Managing Growing Pains: Thinking Big While Being Small

by Jon Arnold

The video titled "Managing Growing Pains: Thinking Big While Being Small," presented by Jon Arnold at RailsConf 2016, addresses the challenges small companies face when attempting to deliver big promises to clients with limited resources. Arnold emphasizes that while startup cultures often encourage grand visions of rapid growth and hiring elite talent, the reality for small companies is much more complex.

Key Points:
- Understanding Growing Pains: Arnold introduces the concept of growing pains, discussing how small teams can effectively manage expectations while navigating the growth process without burning out.
- Realistic Perspective on Startups: He argues that small companies should view themselves as small businesses rather than aiming for a unicorn status, focusing instead on sustainable growth and building strong teams.
- Frameworks for Clarity: Arnold discusses several tactical frameworks that his team has successfully implemented, including 'Jobs to be Done' to identify user needs and a '666 framework' to plan short- and long-term goals.
- Managing Technical Debt: Encouraging a balance of new feature delivery with the management of technical debt, Arnold introduces the concept of 'Fun Day' where team members can address enjoyable tasks and tech debt alongside required work.
- The Importance of a Secret: He highlights that every organization should have a core 'secret' which shapes its worldview and priorities. This secret helps define what the company stands for and informs the decision-making process regarding product development.
- Client Engagement and Sales as Consulting: Arnold notes that selling in his context resembles consulting more than traditional sales, focusing on building relationships and aligning with client goals through workshops.
- Continuous Reflection and Adjustment: He emphasizes the importance of acknowledging mistakes and learning from them, advocating for slow, steady growth aligned with deeper values and long-term vision instead of a rush to scale.
- Hiring for Flexibility: Arnold supports hiring T-shaped people promoting a mix of deep specialization and broad skills, enabling teams to adapt to diverse needs without being overly dependent on specific individuals.

Conclusions:
Overall, Jon Arnold’s talk provides practical tactics for managing small company growth pains while retaining clarity of vision and direction despite the inevitable challenges that arise. He stresses the significance of establishing a clear set of objectives while maintaining flexibility in day-to-day operations, ultimately underlining that strategic growth should be prioritized over rapid scaling.

00:00:09.650 My name is Jon Arnold. Some of my team is running in late. Thank you for coming to hear me talk today. I want to thank RailsConf for the opportunity to be here. This is my first RailsConf, and it has been awesome. It's great to be back in Kansas City; I was actually born and raised here. Anyone else? Go Royals! I'm from Kansas City and now live in Nashville. It was great to come home for a visit, especially to see my mom, since Mother's Day is this week. So, go moms!

00:00:16.740 This is a good definition of how my week has been thus far: constant meat sweats from the BBQ. But what we're really here to talk about today is growing pains in a small company. My talk is titled "Thinking Big While Being Small." Growing pains are something we all know about, and thinking big is fun, but in a small company with a limited team, we need to organize our thoughts, our work, and our team to be effective. Today, startup cultures have led many of us, especially those who aren't technical, to frame this idea of what a great trajectory for a startup will be. We want to hire some code ninjas, some Jedi, some rock stars—or really just some nerds—to help us slam out an MVP. We'll just slap a little business on it, and before you know it, we'll be in the unicorn club, sipping side cars and planning our second Mars base.

00:01:06.960 In reality, though, the teams we build don’t look like that. People have talked a lot about hiring already and how silly it is to call people that. There are great articles out there discussing that what we're really looking to hire are scientists and librarians. No? Nobody’s seen Ghostbusters in this crowd? Okay, scientists and librarians. We don't really have this rocket-like trajectory; we have this startup curve that's been around for a while. Companies like ours, which are small—about 15 people—are somewhere in this trough of sorrow. We have false hope wiggles that give us excitement. We hire people, then we grow, we do all the crazy stuff, and then there are crashes and setbacks. Jeremy mentioned this in his keynote yesterday, but what we're actually building is not really a startup at the end of the day; we’re building small businesses.

00:01:58.320 The latter half of this curve isn't about getting sold. Whoever wrote that was wrong; it's not just about finding a buyer. Instead, it's about building something sustainable—a strong team and a sustainable company. That doesn’t mean we need to hustle all the time. No side hustles, no weekend crushing. I don't want you to become a hero dev, Mike, our CTO; no more late nights or overnights. I want you to be cultivators. I want you to garden, lay out standards, defend them, and be consistent with those standards.

00:02:33.600 So, about our company: we're a multi-tenant SaaS company built on Rails, selling our product to global insurance companies—large, multinational companies that are implemented all over the world, often having terrible infrastructures and technology. I love our clients! We have a behavioral economics model that incentivizes insurance policyholders to change their lives. We've done things a bit differently: while we are around 15 people, we have a dev team of about five. We're a really small team pushing out work that touches hundreds of thousands of people, and as we continue to scale, we are seeing the product we’ve built as just part of the whole offering.

