Hiring & Team Building 101, with AbstractOps' Adam Spector & Nick Hofmeister

Hello everyone, and welcome to our Hiring and Team 101 event. My name is Ryan Micheletti, and I'm Head of Operations for the Founder Institute. For those of you who don't know, the Founder Institute is the world's largest pre-seed startup accelerator. We've launched over 5,000 companies across 200 cities with the largest mentor network in the world of 21,000 mentors. And so part of my role here at Founder Institute is not only running the Founder Institute Silicon Valley program, but also working with our startup leaders and founders from all over the world to help them build their accelerator program and ultimately build impactful global startups. And so if you're interested in learning more about Founder Institute, we're currently enrolling and have open applications across 6 continents. And you can see a list of enrolling cities by going to fi.co/enrolling. So for today, we're going to talk about hiring and building your teams. And so as everyone here knows, hiring and building the right team is essential for any startup's growth. and success. Yet so many early-stage companies fail to get off the ground due to the lack of knowledge on how to build this team. And so anyone here who's spoken to an investor, they, they always talk about the emphasis of having a really strong team, especially in the beginning of your entrepreneurial journey. So the event today is the— I think it's the 3rd or 4th installment of our Mastering Startup Operations series, where we've been discussing best practices around early-stage startup operations with Adam Spector here, ranging from how to manage your cap table, pitfalls to avoid, and more. And so today we have a great international audience. So be sure to say hello in the chat, tell us where you're from. And if at any point during the webinar, if you have a question, go ahead and put it in the chat. So we have our producer in the back end. She's gonna send me some questions here. And instead of waiting until the end, what we wanna do is make this as dynamic and interactive as possible. So we'll try and go slide by slide, answer questions, and then we'll, we'll be sure to, to dive into any topics that you, the audience, wants us to cover. And so just to kind of go over a quick agenda, we're going to do a presentation on hiring and Team 101. We'll do some Q&A throughout slide by slide. And then after the session today, we're going to do an Airmeet networking event. So in this virtual world we find ourselves in, It's harder to meet people. And so we want to create as many opportunities for you founders to meet each other, meet with other mentors, investors, and people around the world through our networking technology over at Airmeet. So without further ado, I would love to introduce Adam Spector, who is the COO and founder of AbstractOps. So Adam, you know, this has been a lot of fun. I think we've done this 4 times now. You've been a mentor for Founder Institute Silicon Valley. You've, uh, you're an angel investor, so you've kind of seen a lot of the, the startup founder's journey. And so do you want to do a quick introduction on yourself and AbstractOps?

Yeah, no, absolutely. Thank you, Ryan. Um, and, uh, as Ryan mentioned, I'm the, I'm the co-founder of AbstractOps. And part of talking about team, how important it is to have a co-founder, we'll talk about that a bit more. Um, but co-founder of AbstractOps, I'm a 3-time founder. I've seen the good and the bad parts of what it's like to build companies and build teams, and also invested in 40+ different companies directly, and I know probably another 50 or so via syndicates and other groups like that. So I've seen a lot of different things that happen in the startup ecosystem, and really how critical it is to build the right team as the foundational element of your business. And then I'll hand it over to Nick, who's someone I've known, I've been lucky to know a really long time, He's working with us actually at AbstractOps as well. And actually, right before that, I'll talk briefly about AbstractOps for a second. We automate the back office. So the whole idea of AbstractOps is basically when you're a founder, the most important thing for you is to spend time focusing on building a great product and then getting customers for that product. The problem is there's a third part called run my business, right? Which is, hey, you need to build a great team. You need to hire that team. You need to fire those people. You need to deal with finances, regulatory compliance, legal, you name it. All that back office work is time-draining and removes you away from the core work that you need to do as a founder, which once again is building that product and getting those customers. So we automate away all that work so you can get back to focusing on what you care about the most. And we're lucky enough to have Nick, who is someone I've known for a long time, who's been helping us out in a bunch of different ways. is an amazing person to have on this webinar as well. I've learned a ton from him, and I know everyone here will as well.

Thanks, Adam. Uh, pleasure to be here. Nice to meet everyone. Um, and then when Adam started talking with me about AbstractOps, my first response was, where the heck was this 13 years ago when I started working on startups? Because I would have used it from day one, uh, rather than trying to learn all this information that everybody has to relearn for no good reason. But we'll get into that a little bit more. My background is I studied computer science and classical music, worked at Microsoft, went to MIT Sloan, Bain& Company in Boston, and then started doing startups about 13 years ago. Everything from algae biofuels to pharmaceuticals to 3D metal printing to the cannabis industry for a little while, and now AbstractOps. I've raised about $320 million in total into startups over that period and have been a mentor at Techstars and other networks. So I've been everything from a co-founder to a mentor and board member of about 20 startups. So taking that background and bringing it to groups like Founding Institute, Founders Institute, and to companies like AbstractOps and saying, how can we create a better ecosystem for all founders, regardless of background, opportunity, or place in the world or geography? That was something that really interested me. So glad to be here.

Awesome. Well, we're lucky to have both of you here. So Adam, do we want to start off with the presentation? And then again, founders, We want to make this dynamic, so as questions come up, just throw it in the chat and we'll go over your questions live.

