Our minds work in such mysterious ways. At the moment I’m putting the final touches on my upcoming TEDx talk on the subject of how our expectations are outgrowing our innovation. During it I discuss deep learning, and how the technology mimics the way our brains work, but without us actually understanding how. All we can do is see the inputs and outputs. There’s a very specific input and output of my own brain that I can’t seem to shake at the moment – the input is non-stop 12-hour workdays at Ometria, and the output is a lack of inspiration to write. Two blog posts in a year is just not good enough. I’m pretty confident that reducing the workload will bring the inspiration back, but I can’t be sure. Because we just don’t know how our minds work.
The one blog post that I simply refuse to give up on however is my annual post analysing the results of the key decisions I made in the year prior to the year that’s just passed. Having tracked my decisions for seven years now, and analysed them for six, it’s not only fascinating to understand which ones were good decisions and which ones were bad over that year, it’s fascinating to see the trends which emerge in the combined learnings over all of these years.
As a reminder, the process is simple. Every month I write down the 2-3 absolutely key decisions that I’ve made. The ones which are very high leverage. The ones where I’m very unsure of the right choice. I write down the reasons for the decision, and my thoughts on the best and the worst possible outcome from that decision. I then leave it and only come back to it exactly twelve months later, where I write down an analysis of whether that decision was the right one, and what I should have done differently if not. By the end of the year, I’ve analysed the outcomes of all the decisions which I made in the year before, and can look at them all in one go to see trends.
It’s a process that requires significant commitment, since you don’t see any results at all for a year, any proper results for two, and only after that does it start to really get interesting. But what’s fascinating is that it’s a process that’s driven by first principles. You start with actual decisions, and your analysis of the potential outcomes. You then evaluate the actual outcomes after a long time has passed, and write down learnings about yourself and your own decision making ability. You then analyse all the learnings together, to spot patterns. And for me, every year, the same things come up, showing clear, objective, unbiased evidence of aspects of myself that I need to work on and improve.
So for the sixth year in a row, just as I wrote on the 1st of January 2017, 1st of January 2016, 1st of January 2015, 1st of January 2014 and 1st of January 2013, here is my list of learnings from my analysis today. This year I’ve grouped them into three broad categories that they seem to fall into.
1. Don’t just try to work things out. Get advice from people who have executed a similar strategy before.
There is a danger that comes with being intelligent, or thinking that you’re intelligent. I fall for it regularly, and I see many other people do the same. There is a temptation to just work things out, in part because you think you can, and in part because puzzles are fun to solve. 2016 was a year when I attempted to solve a big problem, accelerating sales at Ometria, through that approach. My basic logic was – hire some experienced sales people, and they will make more sales. I was totally wrong. Luckily I had a great investor who broke down the fundamentals of what was needed and gave me some guidance based on specific experience. After changing my strategy and implementing the one he suggested, everything fell into place and we’ve grown 10x between the beginning of 2016 and now.
2. Follow the money – don’t try to sell something people aren’t buying, sell them what they want and be the best.
We made some pretty major product decisions in 2016, which were going to be make or break for the company. In particular we had a choice. There was a market we could enter where budget was already assigned, demand was already there, but there were many existing companies all fighting for it. It was the opposite of what Peter Thiel said in Zero to One. There was no monopoly opportunity – just competition. But we did it. And we learned something. When people already want something, and are ready to spend money on it, and you’ve innovated to become the best at it, things just happen. You don’t have to push. The market just pulls you in. The concept applies to just about anything. You can keep pushing, or you can find the tide that pulls you in.
3. Plan ahead for predictable situations.
As I’ve grown older, and as my company has become bigger, the whole concept of “strategy” has taken on a whole new meaning for me. The timelines I’ve realised it’s possible to think in are much longer than I ever thought possible. The British concept of leasehold and freehold is something that sticks in my mind when I think of this. Someone actually came up with the idea that owning a house wouldn’t mean owning it, but would mean leasing it for 999 years. Because that means that in a millenium, the heirs of their heirs would get that property back. What an insanely long-term way of thinking. I don’t think that far ahead, yet, but decisions I’ve made that predicted multi-year changes, both in my aging parents, and in my company, have all paid off well. There is so much in life that’s unpredictable, but not everything. Taking time out to think through the predictable situations is key.
4. Read important legal documents properly, and yourself.
This one always gets me. I’m typically diligent and go through legal documents word by word, even when multiple lawyers are involved. Inevitably I spot mistakes, or changes which are beneficial. Every so often I trust the lawyers. I did that once in 2016, for a high-leverage commercial matter, where I had multiple lawyers who were all excellent. They all missed something, and now I’m having to go through a whole bunch of new hassle and legal expense to resolve it. Lesson, once again, learned. Do it yourself.
5. Qualify. Make sure people are actually serious and make sure you can actually provide value.
This lesson came from us spending a huge amount of time traveling to meet a huge UK retailer, spending time designing a solution for them, and in the end them deciding not to make any changes and to park the whole project. But the concept applies to everything. As human beings, we need to feel like we’re achieving something. For most people, just doing something is enough to get that sense of achievement. So the danger is that people will get very excited and spend lots of time on something, which will make you think that they’re going to follow through, even though in reality they have no ability to actually reach the mutually beneficial outcome. Or the second type of danger is that you can’t actually provide them with what they’re looking for. Salespeople learn that pretty early in their career, as more and more of their prospects waste their time and don’t buy. The rest of us should learn that same lesson.
