Monday, July 30, 2007

It has been a year already………… “much more fun but much harder” (part 1)

I should have written this celebratory/reflection entry weeks ago but as usual I have been very busy and I felt that I need it some tranquility to write this entry. In fact I have had a lot of people asking me about my analysis of how it was going, how the change from industry (large company) to startup/entrepaneurship was, etc… so it is a good opportunity to write about it. I am now in a 3 hours plane so perfect time for some writing

The sentence on the title describes what my overall feelings for this past year and the experience of owning (together with my 3 partners) and managing our own business “it is much more fun but also much harder than I though”

Let´s start from the hardship, why it has been much harder? I think it can be summarized in 5 points
1) Managing cash flow (from your company to your own and not viceversa)
I guess everyone is somehow used to managed its own salary and savings to meet its monthly needs and work towards future purchases and activities. And I guess that I felt that managing our company cash flow will be very similar and have not much of an impact. In fact I felt that once you reach a certain level of salary things just more or less happen. Well the truth of the matter is that cash flow needs to be managed and being a small but fast-growing company we are many times the last in the queu (especially when it comes to invoice payment), but our employees, providers, etc.. need to be paid on a monthly basis and without delay (please note that we have made a compromise to pay and treat our providers as we will like to be treated and we have just in very unique situations delay a payment) and also we know that the founders/management are the last to get paid so very quickly our company does impact our personal cash flow (not to mention that we did cut our salaries by half when joining the company) and there is where the real compromise starts. And I can tell you that you worry, worry and worry. However I am getting much better at understanding and dealing with this reality

2) Managing bad news and how not to take it personally
As important is that every contract/bid not won (I have written about this before), or bad news, delays or people turning down offers to join mmC does become a personal matter and in such dynamic environment you deal with such blows almost daily (thankfully good news come also at such speed and daily rithm). It is very important that you train yourself for these bad influencers to affect you and your mood as little and as shortly as possible. In fact we have a business to run and we are the mirror that our employees look upon and we need to transmit optimism almost at any price. But believe sometimes it seems almost impossible. On the same note I guess I have been learning to minimize bad news and to understand that it does not matter that much, that it is part of running a business and that we can always learn and know that around the corner there is something positive waiting for us if we keep going and working hard (I guess you call this optimism)

3) Staying together and continue working effectively as a management team
It is a blessing to have joined such talented and passionate management and owners’ team (which I have also the honor to call them my friends). However during our day2day in&outs our relationship does suffer, gets strecht and sometimes push to the limits and many times also our egos try to take over.
Fran (one of my partners) did send us by email a press clip (I think it was after 4 months together) which said that most of the startups fail as their management teams don´t manage to stay together (I think the statistic did say something about 80% of teams do separate before 5 years), and main reason being that people/managers (aka their egos I believe) start thinking that they work harder than the rest of team members and this starts destroying trust and ….. until the erosion is final. I have kept this thought in my mind since that day and realize many times how easy is to felt in the trap of thinking that way to then realize how we all give our 100% if not more to the business but that we are also humans and sometimes and in different ways we have to relax and re-energize.
Another interesting view of this issue/hardship is our level of passion. We are so passionate about the business and we transmit that on any chat, dialogue, presentation. To the point that anybody who does not know us if invited to our management discussions as a silent observer will think that we were about to kill each other (or at least walk out of the room) many times during our product development, business model or business development discussions.
I think that with time we have managed to keep the passion in our business and discussions while learning how to live with different views and make them an asset in our discussions while tempering our forms. But it is tough to be a united management team but when managing to do so on a daily basis I believe it is a huge asset (if not the main asset) of our business. I am remembering an almost “phicologist” roundtable we had a week ago to see how we were feeling right before vacation; Kind of a reflection on how we were working as a team after a year. It was refreshing how we all felt we were able to speak the truth of our feelings and go deep on how and when we feel better (or worse) and listening to each other to try to make the team sing opera together (sorry for the musical simil). I can say that we could be agreeing or not to what each one had to say but that was not the point. We also listen and reflect and was able to be himself with no customs. I felt very proud during that discussion of being part of this management team

4) The difficulty of attracting talent (and how to keep it after)
I have written several times on the recruiting front. Thus I just wanted to mention the hardship of investing time and time again lots of energy of trying to attract talent to our company knowing that on 90% of the cases the person sit in front of us (or on the other side of the phone) will not join us for a number of reasons (fear or low tolerance for risk, image needs, money, timing, position, you named it). But this is a marathon not a 100 meters run. First keeping in touch with people that very openly explained to us why they could not join us at a point but hade made an effort to keep in touch and even helping us on different fronts (thank you to all of you). Secondly learning objectively from some refusals and using that feedback into our following efforts and also knowing that we all like to run 120 kms an hour (see point 5) but many times it is not possible and we have to go 80. Just an example, I left Vodafone CZ and I had had the chance to manage over 25 directly and more than 75 indirectly (or work very closely with them). At least I would love to have 10.-15 of them in my team. And today after a year only one of them (Andrea, my former planning and corporate performance manager) has joined us. We have extended 4 offers (and although refused at different times those people is still engaged with us and also we may offer them different roles in the coming months), negotiated or keep closely in touch with some of them and at the end some more will join and the rest will be part of the mmC community helping each other along this journey (as many of them had already)

5) Living to drive at 80 kms/hour on a 120 km/hour highway (and learning from this)
If you know me well (and even only if you know me only slightly) you know I like to run on a business basis. I am a bit of a bulldozer, going non-stop towards the goal and but always trying hard to bring as many people as possible on this journey.
But the reality of a startup is different. We will like to run faster and longer, and we believe we have a vision and a plan to do so but the reality of self financing and leaving on the cash flow rithm is that we have to go a bit slower. And that slower speed to make sure we don´t make any false steps and be ready for those moments in which we can run faster to some time and move us into the next speed level. At the end of the day all the skills and discipline we are learning by having to manage our current limitations will help the business when we have to run faster and longer

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