In this episode of Startups For The Rest Of Us, Rob and Mike discuss focusing on people versus process. They dive into the question whether you have to hire exception people or run your business based on process.
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Rob [00:00]: In this episode of Startups For The Rest of Us, Mike and I discuss valuing people versus process. This is Startups For The Rest of Us Episode 247.
Rob [00:17]: Welcome to Startups For The Rest of Us, the podcast that helps developers, designers and entrepreneurs be awesome at launching software products whether you’ve build your first product or you’re just thinking about it. I’m Rob.
Mike [00:26]: And I’m Mike.
Rob [00:27]: And we’re here to share our experiences to help you avoid the same mistakes we’ve made. What’s the word this week, sir?
Mike [00:31]: Well, I’m in the middle of running a webinar but I had to set up everything up first so I basically copied one of my old webinar campaigns. Going through that and updating all of the little tiny things that need to be updated is incredibly tedious.
Rob [00:44]: Did you change the title and some of the content?
Mike [00:46]: Well, yeah. You change the titles then you have to go through, and you have to go through every single email to make sure you’ve changed the title there. All the dates, any times that you’ve changed, and then of course you have to reconfigure everything if you have it set off of a specific date. It’s just tedious to go through.
Rob [01:02]: Yeah, it’s almost like somebody needs to build a little placeholder thing on that you can enter it in one place and then reuse in a bunch of emails.
Mike [01:07]: Well, kind of. I mean it might be nice to have not tags but like variables that say, “Okay, put this here for the name of it,” or something like that. But even then, you still have to go through every single email and read all the copy and everything. I’ve got, I don’t know, like half a dozen of them or so that I had to go through so it was just a long process of like four or six hours to get everything done.
Rob [01:26]: Right, right. When you started this you said you were running a webinar right now which meant was you’re launching a webinar, right?
Mike [01:31]: Yes, yes.
Rob [01:32]: Yeah. You’re not actually running one while we’re talking?
Mike [01:33]: No.
Rob [01:35]: Cool. For me, we’re working on a bunch stuff. I’m running a webinar tomorrow morning. It’s kind of the first Drip-only webinar. It’s put on by us and it’s only going to be folks from Drip who are on it. Pretty excited by it. It’s nice to have first one, you can get a lot of attendee right? Because you can use your existing list and then the ones after this will have to pull from new folks and start running ads. But that prep has been pretty time intensive, to set up the slides and set up the demos and make sure the demos work, and work back and forth because I’m co-hosting it with Ana who does customer success with Drip. We know when you co-host something like that, it is so much to think about – who’s going to say this, who’s going to run the cameras, to figure out which person’s on at which point and then we’re also trading back and forth on some slides. So there’s a lot more complexity, a lot more logistics than when you’re just running one yourself.
The other thing we’re up to is we’re launching something called Drip University. It’s at getdrip.com/university, and the tagline that I finally landed on is “Courses so good other sites would charge for them.” So our first one is going to be a 20-part video course where I interviewed Patrick McKenzie, and each part is like a two to five minute video of a specific question and a specific answer about email marketing. So how often could you send, what are typical open rates, stuff like that. You get these questions all the time and so I wanted to get his take on it, obviously he does a lot of email marketing. If you go to getdrip.com/university, we’ll have that live in the next – it’s going to be a week or two until it’s live but obviously you could leave your email now and hear about it then. It’s kind of exciting. I’m excited. We have a couple of other courses that are already – we have webinars and stuff that we’re linking to that and other courses in mind that we’ll be launching in the future. So it’s kind of a way to help folks just have more answers about email marketing and obviously it’s a bit of content marketing for us.
Mike [03:27]: Cool. I’d imagine it’s a lot of those videos that you can probably reuse in some of your email marketing where you just send those out to people in sort of a Drip campaign.
Rob [03:36]: Exactly. Yep.
Mike [03:37]: Cool. So what are we talking about today?
Rob [03:39]: Well today, we’re talking about valuing people versus valuing process. And when I say it, it almost comes out weird like, “Shouldn’t you value people?” But it’s really this phrase that you hear in business about whether you have to hire exceptional people who are crafts people and super gifted, or whether you are able to basically run a business based on process and to hire folks who certainly are skilled and you hire the best you can but they don’t need to be these phenomenal talents. You often hear it out, we have to have a process and then we’re going to insert any person or we have to value people over process. The reason I want to talk about it is that for the past several years, I’ve heard a lot of people talking about the value of process. We have standard operating procedures, standard operating documents, you have Dan and Ian at Tropical MBA talk a lot about this, Brian Castle has talked a lot about it, and anybody who’s productizing a service is going to be talking about it. To be honest, I’ve never been a fan of process. I know that you need some. I have Google Docs and I have VAs who look at that stuff, but in general I don’t enjoy that, like I get bored with it pretty fast. So I started realizing that maybe I don’t fit in, like my personal way of running a business doesn’t fit in with the whole process emphasis. So I don’t particularly love creating them and I don’t particularly love following them. Within the span of a couple of months, I heard a couple of quotes from people who, I respect and they both talked about valuing people over process. It occurred to me that perhaps these are just two sides of a coin – that it’s not one over the other, that it really depends on your goals and perhaps your working style. So that’s why I wanted to talk about it today.
