the pre-Hoodie era, they interviewed in various types of then engineering attire – most with jeans, some with khakis, etc. (And back then they were all men.) But as each engineer was hired and started work I began to notice that after a few days they started to wear suits… wait for it… with sneakers. Obviously, this was a pretty bizarre fashion statement – and no one had sent out a memo announcing this as the engineering dress code. After six weeks of furious staffing and recruiting Ben had a team of 10 or so engineers and I have vivid memories of all of them trying to look like Ben.

Yet Ben was oblivious to the suit-and-sneaker clone army he had created.

With my now decades of hindsight, I realize I should have just let the engineers know that Ben had broken his foot and there was no attempt at sartorial innovation. But I remember just being mesmerized by this lesson in implicit leadership unfolding before me.

I knew that the cast was going to come off, and Ben would show up one day wearing regular shoes. What I didn’t know was what would happen to the engineering dress code then– would they all then adopt suits and shoes? Drop the suits all together? Keep their suit and sneaker style?

And how long would the change in engineering dress take? The next day?  A week?

And then it happened. Ben showed up wearing a suit and … shoes.

I’m sure engineering productivity took a big hit that week as cognitive dissonance set in.  Some of the engineers literally went home at lunch and changed – some into shoes, some dropping the whole suit.  Most started wearing regular shoes the next day, and by the second day no one was wearing sneakers.

Decades later Mark Zuckerberg would run the experiment at scale.

Lessons Learned

  • Culture gets set both explicitly with rules and implicitly by example
  • The bro culture of the Valley is a failure of leadership – by VC’s who should know better and CEO’s who need to be taught
  • Ironically, it would take a Los Angeles VC, Mark Suster at Upfront Ventures and the Inclusion Clause to lead the change in venture capital culture
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