Kellblog (Dave Kellogg) Featured on the Official SaaStr Podcast

Just a quick post to highlight the fact that last week I was the featured guest on Episode 142 of the Official SaaStr  podcast produced by the SaaStr organization run by Jason Lemkin and interviewed by a delightful young Englishman named Harry Stebbings (who also runs his own podcast entitled The Twenty Minute VC).

In the 31-minute episode — which Harry very nicely says was “probably one of his favorite interviews to record” — we cover a wide range of my favorite topics, including:

    • How I got introduced to SaaS, including my experience as an early customer of Salesforce in about 2003.
    • Challenges in scaling a software business, learned at BusinessObjects as we scaled from $30M to $1B in revenues, as well as at MarkLogic and Host Analytics.
    • My favorite SaaS metric.  If you had to pick one, I’d pick LTV/CAC.
    • Why simple churn is the best way to value the annuity of a SaaS business.
    • The loose coupling of customer satisfaction and renewal rates.
    • Why SaaS companies need to “chew gum and walk at the same time” when it comes to driving the mix of new and renewal business.
    • User-based vs. usage-based pricing in SaaS and how the latter can backfire in disincenting usage of the application.
    • My thoughts on bookings vs. ARR as a SaaS metric.  (Bookings is generally seen as a four-letter word!)
    • Why SaaS companies should make “the leaky bucket” the first four lines of their financial presentation.
    • Why I think it’s a win/win when a SaaS company gives a multi-year prepaid discount that’s less than its churn rate.
    • Why I view non-prepaid, multi-year deals as basically equivalent to renewals (just collected by finance/legal instead of customer success.)
    • Why it’s OK to “double compensate” sales and customer success on renewals and incidental upsells, and why it’s OK to pay sales on non-incidental upsells to existing customers (don’t put your farmer against someone else’s hunter).
    • Why you can’t analyze churn by analyzing churn and why you should have a rigorous taxonomy of churn.
    • My responses to Harry’s “quick fire” round questions.

You can listen to the podcast via iTunes, here.  Enjoy!


Can You Solution Sell without Selling Solutions?

Yes.  And for those who get the distinction, I’d might add, somewhat obviously.

But too many people don’t get it.  Too many folks equate “solution selling” with “selling solutions.”  In fact, they’re quite different.  So, in this post, we’ll try to make the world a better place by explaining the difference between selling solutions and solution selling [1].

What is Solution Selling?

First and foremost, Solution Selling is a book [2].  And it’s a book written by a guy, Michael Bosworth, who, if memory serves, was trying to sell Knowledge Management Software in the 1980s.  Never forget this.  Solution Selling wasn’t written by a guy selling easy-to-sell products in a hot category, such as (at the time) Oracle database or PeopleSoft applications.  Solution Selling was written by a guy trying to sell in a tough category. Look at the subtitle of the book:  “Creating Buyers in Difficult Selling Markets.”

Necessity, as they say, is the mother of invention.

When you’re selling in a hot category [3], this is what you hear from the market.

“Yes, we’re going to buy a business intelligence tool and Gartner tells us it should be one of Cognos, Brio, and you — so you’re going to need explain why we should pick you over the other two.”

Nothing about value.  Nothing about problems.  Nothing about ROI.  We’ve already decided we’re going to buy one and you need to convince us why to buy yours.  [4]

When you’re selling in a cold category, the conversation goes something like this:

“A what?  An XML database system?  Wait, didn’t Gartner call that ‘the market that never was’ about two years ago — why in the world would anyone ever buy one of those.” [5]

In the first case, the sales cycle is all about differentiation.  In the second case, it’s all about value.  In the first case, it’s why buy one from me.  In the second, it’s why buy one at all.

Solution selling is the process of identifying a business problem that the product solves, finding the business owner of that problem, and selling them on the value of solving that problem and your ability to do so.

To use my favorite marketing analogy [6], solution selling is the process of selling the value of a ¼” hole.  Product selling is talking all about the wonderful titanium that’s in the ¼” drill bit.

For example, at MarkLogic we sold the world’s finest XML database system and XQuery processing engine.  In terms of market interest, that plus $3 will get you a tall latte.  That is, no one cared.  You could call up IT people and database architects and database administrators all day and tell them you had the world’s finest XQuery engine and no would care.  They weren’t interested in the category.

