Mike Moyer's Blog, page 14
April 26, 2014
Equity Splits at Stanford University
Here is a presentation I gave about perfectly fair equity splits at Stanford University:
April 8, 2014
New Book Cover Feedback Survey & Drawing
I’m working on a new book about how to deliver a persuasive pitch or presentation and I would like your feedback on the title of the book and the cover design. I have two ideas 1) Dog & Pony and 2) Pitch Ninja. Please take a look at these two options and answer the questions below. Respondents have the option to enter a drawing for a free copy of the book when its ready. Thank you, in advance, for your participation.
March 12, 2014
Slicing Pie Webinar Recording
Below is the recording for the Slicing Pie webinar from March 12 covering the basics of a Grunt Fund along with some Q&A- thank you to all who attended!
There is a little lag time, the audio actually starts at 9:08!
February 24, 2014
January 11, 2014
Human Resource ABCs
Many managers think of their employees as “A, B or C” employees. In some cases, companies actually get rid of “C” employees on a regular basis. I’ve never seen anyone actually define what it means to be an A, B or C employee so I took it upon myself to outline how I think it breaks down:
A employee- takes the company forward in a meaningful way. Goals are benchmarks, not the end game. Puts the needs of the overall business first with an understanding that personal rewards follow corporate gains. Bolster’s team spirit through optimism, energy, creativity and respect.
B employee- maintains the status quo, service the business well, strives to meet goals. Focuses on personal compensation, but is happy when the company succeeds
C employee- has a negative impact on the overall growth and expansion of the team’s efforts. Brings negativity and skepticism to the process, builds walls in an attempt to protect their job knowing that it may be in jeopardy. Blames others for failure and lack of advancement.
A
B
C
Measuring personal success
Business results
Hours on the job, effort expended
Not getting fired
Management
Works independently
Relies on manager to make big decisions. Wants people to tell them what to do
Blames manager for problems
Meetings
Challenges others, is comfortable debating issues until it’s resolved. Accepts and supports the decision of the team
Participates, but mostly takes notes looking for to-do items, keeps opinions to themselves. Resents team decisions that don’t align with their own.
Tries to avoid new responsibility and accountability. Keeps mouth shut
Mistakes
Brings them to management’s attention and is prepared with possible solutions
Looks to manager for resolution
Covers tracks
Initiative
Looks for what needs to be done and then does it to the best of their abilities.
Does what is asked, but fills in the blanks to deliver a complete final product
Does minimum asked, sits and waits for next assignment
Job satisfaction
High satisfaction
Sufficiently satisfied
Considers job a grind, lacks fulfillment
Compensation
Understands that high performance brings rewards, comfortable with performance-based compensation
Focused on current compensation, doesn’t mind benefiting even when company struggles, believes bonuses are outside their control
Focuses on cost-of-living adjustments. Wants more money for doing same work
Priorities
Puts the needs of the overall business and investors in the center of all decisions
Places emphasis on rewards for themselves and their personal relationships
Looks out for themselves
Productivity
Goes above-and-beyond to deliver results
Performs as expected by job requirements
Puts forth minimum effort
Work schedule
Works a full week and is available after-hours, pitches in where help is needed
Counts hours and avoids more than 40 hours per week unless absolutely necessary
Counts minutes, asks for extra compensation for extra work
Change
Embraces change and looks for ways to improve performance. Understands that better always means different
Avoids change but will try new things if requested. Reverts back to old ways quickly
Avoids change, blames new ideas for problems
Attitude
They think of themselves as optimistic
They think of themselves as realisticThere is no such thing as “Realistic” there is only optimism and pessimism. Realism implies that one can accurately and knowingly predict the future. Calling oneself a realist serves to counteract the optimism in others. Realism, therefore, is a pessimistic outlook.
