Being an advisor to other founders is a contradictory affair: Be helpful, but do not give advice. That is, I want to help you do your best work, but I don’t think I can or should do it by telling you what to do or think.
I obviously think I have value to add or I would not sign up to help. Well, maybe it’s not obvious; our industry is rife with advisors who attach their names and little else to projects. It’s true I’m motivated to join partly by the possible long-term reward, but mostly I’m helping because I enjoy it and am learning a lot.
While running Puppet, I was constantly confronted with a classic leadership struggle: How do I simultaneously help people improve their own answers, yet get them to do what I want? There are many who will say this is a false struggle, that I could have avoided it by focusing on empowering people instead of trying to get them to do what I wanted. Pfft. The literal definition of leadership is providing direction and getting people there, and that’s doubly so for a fast-growing startup where alignment is critical to execution. I spent a decade slowly, incrementally, getting better at this, but felt my incompetence as keenly at the end as I did at the beginning.1
Advising companies allows me to practice the empowerment-half of this skill without the other complications. Unlike when I was a CEO, I know I should not be setting direction or making decisions. My job is not to provide answers, but to help people do their own best work.
My only explicit training for this was when I was an organic chemistry lab tech in in college. My primary task was repeating questions back to the students: “I don’t know, which layer do you keep?"2 When I started dating my now-wife in college, she told me her friends were bitter that I would not give them answers. I knew my job. I was there to help them get an education, which required they did the work on their own. This has also been helpful experience for being a parent: “I don’t know, what is 12 times 9?”
Advising CEOs has similar constraints, but it’s a lot more open-ended, and has no answer sheet. In the lab, there was one right answer, it was always the same, and you could reason it out with the information at hand. Labs were also usually a day of work, maybe three days, and mistakes were pretty cheap, in the grand scheme of things. I don’t expect one of those students to track me down later in life and lay at my feet all of their struggles or successes. Most importantly, we were studying an objective space that I did actually know more about. When push came to shove, I knew the answers, and I could reason out anything that wasn’t obvious.
Helping CEOs is considerably harder. I’m rarely asked about questions that have a single right answer. No competent CEO would bother getting advice on an easy question, or one whose answer wasn’t important. Wrap into this the fact that I can’t possibly know the company as well as the person asking me the question.3 It’s inconceivable that I would often have answers available that the expert in the seat doesn’t.
That simplifies the challenge: Prod the questioner into getting to their own answer, no matter how much they complain. And they do sometimes get upset: I had a CEO exasperatedly demand what I would do, after a long session of forcing him to work through what he cared about, what he saw as the right answer. When I relented - only after he had already done all the hard work - he could see how thin and useless my answer was. By the time he’d decided what to do, he saw that what he learned from the process was at least as important as the answer, and my just providing a solution could never give that.
There is still some risk. I’m by no means a master of this technique. I know I have at times presented people’s options in stark ways, which sometimes felt like no choice at all. My own predilections, such as toward a consumer-style sales model, are hard to separate from any guidance I might provide. It’s honestly just hard to know sometimes whether you’re successfully getting someone to express their own implicit belief or leading them to agree with one of yours.
It’s a skill I expect to spend the rest of my life trying to master. But it’s worth doing, and I’m enjoying the learning process.
Helping CEOs instead of running my own company provides a kind of repeatable laboratory environment. I get to learn at the same time, though, because it’s much harder than being a lab tech.
It’s not enough to just parrot questions back. I spend my time listening closely and drawing out more information, then replaying back what I heard. Listening is a woefully underrated skill. I’ve been loving the opportunity to practice really hearing what people are saying, and trying to differentiate between the words they use, the meaning behind them, and their intent in saying it at all.
As you look for advisors, be sure you demand the same discipline from them. Don’t accept answers. They should hear you, understand your dilemma, and be able able to point out where you haven’t thought completely, or clearly.
A great advisor should provide light, not direction.