Certain businesspeople, however, were quite interested in what you could do with it.

  • If you called the SVP of K-12 Education at Pearson and talked about solving the tricky problem of customizing textbooks to meet many and varied state regulations, you’d get a call back.
  • If you called an intelligence officer at your favorite three-letter agency and talked about gathering, enriching, and querying open source content to build next-generation OSINT systems, you’d get a call back.
  • If you called the SVP of Digital Strategy at McGraw-Hill and talked overall about how the industry needed to separate content from the container in building next-generation products in response to the massive threat to media caused by Google, you’d get a call back.

Simply put, if you called a person about an important problem that they needed to solve, they’d call you back.  Whether they’d buy from you would come down to the extent they believed you can solve the problem based on several factors including a technology assessment, conversations with reference customers for whom you’ve solved the problem before, the cost/benefit associated with the project, and whether they wanted to work with you. [7]

What is Selling Solutions?

Geoffrey Moore refers to an important concept called “whole product” in Crossing the Chasm.  And it’s the idea that you’re not just selling technology platform to your beachhead market, you’re selling the fact that you know how to solve problems with it. Solving those problems might require hundreds of hours of consulting services, integration with complementary third-party software packages, and data integration with existing core systems.

But nobody said the “whole product” had to be packaged up, for example, as a set of templates that you customize that help accelerate the process of solving the problem.  This is the zone of “solutions.”

Many companies, early in their lifecycle for focus reasons or late in their lifecycle to increase the size of a saturating market [8], decide they want to package up a solution after repeatedly solving a problem in a certain area.  This often starts out as leftover consulting-ware and over time can evolve into a set of full-blown applications.

At most software companies, particularly bigger ones, when you start talking about packaged solutions, this is what you mean:  the combination of know-how and leftover intellectual property (IP) from prior engagements not licensed as software product but nevertheless used to both accelerate the time it takes to build the solution and reduce the risk of failure in so doing.

For example, during my time at MarkLogic, we often debated whether and to what extent we should create a packaged custom publishing solution or simply think of custom publishing as a focus area, something that we had a lot of know-how in, and re-use whatever leftover IP we could from prior gigs without glorifying it as a packaged solution.  Because the assignments were so different (publishers used as the the platform to build their products) we never opted to do so.  Had we been selling a business-support application as opposed to do product development platform, we probably would have.

The Difference Between Solution Selling and Selling Solutions

Solution selling is an approach to (and a complete methodology for) the sales process.  Selling solutions means selling packaged, typically application-layer, know-how typically built into a series of templates and frameworks that help accelerate the process of solving a given problem.

They are different ideas.

You can solution sell without a single packaged solution in your product line.  To again answer the question posed by the title of this post:  Yes, you can solution sell without selling solutions.

Solution selling is simply an approach to how you sell your product.  Certainly it can be easier to solution sell when you are selling solutions.  But it is not required and one is not tantamount to the other.

# # #


[1] In fact, rather perversely, you can sell solutions without solution selling.  If your company built a custom-tailored solution to solve a specific business problem and if you sold it emphasizing the features of the solutions (i.e., “feeds and speeds”) without trying to understand the customer’s specific business problem and its impacts, then you’d be guilty of product-selling a solution.  See end of the post.

[2] Which has largely been replaced by the author’s next book, Customer Centric Selling, but which – like many classics – was better before it was “improved” in my humble opinion.

[3] Which leads to one of my favorite sayings:  “if you have to ask if you’re working in a hot category, you’re not.”  If you were, two things would be different:  first, you’d know and second, you’d be too busy to ask.  QED.

[4] Which results in what I call an “axe battle” sales process, reminiscent of knights in heavy armor swinging axes at each other where each is blow can be thought of as feature.  “We have aggregate awareness, boom.”  “We have dynamic microcubes, boom.”  And so on.

[5] Gartner did, in fact, say precisely this about this XML database market, but that didn’t stop us from building MarkLogic from $0 to an $80M revenue run-rate during my six years there.  It did, however, provide a huge clue that we needed to adopt a solution-selling methodology (and bowling-alley strategy) in so doing.

