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After spending his first few years out of high school studying rocket science at the Massachusetts Institute of Technology (MIT), George Berkowski launched everything from a video dating platform to a taxi-hailing app now worth half a billion dollars. Here we share our favourite six pieces of advice from his book, How to Build a Billion Dollar App…
1. Make Decisions – Fast
Bill Gross talks about speed. He suggests, “It’s about making mostly the right decisions all of the time more quickly.” Don’t get caught up on making perfect decisions, but keep the momentum going. It’s better to make a decision quickly that’s 80 per cent right than a decision 100 per cent right too slowly. Especially in the mobile age, things change too fast and your decision is very time-sensitive. What is right today may no longer be right in six months. Be nimble. Larry Page, Google’s CEO, echoed Gross at one of his company’s annual Zeitgeist conferences: “One of the interesting things that we’ve noticed,” he said, “is that companies correlate on decision making and speed of decision making. There are basically no companies that have good slow decisions. There are only companies that have good fast decisions. I think that’s also a natural thing as companies get bigger – they tend to slow down decision making. And that’s pretty tragic.”
2. Invest in Diverse Skills
Bill Gross has backed and advised 100-plus companies and believes that you fundamentally need to build your team with four types of complementary people:
• Entrepreneurs – the ideas people who explore what it takes to get ideas off the ground
• Producers – they are the doers who push projects forward and deliver; they make the product, sell it and answer customers’ questions
• Administrators – these people are builders, who plan, organise and devise processes; they keep your organisation running smoothly as you grow; and
• Integrators – they are the emotional centres that make sure that everyone gets along, especially in times of high stress and pressure.
In an ideal world you want these four viewpoints when your company is making big decisions, and ideally they will be represented on your senior management team.
3. Have Staying Power
Today, Pandora is a billion-dollar music-streaming company, and one of the most used apps in the world. But, back in 2000, at the end of its first year, the company was running out of money. Founder Tim Westergren failed to raise any additional funding and was forced to shrink the team to 50 and didn’t take a regular salary for the next two years. Pandora endured for a number of reasons: users loved the product; and Westergren was totally transparent with his people no matter how bad things got, carefully handpicking his initial team for staying power rather than attracting people who would flee in a crisis. During that time he led by example: he was the first one in and the last one to leave. He also paid salaries with his own credit cards. The journey to success for Pandora was a long one, but that’s how success happens: the perseverance of the co-founders.
4. No Desperate Hires during Rapid Growth
Aaron Levie is a young founder who managed to scale Box into a billion-dollar business without compromising its culture. That’s immensely hard. He attributes much of this success to keeping the bar high on hiring, no matter how pressing the need to fill a role. To limit ‘desperation hires’ he instituted what he called the 10 person test. “For anyone you hire, would you want them to be in the first 10 people at your company?” he asks. “If you’re hiring the 400th employee, you would still want that person to be in your original.” It’s impossibly hard to stick to this rule in my experience. Outside Silicon Valley – which has a unique density of talent that’s not available anywhere else in the world – it’s hard to keep such impossible standards. However, the better the people you hire, the more productive they are, which optimises how many people you need to hire. Google has a very similar philosophy, which has allowed it to be one of the most talent-dense companies in the world.
5. Be Prepared, Not Lucky
“When you get lucky, it’s because you didn’t know what was going to happen. The corollary is, if you know what’s going to happen then there is no luck. There is no uncertainty and there is no risk.” The words are those of David Friedberg, a former member of the corporate development team at Google and founder and CEO of the Climate Corporation, who sold his company in 2013 for $1 billion. All businesses naturally come with a degree of risk. You don’t know where your market is headed, what your competitors are working on or even if people are going to use and pay for your product. So take a more methodical approach: identify all the uncertainties, research the hell out of them, and then deal with them systematically so they are no longer uncertain. “Identify the unknown, mitigate the unknown,” Friedberg says. “Only then can you enable the outcomes you want and increase the value of your company.”
6. Open Communication
Key to the success of any company is transparency and trust. Jack Dorsey, Square’s CEO, is insistent that everyone at Square should know what the company is up to and why it’s doing it. So he instituted an astonishing rule: at every meeting involving more than two people, someone must take notes and send them to the entire staff. It doesn’t matter what the meeting is about: bug fixes, new partnerships, pending contracts, a new launch, important metrics. Everyone hears about them. Dorsey says he often gets 30 to 40 meeting notes every day. He filters them in his inbox and reads them through on his iPhone when he gets home at night.
Even the structure of your office is important: encouraging communication and circulation is good for creativity. “We encourage people to stay out in the open because we believe in serendipity – and people walking by each other teaching new things,” says Jack. Jonathan Rosenberg led Google’s product strategy for almost 10 years. He has a lot of rules for great managers, but the most important element of leadership needs to be transparency. “At Google, our default mode was to share all information,” he says. “We strived to empower everyone equally. In the Internet age, power comes from sharing information, not hoarding it.” Employees like being trusted and hate being surprised. A policy of complete transparency feeds these needs. Rosenberg’s advice is, “Back up your position with data. You don’t win arguments by saying, ‘I think’. You win by saying, ‘Let me show you’.”
This is an extract from George Berkowski’s How To Build A Billion Dollar App. Find out more in July’s Issue 23 of The Collective.