Category Archives: Silicon Valley

Conflict Avoidance Causes Conflict: Managers Too Nice for Their own Good

One thing I try to teach all new (and many old) managers is the simple, somewhat counter-intuitive rule that conflict avoidance causes conflict.

Example:  a manager has problems with an under-performing employee, but doesn’t tell them that their work is below expectations and they need to ship up.  Over time the manager gets increasingly frustrated with the work quality and eventually fires the employee abruptly in a heated conversation.

The employee has no idea his work was sub-par, had been repeatedly reassured by his manager that things were OK, had received a solid annual performance review, and thus leaves the organization angry and confused.  This results in a downstream lawsuit, with the company entering in a weak position because (due to the lack of dialog) there is little or no “paper trail” documenting the performance issues.

Now the company is looking at a legal battle that will cost or settle in the tens of thousands of dollars — if not more — all because a manager was too afraid to say “you write bad code” or “you run events poorly.”

And why did the manager never say these things?  Because they were avoiding conflict.

This pattern happens over and over in business:

  • Managers unhappy with supplier performance and simply cancelling a contract rather than trying to work together to improve service.
  • CEOs and boards getting alignment and everyone being too polite to face the issue until it comes to a major boardroom blow-up.
  • Directors quietly passed over for promotions for reasons they don’t understand until they eventually quit the company.
  • Non-native English speakers getting glass-ceiling-ed due to their communications skills, but their manager is too afraid to put the issue on the table.

In each case, conflict avoidance results in [1] a lose/lose situation and [2] more conflict.

So to phrase a slightly longer version of my rule:  conflict aversion leads to pressure build-up which leads to explosive conflict.

Why does this happen so often in Silicon Valley?

  • In general, we are all taught to be nice as we grow up (e.g., “if you haven’t got anything nice to say, then don’t say anything at all”).  Many people have trouble adapting that principle to the workplace.
  • Silicon Valley is full of introverted math and science types who enjoy working on hard conceptual problems but who, for the most part, would rather have a root canal than sit down with someone to discuss a conflict situation.

Overcoming this isn’t easy.  Hard as it may be to believe, I used to be “nice” myself.  But then I realized that being nice wasn’t actually being nice, it was being conflict averse, avoiding tough situations to the detriment of both parties until things come to a typically explosive ending.

Most of the articles you’ll find on the web about work conflict are about peer-level conflict, such as this nice write-up on UC San Diego’s HR site.  But the most dangerous avoided conflicts are those between manager and subordinate, where the manager simply abdicates the responsibility for doing his/her job.  Over time, this will cost someone their job — either the manager for failing to manage, or the employee, often in what he/she perceives as a blind-side attack.

Here’s a nice Harvard Business Review blog post on giving negative feedback that any conflict-averse manager should read.  If your problem runs deeper, then you should read Difficult Conversations, an excellent book in its own right but also one with a title that provides part of the job description of any senior executive.

What do CEOs do for a living?  I’d argue three things:


The Silicon Valley Strategic “Pivot”

The first time I heard the word “pivot” in the context of business strategy was about nine months ago.  As a student of language, my ears perked up when I heard it.  I remember thinking, “pivot … interesting, haven’t heard that one before, … strong buzzword potential, … nice metaphor, with one foot stationary and the other moving.”

Silicon Valley being Silicon Valley, with more fashion around language than clothing, today you hear it all the time.  Some sample usage:

  • “Yeah, dude, we had to pivot after our A-round, but after that we really got traction.”
  • “I think you know like, we’re running on our 401k round, just trying to figure out the core product, then we’ll expose it to the market, through a pre-alpha and pivot from there.”
  • “Like, you know, every startup needs to  pivot like two or three times before locking-in on its final strategy.  That’s the nature of innovation.”

Extending the metaphor, one wonders in the last example if your board can call the CEO for strategic traveling.  

Despite my general buzzword aversion, I like the pivot metaphor precisely because one foot is stationary.  A complete strategy change is therefore not a pivot but a traveling violation because you entirely abandon the old strategy as opposed to changing direction in a way that leaves one foot in the old strategy and one foot in the new.

