Building a Kick Ass Team – Part II
4. Reward Performance - Anyone that has worked in tech and has a thorough understanding of this business knows that the output of one great engineer adds more value to the company than the output of one hundred average engineers. Unlike the services industry which prides itself with the numbers of warm bodies it has on its rolls, the best tech startups pride themselves for being able to create huge value with the least number of people. We all live in a capitalist society and the laws of capitalism are designed to reward the best.
Unfortunately in our Indian tech industry I don’t see many companies that demonstrate that they understand these principles. Take again the case of how I got the 5 key guys from Zoho to bootstrap the Zimbra Ajax development team. If you are a company with a great leader who can sell prospective employees on the companies vision and their ability to become rich if they took the risk and joined you, you need to deliver this vision to them. Zoho’s hiring philosophy was to get lots of young graduates very cheap and train them on some technology platforms and spend a year or two to make them productive and then contribute to their product line. But, what they lacked fundamentally was the ability to spot the stars and create a culture and a reward system that made it impossible for the star employees to leave the company. In my 2.5 years from start to finish of Zimbra we grew to 40 employees in India, our attrition was zero and I had to fire one person who was a hiring blunder. I can also confidently state that most of these resources were A+. I just made sure that we only hired great people with great attitudes and a will to succeed, created a nice reward system based on equity and cash compensation and provided an amazing work environment where people loved coming to work and delivering. Let me explain how this worked. The Zoho engineers were always big fans of Zimbra as we had done pioneering work in Ajax and there was a lot of buzz around Zimbra in general in the blogosphere. When they learnt that we were opening the India office, I started to receive resumes from these folks. In a week I must have received about 8 resumes which immediately told me that something was amiss at Zoho. When I talked to these folks and we put them through the interview process, they all turned out be the stars from Zoho. What is common with these star programmers is that they are looking to 1.) associate themselves with a great company with great leaders 2.) get recognized for their work and 3.) get rewarded for their good work. When I learnt what they were paid for their level of contribution it was clear why these guys wanted to leave. Here was a set of young engineers who were doing cool Web 2.0 product work in India and were good programmers that were being paid at the level of the services industry. I hired these folks by offering them well over 50%-100% of what their previous employer was paying them. After six months when I realized that we had landed on a gold mine, we raised their salary between 50-100% based on contribution and offered them more equity. Does this mean that you can simply buy anyone with cash? Not really. All I am pointing out is that unlike the Valley where the reward system for performance and excellence is well understood by most companies, in India this system is not that well understood as some founders/leaders with services background tend to carry the baggage from the services world into the product world. It is also super important for the company to be performing and for the world to acknowledge it. This keeps the employees motivated as well. Zimbra was always doing great work, winning accolades and was one of the most buzzed company as the bloggerati rallied around the company. It is very important to get a buzz going around the company so that employees feel like they are part of the success.
I will be writing an article on “Winning Company Culture” where I will discuss the ingredients of a great work environment which I think are key to the success of a startup.
5. Play the roles of Brahma the Creator, Vishnu the Sustainer and Shiva the Destroyer - Startup founders are the creators. They conceive an idea with which they want to change the world and create value. They rally a bunch of people to see their vision and help them execute it. They build amazing teams that pull off some of the greatest feats. However, most startup founders I have met are some of the nicest people that do not like confrontation. As a result, they are slow in fixing problems in the company like firing underperforming individuals or killing a product line that is not delivering revenues. Startups have to be very nimble and not fixing people or strategy issues can mean the difference between life and death for the company. The greatest role the leadership can play is that of the destroyer – someone who constantly looks out for weakness in people, process or strategy and can swiftly take evasive action by destroying the weaknesses to put the company back on the right track.