Avocode at 500 Startups; Week #12: The Downside of Growth

The Avocode beginners UI kit.

#1: Theoretical planning

“Many young people, me included, live by the credo fake it until you make it”.

It doesn’t mean you are a lier, more of a hustler. When you promise to do something you don't know how to do, you create a sense of pressure over yourself. If the pressure (and fear of failing) is high enough you simply have no choice but to learn how to come up with a solution and deliver what you’ve promised.

I believe this unwritten methodology is the foundation of start-up thinking. It’s what pushes us to dive into new fields, stay at work late and grow on both personal and company level.

However, every successful business will eventually hit a stage, when this freestyle thinking has to be tamed. The time between promise and delivery is so short, that there is no time to learn. The time when there are no stupid questions is quickly coming to its end. Each one of us needs to spend more time on the task that concerns his role in the team and less on the stuff that concerns others.

Last week the office got really crowded with all the batch people coming back in before Preview Day. Often we couldn't find a conference room for our meetings, but that didn't stop us.

The need for such optimization obiously arises from the fact that we are growing. No longer can our founders do tasks that are connected to their profession. Step by step they are transfering from “our fellow designers and developers” to “managers and leaders”.

All of this obviously demands delegating more work and responsibility to the team, work task structure and results in hiring new talent.

#2: Hardcore practice

Last week we heard another inspiring talk at the weekly Fireside Chat event. Jessica Mah, Co-founder and CEO of inDinero, accounting software + services for businesses spoke about how she stays on top of things and managments and how she structures her company.

Weekly Fireside Chat with Jessica Mah.

Below are the pin points of her talk.

Public Relations

Think twice before you start giving out interviews as a leader on weekly basis.

“PR is like botox injections. Once you start, you have to keep it up, otherwise you look like shit and die soon.”

Self reflection

Question what you are good at. If you can’t deal with emotions, you can’t do people management. If that is the case, focus your strengths on company growth and leave management to people who are OK to sometimes be the shoulder to cry on.

“Don’t bring me your emotional shit or management problems. Give that to your therapist.”

Delegation of work

Once your company is big enough (Jessica’s company has now 200+ people), hire or name Vice Presidents for all departments. Don’t waste time with long meetings. Set up a simple Google Doc that explains next steps of the company planning and share it with the VPs. Once you meet them, assume they’ve read it. If they want to tell you about their plans and ideas, let them write such document, don't waste time on the phone. If they make their documents enough sophisticated and compelling, you can just scam it and write OK down below. FYI, if this works, you just found a reliable VP.

Hire slow, fire fast

a) Yoga studio

Though Jessica built this exercise for hiring now sales representatives, the idea might work for any position in your company.

  • When you’re hiring someone new, set up a call on a specific time when they try to sell you something.
  • If they are one minute late, tell them they are too late and don’t give them another chance. It might seem harsh, but it will help you filter leads into actual work candidates. Or do you really want to conduct interviews with 50 people?
  • Don’t let them sell you your business. That’s usually too complicated. Instead send them a one-pager describing a “Yoga studio”. Then let them sell you a monthly plan in this studio.
  • This simple exercise will give all candidates same chance of getting the job.

b) Marking

Employee assesment is something people generaly hate. I’ve never seen this to be working in practice, but this is how it apparently works at inDinero. The HR department at inDinero uses a simple 5 steps scale:

  • A1 — A kick-ass worker, who is on his way to become a VP.
  • A2 — A healthy growing employee.
  • A3 — A pretty good employee ho handles the tasks he/she is given.
  • B — “Put your shit together, or you’re out of here.”
  • F — “You are fired.”

Though Jessica’s approach is slightly extreme, she mentioned one more factor to decide whether your employees are worth keeping on board, and I must say I like this one. It’s based on enthusiasm to work for you.

Choose people who you know you would hire again and again enthusiastically at any point of their life in your company.

#3 Last official meeting with Nemo Chu

On Friday we had our last weekly meeting with our Distro Coach, Nemo Chu.

He gave us his last tips for e-mail marketing, and gave us two advices that I just have to share with you:

a) Fundraising

This is a simple explanation of why and when to ask for money and what to use them for:

  • Seed round — The money from this round should help you get product market fit and find the “buttons”* which are getting the most customers — that’s proven with ability to get initial sales.
  • Series A — This round's money will allow you to push the “buttons” that generate customers. By now you should have discovered channels to acquire new customers. Series A money should be used to push these buttons and exploit them as much as you can.
  • Series B — Use this money to invest in automation, mechanisms, technology and people to streamline your push button campaigns — faster, better, cheaper. This will alow you to expand to new markets and seize the biggest possibleshare of the whole market.

*Button: Anything scalable, it can be a literal button but also a repetitive core action of your product. We'll stick with this metaphor also for the concept below.

b) Building a marketing team

Nemo introduced us to his concept of the King of the hill**. Generally you need three people for this game.

  1. One guy makes it to the top — that is the King of the hill, your best “button” that gets the highest ROI.
  2. On the right side of the hill you have another guy who is doing his best to dethrone the first “button” from the the top of the hill. He does so by optimizing and improving the second best button.
  3. On the left side you have another guy who is completely different from the first two. His work is not to dominate the hill. He is trying to find new “buttons”. Once he does, he will pass it onto the guy n. 2 who will optimize the heck out of it so he has a new/better chance dominate the top of the hill.

** A hill signifies a particular channel, so yes, you can have multiple hills. The winning button of the hill is the highest ROI action of any given channel (like e-mailing, ads, social, etc.).

If we stick to the methodology described above and combine it with the general 80/20 rule, we have a general framework for your marketing team.

  • 80% of your marketing efforts should go into pushing the “buttons”.
  • 20% of your marketing efforts should be spent on discovering new buttons.

Discovering new buttons means creative and market research. Pushing buttons means optimizing and day-to-day polishing work.

Thank you Nemo 🙏🏼

We can hardly express our gratitude. I believe that I speak for the entire Avocode team when I say that Nemo has been the most influential and helpful person we've met here so far. We sincerely hope to keep in touch.

You can follow and learn from Nemo here.

#4: Sunny weekend

On Saturday we went to the Half Moon Bay, grilled sea food and on Sunday we visited Santa Cruz for one more time. No need to go into the details, the pictures below speak for themselves.

And that's a wrap.

Matt out. 🎤💥