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Friday
Jul182008

Robert Scoble's Rules for Successfully Scaling Startups

Robert Scoble in an often poignant FriendFeed thread commiserating PodTech's unfortunate end, shared what he learned about creating a successful startup. Here's a summary of a Robert's rules and why Machiavelli just may agree with them:

  • Have a story.
  • Have everyone on board with that story.
  • If anyone goes off of that story, make sure they get on board immediately or fire them.
  • Make sure people are judged by the revenues they bring in. Those that bring in revenues should get to run the place. People who don't bring in revenues should get fewer and fewer responsibilities, not more and more.
  • Work ONLY for a leader who will make the tough decisions.
  • Build a place where excellence is expected, allowed, and is enabled.
  • Fire idiots quickly.
  • If your engineering team can't give a media team good measurements, the entire company is in trouble. Only things that are measured ever get improved.
  • When your stars aren't listened to the company is in trouble.
  • Getting rid of the CEO, even if it's all his fault, won't help unless you replace him/her with someone who is visionary and who can fix the other problems.

    An excellent list that meshes with much of my experience, which is why I thought it worth sharing :-) My take-away from Robert's rules can be summarized in one word: focus. Focus is the often over looked glue binding groups together so they can achieve great things...

    When Robert says have "a story" that to me is because a story provides a sort of "decision box" giving a group its organizing principle for determining everything that comes later. Have a decision? Look at your story for guidance. Have a problem? Look at your story for guidance.

    Following your stories' guidance is another matter completely. Without a management strong enough act in accordance with the story, centripetal forces tear an organization apart. It takes a lot of will to keep all the forces contained inside the box. Which is why I think Robert demands a "focused" leadership.

    Machiavelli calls this idea "virtue." Princes must exhibit virtue if they are to keep their land. Machiavelli doesn't mean virtue in the modern sense of be good and eat your peas, but in the ancient sense of manliness (sorry ladies, this was long ago). Virtue shares the same root as virility. So to act virtuously is to be bold, to act, to take risks, be aggressive, and make the hard unpopular decisions. For Machiavelli that's the only way to reach your goals in accordance with how the world really works, not how it ought to work. Any Prince who acts otherwise will lose their realm.

    Firing people (yes, I've been fired) not contributing to your story is by Machiavelli's definition a virtuous act. It is a messy ugly business nobody likes doing. It requires admitting a mistake was made, a lot of paperwork, and looking like the bad guy. And that's why people are often not fired as Robert suggests. The easy way is to just ignore the problem, but that's not being virtuous. Addition by subtraction is such a powerful force precisely because it maintains group focus on excellence and purpose. It's a statement that the story really matters. Keeping people who aren't helping is a vampire on a group's energy. It slowly drains away all vivacity until only a pale corpse remains.

    Robert's rules may seem excessively ruthless and cruel to many. Decidedly unmodern. But in true Machiavellian fashion let's ask what is preferable: a strong secure long-lived state ruled by virtue or a state ruled according to how the world ought to work that is constantly at the mercy of every invader?


    If you are still hungry for more starter advice, Gordon Ramsay has some unintentionally delicious thoughts on developing software as well. Serve yourself at: Gordon Ramsay On Software/04.html#a225"> and .
    Gordon Ramsay's Lessons for Software Take Two
    .

    Kevin Burton share's seven deadly sins startups should avoid and makes an inspiring case how his company stronger and better able to compete by not taking VC funds. Really interesting.

    Diary of a Failed Startup says solve a problem, not a platform to solve a class of problems. Truer words were never spoken.
  • Reader Comments (8)

    Scoble? Scoble? Really? What experience does he have in running startups? C'mmon guys you can do better. Further, this is an awesome techie blog. Why do you want to risk it by bringing in a pr nobody?

    November 29, 1990 | Unregistered CommenterAnonymous

    The "FriendFeed thread" link is incorrect. FYI

    November 29, 1990 | Unregistered CommenterAJ Batac

    > The "FriendFeed thread" link is incorrect

    Sorry, it took me a while to figure out how their linking worked. Should be correct now.

    > Why do you want to risk it by bringing in a pr nobody?

    I usually post on what interests me, that is a little different, that I can hopefully have a little different take on. That it's just a nobody like Scoble providing the inspiration is no reason not to post :-)

    November 29, 1990 | Unregistered CommenterTodd Hoff

    Is this the same Robert Scoble that left Microsoft to join a Startup (eaten by hype) and dump the startup for a bigger publishing company (FastCompany)?

    You quote that guy?

    I can't believe you...

    The link to the Gordon Ramsay's Software stuff isn't helping. The link display list of 50 or so items how to make a profitable business in the restaurant industry. Why not make the list to 100 to cover the author's deficiency?

