by Elad Gil
You can also create sample tools or templates that show people what good feedback looks like. Sometimes little things like that are so overlooked, and they’re really helpful.
You can show what bad feedback looks like. For example: “You’re a good communicator. You did a good job on that project.” In contrast, here’s good feedback: “You communicated well by keeping people up-to-date on the status of your project and being helpful to your coworkers as you worked through challenges.”
Show people what it actually looks like to give process-oriented feedback that helps people grow and develop. I think coaching and using external vendors, external coaches, can be super helpful, and you can do that at any stage of your company.
Elad: Outside of people outright quitting, are there any warning signs or ways to gauge that you’re creating an environment that is going to drive out certain people over time, or not help people meet their full potential at your company?
Joelle: When you’re bigger—I’d say once you’re 50 people—you can start using surveys. And I think surveys are really helpful, and they actually can be very predictive. There’s research that shows—some things you don’t really need research for—but there’s research that shows that one of the best ways to predict whether an employee is going to leave is if they say they’re going to leave when you ask them in an engagement survey whether they plan to be there in a year. So you can actually start to gauge how people feel about your organization by asking them.
As you get bigger, you can survey along demographic lines too, and then cut results by different groups. You need a certain n-count to do this and keep it anonymous, but once you have that you can start to see, “Oh, do women consistently feel differently about things like the quality of their managers than men?” “Do African-American engineers in our organization feel differently about advancement opportunities than white engineers?”
You have to be a certain size to be able to do that. But before you’re that size, you can still create regular opportunities for employees to communicate with senior leadership about how they feel about the company. You can have regular brown-bag lunches that are specifically designed to talk about culture and how people feel. You can have monthly, or even quarterly, events where the leaders of the org get together with people to just ask about how they’re feeling. You can also hold office hours, where once a month you set aside two hours and you say, “This is specifically designed with a focus on building an inclusive culture, so please come talk to me if you think there are things we could be doing better.” These are things that are pretty easy to do even at a really small stage.
One other thing companies need to think about—even if they’re not going to do this early—is how they are going to start measuring and rewarding performance. I think companies typically wait too long to put processes in place for this. Usually it’s because they’ve had a terrible experience with performance review processes in the past, because most of them suck. But what we know is that if you don’t have any process in place, it’s really hard to make outcomes fair, because people just defer to biases. People’s brains are really bad at relying on data to make decisions.
So actually thinking, “Okay, we’re going to start that process at 50 people. And before we have that process, we’re going to have some rigor in our leveling decisions or promotion decisions or comp decisions in this way. We’re going to ask these three questions.” Having even a light amount of structure, and then plans for when you’re going to roll out more, is really helpful. It’s important to outcomes not only that organizations be fair, but that people perceive them to be fair. When there’s no process that guides outcomes, people question that a lot. So just having some clarity around how decisions are being made, and how they’re going to be made as you grow, is really important.
This interview has been edited and condensed for clarity.
“One other thing companies need to think about is how they are going to start measuring and rewarding performance.”
—Joelle Emerson
Managing in a downturn
Like all industries, the technology sector is cyclical.49 The availability of capital during up periods allows companies to grow rapidly (in some cases with poor unit economics when growth is chased as a primary focus). During the down periods companies need to fundamentally change their behavior in a cash scarce environment (growth is often, but not always, sacrificed for profitability).
I have lived through the downturns in two cycles: the end of the bubble in 2001-2002 and then the financial crisis in 2008 (which ultimately impacted tech in only a minor way and was not anything like 2001). Given that these cycles occur in 5- to 15-year increments, a new flock of entrepreneurs is ascendant at any given tech cycle and people tend to make the same mistakes with each cycle when times turn sour.
If you are an early stage company (e.g., 5 people with $2M in the bank) the primary thing you should do is seek product/market fit. Beyond not spending irresponsibly, there is not much else you should change in how you operate in a downturn. Some of the greatest companies in tech were founded or funded during downturns (HP and Cisco being two of them).50 Google and Amazon really hit their stride as the entire technology industry collapsed around them post-2001.
If you are a mid- to later-stage company (e.g., 40 people to hundreds of people) you should think through the company’s finances and plan ahead.
During a technology cycle downturn you should do the following:
1. Focus on cash. Running out of money is typically how a later-stage company goes out of business. Check your cash position—how long will it last based on projections? During downturns you may want to pad things up to three years in case capital freezes up for a year or two. Ways to increase runway include:
Raise money. Aim to have three years or more of cash in the bank. If you have to, raise a round at a low valuation and don’t over optimize.
