🦄 Startup Leadership

Hyper growth startups require a unique style of leadership.

Startups don't do well in a "command and control" environment because they operate in high levels of ambiguity. Many of the problems you must solve have never been seen before and thus require large amounts of creativity, autonomy, and rapid feedback loops to win.

So how do you create an environment of success?

Here are the four pillars of startup leadership.

🏆 Four Pillars of High Output Startups

1) Set Context and Expectations

To solve complex problems you need autonomous employees. However, before you let them run wild you must set expectations and provide them with enough context to be successful.

It must be clear what success looks like, and they must know what your expectations of them are. What kind of working relationship you expect and how they should behave.

The leadership team is responsible for communicating vision, defining strategy, and establishing the rules of engagement.

You wouldn't let a team of football players on the field without explaining the rules of the game or what winning looks like, so why would you do this with your team?

Once leadership has set the vision and decided on the strategy, domain experts can build a plan. The clear expectations and rules of engagement enable your team to be free with little oversight, enabling creativity and innovation to run wild.

Leadership owns the strategic direction, but domain experts should build the plan to get there.

Problems arise when domain experts don't have enough context of the problem at hand, the constraints they must manage, or the unspoken expectations you hold of them.

If you haven't aligned your team on expectations upfront there will be friction when they remain unmet in the future. Your team will get frustrated when they invest in building a plan only to be rejected because it doesn't meet a criteria that you failed to mention in the beginning.

Don't assume your team knows what you expect from them.

Every company is different. Every exec team is different. You must make your culture and expectations explicitly clear from the get go.

2) Extreme Ownership and Extreme Agency

If you're familiar with Jocko Willink you'll be familiar with the concept of extreme ownership. In essence it means that you own everything within your control. Every variable that can impact your desired outcome is yours to own.

Not hitting quota because you don't have enough pipeline? Extreme ownership would have you pick up the phone and make some dials.

Unable to complete your weekly marketing newsletter because your freelance designer is behind on work? Ring them up and convince them to re-prioritize.

The words "that's not my job" should never come out of your mouth.

Fostering an environment of extreme ownership is important, but you must also enable extreme agency.

Your employees must feel empowered to make decisions and they should be allowed to fail. It's up to you to create a safe environment where your team feel like they have agency over their work and can take the risk to get **it done.

3) Offer Perspective, Not Solutions

So you've set the agenda and provided enough context for your team to be successful, they come back to you with a well thought out action plan. They look to you as their leader for feedback. What do you do?

It's easy to see a plan and say "this is what I would do in your situation", especially if you have previous domain expertise, but don't do it.

Your goal is to inform, not prescribe. Your experience should provide them with additional data points to help inform their decision but it should not dictate the outcome.

Your team will put a lot of weight on your words so be vigilant to avoid people blindly following your recommendations.

In fact, it's better to not give any recommendations at all. Instead challenge their thinking, offer new perspectives, but let them come to their own conclusions.

You want to offer frameworks that broaden perspective, not playbooks that offer solutions.

4) Value Market Feedback Over Experience

Employees look to strong leaders for validation. Perhaps they're not confident in their own conviction or they just respect your expertise too much, but this is dangerous.

Strong leaders know when to put their experience aside and let the market provide the feedback.

As I mentioned earlier, startups are highly ambiguous and the context changes drastically from one company to another. A VP of Sales with industry experience may feel confident in their pattern recognition abilities but even the slightest of context changes can render that information obsolete.

There are many reasons prior experiences can be misleading. For example, survivorship bias.

During WWII, statisticians were analyzing the damage caused to planes who made it home. The common thought was to reinforce the areas in red, where the plane was hit the most.

However, the statistician Abraham Wald, recommended reinforcing the areas that hadn't been hit (the areas in white).

Why?

Well, the planes that made it home.... made it home. Thus, if the plane was hit in these red spots it was fine. What really needed to be reinforced is the areas in white, because those planes didn't make it home.

The initial thinking to reinforce the red areas is called survivorship bias. When you come to conclusions based on only the information that survived.

In a sales process that's the equivalent of saying "Hey, every deal we won we didn't bring up the competition"... sure you may have won those deals, but what about all the deals you lost because you didn't bring competition objections to the surface?

A similar phenomena, and major red flag, is called "resulting":

"Resulting: A mental shortcut in which we use the quality of an outcome to figure out the quality of a decision:. - Duke, Annie. How to Decide

Imagine you're playing poker and you go all in with a 2, 7 (statically the worst hand). If you win the hand you'll think you made a good decision.

You're looking at the result you had and saying "damn, I made a great decision". This is incorrect. It was an awful decision. You just got really lucky.

Instead of looking at the result to assess whether you made a good decision, you should analyze the decision against the information you had at the time.

This applies to leadership advice. And particularly from VPs who have "been there and done it" before.

Overconfidence from past successes can blind you to the reasons that made you successful. Applying similar logic in your new startup could be a recipe for poorly adapted tactics.

A safer way to win is to build fast, get in front of your customers, listen to their feedback, and iterate with this highly contextualized information.

First principles thinking with quick market validation is far superior to gut feelings influenced by past experiences.

Wrapping it up 🌯

The key to startup leadership is empowering domain experts to solve new problems using creativity and rapid market feedback.

To do this you must set clear expectations and provide enough context for your team to be successful.

Teams must exhibit extreme ownership, but you must provide them with extreme agency and autonomy.

As a leader you add value by providing perspective. You act as an additional data point. A sounding board. Your role is to inform the decision, not to prescribe the solution.

Your past experiences may help, but often hinder by misapplying previous successes to subtly different new contexts.

It's your job to set the vision and strategy from the top, and let the creativity and magic rise from the bottom.