online trade shows</a>.</p><h3 id=\"c-grit\">c. Grit</h3><p>When we first started, we couldn’t afford to build the most beautiful piece of engineering work. We had to be fast and agile. This is critical when you are pre-product-market fit. Our CEO Max and a few early employees would go to trade shows to present our product to customers, understand their needs, and learn what resonated with them. Max would call us with new ideas several times a day. It was paramount that our engineers were <a href=https://www.ycombinator.com/"https://angeladuckworth.com/grit-book//">gritty and able to quickly make changes to the product. Over the three or four days of a trade show, our team deployed changes nonstop to the platform. We experimented with offerings like:</p><ul><li>Free shipping on first orders</li><li>Buy now, pay later</li><li>Buy from a brand and get $100 off when you re-order from the same brand</li><li>Free returns</li></ul><p>By trying different value propositions in a short time, our engineering team helped us figure out what was most valuable to our customers. That was how we found strong product-market fit within six months of starting the company.</p><figure class=\"kg-card kg-image-card\"><img src=https://www.ycombinator.com/"https://lh3.googleusercontent.com/CrRDf25EV8if-oP6rfEnSYeA_ttfKsayeQoM61gMOYFODZvpYsId0z2Y5RQ8z5xH4zt8UQaPBOwe1xus8oaqKQW1zxqNxz_ss9LHTpWyCc6tWsyJUm6_g6lVUtb6PkHluwNcqIU9MN3silgCLqtNHO2S8RkPcQCHBYiVPhK9Fteoiq_w9dZJqaxTqA/" class=\"kg-image\" alt loading=\"lazy\"></figure><p><em>Our trade show storefront back when we were called Indigo Fair.</em></p><h2 id=\"2-build-a-solid-long-term-foundation-from-day-one\">2. Build a solid long-term foundation from day one</h2><p>The number one impediment to engineering velocity at scale is a lack of solid, consistent foundation. A simple but solid foundation will allow your team to keep building on top of it instead of having to throw away or re-architecture your base when hypergrowth starts.</p><p>To create a solid long-term foundation, you first need to get clear on what practices you believe are important for your engineering team to scale. For example, I remember speaking with senior engineers at other startups who were surprised we were writing tests and doing code reviews and that we had a code style guide from the very early days. But we couldn’t have operated well without these processes. When we started to grow fast and add lots of engineers, we were able to keep over 95% of the team focused on building features and adding value to our customers, increasing our growth. </p><p>Once you know what long-term foundations you want to build, you need to write it down. We were intentional about this from day one and documented it in our <a href=https://www.ycombinator.com/"https://craft.faire.com/handbook-89f166841ec9/">engineering handbook</a>. Today, every engineer is onboarded using this handbook.</p><p>The four foundational elements we decided on were:</p><h3 id=\"a-being-data-driven\">a. Being data-driven</h3><p>The most important thing is to build your data muscle early. We started doing this at 10 customers. At the time, the data wasn’t particularly useful; the more important thing was to start to collect it. At some point, you’ll need data to drive product decision-making. The longer you wait, the harder it is to embed into your team.</p><p>Here’s what I recommend you start doing as early as possible:</p><ul><li>Set up data pipelines that feed into a data warehouse.</li><li>Start collecting data on how people are using your product. As you add features and iterate, record how those changes are impacting user interactions. All of this should go into a data warehouse that is updated within minutes and made available to your team. As your product gets increasingly complex, it will become more and more important to use data to validate your intuition.</li><li>We use Redshift to store data. As user events are happening, our relational database (MySQL) replicates them in Redshift. Within minutes, the data is available for queries and reports.</li><li>Train your team to use experimentation frameworks.</li><li>Make it part of the product development process. The goal is to transform your intuition into a statistically testable statement. A good place to start is to establish principles and high-level steps for your team to follow when they run experiments. We’ve set principles around when to run experiments vs. when not to, that running rigorous experiments should be the default (and when it isn’t), and when to stop an experiment earlier than expected. We also have teams log experiments in a Notion dashboard.</li><li>The initial focus should be on what impact you think a feature will have and how to measure that change. As you’re scoping a feature, ask questions like: How are we going to validate that this feature is achieving intended goals? What events/data do we need to collect to support that? What reports are we going to build? Over time, these core principles will expand.</li><li>The entire team should be thinking about this, not just the engineers or data team. We reinforced the importance of data fluency by pushing employees to learn SQL, so that they could run their own queries and experience the data firsthand.