Organizations I E140A: Management of Technology VenturesUnderstanding People and Start-UpsA Start-Up’s Key Players: Can They Turn Into an Effective Team?Masayoshi Son’s Quote CEO of SOFTBANK (Japan)Rewards In New VenturesCulture: The Secret to Long-Term Success?Built to Last’s Methods to Preserve the Core and Stimulate ProgressCulture: Major Challenge to Create a Fertile Environment for InnovationSlate Corporation: Cultural GuidelinesWhat Can We Learn from the Remedy Case?E140A-98 Slide #1Organizations I E140A: Management of Technology VenturesRemedy Case AnalysisPeople and Start-UpsWhat Can We Learn from “Sun and Vinod”E140A-98 Slide #2Understanding People and Start-UpsTradeoffs &Adaptation1. Team (“Recruiting Talent”)2. Compensation (“ISOs”)3. Culture (“Company Tenets”E140A-98 Slide #3A Start-Up’s Key Players:Can They Turn Into an Effective Team?Internal–Founders or Initial Partners–CEO and VPs–Designers, Developers, “Architects” and Managers of Products & Services–Sales and Marketing–Operations and Administration–?External–Board Of Directors–Investors–Advisory Boards: Customer or Technical–Professional Services and Suppliers–?E140A-98 Slide #4“The way I attract these people to SOFTBANK is to explain what my dream is. It is not money because they actually come to work and we never talk about payment. They come to work, then a week passes, or longer, then we finally get around to talking about money. I’ll ask them, by the way, how much do you want? And they say, whatever you want to give me. Then I ask them, how much were you making last year? Then I give them the same amount. So they don’t come to SOFTBANK for the money. It’s for the dream that everyone has together. The dream of making the company successful.”Masayoshi Son’s QuoteCEO of SOFTBANK (Japan)E140A-98 Slide #5Rewards In New VenturesNew Ventures ... Status Determined by Contributions to Improving Culture and Increasing the Value of the CompanyHence, Rewards Tend to Be Value-Enhancing Such as Stock Options so Employees Have Equity (Ownership) in CompanyE140A-98 Slide #6Culture: The Secret to Long-Term Success? “A strong system of informal rules that spells out how people are to behave most of the time.”“First four letters of culture spell c-u-l-t.”“The most durable asset of a venture is its culture.”E140A-98 Slide #7Built to Last’s Methods to Preserve the Core and Stimulate ProgressBHAG's? (SP)Cult-Like Culture? (PC)Evolution ThroughExperimentation? (SP)Home-Grown Management? (PC)ContinuousSelf-Improvement? (SP)Reference: Collins & Porras, Built to LastE140A-98 Slide #8Culture: Major Challenge to Create a Fertile Environment for InnovationDevelop Sense of TeamworkUnderstand Personalities of Key PeopleDevelop Open Internal Communication Remain Open to Ideas & Suggestions from AnywhereBe the CustomerBe Willing to ExperimentInclude Creative and Unusual PeopleAddress the Issue of AutonomyReference: Collins & Lazier, Beyond EntrepreneurshipE140A-98 Slide #9Slate Corporation: Cultural GuidelinesRULESEveryone gets a say, only one person decides.Everyone knows who makes a decision.Agree to disagree, then commit.Make a decision, then communicate.Do the job before you get the job.If you don't try, you're in trouble.VALUESWe're here to win.We do the right productSlate is a great place to create products.We have fun.Our word counts.We trust each other.We always give 100%.Product is more than code.A company is more than product.We're committed to excellence.PEOPLEExperienced.Competent.Nice.Want to win.E140A-98 Slide #10What Can We Learn from the Remedy Case?People “issues” in start-ups are just as critical as those strategies related to technologies, products, marketing, and finance and administration. It is worthy of attention and study. It may provide a source of competitive advantage and insure survival during tough times.The founders, CEO, and senior management team in a new venture have many challenges and decisions to make regarding people -- how to recruit outstanding people, build an effective team, create a compelling reward system, and establish a winning culture. For example, they have a choice regarding culture. On one extreme, the company can be a “cult of the personality” (normally the CEO or technical founder). On the other, a consensus-driven, harmonious culture may be centered around the idea of teamwork. What are the trade-offs with these?Furthermore, a start-up may allow the culture to evolve naturally or it may choose to proactively establish one. It may selectively use tools such as off-sites, devices such as plaques or signature walls, and rituals like Remedy’s tenets to do this. Everything has