Transcripts
1. Trailer: In this class I'm going to talk about mantras, two, three word description of why you exist. So, I'll tell you my mantra. My mantra is to empower people. One of the ways you can do it is to make these educational videos and get it to the widest market possible. So, I'm doing it because I want to empower people. So, we're hoping with Skillshare that we could reach a broader audience, and fulfill my own personal mantra of creating brilliant futures. What I mean by that is working with great entrepreneurs, with great ideas, and the potential to create great companies to change the world so we have a better future. If we can touch a few entrepreneurs and make them more successful, enable them to get better solutions out there for the world, we will have been part of helping create a more brilliant future. This class is the art of building a company. So, Bill and I are going to walk you through the process of taking this great start that you have and building upon it.
2. The Art of Team Building: Hiring Right: Hi. Welcome to the first unit in the class on the art of building your company. In this unit, we're going to talk about the art of building your team and we're going to cover three topics. The first topic is hiring right, making sure that you get the right people into your company. Then we're going to talk about nurturing a culture of success, creating a culture inside your organization to get the most out of your team. Then last, we're going to talk about navigating through a period of uncertainty because all start-up companies have lots of uncertainty and it's important to figure out how to motivate your team through that process. So, the first topic is hiring right. One of my favorite quotes on this topic is from Henry David Thoreau who said, "Do not hire a man or woman who does your work for money but him or her who does it for the love of it." The point is you want to hire people who are passionate about what you are doing and that's key to hiring right. Hiring the right team is probably both the hardest and the most important task of the founding team. So, it's critical that you do it the right way. So, we have a list of the top 10 rules for making sure that you hire the right team and win the war for talent. Rule number 1 is that great talent is cheap. This may seem counter-intuitive but it turns out to be true because the reality is mediocre talent is really expensive. If you think that you can save money by hiring a bunch of B players, you will be sorely mistaken and you will regret it. In fact, if you focus your efforts on finding great talent, what we find is generally really, really talented people can be two to three times as productive as your average talent. So, at the end of the day, focus on hiring great talent and, at the end, it will be less expensive for you because they will be so much more productive and they will stick with your team longer. Rule number 2 is in a startup company, it's important that everybody recruits. You cannot assign the task of recruiting to some HR person you hire as a contractor. As the founder and as the founding team and the early team, everybody on the team has got to be involved in the recruiting process. That means in all of your interactions out in your ecosystem, you're constantly on the search for talent. You let people know the kind of talent that you're looking for. You assess everybody you meet as a possible candidate for your company. You're always recruiting. Once you have candidates inside the company who are interviewing for jobs, make sure that all of the senior people get a chance to be involved in recruiting the best talent. Rule number 3 is create evangelists. What do I mean by that? What I mean is when you're out in the ecosystem talking with people about your company, it's important for you to infect those people with excitement about what you're doing and get other people, beyond just your employees, beyond just you as a team, get other people talking about your company and about the fact that you're looking for talented people. The best way to get talent into a company is to have it come to you rather than having to go out and find it. So, what you want to do is make sure the world is excited about the company that you're building and you get people coming to you who are true believers in what it is you're doing. Guy likes to say, "Hire infected people." Hire people who are infected with a passion for the vision that you have for your company. That way, you'll hire great people who will put their all into helping make you a success. Rule number 4 is raw talent beats resume. Too often, we fall into the trap of deciding on whether or not a person is a good person for your company based on looking at their resume. We look at things like a school, on their last job, and their title, and things like that and frequently, that's irrelevant. So, ignore the irrelevant. Don't put as much emphasis on prior job titles or prior schooling and, instead, focus on figuring out whether this person has the raw talent and the enthusiasm to do the job. Generally, the jobs you're going to be hiring people for are not well replicated in prior experience. So, it's rare that you can get a talent that crosses over directly from another job. You've got a new company with a new product in a new market. What's going to be important is the ability of the people you hire to adapt their skill set, adapt their perspective to what you're doing. So, that's more characteristic of good talent than it is characteristic of people with long resumes. Now, there are some exceptions to this, of course. There are some very specific technical requirements you might have whether it's on the financial side or the engineering side or the operational side where it is important. It is important to find people with very, very specific skills. I'm just saying generally, the resume approach to finding talent is not going to find you the best talent. Rule number 5 is that size matters. What I mean is that big companies tend to breed small thinkers. It's pretty challenging to hire talent out of a big corporate environment. So, generally, what most entrepreneurs find is if they hire somebody out of a big company, they're used to all those big company practices; conferences and big cafeterias and all these different perks that go with a big company. The other thing big companies breed is a tendency to avoid risk because the way big corporate cultures work is you have a bunch of junior people at the bottom of the pyramid and you give them a bunch of tasks and some of them succeed and some of them fail. So, we got enough people here, we could just fire all the guys that fail. So, as you go up the ranks, the only people who survive are people who never made a mistake. So, people who've been inside a big corporation, they learn, never make a mistake. That's a problem when you got a startup because you've got to try stuff, you've got to explore different types of things to figure out what's going to work. You're going to make mistakes when you're at a startup company. You've got to find people who are comfortable with making mistakes, who learn from them, and can move forward. Rule number 6 is use your network. You may think you have a small network but the reality is we are all connected by one degree of separation to a broad network of people. Almost certainly, your next higher is known by one of your friends or is known by one of the people in your network. So, take advantage of your network in the next higher. Again, you're not likely to be successful just sticking an ad in the paper or using a recruiter to find the talent that's right for your company. Tap into your network, explore it deeply to try to find the talent you need for your company. Rule number 7 is trust your intuition but check references. So, what you're going to come across are people whose resumes don't look that great but it turns out you just love this