In 1967, Harvard Business Review rejected a paper submitted by Mel Conway. A year later, Conway’s thesis would be dubbed Conway’s Law. Conway graduated from Caltech with a Masters in physics and from Case Western Reserve with PhD in math. He worked on the Pascal compiler among other notable software projects. Over the course of his career, Conway observed a phenomenon. The products software teams created reflected their organizational structure.
At its essence, a product is a combination of different funnels bringing the user from one state to another. How many funnels does your startup’s product have? How many are you measuring? How many are you optimizing?
Uber’s consumer experience has two funnels. The first is user on boarding: registering a user and collecting their payment information. The second is booking transportation from opening the application to rating a driver’s performance.
In his book describing Google’s People Operations called Work Rules!, Laszlo Bock presents this chart to describe the difference between the way many companies think about talent today, as a normal or Gaussian distribution, and how Google thinks about it, as a power law. It’s the most provocative idea about employee compensation I’ve found.
As Daniel Kahneman showed in Thinking Fast and Slow, humans think in normal distributions. Most people will near the mean and a few outliers exist at the best and worst end of the spectrum. But, that’s not the case at work. Quoting Bock:
Which of the 16 major start of categories in information technology will reap disproportionate share of investment dollars in 2016? And which sectors are closely guarded secrets shielded by seed investors, that may have their breakout year this year?
Using Crunchbase data, I analyzed share of dollars commanded by each of these 16 categories over the last five years to understand the trends in both the seed and series A fundraising markets. The chart above contrasts the pace of investment across the two markets by sector measured by % of total dollars invested anually. Seed investment is marked blue, and series A investment is marked red.
When I was at Google, we worked with a user experience team frequently to help us design changes to the AdWords front end. After having reviewed our designs within our product team for weeks, we often thought the design was complete and foolproof. But we were consistently proven wrong by the UX team whose work surfaced face-slapping oversights.
At UserOnboarding, Samuel Hulick has taken this approach with more than 40 different on-the-mark and a bit irreverent UX critiques of many top internet and mobile services.
The fundraising markets have infused more cash into startups in 2015 than in any year since 2001. But, the venture backed IPO markets touched five year lows and whispers of a bubble have become a meme in the past six months. What’s really going on? And should that impact when founders start companies?
No one can time the financial markets. If you can, you should be trading stocks, bonds and options and retiring very soon. The financial markets will rise and fall, and shouldn’t factor heavily into when a founder decides to start a business.
Last week, I was chatting with an old friend who after I told her how busy and ragged I sometimes felt, she asked me, “Are you present?”
To which I immediately replied, “At work?”
And she laughed, and said, “I meant at home, but I have my answer!”
The conversation reminded me of a man at Google named Chade-Meng Tan. In Building 42 of the Mountain View Campus, which is the main building in the center of the headquarters, there used to be a poster on the wall of Chade-Meng with many world leaders including several presidents and the Dalai Lama among others.
As a startup scales and surpasses its first organizational breaking point of 8 employees, it’s time to start thinking about organizational design. The strategy a startup chooses in their market should determine their organizational design.
In the First Round Review profile of Paul Arnold , the Head of Operations at AppDirect, Paul shares the challenges the initial organizational structure created as the company grew 5x in less than a year.
We started building our teams with a simple functional structure: product managers working as a product team, account managers working as an account team, and so forth for engineering, sales, marketing, customer support, QA, and partnerships. But we hit a wall quickly…
The Ultimate Software Company is a $5.5B market cap provider of SaaS Human Capital Management software. Founded in 1996, the company initially sold licensed software and migrated to multi-tenant SaaS in 2002 with a product called UltiPro. Today, more than 82% of revenues are subscription dollars.
The company serves the mid-market and enterprise customers with a broad software suite that includes Payroll, Human Resources Management Software (HRIS), Benefits Management, Time Clock and a Self Service Portal for employees. In addition, Ultimate Software sells a business intelligence product licensed from IBM Cognos. At roughly 2800 customers as of November 2015 and $583M in trailing twelve months’ revenue, Ultimate Software generates about $210k in average revenue per customer, which implies reveune skews toward the enterprise part of the market.
SaaS Enabled Marketplaces employ elegant business models. They are verticalized SaaS companies that manage a marketplace to create winner-take-all market dynamics. SEMs can generate revenue in four ways: charge the buyer and/or supplier a software fee & charge the buyer and/or supplier a marketplace fee. In addition, a startup must determine what rake to charge.
At Redpoint, we’ve invested in more than 15 marketplaces and have evaluated dozens more, including more than 20 SEMs in the past year. Some of these are Free SEMs. So which type of pricing should SEMs pursue? These are the questions we use internally to hypothesize the best pricing models for SEMs.