They are pessimistic
Teamwork
Sees themselves as an important part of the team
Sees themselves as a cog in the machine
Looks out for #1
Priorities
Corporate/Investors/Owners
Co-workers
Self
Knowledge
Values and develops relationship skills and finds ways to bring people together. Becomes a student of the industry, shares new learning with others
Concentrates on domain expertise and completing tasks
Learns minimum to perform job
Information
Disseminates information throughout organization
Uses information to do job
Hordes information to protect job
Problem solving
Is energized by creative problem-solving
Brings problems to others for solutions
Complains about problems
Relationships
Works effectively across all levels and departments of organization
Forms solid, positive relationship with peer groups
Brings others down, tries to get them on their side and against the organization
Feedback
Asks for feedback and accepts constructive criticism as an important part of their future. Accepts and appreciates complements
Avoids feedback, will make specific changes if asked.
Acts defensive when receiving negative feedback. Expects rewards for positive feedback
Hindsight
Learns from mistakes, looks for patterns in decision making that can be improved
Avoids taking responsibility for poor decisions
Adopts an “I told you so” attitude, uses mistakes to justify status quo
Company performance
Is invigorated by corporate success and happy to provide a positive return to investors
Celebrates success with others, looks for ties to personal compensation
Indifferent to success or failure of company beyond any impact it may have on them
Initiative
Looks for opportunity and takes it upon themselves to make improvements or organize others
Usually waits until they are assigned a specific task
Does not take initiative, avoids extra work
Territory
Build coalitions within organization
Is protective of their turf
Cares only on their tasks
Social
Is respectful and kind to others
Is tight with immediate peer group
Avoids relationships on the job
January 8, 2014
Top Ten Startup Lessons Learned
People say you learn more from your failures than your success. After many years doing startups, startup-like jobs and advising startups I still don’t have a private jet so I must have a wealth of important lessons to share. Here are the Top Ten, or at least the Top Ten I could think of while sitting here in the back row of coach.
Always collect a nickel from everyone who promises to buy from you. Do this and you won’t need any other revenue stream. People make promises all the time, especially to bright-eyed entrepreneurs. Nobody wants to say no and it’s easy to say yes something in the concept-stage. When it’s time to actually pay, customers seem to vanish. Always remember, there is a difference between someone who says they are going to buy and a buyer. Do you best to figure it out early.
Don’t go in “50/50” with a partner. I’ve seen this mistake too many times. When two partners go in together 50/50 it seems to always end in disaster. A business needs a leader. Have the guts to pick someone, it shouldn’t be that hard. Use a Grunt Fund to track who gets what.
Never let anyone get in between you and the money. This applies to two fronts- financing and revenue. I’ve learned both these lessons the hard way. I once did a financing deal with a group of investors who wanted to call the shots on any new investors. When they were unable to raise the additional capital needed my hands were tied. On the revenue side it’s more common. I once had a business where my software system was going to be sold by a distribution company. The company’s sale team wasn’t nearly as interested in moving the product as I was. Sometimes distribution deals like this sound appealing and they can work out, but always retain the right to do your own legwork.
Don’t think your product will sell itself. This rarely happens. Entrepreneurs need to always be in sales mode. Unfortunately most of them spend more time developing their product than finding customers. If you simply can’t resist the temptation to work on your product make a rule for yourself to spend at least as much time selling it. Preferably a lot more.
Be sure to make a product that will sell itself. If people like your product they will do two things that will help your business. First, they will stick around and buy it again, second they will tell their friends.
Marry the right person. Being an entrepreneur is a lifestyle choice. Be sure to marry someone who will support that lifestyle and follow you down the rabbit hole as far as it takes you. If you want to start a company start preparing your spouse now. I started laying the groundwork with my wife on our first date. So far she has stuck with me even through the most difficult times. Without the support of your spouse it just doesn’t work.
Start startups early. One of the best times to start a company is when you have nothing to lose. Most college students fit this description quite well. Before I graduated from college I had started several companies including a direct-marketing business and a manufacturing company. It was easy. Now I have a family, a mortgage, a reputation and student loans. It’s much harder now.
Raise the right amount of money. I’ve been in start-ups where we didn’t raise enough and ran out. And I’ve been in start-ups where we raised so much we made bad decisions like hiring too many lawyers and buying fancy office furniture. Be smart about how much you need, work hard on your budget and get the money you need to make it work. Being too lean hurts just as much as being too fat.
