Echelon 2014: How do you keep startup DNA when you grow your company?
Amazon and Airbnb maintained their startup culture even as they grew to become global companies. Pieter Kemps from AWS shares how they did itBy Terence Ng 12 Jun, 2014
All is not always rosy when a startup scales successfully and grows to become a global company. In many cases, the scaling-up stories of startups read like Shakespearean tragedies, with customers getting disillusioned, investments lost, and even founders getting ousted from their very own companies.
It is with this in mind that the last keynote speech of Echelon is about how companies can retain their values that have allowed them to scale and become successful in the first place. Pieter Kemps, Principal, Business Development and Venture Capital in the Asia-Pacific region for Amazon Web Services, terms those values “Startup DNA”. According to Kemps, Startup DNA consists of four parts:
- Fast Iteration
The biggest challenge is finding people
According to Kemps, the people in a company determine its culture, and that the biggest challenge for startups is finding the right team. He notes that while most startups rightly focus on their customer and investor pitch decks, they neglect their employee pitch decks, which comprises their value offering to potential hires. Echoing the sales call of “always be closing”, Kemps exhorts companies to have an “always be hiring” mentality when it comes to recruitment.
One example of a startup with a good company culture, Kemps says, is Philippine-based PayrollHero. It saw company culture as an asset, and created what is known as “adventure engineering”, where employees are free to use their time any way they like given their tasks are completed on time.
Any team that cannot be fed by two pizzas is too large
Even as culture is an important part of startup DNA, Kemps cautions that it is not the be-all and end-all of things. Companies need to leverage on their culture to enable their employees to do their best work. One example he gives is Airbnb, which has structured teams that take care of fluid responsibilities, all collaborating together on various projects.
It is here that Kemps warns against large teams, echoing Amazon CEO Jeff Bezos’ two pizza team rule. Having teams that are too large, according to him, slows down the decision-making process and impedes innovation.
Leaders, dive deep and own your decisions
Next, Kemps segues into Amazon’s leadership culture, which embodies principles such as thinking big, earning trust, and insisting on the highest standards. He notes that while many companies’ leadership principles are meant to be aspirational, Amazon aims to have theirs’ descriptive, with Amazon’s leaders all knowing and following those concepts by heart.
Of those principles, Kemps focusses on two of them, diving deep and ownership. According to him, diving deep means that leaders should not be afraid to operate at all levels, doing the dirty jobs themselves and staying connected to all the details. By ownership, Kemps suggests that leaders should think for the long run, not sacrificing long-term value for short-term results. Leaders should take responsibility of their decisions, and never say that something is not their job.
Be obsessed with the customer and let metrics drive what you do
Lastly, Kemps expounds on Amazon’s metrics-driven culture, which comprises weekly ops metric meetings where teams discuss their metrics scorecards, as well as create graphs for every conceivable customer metric and their correction of error process. He explains that using metrics to inform and guide decisions makes things more quantifiable, letting teams better know how they are doing.
Kemps also notes that companies should strive to start with the customer and work backwards, working vigourously to earn and keep customer trust. He cites an example from Amazon where a customer was pre-emptively given a refund for his streaming video purchase, as the team had noticed choppy video playback that had impacted the customer experience.
Kemps ends off by calling upon companies to raise their rate of experimentation, for companies to start finding the right “primitives”, or the smallest piece of value that they can provide to customers. After all, companies exist for a purpose, to fulfill their customers’ needs.