[6] “Purchasing agents buy ¼” holes, not ¼” bits.”  Theodore Levitt.

[7] Because a startup can only develop this fluency and experience in a small number of solutions, you should cross the chasm by focusing on an initial beachhead and then build out into other markets through adjacencies (aka, bowling alley strategy) as described in Inside the Tornado.  In many ways, the solution selling sales methodology goes hand in hand with these strategy books by Geoffrey Moore.

[8] Geoffrey Moore calls these +1 additions that help grow the market as the once-hot core technology market saturates and you need to switch back to a solution focus if you wish to increase the market size.

Are You a “Challenging” or Simply a “Difficult” Direct Report?

Most managers, save for true sycophants, want to challenge their boss.  Few managers want to be puppet yes-people to the boss.  They’ve worked hard to get where they are.  They bring years of wisdom and experience.  They want to push and challenge.  But many don’t know when or how.  More importantly, they don’t know what they don’t know.

How often do you think you’re challenging the boss when he/she thinks you’re just being plain difficult?  Challenging direct reports keep their positions and rise with the organization.  Difficult ones get jettisoned along the way.

There are two great ways you can figure out how often you’re being which:

  • Think of things from the boss’s perspective
  • Ask the boss

Think from the Boss’s Perspective

Bosses want to get things done.  Things generally fall into two buckets:  easy and hard.  Easy things may still entail a lot of work and planning, but there’s nothing really conceptually difficult or unknown about them.

Running the company’s presence at a tradeshow you attend every year might be a lot of work, but I’ll consider it easy for this conversation because that work is known.

Deciding to terminate a problem employee is easy.  (Note inclusion of word “problem.”)  If you see a problem, the adage goes, everyone else has probably already seen it for months and the damage done is more than you know.  This decision is hard from a personal perspective — I’ve never met anyone who enjoys terminating people.  But firing someone who routinely misses deadlines, training sessions, and team meetings isn’t hard in this context.

Launching the new version of a product is easy.  Yes, the positioning may be hard, but managing the overall launch process is easy.   It’s hopefully done a few times per year.  Yes, it’s a lot of work and planning, but there’s nothing conceptually difficult about running the process.

Difficult direct reports make easy things hard.  How?

  • Complexification.  When you ask someone the time you discover that there are three types of people in the world:  those who tell you the time, those who tell you how to build a watch, and those who tell you how to build a Swiss village.  Simplifiers go far in organizations, complexifiers get stuck.
  • Lack of follow through.  Bosses want to talk once about a project, agree to it, and then have it get executed.  As my friend Lance Walter always said bosses want “set it and forget it” direct reports.  If you have a question, come ask.  But otherwise I assume you are tracking our agreed-to objectives and they’re going to happen without me having to check and re-check.  Ditto for feedback given along the way.
  • Drama.  Difficult directs tend to take things personally.  They turn criticism of work into criticism of them.  They view a heavy workload as dramatic sacrifice and not a prioritization problem.  They are sensitive to criticism, defensive when questioned or given feedback, and often unable to separate bad performance from bad intent.

The result is that over time the boss starts to loathe the idea of meeting with the direct report which results in a downward spiral of communication and relationship.

Challenging direct reports keep easy things easy.  They get shit done without a lot of supervision, complexification, or drama.  On the flip side, challengers don’t just go along for the ride when it comes to inherently hard things like fixing a break in the sales pipeline, selecting company or product strategies, or working on a competitive campaign strategy.  They weigh in, sometimes challenging the majority or consensus view.  They provide good arguments for why what everyone else is thinking could be wrong.  Their selective Devil’s advocacy helps the company avoid groupthink and the organization make better decisions.  And they do this without going overboard and positioning themselves as the resident contrarian.

Simply put, when you say something to the boss or in a meeting, imagine how the boss will react and then count the ratio between the following two reactions

  • God, what a pain in the ass.
  • Wow, I hadn’t thought of that.

Ratios above 1.0 indicate you are a net difficult direct report.  Ratios below 1.0 indicate you are a net challenger.

Ask the Boss

Since knowing is always superior to guessing, I’ll give you a set of good questions that can help you figure out where you stand.

