Scaling Your Startup…Through Your Best Nature

February 12, 2020

The Startup Grind conference brings together hundreds of startup founders from around the world this week. The organizers asked me to give a talk on “scaling” yesterday -- always a hot topic among CEOs. It’s also top of mind for me, since I’ve been reflecting on the journey of my six years at Gainsight. 

My farewell note to the company last week pointed to what’s beautiful and also hard about scaling a company. Here’s an excerpt:

“...My mom recently shared a kernel of wisdom, as she tends to do: ‘Life is all about how you affect other people.’ You all have affected me — shaped me, even — in ways that you may not even be aware of. You’ve offered creative ideas that inspired me, shared input for how I can help you individually and us collectively be successful, and shown me what a team of enthusiastic people can achieve together. I am so thankful for all the good times, and even for the tough times, too. Being a leader has exposed me to the best and worst of human nature — not just in others but more importantly in myself as well, making me acutely aware of all my own faults — and I’ve become a stronger person because of that. You’ve given me greater knowledge of cultures around the world and shown me that despite all of our differences, we all share at least one thing in common — the innate human desire to bring good into the world. I hope that I’ve been able to help you grow as much as you’ve helped me grow…”

Founders clearly exhibit that “innate human desire to bring good into the world.” We see a problem and want to fix it. We see potential for improvement and want to manifest it. 

Our ability to realize our vision of improving the world often hinges on whether we can improve ourselves. When under the stress of trying to achieve these lofty visions, it can be easy to succumb to the “worst of human nature.” And when we do, our team usually does, too.

I want to wax philosophical for a bit (which I am prone to do, as a former moral philosophy student!). The philosopher and spiritual teacher Ekhart Tolle wrote a book called A New Earth that, at least to me, captured the essence of human psychology. You might call it new-agey, but I find that his foundational concepts resonate. He refers to the human “spirit” as essentially the essence within us that is deeply linked to other people; compassion and joy stem from the spirit. The human “ego,” by contrast, causes us to identify with our thoughts and emotions, which distances us from other people. The ego is reactive to pain, causing fear, anger, jealousy, and other negative emotions that in turn create more pain in others. When people grow their awareness of their spirit, they develop patience with their ego, allowing them to connect more deeply with others and create greater joy in the world. 

If philosophy isn’t your thing, the writer of the Wait But Why blog, Tim Urban, refers to a similar duality in his recent series on political dialogue in America. Similar to Ekhart’s “spirit,” Urban’s “Higher Mind” is “the human capacity for clarity, rationality, self-awareness, and wisdom; the ability to override our primal instincts when it makes sense to.” And similar to Ekhart’s “ego,” the Primitive Mind is “the ancient software running in every human’s head that drives us to serve the will of our genes: ‘Survive long enough to successfully pass your genes on.’”

The spirit and Higher Mind are the best of human nature; the ego and Primitive Mind are the worst. That’s why Urban pictured the Primitive Mind as carrying fiery torch and the Higher Mind as surrounded by a halo. Don't you want to give these characters a hug?

No alt text provided for this image

Source: WaitButWhy.com

Whether we realize it or not, every leader (myself included!) mediates the interaction of these two natures, in our own mind and in others. If we’ve said one of the following statements before in our startup, we’ve likely heard our ego talking:

1a: “Person A quit out of the blue, but we’re better off without them.”

2a: “That client didn’t buy (or churned), but they’re really not a good fit for us anyway.”

3a: “The team isn’t doing activity X, so I have to do it myself…again.”

What these statements have in common is self-centeredness. Statements #1a and 2a are often an attempt to rationalize rejection, and they exude defensiveness. Statement #3a positions us as the hero. 

Check out how the “spirit” might communicate about these three incidents:

1b: “I wonder, was there something we could have done differently to keep Person A from leaving?”

2b: “What can I learn from that client churning?”

3b: “Am I effective enough in empowering the team to do X?”

Statement #1b acknowledges that if we really didn’t want Person A at our company, we probably would have been more proactive in organizing a peaceful departure, and it acknowledges that we may have had a role in causing them to leave abruptly. The second statement similarly takes a “growth mindset” approach to the negative incident. Statement #3b recognizes that the team might actually do activity X if empowered properly. Not coincidentally, all of these statements are actually questions, which shows the speaker’s willingness to gather the full set of data about each situation and figure out their role in producing the negative result. Humility underlies this second set of statements.

I personally believe that channeling our Higher Mind is important for spiritual and moral development. But that’s not why I’m writing about it here. This series is about how leading from your Higher Mind will allow you to more successfully scale your company.

In my experience as a startup leader who has made and witnessed plenty of mistakes, and as a board member and advisor to founders, I’ve observed that when leaders are at their best, they lead from spirit, not from ego. When they lead from spirit, they are better able to:

  1. Learn from their mistakes -- because they are open to recognizing their own failures;

  2. Connect with their team members -- because they let their guard down;

  3. Inspire their organization -- because their confidence looks genuine (the opposite of arrogance, which conveys falseness);

  4. Empower others -- because they don’t have to be the hero every time.

Beyond improving their own ability to run their companies, leaders who lead from spirit inspire the same kind of behavior in their teams. Conversely, when leaders lead from ego, they inspire egoistic behavior. Ego spreads like a contagion. Soon enough, everyone is territorial and defensive, collaboration grinds to a halt, and no one is accountable to each other.

This is not an “HR problem”; this is a business problem, since business is simply the organization of people to monetize value delivered. Moreover, as I’ll discuss in this series, this is a scaling problem. Founders who harness the best of human nature in themselves and their teams are able to scale fastest and create enduring value. I’ll cover seven examples of this across the three stages of the startup journey.

Adapting a framework that I believe was first proposed by David Skok at Matrix Partners, those three stages are:

  1. Search for Product - Market Fit

  2. Search for Go-to-Market-Strategy - Market Fit

  3. Scale

No alt text provided for this image

In the first stage, we’re looking to solve a “whole problem” that someone has. In stage two, we’re figuring out a repeatable go-to-market (GTM) playbook for delivering value from our product and monetizing that value. That playbook typically includes the qualification criteria, the elevator pitch, the website messaging, the slide deck, the demo, the pricing, the onboarding process, the customer milestones, the definition of value, the renewal process, and everything else that goes into creating a customer journey from the start to renewal and beyond. In stage three, we invest further to execute that playbook at high volume.

In my subsequent posts over the next few days, I’ll cover three examples of how channeling your higher nature can help you achieve Product-Market Fit in stage one. Hint: it's a lot messier than building great tech!