Open up your mind and say, ahh...

Debate and difference of opinion, lightly salted with an appropriate amount of passion and tenacity, can help lead to significant breakthroughs. In the world of corporate correctness we are all living in, this should be highly encouraged. I really appreciated Bob Frisch’s response to my recent article on the importance of culture. Though I think he missed the point, the overwhelming number of people who embraced the notion that culture is imperative for sustained success is an indication of the importance of this issue and the opportunity culture offers for positive change.

People matter. More than machinery, products, and real estate. People invent and build. People support and serve customers. Your people either create or undermine value, cultivate or kill relationships, drive or reduce success. A well-conceived strategy living in the hands of unhappy, misdirected, misinformed people is a sure way to a slow and painful death. There is no comparison to being in the hearts and hands of energized, informed, and motivated people.

Companies are not linear, inert systems. They are ever-changing, organic communities that are dependent on the engagement, talent, and energy of their people to operate successfully. Ignore the mental well-being of your people and culture at your own peril. Step inside of any company, no matter the size, stage of development, or level of success, and the culture is either driving the strategy or undermining it. To exist in the first place, a company must have a clear purpose, a deliberate intent, and a directive or set of ideas that it uses to pursue a clear goal, but it’s the people who have to execute it.

There is abundant evidence in every industry that the best-laid plans (or strategies) are derailed, suffocated, or eaten by cultures that either don’t understand or straight-out reject the intent. And this, in turn, slows, sucks the life out of, or sabotages the implementation or execution of the company’s strategy.

For the sake of debate, let’s assume there are two kinds of companies in the world: those driven by strategy, where culture is not a priority, and those guided by a clear strategy, where culture is highly valued and universally understood. To help clarify what’s important, let’s look at the relationship between culture and strategy.

Every company needs a clear strategy…really?

You don’t need to be told that a company must have a clear reason for being and a plan of action. But, you might be surprised by how many companies lack strategic clarity, and whose only purpose is to make a profit. To be clear, making money is absolutely imperative, but it is just one of the outcomes of a successful company.

Competitive differentiation and optimal financial performance do not come from strategy alone. To ignore the potential of a fully engaged and mobilized culture that understands, embraces, encourages, executes, and enhances strategy is negligent and a missed opportunity. It is imperative that today’s leaders not only understand and focus on the interdependence of strategy and culture, but also step back and examine their own role–it is one of the most important areas of their personal responsibility. The mental and physical health of the company in their care must be paramount for sustainable success.

Strategy is rational and culture is emotional. 

Strategy, at its core, is rational, logical, clear and simple. It should be easy to comprehend and to talk about. Without a clear strategy, a company is lost. Culture, on the other hand, means different things to different people. It is emotional, ever-changing, and complex. Culture is human, vulnerable, and as moody as the people who define it. It can be intimidating and frustrating, often leaving leaders dodging it, neglecting it, or discounting it. Because so many large companies are run by people whose expertise is heavily skewed to the rational, financial, and legal side of the equation, culture is often subordinated, misunderstood, or underappreciated.

Every company has a culture, but not every culture is healthy. 

Culture is the environment in which the intent of your company is nurtured, fueled, restricted, or suffocated. Every company has a culture and its health should be monitored and cared for. Cultures reach their full potential when the people in the trenches doing the day-to-day hard work understand the game and are fully informed and engaged. Healthy and vibrant cultures are directed, purposeful, vibrant, optimistic, and highly-successful because they are fueled by the company’s larger purpose and supported by the capability to follow through. A company with a healthy culture is able to operate at its fullest potential while one with an unhealthy culture operates far from its best.

Visionary leaders are required for successful culture. 

Like a great coach, a leader’s job is to clearly set the intent for the journey, model the correct behaviors, lead with an understood set of values, communicate clearly and with sincerity, and set clear expectations and guardrails for the culture to thrive within. It’s the team’s job to bring their best game every day and to execute the game plan to the very best of their ability. Like any great sports team, a culture is built by motivation, communication, training, encouragement, and celebrating both small and significant successes.

Culture is the field on which the strategy plays. A vibrant and functional culture is like a blanket that embraces, protects, and nurtures the strategy. A company without a strategy lacks direction. A strategy without a culture that understands or embraces it is like a sports team without spirit.

Understanding the relationship between culture and strategy. 