  1. If you had to rank your direct reports from top to bottom in terms of difficultly, would I fall above or below the median and why?
  2. Can you please list 3-5 things I do that make it difficult to manage me so I can work on them?
  3. To what extent do you find me difficult/contrarian for difficulty’s sake vs. genuinely challenging ideas and helping the company reach better decisions?
  4. When it comes to strategic debates do you feel that I sit on the sidelines too much, participate too much, or strike a good balance?
  5. If there is a pattern of skipped/cancelled 1-1’s (a sign of avoidance) or higher frequency 1-1’s with other directs, then ask why?

Sycophants know they are sycophants.  Challengers usually know they are challengers.  The risk is that you are a difficult when you think you’re a challenger — and that rarely ends well.  So think about, ask, and take appropriate measures to correct the situation.  Before your boss doesn’t want to talk to you anymore.

Simple Rules to Make It Easier To Build Your Startup’s Board Deck

As someone who has assembled many startup board decks over the years, I thought I’d offer some advice to executives who contribute slides to board decks that should make it easier for the point-person to assemble, improve the deck’s appearance, and avoid any painful and/or embarrassing mistakes in the process.  Marketing folks, who both build a lot of presentations and live in PowerPoint, tend to get these basics right.  Everybody else, in my experience, not so much.

  • You are your metrics.  Remember the old quote that’s often misattributed to Peter Drucker, “if you can’t measure it, you can’t manage it.”  I prefer its corollary, “if you’re not measuring it, you’re not managing it.”  And, in turn, its corollary, “if you’re not presenting it at a board meeting, then you don’t care about it.”  Remember, the metrics you choose to present — and perhaps more importantly those you choose not to present — say a lot about you and what you think is important.  Put real thought into selecting them.
  • Take the time to write a short letter.   Remember the again often-misattributed quote from Blaise Pascal:  “if I had more time, I would have written a shorter letter.”  It’s your board — take the time to include as few slides (and as few numbers per slide) as are needed to tell the story.  But no fewer.  Don’t make the classic mistake of just grabbing your ops review slides and pasting them into your board deck.  Don’t make the deck assembler have to decide which slides, from a pile you provided, should be in the deck.
  • Provide context for numbers.  Repeat after me:  the board is not afraid of numbers.  So don’t be afraid to present them.  Don’t drown them — be selective in which metrics you show.  But when you choose to show a metric, provide context so board members can analyze it.  That means providing trailing nine quarters of history, sequential and YoY growth rates, and % of plan attainment.  Thus, each metric translates to 12 numbers, so pick your metrics carefully.
  • Use the right design template.  Assembly is much easier if everyone is using the same corporate slide template, ideally a confidential version of it that includes good security footers (e.g., Company Confidential and Proprietary, Internal Use Only).
  • Learn how to use slide layouts.  Don’t be the guy putting text boxes onto blank slides when you should be using the Title+Content layout.  One great part about using layouts is re-applying them to make sure you, or a prior author, hasn’t changed anything.
  • Don’t hack the layout.  If your layout doesn’t include a subtitle, don’t use one.  It just makes it harder to reformat things downstream.  Plus, too many folks are lazy and make a sequence of slides with the same title, only varying the subtitle.  Bad habit.  Integrate the two and make varying titles.  Less is more.
  • Don’t put numbers into embedded tables.  The easiest way to get math errors in your board slides if to either cut/paste or re-type numbers into embedded Word tables.  Use embedded worksheets for numbers and ideally do live total calculations to ensure all the numbers are right.
  • Be careful as heck with embedded worksheets.  That said, note that Office has a terrible habit of taking the whole workbook along for the ride when you paste a table as an embedded object.  Don’t be the person who pastes in a table of payroll by department, accidentally including everyone’s salary on an adjacent tab, and then mailing that not only to the board, but also the whole executive team.
  • Paste charts as images.  The major upside here is you eliminate problems related to the prior point, the downside if you give zero power to the deck-assembler to fix things at 2 AM.  The best practice is to ship your slides with charts pasted as images and attach a separate Excel file as the source.  That way, you both reduce risk and give the assembler the power to change things if needed.
  • No more than one table of numbers per slide.  While board members love numbers, don’t mentally overload them with too many concepts on a single slide.
  • Use a standard capitalization convention.  I Recommend Title Case for Slide Titles.  I recommend sentence case for slide body copy.  It’s a pain in the neck to fix this if everyone is doing something different.
  • Use a standard convention for notes and sources.  I use * and ** and put the notes (which are often data sources) in 8-point type right above my confidentiality footer.  It doesn’t matter where you do it; what matters is that everyone puts them in the same place.
  • Don’t use slide notes.  In reality, you have two choices here — either always distribute your board slides in PDF or never use slide notes.  Any middle ground is very dangerous — imagine copying a slide from someone else’s deck that has embarrassing commentary in a slide note that you don’t notice, but a board member does.  Ouch.
  • Type text directly on objects.  Don’t create a separate text box and then put it atop on object; make the text and the object one.

