GrubHubMike

The Entrepreneur's Boss: The Board

The entrepreneur is bound by contract to represent the interests of the shareholders as represented by the board of directors.  In most startups, where the entrepreneur is on the board, there is an additional legal and fiduciary responsibility to represent the shareholders interests.  Ain't nothing wrong with that.  When it works well, this is capitalism at its best.  Now, just to be clear, this does not mean that the shareholders are represented to the exclusion of employees and customers. In fact, if such an exclusion exists, the company is already a failure.  Usually, this means a few things:

Increasing enterprise value. Increase share price or pay out dividends.  I ain't got no MBA, but I sure as heck can't figure out what else a shareholder would actually want.  If you've started a high tech entrepreneurial VC funded business, don't try to pay out a dividend.  Good way to lose your job.  So, that pretty much leaves share price.  Now, there are lots of externalities here, but the idea is to govern towards positive trends: higher revenue, lower expenses, a few key ratios that exhibit a healthy company

Minimizing risks.  The shareholders trust management to be close enough to the business to objectively perceive and report risks.  I suppose there are lots of ways to minimize risk, but the most effective one I can identify is staying focused on a clear strategic direction.  Another key way to manage risk is to understand the absolutely essential expenses in the business and manage them to be lower than the overall revenue.  If things get tight, management shouldn't be cutting into bone. 

Aligning interests.  I've said several times in this series that representing the interests of shareholders, customers and employees should never be mutually exclusive.  This doesn't happen by accident, but by setting intentional direction for the company.  The mission of the business should clearly benefit all of these groups. 

Transparency.  Accurate reporting and auditing, accountability, and non tolerance of dishonesty.  These are absolutely critical in today's business environment.  Hire only people you trust, and then setup controls that don't depend on that trust. 

The Entrepreneur's Boss: The Customer

The closest thing to a boss that an entrepreneur has isn't the shareholders or board or employees.  The buck stops with the customer.  When it comes down to it, all the gizmos and gadgets and patents and hard work won't keep the competitors at bay.  At the risk of sounding quaint and old fashioned, the only real competitive edge is getting loyal customers by providing value with integrity. In practice, here are the principles I've followed:

Drive customer loyalty, not customer imprisonment.  Tough contracts and cleverly designed dependencies don't drive long term growth (or short term for that matter).  In the end, the best way to keep a customer is to provide such an incredible value that they gladly pay a premium for it and then brag about it to their friends.  An executive should ask this question about every decision... "Does this really benefit our customers in the long term" 

"Make the resolution more memorable than the problem" One of my customers gave me that advice when we were putting together our customer service team.  You can blow somebody away with generous and awesome service. They'll become your biggest advocates.  The business case for generous service can be hard to prove.  Honestly, I don't bother. I take it as fundamentally true that the cost of treating customers well is always outweighed by the benefits

Commit to rooting out the cause  Wronged customers don't want to be bought off.  They want to be fairly compensated for their trouble.  But, what they really want is to know that the root cause will be addressed.  So do it. Then brag about it. Especially back to the originally wronged customer.  No point in being great at servicing customers if they don't know about it!

The Entrepreneur's Boss: The Employee

The entrepreneur doesn't have a boss, but they are responsible to others.  Legally, the board and management have a fiduciary responsibility to the shareholders.  But, in reality, the responsibility is wider than that, especially with regards to employees. A company where the shareholders interest and the employees interests are mutually exclusive has already failed both fiscally and morally. How does the entrepreneur serve their employees?

Ensuring stability. Startups are by their nature risky environments.  Even so, an executive has the responsibility of providing as much stability and longevity as possible.  Given the relative inexperience of most entrepreneurs, this means surrounding oneself with knowledgeable advisers.  This advice allows an entrepreneur to intentionally balance growth and risk instead of being blindsided by emergencies.

Compensating fairly.  Pay at a startup company is lower.  That is perfectly fine as it attracts a set of self selecting coworkers that are looking for more than just the biggest paycheck at all costs.  To balance out the lower short term compensation the ethical move is to share upside. Sharing upside needs to be done with integrity.  The value of equity needs to be explained clearly along with all of the inherent risks.  Sure the mechanics are complicated and the future is uncertain, but it would be the worst kind of management to use that uncertainty to cloud details in an option plan instead of ensuring the greatest chance for a positive outcome.

Challenging to growth.  Compensation in today's economy is a threshold issue.  Folks don't work 10% harder for 10% more salary.  Instead employees are looking to make a fair wage and then gain skills and experiences that help them through jobs and challenges ahead.  The greatest thing you can offer your employee is a better chance at their next great job.

Influence instead of Authority.  I came to a shocking discovery early on in this "being the boss" adventure; a discovery I've learned repeatedly since.  It is the great paradox of good management.  Once one is in a position to command action by the authority of position alone, one must try to never use that power.  Building consensus, getting buy-in, inspiring passion, aligning values... these are the ways to lead.  Every time I've found myself resorting to the final lowest common denominator of "because I said so" I've recognized the event as a failure.  Sure, it happens from time to time.  But only when I've failed in my job as a leader.