</li><li>It’ll take you multiple reps to get this right. We still miss steps and fail to collect the right data. The sooner you get your team doing this, the easier it will be to teach it to new people and become better at it as an organization.</li></ul><h3 id=\"b-our-choice-of-programming-language-and-database\">b. Our choice of programming language and database</h3><p>When choosing a language and database, pick something you know best that is also scalable long-term.<strong> </strong>If you choose a language you don’t know well because it seems easier or faster to get started, you won’t foresee pitfalls and you’ll have to learn as you go. This is expensive and time-consuming. We started with Java as our backend programming language and MySQL as our relational database. In the early days, we were building two to three features per week and it took us a couple of weeks to build the framework we needed around MySQL. This was a big tradeoff that paid dividends later on.</p><h3 id=\"c-writing-tests-from-day-one\">c. Writing tests from day one</h3><p>Many startups think they can move faster by not writing tests; it’s the opposite. Tests help you avoid bugs and prevent legacy code at scale. They aren’t just validating the code you are writing now. They should be used to enforce, validate, and document requirements. Good tests protect your code from future changes as your codebase grows and features are added or changed. They also catch problems early and help avoid production bugs, saving you time and money. Code without tests becomes legacy very fast. Within months after untested code is written, no one will remember the exact requirements, edge cases, constraints, etc. If you don’t have tests to enforce these things, new engineers will be afraid of changing the code in case they break something or change an expected behavior.<br><br>There are two reasons why tests break when a developer is making code changes:</p><ul><li>Requirements change. In this case, we expect tests to break and they should be updated to validate and enforce the new requirements.</li><li>Behavior changes unexpectedly. For example, a bug was introduced and the test alerted us early in the development process.</li></ul><p>Every language has tools to measure and keep track of test coverage. I highly recommend introducing them early to track how much of your code is protected by tests. You don’t need to have 100% code coverage, but you should make sure that critical paths, important logic, edge cases, etc. are well tested. <a href=https://www.ycombinator.com/"https://leanylabs.com/blog/good-unit-tests//">Here are tips for writing good tests</a>.</p><h3 id=\"d-doing-code-reviews\">d. Doing code reviews</h3><p>We started doing code reviews when we hired our first engineer. Having another engineer review your code changes helps ensure quality, prevents mistakes, and shares good patterns. In other words, it’s a great learning tool for new and experienced engineers. Through code reviews, you are teaching your engineers patterns: what to avoid, why to do something, the features of languages you should and shouldn’t use. </p><p>Along with this, you should have a coding style guide. Coding guides help enforce consistency and quality on your engineering team. It doesn’t have to be complex. We use a tool that formats our code so our style guide is automatically enforced before a change can be merged. This leads to higher code quality, especially when teams are collaborating and other people are reviewing code.</p><p>We switched from Java to Kotlin in 2019 and we have a comprehensive style guide that includes recommendations and rules for programming in Kotlin. For anything not explicitly specified in our guide, we ask that engineers follow <a href=https://www.ycombinator.com/"https://kotlinlang.org/docs/coding-conventions.html/">JetBrains’ coding conventions</a>.</p><p>These are the code review best practices we share internally:</p><ul><li>#bekind when doing a code review. Use positive phrasing where possible (\"there might be a better way\" instead of \"this is terrible\"; \"how about we name this X?\" instead of \"naming this Y is bad\"). It's easy to unintentionally come across as critical, especially if you have a remote team.</li><li>Don't block changes from being merged if the issues are minor (e.g., a request for variable name change, indentation fixes). Instead, make the ask verbally. Only block merging if the request contains potentially dangerous changes that could cause issues or if there is an easier/safer way to accomplish the same.</li><li>When doing a code review, ensure that the code adheres to your style guide. When giving feedback, refer to the relevant sections in the style guide.</li><li>If the code review is large, consider checking out the branch locally and inspecting the changes in IntelliJ (Git tab on the bottom). It’s easier to have all of the navigation tools at hand.</li></ul><h2 id=\"3-track-engineering-metrics-to-drive-decision-making\">3. Track engineering metrics to drive decision-making</h2><p>Tracking metrics is imperative to maintaining engineering velocity. Without clear metrics, Faire would be in the dark about how our team is performing and where we should focus our efforts. We would have to rely on intuition and assumptions to guide what we should be prioritizing. </p><p>Examples of metrics we started tracking early (at around 20 engineers) included:</p><ul><li><strong>Uptime.