If this whole definition of leadership annoys or offends you, I’d ask how you differentiate between leadership and management, and also how you expect a company to align around a direction without someone picking the direction. ↩
Nearly every experiment in organic chemistry involves using liquids to separate chemicals, where part of the solution ends up in an aqueous (watery) layer, and the other ends up in another layer, like separated oil and vinegar in salad dressing. One of those layers is now waste, and the other one has the chemical you’re working on. Don’t throw away the wrong one! ↩
This is another big difference from when I was the leader; I knew Puppet itself better than anyone, even if I could not know your specific area as well. ↩
My experience growing and fundraising for Puppet was full of inspirational-sounding phrases that cut like a knife. Aggressive goals got praise for wanting to “build a real product” and “really scale this thing.” These are some of my favorites. And when I say “favorites,” what I mean is, I hate them. Deeply.
The one that I heard most often made me want to walk out of the room. I’d pitch an investor while fundraising, and he (always he) would say: “So you’re going to try to turn this into a real company, eh?” As if being my full time job for years was somehow not real. As if you are the arbiter of truth, not my customers. Or me.
If you want to make an entrepreneur feel small, you really want to piss them off, try to inspire them this way. I assume most people who used it thought they were complimenting me, impressed that I was taking this big step or something. But it was a sure fire way to trigger my defenses. When you diminish the work I’ve done so far, it’s hard to see you as a potential partner. I quit my full time job five years ago, and have missed out on hundreds of thousands of dollars of earnings, but asking you for money is what shows I’m serious?
I’m convinced at least some investors did it on purpose, as a form of negging - trying to position themselves as an authority and me as someone who needed their help and wisdom. “That’s pretty cute. Why don’t you get some help from the professionals?” I’m good, thanks.
I know most people didn’t mean it that way, though. Their worldview is just so skewed that if you haven’t raised a ton of money, you’re not really trying. They can only conceive of success if it looks a specific way. You literally cannot succeed unless you do what they do, what all their friends do.
If you’re an investor, advisor, or executive, take a deep look at how you talk to founders. Are you truly complimenting them, or actually diminishing their work? Are you presenting yourself as the arbiter of success, even while you think you’re saying the other person has done so well?
If you’re a founder, know that you don’t have to take it. No one else gets to define success for you. There’s always an in-crowd, but by definition the best results come from being outside of it. Even if you decide you need their money, you don’t have to accept their framing.
I am a tool junkie. I love the effortless balance of a well-known chef’s knife, like my hands know what to do all on their own. Heavy usage builds callouses and tunes muscles, its usefulness evidenced by scuff marks and changed infrastructure. Failure leaves blisters or even hospital visits in its wake.
A good tool proves its utility. Knives slowly shrink with sharpening, work pants thin, machines need oil. If they don’t, you’re either not maintaining your tools, or barely using them.
This wear is proof of your usage. They should be scratched. Dented. Aged. Patinas should be acquired from the shop, not factory treatments. Their callouses should pair yours. Tools can not be precious. They’ll just live on a shelf, then retire to your attic. You should seek that perfect middle ground, where you spend enough money that your kids can inherit them, but not so much that you are squeamish about giving them a job.
Tools only deserve the label if they help you work.
You might say I have strong feelings about them. I’m assuming this love led to my focus as a software entrepreneur on helping people people work. Or maybe my experience with tools in the physical world led me to seek them in the digital world, learning to make what I could not buy.
Given my tool fetish, you’d think I’d have a solid grasp of what I mean when I use the word. Apparently, not so much. I was recently pulled up short by a simple question, asked by Jordan Hayles of the Radical Brand Lab: What do you mean by tools?
What do you mean, what do I mean? It’s a simple question, right? The above text gives one example, but I would have thought I could answer it in a bunch of reasonable ways, none of which seem terribly controversial.
But the more I explored, the less simple the question became.
I’ve been describing my goal as building power tools for people. This phrase comes from my time building houses with my dad, and ‘power tools’ just meant the things you plugged in. You know? Because they needed power? It’s a common usage, maybe the word choice here did not mean much.
Except… I’ve spent more than a decade learning product management, describing myself as a product-oriented founder, managing that function in a growing company, and attempting to teach it to others. Yet here I am ignoring both the term and the field entirely. Why am I so quickly dumping my work of the last ten years? Is it just creative branding? Cynicism about my industry?
Why not power products? That’s a motor boat of alliteration: ‘power products for people.’ Awesome, right?
Ok, maybe not.
