Leadership in startup companies

I’ve spent most of my career in small-ish VC-backed startup companies, with between 10 and 150 people. Things tend to move and change fast in small companies. Your success is far from guaranteed, and the ‘rules of the game’ can change frequently – A year can happen in a week. It’s important to have leaders who can steer the ship through the fog, and keep the team moving forward. You need to be the compass for the team. I spent time reflecting on key leadership traits, behaviors, and activities that are useful towards being this compass. This isn’t a comprehensive list - just a few of the main things that come to mind.

A good leader…

Clearly articulates the mission and vision of the company, and does so with a fair dose of repetition

• Teammates should know Why are we building what we’re building? and Where are we aiming to be? If you asked teammates across functions What is important? and What are we doing here? - and you get a lot of different answers, then there’s a lot more work for you to do.
• A leader should not make all the decisions, but should ensure that most decisions are made with a consistent mental model for what is important towards the company’s success. Continually re-stating, clarifying, and communicating the mission and the vision is one way to nudge this.

Sets measurable goals, regularly measures them in public, and incorporates learnings from the measurements to inform changes in behaviors or focus areas

• You need to build a heartbeat in a company to understand How are we doing? What should we change? What assumptions that we have are wrong? - rigorous goal setting and reflection is a key way to do this.
• Setting goals, and finding the right outputs to measure, is hard work. It’s easy to make excuses for having fluffy goals, and to instead do things that feel like progress. Without measurable goals, teams inevitably work on the wrong things, or even worse, work on things that conflict with each other.
• It’s also useful to set ambitious goals (maybe even a bit too ambitious). You don’t want teammates to be afraid of the goal, but you also don’t want teammates to know exactly how they’re going to get there, or even if they are going to get there. Most high-agency people want a challenge, and the reward is higher if the challenge is sufficiently challenging. It’s a continuum — and if you push on this (e.g have really ambitious goals), it’s important to build the right culture around what it means to ‘miss those goals’. This could mean different things in different companies, but I think the key positive outcomes are: 1) Did the team stretch itself? 2) Was the team aligned on the right set of work? and 3) Did the team learn from the outcomes and adjust?

Connects the team’s work to the work’s true impact

• Teammates need to understand why the work they are doing is important. If they understand how it connects to the broader goal, they will be more motivated to do the work well, and will be better equipped to make all the little decisions they need to make along the way.
• A leader is always going to have more context on how things fit together across the company. Different people across the company have different bits and pieces of context. The leader needs to find ways to inject cross-cutting context to the right teammates at the right time. No one will ever be able to know everything, but a leader needs to know ‘which part of the work graph’ is important to whom — and to take an active role in continually revealing those connections publicly and clearly.

Acts decisively and has high decision velocity

• A big mistake a leader can make is to delay taking action, or to assume it’s someone else’s responsbility to make a decision. The more decisions that are made, the more things are tried, the more you can learn, the more you can adjust your next set of actions. Like many things in life, a lot of progress in companies works like evolution, or trial and error. It’s easy to be paralyzed by hard decisions, but in general, the worst decision is to make no decision at all, or to make it long after it should have been made.
• I am a big fan of the ‘one way door concept’ - Is a decision reversible? If so, then still try to make a good one, but do the best you can in weighing the options, and just move forward. Is it an irreversible decision? Take more time, but you still need to make one.
• For really tough decisions, or decisions that are controversial – spend enough time clarifying to the team how the decision was made and why. Walk them through the decision process. Spending time here can build a lot of trust.
• There are numerous decision frameworks out there. It’s useful to learn about a few, and to have a preferred menu to use as a company when needed.

Connects the team to itself, across functions

• Siloing can happen incredibly fast if you’re not careful. If you hire correctly (more on that in a follow-up post), when siloing happens – teammates usually have good intentions and motivations, but just don’t have the right context. They don’t know they should be working with another team or another person on something. A good leader can see when this is starting to happen, and can break the pattern by building the right context, awareness, and connections across teams. Siloing is also much less likely to happen if you have clear and measurable goals, shared publicly across the company.

Communicates what is not important, and ensures the company isn’t working on those things

• Choosing what not to work on is as important as choosing what to work on. Companies can get bogged down by work that doesn’t add a lot of value, or that isn’t aligned with their moat / competitive advantage. You have a finite amount of time to make things work, so make sure you’re working on a very small set of really important things. Be picky and stay focused, and build systems to ensure that the team does the same.

Again, this isn’t a comprehensive list, and I’m keen to keep thinking about this and writing about it. What do you think? I’d love to hear how you think about what matters in leadership – drop me a note.