candidate. For some reason, the candidate clicks, they get what you're doing, they're bought into the mission but the resume doesn't quite match, or it could go the other way around. It could be you have somebody with this brilliant resume. They went to Harvard, they went to Stanford, they worked at McKinsey, they may have had some extraordinary background experience but for some reason, it doesn't seem like they fit into the organization. They may fit the job spec but maybe they don't fit the organization. Trust your intuition and make sure you don't hire the wrong person just because their resume says they belong at the company, or conversely, don't overlook a person just because a resume doesn't make an exact fit to the job specification. The next rule is hire leaders, not followers. So, generally, you're building out a company and you think to yourself, "Okay, we got the senior team here. We got the founders. Now, we need a bunch of worker bees." So, there's this orientation that says I don't need somebody talking back to me, I don't need somebody who has original ideas. I just want to hire somebody to get that piece of work done. That's a bad instinct. It's important when you have a startup company that everybody in the organization have the ability to think, to think well, and to think outside the box because, across your organization, you're going to come across problems or challenges or issues that have got to be resolved and you want them resolved down at that level. You don't want everything bubbling up to the founding team. That's a recipe for paralysis. So, hire people who are leaders in their own particular domains and can take charge of their responsibilities without depending upon direct orders from you. The next level is to be flexible on skills but inflexible on character. We've talked about how the resume is not necessarily the best indicator of the right people for your organization. Frequently, the critical factor in making a decision is going to be the character of the individual. You've got to have people with honesty and integrity, who've got healthy egos, who can handle the chaos and the pressures of a startup company. So, while I'm saying the resume may not be important, the character of the person is critically important. How do you assess character? You're not going to get it from the resume. You only get it by spending time with the person and that time can't just be in an artificial interviewing environment. You're going to have to get out of the building, you're going to have to get to know the person in a different setting than sitting in an interview chair but being flexible when it comes to the character of the people. Then lesson number 10 on hiring right, unfortunately, lesson number 10 is you have to learn how to fire. You have to learn when to tell someone they're not right for the team, they need to move on. It's critical for the sake of your team, for the sake of your company that when a person doesn't work out, you move quickly and you find the right place for that person. Sometimes, if you move quickly enough, that person can be a superstar in a different role inside the company but almost always, what happens is everybody is afraid to address the problem and they let it fester. The result is that person creates a negative experience for the people around them and they just want him gone and then you've lost a talented person. So, when a person doesn't seem to be a fit for their position, consider putting them in a different position before it's too late. Otherwise, you're going to have to learn how to fire. So, those are the top 10 rules for hiring right.
3. The Art of Team Building: Nurturing a Culture of Success: Lesson number two in the art of team building is nurture a culture of success inside your company. Company culture is kind of like the weather. Everybody talks about it but nobody does anything about it. It's this ambiguous concept that people have about startup companies. People think of startup company culture as being about ping pong tables and pizza nights, or at the other extreme it's about working until midnight and sleeping under your desk, and in some cases it's about people who scream at each other or also known as constructive conflict. All of these are different elements of culture. Some of them are symbols of a culture. Symbols are important under themselves. As you know, all human societies have symbols and rituals, and those are important in integrating the fabric of those societies. So, don't ignore symbols and rituals, but what's key is to understand what are the core elements of nurturing a corporate culture. Why should you pay attention to corporate culture? Because all the research has shown that the success of a company depends, not just on their financial performance, but also the health of the organization. Culture is all about creating a resilient organization that is able to get the most out of the people inside the organization. So, what are the key elements of building a successful corporate culture? So, I think of it in terms of the pyramid of corporate culture. At the top of the pyramid is a clear purpose. It's important, as I said before with regarding to critical milestones, that you as an organization have a very clear purpose as to what it is you want to achieve, not just in the near term but also in the long term. What is the purpose of the organization? That's at the pinnacle of the triangle. Then at one corner is a commitment to team success. An important aspect of all successful cultures is a team orientation. That people work together and are committed to the success of the team over their individual success, because at the end of the day it's only with a team that you can build a big organization. But that's not to ignore the individual. The individual's critical. So, at the other corner is individual achievement. Now, most people, most entrepreneurs, most managers, think of individual achievement in terms of objectives and goals and MBO-type measurements. That's part of it. It's important that individuals know what their responsibilities are and are held accountable for those responsibilities, but the core of individual achievement is a two way street. It's not just about what the individual is going to do for the organization but it's also about what the organization does for the individual. If you are a company that is truly making meaning, you're making meaning for the world, but you're also making meaning for your individual employees. Most people today are not motivated just by salary, they're motivated by the opportunity to develop themselves, by the opportunity to show their strengths, by the opportunity to become more successful people. Part of that is salary, certainly, but a lot of it is beyond salary. It's important that your organization understand the motivations of all the people on the team, and address those motivations directly. So, somebody who wants to follow a certain career path inside the organization should be rewarded appropriately. Don't think that rewards are just about bonuses, pizza and stock options. Think about it in terms of the development of the team. So, that's the pyramid of company culture;lcear goals, commitment to team success, individual achievement. That pyramid is held together in the center by shared values, a core of fabric of shared values like openness and respect for the individual, honesty and dedication to quality, curiosity, a willingness to experiment, an acceptance of failure, these are all shared values that you need to decide, is this part of the culture of the organization that I want to develop? So, if you want to build a successful organization you need to nurture this culture of success. That includes providing everyone with clear goals, making sure you hire the right people to bring them onto the team, and then developing core shared values to pull the team together in tough times as well as in happy times.