    One thing that is being overlooked by all of you (including the author of the Gordon Ramsay's link) is that Gordon Ramsay suggests:

    1) Simple, Simple, Simple, Simple
    2) Don't overdo
    3) Cut down menus (features)
    4) Have a Strong Baseline before you grow up

    When I see Ramsay and DHH, I quickly realized that they "understand" reality. In the real world, we can't do too much as a human. We must focus (in which I agree with your point).

    Most North Americans are crazy about Productivity (Provigil), Early Retirement, Banking on Startup, Stock/Investments (in a big way, wanting to be like Warren Buffet). When I see Ramsay and DHH (which coincidently are both Europeans), they're more toward "let's do one step at a time, don't think too big".

    Then there's Scoble, Jason Calacanis and Michael Arrington. These group of people are more like:
    1) Fire lazy-ass (a.k.a people who work 9-5 no OT)
    2) Fire incompetent (instead of figuring out what he's good for or find a way to motivate him)
    3) If you're not passionate, you sucks (we're passionate, just that we thought our CEO come up with ridiculous requirements and deadlines)

    These are the people who treated developer as code monkey.

    If startup can't pay developer high-price, why should we work for them if we knew the chances to fail is 99.99%? Is it for the Big Day Paycheck like Google? Heck how many Google out there? I see only Google and MS, nobody else.

    Almost nobody gets rich from doing Tech Startup except the owners (or part owners).

    If a software is buggy, there could be couple reasons:
    1) Developers fault
    2) Tight deadline

    If a product has unnecessary features, there could be couple reasons:
    1) PM fault
    2) CEO fault

    If a company failed, it's almost obviously the CEO fault:
    1) Can't motivate people
    2) Too high standard
    3) Ridiculous requirements
    4) Trying to match feature-by-feature of competitors
    5) Thinking too big
    6) Reading too many blogs to influence his mind

    November 29, 1990 | Unregistered CommenterAnnoyed Reader

    Scoble is just trying to gain attention for himself. He has no idea how to run a business. I love his cheap lines from some third grade business book. Duh. Scoble failed out of San Jose State and is a PR flack for Fastcompany. No credibility.

    In reading Scoble's comments all I see is "look at me I'm brilliant and it's not my fault". Frankly companies fail because of guys like him in organizations. Failures like Scoble play the blame game. They act like they know everything then blame everyone when something happens. If something good happens guys like Scoble take all the credit. He plays the "if they only listened to me line". Typical of a loser. This guys Scoble is all about taking care of himself not taking a risk. Startups are risky and most fail.

    Scoble is a loser and a master of hype. The way this is playing out it seems that one man ego shows like Scoble are biggest part of this story.

    November 29, 1990 | Unregistered CommenterAnonymous

    Scaling startups. Interesting questions with many possible answers. Last time I checked it takes a architecture, plan, and money. Keyword is money.

    How do you get money? Investors and revenue.

    Investment
    $7.5 million in venture - good start but sounds like they didn't support the company

    Revenue
    Venturebeat said they had a run rate in 2007 of $7m. That's a good sign something was working.

    Prospects
    Millions in venture + $7m 2007 revenue - Looking up and growing with customers

    Downfall
    Founding CEO was fired by VCs
    Top talent leaves
    Motley crew left to run company
    VCs give up
    Company nose dives

    Outcome
    Firesale and blame game.

    Lesson
    Have money and never let the VCs control the company

    November 29, 1990 | Unregistered CommenterMike Jones

    Revenue is great until you run out of money. Why is it that no one talks about profits? Is it the assumption that VC money begets more VC money so who cares?

    Here's my rules:

    - Manage your cash because that determines when the front door closes for good
    - Think more before you act. Fast is good except when you are running in the wrong direction.
    - If no one in the room is an absolute expert in your core competency and business, a) how did you get funded and b) better go get one.
    - Assume failure. You will miss projections. Some people you hire will suck. Some advisers won't know their a_s from their elbows. Need more examples?
    - Above all else, commit your mind, body and soul to the effort. You're in a death match the second you say...we should start a company.

    Oh, and don't forget, who succeeds or not is mostly just luck. So good luck!

    November 29, 1990 | Unregistered CommenterBob

    Good point Bob. Venture capital can create a false sense of security and it's a death match. The venture guys always try to replace founders and bring in management and that's where it fails. Give me a team of hungry guys who have the guts to start a company and I'd rather have them fight the death match. From the conversation it's clear that Scoble is a windbag not a fighter.

    November 29, 1990 | Unregistered CommenterJim Bailey

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