The objective of focusing on Work is to make a living and to build something I'm proud of. I've worked for most of my life starting at an early age in mom and pop shops, restaurants, coffee shops, construction sites, and now in tech. In the tech industry, most of my time has been spent in software technology startups.
Work in the software industry generally falls into two buckets: Operating and Investing. Operating focuses on building companies where as Investing focuses on deploying capital into companies. This section focuses Operating where as Investing is covered under Finances.
When it comes to building a software company, each company basically does three things: (1) Build a great product, (2) Sell the product to customers, and (3) Support the company's operations and it's people. These three things typically map to the company's organizational structure as the larger buckets of Research and Development (R&D), Go To Market (GTM), and General & Administrative (G&A).
The simplest company org structures are organized by function. The broad functions are:
- Engineering (including IT)
- Product (including Design)
An alternative structure is a matrix organization which comes with it's own challenges.
Understanding your operating level helps you understand where to focus. For example, a Product Manager focuses on the 250 ft. view building out a quarterly plan and bringing it to the 10 ft. view in the form of issues for Engineers to build. Engineers then take the issues at the 10 ft. view and turn it into code at 1 ft. As a whole, an organization is constantly going from 10,000 ft. down to 1 ft. with each of it's team members being responsible for certain parts.
The ability for an individual to go from 10,000 ft. to 1 ft. is rare. If you find one, hire them right away.
|10 year plan
|3 year plan
|Exec / CEO
|1 year plan
|Director / Exec
|Product Manager / Director
|Engineer / Product Manager
|Engineer / Product Manager
All work at a company happens at a certain cadence.
Here's an example of how GitLab defines it's cadence:
An alternative hierarchy to this is:
* Mission - why we exist
* Vision - what we want to be
* Priorities - what's important now
* Goals - a measurable outcome we work towards
* Tasks - the thing we need to do today
How we get there:
* Values - a compass to navigate through the grey areas
* Routine - how I spend my time and energy.
It's incredibly difficult to move thousands of people together in the same direction to accomplish a goal. Companies will often use company values to represent their operating principles. Team members are meant to be stewards of these values to incorporate these values in their day to day work.
At GitLab, we use the acronym CREDIT which stands for Collaboration, Results, Efficiency, Diversity, Iteration, and Transparency. The acronym is easy to remember and we interweave these values into all aspects of our work. Some other acronyms with similar values that I like are: STRIVE: Support, Transparency, Results, Inclusion, Velocity, Efficiency. THRIVE: Transparency, Helpfulness, Results, Innovation, Velocity, Efficiency.
Here are some other examples of company values: https://asana.com/resources/company-values-examples
If you're looking to create a memorable acroynym, I suggest first starting with a few core values then Scrabble wildcards for the others: https://scrabblewordfinder.org/
Below, I've placed my operating principles into the STRIVE acronym Support, Transparency, Results, Inclusion, Velocity, Efficiency.
Your customers should be at the center of everything you do.
Start with the high level so people can orient themselves, then keep zooming in more and more into the details. The ability to zoom in and out from the 10,000 ft view to the 1 ft view helps you map between / align the different levels.
I think one of the most important operating principles is to be bold and right. If you're bold and right, you'll have made a large bet on the right opportunity. If you're timid and right, you'll wish you had done more. If you're bold and wrong, you'll end up deep in the wrong direction. If you're timid and wrong, nothing happens.
|Large bet on the right opportunity
|End up deep in the wrong direction
|End up living with regret
More reading: Steve Ballmer's advice to Satya Nadella
Long term results come with consistently work. Consistently taking risk, consistently being right, consistently shipping, consistently serving customers, etc.
The best solutions come from considering multiple points of view.
Examples of things that were built quicky: https://patrickcollison.com/fast
Definition of iteration: https://about.gitlab.com/handbook/values/#iteration
Make Decisions Quickly
Amazon breaks decisions into two types:
- Type 1: One way doors that are consequential and irreversible. "These decisions must be made methodically, carefully, slowly, with great deliberation and consultation."
- Type 2: Two way doors that are changeable and reversible. "If you’ve made a suboptimal Type 2 decision, you don’t have to live with the consequences for that long. You can reopen the door and go back through. Type 2 decisions can and should be made quickly by high judgment individuals or small groups."
Avoid slowing down when growing larger: "As organizations get larger, there seems to be a tendency to use the heavy-weight Type 1 decision-making process on most decisions, including many Type 2 decisions. The end result of this is slowness, unthoughtful risk aversion, failure to experiment sufficiently, and consequently diminished invention.1 We’ll have to figure out how to fight that tendency."
Make Type 2 decisions with 70% of data: "Most decisions should probably be made with somewhere around 70% of the information you wish you had. If you wait for 90%, in most cases, you're probably being slow. Plus, either way, you need to be good at quickly recognizing and correcting bad decisions. If you're good at course correcting, being wrong may be less costly than you think, whereas being slow is going to be expensive for sure"
Amazon's fundamental management and decision-making approach:
- We will continue to focus relentlessly on our customers.
- We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
- We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.
- We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.
- When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.
- We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.
- We will work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.
- We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.
- We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.
Meritocracy in decision making
When it comes to decision making, Ray Dalio outlines a few different ways which decisions can be made:
|Boss knows best
|One person one vote
|Based on the merit of that person and what each person is good at. Believability points are given based on merit. Not all opinions are weighted equally.
Aim for a meritocracy where the person with the most knowledge in the specific area makes the decision.
Generalizations are quick and easy but never lead to the best solution. Problems always have edgecases and understanding nuance (i.e. the details) helps you solve for each edgecase / scenario.
A lot can be accomplished through asynchronous work. Do the prep work first before meeting.
Burn rate increases when process doesn't keep pace with change.
If you're the CEO of a company, the chore level is high and if you don't do your chores then the company goes to hell.
Source: Elon Musk on All In Podcast
"If you want people to make decisions, people cannot make smart decisions unless they have context and information. If you want people to make the same decisions you would make but in a scalable and high leverage way, you have to give them the same information you have." Transmit all of the data from metrics: finance, marginal economics, is the only way you can teach people to make smart decisions and scale." - Keith Rabois (The Role of a COO)
From Keith Rabios:
- Transparency improves the decision making of everyone.
- There’s a divorce between the information the CEO has (fundraising environment, macro market, competitive landscape, listening to his/her board) versus what other executives / employees know. It's often that the CEO is exposed to data, but is not translating and broadcasting it to the entire company.
- In Square, at the end of every board meeting they share the deck to the rest of the company.