6. Cash is king. Always have some extra cash. It lets you prioritise in a way that’s best for the long-term.
This is tied closely to point 3 above. Both on a personal level, and on a company level, having a cash buffer makes a huge difference to the timelines that you’re able to think in. How I look after my mother depends entirely on the amount of absolutely certain personal runway I have. Who I hire and when, and what our product roadmap looks like, depends entirely on the amount of absolutely certain runway Ometria has. If we’re about to run out of cash, we’ll focus on features that lead to sales now, but not to a long-term competitive advantage. Being in that position is not conducive to long-term success. So we raise more, dilute more, but optimise our chances of winning.
7. Be a must-have. Whether a software platform, or a person.
Somewhat tied to point 2 above, but broader. When developing a commercial product, such as a software platform, don’t be a nice-to-have, be a must-have. People are ready to spend money on a must-have. You don’t have to persuade them that they need it, they know they need it. You just have to persuade them that you’re the best, and then actually solve their problem and provide the value. What’s interesting is that the same thing applies on a personal level. I often think of the Netflix test. If someone in your company says they’re leaving, would you offer them a large raise and fight hard to keep them? You want to be the person for whom the answer is always yes. You want to be the must-have.
8. Aggressively identify elements of your life that are wasting time, and remove them.
There were a few responsibilities I had built up over the years, not related to Ometria, or to anything important to me on a personal level, that still took up my time. It wasn’t a lot of time, but it also wasn’t entirely predictable – out of the blue I’d need to find a couple of hours in the coming week, and that would happen every few months. I found a way of delegating those responsibilities and making someone else own them. There’s a risk of that person screwing them up, or leaving, but for the foreseeable future I’ve reclaimed that time. I’m now going through everything I spend time on, and seeing if anything else needs to be cut in the same way.
9. Get rid of anyone who isn’t open to learning, who isn’t clearly progressing, or who is causing internal turmoil.
Brad Feld once said that he invests in CEOs who are learning machines. Everyone at a startup should be a learning machine. And if you’re that kind of person, then everyone in your life should be a learning machine too. We hired someone in 2016 who seemed excellent in the early conversations, but simply refused to learn. Every conversation was a drain. A few months went by and he didn’t change. He didn’t progress. We also hired someone else who was very quick at learning, but couldn’t help causing all sorts of internal turmoil by complaining about everything. I left it far too long, because as soon as we let them go, the team they were in became an order of magnitude more effective. The same concept applies just as much to people who are generally in our lives.
10. People with a low bar will let people with an even lower bar in. Don’t let it happen.
The typical saying is that A-players like to work with other A-players, but B-players like to work with C-players because it makes them look better. I experienced this myself in 2016. When you’re building a team, you have to get the absolute best, and then help them work well together. The building blocks are people, and if you get those wrong, there’s no way of fixing it afterwards. As a team gets bigger, responsibility for growing the team gets passed on to the department heads, and then the managers. If you don’t get those right, the whole team will collapse. In the early days, Jeff Bezos apparently spent most of his interview time on how well that person could hire, as given the hypergrowth of Amazon, that was much more important to him than how well they could do their job.
11. Delegate and let go of control, but only to people who can truly “own” and do so much better than you.
The hardest thing for a founding CEO to do seems to be to let go. When the buck stops with you, it seems terrifying to just delegate and trust a bunch of other people to get on with things. But a company can’t scale without it. And neither can a life, assuming in life you’re planning to have a large family, investments, etc. So delegation is not some nice concept, it’s an absolute must. But delegation has to be to someone who is clearly completely competent, and can truly own what you’re delegating. It’s hard to find those people. When you do, it’s magic. That whole entire problem just goes away. All you get is updates that everything is under control. But when you delegate to someone who doesn’t meet that bar, you just end up spending even more time fixing things when they go wrong, and worrying about the next time that they’ll mess up. So find someone who can own, and only then delegate.
12. Management is a skill that is hard, and needs learning. Don’t just stick people in a management role and hope it works out.
This one is pretty specific, but I’ve learned a huge amount about it in the last two years. Management is a genuine, complex, skill, which requires years of focused practice. Like most startup founders, I didn’t take this particularly seriously, and the concepts of one-to-ones, career progression, appraisals, or development plans were ones that were pretty alien to me and the rest of the early team. But over 2016, and certainly over the past year, our team expanded very quickly, I put people into positions of management without either of us truly understanding what that required. A lot of things went wrong because of that. We realised quickly enough, and fixed everything, but it’s definitely not a mistake I’ll be making again. And it’s not just me putting other people into management roles. It applies to me as well, so on a personal level, I now work with my CEO coach to ensure that I gain those skills, and others, at a pace that lets me stay ahead.
So those are my twelve big takeaways from the decisions I made in 2016, and analysed in 2017. So many keep popping up as the years go on, demonstrating that I’ve not been able to learn from them, to change the way I think and work. But it’s a useful reminder of the areas of personal development I’ll be focusing on as we go through 2018, and hopefully it’s given you some things to think about too.
My best wishes to you for 2018. May it bring you health and energy, the underlying components without which nothing else can it be achieved. May it bring you family and friends who ground you. May it bring you creativity and inspiration. And bring me some of those too. Let’s make it a great one.