Product management as we know it began in the consumer goods industry. You’re handed a train car full of dish soap and told to sell it. You’ve got to package it, set pricing, convince a local store to carry it, argue with them about location, move it away from competitors, all that. Every product you see in your local grocery store is loved by a product manager who fights for its shelf space, believes it is beautiful, and wants you to give it a good home.
Tide soap is one of the most commonly stolen consumer goods, but not because it’s soap. The strong brand makes it easy to resell, even allowing it to be used as a stand-in for money in drug deals. I wish I was that good at product management. For all that, it says nothing about the soap.
Product management can also be used for evil. Laser printers had toner cartridges you could just refill. Not very clean, but cheap and reliable to run once you plonked down the cash for the expensive printer. Modern inkjet printers instead use disposable cartridges. To sustain profit margins in a rapidly commoditizing industry, manufacturers started putting rules in place on the cartridges: You had to buy them from the manufacturer, they had to be replaced every year, you could not refill them, you could not print in black and white if any color cartridges are empty.
The user was getting hurt so the vendor could make more money. People got pissed of enough that the US Supreme Court weighed in.
That’s good product management. Well, it’s evil, but you know what I mean. It’s effective. We’re talking big-B revenue effective. Hmm. A moral distinction begins to reveal itself.
These are examples of companies forcing their business model onto their customers. There’s no difference between the dish soap sold at retail and the one sold in bulk, yet they’re separate products, differentiated through packaging, shipping needs, and labeling. You pay much more for the retail package than the wholesale one, primarily because the business model behind them is so different.
But when I think of a tool, these complications are missing. When I use a hammer, it just has to fit my hand and smash stuff. When I pick up my drill, it works with every bit I own, regardless of the logo. The battery and charger are proprietary, but the vendor’s most visible role in my life is color choice. My yellow drill works just fine with bits from the blue or green companies. (You probably visualized brands by my just mentioning colors. That’s still effective here.) It does not matter whether I bought the drill from Home Depot or inherited it from my dad; once in my hands, it just works.
I think this begins to answer the question of what a tool is.
It helps you do your job, without your worrying about the vendor’s needs.
I know that DeWalt and Mikita need to make money to sell me a drill, but I don’t think about it when I’m using their tools. Even after more than two decades without one, I can comfortably recite that “my” hammer is the Estwing 22oz waffle head with a straight claw1, but none of those details mean I need the vendor’s permission to hit a nail with it. I make a decision about the right tool, I buy it, I use it. End of story.
It is small. If you call something a tool, not a product, you’re saying it’s less, it’s not as complete a solution. This can be belittling, insulting, but it does not have to be. It’s also a statement of independence. Of freedom. Of, and this is going to sound crazy, compatibility.
Products have an implicit, ongoing dependence on their vendor. If that’s me, I love it: I want you to pay me all the time, not just once. That ongoing relationship is how I afford to keep improving what I’ve built for you. This can be a great way to ensure we have a long-term, sustainable partnership. But it’s not always a healthy relationship. The more you have to deal with how I make money, the worse the experience is for you.
I think this is what I like about tools. They’re self-contained. Independent. Using them is fundamentally pragmatic, not a lifetime commitment.
That independence has downsides for me as a vendor. You don’t get any of those delicious growth-hacker buzzwords. Your product isn’t “sticky”, there’s no “moat.” Those are examples of my customers being constrained by my business model, and their absence means revenue is harder to build, to protect.
One might argue I’m better off because treating my customers with more respect makes a better business in the long term, and I’d probably agree. This kind of respectful partnership should deliver higher returns than one that traps and mistreats its customers. I think this is often the right answer, but it’s not a popular one. It’s harder to get funding, to get off the ground. I might be accused of not “wanting to build a real company,” or I might have Silicon Valley’s most dire insult hurled at me: “That’s just a lifestyle business”.
Tell that to Adobe. Or AutoDesk. These are great tools companies. They are the behemoths we know today because they knuckled down and solved their customers’ problems. They worried about that, rather than how they could extract maximum revenue over time. It was a different time, but people have not changed.
I don’t think that every product is compromised when the vendor’s needs show up in the customer’s life, but I think most are. Some of it is laziness, shoring up product limitations with business model innovations, but a lot of it is strategy, recognizing the value of painting your customer into a corner.