Yeah, absolutely. So we're going to talk about a bunch of different key areas here that are really critical to building your company and team. Obviously, some of this will take some time. We're going to try to go through it. It's going to go pretty fast, but we're also going to pause for questions during it. So please ask. We want this to be interactive. Hopefully it will be a quality learning experience for you as you're building out your company. First and foremost, sometimes people think there's this founder versus everyone else on the team. You're this founder, this exalted person who's up on the hill, who had this amazing idea. As someone who's built 3 companies, I will tell you that that is a complete myth. And if you think that way, you should get that out of your head right now, because in the end, actually, your job is to build a team of great people and not be this mythical founder on a hill. If you are, it's mostly ripe for failure. There are obviously a few extreme examples where maybe that's not the case, but even in those examples, let's say Steve Jobs as an example maybe, or Elon Musk, even there, they're incredible recruiters. And what they had special powers and were able to do is create that culture, create that idea of the company that they were building and who they are and what that company meant and the values that they brought to it. And by building that, they were able to recruit the best folks, have people who embody that culture, and then spread that culture out as you continue to grow. We very much believe that frankly, you should never treat your teammates like— they should be teammates, they aren't employees. So it's a very critical sort of difference. And that's just a mind shift. These aren't people who work for me, these are people I work with. And that's just a different mindset because you're in this battle to go build something that no one's ever done before. And figuring out a way to go do that with a team who is just as passionate as you are, even if they don't have the same amount of equity, it's critical to you being successful. So respect the risk that they take as well, because that's so important. People are taking this big risk on your idea and your vision. The last thing I'll add to this is frankly that as a founder, the only big difference between you and the rest of your teammates is one, you do have a few special powers, your ability to explain what you're doing and why and set the culture and vision. But the last one is really, you really can't walk away from this. So teammates can, they can leave, they will switch jobs. You as a founder, you're in it basically until you go public or you fail. So there is a difference there, and certainly that makes you work harder sometimes. But beyond that, like, your team's there with you, and you should respect that. So, Nick?

Yep. I think that there's something about a set of good startup leaders and some qualities that Adam and I have seen over time. We've actually tried to codify this at Abstract ops as much as we can. Obviously, this is not a full list, but we feel like there are some dos and don'ts when it comes to being a good leader. The first one relative to the Anthony Hopkins quote is: Even Adam and I have been around the block a bunch of times. We don't feel like we know that many things deeply, truly know in the capital T truth sense. And if you bring awareness to that, that there are very few things you can actually know, then it makes. Your job a lot easier. I know that sounds a little bit counterintuitive, but the idea is that when you get rid of this false sense of certainty that cannot be true, you then can be okay and accept the fact that most things are completely uncertain. And in startups, that's even more true. Uncertainty is a norm. There are very few things you know, but finding out those things that you know, glomming onto those things that you know and holding onto them, and then using that as a core to build out your company, build out the culture that you want, That ends up being a really good core foundation to build on. If you instead build a really shaky foundation, insisting that you know many, many, many things, but you're wrong about 90% of that, that will crumble on you. And it crumbles because when transparency finally comes to that foundation, that crumbly foundation, and people realize that you're lying or that you don't really know the things that you know, then faith starts to erode. That journey that they're on with you starts to erode, and they don't believe you. And that belief, that risk that they're taking, they don't offset each other, and that belief starts to crumble. So, um, one other focus that we see in good leaders, and I learned this from the first CEO I ever worked with in startups, was focus on the 3 things that only you can do. So wake up in the morning, write down a list of 3 things. There should be 3 things that are important, and there are 3 things that only you can do. And as the CEO, as the founder, there are some things that no one else can do in the company. So find out what those are, focus on those things, push as much responsibility down into the team as you can, and recognize the things that only you can do. And lastly, we'll talk about this a lot more, but create a mission and a culture that can sustain a team. Many, many things will go wrong in your startup. In fact, more things will go wrong than go right, because you're experimenting, you're learning, you're going to fail a lot because you don't know, you're trying something new. But your mission and your culture that creates a team—that is what will sustain you through that. Bad leaders. These are some don'ts. I have been unfortunately an employee, a direct report told what to do by people who manage by crisis and fire drill. They become dictators and egomaniacs, and they tend to talk too much and listen too little. I think those are the three biggest. Killers that fall— that founders and CEOs fall into in particular. And it comes hand in hand with some of the other really good qualities that a CEO and founder needs to have. So keep these 3 top of mind as you go through your daily interactions with your teammates, not your employees, but your teammates. And watch out for these because they're very easy to fall into as a CEO and founder. And yet they create a culture that, that breaks down very easily, loses resilience, And doesn't survive when things go wrong.

So I see a couple of questions here in the chat, and they're not necessarily directly related to this slide. In fact, I think we might actually cover some of them later on in the presentation. So I'm going to hold back on asking questions right now. Let's go to the next slide and keep going, and then we'll jump into questions.

Will do. And actually, before we do that though, Nick, I actually had a question for you about this, right? Sometimes what I've seen with bad leaders, the reason they talk too much, they don't listen, they manage by crisis, is actually because they're really scared.

Yes.

It's actually like a fear response. You're trying to— you're worried if you give up things that you think you should be doing because you're the founder, you have to talk a lot to prove that you know what you're doing. And that goes to your point though, giving up those things you're not good at, because as a founder, the reason you started your startup is because hopefully you have special knowledge about one thing that you are so good at, you can see over the hill that no one else can see. You know that that next reality is coming. You have that vision, but that doesn't mean you're good at finance. That doesn't mean you're good at sales. That doesn't mean you're good at marketing. You don't have to be that expert and then create this level where you probably have that fear. I mean, that's what I've experienced at least.