If everyone on the e-staff follows these tips you’ll end up with a better board deck and it will take whoever assembles it — often the CEO at smaller companies — far less time to do so.

The SaaS Rule of 40

After the SaaSacre of early 2016, investors generally backed off a growth-at-all-costs mindset and started to value SaaS companies using an “appropriate” balance of growth and profitability.  The question then became, what’s appropriate?  The answer was:  the rule of 40 [1].

What’s the rule of 40?  Growth rate + profit should be greater than or equal to 40%.

There are a number of options for deciding what to use to represent growth (e.g., ARR) and profit (e.g., EBITDA, operating margin). For public companies it usually translates to revenue growth rate and free cash flow margin.

It’s important to understand that such “rules” are not black and white.  As we’ll see in a minute, lots of companies deviate from the rule of 40.  The right way to think about these rules of thumb is as predictors.  Back in the day, what best predicted the value of a SaaS company?  Revenue growth — without regard for margin.  (In fact, often inversely correlated to margin.)  When that started to break down, people started looking for a better independent variable.  The answer to that search was the rule of 40 score.

Let’s examine a few charts courtesy of the folks at Pacific Crest and as presented at the recent, stellar Zuora CFO Forum, a CFO gathering run alongside their Subscribed conference.


This scatter chart plots the two drivers of the rule of 40 score against each other, colors each dot with the company’s rule of 40 score, and adds a line that indicates the rule of 40 boundary.  42% of public SaaS companies, and 77% of public SaaS market cap, is above the rule of 40 line.

As a quick demonstration of the exception-to-every-rule principle, Tintri recently went public off 45% growth with -81% operating margins, [2] reflecting a rule of 40 score of -36%, and a placement that would be off the chart (in the underneath sense) even if corrected for non-cash expenses.

For those interested in company valuations, the more interesting chart is this one.

rule of 40 valuation.PNG

This chart plots rule of 40 score on the X axis, valuation multiple on the Y axis, and produces a pretty good regression line the shows the relationship between the two.  In short, the rule of 40 alone explains nearly 50% of SaaS company valuation.  I believe that outliers fall into one of two categories:

  • Companies in a strategic situation that explains the premium or discount relative to the model — e.g., the premium for Cloudera’s strong market position in the Hadoop space.
  • Companies whose valuations go non-linear at the high end due to scarcity — e.g., Veeva.

Executives and employees at startups should understand [3] the rule of 40 as it explains the general tendency of SaaS companies to focus on a balance of growth and profitability as opposed to a growth at all costs strategy that was more popular several years back.  Ignore the rule of 40 at your peril.


[1] While the Rule of 40 concept preceded the SaaSacre, I do believe that the SaaSacre was the wake-up call that made more investors and companies pay attention to.

[2] Using operating margin here somewhat lazily as I don’t want to go find unlevered free cash flow margin, but I don’t think it materially changes the point.

[3] Other good rule of 40 posts are available from:  Tomasz Tungaz, Sundeep Peechu, and Jeff Epstein and Josh Harder.

Detecting and Eliminating the Rolling Hairballs in your Sales Pipeline

Quick:  what’s the biggest deal in this quarter’s sales pipeline?  Was that the biggest deal in last quarter’s pipeline?  How about the quarter before?  Do you have deals in your pipeline older than your children?

If you’re answering yes to these questions, then you’re probably dealing with “rolling hairballs” in your pipeline.  Rolling hairballs are bad:

  • They exaggerate the size of the pipeline.
  • They distort coverage and conversion ratios.
  • They mess up expected-value forecasts, like a forecast-category or stage-weighted sales forecast.