Honestly, some of it is just survival. A lot of those inkjet printers are unaffordably cheap, but buyers care only about cost, not value. Some markets are intrinsically dysfunctional, with users and vendors slowly killing each through bad deals and cynical behavior. But as a vendor, I get to make a choice about what markets to play in, and how to work with my customers.
I am a simple person with a simple dream: I want to build something that helps someone work. I have to make money while doing it, because that’s the nature of the job, but I’m more interested in my customers’ work than my own. I know I need a business model, a go-to-market strategy, a plan for growing and supporting my business. But my customers should not need to care about that, should they? If they like what I’m building, they should be able to buy it, and use it. And tell all their friends how great it is. They should not wake up one day to find they’ve accidentally gotten married to me.
I just want to build tools. And I’m proud of it.
We told with great pleasure the (most likely apocryphal) story that this hammer was illegal in Florida because the metal haft could cut your thumb off. ↩
I don’t know what the rest of the world thinks when they use the phrase ‘power tool’, but for me it’s visceral, literal. My experiences using them and watching them transform my family’s work permeated my time building Puppet. These power tools aren’t little plugins to expensive frameworks, they’re large capital investments that dramatically change your job.
I grew up building houses with my dad. The worst task he gave me was trying to paint a set of louvre doors for a closet while in high school; I had to flip the doors over every 90 seconds to catch drips getting through the slats. After three days of misery, my father relented and rented a paint sprayer, with which we finished the job the same day, at a much higher quality.
Around the same time, my dad would rent a pneumatic nailer for big framing jobs. By the time I finished college a few years later, that critical tool went from borrowed to owned and traveled everywhere with him. Initially used only for large jobs, most contractors now have multiple nail guns to cover framing, trim, and every other use case, and the air compressor needed to power it is as important as electricity.
It might not be obvious, but both of these are examples of automation. You replaced a very manual process - applying paint, or nailing things together - with a machine. If this were a factory, these days you’d call those machines robots, but because it’s a construction site, we just call them tools.
And these tools were expensive. Even with how much faster we finished that painting job, I expect it cost more to rent the sprayer than to finish the work manually, because of how little he was paying me. (This does ignore the soft costs of listening to me complain, which were likely high.) Even today paint sprayers and nail guns are often rented rather than purchased, because good ones cost a lot of money and aren’t needed all the time.
It’s no surprise that discussions of tools and productivity are easier to understand from my experience as a carpenter than as a sysadmin. There’s plenty of room for arguments about what is or is not a software power tool, but when it costs more than a week’s wages, it trails a bright orange cord everywhere it goes, and it can nail your hand to the wall while you’re standing at the top of a ladder1? It’s a power tool.
There’s a common story about what robots and automation do to people like my dad (and both of my brothers, who followed in his footsteps): It steals their jobs and ruins their lives.
What utter poppycock.
If you think of your job as driving metal spikes into wood, then a nail gun is a mortal threat. But if this is your value add, your biggest danger was never automation. My dad never sold his ability to join raw materials together quickly; he sold homes, he sold the opportunity to enjoy your house and family more. How did these new power tools affect that?
They were awesome. Painting and nailing are classic examples of menial, low-value work, and yet we spent most of our time on them. All of the differentiation we offered to our customers was packed into a narrow slice of work, because implementation took so much time and money. As we were able to bring more powerful tools to bear, the menial work shrank and larger portions of our time could be spent on design work, customer interaction, and tuning our customers’ homes.
Interestingly, my father’s next career step was even more pointedly about experiences enabled by tooling. He took a job with a state hospital in Tennessee, fabricating custom furniture for severely disabled patients. Suddenly he was using industrial sewing machines for upholstery, and partnering with medical professionals to design multiple beds for each patient, enabling them to be happier and more comfortable (and also avoid bed sores, thus saving hundreds of thousands of dollars per patient). Given the tragically minimal budget allocation for this kind of work, every dollar saved through automation and tooling directly delivered health and happiness to his patients.
It’s no wonder I see the value in power tools, that I am more conscious of the benefit they can deliver than the loss of low-value menial work.
I had a similar experience as I was building Puppet. I would meet executives and salespeople (I don’t know why it was always them) who would say, “Oh, automation? Great, you can fire sysadmins!” No. Beyond the obvious reality that I was selling directly to my users, who would never buy on the promise to fire their coworkers, that was just not why we were valuable.
