Advice for CEOs, How to Measure Engineering Productivity, Common Legal Mistakes to Avoid and more- Tactician #0032

10/01/2024

ADVICE FOR CEOs

Mario Gabriele, Founder at The Generalist collects advice from startup CEOs on how to succeed as a founder in “The single most important thing you need to do as a CEO”

• Admitting Knowledge Gaps and Seeking Help:

  • Mathilde Collin emphasizes the importance of recognizing one's own limitations and seeking external support. She says, "It starts with telling yourself and others that you don’t know something. To be able to admit this, you need to have enough self-confidence and enough self-awareness. Having a coach or a therapist (or most likely both!) will help."

• Leveraging Peer Networks for Learning:

  • Creating a peer group for shared learning is highlighted by Collin, "Create a group of peers (similar-stage companies) you can learn from. I have a WhatsApp group with four other SaaS CEOs of Series C-E companies."

• Learning from Those Ahead in the Journey:

  • Collin advises seeking insights from more experienced CEOs and leaders. "Ask CEOs/leaders who are ahead of you: every CEO/leader is asked to reinvent the wheel on topics that have been thought about before by hundreds of smart people."

HOW TO MEASURE ENGINEERING PRODUCTIVITY

Tomasz Tunguz, Venture Capitalist at Theory, on the challenges of measuring engineering productivity and a holistic approach to managing software engineering teams in “Gordian Knots in Software Engineering”

• Inadequacy of Traditional Metrics:

  • The author criticizes traditional metrics like lines of code, explaining their limitations: "Lines of code, like lines of a blog post aren’t a good metric. Most of the time, short, direct prose is better than verbose or lengthy sentences."

• LinkedIn’s Developer Productivity and Happiness Framework:

  • The author describes LinkedIn's approach: "So is LinkedIn’s Developer Productivity and Happiness Framework, which explains how their developer teams are measured."

• Three Key Metrics at LinkedIn:

  • LinkedIn's selected metrics are detailed: "Developer Build Time: the time between when a developer writes code to when he or she can test it on their computer. Post-Merge Duration: the time between committing code to seeing it live on the website. Code Review Response Time: how long code awaits a peer-review."

• Focus on Process Latency Metrics:

  • The author explains LinkedIn’s focus, "They aren’t about individual production metrics but overall process latency metrics."

• System-Wide Optimization:

  • The key takeaway from 'The Goal' is shared, "The key lesson: optimize for the entire system end-to-end, not each step."

WHAT TO LOOK FOR IN VP CANDIDATE IN 2024

Jason M. Lemkin,  SaaS Founder, advises Founders on hiring practices for VP-level positions in “In 2024, Maybe It’s Best Everyone Starts as an Individual Contributor.”

• Shift in Attitudes Toward Management Roles:

  • Lemkin notes the impact of recent developments: "Perhaps the biggest change though is how many folks want to manage a team, versus do the work themselves […] The 1000+ unicorns of Covid fueled this, with ample capital to hire, hire and hire. And so did a bit of laziness that creeped into many of us during the past few years."

• Key Advice for Hiring in 2024:

  • The author's central advice is: "Make Sure any VP You Hire Does The Job Themselves First. Before They Hire Anymore. Period."

  • "Let’s get back to basics here. If you hire a VP that never does the actual job themselves, well, it’s super high risk."

• The Interview Process:

  • He advises on the interview process: "And just ask. Ask in the interviews. Ask what they’d do the first 30 days."

COMMON LEGAL MISTAKES FOUNDS SHOULD AVOID

David Siegel, Partner at Grellas Shah LLP,  points out common legal mistakes made in early-stage companies in “Startup founders often make these legal mistakes”

• Consequences of Vague Promises:

  • The implications of such informal agreements are serious, "That earlier vague promise could potentially be considered a binding contract with unsettled terms, leaving a cloud on the company’s capitalization that can be hard to clear without litigation."

• Real-World Example: Consensys Lawsuit:

  • Siegel uses a real-world example, "The recent lawsuit brought by early employees of Consensys against its founder/former CEO, Joseph Lubin, and the company demonstrates the real-world danger of ill-documented relationships and their impact as the company grows."

• Misunderstanding Fiduciary Duties:

  • The author explains the common misunderstanding of fiduciary duties by founders, "Many early founders face legal problems because they don’t quite understand what it means to be a fiduciary to a company and its shareholders... founders sometimes issue themselves shares after their initial grants, diluting other shareholders and not knowing that those shareholders can challenge this."

FOUNDER INTERVIEW

Jillian Williams, Partner at Cowboy Ventures, interviews Alain Meier, Head of Identity at Plaid and  John Backus, Co-Founder and CTO of Cognito in “Building the Best, with Jillian Williams feat. John and Alain of Cognito”

• Start by Solving a Specific Problem for a Specific Demographic:

  • Meier stated, "You know, we took the YCombinator playbook, to heart with every decision we made. And one of the things that they say is like solve one problem for one specific demographic, extremely well. And for us, it was solving identity verification for crypto companies really well, at first."

• Improve Every Day and Success Becomes Destiny:

  • Meier reflected, "There was no reason for us to actually be potentially good at this. We had no, you know, connections that other people didn't have, honestly, we had very few skills that other people didn't have, it was just through this sheer force of will, that we were able to get better and just force ourselves to, you know, improve every single day."

• Dealing with Rejection and Maintaining Self-Belief:

  • Meier noted, "It was genuinely something that was difficult for people to solve. So we thought if we had the pain, others almost definitely did. And it was only through a lot of time, and getting to know the industry and working in it really hard that we began to love it."

• Focus on Building What You Love:

  • In concluding thoughts, Meier expressed, "I'm a simple man, I want to build cool things, put them out there, see people's reactions, and do it really, really quickly."

Sign up for Tactician

Curated newsletter of MUST-READ articles for startup founders and operators

No spam. Unsubscribe anytime.