4. The Art of Team Building: Navigating Through Uncertainty: So, the third lesson in the art of team building is how do you help your team navigate uncertain times? Again, the reality of being a startup is there's a lot of uncertainty in your future. As I said before, typically, you cannot build a big heavy strategic plan to navigate that. You've got to be nimble. How do you develop a team that can be nimble? Well, there's a famous story about Cortez, the Spaniard who invaded Mexico a few 100 years ago and after he got all of his troops off the ship, he burned the ships behind him. So his troops got the message, and the message was, "We can't go back, we are here, the only way we can go is to go forward." Well, that's just the reality of a startup company. Well, you don't even have any ships to burn, the reality is after you've launched your company, the only way you can go is to go forward. But how do you plan in an environment where so little is known? How do you motivate your team to move forward? A lot of entrepreneurs reminisce, I know, going back to the old days when we started the company and how simple life seemed back then and how complex it has become. Well, you cannot go back to that time when you thought things were simple and clear, and the reality is they never were, it just looks that way in retrospect. So, the trick is to put together mechanisms in your organization to help you increase your facility with dealing with change. So, here are some tips on putting together a model for reacting quickly, and in fact, proactively to the evolution of the marketplace. First, make sure in your organization you assign a customer advocate. Somebody who speaks for customers, who speaks for prospective customers. These people or this person is to constantly monitor and report back into the organization the problems and needs and wants of the customer. They provide the perspective of the customer into the organization. So, that requires that that person be in constant contact with the customer. Fortunately today, the tools are outstanding for staying in touch with customers. You can use social media to stay in touch with customers and you can also use direct contact, but you want to make sure that an individual or a group of individuals in the organization are assigned the responsibility of being the customer advocate inside the organization. Then next, you want to assign someone to be the competitor advocate. What you want is to get fed into the organization, how is it that our competitors are selling against us? Or how would they sell against us? So, you want somebody who's going to take seriously the idea that they are selling against your organization. Too frequently, whenever an organization puts together their competitive strategy, they discount the competition, they're slower and they're more expensive and they can't move as quickly and it's easy to dismiss the competition whenever you're selling. You need somebody who will represent that perspective honestly and with integrity to make sure that your marketing message and your sales message is being honest about your advantages and disadvantages relative to the competition. The other thing that you need to do is to be able to periodically run a company critique. You need to have a culture inside your organization that allows for openness and honesty. So, every once in a while you can sit around a table and say, "Okay guys, no BS here. What's good? What's bad? What are we strong at? What are weak at?" It's like the pre-mortem that we talked about in the prior class. The idea is to create a context that's open and honest where people can voice their concerns and identify the strengths of the organization. So, you compare your assumptions about the world against this data that you're collecting, you're collecting data about the customers, you're collecting data about the competition, and you're collecting data from your organization about what your strengths are and weaknesses are. How does that map against your assumptions about how your company is operating? Then sit down and figure out what's it going to take for us to get back on track? How is it that we're going to get there from here if indeed our assumptions are wrong? This is the basis of maintaining a nimble organization and engaging your entire team in the process of continuous adaptation to changes in the market. By creating this model, you get your whole team involved in building a successful organization and that's the key to having a great team.