Maybe they’re real deals; maybe they’re figments of a rep’s imagination.  But, if you’re not careful, they pollute your pipeline and your metrics.

Let’s define a rolling hairball

A rolling hairball is a typically large opportunity that sits in your current-quarter pipeline every quarter, with a close date that slips every quarter.  At 2 quarters it’s a suspected rolling hairball; at 3 or more quarters it’s a confirmed one.

Rolling Hairball Detection

The first thing you need to do is find rolling hairballs.  They’re tricky because salesreps always swear they’re real deals that are supposed to finally close this quarter.  What makes rolling hairballs obvious is their ever-sliding close dates.  What makes them dangerous is their size (including an accumulation of them that aggregate to a material fraction of the pipeline).

If you want to find rolling hairballs, look for opportunities in the current-quarter pipeline that were also in last-quarter’s pipeline.  That will find numerous bona fide slipped deals, but it will also light-up potential rolling hairballs.  To determine if an opportunity is  a rolling hairball, for sure, you can do one of two things:

  • See if it also appeared in the current-quarter pipeline in any quarters prior to the previous one.
  • Look at its stage or forecast category.  If either of those suggest it won’t be closing this quarter, it’s another big hairball indicator.

The more sophisticated way to find them is to examine “stuck opportunity” reports that light-up deals that are moving through pipeline stages too slowly compared to your norms.

But typically, the hairball is a big opportunity hiding in plain sight.  You know it was in last quarter’s pipeline and the quarter before that.  You’ve just been deluded into believing it’s not a hairball.

Fixing Rolling Hairballs

There are two ways to fix rolling hairballs:

  • Fix the close date.  Reps are subtly incented to put deals in the current quarter (e.g., to show they’re working on something, to show they might bring in some big sales this quarter). The manager needs to get on the phone with the customer and, after having verified it’s a real opportunity, get the real timeframe in which it might close.  Assigning a realistic close date to the opportunity makes your pipeline more real and reminds the rep that they need to be working on other shorter-term opportunities as well.  (There is no mid-term if you fail enough in the short term.)  The deal will still remain in the all-quarters pipeline, but it won’t always be in the current-quarter pipeline, ever-sliding, and distorting metrics and ratios.


  • Fix the size. While a realistic close date is the best solution, what makes rolling hairballs dangerous is their size.  So, if the salesrep really believes it’s a current-quarter opportunity, you can either reduce its size or split it into two opportunities (particularly if that’s a possible outcome), a small one in the current quarter along with an upsell in the future.  Note that this approach can be dangerous, with lots of little hairball-lets flying below radar, so you should only try if it you’re sure your salesops team can produce the reports to find them and if you believe it reflects real customer buying patterns.

Don’t let rolling hairballs pollute your pipeline metrics and ratios.  Admit they exist, find them, and fix them.  Your sales and sales forecasting will be more consistent as a result.

How to be Passionate without Being Self-Righteous

I can easily think of a dozen cringe-worthy times in my career when I look back and say, “wow, I must have appeared to be a self-righteous idiot when I said thing X.”  Let me thank anyone on the receiving end of those statements for their patience.  I now get it; I understand.

Look, I’m all for passion in business.  I’m all for speaking up.  One day I’ll write a book called “Management by 1970s Bumper Stickers” and the first chapter will be on this sticker:


I enjoy questioning authority — ask any of my old bosses. As CEO, I like being questioned.  Good CEOs don’t fear questioning because you typically end up in one of two cases:

  • The point raised has already been considered in making the decision, and explaining the rationale behind that helps the organization understand the decision and increase buy-in to it.
  • The point raised has not already been considering in making the decision and results in either changing or not changing the decision. Either way, the decision is better because we either find a better decision or another reason to support the existing one.  (As long as you beware confirmation bias.)

As CEO, your job is to get the right answer and make the best decisions, not to think everything up yourself.  Pride of authorship should have no place in CEO decision making.

Most people get questioning correctly.  They don’t assume things.  They’re not accusatory.  The simply ask the question that’s on their mind without a whole lot of overtone.  Every once in a while, however, I find someone who gets it all wrong and appears, as I did back in the day, to be self-righteous and dumb.