I also like the pivot metaphor because I agree with the idea that from inception to $100M that a company will need to pivot and probably a few times.  (Think pivoting multiple times in a game, but not on one ball.)  That truly is the nature of innovation and Silicon Valley companies do it all the time.

The two interesting questions then become:

  • How do you know if you’re traveling vs. pivoting?
  • How you know if the pivot worked?

I answer the first question by evaluating the degree of continuity between the old and the new strategy.  I’d evaluate the second question by the revenue and margin contribution of the old strategy vs. the new one.  If the old strategy is driving all the revenue, then you may have pivoted, but it’s not working.  If the new strategy is driving the lion’s share of revenue and margin, then — and only then — have you done a successful pivot.

Seating Chart for President Obama’s Silicon Valley Tech Titans Dinner

While I was reading this story in the Mercury News about President Obama’s dinner yesterday with a number of Silicon Valley tech titans, an odd thought occurred to me:   Boy, I’d hate to make the seating chart for that dinner!

How do you prioritize Larry Ellison, Steve Jobs, Mark Zuckerberg, Eric Schmidt, Reed Hastings?  Who gets to sit near the President?  Who has to sit far away?

So when  saw this photo in the paper, I thought I’d add some value and turn it into a seating chart for your interest and amusement.  In the end, having Obama sit between Zuckerberg and Jobs wasn’t that surprising, but the structure among the rest is still fun.  (Bear in mind the dinner was held at Doerr’s house, so he and his wife were the hosts.)

Strategic Thoughts on Finding a Job in Silicon Valley

While I know that reading the newspaper — with high unemployment, record budget deficits, and drastic spending cuts  — might make you want to go back to bed in the morning, from my experience there is plenty of positive excitement happening in Silicon Valley right now.  Venture capital (VC) is the engine of Silicon Valley, VC investment is strong, and entrepreneurship seems to be alive and well.

After finishing up a six-year run at my last company, I am currently in the process of looking for my next opportunity.  Since I’ve been out-and-about and thinking quite a bit about the job search process, I thought I’d share a few of my learnings along the way.

  • Opportunity trumps execution.  Seek companies that face large and/or obvious market opportunities.  I have always done best when joining companies where I am convinced that everybody needs one.
  • Team trumps position.  Being on the right team is more important than the particular position you’re asked to play.  Positions change over time.  Don’t pick a director title at a weaker company when you could have made five times the money, had five times the fun, and made five times more valuable networking relationships as a senior product manager at a stronger one.  Business card narcissism can be a road to nowhere.  See the bottom of this post for some fun math in this regard.
  • Think IPO-zone, not pre- or post-IPO.  Most people draw a bright line at a company’s IPO, acting as if the good part of the movie ends there.  In reality, an IPO is like high school graduation — it is the beginning, not the end.  If you can join a quality company in the IPO zone (e.g., 12 months either side of an IPO), you are likely to do very well.  Which side of the IPO line matters far less than whether company is reasonably in the IPO zone.  (Thanks to Jerry Held for helping me reframe things this way.)
  • Know thyself.  Get a sense for what kind of environment you will realistically like and then use interviews to validate or invalidate that view.  For example, I’ve talked to companies ranging from 3 to 300,000 employees, and I can say that I most enjoy the 100 to 10,000 range.  Yes, that’s two orders of magnitude, but I’ve talked across five!
  • Have a positioning.  I have worked hard to keep my positioning “strategic marketing guy.”  You might think I would have dumped “marketing guy” in favor of “CEO” during the past 6 years, but I deliberately did not for two reasons:  I thought it would needlessly close doors for  SVP/ GM jobs at larger organizations and I thought it was inaccurate.  In the end, nobody grows up a CEO; we all grow up in some function that helps define who we are.  Yes, I have been a successful CEO, think I’m process-oriented, and think I’m great at running and scaling operations — but deep down I’m an analytical, strategic marketing guy from New York.  It’s essence vs. experience:  positioning is about essence.
  • Remember that like sales, it’s a volume game.  I have looked at over 40 different opportunities in one month and keep finding new ones every day.  I’ve done this through networking with peers and venture capitalists, cultivating recruiter relationships over the years, and to a lesser extent by leveraging social media.  At some point you will pick a new role and you will make a more informed choice if you have really beaten the bushes while searching.
  • Be picky.  Life’s too short and we spend too much time at work to work with people we don’t genuinely enjoy.  For me, that means finding smart, direct people who are just a little bit crazy.  For you, it probably means something else.  But all of us should (politely) avoid bossholes (or boardholes) who ruin things for everyone.
  • Be nice.  A CEO friend has a board member who is fond of saying “friends come and go; enemies accumulate.” That’s great advice to remember both in day-to-day work life as well as when you’re out looking for a new opportunity.  It’s a small valley and you want to accumulate as few enemies as possible during your time working in it.