5. The Art of Rainmaking: The next topic is the art of rainmaking, and rainmaking is this concept of closing sales to make it rain. I'll tell you that one of my biases in entrepreneurship is the saying, I hope Bill agrees with it, and the saying is that, "Sales fixes everything." Which is to say, that if you're in a startup and you're selling stuff, you're closing stuff, life is good. When I say life is good, I mean that investors are not going to be bugging you because you, unlike the other 10 companies, have sales. When you have sales, employees are happier because they see money flowing in. You're happier because you see money flowing in. Partners are happier because they see why they should work with you. PR, bloggers, social media, they're happier because they want to see that they're aligned with the winner, they're covering a winner, it's a more positive story. So fundamentally, sales fixes everything. If you have sales, you're always in the game. One of the people who was the architect of Grange, when we started a long time ago, was a guy named Craig Johnson. Craig Johnson had a great saying, which is, "The leading cause of failure in Silicon Valley for tech startups is death." When I first heard that, I said, "Craig, I mean, you're talking in circles here. Of course, failure is death. " He said, "No, what you don't understand is the reason why you fail, is because you die, and the reason you die is because you run out of money, and the reason why you run out of money is because you don't have sales." So, the key is to get sales because as long as you have sales, you have flow and as long as you have flow, you have money. As long you have money, you are still in the game. Sales fixes everything. Have I convinced you were rainmaking is important? I hope I have, and now I'm going to tell you how to do it. Step one in rainmaking is a saying that I stole from Chairman Mao, not that he ever applied it in the way that I apply it. The saying is, "Let a hundred flowers blossom." Let a hundred flowers blossom means that at the start of a company, you may have thought you figured out exactly who should buy your product and how they should use it and come to find out your target market and target use doesn't happen. But, lo and behold, other people use your product and they use it in ways you never anticipated. At that point, you have this decision. You can either go into a deep funk and say, "Oh my god, the wrong people are buying our products in large quantities. They're using it in ways we didn't intend. We need an offsite, we need to reposition, we need to fix this." The other attitude is, "Halle-freaking-luja. People are buying our product and service. They're using it. We don't care why they're using it, we don't care who they are. They are buying the product." Remember, sales fixes everything. So, letting a hundred flowers blossom means that you take your product, sure you fix your branding, your positioning, all your marketing, all that stuff, and you put it out there and then you put it out there, and you see what flowers bloom. Point in case, with Apple, we thought we had a Macintosh that was good for spreadsheet, database and word processing. If you're a Macintosh user for the mid-80s, you know Apple's zero for three, there. Zero for three. Nobody was using it for spreadsheet, database or word processing. But there was a flower that bloomed. This flower was called desktop publishing. Desktop publishing was created because of Aldus PageMaker. Aldus PageMaker saved Apple. If it wasn't for PageMaker, no desktop publishing. No desktop publishing, no Apple. No Apple, the world would be different. All our phones would have keypads. All our phones would have batteries that lasted for more than six hours. All our phones would have GPS at work. It would be a different world. I believe that Aldus PageMaker was a gift from God to Apple, and it saved Apple. I believe in God, and one of the reasons why I believe in God is that there is no other explanation for Apple's continued survival than the existence of a benevolent God. Now, where was I? One hundred flowers blossoming. Apple thought it had a spreadsheet, database and word processing machine, guess what? Guess what flower bloomed? Desktop publishing. Nothing to do with spreadsheet, database or word processing. Take that lesson. Take your product, put it out there, if the "wrong" people buy it and use it in the "wrong" way, declare victory. Let a hundred flowers blossom. Tip number two. This is great, great study. It was done by Dan Simmons at the University of Chicago, and what he did is, he had a tape where people were tossing balls to each other, white balls and black balls. The students, the subjects of the experiment, were supposed to count how many times the black ball was tossed around. So, that was the goal. Watch this video, count how many times a black ball was thrown around. In the middle of this video, somebody, dressed up in a gorilla outfit, came into the video, did a little dance and then went off. Okay. At the end of the experiment, the question was, "Did you notice anything unusual about the people throwing the balls? Did anything funny happen, anything out of context happen in the middle of the video?" Something like 30 or 50 percent said, "No. Nothing happened. People were tossing balls and we counted how many black balls were tossed." So, the lesson here is that if you set people into this path where you're saying count the balls, many people are not going to notice. They're not going to "see the gorilla". So, the second lesson about rainmaking is you need to step back and see the gorilla. You may let a hundred flowers blossom, you may see that people are buying your Macintosh to use desktop publishing, not spreadsheet, database or word processing, but then you have to see the gorilla. You have to be smart enough to say, "Okay. So, we wanted to count spreadsheet, database and word processing, but we see a gorilla and this gorilla is doing desktop publishing." You need to see that gorilla. Many companies do not see the gorilla. See the gorilla. Tip number three. Tip number three is you need to find the key influencer. Many people in a B2C kind of business, they think, "Oh, reaching consumers, who makes the decisions? Who's the key influencer? The father, the male of the household." I think you'd be wrong roughly 80 percent of the time. It's the mother. It's the woman of the household. That's who the key influencer is. It could be the mother, it could be sister-in-law, brother-in-law, grandparent. It doesn't have to be the father, doesn't have to be the male figurehead. All right? So open your mind up, look for the key influencer. In my family, it happens to be the daughter. Basically, I'll do anything for my daughter, anything to make her happy. You want to make me happy? Make my daughter happy. Okay. So, as a proof of that, I'll tell you, I've been to not one, but two Justin Bieber concerts. That's how important my daughter is. The message is find the key influencer. Now, okay, so that's B2C. So what about in enterprise, right? So you think, "So, I had this enterprise software product. The key influencer's the CIO. So, I'm going to get to the CIO of a Fortune 500 company and close the sale." Well, guess what? You're not going to get to the CIO. So you have to figure out, well, who might be the key influencer? It might be the summer intern who's doing