Unless you have been living under a rock these past couple weeks, news in the world of tech & startups has been a DOOZY! Just to name a few…

• WeWork CEO, Adam Neumann, steps down after a snowball of criticism initiated by the WSJ and then the IPO gets pulled all tied together in a big bow last week via this Business Insider expose
• Juul Labs CEO steps down as the company faces escalating vaping controversy
• Comscore charged with fraud for overstating revenue and making false and misleading statements

Can’t even imagine what it would be like to get caught inside one of those company blenders.

Is the most important lesson here for managers that choosing the founders & executives we work for with is plausibly the most important decision one can make?

In order to help guide the future of the tech startup industry, these initial and ongoing employment decisions of where we spend our time are critical. These choices influence everything from career growth to team building to mental health to perhaps the majority of all essential ingredients influencing startup success outside of exogenous market forces.

When trying to wrap up how to distill the lessons and warnings of these leadership pitfalls into an evaluation framework, I wonder if these simple 3 relative scales might be helpful:

The Me vs. We Scale

• When interviewing or sitting in staff meetings with your founders & executives, are they describing their mission and objectives in personal or collective terms? 
• Are they highlighting the work of the team and standout individual contributors…or their own?
• How is the culture promoting individual accomplishments vs. the executive / founding team?
  • Are they name dropping in meetings?
  • How are people hired, fired & promoted?
  • Are there any weird conflicts of interest like high ranking family members or other self dealing?

Time Allocation Scale

In one sense, the allocation of a founder or executive’s time is not exactly the business of an employee or manager. But, if the founder/executive is a head decision maker of the employer, it kind of is right?

• Do you see them in the office?
• Are they active in the daily running of the company & team management?
• Are they doing more press & “fun(d)raising” than they are company running? i.e. are they a scenester

Now of course there will be periods of time where it is the founder/executive’s responsibility to be *outside* of the office meeting customers, fundraising, etc etc. BUT, that is a deliberate decision in responsibility setting that is best clarified beforehand with a management team. Or at least one would hope…

Reality Distortion Scale

Steve Jobs was famous for his widely reported reality distortion field. But he backed that up with relentless focus and execution. The guy knew how to run a business. So for our purposes…

• Are the metrics progressing toward the mission?
• What type of goals are tracked, achieved, and celebrated internally?
• Is there transparency in progress made and scenarios accounted for?
• How are we differentiating vs. our direct competitors? Should we really be worth way more?
• What are the cultural values and how do they match up against common sense logic?

Aggressive goals and a big ambitious mission are hugely important to company building. But if, for example, you’ve raised >$12B and only have $2.5B left in the bank with limited options to cut down spending against revenue to reach breakeven, that can be concerning… 

CB Insights’ CEO Anand Sanwal re-shared a 2018 tweet storm recently that highlights a great ratio: revenue / $$ fundraised. This can be a really helpful gut check for managers to measure business health. Namely, how good is the business in turning venture capital into revenue (remember the time allocation scale above). Linked here:

Summary:

Using these 3 scales above can be extremely helpful to benchmark the type of company, founder, or executive that you choose to work with. Your career hangs in the balance and the team you recruit will ultimately be your responsibility.

Me + Where Is..? + Distortion Absent Reality = Run Away

Don’t lead your light brigade into a valley of death. Beware the signs or risk becoming a headline. And if your assessment of those 3 scales look like the equation above, might be a good time to dust off the old resume. Just sayin’.