00:03:09.630 What truly matters is the team and the promises we make both to each other and to our clients. With our limited resources and constraints, companies like ours must bloom where we're planted and seek opportunities to maximize wins. We can’t just look for something close; we have to make things work where we're currently at. We've been around for about four years, transitioning from a very small app to a somewhat larger one, and lots of things are happening.

00:03:45.600 I’m going to share some tactics and philosophies that we've used over these four years. The first and most important tactic is to steal. I am a certified stealing agility practitioner. That badge indicates that it's a real thing you can get on the internet; it’s great! We utilize frameworks that help us instill clarity, vision, focus, and value. These are all things that Jeremy mentioned in his keynote yesterday. We've stolen a ton of frameworks and discarded many, but here are a few that work well for us.

00:04:05.060 One of these is 'Jobs to be Done,' which we took from Thoughtbot and Intercom. They recently released a book on this too. The idea is to ask what job the user is hiring the product to do. What are we replacing in their life or making better through our software? What motivation are they experiencing today? It’s a simple question to ask. We write about four or five of these for our users and about two or three for our clients to understand their needs and desires. They are very simple words and sentences, not long stories or press releases. Just direct questions about what they want.

00:04:59.250 We also use this interesting framework called 666, which I call 'the devil’s framework.' What this really means is six weeks, six months, and six years. Clients often resist the six-year thing because they want to know what’s happening tomorrow, not down the line. The six weeks focus on our current team actions—what we are doing today. The six months identify our priorities that direct us, while the six years consider the worldview we're building, including the steadfast beliefs that define our product.

00:05:35.040 Mixing this framework with user interviews and feedback sharpens that worldview. When combined with the jobs framework, it’s amazing what emerges. For example, the six-week timeframe shows how we can change the user's ability, which starts to affect their behavior. The six-year perspective investigates how we’ve altered the user’s life as a result of using our product—and that, especially the latter two elements, is what we can actually sell to big clients. They get excited about figuring out how they fit into this picture and what this all looks like.

00:06:00.250 Additionally, each feature we build has a roadmap. Every significant component has a purpose and fits into the broader platform based on defined opinions and a worldview; otherwise, we won’t build it. Another concept we've adopted is 'Fun Day,' which I believe originated from a RubyConf last year. This method involves maintaining a list of nice-to-have items and technical debt, even if it’s not always enjoyable. Sometimes our team starts working on a new requirement but hits a block, so we have to pause and get design input.

00:06:46.920 Currently, we’re in the process of a full-time design engagement to assist us. While those blocks are being addressed, our team takes a day or two to dive into these enjoyable tasks. This helps balance delivering new features with addressing technical debt and client needs. Everything we’ve discussed so far underscores my belief that every company needs a secret at its center.

00:07:20.610 For example, Uber and Airbnb capitalized on the secret that individuals have unused assets like cars and empty rooms, thereby creating lucrative software solutions. We have a secret too. I think every organization needs something similar, as it informs and defines their worldview. This becomes crucial in establishing the priorities we adhere to when choosing what to build. We focus on five core aspects: What do we believe that we will never back down on? What improvements can we pursue that yield significant advancements? Where can we prioritize user research and feedback—the things that should be integrated into our vision?

00:07:51.539 Additionally, we look at scaling growth, quality, and stability. These five factors guide our roadmap, reflecting both our unwavering beliefs and concerns from our clients—especially if they're paying us to address something. Small companies, like ours, also must focus on selling. When we engage with clients, it feels more like consulting than a product sale. As Andreessen Horowitz pointed out, it’s often harder to get a law passed in Congress than to sign a large software deal.

00:08:25.260 There are corporate layers, approvals, legalities, and technology infrastructures that must all align. But fundamentally, the process is about consulting, getting to know the client's objectives, and collaborating to define those objectives. We conduct client-facing workshops to closely examine those objectives and demonstrate how our software can help them achieve their goals. We also illustrate how they fit within our six-month and six-year vision.

00:09:02.910 We need to sell that vision to our team as well. We have to remind them how their respective work contributes to the larger product. It’s essential for the marketing engagement and overall experience we want to cultivate. We might sound repetitive to our team—sometimes even annoying—but it’s essential because it keeps us on track. It’s easy to get sidetracked by small tasks and lose sight of the overall vision, so we must constantly remind ourselves how each enhancement or fix adds another brick to the road for the future.

00:09:50.250 We often find ourselves acknowledging our mistakes. I'm wrong frequently. I engage different people, share my opinions, present research findings, and am wrong. When it comes to choosing which battles to concede, I think in terms of the micro and macro. The grand story arc of your products—the macro perspectives of where you're headed in six years—is something you want to be firm about. However, within the micro context—day-to-day transactions—things can be more flexible.