a special project. It might be the secretary. It might be the administrative aide. It might be the database administrator for that company. It could be a lot of people. It's probably not the CIO. So the message here is open up your mind, find the key influencers, and I'll tell you that my experience is that, the amount of influence someone has on a decision, like embracing new technology, is typically inversely related to the prestigiousness of the person's title, which is a nice way of me saying that CIOs are the last people you should go after. Very prestigious title, very slow to adopt. Look for interns, summer hires, secretaries, administrative aides, database administrators. Those are the people who embrace new technology, and it's because they really do the work. So they really understand what your product does. Final tip for rainmaking. Provide an easy safe first step. Basically, when you're trying to make a company, try something new or make people try something new, you can't force them to climb Mount Everest or jump off a cliff. Make it easy. If you have a new database, make it easy to translate your old data formats, competitor's data formats into your data format. You want to make this a really smooth, slippery slope. Data formats, conversions, how you go from one platform to another. Yes, your platform may be the greatest thing. It may be so great that you believe that all the potential customers, they should be willing to manually retype all the data into your new format. Well, welcome to the real world. It's not true. You have to give them a very slippery slope, an easy way to get into your format, to get into your product or service. You need a slippery, slippery slope.
6. The Art of Customer Service: Next topic, The Art of Customer Service. Customer service is part of building a great company. It's often neglected because the excitement is you create this great product and then marketing ships it and it just takes off on his hockey stick. You never hear about this other stuff. This other stuff is about service. If you think about it, when you're really loyal to a company, yes, it has great products, but it also has great service. I would make the case that, in a perfect world, yes, you'd have great products and great service, but I would take a slightly less great product if it had great service. Believe it or not, I think Apple is an example of that. You walk into an Apple store and you have a Genius appointment. You know that you will be taken at that time. Why can't hospitals work like that, right? So, you walk in there, you get Genius appointment and you know that Genius is going to fix your problem. So, that's customer service. You call 1-800-Apple, you will get an answer. Nordstrom, you walk in that store, you know you're going to get great service. It might not have the greatest selection, but you know you're going to get great service. So, service is a very key part of building a great company. So, let's talk about service. First of all, strategy number one is you put the customer in control, right? So, customer has a problem, the customer should feel like I have these options. I can send back the product, I can take it to a store and get it replaced, I can decide to try it a little while longer, it'll pass the return period. I'm in control. As opposed to you call most organizations and they say, "I don't know. Somehow, Moses or God said that on the 31st day, you're outside the warranty period." or that "The way you have to do it is, you have to call this 800 number. You have to get a return authorization number. They have put it in a very specific box and they have to send to a very specific place." The customer is not in control. It's almost as if the company has said, "Okay, so we're going to have these customer service problems. Let's put as many little fences in front of people so that they will give up. You have to call an 800 to get a return authorization, then you have to take it to this special place to drop off. You have put it in a special box, and if we open up the box and it doesn't have the special return authorization number, it's not going to be processed. Let's put as many barriers in front of them, so at some point, they just give up, right?" Because giving up is winning, and they're so wrong. So, put the customer in control. When you walk in Nordstrom, you are in control, right? If you're at Nordstrom, then you're in the shoe department and you say, "Well, can I go get some shirts and bring it over here and pay for the shirts in the shoe department?" Most stores will say, "No, it's a separate cash register. I only work in the shoe department. I don't sell shirts." Whatever. But Nordstrom are, "Sure, bring it. Get everything from any place in the store, bring it here, we'll check you out right here for everything." So, put the customer in control, step one. Step two in great customer service is to take responsibility for your shortcomings. If you shipped the wrong thing, if it was broken, if your policy doesn't work for this customer, don't try to bludgeon the customer, try to convince the customer that he or she is wrong. If you're wrong, take responsibility for sure, admit you're wrong, just fix the problem, but don't try to argue with the customer, don't try to say that, "Really, it's your fault, you're the idiot. You didn't know how to install it. You didn't know how to use it. You didn't know how to do something." Take responsibility for your shortcomings. Odds are it probably is your fault. This is not to say that there aren't stupid people who use your product or service, but you should always assume that it's your fault. That would be a much better attitude that will generate much better PR for your company if you assume you're wrong. The third point in customer service is you should always underpromise and overdeliver. So, if you know that your software will be fixed in 30 days, tell people it's 60 days. Well, software is a bad example because you never know when something's going to happen in 30, but let's just magically suppose that you know that a fix is coming in 30 days. Tell your customers 45 days, tell them its 60 days. Because if you tell them it's 30 days and it ships in 32 days, you're a jerk, you're wrong, you're late. But if you tell them 45 days and it comes in 30 days, they're thinking, "My God, this company is even better than they said." So, underpromise, overdeliver. So, when you go to Disneyland, you standing in line for cars and you'll see a sign that says 60 minutes from this point. Okay? Then you get to the front line and it's only 45 minutes. You're delighted, you're happy, it's less than the sign said. Disney underpromised and overdelivered. So, imagine if the sign said 60 minutes and it took 75 minutes, you get to the front line and you're angry, it took longer than Disneyland promised. So, what I learned at Disneyland is, well, if you want to make people happy, tell them a number, then beat the number. Always beat the number. This applies not just in customer service which is the topic here, but it also implies in particular to investors. Right, Bill? I mean basically, you tell your investors, well, we expect the ship on this date and you sandbag that a little, and you say, well, our first year projections are X million and you sandbag that. It's always better to come in faster and higher than what you said. Always underpromise and overdeliver.
