The QuickBase Blog
I spoke to David Hornik, who has worked with technology startups throughout the software sector. In 2000, David joined August Capital to invest broadly in information technology companies, with a focus on enterprise application and infrastructure software, as well as consumer facing software and services. Prior to joining August Capital, David was an intellectual property and corporate attorney at Venture Law Group and Perkins Coie. In his legal practice, David represented high tech startups in all aspects of their formation, financing, and operations. In the following brief interview, Hornik talks about why some companies are more successful than others, how to scale a company, build a culture, vetting employees and more.
Dan Schawbel: Why are some companies more successful than others? What does the DNA of a successful company look like?
David Hornik: If you look at the DNA of any great company, you will see an amazing team at the core. While a great team alone is not sufficient to build a successful business, it is 90% of the battle. Great teams can attract other great people. Great teams can build great products. Great teams can raise money from great investors. The last 10% of the equation is a great market. A great team pursuing a mediocre market may be able to build an OK business. But a great team pursuing a great market will be able to build something special.
Schawbel: What should startup founders be mindful of as they create and scale their companies?
Hornik: Company building is hard. And it is a team sport. Find great people and trust them to make good choices. Find great advisors and trust them to give good counsel. Find great investors and trust them to be your partners. Going it alone is a long and lonely path.
Schawbel: How do you go about scaling a company, while maintaining a strong corporate culture?
Hornik: Every company has standard-bearers for the culture. Those folks are the ones who brim with enthusiasm for the company, spread company lore, only wear company apparel, call out behavior that is inconsistent with the mores of the company, etc. So long as the keepers of the culture are treated well and encouraged to spread the corporate gospel, the company values will stay strong no matter how quickly the business grows.
Schawbel: What is your process of vetting advisors, employees and CEOs?
Hornik: There is no substitute for speaking with those who know them best. Talk with people for whom they have worked. Talk with people with whom they’ve worked. Talk with people who have worked for them. You will quickly get a consistent picture.
Schawbel: How do you get every employee aligned with the company vision, especially as the company matures?
Hornik: Great leaders inspire teams to follow. I have seen some amazing entrepreneurs over time and they have no problem engaging the entire company around a shared vision. But great leaders also inspire teams to think independently and to innovate. Company vision can never be static. The best leaders listen to those around them and adapt.
Schawbel: Can you give examples of great leaders you’ve worked with and explain why people follow them?
Hornik: One of the great things about Venture Capital is that you get to work with amazing people. I have worked with stunning domain experts who garner the respect of their employees because of their incredible knowledge, like Kevin Johnson from Ebates or Rene Lacerte from PayCycle and Bill.com. I have worked with incredible managers who are masters of team building and leadership, like Godfrey Sullivan from Splunk or Danny Shader from PayNearMe. I have worked with incredible product visionaries, who invent the future, like Selina Tobaccowala and Al Lieb from Evite. I have worked with charismatic young leaders who are wise beyond their years, like Ashvin Kumar from TopHatter and Bill Clerico from WePay. I’ve worked with brilliant technologists who lead by example, like Artur Bergman from Fastly. I am honored to have the great fortune to work with these amazing entrepreneurs, as well as the many other spectacular leaders I didn’t have room to list.
Schawbel: How do you balance out a team’s strengths and weaknesses? Is it smart to find people who are specialists or generalists to fill gaps in a team?
Hornik: There is clearly value in diversity. But there is no single way to build a great company. Some companies thrive when made up entirely of technical talent. Other companies thrive when founded by business thinkers and product visionaries. Over time, companies can only scale when made up of experts across a range of disciplines (technology, sales, finance, legal, product, etc.). But focus and specialization can prove powerful at the earliest stages of company building.
Schawbel: How do you know if the company is pursuing the right market?
Hornik: Markets are tricky. The biggest and best markets don’t exist when you start out. Great companies create markets. Sometimes a great company creates a market out of whole cloth. My firm funded Atheros Communications when there was no such thing as Wifi, yet Atheros went on to be the leading chip provider for all things Wifi. My firm funded Splunk before there was any discussion of Big Data, yet Splunk went on to become the poster child for Big Data. Sometimes a great company reinvents an old market. My partner Howard was the earliest investor in Skype, which went on to reinvent telecommunications. My firm recently invested in Fastly, which is reinventing the Content Distribution Network, and AvantCredit, which is reinventing online lending. In each instance, there was a massive unmet need and billions of dollars of commerce attached to solving the problem.
1. How about a pre-cation before you start a new job?
Ever wished you could have some serious time off between jobs but felt like you couldn’t take it because the new company wanted you to start quickly? Then you’ll love “pre-cations,” a new perk from Silicon Valley, where start-ups are increasingly pushing new hires to take time off – on the company’s dime – before starting work. Some go so far as to give new hires not just paid time off before their first day, but travel vouchers too. “We want people to bring their best every day, and we want them here for the long haul,” Jeff Diana, Atlassian’s chief people officer told Slate. “Changing jobs is an important shift, and we want to give people time to recharge, spend some time with family. Because once you start a new job, you kind of jump all in.”