Watch expenses. Don’t spend money unless it is really necessary. If you need to scale up sales, definitely do so. Keep doing whatever is needed to make your company successful—but be cheap about how you approach it. Think hard about pound-foolish/pennywise trade-offs. For example, don’t cut snacks in the office and then spend lavishly on first class flights for the sales team.
Increase profitability. How can you make existing sales higher-margin or revenue-accretive? If your current sales are unit margin negative, how do you fix that? Quit focusing on growth if you are losing money with every sale—this just means you are accelerating your burn.51
Fire bad customers or markets. A number of your customers may be unprofitable to serve. Remove them as customers to decrease burn.
Hiring plan. Figure out your hiring needs for the next 6–12 months. What does the company really, truly need? If you cannot raise money or increase profitable sales you may need to decrease the size of your team. If you continue to hire, soon truly great talent will start looking around for a new job. You may be able to reset your hiring bar even higher.
Real estate: the silent killer. While you can decrease staff or other expenses, real estate is tough to unwind in a downturn. In boom times you can sublet space at a profit, but when things go bad suddenly there are a ton of people locked in to high-priced real estate. This means you cannot sublet your space, because everyone else is trying to do the same thing and the whole market is upended. If the company you are subletting to goes under, you may suddenly lose an important cash stream. Don’t sign any big multi-million dollar real estate deals or build out a huge new space unless you have ongoing access to capital or are profitable.
2. Be open with your team. Even if you are in great shape, your team may still worry that your company may end up in trouble.
Ignore the noise, and tell your team to do the same. There will be a lot of noise in press and blogs about how the whole world is falling apart. This is a normal press cycle—just as it was impossible to fail six months earlier and everyone had a $10 billion valuation, in a downturn even gr
eat successes will be questioned as failures for a 6–12 month period.
Explain your financials. You can also work your team through financials, cash flows, and sales plan as another way to show them that everything is okay and your company is a stable oasis amidst all the noise.
3. Think about how to take advantage of it. Downturns can present opportunities for startups. Your competitors may run out of cash and not be able to replenish reserves: Should you start a price war with them? You can hire amazing people if others are cutting headcount: Who should you go after or revisit as a recruit? You can learn to impose greater financial discipline and recapture your frugal startup roots (if you have been spending too much).
At a high level, watch your cash, be open with your team, and don’t panic.
* * *
49 Business cycles: See Wikipedia for an introduction. Link on eladgil.com. [https://en.wikipedia.org/wiki/Business_cycle]
50 See Aaron Harris, “Don’t Focus on the NASDAQ.” Link on eladgil.com. [http://www.aaronkharris.com/dont-focus-on-the-nasdaq]
51 Two counter examples to this would include:
You are a consumer, network effect driven business and will largely be valued on user growth rather than monetization in your current stage of company (note, this does not last forever, but should last for the first few years of a consumer company).
You have a huge pile of cash, and you can destroy your competitors by causing them to spend even more money and go out of business.
CHAPTER 6
Marketing and PR
Marketing, PR, communications, growth, and your brand
High-growth companies’ perception of marketing and public relations has shifted over the last 20 years. Product management used to be considered a subset of marketing at many companies in the 1980s and 1990s, while growth marketing did not exist. Public relations used to be about writing press releases.
Things have changed, but the one thing that hasn’t: all marketing and PR efforts ultimately contribute to building the company’s brand, public perception, and customer acquisition.
Below is a breakdown of various marketing and public relations functions. In general, you need to hire different employees for each function if you are to fully engage in the area.
Growth marketing
Growth marketing is analytically driven marketing and includes all quantitative areas of marketing. This includes online advertising, email marketing (where conversion can be tightly measured), SEO/content marketing, viral marketing, and funnel optimization. Growth marketing includes demand generation or lead generation, but also encompasses converting leads to customers once they’ve landed on your website.
Growth marketing focuses on moving a handful of key metrics (e.g., signups, logins, conversions) in an ROI-focused manner. Many growth tactics were famously pioneered at Facebook, but were really a response to a macro shift in ROI-based advertising (starting with Google), email marketing campaigns, and the more general rise of the internet as a marketing channel.
Social media marketing (Twitter, Facebook, Instagram, Snapchat) tends to fall under growth marketing or communications/PR in most technology organizations.
Product marketing
Product marketing (sometimes just “marketing” without a prefix word) is the canonical, old-school technology marketing discipline. This includes things like customer testimonials, feature requests, user testing and interviews, competitor analysis, collateral generation, and case studies. In the olden days (1970s and 1980s), product marketing and product management tended to be two sides of the same discipline, but this diverged over time.