Puppet gave people a choice between lowering cost but keeping the current service quality, or keeping your costs flat while providing a much better service. “Wait, making things better is an option? I didn’t know that!” Most companies were aware that their IT sucked, but they only knew how to measure and manage cost, so that’s what they did. Once you believed in the power to make things better, power tools turned out to be great investments for both the user and the buyer.
By letting people spend more time on the parts of their work they enjoyed, the work that makes them special, we also delivered higher quality experiences for their customers and constituents. “Spend less time firefighting and doing menial work, and more time shipping great software.” If the heart of your skillset is clicking buttons or responding to outages, Puppet might have been a threat to you, but our users knew where their real value was. We helped them spend more time there and less time on the boring, low value stuff. The sysadmins hated the work, the customers hated to need it, and the executives hated paying for it. Great, done, don’t worry about it.
That’s partially why productivity has stagnated2. The world has not changed that much - some of the greatest improvements to productivity come from making large capital investments in tooling for your workers - but how we spend our money has. People balk at a $5k computer, when the Mac IIci would cost more than $13k in today’s dollars just for the hardware, yet was a powerhouse in desktop publishing. This is to say nothing of how the mobile app stores have driven down what people are willing to spend on software.
Yes, Adobe’s software is expensive, but it’s that price because it delivers so much value. If it didn’t, no one would buy it. Every large market should be so lucky as to have the collection of power tools that graphic designers get. It sounds crazy, but we’re suffering from not enough expensive software. Instead of building the most powerful software possible and finding customers who see its value, companies are building the simplest thing they can and trying to get everyone to use it.
There are bright spots in the industry, like Airtable and Superhuman. I’m hoping they help to shift momentum back to automating away the tedious work and enabling focus on what humans excel at.
More powerful tools improve your life, but they also make you happier even if you can’t buy them. They tantalize you, promising you great returns, if only you can come up with the cash. And they’re maybe just a little bit scary, warning you that buying them is not enough. You must master them.
A friend of ours managed to do this when working alone in the time before cell phones. ↩
Yes, I might be being simplistic to make a point. ↩
Modern capitalism raises the flag of the free market while pitting centrally planned organizations against each other
It’s quite a journey from being born on a commune to raising more than $87m in funding at a software company. This journey forced me to wrestle with existential questions about my true beliefs, and how they intersected my life as an entrepreneur. One’s work is rarely a pure reflection of ideology, but companies need a clear and authentic strategy, which requires a tight alignment between company operations and the founder’s philosophy. I have discovered more about those differences between what I believe and the best ways to grow a corporation while studying economics - that is, how money is made and exchanged - than any other area.
A worldwide conflict between communism and capitalism defined the latter half of the twentieth century. The United States’ ideological battle was the central drama of my childhood, and it was with a combination of glee, pride, and “told you so!” that my fellow Americans watched the wall fall in Berlin, and the USSR dissolve shortly thereafter. I expect few would deny that the US is the standard bearer for capitalism.
Yet, there’s a flaw at the heart of this claim. While the United States operates as a free market economy, the key agent within modern capitalism - the corporation - works more like an authoritarian state. Given how much of our world is built around corporations, this truth and its impacts are critical.
I grew up apart from America’s passion for capitalism. In the era of Reagan, I was living on a commune. My parents did not earn money for their labor, and we didn’t have personal property. My family left the Farm when I was 8, and as I matured, my ideological roots were in conflict with the US’s nonstop pro-capitalism message. As I joined the workforce and eventually started my own company, I found myself attached to neither the communal roots of my childhood nor the Wolf of Wall Street world I moved into. I grew slowly in convictions, as I encountered problems in the course of scaling a company.
The first real conflict came when it was time to hire managers. I founded a company primarily because I did not thrive as someone else’s employee, so what led me to think others would? More importantly, anyone who has ever operated at the front line is aware of the severe costs imposed by the separation between the people who do the work and the people who make the decisions in hierarchies. Hiring managers was just going to make the company do worse, not better, right? Right?
