
Twitter CEO's Unexpected Advice on Preserving Startup Culture in Your Company - smalter
http://blog.idonethis.com/post/62808799986/unexpected-advice-on-preserving-startup-culture
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thenomad
The second half of the article is arguably more interesting than the first: it
covers Zappos' CEO's idea for increasing productivity with large numbers of
employees.

I'll be very interested to see if his "city" experiment works.

~~~
chiph
I've worked at firms in suburban office parks, and I've worked at firms in
downtown urban areas. I like the latter more, simply because you can walk to
lunch and interact with people (sometimes they're the homeless, which is how I
learned about Blue Leapers being a global threat to mankind...)

With the suburban offices, either I'm bringing my lunch, or I'm driving
somewhere to go eat. In both cases I'm in a sensory bubble, and that's bad. So
I think Tony's idea has a lot of validity.

~~~
wtvanhest
Even more than that, every person I know who in their 20s and 30s would prefer
to work in the city and either do a quick commute in via public transportation
or live in the city. No one wants to have to get in a car and drive for 40
minutes. If they do, they justify it due to cost, not actual benefit.

The companies that get the best people are the one's located in downtown. That
alone increases productivity.

~~~
asdasf
You are generalizing your little bubble to the world at large. Lots of people
don't want to live or work in a large city.

~~~
wtvanhest
The vast majority want to live in cities. It is proven quantitatively through
rents rising much faster in all the dense areas of the US while suburban rents
and prices have lagged.

Sure "Lots of people don't want to live or work in a large city." is
technically correct, but pretty much every other person wants to be able to
walk to work, walk to resturants and never have to touch a car except for
trips outside where they live. That lifestyle doesn't exist when you work in
office parks.

The only argument for living in the burbs is price. People say "I want a
yard"... if you had the money you would have it in the city.

Sure, some people make tradeoffs and would rather have the yard, but most
people I know move to the burbs because of price and justify it with the yard.
Most of the top talent lives in cities.

Are there exceptions? Of course.

~~~
asdasf
Was that intended to be a serious response? "I know what people really want
even if they say they want something else"? People being forced into cities
quantitatively proves they want to be in cities?

~~~
wtvanhest
I'll humor you, what is the benefit of living in suburbia?

~~~
cgore
More space, less crime, parking, cheaper rent or mortgage, cleaner air,
quieter, more green spaces, and typically only a 20-30 minute drive from the
city if you actually want to go to something big-metro-specific, like the
opera/museum/theater/etc.

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mathattack
This is obvious, but sometimes tough on employees. At a prior employer I
watched how early employees felt that things had become too impersonal when
they had to start recording their time and submitting expense reports. But the
reality is the company was suffering from under-management as the founders
couldn't keep a grip on the firm with their informal management style. They
were smart enough to change some of the culture to enable the company to keep
growing.

From an employee's point of view, it's tough, but if you're happiest at a
20-50 person firm, it's best to move on (at least after vesting) when the
company gets too big.

~~~
bane
I'd say that the moment you start doing time keeping is the moment the startup
culture days are over. It's like a mental switch for everybody in the company.
Everybody feels it and there's simply no going back.

It's like puberty, painful, but inevitable, and leads to more maturity later.

~~~
Wilya
I'm curious about what's so wrong about time keeping.

I've seen startups that did some time keeping (though not in a very tight way,
more in just keeping track of who did what on a half-day basis), some that
didn't keep any, and I can't see much of a difference in the culture or how
it's a bad thing. I don't see how it's useful, but it's never been a red flag
to me by itself.

Is it because of the formal process that comes with it, because of the way
it's usually done at bigco, or do some people feel annoyed about having to
always count their time ?

~~~
DanBC
> Is it because of the formal process that comes with it, because of the way
> it's usually done at bigco, or do some people feel annoyed about having to
> always count their time ?

Some people must account for all of their time in 15 minute blocks. It's
frustrating because either you do it properly, and have people complaining
about the amount of time you spend doing the paperwork; or you fudge it, in
which case whyTF do they specify it to 15 minutes why don't they just let you
give a broad outline of what you've done?

BigCo can be _really_ weird.

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jtbigwoo
I feel like there are four stages of company development that need distinct
sets of people.

1\. Pioneers who can survive and search for a successful direction.

2\. Generalists who can take that direction and establish a foundation.

3\. Specialists who can take that foundation and build something that can
succeed on a large scale. (I don't like the Specialist label, but I couldn't
think of a better one.)

4\. Optimizers who can grow and refine a large-scale business.

Many companies (Microsoft, for example) make the mistake of promoting
themselves as a stage 1 or 2 company when they function like a stage 3 or 4
company. They keep looking for Pioneers who are going to be unhappy and quit
after a year when what they really need are Optimizers.

It's not that later-stage companies can't benefit from having and keeping
Generalists, it's just that the company is too large to be doing the things
that Generalists enjoy. They don't need somebody who can build a server one
day and code a new contact page the next. They need somebody who will spend
six months working on a project that makes a certain kind of transaction 10%
faster.

~~~
mathattack
I'd add a 5th. "Maxing the value of a mature or declining business." Many
companies overinvest on #4, when the business has moved to step 5. IBM played
this very well. Blackberry, perhaps not so well.