Bonus:  Some Fun Employment Math
First, let me make a table that demonstrates two rules of thumb:  salary increases 30% with each level in an organization and equity increases 4x.  Applying these two rules generates a reasonable approximation of a B-round startup, below.

Note that while the CEO makes 4.6 times a clerk’s salary, he or she makes 1024 times a clerk’s equity.  That is the argument for being high in an organization.  But we have to be careful not to apply that logic blindly.

Let’s take an example.  Say you’re good enough to get a VP job at a good quality startup.  That might come with 1% equity grant.  Now, let’s say you’re talking to another, better-quality startup and they want to make you a director with a 0.3% equity grant — but, because you’re a hot candidate you can talk them up to 0.5%.  Let’s say the stronger company is growing 80% and the weaker one 30%.

You make 3.5 times as much money with the smaller grant, and smaller title, at the stronger startup.  Note that even if you can’t talk up the grant to 0.5% and only get the 0.3% initially offered, you still make over twice the money at the stronger company.  Which company will look better on your resume in the future?  And, if you’re good, who’s to say you won’t end up a VP at the stronger company in year two?

Hopefully this demonstrates how company opportunity trumps job title — i..e, that being on the right team is more important than the position you’re initially asked to play.

Veterans vs. Up-and-Comers in Startups

The conventional Silicon Valley /  venture capital (VC) wisdom is that startups should not bet on first-time managers in just about any position, but particularly at the executive team level.  It’s best captured by the statement:  a high-growth startup is not the place to learn how to do your job.

This is the conventional wisdom because, while counter-intuitive to some, VCs are not actually risk-takers, they are risk-isolators.  A typical VC is trying to isolate risk down to one thing:  the unique value proposition behind the startup.  Those value propositions can vary considerably:

  • Sometimes, it’s about the technology.  Mark Logic, for example, is a technology disruptor.
  • More in vogue these days, it’s about the business model.  Salesforce disrupted the on-premises, perpetual license business model with SaaSMySQL disrupted the traditional license model with open source.
  • Sometimes, it’s about both.  My friends at Clearwell will rent you an appliance that includes an innovative e-discovery application.

But the point is that VCs are trying to isolate risk down to the one key value proposition.  They do that by setting every other lever in the business to standard.  For example, per the conventional wisdom, a SaaS BI business model disruptor should:

  • Hire standard managers with experience in big BI companies, and use equity to lure them from their cozy jobs.
  • Develop a standard BI application/product that contains the features users expect.
  • Build a standard enterprise sales force, hiring salespeople from the established BI vendors
  • Implement a standard BI partnering strategy, with the usual suspect technology and systems integration partners
  • Devise a standard marketing strategy, typical of those used by other BI companies but with a key emphasis on the unique value proposition.

Like most VC wisdom, at the first order the approach makes a lot of sense.  At the second order, however, it presents some problems.