1. Strategy drives focus and direction while culture is the emotional, organic habitat in which a company’s strategy lives or dies.

2. Strategy is just the headline on the company’s story–culture needs a clearly understood common language to embrace and tell the story that includes mission, vision, values, and clear expectations.

3. Strategy is about intent and ingenuity and culture determines and measures desire, engagement, and execution.

4. Strategy lays down the rules for playing the game, and culture fuels the spirit for how the game will be played.

5. Strategy is imperative for differentiation but a vibrant culture delivers the strategic advantage.

6. Culture is built or eroded every day. How you climb the hill and whether it’s painful, fun, positive, or negative defines the journey.

7. When culture embraces strategy, execution is scalable, repeatable, and sustainable.

8. Culture is a clear competitive advantage.

9. Culture must be monitored to understand the health and engagement of your organization.

10. Strategy and culture both require the clarity and power of brand to bring them seamlessly together.

Image: Flickr user certifiable.nl

Launching a startup is like firing off a rocket ship, then trying to hold it together with duct tape. Simply surviving feels like success.

The goal, in fact, of most new enterprises is to hang in until a scalable, repeatable, or comfortable path is found. Celebrated entrepreneur and investor Marc Andreessen calls this “product/market” fit.

In our quest for escape velocity, my startup, Contently, nearly exploded on a dozen occasions. In 12 months, we validated an idea, built a repeatable business model, and talked investors into giving us $2 million to grow it. But we cut things close.

Looking back on that first year with a mix of pride and regret, I realize our blunders helped us mature as entrepreneurs. But not everyone has to fail to grow up. Here are six mistakes we made that you shouldn’t:

1. We built features in order to test them, rather than testing to know if we should build them. 

“Great idea! Let’s build it and see what our users do!”

2 weeks later: “It’s not quite ready for scale. What if a million people use this? We’ll need another couple weeks to make it air tight.”

3 weeks later: “Well… no one’s using it… maybe if we built this feature to go with it…”

Sound familiar? This is why so many new companies fail. With the limited resources of a startup, investing time and money on anything is a big bet, too many of which can kill.

We spent valuable cycles building elaborate certification systems and style guide generators for our publishing clients, when in reality all we needed was to ask users what they wanted.

The book The Lean Startup changed our entire company culture from “make the developers build it” to “how can we validate this idea for free?”.

Spreadsheets, surveys, paper mockups, and dummy prototypes can prevent companies from launching expensive, misguided missiles.

2. We waited too long to get our books in order. 

As our company grew, we discovered a disturbing irony: The more success we had, the more financially screwed we were.

The problem was twofold. We’d placed the burden of accounting on one of our three cofounders, who was already spending 80 hours a week on other work. Bookkeeping was relegated to some Saturday evening every couple months.

At the same time, we were invoicing clients a month after we’d floated cash to the writers the clients had hired through our platform, and many of those clients took 45 days or longer to pay via check.

Needless to say, one day we looked at our bank account and found a nasty surprise. We thought we were profitable, but cashflow was killing us.

Luckily, we survived long enough to set up automated billing and hire a bookkeeper. Had we discovered the gravity of our error two or three weeks later, the business would have failed.

Virtual bookkeepers and automated credit card billing systems like Stripe or PayPal are dirt cheap when compared to the value of a founder’s time. The right time to get accounting set up is “immediately.”

3. We didn’t split up responsibilities among founders early enough. 

In the early days, all three Contently cofounders weighed in on every product decision and went to every meeting, pitch event, and sales call. While it was important early on for us to experience all aspects of the business, you’d be amazed how good 3x productivity feels. We all loved business development and product design, but ended up divvying up responsibilities and just keeping each other informed. Joe worked on business, I worked on design, Dave worked on tech.

Naval Ravikant of Venturehacks talks about the power of complementary cofounders where “one is good at building products, and the other is good at selling them.”

Delegation at a startup can mean the difference between failure and success.

4. We spent too much time talking, not enough time doing. 

In his book, Making Ideas Happen, Behance founder Scott Belsky (disclosure: Scott has invested in Contently), says, “A relentless bias toward action pushes ideas forward. Most ideas come and go while the matter of follow-up is left to chance.”