Let’s start with an example from one of my favorite old sci-fi movies, Soylent Green.


What a great scene.  But imagine if everyone knew that already.  Imagine how stupid you’d sound if you were delivering all those messages with all that same drama.

Imagine Hatcher saying, “Yes, yes, Detective Thorn, everybody knows that.  And boy are they tasty.”

You’d look pretty self-righteous.  And you’d look pretty dumb.  What rock did he crawl from under?  Everybody knows that Soylent Green is made out of people.

So what’s the best way to question authority?  Here are some tips.

  • Assume there is information that you can’t be told.  “We need to buy company X, why can’t anyone else see how critical that is, why won’t anyone listen to me?”  Now imagine the company tried to buy company X last quarter and they wanted 3x more than we could pay.  But no one can tell you that because the whole thing is under non-disclosure agreement.  Should you raise the point?  Sure.  Ask the question respectfully and lose the assumption (and overtone) that you are being ignored.


  • Assume there is personnel information that you don’t know.  “The HR department is failing and nobody over there can get the job done — why isn’t anyone doing anything about this, and why won’t anyone listen to me.”  Now imagine that the HR manager is already on a performance plan and 30 days from being terminated.  No one could ever tell you that.


  • Assume there is a bigger picture conversation that you’re not privy to.  “Why are we giving the new head of Engineering control over Product Management and making the job EVP of Products instead of SVP of Engineering?  Product Management was working fine, we don’t need to make this change, why won’t anyone listen to me.”  Now imagine the company has been struggling to hire a new head of engineering, the CEO is under big pressure to do so, and an extremely well qualified Engineering candidate won’t join unless he also gets Product Management.  No one’s going to tell you that in a Q&A forum.


  • Don’t ignore constraints.   Some of the most self-righteous rants I’ve heard completely ignore practical constraints on the business like a lack of talent, a lack of money, the need to keep paying customers happy, or product constraints related to compatibility.  Now, yes, sometimes great breakthroughs happen when people challenge constraints — but never pretend they don’t exist.  It’s not a great strategy for our company if we can’t execute it.  Maybe it’s a great strategy for some other company, maybe not.


  • Don’t trivialize execution.  Ideas are easy.  Execution is hard.  So when asking questions about ideas, don’t act as if they are free or if we could just get started with two people.  Yes, sometimes, great things start out with tiny investments — a $60K outsourced Twitter connector ended up serving as the genesis of Salesforce’s huge Social Enterprise strategy.   But often projects just end up dead because they were never properly resourced in the first place.  Execution is hard.


  • Don’t forget biases introduced by your personality type.  I stumbled into this great post the other day, What Everyone Desperately Wishes You’d Stop Doing, Based On Your Myers-Briggs Personality Type, and I just love the entry for ENFP — “Expecting everyone to be as excited as you are about today’s new BIG EXCITING PLAN when we all know you’ll have forgotten all about it by this time tomorrow.”  Look, some people are natural executors and others are natural idea generators.  Know which you are in assessing if you’re being ignored.  Is authority refusing to be questioned, or do you just have 10 ideas a day in a startup environment when the company needs to focus on one or two?


  • Don’t be naive.  Bob Waterman, co-author with Tom Peters of the legendary In Search of Excellence, was on our board at ASK, and one day he came down to hang out with the troops at the Friday beer bash.  I remember asking him (before I got my MBA) something akin to, “do you really believe all these green Harvard and Stanford MBAs should run companies or would businesses be better if everyone worked their way up.”  The man had an MBA from the Stanford and worked at McKinsey.  He must have thought I was the biggest idiot on Earth.  My spider-sense told me I’d done something wrong.  It was right.  He muttered something and walked away.   An opportunity wasted due to naivete.

I’m a big believer that the more someone knows about how a decision got made, the more they will agree it.  That’s why, as part of my management style, I spend a lot of explaining decisions to people.

That dumb corporate decision to prioritize X over Y might make more sense to you if you knew all the circumstances about how it got made.  Sometimes there’s a missing piece to the puzzle that makes everything make sense.  Sometimes you can be told about that missing piece.  Other times, you cannot.  But don’t assume it doesn’t exist, nor trivialize matters of focus and execution.