Finding a needle in a haystack
Finding a needle in a haystack and other thoughts from Silicon Valley
If you had to find a needle in a haystack and you had a dollar, what would you do?
You might be wondering if this is some bizarre post on obscure quiz questions, but no, on a trip to the US West Coast in March, I learnt that it is just the type of interview question that you might face as a potential Google employee. (Not sure how to answer? One possible answer can be found later in this post)
Learning how the Silicon Valley elite think and function was the main aim of the Learning Journey to San Francisco that captured the attention of 18 'willing to learn' business leaders from the UK. I was honoured to be part of this group.
Access to founders and senior employees of companies such a LinkedIn, salesforce.com , Symantec, DPR Construction and Plantronics isn't an everyday opportunity and as you might imagine, the group wasn't made up of everyday people. I was surrounded by a group of people who had growth, innovation and leadership on their minds. Listening skills were being honed as we embarked on a unique opportunity to try and reverse engineer some of the Valley's secret sauce.
After 10 intense meetings in three and a half days, I'd say that the answer turns out to be simpler than you might have thought: 1. Network, network, network 2. Iterate, iterate, iterate
Sounds easy? No one said it was rocket science. But it does take massive commitment and a lot of hard work. It also takes clear thinking and plenty of guts. The work ethic in the region was as palpable as was the fitness culture. Everywhere you looked competition was rife. From long streets lined with restaurants to hundreds of boats in the bay racing to the windward mark on Sunday afternoon. Everyone here was hungry. Everyone here wanted to be the best.
At Keiretsu Forum we learnt that they are positively jealous of the EIS scheme that the UK offers (and well they should be, it's one of the best government policies the UK has), however, they completely reset my thinking on their business model. I was up for a confrontation as to their practice of charging $2,500 to companies to pitch to their network. However, it turns out that they don't charge any success fee and they don't take any warrants. As a company, Coracle has just raised some finance and for a small part used the services of a company called Envestors. They charged us £500 to pitch to a small group. They take 6% of funds raised and a further % in convertible options, warrants. I'll take the Keiretsu route any day over Envestors next time around. And it's not just down to fees. Keiretsu demonstrated first hand by letting us sit in on a pitch how they vet companies before putting them in front of investors. The sense of urgency, the focus and advice that was on display set them so far apart from the UK equivalent that it was literally like chalk and cheese. By not taking success fees, Keiretsu were focused on preparing companies to pitch and that means they added buckets full of value to the process. I salute you.
But I should rewind to our first meeting, Symantec, because if you ever wanted a lesson in preparation, here it was. Our hosts were so well briefed that I started to wonder if their ability to analyse data on us was inspired or paranoid. We were bombarded by the personable Dr Zabriskie, “Dr Zee”, evangelist. At the time I think there was almost a snigger at the title, ‘evangelist’, but reflecting on the meeting I completely understand why this role is totally inspired. The ability to communicate should never be under played. It's the networking thing... We learnt that as much as 2.7 zettabytes of data might be created this year and that we need companies like Symantec to keep our data safe. Despite our best intentions we all have a tendency to treat all data as the same, but it isn’t: some is more valuable than others. The trouble is we don’t know which bits are really critical and so Symantec innovation has a lot to do with adding layers of intelligence under the information veneer to help protect us from the threats. Stephen Cullen (Senior VP SMB and .Cloud Marketing) provided insight into the innovation culture at Symantec and pressed home the point that innovation should to be part of everyones responsibility and that a culture of working in iterative steps, prototyping to get feedback and failing fast when necessary is the key to the success of a company like Symantec.
Salesforce. As a customer of Salesforce, I was a bit biased going into this one. Was I disappointed? Are you joking! No! These guys are phenomenal hosts but the key to me was the atmosphere in the office. There was a real buzz about the place. When the hot water in the thermos ran dry, Salesforce chief scientist JP Rangaswami hit the support button on the iPad that controlled the facilities in the room and within seconds a tech dude appeared. Much laughter followed about how we didn't really need tech support, just hot water! But rather than look confused and like his time had been wasted, the tech support guy instinctively understood that here was a feature to add. And I bet it has been! Woodson Martin, Clarence So and JP all provided valuable insights into the company culture, but a few comments really stood out for me. - When it comes to launching a new product the management team look at the resources available internally and ask themselves which product to cancel this year in order to give 30-40% growth next year. Understanding that next years revenue isn’t going to come from this years success and putting products in place to help transition requires bravery, transparency, trust and a general willingness to accept that long term growth requires constant iteration. - “Let tactics dictate strategy”. This is an important theme because the value proposition of a company changes during the life cycle of the company. In order to keep an innovative edge, Salesforce strive to hire engineers who like a good degree of freedom to try things. Engineers want to build cool things; providing them with the culture to do that is therefore critical. - Measurement. Salesforce use a system called V2MOM (Vision, Values, Methods, Obstacles, Metrics) Managers create group V2MOMs. Employees have individual V2MOMs and these are all visible to all employees. V2MOMs are created annually and reviewed quarterly. By understanding what colleagues are working on and where they might benefit from help, there is a culture of co-operation, based on the key element of metrics.