I expect three of you are gleefully shouting, “Yay, holacracy!” right now, while the rest are confused and either offended or think I’m an idiot. I did consider a manager-less world, but a little research provided only examples of disaster, because the only available options just replace an explicit power structure with an implicit one. In other words, it’s still hierarchical with the founder on top, but now decision making is opaque and the system is easy to exploit because of the lack of controls (which looks surprisingly like the cult/commune I grew up in).
Those who are confused or offended by the idea that managers make performance worse would be informed by a deep dip in economics. One of the core principles of the free market is that central planning committees can never be as efficient or as effective as the people doing the work. By definition a free market economy lacks a decision-making hierarchy; the ‘free’ means every agent (individual or corporation) can decide for themselves, without needing permission from a manager above.
While there are many aspects of modern American capitalism I reject, this one I wholeheartedly support1. The downsides of a strong central executive were taught to me early.
Like many other communes, the one I grew up on routinely failed to feed its people - my parents speak with horror of the ‘wheat berry winter’, when we lived on little else. While his people were short on food, the founder of the Farm was off touring Europe as the 3rd drummer in a band, “bringing our message to the world”.
Thankfully none of us starved to death, but the failing was similar to what most communist countries experienced: The central organization could not feed everyone. For years, I assumed this was just incompetence, whether at the scale of the Farm or China. The truth was far more structural. Millions starved during the Great Leap Forward because the central organization was trying something impossible: Managing the productive output of an entire country. The Planet Money podcast tells a great story of how this central planning was walked back in China, but the general point here is that these communist countries did not just nationalize the means of production, they tried to centrally control all of it from within a small group.2
When people talk about communist countries not being a free market, this is what they mean: They tell the farms what crops to produce and in what quantity, rather than letting them decide for themselves. China even went so far as to dictate what hours a farmer should start and stop working, and then directed managers to ring a bell for transition times to control every little group of farmers. Anyone who’s ever had to punch a clock into a rigid, dysfunctional hierarchy is likely getting painful flashbacks about now.
It should be immediately obvious why this fails miserably: The distance between the central planning committee and the farmer is so great that good decisions are nearly impossible. It’s nearly impossible for critical feedback to make it from the edge, where the farmers are working, to the central planning committee in time to affect decisions, and then for those decisions to make it back to the edge in time to be useful. The podcast linked above also points out how unmotivated the farmers were under this regime, cutting productivity even further. Those who have studied lean manufacturing, agile development, and DevOps are likely seeing parallels here.
The result was catastrophe. When a corporation is painfully inefficient it loses money and might have to do layoffs, but when a country fails at growing food, its people starve to death. I don’t mean to imply that central planning was the only cause of famine under communist rule - there were political operations that led to mass starvation, just like in the West - but learning more about these helped crystallize what I do truly prefer about capitalist models. It also converted the phrase ’the free market’ from a catchy slogan into something meaningful to me.3
The most important feature of free market economies is that each person within them is able to make independent decisions in their own best interests4. If you’re a farmer, you can decide what to grow, how much to grow, and when to work to develop your crop. Heck, you can even choose not to be a farmer any more. Success is merely dependent on your finding a buyer for your work at a price you can tolerate. Any given year might not be perfect, but your decision making gets better over time as you learn to respond to customer demand.
This pattern is easy to understand in any system where the people doing the work make the decisions. If you’re a jeweler, you can decide what to make, how much to sell it for, and what to spend your time on. Same if you run a small restaurant, lead local tours, or are a one-person shop doing house remodeling. It’s a free market, where you can charge what the market will bear, and you can quickly and efficiently respond to its whims, ensuring that you are getting the best use of your time.
This was a powerful organizing principle for a long time. The history of human commerce developed largely this way: One person, or as many people as could fit in one shop, would turn labor into a product, then find a buyer for it. Most large-scale efforts were organized by the state of the time: Monarchs and the landed gentry, who were the only ones capable of marshaling enough resources to build palaces, roads, and other large construction projects.
This began to change in the 17th century when corporations like the Dutch East India Company were able to deliver massive windfalls to investors by pooling money and using it to extract resources from colonies. There was a step change in the 19th century, as corporations went from generating wealth to building and owning infrastructure. It’s one thing to outfit a single ship for a year-long voyage, yet another to maintain railroad schedules across the United Kingdom, or run a telegraph network around the whole US. These aren’t just short-term money-making exercises, they’re long-term commitments with big capital outlays and large returns over years and years.
