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Summary:

  Veteran VC Ray Rothrock, of Venrock, said something refreshing to me yesterday: “Venture Capital is really all about pattern recognition. We look for patterns it the market, patterns in entrepreneurs, cultural patterns at the startups pitching us.” Rothrock’s pattern recognition thesis is important for founders. […]

 

Veteran VC Ray Rothrock, of Venrock, said something refreshing to me yesterday: “Venture Capital is really all about pattern recognition. We look for patterns it the market, patterns in entrepreneurs, cultural patterns at the startups pitching us.”

Rothrock’s pattern recognition thesis is important for founders. Here’s why: Patterns in the market unearth new business opportunities. Patterns in behavior reveal potential leaders. But it is the cultural patterns at a company that reveal to Rothrock whether or not there is a real investment opportunity in the startup in front of him. If you have patterns of positive culture, he might fund you. If you don’t, he definitely won’t.
A few things that indicate patterns of “positive culture” to Rothrock, and why:

1) Mission Statement:

“I want to see it big and bold, framed or whatever, hanging in the front lobby so that everyone in the company knows what the goal is. In a startup [a founder] can’t possibly direct every decision that is made, review it to ask ‘ does this work for or against us?’. But if your mission is clear for everyone to see, every employee in the company can test any decision against it –‘is this for or against the goal?’ It should be very binary. I don’t like companies without mission statements because I don’t like situations where people can make dumb–or even smart–decisions that do not further the company goal.”

Giving your staff a tool to make this simple determination on their own will fosters positive culture by bringing every company-related decision into concert.

2) Ships Bell:

Revenue is the life blood of a company, at least it should be — the absolute life blood. Revenue is the cheapest form of equity on the planet. Think about it. You can sell your equity or sell your product. What would you rather do? [This is a VC talking!] It is important to signify to your staff when you’ve achieved a goal, especially one as important as generating revenue. If I were running a startup today I’d buy a ship’s bell and put it in the lobby and every time we made a sale I’d ring it as loud as I could so everyone in the company knows we just had a win… It is very important to celebrate your successes.”

You don’t need to pick a ship’s bell, Rothrock says, but choose some regular–patterned–way of telegraphing to your staff that the company has moved another step toward achieving the goal articulated on your mission statement, each and every time it happens. (One of our reader-founders, Greg Cangialosi, based in Baltimore, MD, wrote in to share this image of the gong he and his partnes use at their current startup, Blue Sky Factory.)

3) Personalized workspace is for the birds.

“I know lots of people think having personalized space in a working environment (low lights; special furniture) is good. I say ‘No!’ Personalized space if great for individuals, but you’re building a team. I don’t like ‘distributed workforces’ for the same reason. In a startup you need to foster a culture of energy and excitement around your product. I think that can only be felt if you and your staff are in the same place, working side by side. At Check Point Software (one of our companies), from day one the rule was ‘no one leave for lunch. ‘ The team sat down to have lunch together every day. They still do it. Of course, the company is so big now (1,800 employees) that they have to do it in teams. But when I visit a company I like to see the people in the shop.”

Emotional bonds between staff are more easily made in person. Working physically together is an important part of building bonds between workers and to the company and, therefore, is part of positive culture.

4) Building or Selling?

“This one is a simple test. In a startup with 35 people or so, I want to be able to see the every single person is either building something, or selling something. Literally. There is no room for anything else. It is a real warning light, to me and should be to a founder, if anyone in the company is doing something other than one of these two things. Those people have got go.”

You might like your personal assistant, but if s/he isn’t selling or building, answer your own darned phone.

5) ‘Dial 1′ on the company voicemail = ?

“I can tell a lot about the DNA of a person or their company right there: When I call, and I get the answering service, what does hitting ‘1’ get me? Now I can’t claim credit for this rule myself, because it is something that Salesforce.com founder Marc Benioff told me once at an event, but: Marc Benioff

For a company in development or growth mode, dialing ‘1’ should always take me straight to sales. When I ask the CEO if he knows what’s on the company voicemail, and he doesn’t, that is a bad sign. The CEO should know, not pawn it off to ‘someone else who set it up.'”

For many customers the 2nd thing they experience (the 1st will be your website) will be your voicemail. Make sure that your #1 priority is represented in the prompt callers hear first. Maybe it’s sales, maybe it’s customer service. But here’s a hint: it is the thing on your mission statement!

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  1. Advice Network Friday, November 30, 2007

    As someone starting a company, I find this post to be really inspiring.

  2. After many years of working in ”traditional companies”, it is such a breath of fresh air to work for my startup. I have truly come home and am passionate about what I do; Adaptees of the world unite.

  3. If you want to know about trends…ask an artist…

  4. Greg Cangialosi Saturday, December 1, 2007

    I agree with most of Ray’s comments. At my company we celebrate sales by banging a large gong :-)
    http://www.flickr.com/photos/trendjunkie/644081500/

    Good stuff, thanks for sharing.

    – Greg

  5. Thanks, Greg. I’ve updated the post with your image!
    Best, Carleen

  6. links for 2007-12-01 « John’s musing Saturday, December 1, 2007

    [...] ‘Dial 1 for Sales’ & other patterns of positive culture « FoundRead (tags: advice startups business entrepreneur) [...]

  7. Interesting post. I wonder if they seek out these companies or these companies seek out them. There are so many different personalities/cultures out there…

  8. Great post! It reminded me to evaluate my own actions day to day…be building or buying – got it!

  9. Scratch that… be building or selling!!

  10. Weekend Roundup | Salesforce Times Monday, December 3, 2007

    [...] Tips on building a startup from Found Read including words of wisdom from Marc Benioff [...]

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