Next it was Stanford University for an hour or so with Tom Byers. Confession time.... I'm a podcast addict. I love eCorner from Stanford and as a company we have produced over 900 podcasts at ShippingPodcasts.com. As an individual I love to listen to podcasts at every opportunity, normally at double speed, but thats another story! I was looking forward to hearing Tom talk and he didn't disappoint, he left us with a wealth of educational leads to follow up on as we talked about the importance of getting ideas out of your head and into the open (it’s the iterative theme coming through again). We talked about the importance of a sense of story and execution. We talked about the importance of secondary markets in the Valley and of the current popularity of The Business Canvas. For me, Tom reinforced that business can meet education and that creativity can exist in many formats.
After a full on day, we got back on the bus to find that our uber efficient guides John and Roddy had shipped in a case of beer. This summed up the Valley ethos... Work hard, play hard: focus on the detail.
On paper, day 2 looked to me like it might be a weaker day. I know that I’m not supposed to admit something like that...but I'm an honest type of chap. So off we went to Whipsaw to kick the day off. Do you know Whipsaw? No, neither did I. Yes I'd looked at their website, but wow! This was a lesson in industrial design like I couldn't have imagined. Founded by Dan Harden in 1999, Whipsaw are Industrial Designers and Engineers; true consultants. They enable, support and enhance product innovation by getting inside the problem and thinking like the user as much as possible. Would it surprise you to learn that they’d even had an intern admitted to hospital in order to observe how nurses obs were really being done? The level of detail and almost obsessive desire in this part of the world to strive for perfection was starting to rub off, because I didn’t really bat an eyelid on hearing that story! Dan kept us engaged for well over an hour as his passion inspired us all. What a start to the day!
Next up it was DPR Construction. I know zero about the construction industry. Actually I know less than zero and I don't think it's an understatement to say that I was genuinely nervous about this meeting. I felt way out of my depth. As it turns out, the meeting had nothing to do with construction really, but as a lesson in setting and maintaining a company culture, this 'nailed it' (that's the only construction gag i'm doing!) This was one of those meetings that re-sets opinions. As a learning journey, this one turns out to be the one... Hearing from a co-founder (there are no titles in the organisation for anyone, but I think co-founder would still be allowed) how they went from zero to a billion dollars in 10 years was always going to be something special. Their business model, their ethos, their ethics, their structure, all point in one direction... It’s all about serving their customers and it's no wonder they win big contracts. There were so many valuable take aways from this inspiring meeting that I’m going to be re-reading the pages of my notes for a long time!
We raced off, in the rain, to Bridge Bank in Palo Alto for a lesson in how banking could (possibly should) be. Can you imagine a meeting at a bank where the first 10 minutes is spent by them talking about assimilation to their country? Think about it......... You can't can you? Perhaps it’s that customer focus that explains why they are the fastest growing bank in the the USA. As one of their customers has said, “the attention you pay us makes you a better bank to deal with”. I got the feeling that they have taken the UK private banking model and applied it to business banking - it turns out that’s a winning formula. But it's not all unbridled praise. Our charismatic host, Ed Lambert, was emphatic in his opposition to the use of derivatives. His colleague, Brian Simonson wasn't. Thank goodness for balance and for open debate. I have a background in derivatives so I’m biased, but what really struck a chord was the culture that having a view is encouraged. In terms of the secret sauce of the Valley, Bridge Bank summed it up with the Chinese proverb, “A wise man knows everything. A brilliant man knows everyone”.
So was day 2 a weaker day? Not in the slightest. This trip was getting better by the minute.
