How to be half as effective

Posted: September 11th, 2012 | Author: | Filed under: Startups | 8 Comments »

When I founded Ontela with my friends Charles and Brian, we were all sick of big companies.  There were a lot of things we wanted to do differently, but one of the big ones was to build a company that wasn’t a faceless bureaucracy.  (Hindsight: good goal)

A company where everyone was impactful.  (Absolutely!)

A company where nobody felt disempowered. (Everyone should be empowered to do their job, for sure!)

A company where everyone was a part of the decision making process.  (Wait… everyone should be a part of every decision making process?)

A company where nobody was left out! (Now something has gone dreadfully awry.)

We made one of the classic startup blunders.  We confused individual empowerment, which we all wanted, with its precise inverse: decision by committee.

It started out great: I (the CEO) went over the schema with Charles (the CTO).  Brian (the VP business development) reviewed his pitch decks with Charles & I, who had lots of feedback.  And Charles & Brian would suggest dozens of changes to my fundraising pitch, most of them quite helpful.  We were a well functioning team.

Except that we weren’t getting work done very fast.  We were putting in long hours, but it always seemed like there was more motion than their was progress.  We didn’t realize it at the time, but we had run afoul of one of the most important rules of startup productivity:

If two people work on a task, it takes twice as long.

Working togetherAs we kept working together on everything from leasing office space to drawing design mocks, we were effectively using two or three founders to do the job of one.  The math was simple – our decisions were better – maybe 20% more likely to be right? Maybe 50%? –  but they were taking up the whole company instead of just one person.  Less stuff was happening.

And then things started getting hard.  I disagreed with Charles’ choice of platform.  Charles thought Brian wasn’t pitching partners effectively.  Both of them were on my case for failing to raise any outside investment.  And suddenly, not only were decisions consuming 2 or 3 people, they were taking longer.  And because we were disagreeing more pointedly, we were getting less effective at communicating and resolving our differences.  So the net result was that we were taking 2-3 people to make a decision instead of one, and those people were consumed for more time than one person, for a net productivity decrease of way the hell too much.

We eventually figured out where we had gone wrong. Big companies are frustrating because you can’t get anything done.  Instead of each of us being empowered individually, we empowered ourselves to second-guess each other.  And the funny thing about second guesses is that they take twice as long – but they’re not twice as good.

Startups don’t out-think their competitors, they out-execute them.  The best startups have founders who stay in sync, but work independently.  And there’s a single magic ingredient that makes this work:

Trust.

You trust that the CEO’s going to figure out how to raise the money.  You trust that the CTO is going to pick the right technology stack.  You trust that the VP of BD is going to put together a great pitch.

That doesn’t mean you don’t collaborate.  Everyone has knowledge that must be shared, because decisions can’t be made in a vacuum.  And sometimes you need to ask your colleagues for help.

It also doesn’t mean that the CEO abdicates leadership.  The CEO role is to voice the strategic direction of the company, make everyone’s goals and responsibilities clear, and keep an eye to make sure no one is overmatched for the job at hand.

But success – fast success – means that everyone knows who owns a decision, supports that person in making that decision, trusts that person’s final decision (even if they’re wrong sometimes), and shuts the hell up when that person’s decided.

At Ontela, we muddled through it.   We learned to trust each other, to bite our lips, and to spend time on our own problems instead of each others’.  But it was a painful, slow lesson.

But I never forgot this lesson: at a startup, you can double your effectiveness and outperform your competitors by simply doing your job… instead of someone else’s.

(Disclaimer: I have a terribly fuzzy memory, and my quickly-pounded-out recollections of the early days of Ontela are likely adled by time and wishful thinking.)

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  • jhepfer

    Great post, Dan! One more thing to add is that communal decisions make accountability for the decision much murkier. Lack of direct accountability is another specialty of the “big company”.

  • http://www.plinan.com/ Brandon Wu

    This article came at the most perfect timing. I’ve fallen victim to the “decision by committee” inefficiency without understanding what exactly was causing the problem. A great reminder for us while we start transforming ourselves. Thanks for sharing! :)

  • http://www.facebook.com/profile.php?id=100003856621669 Chris Anderson

    Dan, I came across your blog after searching “entrepreneur” and searching under “pages” in facebook. I appreciate you mentioning that although one person’s final decision may not be completely correct, just trust their final decision, and get on with the process! On a side note, have you ever heard of Jeff Walker? You may enjoy his tips on launching products… more good info for cutting through all the B.S. seen at big companies. Cheers!

  • http://www.danshapiro.com/blog Dan Shapiro

    Very true. Everyone should have their zone of responsibility, and with that comes the zone of accountability.

  • http://clareyouthere.com/ Clare

    Great post, Dan.

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  • Barry

    Loosely coupled, tightly aligned.