One perk of this quarantine situation is that with no social events, no daily commute, and only so much Netflix to watch, is that I've starting reading more again. Most recently, I finally finished working through High Growth Handbook from Elad Gil, former VP at Twitter and investor of some fan favorites like Airbnb and Stripe. Elad also has an excellent blog that you should check out.
In short, High Growth Handbook is the playbook for growing your startup into a global brand. It dives deep into all the nooks and crannies of scaling companies from 10 to 10,000 employees. During this journey, things dramatically change every 6-12 months. This handbook will guide you during the inevitable times of uncertainty.
I took a lot away from High Growth Handbook. Below are the key points that stood out to me from each chapter, along with some of my favorite quotes along the way.
The Role of the CEO
- The CEO sets the overall direction of the company, hires employees, raises capital, and take care of organizational issues.
- It's imperative that CEOs manage themselves first. That means effectively delegating tasks, auditing their calendar often, saying no even more often, and ruthless prioritization.
- Most cofounder relationships aren't equal. There's normally an executive transition at some point. Be prepared for that point.
Jeff Bezos favors product innovation teams with five to seven people — no more than can be fed with two pizzas.
Managing the Board
- Board members are like your mother-in-law and father-in-law. You are going to see them regularly, they are hard to get rid of, and they can have an enormous impact on your future.
- Managing your board effectively can help you get strategic feedback, source and close candidates, get help with fundraises, be coached as CEO, and ensure the right person is in place as CEO.
- Take lower valuations in order to work with board members or VC partners that you really like and respect.
- The board should not be running the company. It's a group of people and therefore it's group-think. No committee ever build anything great.
It’s very important as a founder-CEO that you manage your board. Because if you don’t, then whoever the next most aggressive board member is will step in and fill that vacuum.
Recruiting, Hiring, and Managing Talent
- There are some best practices that you should follow when hiring: Write a job description for every role, ask candidates the same questions, assign focus areas to interviewers, move fast, and check references.
- Once the new employee comes on board, send out a welcome letter and package, assign them a buddy, give them some ownership, and set 30-, 60-, and 90-day goals.
- Early employees who are humble enough to realize they can learn from fresh blood can grow with the company and use it as a personal platform for their own learning and impact.
I think the biggest change people fail to make is that at some point your job becomes more about hiring people and working with them to get what you want done than doing it yourself.
Building the Executive Team
- At some point, communication will break down. Suddenly you realize that you really need someone with more experience on your team. You may need to hire an executive.
- Look for people that have experience and background that would make them a good fit or hire for the next 12-18 months. No more, no less.
- There's a few traits to overindex in your search: Functional area expertise, ability to build and manage a team, collegiality, strong communication skills, owner mentality, and strategic thinking skills.
- Give yourself permission to make hiring mistakes as long as you are willing to quickly correct them
One technique I learned, actually from Brian Chesky at Airbnb, is to go find the five best people in Silicon Valley that do that role, and just have coffee with them.
Organizational Structure and Hypergrowth
- Organization structure is an exercise in pragmatism, that is, what is the right structure given the talent available to your company, the set of initiatives you need to pursue, and your companies 12- to 18-month time horizon?
- If you are growing fast, you are going to have a different company every 6-12 months. Be prepared to change everything and adapt.
- Never compromise when hiring to culture. Bad culture leads to pain.
You just have to relentlessly say, “This is what we’re doing, this is why, and this is how we’re going to do it.”
Marketing and PR
- Each company should tailor its marketing efforts to its user base, product, and best growth vectors. This may mean growth marketing, product marketing, brand marketing, or PR and communications.
- Getting press coverage is a satisfying feedback loop, but scalable revenue is a much more important metric. PR does not translate to recurring distribution.
You can usually look around an office, especially if it’s an open office, and see who’s coming to people’s desks. The people who are thriving—at any level, junior to senior—tend to have people approaching their desk all the time.
- Great product management organizations help a company set product vision and roadmaps, establish goals and strategy, and drive execution on each product throughout its lifecycle.
- Look for PMs with product taste, ability to prioritize, ability to execute, strategic sensibilities, top 10% communication skills, and a metrics and data-driven approach.
- Product management should be viewed as the function in the middle of design, engineering, and product that needs to make holistic trade-offs.
- Once a company see some success, they often think product development is their primary competency. In reality, the distribution channel and customer base derived from their first product is now their biggest go-forward advantage and differentiator.
The VP product should be able to lay out a compelling product strategy that includes a strong understanding of (i) who your customers really are, (ii) what it means to win in your market, (iii) how to differentiate as a product and company, and (iv) how to build compelling and remarkable products for your customers.
Financing and Valuation
- Late stage investors fall under a few categories: Traditional VC, hedge funds, private equity funds, family offices, angels, public market investors, strategic investors, foreign internet companies, and sovereign wealth funds. You have lots of options all with different pros and cons.
- Being prepared to go public creates a discipline and focus that you wouldn't get otherwise. Increased transparency and accountability is always a good thing.
- Valuation is temporary. Control is forever.
Once a company goes public the hiring profile hits another transition. In general you will have the same overall caliber of people joining, however their risk profile will shift to more conservative.
Mergers and Acquisitions
- As your valuation increases, your stock becomes a valuable currency with which to buy other companies. Many shy away from acquisitions, but you shouldn't write them off.
- There are three types of acquisitions to understand: Team, product, and strategic buys.
- Different factors to assess depend on the type of acquisition, but a few are universally a good idea to think about such as cash position, incentive to sell, competition, defensibility, and opportunity size.
I think of money, of capital, like oxygen. Imagine if we all had to live our lives and pay for every breath.
If you found this interesting, I would recommend the usual tech startup suspects, starting with Zero to One by Peter Thiel and Blake Masters. If you want to browse more book summaries, try looking around my blog and see if you find anything worthwhile.