So the two people who had mentioned this valuing people over process, the first was the CEO of Pixar’s. His name’s Ed Catmull, and he has the book Creativity, Inc. where he talks all about their creative process. He kept pointing out in that book that in order to create the Pixar movies that they’ve done that they have to trust people, not process. They do have a process for creation but he says it wouldn’t get done without the people. The other person who talked about this is I heard Warren Buffett quoted as saying something very similar where like he said, “I just have to have really good people and then let them run it.” He also runs a bunch of companies so he has to hire like really good CEOs, and for him creating process wouldn’t work. But it just got me thinking along these lines, and I guess I’m definitely more of a believer in this people side of things rather than investing so heavily in process.
Mike [06:07]: Well, I think it depends pretty heavily on the type of problem that you’re having people solved too. So there are certain types of problems where there is either a single way to do it or there’s a single best way to do it and it’s clearly identifiable, or there’s a good enough way to do it and just go through these steps and although it’s not perfect, it doesn’t really make a difference. And then there’s this whole other classification of problems where you really need to have good people who are creative and are able to think outside the box and it’s not necessarily a standard type of problem. So for example, one of the things that you can look at is the software development which actually fits both of those types of things at the same time. So there are certain types of software development where you have to do design and you have to build good stuff, and that tends to happen I think more on the UI side of things. You need to have that creative side in place where you actually have to have good people. And then there’s other things, on the backend for example where the customer doesn’t see the code and it’s very straightforward, so like a simple [?] application where all the backend processes are pretty straightforward. That type of stuff, you can hire somebody who does more of a process-driven thing.
Now, of course the entire software development process, there’s a process in place for handling that and rolling out changes and everything else, but depending on the type of problem that you’re solving, it can go one way or the other. For any sort of services, business, some of the different names that you talked about earlier, any sort of productized service or business, those are heavily driven by process. You want to be able to produce a reliable output for those things so you’re going to need a lot of standard operating documents, you’re going to need a lot of processes in place. Anything that’s creative, you mentioned Ed Catmull from Pixar, they need to have a lot of creative people in there because there’s a lot of stuff there that you just can’t have a process for. They’re basically creating emotions. I’m not going to say that there’s no process that you could follow in terms of psychology to create certain types of emotions throughout a movie, but that’s very difficult to pre-engineer in a way that’s not predictable for an audience. You don’t want to have a ton of cookie cutter movies, which is certainly not what Pixar has ever come out with. They don’t do cookie cutter movies but they do do good movies.
Rob [08:20]: Yeah, it really is. The more I’m thinking about it, it really is a choice. If you want to grow fast, let’s say you’re venture funded, I feel like you have to rely on process because if you rely on people, you’re going to really not going to have a lot of process. You have to hire exceptional, exceptional people and so you must grow slower because by definition, you just can’t find that many people who are that good. So I think the question really boils down to is, should you hire the best you can find and rely on strictly documented processes or should you hire only exceptional people and rely on them to make good decisions realizing that it’s going to kind of stunt your growth a little bit?
Mike [08:55]: Well, I think there’s two pieces of that. They’re just entirely glossed over by that question, and the first one is, do you have the money? Second one is, then if you do have the money, then what do you want? What is your ultimate goal?
Rob [09:06]: Yeah, that’s right. There’s a couple of really good articles by Joel Spolsky on this topic. One is called “Ben & Jerry’s vs. Amazon” where he compares Amazon who is just raising a bunch of funding, and this was ten years ago. He wrote this maybe even more, maybe 15, and he compares them to just growing and growing and growing and obviously they needed enormous amount of process, enormous amount of employees and they just need to kind of plug them in where they come. Whereas Ben & Jerry’s was a very slow growth organic business. I don’t think it raised any funding. He talks about knowing your goals up front and I think that relates here.