Be careful not to overvalue “skin in the game”. VCs and investors always like to see that the entrepreneur has invested their own money or is taking a painfully low salary to show that they are committed and have something to lose if the venture doesn’t succeed. While this sounds logical, I believe that the best, boldest decisions are made when you have nothing to lose. If you have a lot on the line your decisions might be too safe and conservative. Investors need to set entrepreneurs up to think big and bold.
Take lessons from other entrepreneurs with a grain of salt. Just because something didn’t work for them does not mean it won’t work for you.
Learning from startups and learning from failures are synonymous. Every successful entrepreneur I’ve ever met has seen plenty of failure but it rarely prevents them from trying again. The best way to learn to be an entrepreneur is to be an entrepreneur. Start early, start often!
November 12, 2013
Get Them Gators- Beta Version
Dynamic Equity Splits aren’t widely understood. If you are trying to convince skeptical investor, employee or partner that a dynamic split is the best way to go send them a copy of Get Them Gators!
This is a short guide that makes the case for a dynamic equity split.
Today nearly every startup company uses a pre-negotiated, fixed equity split. Because startups change, the split that was right one day will be wrong the next. This means that in nearly every startup investment there are less-than alligators () representing people who have more than they deserve. In a fixed equity split every deal is an alligator pit.
When we approach the alligator pit we do it with fear, mistrust and a keen instinct towards self-preservation. These are not the best building blocks for creating an awesome company.
If you want to create a working environment that is dominated by trust, fairness and cooperation where everyone has aligned incentives you’ve got to get them gators out of the equation.
To download a FREE (BETA) copy of Get Them Gators enter your email below.
November 9, 2013
Radio Interview: Mike Moyer on Dynamic Equity Splits
Mike Moyer interviewed on Product Management Talk Radio about the benefits of dynamic equity splits.
Check Out Business Podcasts at Blog Talk Radio with ProdMgmtTalk on BlogTalkRadio
August 13, 2013
Release Notes: Version 2.3
Thank you to those who provided feedback and edits to earlier versions of this book. I have updated the book and have created this version 2.3. In this release I’ve added the following:
Updated dedication (because we had a new baby)
QR Codes that link to A La Mode topics
Grunt Glossary (please let me know if I should add other terms)
A variety of graphical and grammatical edits
The concept of a Grunt Daily Resource Rate (GDRR) with a chart on page 61
A note about milestones on page 67
A recommendation for a maximum GHRR on page 69
The introduction of the concept of the “Well” on page 72
More detail on how to value and provide appropriate rewards for ideas and intellectual property on page 83
A new chapter about how to retrofit the model to existing companies on page 131
An updated chapter (with a new title: “Legalize It”) on legal issues you will want to discuss with your lawyer on page 145
Some new drawings of pies and Grunts
A new cartoon at the end
This list is not comprehensive, but hopefully it will help previous readers get acclimated to the new version quicker!
Please don’t hesitate to provide additional feedback for future versions!
For $5 off your very own copy order HERE and use the coupon code: 3CVUCT64
June 25, 2013
Milestones
Unfortunately, earning pie with hours does provide incentive to work more hours which is something you will want to keep a close eye on. In some cases, you may want to provide extra encouragement for getting something done and extra discouragement for taking too much time. You can do this by sitting with the herd and discussing how much time it will take to reach important milestones. For instance, your developer may estimate 80 hours to complete a working prototype. The hours will be accrued only when and if the milestone is met and only up to the agreed-upon hours.
There are a couple of things to keep in mind when doing this to avoid conflict. First, you must resist the temptation to change the timing and the scope of milestones. If you do, you may have to accept the hours spent working towards a changed milestone even if it’s not met. It’s impossible to know, in advance, what activities and behaviors will be most important or what will change. You can’t penalize a Grunt for acting in good faith.
Second, if the project moves faster your developer will still have incentive to take the extra hours. In this example you will be allowing 80 hours for a job that may have otherwise taken 40.
If you see people gaming the system you may have to have a little Grunt-to-Grunt talk with them.