Yeah. I think you're exactly right. It's either fear-driven or ego-driven. I've seen both out of bad leaders. And But I think it's more often fear-driven because we're told as CEO founders that we must be good at everything, we must be amazing, we must be superstars. But I think you hit the nail on the head, which is, no, we're good at— we're really good at one thing. We just need to know what that one thing is. We need to capitalize on that one thing and use that to drive the mission, the culture, the values, and the direction of the company we're creating. That's our superpower. That's our, our super skill. Everything else, we should admit, we can admit that we are not expert at. I am not expert at HR, even after 13 years of working on startups. I am not an expert at HR. I am not the person who should be in charge of it all the time. There are other people who are far better than I am. And I can say that for probably 6 out of the 7 major topics having to do with startups.

You bring up some really good points with that. And there's a question here that kind of directly ties to it, but I've seen founders who are like, they're not technical. Maybe they can do a little bit of sales, but what they're really good at is like motivating people, that vision, driving home what they're trying to build. And because they were good at that, they recruited a rockstar team around them. And then now all of a sudden they like broke through the line of hyper-credibility. And so like, at the end of the day, like your job as a startup founder is to be that leader, and that and recruit that all-star team that could then elevate what you're doing to the next level.

Exactly. And we're definitely— you're jumping right into the segue, I think, of what we're heading into. Yep. So a few thoughts on team building. We're going to start by breaking this down by stage. There really is a difference as you build out a company on how you think about a team by stage. And there are things that are easier and harder depending on how many people you have involved with the company and what you're trying to accomplish. So at the beginning of the company, when you're a, you know, a garage startup, or there's just a few of you, the, the shared values component seems particularly easy, because there are 3 of you or 4 of you, and you all come in with a shared set of values. Unfortunately, this is usually implicit. And when you get founder issues, which is a source of friction among many early teams and is one of the 2 great killers of startups, The other being shiny object syndrome, which we'll talk about later. It's because they didn't sit down and actually make their values explicit. They didn't write down what they care about and why, and how they're going to organize their company, and how they're going to organize themselves, and how they're going to make decisions when there is a clear trade-off and no right decision, which is most of the time. So what I try to encourage people to do is, even when it's just 3 of you, Or 2 of you sit down and write out the values that matter to you. Why are you doing this? What do you care about in life, not just your company? And then create a set of values for the company that are going to be the foundation for the culture.

And Nick, before you go on, quick question for you. What percentage of companies have you seen where there are major founder issues that crop up and potentially either break the company or at least really derail it for a little while.

Yeah. Of the 25 that I've worked with, I would say 40% have some sort of major founder issue, where a founder leaves, or there is some crisis moment, or there is some major disconnect between founders. Is your percentage different, out of curiosity?

No, that's— it's mine. I've seen a little bit lower. But also, I think it does happen early on where people— one of the founders leaves, and then it is okay. And one thing I'll add to your point that I think is a really good one and talk about my own personal experience with Harry, my co-founder, and what we did at this very— when it was just us. I didn't know Harry from anything else. We got introduced by a mutual friend. One thing that he had already done before we met was write up his— I think it was like 60-line list of all of his qualities, where he was good, where he was bad, his issues that he had, all these different parts of himself. founder dating. And to his credit, he asked me to do the same thing. And we actually thought through that in depth. And I think I can say pretty happily from my perspective, and Nick has been a third party who's come in recently and been really a part of what we're doing, and I think he can say the same, is that we actually work really well together despite starting off not knowing each other. But we really did set those norms early on. Like, what do we care about? What mistakes did we see in previous companies that we didn't want to repeat? At AbstractOps. And we've actually been very explicit about writing those down. And we're on version 4, as an example, of our value statement. 4 versions in about 20 months of our value statement that we write down that are very explicit. We tell everybody in the team when they join what they are, how they work. And then we say we can update these as a team because the team is working on these together and they might change over time. But we've been very explicit from day one. And I think that's kept us strong and gotten us to where we are today.

Which ties directly into the transparency point as well. There's transparency between Adam and Harry. I've witnessed this directly many, many times, which gives them a chance to give direct feedback to each other and then go back to the shared values that they started out talking with, right? So always grounded in something. It's not just, hey, I think this, I think you think that. It's why do we think these things? How does it relate to what we're building as a company? Is it Part of our fundamental mission? Is it part of the values that we care about? So it gives you a grounding on which to disagree sometimes. And then the next stage is when you get to the first 10, and I— Adam and I have both seen this many times where people start to hire specialists too early. There are exceptions to every rule, but generally we want to hire generalists at this stage. We are still looking for people who can fill multiple roles, and the main reason is You still don't know squat about what your company is going to be. Even with 10 people, you have a vision, you have some idea of what your product's going to be, you have some idea of what your customers are going to be, but it's probably 90% wrong because all of us are 90% wrong at this stage. And you, you know, the job of the company at this stage is to learn, to get better, to find product-market fit. So hiring generalists in at this stage is still our preferred mechanism. It's what we do at AbstractOps. Still at 25 people, because we don't know what our needs are going to be. But we want people who can think across across disciplines and work across disciplines if when our needs change that they are able to take on multiple roles regardless the shared values are crucial so generalists and shared values if they have those two things you know then they are halfway sixty percent of the way to being a really good fit for us so the other. The last thing to keep in mind, because it fits into the other stages here, is these will likely be your first managers at the company because you're going to promote within because you have to. You know, that is most likely what's going to happen. So consider them your cultural center. If you don't hire for shared values in these first 10, you will have a very hard time creating any type of cultural center and holding it together. So highly encourage you to interview based on generalism and shared values at this stage.