The other article’s called “Big Macs vs. The Naked Chef” and we’ll link up both these in the show notes. But the Big Macs one is really interesting and probably even more applicable here because it talks about how the Naked Chef is this expert. He’s an exceptional chef and he can make everything up the top of his head, he doesn’t need any process, and he can start a restaurant but he can’t start a hundred restaurants without having a bunch of process and then bringing in people who are not as good as him. Whereas if you’re going to start a restaurant that serves Big Macs, he says Big Macs aren’t very good but they’re all not good in the same way. They’re very, very consistent and it’s because they have this killer process. So if you do want to get large like that, you kind of can’t. You just can’t rely on people as much as process.
I think some other roles that really lend themselves well like you said earlier to process are like virtual assistant roles, support, friend and support. That is one place where we do have a bunch of process. We have always had process for Drip and HitTail and [?] and all that stuff because it just makes sense and the things are a little more cookie cutter. I think if you have a manufacturing business, for sure, any type of productized consulting we’ve already mentioned. Yeah, I can’t imagine trying to scale that without having really good process and being able to hire – you hire good people. You hire as good as you can but they don’t have to be these truly exceptional people who are off the charts, either consulting in VC back there, perhaps the other places where you’re definitely going to need process just because you can’t find good people quick enough.
Mike [11:00]: I do wonder if a little bit of these just boils down to being able to think outside the box for certain types of problems. We did talk about it a little bit before. Any sort of creative activities, so Pixar obviously is a great example of scriptwriting and scripts in terms of movies and things like that, but anything where there’s not a clear best approach. Obviously movies fall into that, some software development falls into it, but I think that there’s also places in consulting where you do need to hire good people as well, so if it’s a consulting engagement where there’s the high potential that something could go wrong. I’ve done a lot of enterprise consulting before, and you need to have very good people. Process helps you to some extent, but you still need people who are extremely knowledgeable and know the software inside and out, and you can’t just throw some random person in there who’s got certifications because that doesn’t always work. They need to be able to not only manage the software but the project itself, and those are two different skill sets. There’s some people who are technical and some people who are good with people, and finding the overlap between those such that they’re able to solve not just the technical problems but also the people problems associated with that, that can be really hard to do and you can’t just have a cookie cutter process for something like that. Especially because there are situations that come up where you have to deal with them on the spot and you can’t just go consult a manual or you can’t go talk to other people, and you need to come up with an answer right then and there on the spot. Especially when it comes to a meeting where somebody looks at you and says, “What do you think we should do?” You can’t say, “Hey, let’s take a 30-minute break while I go talk to my colleagues and figure out what the best answer is.” Sometimes you just can’t do that. So there’s these places where you need to be able to think on the spot about that stuff, and that’s where the people over process comes in.
Rob [12:45]: Yeah, I would agree with that. I think any task that involves a high element of creativity or that’s extremely complex is really hard to turn into a process. When I say complex, that might not be the word for it, I’m thinking of software development like writing code. I’ve seen shops with 50 or 100 developers and how they tried it. Any process around something, any process for the basic steps of checking in code or checking out code from source control or deploying, those things, I’m not arguing against having process for that because it totally makes sense. But it’s like trying to turn software development itself, the art of taking a feature and architecting it, building it, and putting that out the door trying to turn it into a process, I’ve seen people attempt to do that. Again I’ll counter, it’s not a methodology either because Agile I would not say is a process, it is a methodology that guides you but you still need solid people. If you put crummy developers into Agile methodology, you’re going to get crap code out the other end. That’s what I’m kind of wrestling with. It’s like I think that certain roles really lend themselves well to heavy process and it’s the ones that are not necessarily as creative and they’re more road tasks and they’re not as complex as something like software development.
The complexity like I said might not be the word, it’s almost like craft. When it’s a craft, when you’re having to hand-shape something and build it yourself and pull a lot of brainpower and be that, they call it a knowledge worker. I think Bill Gates came up with that term. Those are the roles where you can put a process to it and I’ve seen it done “successfully” in the sense that software does come out the other side, but in my opinion, that software tends to not be very good. It either suffers from bugs or the features are not built really well or the UX is really awful. The stuff that I’ve seen that I want to emulate, the projects, the products, they are built by crafts people that are really, really good at their craft and it wasn’t a process that told them how to design the front end of it and how to build the UX and how to write the code. The stuff that really executes and is elegant tends to be done by these exceptional people. Frankly, I just enjoy being around people like that. They’re smart, they’re interesting. That’s who I want to work with day to day. So I think what’s occurred to me is even if it hampers my company’s growth because I can’t hire 50 people or whatever, I want to air on this side of valuing people versus trying to put everything into a process.
