CHAPTER SIX

BRINGING THE STORY TO LIFE

Every parent who reads to his or her children has heard the question: “Did it really happen?” More often than not—and whether we let our kids in on the secret or not—the answer is “no.” In the realm of make believe, we wouldn't have it any other way. (Where would we be without hobbits and Hogwarts?) But in the world of startups, our goal is to make all our stories come true.

The “Lean Canvas” slide is meant to state your hypotheses for internal consumption and get your entire team aligned around the goal of testing them. Your investor deck should secure the required funding. Your mission, vision, and values declare what you will do—and what you won't do—to achieve your goal. The intermediate step between those statements and the nitty-gritty details of team building and execution is the process of building your organization. It's much less well defined than the process for building a good business strategy or doing customer development work to find product-market fit. But that doesn't mean it's any less important.

It's what turns your idea into a company.

BUILDING YOUR COMPANY PURPOSEFULLY

One of the most important keys to building a company is to be intentional about everything. Things will happen around you that are always harder to change after the fact than to steer up front. Do you come off as a micromanager or, worse, a Monday-morning quarterback? Or do you let things go that you feel aren't right for the direction of your company long term? It's better to be proactive about everything.

Deep into my second decade with Return Path, I've devoted as much if not more time to building the company as I have to building our business lines and products, and I don't regret it at all. In the early years of our company, I did some things that now seem crazy for a brand new, 25-person company—like designing a sabbatical policy that wouldn't kick in until an employee's seventh anniversary. In the long run, this effort was not wasted (even if they were a little wasted in the short run). There are two ways that a focus on building the company—even from the earliest days—pays long-term dividends:

1. It helps lay the groundwork for scaling. When you get to that amazing “hockey stick” moment and rapidly scale your business, it's important to do so over a very solid foundation. If you wait until that moment to start “building” your company, it will often be too late—and the growth might kill your company.
2. The company won't necessarily die if the product or business runs into trouble. At Return Path, our original “email change-of-address” business basically proved to be a loser by 2002. We pivoted, and, because the company was carefully built, we survived.

I'm not saying that there's a right path or a wrong path here when you compare business building with company building. In the end, a good CEO and management team must be concerned about getting both elements right if they want to build an enduring, stand-alone company.

THE CRITICAL ELEMENTS OF COMPANY BUILDING

Here are some of the critical elements of company building. Some are things most people would label culture, but they're specific enough to call out here.

• Geography. Do you want your team to be primarily in one office? Exclusively in one office? Or do you want to be wherever the talent is? Do you want to build an offshore development capability to optimize development dollars, and do you have the know-how on your team to manage people in India or China? At Return Path, we decided early on that we'd be in multiple locations to take advantage of the best people, since Internet talent was scarce in 1999. If I had to do it all over again, I'd have insisted on one center of gravity for as long as possible. Being virtual and in multiple locations has some real advantages (talent pool, proximity to customers in B2B environment), but we also pay a penalty for it in terms of communications and travel overhead.
• Type of office. Do you want an office, or do you want to be virtual for a while? Do you want to be in the city or in the suburbs? Do you want everyone in one big open room or are you okay with offices and cubes? There's really no substitute for proximity in terms of informal or serendipitous conversations. We started Return Path in one big, open room, but that wasn't practical for a number of reasons. Nonetheless, we wanted to have an office on Day 1, and this was the only way we could manage it early on.
• Systems. Are you a Mac shop or a Windows shop? Microsoft Office or Google Apps? Exchange or Gmail? Do you have a preferred collaboration tool like Basecamp or Confluence? Are you going to put all development in the cloud from Day 1? (We're a more traditional Wintel/Office shop, but that's a function of having gotten into business in 1999. If we were starting from scratch today, we'd do things differently.)
• Driving force. Are you a sales-driven company? A product-driven company? A technology-driven company? A people-driven company? We've always opted for a balanced approach. We aren't sales dominated or product dominated or tech dominated. We are business dominated. That works well for us.
• Staffing and compensation. Are you going to pay people top dollar? How do you think about cash versus equity? Do you want to have a senior heavy staff or a bunch of interns? We hired more senior people early on to get experience in the door and drive things forward, but it was expensive. We paid very little at the beginning—everyone made $75k—until we'd raised institutional money. Then we went closer to market comp for cash as well as equity.
• Policies about time off. Strict vacation policy? Or open? Do you care about sick days or not? Do you allow people to come and go as they please? Are you pissed off when you walk around and no one is in the office before 8 or after 5? How will you handle maternity leave or requests for paternity leave? While most companies get more formal as they grow, we've gone in the opposite direction.
• Policies about expenses. How frugal are you going to be? Are you covering people's cell phones and data plans? Gym memberships? We're frugal in a number of areas—offices, travel, and so on—but generous on things that mean a lot to individuals, like cell phones or gym memberships.
• Communication patterns. Are you meeting-centric? Email-centric? Are you even going to have phones? Or will you rely on people's cell phones? Because we've always had multiple locations, we're very email- and IM-centric at Return Path. (More recently, Skype and Cisco videophones have become a big part of our corporate communications.) Historically, we've had phones everywhere, though a number of our employees (especially engineers) hardly ever use them. Recently, we acquired an engineering office that never had phones on every desk—so we're experimenting with that.
• Personal acknowledgments. Are you going to celebrate birthdays with parties in the office? Will you track them yourself? What about marking people's employment anniversaries? Is there any kind of standard around holiday presents? We don't have birthday parties at Return Path, but we do celebrate each other in our own unique way.