00:10:42.750 These are areas where you can experiment and fail safely. It’s beneficial to learn from these small mistakes since they can be corrected swiftly and have limited impact. However, that larger arc—the steadfast beliefs you have about your vision—needs to be resolute. You need to be clear in your convictions and unwavering in your guiding beliefs, even if you choose to depart from smaller details. Another critical aspect is saying no—in fact, we say no often. We have to say no to our sales team, our executives, our clients, users, and even our team members.

00:11:46.560 You must say no more than you say yes. Jeremy also highlighted this in his keynote. It’s important to resist pressure, like we faced from investors wanting us to build a mobile app. Our clients aren't paying for that yet, and while users might like it, we need to focus on what’s currently profitable. That short-term funding might sound enticing, but it's not worth diverting our resources, as it detracts from our core focus. We have a wealth of excellent ideas, as all startups do—there are countless possibilities to explore.

00:12:43.740 But as a small company, we must prioritize what keeps the lights on. There are two forms of currency we must be aware of: money and user time. The latter is crucial because user engagement—what prevents them from onboarding or coming back—is just as vital as receiving payment from them. We should emphasize features that support our vision. You must be strategic and prioritize solving those critical user concerns that result in ongoing engagement with our product.

00:13:39.750 In order to implement big features, other steps must be put in place first. It’s vital to have a structured approach for each feature. We often say no, but we also say yes—though less frequently. We say yes to many good ideas proposed by our team. They are knowledgeable and thoughtful, generating numerous valuable ideas to advance our goals. Yes, yes, yes to that! We also pick and choose which ideas to bring to life based on user willingness to invest in additions that align with our vision.

00:14:28.320 Focusing on systems is crucial for successfully building new functionality. Those little steps we take may seem like detours at times, especially to leadership who generally aren’t involved in daily operations. However, each feature adds to our larger strategy as they express our capabilities. Therefore, growing slowly is vital. It’s easy to get caught up in the excitement and hire a lot of people, convinced you’re going to make a significant impact.

00:15:19.830 But remember to grow gradually. I've observed how quickly people want to accelerate growth; we have to constantly remind ourselves to do so at a slower pace. There have been insightful talks regarding hiring this week; something that has worked well for us is hiring generalists or individuals who have switched careers. People with diverse experiences apply uniquely to our team's needs.

00:16:04.500 For instance, we have a developer who was formerly an editor, and that skill set proves beneficial for our content side of things. Similarly, we have a developer with a background in healthcare, which aligns with our application's focus. These cross-functional capabilities enhance our team's flexibility when addressing various needs.

00:16:53.100 One of the tactics we embrace is the concept of T-shaped people—those with a deep specialism in one area, alongside a breadth of experience in various fields. This combination brings valuable skills to the team, particularly when one member has a passion, like wearable devices, while also having cross-disciplinary experience in project management and multiple other relevant skills.

00:17:40.080 Growth should be achieved even if done well, rather than aiming for greatness and finding yourself needing to lay someone off later. Maintain focus on the roles your team needs over the individuals who fill those roles because people are costly. People can be difficult to retain as they often leave once their tasks are completed. Conversely, defining roles allows for various individuals to collaborate without proving detrimental to the organization.

00:18:33.720 It may be a little bumpy, but using mistakes in those roles can shape future job descriptions. Another key principle originates from a company called Infusionsoft, based in Phoenix. They have an impressive story, starting in a garage like many startups. They have a wall showcasing their Everest mission, incorporating their mission, vision, core values, and purposes.

00:19:30.240 They also outline their yearly goals—client counts, milestones, and expansion plans. The visibility of this information is crucial as it's displayed in their conference room, reminding everyone weekly of those targets. They're not just ornate ideas; they maintain spreadsheets detailing key objectives, results, contributions, and timelines. What's remarkable is that they’ve hit those numbers accurately each year. Achieving such harmonious growth suggests employing the OKR (Objectives and Key Results) framework, which originated at Google.

00:20:20.340 Using this approach, we establish small teams that decide how to meet their objectives. They claim ownership over these targets, and we simply facilitate the process and monitor progress. This method fosters team ownership, clarity of objectives, and contextualizes how they engage with the larger mission.

00:21:25.260 It cultivates an environment where failure isn't seen as detrimental; it provides a platform for growth and reflection as the teams can experiment within their objectives. We check in with them weekly to ensure our plans remain aligned with our goals. Pursue your vision relentlessly, and do not shy away from vocalizing it. Ensure your clients, your team, and even your pets know it. Everything you do should resonate with those talking points.

00:22:18.810 Being systematic in completing your objectives leads to clarity. After accomplishing one task, determine which aspects naturally lead to the next step. Understand that losing small battles today can provide valuable learning opportunities while also facilitating broader partnership opportunities.

00:23:05.500 While conceding may seem challenging, it can ultimately lead to substantial gains. Change often, but emphasize slow growth. Empower your team to navigate its path, driven by key visions for the future, and hopefully, everything will align.

00:23:56.160 Questions?