7. The Art of PR: My topic here, in this section about building a company, is the art of PR. PR is one of my favorite things. I just love building bars and spreading the word. So, let me give you guys tip to building PR. First and most important, the key to great PR is to have great reality. Well duh, I could tell you that it's a lot easier to generate great PR when you're a great product or service. So, on the other hand, it's very hard to create great PR when you have crap. So, this sounds like a deism, but it's a deism that many people just don't grasp, which is you've got to have something great to generate great PR. So, step one is, have a great reality. What a concept. Step two is that you should make friends before you need them. If you wait till your product is ready to ship and that's when you decide, "Oh I've got to contact this writer at Mashable or TechCrunch or the Wall Street Journal or CNET or Wired," It's a little too late. You have to make this contact the moment you decide you're starting a company. So, go to conferences, start following those people on social media, start contributing comments, do favors for them, do whatever it takes to get to know them way in advance of when you need them. When I was at Apple, I remember there were reporters from the Wall Street Journal, the New York Times and the Washington Post, and of course Steve and Apple PR machine took care of them. So, what I was left with is people from the Los Altos Gazette and from the San José almanac, and stuff that nobody had ever heard of. But I helped them all. I wish I could tell it was pre-planned but I helped them all just out of I like to help people. What can I say? I default DS. So, I helped all these people who were working for these organizations and publication you never heard of, and then 10 years later come to find out, my God, that person is now the West Coast editor of the Wall Street Journal. Hallelujah! And you know what, she remembers me because I took time to work with her when I was at Apple, when Apple was focused on the New York Times and the Wall Street Journal. I learned a very valuable lesson, you should make friends before you need them. So, that's tip number two about PR. Tip number three is that you should use a rifle not a shotgun. You can't just blast the press release or blast that email to an entire organization. Don't go to the TechCrunch or verge or Mashable website and find these are the 50 reporters and blast them all with an email about your great new widget. Go to that website, go to those sites and figure out exactly who covers my topic; who covers mobile apps? Who covers social media? Who covers gadgets as opposed to social media, and use a rifle not a shotgun. Don't waste people's time. Don't think that, well, if i send 50 emails into Mashable, it's more likely I'll get coverage because what will probably happen is the person who really should get the email is going to hear from the other people that, oh, you know, this idiot sent this email, this pitch, this package to me and I have nothing to do with it so I'm giving it to you. So, now this person is going to get multiple copies, multiple packets and that person's only logical conclusion is, "This entrepreneur is an idiot. This entrepreneur didn't even do the research to figure out that he or she should not have sent it to the other five people." So, you need to use a rifle, not a shotgun. Next tip. You need to be a foul weather friend, which means that when things are going bad for your company, you still have to return the phone call, you still have to return the email. Don't only contact people when you want them to do something for you because it's very positive, it's a product intro or something great like that. You know what? When your company has an issue, when your company has a bug, when your company is hacked or something you need to still respond. Arguably that's when you make your strongest relationships, not when you're on this role and you're thinking you're owning the world so be a foul weather friend. Next step. You need to be a source, not everything can be about you in the press. What a concept? Get over yourself. So, you need to be a source, you need to help reporters knowing that you will not get any ink in the story. So, if someone's doing a story and they're looking for information, provide that kind of information. Provide that information give them, "I don't know anything about it but I can introduce you to someone at this other organization who knows a lot about it and she or he can help you." So, you need to be a source and do favors for people. This has worked extremely well for me. In a sense there's a publication called HARO, H-A-R-O, stands for "help a reporter out". So, at HARO, journalists post a story. We're doing a story about people who are in wheelchairs using tablet, computers. So, a reporter might post a request in HARO, does anybody know anybody who's in a wheelchair who really uses tablet computers to improve their lives? So, that would appear in HARO, and then you get this HARO email every day. So, yeah, I know somebody like that I can be a source for this person and introduced his person, so do this all day long. Basically pay it forward. Those are my most powerful tips about PR. A long time ago, I worked for this guy named John Lewis Agassi at Apple. One of the many lessons I learned from John Lewis Agassi is that advertising is when you pay and you talk about yourself. PR is when other people talk about you. Fundamentally PR is much more powerful than advertising, because with advertising, everybody understands that you paid for it, you control it, you're trying to do it, you have this agenda. Whereas with PR, when somebody else tells you that this restaurant is good or you have to try this app or you have to try this website. When somebody else is recommending, when somebody else is telling you to use a service, and they're not affiliated with the service, they don't work for the service, it is much more powerful than when the service, the company, the organization tells you through advertising, buying attention. That's why PR is so important. Because PR is much more credible source of information.
