Tuesday, November 17, 2009

Request for Feedback: scaling up to a larger founder team

I'd like to request comments on the following concrete proposal for how a Silicon Valley founder team might be productively scaled up to four, five, or even six founders.

Management. The founders periodically elect a manager from amongst themselves. The manager is expected to act in an authoritarian manner and pursue aggressive schedules. Where possible, the manager delegates responsibilities to other founders, who are also expected to act in an authoritarian fashion within their area of responsibility. This allows the startup to make decisions quickly despite its larger size, and also fights over-engineering: software can still ship even if there's no consensus that all issues have been solved to everyone's satisfaction.

Communication. Rather than write down brief status reports, random screenshots are automatically taken during the day. At periodic intervals, each founder then walks the rest of the founder team through his screenshots, using them as visual aids to explain what he's been working on. This allows the other team-members to understand his activities and make suggestions. This also provides more opportunities for team-members' work to be recognized. Watching and listening to occasional visual status reports is probably not a mentally taxing activity, and so should enhance communication and coordination without greatly increasing mental fatigue.

Equity. Founder equity vests gradually over the course of three years, vesting at a reduced rate throughout the first six months. Any founder can be dismissed at any time by a majority of the other founders, if they are not a good fit for the organization. Founders are required to verifiably work for at least seventy hours per week, not including breaks and meals. Founders are expected to get proper sleep, nutrition, and exercise. Founders are required to abstain from recreational drugs; if enforceable, I would even favor a clause that founders forfeit equity if they fail to abstain. The goal of this equity strategy is to encourage good work habits and to reduce tensions and conflicts over perceptions of unfair workload distribution.

Many aspects of the proposal are expected to be tweaked or replaced as one gathers evidence of what works and what doesn't. Any comments are welcome on specifics or the overall approach, either by posting comments below or by sending me email, but I'm especially interesting in hearing:

  1. Have similar approaches been tried before, and what lessons were learned?
  2. If you're a software developer, would you tilt towards being interested in participating as a co-founder in such a startup?
  3. If you're in a position to hire consultants, would you tilt towards hiring such an organization to provide consulting services to you if it provided appropriate consulting services?
  4. If you're a VC, would you tilt towards funding such a startup?



I think more than 3 founders is crazy for most software startups. I haven't seen that many software teams of senior people produce really coherent good code when scaled much larger than three or four senior members. Six founders is a lot of chiefs. Do you need, say, your entire executive staff on board as founders to start out?

And the attitude toward manager as authoritarian is truly off-putting in a start-up. Simply making decisions quickly does not mean making them well. Shipping software without consensus of senior people or even them necessarily feeling well heard or consulted (the authoritarian part) is a formula for disaster.

Random screenshots don't mean a damn thing to many types of early development. Assuming that everyone does their best work or that you want them to work at less than their best for 70 hours is insane. A start up should be concerned with quality, not quantity.

And what is this about dictating founder's personal habits? Are you aware of how much of Silicon Valley resulted from the effort of techno-hippies? You can stuff your idea of how founders should work. I would never ever work in this kind of BS setup and certainly not when taking on the major challenge of being a founder.

At this point I don't see what is "rational" about your comments.


I'm not particularly keen on the prospect of working 70 hours a week; I suspect I would run out of juice some time before that, and have to pretend to work to maintain my stake in the startup. One programmer I know who is fairly productive (gets paid $180K/yr) says that he actually gets sharply diminishing returns when he works more than 36 hours a week.

I guess I might somehow be tempted to work on a startup like the one you describe if I thought I'd end up significantly richer, but I think I'd do much better psychologically working with a few friends I trusted thoroughly, operating on a consensus basis.

Rolf Nelson

@John is your programmer friend heads-down on programming all the time? If so, I wonder if varying tasks more and having an explicit strategy for reducing mental fatigue would help (for example, spending more time talking with users). Of course, if his main goal is to be happy, he may very well be pursuing the right strategy anyway in terms of hours worked.