  • It encourages cronyism, where the first such experienced manager knows a whole clan of other folks who also are looking for jobs, often for the same reason he or she was (e.g., recent of acquisition by Oracle, a new CEO, a strategy shift).  While one of the benefits of hiring experienced managers is undoubtedly their networks, I’ve seen this work out both quite well and spectacularly badly.    The key issue boils down to whether you are hiring drivers or passengers.  Was the company from which you’re hiring successful because of these people, regardless of these people, or indeed in spite of them?  Are you hiring real results drivers or people who, Fooled by Randomness, have great resumes and think very highly of themselves, but who are incapable of solving your company’s problems?
  • This cronyism often creates a divisive environment that drives out your top existing talent.  As the “Company X” mafia takes over, they typically show insufficient respect for those who got the company where it is, ridicule some past practices, and talk boisterously how easy it’s going to be to fix all this.  While problems in operational practices are easy to spot and fix, this approach overlooks the startup’s need for process maturity (e.g., size relative to Company X) and the startup’s strategic position in its market.  I remember when the experienced (manufacturing-oriented) managers from ASK took over Ingres (then a ~$200M company) and decided that implementing a heavyweight quality process was the answer to our problems.  In reality, our problem was strategic:  in a land-grab market we’d made some poor technology choices (e.g., Quel vs. SQL) that hampered sales and we had been too conservative about grabbing land.  Just as the Ingres executive team’s only hammer was technology, the ASK executive team’s only hammer was process.  Neither, unfortunately, was called for given the company’s situation.
  • It limits career growth for talented up-and-comers within the company:  either individuals with management potential or existing managers with executive staff potential.  If every new management job will be filled by an experienced outsider, then insiders quickly feel trapped and unable to advance in their careers, making them — particularly the more ambitious ones — more likely to leave the company.

The answer to managing all this is, of course, balance.  Both the CEO and the executive team need to take some calculated risks in betting on up-and-comers in a number of posts.  This generally will cost the CEO some political capital (debited at promotion time and never credited back, even if the up-and-comer is highly successful), but will help him or her retain both institutional memory and some key people for the future of the company.

Having a stronger-than-usual preference for up-and-comers, I’ve developed a few rules for managing this process.

  • Always do a external search.  You can turn the dial on how hard — from a check-the-network or calling a few contingency recruiters all the way up to a retained search — but you should always expend energy to see “who’s out there” so you have a sense of the market in making the veteran vs. up-and-comer decision.  You owe this to yourself, your board, and your shareholders.
  • Run up-and-comers through the same process as the external candidates.  The only exception here is when you are restructuring in which case many people may be changing roles without following an interview process.
  • Keep a mental balance of how many up-and-comer chits you have used and how many you think you have left.  You need to view them as a scare resource, because they are.
  • Ensure the up-and-comer is “all in.”  If you are going to bet political capital on someone they can’t either be [1] telling you what you think you want to hear or [2] be unsure of whether they can do the job.  You should only bet on up-and-comers who are certain they can be successful, and so certain that they will probably quit in the not-too-distant future if not offered opportunities.
  • Limit up-and-comers’ ability to bet on other up-and-comers.  Force them to prove they merit their posts by demonstrating how they can bring in veterans.  This is a both a solid practice and a great test.  The worst outcome is that your up-and-comer hires no veterans for his team and you end up with a whole multi-level hierarchy of inexperienced people.  (I’ve seen this happen, too, though happily not in my department and it’s one heck of a mess because there is typically no organizational awareness that anything’s even wrong! )

New York Times on the Changing Ways of Silicon Valley PR

Quick post to highlight this New York Times story, Spinning the Web: PR in Silicon Valley. The article starts with the story of a start-up first pondering, and then deciding not to pitch the big tech blogs like TechCrunch.


Instead, [publicist Brooke Hammerling] decides that she will “whisper in the ears” of Silicon Valley’s Who’s Who — the entrepreneurs behind tech’s hottest start-ups, including Jay Adelson, the chief executive of Digg; Biz Stone, co-founder of Twitter; and Jason Calacanis, the founder of Mahalo.

Notably, none are journalists.

