Saul Klein, founding partner at LocalGlobe, on scaling your team
*This is an extract from UPSCALE, a new book, launching today, on scaling by Tech Nation, the UK network for ambitious tech entrepreneurs. Saul Klein was speaking to Upscale’s author James Silver for Tech Nation.
There are five key things in any business that a founder is keeping in mind at any one time, no matter the stage, says Saul Klein, co-founder and partner of London Seed-stage VC LocalGlobe:
· Product.
· Team.
· Growth.
· Underlying unit economics.
· Capital and cash flow.
“As a leader, certainly as a CEO, you’re permanently juggling all five of those things,” he says. “But as you scale, you need to start to build a team around yourself that can take functional and operational control of those areas, so that you’re gradually putting yourself in a position where someone else increasingly has full ownership of them.
“That means trusting them to have oversight and provide support and direction for the teams in those areas, because without that you’ll end up being too down in the weeds,” adds Klein, arguably one of the UK’s highest profile tech investor.
“Communication and on-going dialogue are critical.”
As a founder, you need to make sure that your teams – right down to specialists, if you’re a software company, such as your backend and front-end developers, data scientists and dev-ops are talking to one another, and that people are pointed in the same direction. Obviously the more people you have in the organisation, the more challenging that becomes.
“That’s where things like strategy, culture, goals, objectives become really important because the larger, the more complex the organisation, the more you need things that really bind people together.”
One of the ways Klein believes founders can achieve that all-important bond is a concept he terms “Total Football”, which is defined by the Cambridge English Dictionary as ‘an attacking style of playing football (soccer) in which all the players in a team except the goalkeeper can change positions during the game’.
Says Klein: “The key idea there is that every single member of the team, theoretically should be able to play in every other position.
“Now obviously a software developer is not necessarily going to write great marketing copy, and a sales person is unlikely to be able to write Python. But the real principle that applies is that it’s very hard to get the most out of a team unless the different people within it understand and respect the other roles.”
It’s common, he says, to see divisiveness in organisations between engineering and marketing or sales and marketing or finance and product – particularly in scaling companies.
“While it’s unlikely that people will be able to swap in and out of these very different roles – Total Football-style – at the best types of organisations, certainly people in leadership roles understand and respect the roles that other people are playing and also understand that ‘while I’m not going to understand your piece of the business as well as I understand my own, the better I understand your piece of business, the better I’ll be able to work with you and the more successful my piece of the business will be’.”
“The kind of people you want in your first 50, 100, 200 people, by and large, will not only be really knowledgeable, but born into the mission.”
“You also want them to be agile and flexible. It’s very hard to recruit and retain those kind of people unless you’re giving them a lot of access, a lot of information and a lot of autonomy.”
“Crossing the Rubicon.”
Klein refers to another key aspect of successfully scaling a team as ‘Crossing the Rubicon’, in a reference to Julius Caesar’s irrevocable decision to cross the Rubicon river in 49BC, a strategic move that he knew would be viewed as an act of war by the Senate in Rome.
“The real point of the analogy about crossing the Rubicon is to say when you are confronted with a tough, make-or-break decision – where there is not necessarily a single answer or where there are very good reasons why you could stay on your side of the river – and you make your choice, having discussed it at length, you cannot then disown it.
“So this is about team coherence and cohesiveness, because you make tough calls as a team, you have the debate, you may be right, you may be wrong, but this is the decision you’ve made. And once it’s made, you all own it as a team.”
“There are at least five to ten decisions a day, big and small alike, being made inside an organisation.”
“That’s why it always comes down to creating a culture based around team-work,” he says.
“So the point about crossing the Rubicon is: thrash it out, have the discussions, have the debates, but don’t paralyse yourself because there is (often) no right answer.
“When you do make a decision, make it proactively – and one of the rules about crossing the Rubicon is that you don’t look back and you don’t turn around to your colleagues, when you cross the river, and say ‘I told you this wasn’t going to work’ or even that ‘I told you this was going to work and now I’m going to take credit for it’.”
“The point of having a weekly management or partner meeting, or quarterly off-sites, or whatever it is, is the rhythm you establish is actually a forum where people can have these ‘crossing the Rubicon’ discussions.”
“You can put stuff on the table, you can honestly discuss and debate issues but you then move on as a team,” he says. “And if you can’t, you stay on your side of the river.”
Far better to have these hard conversations and decide either to go on together or not, than to have someone or part of a team dragged along because they weren’t really happy with the decision in the first place, says Klein. “That’s the atmosphere and environment that exists in 70% of companies, or more. And those are the kind of things that kill companies.”
*This is an extract from UPSCALE, a new book, launching today, on scaling by Tech Nation, the UK network for ambitious tech entrepreneurs. Saul Klein was speaking to Upscale’s author James Silver for Tech Nation.