8. The Art of Enduring: Resillience: So, the last unit in this class is the art of enduring. It's all about building a company that will endure through crisis and tragedy well into the future. We're going to talk about three topics in this lecture. We're going to talk about developing resilience, creating an organization that can withstand the pressures of growth and crisis. We're also going to talk about building an ecosystem, extending the reach of your organization beyond the walls of your company into the entire ecosystem of the market sector in which you're operating. Then lastly, we're going to talk about creating an open system, an open system in your marketplace that enables you to thrive. So, let's talk about what it takes to develop resilience. You look at all of the companies in the Fortune 500 or pick any other list of large successful companies, and what you see is that there are some companies that have endured for decades even though there have been a number of downturns or other types of crises that could have thrown them off. Meanwhile, most companies over these last decades have actually crumbled and disappeared. The success rate for companies is actually surprisingly low. What differentiates the companies that endure from the companies that fail. You would think the primary factor would be something like financial performance. It would be something like revenues and profits. But it turns out key to the ability to endure is something beyond that. There are some core underlying factors that enable a company to endure. For example, company like REI has become more than just a store. It's not just a place that sells outdoor equipment, REI managed to create a culture within the organization and then throughout its customer base of being more than just a store, it's a culture that is committed to outdoor recreation. So, that larger purpose has enabled it to continue even though it's come across a few rocky times. Companies like Zappos that has this unbelievable customer trust in terms of allowing you to send back at their expense shoes that don't work for you. Companies like Tesla and Apple all have created a enduring culture that extends beyond their organization out to their customer and customer-base and throughout their marketplace in general. So, the key to remember if you want to build an enduring organization that has a lot of resilience is that you are not just what you are selling, you are also about why you are selling it. Your larger purpose, the meaning and mission that you have in the organization. What that means is at the core you've got to be committed to creating value for your customers. You've got to be committed to something more than just making and selling products and separating customers from their money. By creating this meaning you have a huge advantage over your competition. Internally, your employees care about what they're doing because they have a larger mission, and externally your customers care about you as an organization. This is the trick to increasing brand strength. It's not just about a lot of advertising and a lot of PR, it's about truly living up to the values and to the goals that you set out for your organization. So, at the end of the day, companies that win are companies that have an emotional relationship with their customer base. You want to be able to create some emotional connection to your customers like awe, trust, respect, delight, beauty, characters like that, emotions like that, that connect you beyond simple product customer relationship. So, as an exercise for each of you, I recommend, think about what it is that you're going to be creating in your own organization that is going to cause customers to connect with you beyond your simple product or service relationship. What is it that makes your company lovable? What is the emotional connection that you're going to have with your customers? Tell us what that is and load it up on the Skillshare site, it will be interesting to have that discussion.
9. The Art of Enduring: Building an Ecosystem: So, the second lesson in the art of building an enduring company is to build an ecosystem. Build an ecosystem of relationships in your marketplace beyond just the internal organization of your company. An ecosystem is a connection among all of the stakeholders in your business. It includes your customers, your distribution partners, it includes your vendors, it includes developers, it includes obviously your employees, but it also includes the members of your community. That is an ecosystem that has a stake in your success or failure. Reach out to that ecosystem, and draw on their strength to add to your strength. Some classic examples of successfully building ecosystems. Intel and other semiconductor companies, the key to their success was, ''We make hardware. Ultimately, what causes our customers to buy our hardware is the availability of software and other machines that our hardware can drive.'' So, they had an ecosystem of relationships with software developers and computer manufacturers that were part of making them bigger than just one company. Similarly with Oracle, leader in the relational databases, but they're nothing without applications built on top of those databases. So, Oracle has invested vast amounts of money in developing an ecosystem of developers who are building applications on top of the Oracle platform. Similarly with Adobe, who with their various products nurtured developers to build on top of their technologies. So, by building communities of people who are interested in your success, you're extending your reach because all of those communities by being interested in your success are going to want to project your success further out into the community. So, they're going to be evangelists for you, and they're going to be supporters of you in places that you cannot reach directly. Another great example of building ecosystems are the open source organizations like Linux and the Mozilla Foundation. So, you may be familiar with Firefox, which is a browser. Part of the success of Firefox is that lots and lots of third party developers have built applications on top of Firefox. Their interest in the success of Firefox has extended both the quality of the product and the reach of that product because of that. Then more recently companies like Salesforce, and Facebook, and Apple, and Android had a somewhat different model of building ecosystems by enabling these App stores on top of their platforms. What they were able to do was create an even stronger economic interests in the community in their success. So, can your organization develop a similar ecosystem? One of the ways of helping nurture an ecosystem is to put together initiatives that will cause your stakeholders to come together. So, for example, in your industry, there might be a policy issue that is relevant to the success of not just your company but the developers and even competitors in your industry. If you become a leader in lobbying for a change in policy or for a new policy that helps that ecosystem, that leadership will carry over into your marketplace as well. A variation on that is getting stakeholders together to support common standards around your technology. This was key to making the cell phone companies successful. This is the whole essence of the Android community is working with a whole bunch of different manufacturers around common standards for the Android platform. Another way to build an ecosystem is to create domain conferences, conferences in your subject area, or to organize associations in your subject area to convene people around topics of the marketplace, of policy, of technology, of common standards. Doing conferences, seminars, workshops conventions is a way to help build your ecosystem. But, it's not something that's going to happen by accident, and it's not going to happen if you don't dedicate resources to it. It can be a powerful way for you to attain leadership in your marketplace, if you show leadership in building the ecosystem around your business. Now, for your particular business as an exercise for each of you, is there an ecosystem you can imagine developing? Is there a particular initiative whether it's a conference or a policy issue that maybe would be relevant to you to help you show leadership in your own ecosystem? Let us know and load it up on SkillShare and we can have the discussion.
