HR, Operations, Startup Sales, Startups

The one thing about meritocracy

Is that it can be not all it’s cracked up to be. At scale it’s difficult.

It’s much easier to point to someone’s tenure and title and say she or he is in line for the next promotion. They’ve “earned” it and really put in the time.

While this may or may not be the case, many idealistic startups prefer meritocracy.

The idea of a “level playing field,” free of bias, where individuals are rewarded based on capability is attractive to everyone.

Who doesn’t want meritocracy?

I believe it’s natural for larger organizations to fall into this pattern.

It is far more difficult to follow the tenure playbook than it is to run rigorous HR reviews, 360-degree feedback, keeping HR software updated, etc.

But also, it’s even far more difficult to do the above while trying to find the elusive product-market fit; to close deals when you’re still not 100% sure what you’re doing is correct as a startup organization in the first place.

Who has time for that?

So generally what I believe happens is that that initial intention eventually is replaced by the usual bureaucracy and politics. Biases and human flaws are magnified at scale.

And so far, there doesn’t seem to be many well-known, proven cases of a meritocratic organization succeeding.

So what are organizations supposed to do then?

The closest things we seem to have towards this utopia of an organization, is where extraordinary entrepreneurs and founders have iterated and built up scalable, more objective systems. And even then, they acknowledge the bias and inject into their culture

Ray Dalio’s Bridgewater Associates is the closest case in which he talks in depth about how he built up the BA culture over time; created HR systems for assessing and analyzing personality; built software to enhance accountability; documentation and content to track results and individual track records; and dives further into using concepts such as “believability” and honest feedback to achieve something.

(Suggestion: Read Principles as soon as you can.)

So why does this matter at an early stage?

If you’re a founder, it’s your responsibility to consider, build, and combat the challenges that the organization is going to face down the line.

In the startup world, everything is about scalability.

If those systems/frameworks are not in place or being built iteratively from the beginning, then it becomes exponentially more difficult to institute them successfully later on when you need every ounce of juice to hit your next KPI towards exit.

And as an individual contributor?

When your prospective CEO tells you that the organization is based on meritocracy, exercise caution.

Specifically ask how she or he plans on maintaining that meritocracy at scale and who is going to be responsible for instituting those as the startup evolves.

Ask how is someone going to objectively track meritocracy to ensure that it remains a founding principle of the startup.

Consider the down-the-line consequences – what happens if we’re acquired? How can you ensure that we’re going to remain a meritocracy?

Ask for title bumps. And often.

In early stage organizations, it might go “against” meritocratic values to have a big title. But the value of those titles do exist outside of your startup silo – they exist in public markets all over the world.

If a public company is going to acquire the startup you’re joining, consider how they will view your title.

Will the title port over for all the hard work you put into the startup system that lead to the acquisition?

Or is it a better idea to assume that your efforts may not be fully recognized? And that the higher your title at the time of acquisition, the higher your title at the acquiring corporation? Or that all of the associated perks and benefits are actually tied to that title being assigned to you by the acquiring corporation?

I’d argue the latter. Always assume the worst.

And assume that that meritocracy, being touted as a meritocracy, is likely not one and allow them to prove it to you.

Marketing, Product-Market Fit, Sales Process, Startup Sales

The Easy Guide to Product-Market Fit (PMF)

90% of startups fail because they never reach Product-Market Fit (PMF). PMF is a function of a variety of daily, outward-facing activities that occur at an early stage: customer & product development. This represents the basic framework all startups need to find success and to really begin scaling.

I have met, mentored, and seen too many startups and entrepreneurs waste valuable time, effort, and money chasing a problem that doesn’t exist, with a solution that no one wants. Enthusiasm and passion alone don’t cut it. Often, startup failure directly correlated with the lack of these critical development efforts. But you don’t need to take my word for it.

Steve Blank, esteemed Silicon Valley pioneer and author, is a huge champion of the process. His books and research powered a lot of Eric Ries’ thinking in the Lean Startup approach today which is generally the gold standard by which modern tech companies are run. And be sure to check out Marc Andreesen’s famous post on the matter here too.


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Customer Development is a formalized process in which the Entrepreneur and his team must “get out of the building” and ultimately communicate with their prospective customer base to identify the key ingredients to a successful startup. It’s a combination of all the “outward-facing” activities (e.g. sales, business development, followed by marketing) that the founding team must engage ideally before they go all-in with the startup.

Steve breaks it down into four steps:

  1. Customer Discovery – Who’s the customer base? What’s the problem that I’m solving? Talk to 50 potential customers and get to know them. Do this before you invest too much, if any resources, in building the actual product. Revenue should always be aligned behind. There’s enough data to begin developing a Minimally Viable Product (MVP) and core features that begin to help the Client overcome the problem you’re solving for.
  2. Customer Validation – Is the market reacting positively and buying your solution? Is there some semblance of process and marketing messages that are resonating positively with the customer base?  This is the beginning of demand-generation and the production of a marketing message that will further drive demand. The Product is there and new features are being added to the product that will continue to meet the clients’ expectations. The first sales are complete and the organization begins to understand what actions are required to move a buyer down the sales funnel.
  3. Customer Creation – Can the organization drive repeatable, end-user demand that gets added to the sales funnel? This is where the marketing message matures as more knowledge is acquired about how the clients’ organizations are run. The sales team identifies what the Ideal Customer Profiles (ICP) is, the key decision makers are, buyers, budgets, and processes and how to incorporate those key factors the decision. There are more data points, more customers buying, and more customers lining up to buy. There should be some level of inbound activity and the startup needs to understand and provide material to the customer along their Customer’s Journey. This is where the funnel starts becoming optimized, and the sales and marketing organization is able to provide the customer with resources that answer their relevant questions.
  4. Company Building – How is the startup going to scale? What departments and leaders need to be hired now to continue growing the organization and repeating the customer development process in a way that will generate successful returns? Are we maintaining relevancy as the market is changing? Is our product still #1?This is once product-market fit is obtained and the organization has crafted a product that is directly solving the clients’ challenges. Recruitment, hiring, HR, diversity, and other internal initiatives become more important.

Each of the above steps needs to be studied, understood, and executed. In theory, if this is done correctly, the entrepreneur confirms and defines the purpose of their organization and can grow into a larger enterprise. It is an iterative process that continues to propel the organization forward.

To close, the common theme you will find here is sales. This team represents the outward facing component of the business gathering new information to bring back to marketing, product, and other organizational leaders. They are key and critical to the company’s success and just as important as the idea itself. An early stage sales hire that understands this is key to the success of that organization – often more so than the founders themselves who are not engaging in sales related activities.

A team can have the best product ever, but without the right customer-interfacing mechanisms for adoption and growth, there is nothing.

In my next post, we’ll take an even deeper dive into the importance of an excellent early stage hire, the rescaling your early stage, startup sales organization.