We still live in a free market economy, but it’s not one Adam Smith would recognize. Instead of individual or small operators, ours is composed almost entirely of corporations. Really big corporations. And these companies, they use the same kind of central planning that we so despise in communist systems. I know. I’ve done it.
By the time my company got near 500 people, we had a multi-week planning process, where the leadership (i.e., me and my lieutenants) set out top-level goals, built a top-down plan to accomplish them, then drew information from the front line to see where it needed change. We called this a bottom-up plan, but it was only bottom-up from the perspective of numbers - how much money we’d have, what our costs were, etc. - rather than from the bottom of the organization. We could see no way to have a system where the people doing the work built a plan for the organization. Even thinking about it now, my reaction is, “How would they know what my goals are?”
That’s the kind of question you can only ask in an authoritarian state, not in a free market economy. My goals became my company’s goals, and the only real way to ensure people worked toward them was providing a plan. You might argue that a corporation should focus on shareholder value, but that doesn’t help make decisions about what the company should actually do.
Great leaders find a way to listen to everyone in the company, but in the end, leadership is about making decisions. That’s essentially the definition of the word. And we all know leaders who did not bother to listen, or just did not need to in order to be great; today’s most vaunted tech leader, Steve Jobs, was famously disrespectful of the opinions of others, yet made a lot of world-changing decisions (not all for the better).
This is exactly why working in a big corporation is so stifling. If you’re in a small company, the executives are close enough to the front line that it’s more like working in a tribe, but in a big company, the leadership is so removed from whose who do the work that executive teams operate like the politburo we so decry in communist countries. Certainly the bureaucracies are no more enjoyable or forgiving.
I find it both ironic and painful that my inability to work for someone else resulted in my creating a company that involved a lot of smart, capable people working for someone else.
I wish I had a solution. If this were an easy problem, its solution would already be pervasive, because the benefits are massive. Just in terms of efficiency, we’ve seen how much better the free market is than planned economies, but it also has a hugely positive impact on quality of life. People are happier when they’re in control.
I know the solution is not more freelancing and contract work, which America’s corporations are addicted to. That’s the worst of both worlds: The exploitative nature of capitalism with the inefficient bureaucracies of communism. Transactions on the free market work because they’re good for both sides, but most people only accept part-time contract relationships today when they have no other real choices.
Holacracy certainly isn’t the answer. It’s fundamentally flawed because of its implicit power structure - Tony Hsieh still runs Zappos, even if he does not use a central planning committee to do it - but the biggest problem is it makes no mention of economics. Without a clear system for scoring the transactions (i.e., money) it’s impossible to build a free market.
This problem of how to handle economics within a non-hierarchical company might lead some to think of using blockchain tokens as an internal currency. This is impossible today, beyond the fact that the world of blockchain is mostly about fraud and black market sales. The biggest problem is that we have no idea how to value most of the work people do. I mean, we might know that what a developer should get paid for a year’s work, but how much is that work worth? The majority of the work done in modern corporations is incredibly hard to value, which is partially why companies are so inefficient and make so many bad decisions.
That brings up an even bigger problem - companies today hire workers to make money from their labor. In other words, they generate profit because they pay their employees less than they’re worth. If everyone could trade their labor for exactly the amount of money it was worth, the corporations that employ them would have a much harder time making money. Instead, in modern corporations the shareholders and the executive team - again, the central planning committee we so despise - make the majority of the money, while the front line does all the work and makes very little. This is true even at the big tech firms; software developers might be well paid relative to hotel workers, but they’re paid a pittance compared to the founders and executives. This might speak to why we have no solution yet - free market corporations would tend to reduce concentrations of wealth, which would be terribly disruptive to the current system.
Like I said, I don’t have a solution. But at least now I know what makes the current system so painful, and it gives me some hope that we actually can come up with a better answer. I know I’ll be working harder in the future to manage the downsides of what we have today.
Although I might stress the “well regulated” part more than most modern economists. ↩
I’m a tech founder and recovering SysAdmin. I helped found DevOps and grew up in open source. These days I am convalescing from a decade of physical and mental neglect while running Puppet.
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