This is the new world of promoting start-ups in Silicon Valley, where the lines between journalists and everyone else are blurring and the number of followers a pundit has on Twitter is sometimes viewed as more important than old metrics like the circulation of a newspaper.

The article goes on to discuss what, in my opinion, are truly massive changes to the business of Silicon Valley PR over the past five years, driven by changes in the B2B trade press and the rise of social media.

While the article raises many good points, I think its over-reliance on Ms. Hammerling starts to make it feel — in an ironic twist of journalistic narcissism — like a puff piece about her: the journalist admiring the PR person instead of focusing on the changes in the business.

Over the years, her contact list swelled to the point that her stories now overflow with dropped names. There are the e-mail messages from Larry Ellison, the chief executive of Oracle, and the time she handled a client’s crisis from her BlackBerry while traveling to St. Barts to join the former Hollywood überagent Michael Ovitz and his family on his yacht. Or the time she was in her bikini at a Mexican resort, checking her e-mail at the hotel’s computer, when Ron Conway, a veteran tech investor, walked in.

Or the purportedly secret poker party she threw in her suite at a recent tech conference: “All my friends were there — Arianna was there, the Twitter boys were there,” …

“Arianna told me I was a great hostess, and I thought I was going to die,” she said

A Silicon Valley GeoAnalysis by John Blossom

Information industry pundit John Blossom, president of Shore Communications and author of the new book Content Nation, recently stopped by Mark Logic on a visit to Silicon Valley and wrote an interesting piece on his ContentBlogger blog.

The post, entitled Silicon Valley Journal: Driving Up the Content Stack of Value, describes his journey as he works his way up Silicon Valley from (roughly) San Jose to San Francisco, observing that there is a general tendency for a vendor’s location in the high-tech stack to be correlated to its latitude, with low-level technologies to the South and applications and services to the North.


Rand [Schulman, his dinner host] observed that the bottom end of the bay was historically home to many of the companies that specialized in the lower-level aspects of the information industry such as hardware and operating systems, and that as one drove up the bay on 101 towards San Francisco you passed by the headquarters of companies that moved further up the technology “stack” towards the media-centric companies in and close to San Francisco itself.

While it’s not something I’d ever noticed before, I would agree that it’s broadly true. More:

Rand’s model is particularly telling in relation to the content industry when you look at what happens in the middle stretch of Silicon Valley along 101. You have companies such as Google in or near Mountain View, rather on the southern-middle end of 101, that perhaps seemed to some like low-level technology plays when they were first launched that today have an enormous influence over the content industry as a whole.

And onto the part about us:

In the dead center of this stretch in San [Carlos] you find the headquarters of Mark Logic, a company specializing in XML server technologies that enable publishers and enterprises to create content services from multiple content sources. At our meeting with the team of Mark Logic CEO Dave Kellogg we heard how Mark Logic is enjoying prosperous times, in part because they’ve honed much of their infrastructure for delivering their services to a highly operable and scalable level and in part because they’re looking up the highway, you might say, towards opportunities that service the content end of Silicon Valley more effectively.

In a sense much of the center of gravity in the content industry is heading towards such technology companies that used to be thought of as “middleware,” rather industrious but supposedly dull bits of this and that that helped to glue diverse information systems together. With source-agnostic content aggregation the focus of much of the value in the content industry these days, you can hardly call companies like Mark Logic dull, much less similarly focused companies such as Google, MuseGlobal and Really Strategies.

Continuing the North/South analysis, I’d say that Facebook (Palo Alto) aside, most of the cool content applications and services companies are indeed up towards San Francisco.

Overall, I’d say that in this framework, we did a good job in locating our headquarters in San Carlos since we are very much as next-generation, mid-level infrastructure company — i.e., above the hardware and operating system layer, but below the application layer.

And, as a side motivational benefit, we can look out the window to see Larry Ellison’s smallest jet periodically take-off from San Carlos airport (suspiciously coded KSQL), lest we ever forget the importance and ubiquity of infrastructure technology in an applications stack.