Brand marketing
Brand marketing is focused on the squishier side of marketing: brand awareness and perception, logos, and other design elements. It is the Nike swoosh—but more than that, it’s about causing widespread association of Nike with not only the swoosh, but the attributes of athleticism and perseverance in popular culture.
All marketing efforts ultimately contribute to the company brand.
PR and communications
Public relations is focused on story development (your company’s narrative), press (proactive, reactive, contributed content), events (speaking engagements and also networking opportunities to some extent), as well as product-focused activity such as reviews and awards programs.
Media relations can benefit all areas of a company: Beyond simply telling the product story, PR can help with culture storytelling as well as executive profiles. Additionally, PR campaigns of late have included influencer relations, though this is also a function that’s sometimes handled by a marketing team. PR teams are also usually the first point of contact in a crisis. Think of PR as the ongoing telling of the company story to the press and broader world.
Hiring marketing and PR teams
As you can imagine, there are large differences between most hires for a growth marketing role (quantitative, numbers driven) and PR (media relations, focus on the pitch, relationship building, telling a story). For example, for a growth marketing role you will likely look for a numbers-driven quantitative marketer. In contrast, a communications hire will focus on storytelling, positioning, and process management.
Marketing organization structure
Like all organization decisions, there’s no right answer about which executive the marketing team should report into. Making the decision is an exercise in pragmatism. In enterprise or sales-heavy companies, marketing may report into sales, product, the COO, or directly to the CEO. Marketing may be matrixed across different lines of business, or directly into each business unit. Sometimes product marketing will report into product management while PR and branding will report into another organization.
A recent trend has been to combine regulatory affairs or lobbying with PR and communications. regulatory affairs is also often found under your legal team, proving again that organizational structure is an exercise in pragmatism.
Given the code driven aspects of growth marketing, some parts of the growth marketing team may consist of engineers reporting into an engineering group versus a marketing org.
Eventually, as your company scales you might find it advantageous to have PR and branding report to a single person who may (or may not) also own product marketing and growth marketing.
To PR or not PR
Some companies have famously gone without any sort of marketing except for Growth Marketing. Wish reached an $8 billion valuation with little brand marketing or PR. The company invested very little in targeting the mainstream press, and focused instead on building momentum via growth and distribution tactics.
The takeaway is not that you should forgo a PR team (Twitter is a counter example that grew in part due to PR). Rather, each company should tailor its marketing efforts to its user base, product, and best growth vectors. In general, a high PR profile helps accelerate recruiting, deal making and partnerships, and fundraising.
BUILDING A MARKETING AND COMMUNICATIONS ORG THAT CAN WEATHER THE STORM
An interview with
Shannon Stubo Brayton
Shannon Stubo Brayton is currently the CMO at LinkedIn. Previously, she was Senior Director of Corporate Communications at OpenTable, Inc. She joined the company when it was private and helped lead the communications efforts for the company’s IPO in May 2009.
Prior to joining OpenTable in September 2008, Stubo spent nearly seven years at eBay Inc. where she was most recently its Vice President of Corporate Communications. Before that, she spent several years at Yahoo!, on both the public relations and corporate communications sides. Prior to joining Yahoo! in 1998, Stubo spent four years at Intuit Inc. in a variety of roles.
For over two decades, Shannon Stubo Brayton has crafted narratives for some of the largest and fastest-growing companies in tech, tackling everything from crisis management to product marketing. So when I was looking for someone who could give even the most technical founders a rundown on how to spin up a marketing and comms org, it’s no surprise that a
ll recommendations led to Shannon.
Shannon sat down with me to share what she’s learned about building agile, efficient teams—and filling them with leaders who are equipped to thrive through all the shifts and re-orgs of hypergrowth.
Elad Gil:
I’m sure you’ve seen a real evolution in best practices during your time as a marketing/comms leader in tech. You run an organization responsible for product marketing, branding, PR/communications, and other areas. What has been the most significant shift the role of the CMO and of a marketing organization at technology companies in recent years?
Shannon Stubo Brayton:
One thing that has really evolved over the last ten years is the importance of internal communications. I spent seven years at eBay beginning in 2001, and internal communications was essentially how do we write emails about org changes and executive departures. It was a very different vibe than now. Internal communications and really getting your employees to be your best brand ambassadors was never in the forefront. People considered internal comms as an afterthought.
Once you get to a company size of 100 people, it’s one of the first hires you should think about making. A good rule of thumb is one internal comms person for every hundred people.