So there's a question here that goes back to what we were talking about around vision. So this comes from Drago. He's saying, what if you have the vision but not the skills to execute on that vision? What would you do? Do you partner with people that can build it with you? He believes that execution is more important than ideas.

Yeah, Adam, I think we have a slide on that later, right?

Yeah, a little bit. Yeah, I mean, I'm smiling a little bit because I think, Drago, I would push back on your thesis or premise in the first place. I think every founder has the skills to achieve their vision to some extent. If you're non-technical and you have a technical product, you clearly need to recruit people who can help build that product, but then that comes down to your ability to express and explain the vision. And so if that is what you need to do, then you need to find a way to Be good at storytelling, be good at explaining why someone should join your team and join this vision as part of it, and find the right team. So I think you do have— I would argue every founder has a skill set to get to the first 10 at minimum. If you don't, maybe you're building the wrong company then, but I would argue almost every founder does in general to get to the first 10 people at least.

And we'll talk about this a little bit more, but There is a balance between ideas and execution people. And, you know, we have a theory about that, but it's just a theory. But I do think you need both. So there are people who are really good at ideas, really good at vision, really good at recruiting, really good at motivation. And there are people who are really good at taking something, running with it, and building it and executing on it, and are detail-oriented in that way. And those are very rarely the same person.

There's another question here, and this goes back to the previous slide you were on. Comes from Nikhil. As a founder working 16 hours a day with little sleep and always managing crises, I know that I'm not doing these things, and you're probably displaying many of the negative indicators. First of all, Nikhil, thank you for being honest. Where do I find the time to step back and manage these? So this kind of goes back into like leadership and time management. Do you have any tips for Nikhil?

I'll take the first crack at it and then Adam would love your thoughts as well. So Nikhil, the first thing that comes to mind is the thought about the 3 things that only you can do. So if you have any other people on your team, you're working 16 hours a day and you're not getting any sleep, then the first thing that you want to do is try to push responsibility to other members of the team as much as you can. feel comfortable doing, actually well beyond your comfort zone. Push as much as you can to other people and focus on— write down a list in the morning. I mean, I actually do this. I sit down in the morning and I write down what are the 3 things that only I can do today that I need to do. And if I get those 3 things done, it's a good day. If I get anything more than that, it's a great day. And if I, if I don't get those 3 things done, but I only get 2 of them done, you know, that's pretty good. And then I stopped worrying about trying to get The 25 things done, because it will never happen. I don't care. I'm a big fan of GTD. I don't care how good you are at GTD, getting things done. You will still not get your entire task list done. Your inbox will never be truly clear because there will always be things in the background or constantly new emails coming in. There will always be more to do. But did you get the things done that were important that only you could do? And did you empower the rest of the people on your team to do the rest. There is also a dimension of getting ahead of fire drills, which is hard to do when you're in fire drill mode. And one of the things that we've done at AbstractOps, which I've done at other companies, is actually slow your growth. If you are in fast growth mode and you're constantly under fire drills, you're going to burn out your team. We've seen this happen with a lot of companies, and you will You will crash and burn. In, uh, I drive race cars for fun. In, in race car driving, there is an adage which works really well for startups, which is go slow to go fast. So when you're first learning to drive, you go out on a course, you drive really slowly because it is much more about the technique. It is much more about learning the line than it is about driving really fast. When you learn the technique and you learn the line, speed comes naturally. For startups, I believe there's a very similar thing. You focus on the vision, you focus on your culture, you focus on creating internal processes to the level that's required, you focus on creating a repeatable, good functioning organization, which we'll talk about more later, then the speed will come, but the fire drills get camped out. Because of that. So you may need to take a pause, you may need to slow your company down and say, we're taking 2 weeks to get our house in order, to put all the fire drills out, have everybody take a breath, and then reset. Adam, any other thoughts?

No, that was, that was perfect.

Okay. That was fantastic. The thing that I'll add, and what I've seen from experience, kind of having too much to do and not enough time, is exactly going back to the 3 things you mentioned, right? And I've always categorized this as like offense and defense. You as the founder, like you have to move the ball downfield every day, right? Without exception. And it turns out that if you focus on those things first, you know, in terms of your day, you're much better at doing that quickly and efficiently. And then all of the things that like, you know, kind of come after that, like the defense, the like Responding to emails, all that. Sometimes those things will just resolve themselves. And you also have to be okay with letting things die. Like sometimes not responding to an email is better than responding to one and then creating 3 more emails as a result. So you have to get good at like applying your time.

Yeah. There's actually one, the takeaway for me that comes to mind is ruthlessly prioritize.

Yes.

That is what you need to do as a founder. So, but maybe go through these ones quickly because most of the audience is smaller anyways, and we're already— we got a bunch more slides to go, so I want to make sure.

Yep, we're behind, so I'll do it quick. Um, 25 people, which is where we are at Abstract Ops, everything's starting to stretch and stress out. You need to implement some level of process. The amount of process is really dependent on both your culture and your tolerance for process. You're bringing on your first specialists. And as a founder, you need to think about what you're giving up because you can no longer do everything. You can no longer even touch everything. So push more responsibility down into the organization. If you're doing a good job as a founder, you're becoming more and more irrelevant over time. You're limiting the number of categories of your relevance over time. And you're becoming much more about the vision, about the motivation, about the recruiting. that's your specialty. And at 75, that's even more true. Um, but those, those people that you hired at the 10-person company really become the cultural center, and they will make a huge difference on how your company scales through 25 and 75.

