Official Blog

I am writing this in our hotel in Silicon Valley. I am here as a member of the Swiss Silicon Valley Association. It is a week long trip touring the valley, visiting various companies and Universities such as Sun, Google, Stanford University, Berkeley, Radar Networks. Fun and very valuable input to our work at Nektoon.

Two things struck me during the past days. First, the valley is large in its geographical expanse – at least for somebody from Switzerland – and yet it has the feel of a small village. There are hardly any highrise buildings. Old Palo Alto main street is about as exciting as the main street of Wil. Yet, the names reverberate in my years: Menlo Park, Mountain View, Palo Alto, Sunnyvale. Before coming here, I imagined this to be big cities in themselves, packed and bustling with activity. So many companies are located here. Yet the feel is distinctly small townish.    

Second, this observation translates to the companies as well. You see the company signs in this or that business park. Illustrious names: Sun, Oracle, Salesforce, Netlogic, Mozilla, Oracle, Apple, etc. From afar I often thought: This must be a mighty and big places. Yet standing here, it is about the same as passing say the Technopark in Zurich.  

It seems to me that the company founders simply never wanted to leave university and replicated the campus feel of Stanford University to their workplaces. Sure, Sun is a large behemoth; sure Google is not that smallish startup company anymore. But even these places, especially Google, have that distinctive campus feeling.

On the campus at Stanford we were visiting the Center for Foresight and Innovation. The department provides one of the more sought after classes: Industrial design. The students are together for one year developing on behalf of a company a working prototype. A small team put together to solve a big problem.

From the experience at our previous gig, I strongly believe that smaller and independent teams produce better results. You focus on the issue at hand, instead of coordination and issue handling within and between big teams. There is surely a wide body of research literature on this. I keep it with the findings of this book “The Starfish and the Spider” by Ori Brafman and Rod A. Beckstrom, and confirm their findings: The spider, with its brain, head and body, represents hierarchal order. In contrast, the starfish, an undifferentiated neural network, represents decentralization. Generally, Starfish organizations are far more flexible and adaptive than spider organizations. At local.ch we adapted as much as possible to this type of organization. Instead of issuing codes of conduct and direct orders we set out 9 golden rules – call them norms of behavior, and made sure that all understood the common goal of the platform. Then we let the teams pretty much figure out themselves how to go along.

To ease this process we split the platform into different parts and defined the interfaces between these building blocks. The teams could now work pretty independently on their parts, without having to overly liaise with the other teams and their may be differing timelines.

In addition we developed a set of work practices adapted to this work style. Cédric, the driver behind all of this, wrote about the setup in his blog. To glue the independent teams together and to ensure that there is lot's of communication within the teams we used Skype chat. Skype has the unique feature that chat is historized – when I come back and start my computer the chat meanwhile messages exchanged show up. The second success factor we found is the widespread use of Wiki and task tracking software (more of that in a forthcoming post). Plus we put up whiteboards on every wall possible to allow for quick and visual problem resolution.  

In the beginning a few employees had some issues with this approach. But once the folks realized that they are really and fully in charge they took the responsibility and started owning their issues. The book and our experience confirm the findings of Cyril Northcote Parkinson in his famous study on optimal team sizes (link to pdf): “When any organizational entity expands beyond 21 members, the real power will be in some smaller body”. Powerful small teams are better at execution (1).

Next in the series how to build a scalable startup: Project management.

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(1) By the way: Never create teams of eight. They fail abysmally. You don’t agree? Read this  

It was a fun and exciting day in Venice Beach. We were heading home to our budget hotel in downtown Los Angeles. Little did we know what excitement was still to come.

It was in the summer of 1988 during the summer school recess. My best friend Daniel and myself traveled for 5 weeks through the USA on a Greyhound Ameripass. An epic journey from coast to coast. On that fateful Saturday we were the second night in Los Angeles. To cover for our travel expenses I had American Express Travelers Cheques, Daniel had cheques from another issuer.

In our room we made a bad discovery: Our room safe was broken open. The travelers cheques gone.

The break-in came as a shock. Okay, the hotel wasn’t a five star hotel, but it was probably still the most expensive hotel on our shoestring trip. It was Saturday evening and we carried only very little cash: We were broke and jittery.

In distress I called American Express to block the cheques. After just a few moments I had a polite Amex representative on the line. I explained my case in my best high school English. A little moment later I had a German speaking agent on the line. That eased the proceedings considerably. I detailed what happened and no more than ten (10!) minutes later the case was solved: Amex offered replacement travelers cheques to be picked up at any Amex office of our convenience (When we arrived in Las Vegas the day after – a Sunday – the office clerk had everything ready) and they even dispatched a messenger – it was Saturday evening by now after 11pm! – with $200 cash to cover for all expenses until then.

Even today I am pleasantly surprised by their service. We were two poor high school students and surely not high-worth clients. Yet Amex helped, even providing assistance in our mother tongue and dispatching a courier on a Saturday evening. What a difference with Daniel’s travelers cheques issuer. We had to spend two hours in a downtown LA police station to get a police report the issuer requested. The police escorted us back to the hotel, because they deemed it unsafe to walk. And we chased the replacement cheques for the next two weeks.

No prices for guessing which credit card I signed up to the moment I could afford one. I’ve been a member ever since on just that basic assumption: Whenever I am in trouble again on a trip Amex will help. Amex earned back their ’88 investment many times over.

First observation: Put your customer first and your customer will put you first, too.

I know: It’s a worn saying “put your customer first”. However, how many times have you been let down lately by a company you trust? At our previous gig we tried to live up to above outlined standards. We had a simple rule: Customer first. Illustration: On each page users can provide feedback. And feedback we got! Funny feedback, lousy feedback, good suggestions, deserved criticism and well earned praise.

Kerstin and myself spent countless hours answering every feedback (3). We got much out of this: We could resolve the issues of a large number of our users and ad clients. Example: Back in 2008 we received an angry E-Mail from the mayor of the municipality of Charrat in the canton of Wallis. They changed some weeks on beforehand parts of their street naming and our map wasn’t reflecting these changes. After a longer conversation with the mayor his anger gave way to satisfaction. We provided him with a detailed explanation of the current situation and how to change.

Second observation: Each (negative) feedback is an opportunity.

There is a fine line between listening to feedback – adapting your service – and ignoring feedback – keeping your service the same. Mostly, only a tiny fraction of your customers speak out. They are the vocal minority as opposed to the silent majority. Therefore before deciding on adapt or ignore we always tried figure out how a proposed change or status quo would affect all of our customers. We tried hard to aggregate the feedback into meaningful categories. And often we tested the alterations extensively. How to decide: Change if this modification can make at least one individual better off without making any other individual worse. The better you do this, the closer you are at a Pareto optimum.

Next in the series how to build a scalable startup: Smaller organizations.

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(1) At the end of the conversation I asked where the agent was sitting. She was based in Utah. I later discovered why: A lot of folks of Mormon religion travel the world after school. On returning they bring home souvenirs and foreign language skills. Should I ever want to open a call center in the US, the first place I will go is Utah. 

(2) Since, I’ve been coming across this story: May be Amex is changing after all to the worse? I sincerely do not hope so.

(3) Flowers where flowers belong to: Kerstin in her unrelenting manner answered much more feedback than I did, and surely her answers were ever more to the point than mine.