Mike [15:04]: I think one thing that comes to mind around this particular side of things is the unpredictability of the output. So if you do something, in the example of Joel Spolky’s “Big Macs vs. The Naked Chef,” on the Big Mac side they’re all cookie cutter. You know exactly what the input is and you know exactly what the output is and you need somebody to just execute that. But if you’re dealing with a problem where the end result is not necessarily known and you don’t even know if that’s the best result, I think that’s where the unpredictability is and if you can’t predict it, then you need good people. Process will help but it doesn’t guarantee success. It doesn’t guarantee that you’re going to get the best possible result. Even having good people doesn’t necessarily do that, but I think that it improves your chances. Maybe that’s really an additional element that needs to be taken into account is how predictable is the output? How predictable is the stuff that you’re putting into? For example if you got a process that’s executing and you have to evaluate the quality of the data going into it, well, you have to have good people in order to do that. Just process is not going to get you very far.
Rob [16:05]: Yeah, and let me point out that I think I have the advantage of kind of a little bit of naivety, right? We’re at five employees at this point. I think when you hit 10, 15 or 20, no matter how well you hire, perhaps you need to bring more process into it and there might not be any way around it. But somehow in the back of my mind, I want to try to avoid this heavy burden of – I’ve worked at companies where there were four developers and it was so much fun, and then we grew to 24 developers and it was awful. I hated it and I left, and that’s the traditional path that I see a lot of the dev teams go down and frankly just a lot of companies that as you get and add process, it becomes less fun.
Mike [16:42]: But I guess that introduces the question, is it because the team’s got bigger or is it because they lowered the standards and quality of the people they were bringing in?
Rob [16:50]: Yeah, they definitely lowered the standards and the quality of the people they were bringing in and they added a ton of process I think as a result. Maybe they would have added it anyways. But they couldn’t have gone to 24 people if they had raised some funding and they couldn’t have gone to 24 people without lowering the standard because there just aren’t’ enough candidates.
Mike [17:07]: Well, I wonder if there’s a correlation there between the quality of the people versus the amount of process.
Rob [17:13]: Right.
Mike [17:13]: It’s an interesting question.
Rob [17:14]: Well, it’s interesting to think like even Peldi who started Balsamiq, they hit, I don’t know, 12 employees? He spoke two years ago at MicroConf and he said they hit around 12 employees and that he had to introduce a decent amount of process. Actually that was one of the things he talked about in his talk was all the standard operating docs and the procedures, the stuff that he put in place. I was a bit surprised by that because I kind of thought of him as like a nimble startup, and I was thinking he was kind of in that camp of keeping it small and keeping it simple and keeping it lean and not putting much process on it. But A), maybe I was incorrect, maybe he just leans more towards process in general. It’s definitely a personality thing. Or B), maybe at 12, it becomes hard to do it. Although I can’t think of a couple of counter examples. I think like Xerox PARC back in the day, these research centers where they have PhDs and really, really smart people doing crazy exceptional things. I’ve heard that they have very flat management structures, they have almost no process, and they kind of just move forward in research stuff. I guess more of a scientific thing, and obviously you can’t put a process behind scientific research.
Mike [18:15]: No, but I would assume that once something gets to the point where it seems like it’s a viable product, there’s probably some sort of process in place to take it out of the research facility and put it into the market, and from there it becomes a full-fledged product then put a development team behind it and everything else. So there’s a point in which R&D is really not process driven, it’s more people driven, and then at some point when you start to scale it, that’s when you have to bring in that process. So maybe it’s that scaling side of things as well. That could factor into it. I like the idea of saying, “Okay, well, if there’s unpredictability in the output, that’s a factor in how much process you need. If there’s lower skills, you need more process. If it’s more creative stuff, you need less process.”
So it think the underlying question here is, what is right for you though? What stage is your business in? What fits your own personality? What kind of business do you want to build? You could build a very large company very quickly but you’re going to have to have a lot process versus if you want to stay small, you can probably get away with very little process especially if you have a small team. So those are the two different things that somebody might need to think about, and again it boils down to personal preference. You could probably forego a lot of process and grow slowly over time just by concentrating on hiring the best people in the world.
Rob [19:30]: Yep, I would agree with that. I think as a listener, that’s the point. Really the point of this conversation is not to use you or I as necessarily as the example, but for the listener it’s like, “What are your goals?” Because I definitely think that depending on where you want to head, it has a lot to say about what you are going to have to do in terms of putting process in place or of hiring the best people out there. A mix of both would be ideal, wouldn’t it?
Mike [19:55]: Yes, it would. Well, I think that about wraps us up for today. If you have a question for us, call it in to our voicemail number at 1-888-801-9690 or email to us at email@example.com. Our theme music is excerpt from “We’re Out of Control” by Moot used under Creative Comments. Subscribe to us in iTunes by searching for Startups and visit startupsfortherestofus.com where you’ll find a full transcript of each episode. Thanks for listening, and we’ll see you next time.