I think, Nick, the one question for you in a sense is like, I think people have a mindset though, is as you get to 75— 25 and 75— and as a founder, you're giving up so many things, you might have this worry or feeling you might lose relevance in the company. And so like, wait, wait, now I've given away all these things to these great experts. What am I supposed to do as a founder? How do people avoid that feeling? Or what should they remind themselves of that like, you're still really important?

I would say maybe you're not as important as you thought. And that's great. At 75 people, you're a teammate, you're one of many, you should not be the center Of everything that occurs at your company. You should be able to go for a week and take a vacation and your company still survives. In fact, it may thrive while you're gone. Something interesting might happen. So be okay with being irrelevant. That's all right. Be okay with people who are so good at their jobs and so motivated by them that they're making your job easier and you actually get to take a vacation for the first time in 4 years. That is great. Give yourself a pat on the back for that.

Awesome. Um, let's see, did it change? It like partially changed in my screen. There we go. Okay. Um, uh, so, um, look, we talked about there, one of the questions, right, was about idea— ideation, execution, um, and what sort of people you're going to have on the team. Um, look, on your team itself, you really want to focus on mostly having execution people. Um, you want people who are going to put their head down, get it done and be really, really focused. Some people, you need idea people. And especially when you hire your first 10, you want generalists who can have ideas because arguably, there's actually a lot of studies about this. The teams that are the most successful, not just at startups, but scientifically, are the teams that have people with a lot of different skill sets that they're bringing to the table because they have ideas from something like, they may think, hey, I can apply this total idea that no one had ever thought of, to this new thing we're doing here today. That's wonderful. And you can bring this sort of melting pot of ideas into something. But as you get bigger, you want more people who can just execute. You are just an amazing person at this. I'm going to go let you run. And then around the leadership side, it might be a little bit more of the CEO might be someone who is that idea person, which is great. And maybe you have another co-founder who's a little bit more of the execution person, which you do sort of need, especially early on. And then as you grow, you still can have those skill sets, especially in leadership positions, because you're hiring more people on your teams for execution, not as many for ideas. You'll still need them, and you want to create a culture that allows and enables new ideas to come to the top and float up. But you want to focus on that. And Abhi's last point is, it's super rare for there to be founders who are both idea people and execution people. You're almost certainly one or the other, and you should make sure to either find a co-founder or team members who can balance the scales on what you don't have.

Adam, do you mind talking briefly about the relationship between you and Harry and as an example of this?

Yeah, totally. So I've been a founder and CEO of my own companies before, but at AbstractOps, I'm co-founder and chief operating officer. And part of that is because I think I have a lot of ideas and I think I'm pretty good at that, but I'm also better at executing. I enjoy that part a little bit more. I also think, frankly, as a founder, you have to have a level, like a CEO founder, almost a level of just like, we can do anything. And sometimes when you're an executor, you're much more focused on just, I need to get it done, which means you have to be a little bit more grounded to reality. And so my co-founder Harry, I hope he won't mind me saying this, I think he has a million ideas and they're amazing. And they have absolutely helped us get from where we were 20+ months ago when we started to where we are today. And they're going to be instrumental to getting us to where we want to be in the next 2, 4, 5, 10 years. And those ideas are brilliant, but at the same time, I'm the person who will push back and say, hey, look, I love all these ideas, but let's make sure, like, let's prioritize them and then let's figure out what we can execute on when. And I think that's been a really healthy balance for us as we've built out AbstractOps.

One of the great things that I've seen between Harry and Adam is that they give power and respect to each other. So the idea person gives power and respect to the execution person and vice versa. so that they act as a balancer, because only one— only having ideas or only having execution is going to blow up in your face.

Yeah, absolutely. Um, and this key warning here, uh, for any founder who's out there who might be like this: watch out for SOS, shiny object syndrome. Um, I've worked with founders and co-founders who have this. Nick has as well. It basically means Before you even have a chance to go finish off your current project, you see some shiny new object over here. In this case, lots of shiny cherries. Which cherry is the best? Is the image that I thought would be appropriate here. You keep trying different parts of different cherries. You never finish a whole one. You never get to the bottom of the bag. And then you end up getting sick because you ate too many and you didn't think, hey, what's the right way to actually— like, how many cherries can I actually handle eating right now? In which case, you'll enjoy your cherries and not get sick. And be able to grow your company. It's the same sort of thing for a founder. So if you are this person, one, acknowledge that about yourself. I always— you first need to acknowledge it about yourself. And then 2, find people on your team who you trust to push back on your SOS and can say, hey, hold on, these are great ideas, but let's wait till we finish this first one. We agreed that this was our goal for the next quarter. Let's finish this goal this quarter before we move on to the next.

There's another analogy for those of you who are minimalist materialists out there, which is that one shoe in, one shoe out policy. So you can only have so many pairs of shoes in your closet at one time. If you buy a pair of shoes, a pair of shoes has to leave. That's another way to handle this, which is a ruthless prioritization of our company can only handle 2 major priorities, maybe one. Uh, if we take on another one, then one has to get booted.

