Don't Forget the People

I was having lunch the other day with my friend and fellow UCLA business school alum, Manuel. I'm working with him on his latest venture, iPling. He summarized a key learning from his career as a serial entrepreneur: don't forget the people. Without the right people with the right skills focused on the right problems, you can't succeed. That's even more true in a startup environment, where teams are small and lack the redundancy of a larger company. Part of the volatile nature of an early-stage startup is that any failure can become a critical failure. Good team chemistry is vital.

In a startup you're often working with the smartest and most driven people, all of whom are used to setting their own agenda and proceeding according to their own best judgment. It can be tough getting everyone pointed in the same direction and motivating them to put the customary ego on the back burner for the sake of the team, even when the future of the entire organization--and the welfare of each of its individual members--is at stake. It's almost like a real-world game of Prisoner's Dilemma.

But the people equation is important in large organizations as well. In that context I'm reminded of my days at Yahoo. When I arrived in early 2002, the company was relatively small (about 2,000 employees--today, I hear, it's around 14,000) and focused in terms of rigorously screening potential hires for similar professional and educational backgrounds, work ethic, business values, and so forth. But within a couple of years Yahoo acquired some companies that weren't such a tight fit, and little effort was made to align the old and new cultures. Viewing the situation from the inside it seemed to me and some others that starting at about this time, increasing amounts of energy were diverted into attempts at negotiating culture imbalances--for example, different visions for product development, management, and marketing procedures and different sales strategies--at the expense of executing on revenue projects. Leadership didn't identify, understand, nurture, and enforce success vectors and best practices. In the end this "people problem" was one of the reasons Yahoo lost its market-leading position.

I haven't worked at Google, but I hear from people who do (fellow Yahoo alums, as it turns out) that the situation there is different. As large as Google has grown, the company still maintains tight control of the applicant screening process to be sure anyone allowed through the gate complements the existing corporate values that have proven so successful. The higher the position level the more rigorous the examination, I'm told. And it's hard to argue with Google's success. They understand that having not just the "best" people, but the right ones for their organization, goals, and strategy, is a critical element in business performance.

Manuel hasn't built the "next Google"--at least not yet--but his vision is on target. There are lots of things to deal with in a startup: money, product, positioning, marketing, business strategy, and more. But as Manuel points out, don't forget the people. They're the ones who make it all happen.