The Entrepreneur's Boss

After getting muddled in a series on the Entrepreneur's boss, I'm gonna give it another try in a more condensed version:

One of the best things about starting your own business is not having a boss.  It is also a horribly inaccurate lie.  The reality is, one gets much more freedom, but a disproportionately more amount of responsibility.   While its true I don't have a boss, I do have responsibilities to different groups of people. 

The obvious one is the shareholders of the company.  In fact, I have a fiduciary and legally binding responsibility to them.  But, there are three other groups that I am responsible to as well: employees, customers, and the public (in the form of the brand)

So who is the boss? Well, there are several:

The Customer

The Employee

The Brand

The Shareholder

The Internal Referee

Marathon Playlist

My marathon playlist.  Super slow songs in the middle. Very angry songs at the end. With a little this american life in there for distraction.

You can still donate to my charity here: http://www.teamholeinthewall.org/mevans

Dave Matthews Band    Satellite - Live
The Cure    Lovesong
Interpol    Narc
Interpol    Stella Was A Diver And She Was Always Down
Red Hot Chili Peppers    Californication
Counting Crows    Round Here
Snow Patrol    Shut Your Eyes
Everclear    Santa Monica
The Fray    Over My Head (Cable Car)
Red Hot Chili Peppers    Under The Bridge
Red Hot Chili Peppers    Dani California
Remy Zero    Bitter
Third Eye Blind    Jumper
This American Life    My Pen Pal
This American Life    Aircraft Carrier
The Sounds    Queen Of Apology
The Sounds    Hurt You
The Sounds    Ego
Dave Matthews Band    Proudest Monkey -Live
AFI    The Killing Lights
The Fray    Dead Wrong
Editors    Fingers In The Factories
Editors    Munich
Third Day    I've Always Loved You
Iron & Wine    Peng!
Death Cab For Cutie    Brothers On A Hotel Bed
Iron & Wine    Friends They Are Jewels
Death Cab For Cutie    I Will Follow You Into The Dark
Iron & Wine    The Trapeze Swinger
Snow Patrol & Martha Wainwright    Set the Fire to the Third Bar
The Fray    Vienna
Death Cab For Cutie    What Sarah Said
The Fray    How to Save a Life
Fall Out Boy    Dance, Dance
Modest Mouse    Float On
Editors    Lights
The Fugees    No Woman, No Cry
Snow Patrol    It's Beginning to Get to Me
Snow Patrol    Open Your Eyes
Dave Matthews Band    Ants Marching
Dave Matthews Band    Rhyme & Reason
Switchfoot    Company Car
Snow Patrol    Headlights On Dark Roads
Fall Out Boy    I Slept
Red Hot Chili Peppers    Snow (Hey Oh)
Red Hot Chili Peppers    Torture Me
Interpol    Obstacle 1
Red Hot Chili Peppers    Turn It Again
White Stripes    Seven Nation Army
Various Artists    Destiny's Child / Say My Name (Maurice's Bass 2000 Mix)
Various Artists    Maxwell / Fortunate (The Naked Uncut Remix)
Various Artists    Madison Avenue / Don't Call Me Baby (Original Mix 7")
Deliriou5?    King Or Cripple
The Waiting    Israel
Third Day    Never Bow Down
Third Day    Your Love Oh Lord (Psalm 36)
The Fugees    Ready Or Not
Chevelle    Open
Chevelle    Point #1
Everclear    Father of Mine (Radio Mix)
Third Eye Blind    London
Flobots    Handlebars
Dave Matthews Band    All Along The Watchtower
Flobots    Stand Up

Da Choppa is Down

 
We interrupt this regularly scheduled entrepreneurship series to bring you the results of the first  RC helicopter flights.  My wife bought me an RC Heli for our 10th wedding anniversary.  This makes her the most awesome wife ever to have lived.  I know you are jealous.  It turns out that flying an RC Heli is incredibly difficult (which is why she also bought me a simulator program, which of course, I did NOT use before my first flight. dumb. ) Here are the results:

Flight 1: 13 minutes flight time.  Forceful crash into the ground.  Like most rookies, once it got 3 feet off the ground I freaked out and quickly "hit the breaks" or rather, pushed to full descent. The crash broke the skids in half and snapped off one of the main rotors

A week later, 5 replacement parts and 8 hours on simulator.  Flights 2-6:  Very timid. Just enough lift to make the heli "light" and scoot it around using the aerilons. Didn't really get off the ground.

Flights 7 and 8.  Accomplished 3 or 4 hovers of 15 seconds or so about 6 inches off the ground

Flight 9.  30 second hover 1 foot off ground.  successfully moved from point A to B and back again.

Flight 10:  1 minute hover at 3 feet.  Flight above the deck for about 15 feet.  Truly spectacular crash into the side of a building.  Broke the main rotor in 3 spots and drive shaft in 5 places. pieces flew everywhere. 
 

I've got it repaired now. (surprisingly, only about $20 worth of parts, but its a pain waiting for them in the mail.) Writing a post about it while I wait for the rain to stop.