Yeah, focus. To me, what I tell every founder I work with, um, focus is the most important thing that a company can have, and it's how you can be more successful than all of your competitors, because you can be laser-focused on a single goal, whereas they might be distracted by a bunch of different things. Um, and that's why every startup can attack the big guys, because they have— the big companies have 10 different things they're doing. And so you have an opportunity there, but if you lose that opportunity and you lose your focus, your company will fail. So basically, what are the cultural things that lead to differences between success and failure? We've talked about this a lot and there's a reason for it, which is having those values around transparency, trusting your— treating your teammates like adults, consistently applying those values leads to a self-reinforcing structure that enables a strong company to grow. It enables your company to weather the body blows that it's going to have. Your companies, there are some certainly that just are rocket ships and just totally take off, but most of them are a little bit like this image where you're building it and guess what? Before it's finished, it could get blown over. And you have to have a team that's able and willing to pick it back up and stand it back straight. And that— the difference between that and the resiliency that you build is all about the culture, the shared mission that you share, the transparency that you have. And that becomes, of course, the glue that will help your business be successful. So a few key things there, like hold everyone accountable. Yourself included, by the way, as a founder. You don't get special privileges because you are the founder in any way. Follow your own rules. If you don't, you destroy your cultural mission in general. So it needs to be applied equally across the entire company.

So Adam, take one of our values at AbstractOps, like trust or something like that, and what's an example of A time when that glued a team or destroyed a team?

Yeah. Um, um, yeah, so probably like a good example of trust is, um, actually a really good example of this, um, is why Nick joined our team. Um, so, so we had a project that we wanted to do, um, and there was disagreement between Harry and myself about how we wanted to do it, what sort of person we thought would be perfect for it. And when we should get it done. And we decided, after lots of discussion, A, trust my co-founder that this is the right direction to go into. Then he trusted me to help find the right person for it, which was Nick. And then really go forward and use that trust to go help us build this out. And it's something fairly big within the company that the whole company had to get behind and understand. And it's not perfect. We have a long way to go with it still. It's a project that is definitely not complete. But being able to have that cultural value of discussing why it's not complete, the challenges that we've had, how do we learn from it, what are the takeaways, and how do we work with the various people on the team who are working and building this, I think, partially stem from us being strong. I think if we weren't as strong culturally as a company, it could have taken us in a fairly negative direction. Yep. So, um, Nick, this I think is you for org structure.

Yep. So to get a little bit more into the weeds here, let's talk about org structuring. So as you're building out a company on a strategic level, there's 2 major schools of thought here. One is to plan ahead of need. So, and the advantage of that is that you get to train people. You're not doing fire drills all the time. You're, you're basically trying to build up your company. And prepare it for whatever growth is coming. The other is desperate need drives hires. Now, I don't like fire drills at all, but I actually fall into the school, and Adam does too, we've talked about this, of leaning towards desperate need drives hires. And the reason is that as a startup, you have very limited resources all the time. When you're a big company like Microsoft, okay, sure, plan ahead of need and hire people and train them up and You be ready for growth. Fine. At a startup, you don't have that luxury. If you're hiring generalists and you're, you know, you're in the 10 to 25 people range, you can do desperate need driving hires as the general bias. You cannot predict very much about your company. So you get to be iterative in this mode, you get to hire generalists into this mode, and you get to move those generalists around as you learn. So I tend to sit in the second school. Because you don't know what your company is going to need, you cannot structure it correctly because there is no correct at any given moment. You don't know what correct is going to be in the future. Therefore, again, hire for generalists. Structure the company around knowing that you're going to have to change things, knowing that you will need to be flexible, and you're looking for resilience, you're looking for flexibility. You must be ready to fire, and we'll talk more about that a little later on, but you will not get this right. You cannot guess what your company is going to need. There's no way to know, even in an interview process, whether you're hiring for the right values or not. So you might hire, you might end up firing for that reason. You might end up firing because your company changes direction. You have a pivot, you learn, and you change. But do be clear about the role and write a JD for it. So you're at least starting from a place of having a stake in the ground. It is much easier to edit than it is to create. So put a stake in the ground that you can edit around, that you can pivot around, rather than saying we're just hiring for the company, we just want a person. No, create a role, start with something, and then hire generalists who have flexibility to change that JD into something— that job description into something else.

Yeah. And just to add, really, I think it's so critical to make sure you're clear about, to some extent, the role that you're looking for and why you want that person. Because if you just hire people, like, they'll figure it out. They will if they're generalists. But if you don't quite know why or how you need them, that sets you and up— both you and them up for failure. So if you're not willing to take 30 minutes or an hour to write up a really clear job description about your needs, You shouldn't be hiring.

Yep. Yeah, that's a, that's a good point. So what does desperate need mean? It means that you can clearly define what is the huge pain point for you right now that you're willing to hire another person to fill it. All right, let's talk about tactics. So just wanted to get a little bit down in the weeds here for a minute, which is, this is actually an organization chart from the last company I founded. I went back and found this from our seed round. This is a chart I actually created, which was looking out 6, 18, and 36 months from founding of who we were going to need and why. This was 95% wrong, but it gave us a stake in the ground in which to pivot on. So we went out and said, okay, well, who do we need in the next 6 months? We need a scientist plant breeder and we need a technician. We went out and hired those people. Turns out the technician we got was not a good values fit. We ended up firing them and getting a different technician. And then we brought in a lab manager called tissue culture faster than we thought we were going to because our needs changed. But it gave us an outline to work with. It was something that we could then edit and work around rather than just kind of flailing in the air. And it did 2 things. One, it gave us some direction internally, but 2, it gave us really good direction with investors and saying, We know that this is speculative, but this is the general plan of how we're going to grow the company, how we're thinking about that growth, how we do— this drove the financial model about how many people we're going to hire and when. It was wrong, but it gave us a stake in the ground. So I'm just arguing to put a stake in the ground, do it in some version of a, of an org chart that changes over time. It gives you a visual approach to this whole thing. It allows you to get some grounding in what you're going to be doing, knowing that it will change as you learn.