I will discuss many of these items in more detail later, and surely there are other dimensions of company building that I've left out here, but they all have one thing in common—they are not related to your specific offering. These are issues that every company needs to face. Do so intentionally, and they will fuel productivity and growth. Ignore them, and they'll just “happen”—poorly.

ARTICULATING PURPOSE: THE MORAL OF THE STORY

Companies can and should make the world a better place in multiple, different ways. Certainly, many companies' core businesses do that—just look at all the breakthroughs in medicine and social services over the years brought to market by private enterprises. There are days where I wish Return Path was in the business of curing a disease or feeding the hungry. How awesome would it be to have a business with such powerful intrinsic motivation baked into its mission? Motivating people would be a snap!

But, alas, most companies in the world are like mine; they're not inherently “save the world” in nature. And yet, it's still critical to motivate your team by articulating the purpose of their job and the company's existence. At Return Path, I do this by placing our story within the wider context of all the customers we serve.

For example, one of Return Path's products is Email Certification, which helps marketers, publishers, banks, and other companies make sure their email doesn't get caught in a spam filter by mistake. Doesn't sound particularly impactful for society, does it? But then I did some math on our Certification business. In a given year, we certify about 1 trillion emails. Without our certification, 25 percent of those emails would probably be filtered by mistake. In other words, people around the world probably got 250 billion emails last year that they wouldn't otherwise have received because we exist.

Then I looked at some of our clients: Match.com and eHarmony, UNICEF and the American Cancer Society, and Scholarships.com and the College Board. How many more people get married every year or have babies because Return Path exists? How many more people got food or medicine from nonprofits because Return Path exists? How many more people could afford to go to college because Return Path exists? For most businesses out there, you can connect the work you do in a fairly straight line to creating good in the world, even if the line has to go through a few intermediate data points to get to its destination.

YOU CAN BE A FORCE FOR HELPING OTHERS—EVEN IF INDIRECTLY

Maybe you're not in the business of curing a disease. That doesn't mean your company can't help others who are. Whether you organize community service projects, give money away, or find another way of giving back to the community or world, you can galvanize your team around a mission or an ethos of service that makes your company stand for more than just your products. For many companies, adding this element to your mission and values is great as a recruiting and even a marketing tool, not to mention just a plain old good thing to do.

We've changed our approach to this over the years to try to maximize our impact and also make service a company-building exercise as well. In the early years, we allowed employees to take a limited amount of paid time off for community service work each year (once we established open vacation, this became less relevant). We also responded to requests from individual employees to help sponsor service events that they were involved with. Occasionally, we'd organize a local community project for employees to work at together: we sent a couple of teams down to New Orleans with Habitat for Humanity after Hurricane Katrina, and to the Rockaways for a day to help after Superstorm Sandy.

Other organizations donate money or services to charitable organizations they believe in, or provide matching gift programs for employees' donations. All of these approaches are great, as long as you publicize them internally and make sure people understand the impact the company is having.

Now, we are experimenting with a new program called DreamFund that we launched last year. Our aim is to replace a long list of scattershot efforts with a more focused one. We have basically stopped doing all of the other efforts I noted above, and instead are inviting teams of people across the company to apply for a one-time, $10,000 grant a few times per year to do a project that benefits one of the communities in which we operate. The projects can't just be funneling the money to an organization; the money has to accompany action. So far, teams have included hands-on work to help refurbish and renovate some rooms in a facility for abused children, a walk to raise money for cancer, and a literacy project.

You may not be curing cancer at your company. But are you helping someone who is?