Deming

Team

Every Project has Three Things: Revenue, Support, Ledger

Group	Description
Ledger	People and Finance.
Growth	Sales, Marketing and Partnerships.
Support	Customer Support and Technology.

The goal is to optimize these three parts continuously with Deming’s Statistical Process Control.

The best way to judge people is to have them do problems right off the bat and see how they work with your team. Unfortunately, I do think algorithmic problems have a place for companies like Google and Amazon which are triaging through thousands of candidates. However, startups doing this seems like a bad call. Most of the time as a startup you are trying to figure out not if someone can do a bureaucratic task like pulling an algorithm out of their ass, but do they know the context of the code they are building. Can they understand the library ecosystem and use existing tooling.

One effective process I’ve found in weeding out ineffective people is hire them fast and put them on simple problems in the codebase that shouldn’t take more than an hour to accomplish. If they solve it in that time or find additional problems. Wonderful, we can start working more together and I just continue assigning tasks. If they can’t get anything done within the first hour or two when they said they will. I will cut them.

To remove my bias on people and different backgrounds I do not have video calls. I only chat with them and write the issues they need in GitHub Issues. Sometimes I send a Loom video if there is something that can be explained better.

Seems like it is working thus far.

I’ve wondered why small teams work. What is it about them that drive results? I think the answer is that they empower people to make changes giving them ownership over the outcome. People have pride when they see their work actualized. They like to point and say I did that. It is a good feeling.

I'm looking to see how to setup Notion in such a way that it is easy to manage multiple teams as individual units. I don’t want them to really interact and as a secondary they should be provided value.

• Roles, Responsibilities, and Ownership
  • Job Information

All jobs are created with the following information:

Job Description

A clear and concise description of the role.

Responsibilities

• Define what this position has ultimate responsibility and decision authority over.
• Clearly outline the products, services, assets, activities, and subordinates assigned to the position.

Expectations

• Specify the results required of the position to achieve the firm's objectives.
• Expectations should be:
  • Clear, specific, and measurable.
  • Focused on desired outcomes rather than activities.
  • Open-ended and challenging to encourage experimentation and innovation.

Access

• Define what resources or systems the person is given access to and how they are expected to use them.
• Ensure each person is given the least amount of access needed to accomplish their job.

Training

• Provide the information needed to be most effective at their job.
• Include any specific principles or guidelines related to their role.

Routine

• If the job involves singular tasks, list them here.
• Link to recurring tasks that the role is responsible for accomplishing.

Manager

• Specify the manager responsible for overseeing this position.

7 Powers

We optimize our growth engine around the 7 Powers framework. The framework is basically the following:

• Scale economies: A business in which per unit cost declines as production volume increases.
• Network economies. The value of a service to each user increases as new users join the network.
• Counter-positioning. A newcomer adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business.
• Switching costs. The value loss expected by a customer that would be incurred from switching to an alternative supplier for additional purchases.
• Branding. The durable attribution of higher value to an objectively identical offering that arises from historic info about the seller.
• Cornered resource. Preferential access at attractive terms to a coveted asset that can independently enhance value.
• Process power. Embedded company organisation and activity sets which enable lower costs and/or superior product.

We build experiments that help us optimize each of these powers leading to competitive moat.

Control Charts

Ledger

Metric	Goal	Formula
Revenue Growth	30% per year
Asset Growth	30% per year
Free Cash Flow Growth	100% per year	Free Cash Flow = Net Income + Depreciation and Amortization – Changes in Working Capital – Capital Expenditures
ROIC	30%	ROIC = (Net income – Dividends) / (Debt + Equity)
Debt-to-Free Cash Flow	400%
Debt-to-Asset	50%
Effective Tax Rate	12%
Negative Cash Conversion Cycle	-30 days	Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding

Working Capital

What is the working capital of the business per month. We need to know exactly how much to keep within the account.