So interviewing, and this goes a little bit to some of the stuff we were just discussing also about like creating a JD, because you can't interview unless you've created a clear JD about what you want to interview for and why, right? If you don't know what the position is, you don't know what the person might be doing, it's really hard to ask the right questions and figure out what, what they're going for. Um, so some of the key things to look for— hiring is its own massive topic, but we're obviously going to cover some high-level pieces here. Um, first of all, don't try to like be perfect about your interviewing. It doesn't exist, not, not possible to do. Um, second, really try to avoid entitlement. Um, it can be hard sometimes, but you don't want to find— you want people on the team who are humble, um, which by the way, once again, comes from you culturally, hopefully, to be humble too. But find people who are there because they believe in the mission, they're excited, they're not there for just promotions or to get rich. I mean, it's helpful, it's nice if your equity keeps going up in value, that's a wonderful part of it, but hopefully they're there because they're really enjoying their job and they're just there because they want to have fun and they want to learn. That's one of the best parts of working at a startup is you have this opportunity to learn and try so many different things. Even for me, I've been in startups a long time. I'm learning new things every single day, and that is worth far more than, frankly, my low salary that I'm making right now. Sure, I think my equity will be worth a lot someday, but I learn new things every day, and that's by far the most important part. And we want to hire people who feel the same way. I'm not entitled to my role or my job unless I constantly prove that I can do it, and it's the same for everyone else on my team. Um, you know, watch out for people who are really— who are a little fluffy, like, like these puffins here. Um, watch out for them. Uh, and, and once again, go, go for folks who really want to focus on achievement and getting things done, not about showing off about a title. And we'll talk about titles a bit, but like titles or other things, it's just like, get things done. Um, same thing, shared values. We talked once again about values so much. But ask these questions, right? Do you have a history of acting for the values your company cares about? Ask their references that question. Has this person worked in a values-driven way at your company? Are they demonstrating a history of achievement? And are they really excited about the mission and vision of what the company is doing?

Adam, what has been the response when you show people the AbstractOps values?

Yeah, so it's a great question. So we are— yeah, thank you for that question, Nick. We, we at Abstract Ops, once again, one of our values is transparency. So all of our values are public. Um, all of our compensation is public as well. So people are curious what our compensation structure is, it's all public. You can find it for every single person and sort of level that we're hiring for right now in different parts of the organization. Um, we are very— there's a lot of reasons why we do that. But one of the big ones is frankly, people appreciate the transparency. They want to know what they're getting into when they go into it. They want to know the reasons behind it. We try to be really clear in explaining it, and it's actually helped us recruit. So we're not massively public about things, and with good reason, for a bunch of business reasons, but we still have no problem recruiting amazing talent. And part of it's people look at our job description, our job pages, like, wow, like, these are great job descriptions. The way you talk about your values, what you're doing, why you're doing it, how you're doing it, um, feels so transparent and frankly really different. Um, it actually has become a recruiting differentiator for us. Yep. So like, one of the key things, and this is a founder thinking about this own thing, is once you start doing a ton of interviewing one of the big questions you have to ask yourself is like, how do I fit into this stuff, right? Where, where do I fit? Um, and, and at every step as you go through those stages that Nick talked about earlier, at every single step you have to ask yourself, um, do I want to be the CEO or even a C-level person? Um, that doesn't need to be the case. Uh, remember, like, you're an important person in the organization no matter what your title and what your role. Even if you were the founder and you might have just an individual contributor role, just doing IC work, you still have massive value because you were the driver of that culture. You were the keeper of the flame in a sense. And that might be your only role, but that is okay. So think about that in depth. Is being CEO or a C-level person bringing you value for what you care about? If not, or even if it is, What else could I be doing to drive massive critical value? Those are the questions you should be asking. And once again, remember, you will always be a founder. You don't have to be the person who is sacrificing every part of your life every single day for 10+ years. That doesn't have to be you to build a successful company. And arguably, if it is you, you probably won't build a successful company. Once again, there are Counterexamples to that, but there aren't very many. Most companies are successful because they have a great team and leaders who have the understanding about themselves to step back and hand off their pet things to people who are better than they are.

Just to chime in about that for a second, everybody focuses on the exceptions, the Steve Jobs or God forbid Elon Musk. I know, that guy. But the rule, the vast majority is, it's the same rule as ideation and execution. It is so rare. In fact, I've almost never seen it that the same person is a superstar at ideation and a superstar at execution. That's not even true for Elon or Steve Jobs. It is so rare. that the best person to be CEO at a brand new company is the best person to be CEO of a 10-year-old company. That is almost impossible. I'm sure there are exceptions, but do consider at least what your role is and what you focus on, if not entirely what your title is and, you know, how the company is organized at each of these stages.

So Adam, here, just in the last 5 minutes that we have left, I feel like we should have made this a 2-hour-long session because there are so many really, really good questions in the chat that I want to get to. But I also know that people are enjoying actually like learning from this. So why don't you keep going, and then, um, people in the audience, feel free to put in your, uh, your questions, uh, but we do have a hard stop in about 6 minutes so we can transition over to the networking part.