An early start on day 3 saw us heading to Google. For many in the group this was the big one. Culture was the topic of discussion and we were impressed at the ability that a company of this size maintains a sense of openness, at least internally. As 48 hours of video is uploaded to YouTube every minute, it really helps to understand that Google view themselves as an infrastructure company, as opposed to a search engine. Like Salesforce, Google employees publish their goals, in this case it’s OKR’s (Objectives and Key Results) Google employees famously have 20% time. This is where 20% of an employees time can be spent on a non-core project. GMail is one of the best known products of this system. The reality however is that 20% time is 120% time. But due to the importance of metrics, everyone is on a very high bar: they all want to, and do, devote time to keeping the level of that bar as high as possible. There are 25-50 quarterly impact awards of around $5,000 and an annual founders award of $2 million. These rewards are actually remarkably small given the potential importance of the work done, but because there is a culture of ‘do’ and because there’s lots of trust built into the culture, it appears to be a win-win situation. We were treated to the 9 rules of innovation:
- Hiring - get the best people
- Ideas come from everywhere and all people
- Share all information
- Have a clear vision
- Morph ideas, don’t just kill them
- Iterate products
- Data, data, data - measure it
- Users come first, not money
- Follow your passion
Wise words! We also got to slide between floors on their infamous slide and take pictures in their photo booth. All jolly good fun, even if we weren’t allowed to take pictures.
Dragged away from Google we were headed to Berkeley, University of California, to meet Jerry Engel. I was pretty awe struck to meet Tom Byers at Stanford, but in contrast, I didn't really know much about Berkeley or Jerry Engel. However, I had done my research and I was aware that this guy was quite the business player. He prefers the title teacher, but as the co-founder of a VC that invests in early stage business, Jerry was never going to be a tweedy school master type. How's this for an intro: "I was at my book club last night with a few VC’s and some entrepreneurs, you know, the typical crew" Boom! It’s the networking thing again. We talked about what innovation is and how it’s easier to kill than make it happen. We talked about the creation process and the fact that discovery is hard to do and takes time, but that innovation is fast when knowledge collides. We talked about clusters of innovation and how Silicon Valley understands the value of the small players and how the vacuum effect helps innovation as capital gets recycled. We discussed the importance of shared ownership and catching waves. We covered so much ground in such a short space of time and the whole experience has left me somewhat desperate to study again. Since I returned, I've looked again a MBA programmes, but ultimately, when trying to juggle a growing business, I think that it's going to be the IOD chartered director programme for me (thanks to fellow learner Keith Jackson for the inspiration on this choice)
LinkedIn was out next destination and a meeting with co-founder Allen Blue. LinkedIn have a mission, “to connect the world’s professionals to make them more productive and successful” At 1.5 million new members a week it seems like they’re well on their way to achieving that mission. The company has a focus on content discovery and content quality and we talked about a wide range of topics from handling growth to the more general, but absolutely fundamental trait of taking responsibility for successes. With NDA’s signed before the meeting, I’ll keep my reflections to myself.
Our last stop for the day was Obscura Digital and here I have to make a confession: I have serious office envy. It turns out I’’m not the only one though! Back in October 2011 Architizer wrote a piece on the space . Creativity was in evidence all over the place and I urge you to look at the videos of their work on their website. From a business attitude point of view, this was a company that screamed, ‘we can’. Office aside, it’s their customer focus and willingness and desire to find solutions makes Obscura Digital a very special place.
What a day!
Last day and we had meetings at Keiretsu Forum and Plantronics.
I’ve covered Keiretsu above and so now some thoughts on our final pit stop, Plantronics. As a business that’s been around for longer than most in the Valley, the challenge for the management team really centres on change management. $680 million in revenue and positive cash flow for the last 18 years suggests that they’re doing a great job at that. Making consumer electronics presents a potential problem: functional innovation can be replicated. Plantronics understand that the differentiator has to be about experience, especially in the emotional domain. No wonder they focus so heavily on industrial design. Even in a recession people will pay for products if they feel special and so it’s no surprise to hear that this feeling is driven from the start point of the internal team. No fewer than 3 people told me, “I shouldn’t let my boss know this, but I actually have the best job in the world”. The company has created an energising workspace, but the attitude is one of, come to the office in order to collaborate. Be where you need to be to solve problems and don’t just do tech for techs sake. I wish we’d had longer here as there was so much to learn, but unfortunately we’d arrived late. Generous hosts as they were we still given a wonderful lunch and an inspiring view into their world.
If you're interested in longer form views and key-take aways, then I'd be delighted to share them.... There is a catch however because I'm only sharing my deeper thoughts with employees of Coracle.... BUT, here's the good news! We're hiring! So please do send your CV to firstname.lastname@example.org if you're interested in joining a Cambridge based company focussed on growing.
And what about that needle in the haystack? Well you could use your dollar to buy a box of matches and then burn the stack.. Other ideas? Please share them!