All right.

god eftermiddag och välkomna till den sista klassen i hur man startar en startup

So this is

a little bit different than every other class.

Every other class has been things that you should be

thinking about in general at the beginning of a Startup.

And today, we're going to talk about things that you

don't have to think about for a while.

In fact, you shouldn't.

But since, I'm not going to get to talk to most of you,

again before you get to

sort of post-product market fit stage.

I wanted to just give you the list of things that

you need to think about as your Startup scales, and

the list of the things that usually.

Founder failed to make the transition on.

So these are the topics we're going to talk about but again

all of these things are things that are not writing code or

talking to users.

Which means,

with a few exceptions that I'll try to note, you can

ignore them until after you have product market fit.

Most of these things, for most companies,

become important between months 12 and 24.

But it's really more about stage than anything else.

These are things that usually hit around 25 people and

definitely post product-market fit.

So just write these down somewhere and

look back at them when you get there.

So the first area

we're going to talk about is Management.

At the beginning of a company there is no management, and

this actually works really well.

Before 20 or 25 employees most companies are structured with

everyone reporting to the founder, it's totally flat.

And that's really good, and that's what you want, and

at that stage that is the optimal way, for product,

that's the optimal structure for productivity.

But the thing that tricks people is that when,

when lack of structure fails, it fails all at once.

And so what works totally fine at 20 employees,

is from zero to 20 employees?

Is disastrous at 30.

And so

you want to be aware that this transition will happen.

And you don't actually need to

make the structure complicated.

In fact, you shouldn't.

All you need is for every employee to know,

who their manager is?

And every, and there should be exactly one.

And, and every manager should know,

who their direct reports are?

You want to ideally cluster people in

teams that make sense of course.

But the most important thing

is that there's just clear reporting structure.

And that everyone knows, what it is.

And if you want to make changes to it people sort of

understand how to make changes or to hire someone.

Clarity and simplicity are the most important things here.

But failing to do it is really bad.

So, because it works in the early days to have no

structure at all,

and, because it sort of feels cool to have no structure.

Many companies are like,

we're going to try this crazy new management theory and

have no structure.

What you want to do is innovate on your product and

your your business model?

Management structure is not,

where I would recommend trying to innovate.

So, don't make the mistake of having-

>> >> Nothing but don't make

the other mistake of having something super complicated.

A lot of people fall into this trap,

where they think it's like you know,

people feel cool if they're someones manager.

And if they're just an employee they don't feel cool.

So people come up with these convoluted circular matrices

management structures, where you report to this person for

this thing, and this person for that thing, and

this person for that thing.

But you know,

actually this person reports to you for this thing.

That's a mistake too.

So don't, don't try to innovate here.

This is the first instance of an important shift,

in companies, or in, in, in the founders job.

Before product market fit your only job that matters is to

build a great product, right,

you're number one job is to build a great product.

As the company grows and

at about this, you know, 25 or so employee size,

your main job shifts from building a great product.

To building a great company, and it stays there for

the rest of your time.

And this is probably the biggest shift in being

a founder that ever happens.

There are four failure cases we see all the time,

as founders become managers.

So I want to talk about the four most common ones.

The first one is being afraid to hire senior people.

In the early days of a Startup,

hiring senior people is usually a mistake.

You just want people that get stuff done.

and, and the willingness to work hard and

aptitude matters more than experience.

As the company starts to scale, and about this time

when you have to put in place a basic management structure.

It is actually valuable to have senior

people on the team.

You know, executives that have built companies before.

And almost all founders after the first time

they hire a really great executive and

that executive takes over big pieces of the business and

just makes them happen the founder says, wow,

I wish I had done that earlier.

But everybody makes this mistake and

waits to long to do this, so

don't, don't be afraid to hire senior executives.

The second mistake is hero mode.

So, I will use the example of say someone that

runs the customer service team.

Someone runs the customer service team,

they want to lead by example, this starts from a good place,

it's, it's the extreme of leading by example.

It's saying, you know what,

I want my team to work really hard.

Rather than tell them to work hard I'm going to

set an example and I'm going to work 18 hours a day.

And I'm going to show people how to get a lot of

tickets done.

But then the company starts growing.

Also they have the normal discomfort of assigning a lot

of work to other people.

So the company starts growing and

the ticket volume, keeps going up, and

now they have to do like 19 hours a day, and

then 20 hours a day, and it's just obviously, not working.

But they won't stop and hire people, because they're like,

if I stop, even for one day,

we're going to get behind on tickets.

The only way to get out of hero mode in this case is to

say, you know, what?

we're going to get behind on tickets for two or

three weeks, because I'm going to go off.

And I'm going to hire three more support team members and

I've calculated based off our growth rate that this is

going to last this long.

And next time,

I'm not going to make the same mistake.

I'll get ahead of it and hire again.

But you actually have to make a tradeoff.

You actually, have to say, you know, what?

I need to hire more people and

we're going to get behind on other stuff.

That is the right answer.

The wrong answer is to stay in hero mode until you burnout,

which is what most people do.

Third mistake bad delegation.

Most founders have not managed people before and

they certainly haven't managed managers.

And so the way that the bad way you delegate is you

say hey, employee, we need to do this big thing.

You go off and research it.

Come back to me with all the data and

the trade-offs, I'll make a decision and tell it to you,

and then you'll go off and implement it.

That's how most founders delegate, and that does not

make people feel good and it certainly doesn't scale.

A subtle difference but really important is to say,

hey, you're really smart, that's why I hired you.

You go off, here are the things to think about,

here's what I think, but you make this decision.

I totally trust you, and let me know what you decide.

That's the delegation that actually works.

because, I think, because Steve Jobs was able to get

away with the former and make every decision himself, and

people just put up with it.

And every founder thinks they're the next Steve Jobs.

A lot of people try this.

But I, for 99.9% of people.

The second method here works a lot better.

And then the fourth area is just

a personal organization one.

When you are working on product,

you don't actually need to be that organized in terms of

how you run a company, and

how you talk to people about what they're working on.

But if you fail to get your own

personal organization system right.

where you can keep track in some way of what you need to

do, and what everybody else is doing, and

what you need to follow up with them on.

That will come back to bite you,

so developing this early as the company begins to

scale is really important.

Two other things that we hear again and

again from our founders, they wished they had done earlier.

And that is simply writing down, how you do things?

And why you do things?

These two things, the how and the why, are really important.

I mean early there is you just tell everyone,

employee, when you're, like,

sitting around, having lunch or dinner, you know?

This is how we think about building products,

this is how we push production, you know,

this is how we handle customer support, whatever.

As you get bigger, you can't keep doing that.

And if you don't do it,

someone else is just going to say it.

But if you write it down, and put it up on a Wiki or

whatever, that every employee reads.

You as the founder get to basically, write the law.

And, and if you write this down it

will become law in the company.

And if you make everyone read this as the company hires 100

and then 1,000 employees people will read this and

say, all right, that's how we do things.

If you don't do it it will be like random oral tradition of

whatever the hiring manager or their best friend that

they make at their first week in the company tells them.

So writing down how you do things?

And the why?

The why is the culture of values,

Brian Chesky talked about this really well.

Every founder I know wishes that they'd written down

both of these, the how and the why, earlier.

To just establish it as the company grows, and

then this becomes what happens.

I think it's one of the highest leverage

things that you can do that, that people don't.

All right. Next area, HR.

HR is another thing that most people correctly ignore

in the first phase of a Startup because again,

it's not writing code.

It's not talking to users.

But it's a huge mistake to continue to ignore it.

And the reason that I think most founders ignore it,

is they have in their mind this idea of,