~~~
wtvanhest
I'd argue that what IBM did well was build a consultancy business. That is
where a lot of their growth came from over the past 5 years. Their core
business is being used as a cash cow and brand for their new business.

~~~
mathattack
True. I view the move to services as a way of monetizing the brand.
Historically their HW and SW weren't always the best, but people knew you
could call their support with a problem. Now they've found a way to get paid
for the support as demand for their big iron shrank. They've done a lot of
acquisitions too, but not wasteful ones. They still do share buybacks every
year, which suggests they know their place as a shrinking company, so they
invest profits in shrinking the amount of outstanding shares. You know
something is up when Warren Buffett is investing in them. :-)

Compare this to other mature tech companies who blow away all the shareholder
wealth once the growth stops.

~~~
wtvanhest
Yeah, I've found that companies are usually bad at knowing when to buy back
shares. I'd usually prefer them to just pay a dividend, but you are definitely
correct that they [IBM] are much better with being shareholder friendly than a
lot of tech companies.

I really like the framework proposed by the OP and added by you.

[Added] IBM

~~~
mathattack
Dividend paying stocks outperform non-dividend payers over time, so you're on
the right track. Giving the owners their money back keeps mature firms from
wasting it. (This is very different from high growth firms who have a high
cost of capital)

The upside on buying shares back is that it doesn't force people to reinvest
in the company - it just shrinks the ownership base as the company shrinks.

The OP deserves the credit. He did the harder thinking.

~~~
wtvanhest
When I said dividend, I should have specified 'special dividend' one that is
paid out once in a large cash payment.

"The upside on buying shares back is that it doesn't force people to reinvest
in the company - it just shrinks the ownership base as the company shrinks."

That upside is really not important for professional investors when dealing
with mid cap or larger companies. Assuming best case that management teams are
genuinely looking out for shareholders rather than inflating the stock price
for their options, management teams are not very good at predicting when their
own stock is under/over valued.

Most investors want them to return cash to shareholders in most cases as
liquidity for companies like IBM is so big that it doesn't matter if they must
buy back shares.

Since it is professional investor's jobs to value the share price, they are in
a much better position to decide whether the share should be bought or not.

Also, dividend stocks have supposedly performed better over history, but
dividends is not a recognized alpha factor by the main finance research relied
upon by market participants(1). Dividends go in and out of favor depending on
a number of factors, right now, its probably the market's expectation of
raising rates set against the background of increasing demand for income.

Professional investors like dividends because they can simply put that money
to work somewhere else.

(1) There are papers that say dividends are a factor, but I'm not aware of one
that is widely implemented.

Anything beyond fama-french's 3 factor model doesn't have widespread
acceptance yet. There are a number of other models in use, especially by quant
funds, but they are not public and tested in public.

------
bicx
The whole idea of bringing people together for more interaction can easily be
abused. As a dev at a startup, we just sit at a big table (well, technically 6
desks pushed together). While we have had some great discussions that improved
our workflow and even the direction of the company, we also had many, many
discussions about football, Verge articles, and Youtube videos. Being
motivated, (generally) hard-working developers, we actually got a bit
frustrated with how easy it was to interact with each other.

A few months ago, we let go of most of our scheduling structure, and now we
have virtually no obligation to be in the office if we don't want to. Now we
just work from home if we absolutely need a highly productive day. I like the
structure we've come up with (plus we distract each other a lot less these
days), and we are much more productive. There's a balance to be struck, and
encouraging interaction can have unintended side effects if you aren't
careful.

~~~
jbattle
We had a similar problem here. I was frustrated when people felt like they
_had_ to stay home to get work done. We set aside one of the meeting rooms as
a quiet work room (with monitors/keyboards/mice). Gives another option for
getting away from the noise to focus but you are still close enough for
collaboration when you want/need it.

------
ChikkaChiChi
Being a CEO requires you to sell two products: What your company offers, and
what you offer those that produce those offerings.

Achieving greatness can only come with an obsessive self-awareness to always
be trying to improve both.

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jusben1369
I was employee 40 at a startup that went to 400. I think Dick's advice is
right. The hardest part is losing many of the early employees once you hit
about 150. But the bigger problem would be trying to keep them. You need
different skill sets and different people for different stages. It hurts
though. (also agree that the Zappos piece was much more interesting to me -
but Vegas?! It's tough to go outside 3 months of the year after 9am)

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dbough
The company I work for has been going through the metamorphosis of startup to
medium sized over the last few years.

I firmly believe that there needs to be more structure (policies, procedures,
documentation) as you get bigger and add employees. If those are lacking,
you'll get a lot of uninformed employees making poor decisions and a product
that looks and feels disjointed.

------
TheCowboy
A couple people mentioned wanting to read more on Tsieh's Downtown Project.

This colorful piece was posted on HN over the summer:
[http://news.ycombinator.com/item?id=5895699](http://news.ycombinator.com/item?id=5895699)

When reading I'd recommend considering that some time has passed, so maybe
things have improved on the Zappos/Hsieh side.