Like many businesses, we spent meeting after meeting brainstorming ideas, rehashing arguments and potential solutions to problems. At the end of a two-hour talking session, we’d leave feeling good, as if we’d accomplished something.

This was killing our progress. The only advantage a startup has over an established company is the speed and agility we were hamstringing.

It wasn’t until we started holding ourselves accountable for action that we stayed the talk trap. At the end of meetings, we discuss action items and who’s responsible for them. We started holding a team lunch every week where each member reports what they did, and what they’re doing next week. It creates a good kind of peer pressure, that keeps us acting rather than just talking.

5. We started raising money too early. 

Raising investment is like Game of Thrones. You think you’re committing to a couple hundred pages, but end up trudging through 5,000. Scheming characters and gore abound.

In two rounds of fundraising, we discovered two things make an enormous difference in the time it takes to close venture capital. The earlier you are, the longer it takes. The more social proof you have, the shorter it takes.

Two months into our company, we thought we were ready to raise money. Naively, we thought having a good team and a good idea could nab us half a million bucks. We learned that although we thought we were a good team (and every entrepreneur thinks this), we were unproven in VCs’ eyes. Investors liked our idea, but saw little proof it would work, much less scale.

We spent months collecting fuzzy responses, until–to our horror–we started hearing, “Haven’t you guys been raising money for a long time now?” Implied meaning: What’s wrong with this company?

The biggest problem with raising money too early is time spent fundraising is time that could be spent making the company more fund-worthy. We squandered valuable money and opportunity cost chasing venture cash too soon.

Months later, we’d built a better product and finally landed investors who believed in our vision. But by that time, our credit cards had little left to give.

6. We didn’t ask ourselves the hard questions often enough. 

Ideas are people’s babies. It’s hard to look at your baby and admit it’s flawed. But recognizing the flaws lets you get your baby help.

We were afraid to ask ourselves questions like, “Does this scale?” “Will people use this?” or “Does this even work?” because they threatened the existence of our company and the value of our months of sacrifice. But the longer we refused to truly address the tough questions, the worse the repercussions.

Fortunately, we’d guessed right on a few crucial points. That kept us afloat while we sorted out the others. The market we were going after, for example, had ended up exploding in popularity, eliminating some risk. But the way we crowdsourced copy editors on our platform, on the other hand, was creating a huge bottleneck in our process and, upon inspection, was completely unscalable.

When we finally looked at ourselves in the mirror, we fixed the problem. And now, every time we meet as founders–and every time our team meets for Friday lunch–we end our updates by announcing the one thing we’re most excited about and the one thing we’re most worried about. By developing a culture of candor, we’ve been able to cut through our own BS and ask the questions we need to face.

Though we’ve made a lot of mistakes, we built a company by stockpiling double-stick tape and fire extinguishers. Persistence and a “fix it now” attitude got us through turbulence, and will get us through more.

Sometimes you have to crawl onto the rocket’s hull and hold pieces down with your own body. But that, to me, is entrepreneurship.

Image: Flickr user Chris Willis

Does Google’s new privacy policy conflict with European law? France’s official data protection agency is launching an investigation to find out.

The Paris-based data watchdog CNIL will check out Google’s new policies across Europe, reports Reuters.

The team of regulators will produce questions for the company by mid-March, according to a letter CNIL sent Google.

“The CNIL and EU data authorities are deeply concerned about the combination of personal data across services,” CNIL wrote to Google. “They have strong doubts about the lawfulness and fairness of such processing, and its compliance with European data protection legislation.”

Google announced controversial changes to its privacy policy in January. The updated rules will house all of Google’s products, including YouTube, Gmail and Google+, under one privacy roof.

Google also announced that it would start using data collected by non-search products (such as Google Docs) to improve results in Google Search. So if you often share news and photos of the latest sports cars on your Google+ profile, Google will now be able to use that data to give you Volkswagens instead of insects when you search the web for “beetle.”

Google reiterated its commitment to privacy in a blog post early this month — while saying it remains open to questions about the changes. Google also sent a letter to CNIL responding to its inquiry.

According to Google, these changes will make the overall Google experience simpler, more seamless and more user-friendly and cross-platform user data will not be shared with advertisers.

“As we’ve said several times over the past week, while our privacy policies will change on 1st March, our commitment to our privacy principles is as strong as ever,” wrote Peter Fleischer, Google’s global privacy counsel.