2. Could your choice of mate make or break your career?
The most successful people have particularly conscientious mates, finds new research that will be published in an upcoming issue of Psychological Science. Researchers found that people who scored highest on three measures of career success –salary increases, promotions, and job satisfaction – all have mates with a personality type known as “conscientious,” meaning that they’re especially reliable, detail-oriented, and organized. After all, “it’s a lot easier to concentrate on your next brilliant idea at work if someone else can be counted on to make sure the dog has all his shots, the car gets inspected on time, and the kids are fed,” notes Fortune. Moreover, suggests the researcher, personality traits can rub off; over time, people may emulate the behaviors of their conscientious partners.
3. When a manager is a jerk, does intent matter?
When a manager is a jerk to staff members, does intent matter? A researcher at San Francisco State University set out to learn whether workers felt differently about abusive behavior from a boss when they believed it was intended to motivate them – to light a fire under them, for instance, or to get a team to up its game. Psychologist Kevin Eschleman found that this type of “motivational abuse” is just as counterproductive as abuse that’s meant solely to humiliate or demean. His study concluded that employees who are verbally abused – regardless of motivation – are more likely to slack off or act out at work. That’s one more reason that companies should care about how their managers are treating employees.
Kraft Foods Group Inc. is a company perhaps best known for products such as Velveeta, Jell-O and Kool-Aid. But it also is trying to make a name for itself as an innovation leader with engaged and forward-thinking employees. One of Kraft’s leaders shares how its culture is changing.
Barry Calpino, vice president of breakthrough innovation at Kraft Food Group Inc., recently noted in a radio interview that there is an effort within Kraft “to push our organization and our innovation teams to shoot for bigger opportunities, more incremental white space, new categories and new usage occasions.”
While he admits that driving innovation was one of Kraft’s “weaknesses” in the past, it is “now one of our biggest strengths,” he says.
Part of that strength comes from hiring more innovative-thinking employees to join the company, which has more than 22,500 workers.
“Our people are our competitive advantage. When we recruit, we’re always looking for a diverse profile of talent. Our objective is to bring together diverse talent and unique perspectives … which, in turn, drives innovation that reflects the needs of the consumers we serve,” Calpino says. “With our big push toward Innovation, we’re particularly focused on finding creative, conceptual thinkers – especially for roles that involve ‘white space’ innovation.”
Such “white space” innovation means looking for new opportunities in a crowded marketplace, an initiative that has proven successful for the company. Calpino points to Kraft’s leadership as making a “huge difference” in that effort.
“Our business unit leaders set the tone and set the example with their sponsorship of innovation – and innovators. It’s important to have empathy to what it’s like to work in white space, given the high rate of failure,” he explains.
In addition, Kraft has created dedicated innovation teams in all of its business units, “which helps keep the fire lit red hot all the time,” he says, noting teams “feed off each other.”
Further, Kraft takes seriously its commitment to innovation by providing training, speakers and town halls, which “again, keep that fire burning,” he says.
Calpino acknowledges that while innovation can be exhilarating, it can also be difficult. One concern is ensuring that Kraft workers don’t feel they’re taking on too much.
“We have a strong stage-gate process that is designed to help teams deal with innovation challenges and do so in a highly collaborative way, so they don’t feel like they’re out on an island,” he explains. “Culturally, it’s really about leadership and empathy – leaders signaling to innovators that they ‘get’ the pressure and stress. They’ve been there, and they are supportive and have their backs.”
Calpino says that these teams feeding off one another means that the company doesn’t need to turn to gimmicks or other motivational tactics to keep teams engaged, “especially when their leadership is acting as sponsor and champion, and is highly empathetic,” he says.
But one concern, he acknowledges, is that the work can be so exciting that “I would actually say from experience one of the challenges is to not be too engaged or wrapped up in the innovation so that issues of burnout or loss of perspective come into play.”
Kraft does use metrics for key milestones, “results that happen along the journey from ideation to commercialization” – so that teams and individuals are “seeing and chasing results every step of the way, not just at the very end,” he says.
“This is also key for engagement – but also for retention of top innovation talent, especially those who are strong at the front-end but do not want to be the ones who execute in-market,” he adds.
Kraft was started in 1903, but in 2012 the company remade itself, Calpino explains. The international business, the Nabisco business and the chewing gum business was split off as a separate company called Mondelez International. What was left behind was the traditional Kraft brands that many consumers know.
At that time, the company decided it wanted employees to embrace a “fresh mindset,” he says.
“The most important thing is to drive hard against our agenda – and to track it and measure it. It’s one thing to emphasize innovating on traditional brands – it’s another to track it, measure it, and set goals against it. It must be more than talk,” he says. “And when we have wins, it’s important to share those success stories, to show everyone what’s possible, and what’s achievable. “
Still, Kraft isn’t just focusing on its traditional brands and launching new products. Calpino says the company also believes it must have teams building the future.
“This is one of the hardest things to do. It’s about having the right type of talent and keeping them focused on filling the future pipeline versus executing the current pipeline, which in any company tends to get more attention and traction,” he says.
“You have to be very deliberate about it – even amongst those groups make sure there are milestones and metrics and measures of success that teams can drive against and achieve. But they must be dedicated and focused. Where we do this at Kraft we see incredible quality and quantity of future pipelines and big ideas,” he says.