10. The Art of Enduring: Creating an Open System: So, the third lesson in the art of enduring is create an open system. What do I mean by an open system? The best example of a brilliant open system is actually Silicon Valley. Silicon Valley is an ecosystem of a lot of different companies and a bunch of different technologies. A lot of them are competing fiercely against each other. But the Valley as a whole is this extraordinary open system that has developed and sustained this open culture that is incredibly powerful and to the benefit of every member of the system. What do I mean by that? What I mean is if you look at the system that is Silicon Valley, you see a society here that embraces experimentation across the valley. It tolerates risk, it tolerate failure. Silicon Valley has this ethic of paying it forward where people help each other, even competitors will help each other because they know that in this culture of paying it forward, if I help you, you might not help me immediately but somewhere down the line somebody else is going to help me out because that's the nature of this system. So, if you can, in your own particular company, in your own particular industry, figure out a way to create an open system within your ecosystem. So, what do I mean by open system? I mean an environment in which you can welcome criticism. As Gael has said before, it's key that you've got to be able to take the criticism in and understand it and embrace it. If you embrace criticism and you reach out to the people who criticize you, you can both learn from that experience and build a new evangelist. What better way to get someone enthusiastic about you than somebody who initially says, "Hey, I don't like your product or I don't like your company." Or whatever it is, you reach out to them and you show them how you're going to change, you're going to adapt, or you're going to explain in such a way that they say, "I get it. I was wrong. You guys are great." So, that's part of the key of developing an open system. Part of that is to create an environment that fosters discourse. So, you want to have these networks throughout your ecosystem that enable people to talk with one another. Usually, the conversation is not going to be that important or constructive but frequently you're going to get extraordinary tidbits of gold about opportunities that maybe you've missed, a company or a market segment or a customer base that you hadn't thought of before, that someone in your system says, "Probably I wonder if this application could be used here." By listening, by being part of the discourse, you can grab that insight and bring it into your organization. Another part of creating an open system is to make sure that you diversify your team. Diversify your internal team, diversify your external relationships. You need these varied perspectives and if all of you are of the same background, if all of you have the same perspective, you're going to be blind and deaf to the perspectives of others and that's going to make you miss a lot of possible insights. So, with a lot of diversity, with open discourse, with a welcoming of criticism, you can build a community that collaborates around improving both your products and services, improving the community and improving the overall marketplace. It's important also when you're part of this open system that you look for opportunities to be generous. What do I mean by that? Well, in your community, you have the opportunity to reach out and help people who may not necessarily be able to afford your product or may not yet be a part of your product but someday they will be. So, a lot of companies have philanthropic programs and they send them off to some corner of the HR department and they say, "Okay. Do matching contributions when our people give to these charities." They think that somehow that's fulfilling their obligation to the community. What we're saying is make it part of the shared values of your organization, make it part of the mission of your organization that you're giving back into the community. Get the top team involved, be visibly involved, get the whole organization involved. Don't just push that off into some corner of your HR department. Make your organization part of the fabric of your community and a leader in your ecosystem and that will help you through into the future. Bottom line, as we keep on harping, we've talked about this a lot in all of these lessons. It's critical that your organization be committed to something beyond just making money. You have to have a higher purpose. You have to have shared goals that are shared not just by you and your founders but by all of your employees, by the all of the people in your ecosystem. By creating this higher purpose, by creating an open system, by developing your ecosystem, you will build an enduring organization that can withstand the shocks of the overall marketplace and that can accelerate their growth when you have a healthy economy. So with that, I encourage you, focus on building enduring organization, make sure that you create an open ecosystem that reaches out beyond just your narrow purposes.
Guy Kawasaki, Chief Evangelist, Canva