I was gonna say, we can go over a little bit if we need to, but if you guys have a hard stop, we can, we can hard stop too.

Okay.

Yeah, and always happy to, uh, if we need to do a follow-up session or something like that, that's also fine. So, um, performance management— there's formal versus informal performance management. Formal meaning you're doing it with a piece of software like Lattice. Informal meaning— and you have a prescribed process internally. Informal meaning you're just meeting with people and talking with them. It is definitely defined by both company stage and company culture. You need it to be formal generally by Series B, and process-oriented cultures will do this earlier. We're doing it now at AbstractOps, is essentially a 25-person company, but it is culture and company dependent. Regardless, you want to keep it fairly lightweight and structured to the point that it's easy to understand, so you need to do weekly one-on-ones, monthly check-ins, a promotion cycle, and annual reviews. If you have those elements in place, you are giving the basics of performance management across the company. And then at 25+ employees, we highly encourage people to move to some sort of management software that specializes in doing this to remove all the friction in actually getting this done, um, in just sending out reminder emails and coordinating the right people to write peer reviews and things like that. Um, but these can wait until you get to 25+.

Yeah, and you don't want to overdo, um, process, of course, at companies. Like, that's always a danger. But you don't want to underinvest in this because as you grow, if you don't put this in place soon, even, even like super informal, it will come back to bite you, um, over time. And that's what you got to pay attention to. Uh, promotions. I'll go through this really quick, but the high level here is basically like, it's really tough. It's an art, not a science. Um, the clearer you can be with your team about how— what you're doing and when you're doing promotions and why, instead of it just being completely ad hoc, the better. But it's still really tough. There are people who are going to get passed over for promotion when they think they deserve it. It's going to take longer for some people than others. And it's just, it's hard. One of the key things, of course, you always have to pay attention to, including with yourself, to be clear, is this idea of a Peter Principle where you actually promote someone beyond their level of competence and they sort of topple over. So it's something to pay Close attention to as you grow. Titles. So this one is something sort of near and dear to our hearts at Abstract Ops. So we, over the summer, we got rid of basically all titles. The only people who have titles at Abstract Ops now are myself and Harry, mostly because we deal with a lot of public-facing folks, so like investors, things like that. No one else has titles. We got rid of all of them. The reason we did it at a high level is in the end, titles are cheap, so they're easy to give out when you don't have a lot of cash. Like, oh, you're a VP, you're a director, you're C this, C that. The problem is what happens as you grow? Now that person who's your chief marketing officer, they're actually not that good at marketing, or maybe they're really good at one part, but they really should be like an associate level. Maybe they were perfect when you were a 3 or 4 person team. How do you change that? And then you take away their title, they don't feel good anymore. So I would remove titles, especially going back to that idea of who you're hiring and when. Um, you want to probably hire people who are low ego, so people don't need— shouldn't need to have a title to prove that they are doing great work, that they're excited by what they're doing, that they're learning a ton of things. Um, so just don't focus on it. There's a link here to a great article by Gokul. It's a fantastic founder and leader, frankly. Um, but just be really careful about titles. And then how you do direct reports and executive, we have DRIs, people managers, stakeholders. You can have ICs. And going back to promotions, you can have ICs and also have individual contributors and people managers. You can have different tracks for all these people and they can still get leveled up. They can still get promoted. They can still be paid appropriate amounts, but you can just be levels. And they can describe their work if they want to put it on their LinkedIn, but a title A title is really just an external-facing thing, which in many cases would imply that people who care about it care more about how they're perceived externally versus how they're perceived internally. And in the end, you want to hire for people who care about the internal part of what they're building with the company, not how a future manager or company might view them.

So Adam, I mean, this topic is huge, and obviously we have a lot of demand from founders asking questions and things like that. So I would actually propose Maybe we do a hiring and team 2.0 event in the next month or so. Maybe like we'll try and squeeze it in before the holidays, um, because it is such an important topic and it's resonating with the founders. Um, so let's go ahead and do this just because we have 1 minute left. Yeah. Let's go ahead and bring this party over to Airmeet. And Adam, if you still have a couple of minutes, like why don't you jump over there? You can, um, join one of the tables, uh, and start answering some of the questions. And Nick, you could kind of join a separate one if you have time as well. And then we'll plan to coordinate another session. This was really, really great. It was super informative. We're going to send everyone the video from this, and then we can kind of dive into other topics as the, the next event unfolds.

Perfect. And Ryan, I think the link— if maybe it's in there, I want to make sure I have it somewhere for everyone.

We'll paste it in here right now. And then just to everyone who joined us today, Sincerely, thank you for joining. As I mentioned, this is recorded. We're going to send it out to everyone who's registered. And for founders, I know we have a lot of enrolled founders in the programs, and so some of you are actually jumping to join your, your session right now. But if you're not enrolled in the program, if you're interested in connecting with guys like Nick and Adam to help you with your startup, we're enrolling in 6 different continents right now across the world for 2022 programs. So Feel free to respond to any of our emails if you have questions. And then Veda is going to put the link to Airmeet in the chat, and we'll see everyone at the next one. We're going to leave this, this line open just for a minute so everyone has a chance to transfer over.

Thank you, Ryan. Thank you. And the Founders Institute team really appreciate it. It's always fun.

Of course, everybody.

Thanks, guys. Take care.