</strong> One of the first metrics we tracked was <a href=https://www.ycombinator.com/"https://docs.datadoghq.com/integrations/uptime//">uptime. We started measuring this because we were receiving anecdotal reports of site stability issues. Once we started tracking it, we confirmed the anecdotal evidence and dedicated a few engineers to resolve the issue.</li><li><strong>CI wait time.</strong> Another metric that was really important was CI wait time (i.e., time for the build system to build/test pull requests). We were receiving anecdotal reports of long CI wait times for developers, confirmed it with data, and fixed the issue.</li></ul><figure class=\"kg-card kg-image-card\"><img src=https://www.ycombinator.com/"https://lh3.googleusercontent.com/KiE8tjsqkFvtJFmyY_6-IinXuT1A6C4x6JBUSX9qb9nDHB9lurJZAlHocGDEi3Sx_HSHNuBxozMBljGOsNokrQIJ9Hk6ZolI39yQtKPz0yuAbue0G2weaKWXqD65_Gbal_LYuEC5TpPoGIdCGd0jflhy1yRQzuG-pxV1IePbh8LuEtvqehC1gHs5lw/" class=\"kg-image\" alt loading=\"lazy\"></figure><p><em>This is a dashboard we created in the early days of Faire to track important engineering metrics. It was updated manually by collecting data from different sources. Today, we have more comprehensive dashboards that are fully automated.</em></p><p>Once our engineering team grew to 100+, our top-level metrics became more difficult to take action against. When metrics trended beyond concerning thresholds, we didn’t have a clear way to address them. Each team was busy with their own product roadmap, and it didn’t seem worthwhile to spin up new teams to address temporary needs. Additionally, many of the problems were large in scale and would have required a dedicated group of engineers. </p><p>We found that the best solution was to build <a href=https://www.ycombinator.com/"https://www.datadoghq.com/blog/the-power-of-tagged-metrics//">dimensions so that we could view metrics by team. Once we had metrics cut by team, we could set top-down expectations and priorities. We were happy to see that individual teams did a great job of taking ownership of and improving their metrics and, consequently, the company’s top-level metrics.</p><h4 id=\"an-example-transaction-run-duration\">An example: transaction run duration</h4><p>Coming out of our virtual trade show, <a href=https://www.ycombinator.com/"https://blog.faire.com/thestudio/faire-summer-market-2021-our-global-trade-show-event-is-coming-in-july//">Faire Summer Market</a>, we knew we needed significant investment in our database utilization. During the event, site usage pushed our database capacity to its limits and we realized we wouldn’t be able to handle similar events in the future.</p><p>In response, we created a metric of how long transactions were open every time our application interacted with the database. Each transaction was attributed to a specific team. We then had a visualization of the hottest areas of our application along with the teams responsible for those areas. We asked each team to set a goal during our planning process to reduce their database usage by 20% over a three-month period. The aggregate results were staggering. Six months later, before our next event—<a href=https://www.ycombinator.com/"https://blog.faire.com/thestorefront/announcing-faires-2022-winter-virtual-trade-show-events//">Faire Winter Market</a>—incoming traffic was 1.6x higher, but we were nowhere close to maxing out our database capacity. Now, each team is responsible for monitoring their database utilization and ensuring it doesn’t trend in the wrong direction.</p><h3 id=\"managing-metrics-with-kpi-scorecards\">Managing metrics with KPI scorecards</h3><p>We’re moving towards a model where each team maintains a set of key performance indicators (KPIs) that get published as a scorecard reflecting how successful the team is at maintaining its product areas and the parts of the tech stack it owns.</p><p>We’re starting with a top-level scorecard for the whole engineering team that tracks our highest-level KPIs (e.g., <a href=https://www.ycombinator.com/"https://docs.datadoghq.com/tracing/guide/configure_an_apdex_for_your_traces_with_datadog_apm//">Apdex, database utilization, CI wait time, severe bug escapes, flaky tests). Each team maintains a scorecard with its assigned top-level KPIs as well as domain-specific KPIs. As teams grow and split into sub-teams, the scorecards follow the same path recursively. Engineering leaders managing multiple teams use these scorecards to gauge the relative success of their teams and to better understand where they should be focusing their own time.</p><p>Scorecard generation should be as automated and as simple as possible so that it becomes a regular practice. If your process requires a lot of manual effort, you’re likely going to have trouble committing to it on a regular cadence. Many of our metrics start in DataDog; we use their API to extract relevant metrics and push them into Redshift and then visualize them in Mode reports.</p><p>As we’ve rolled this process out, we’ve identified criteria for what makes a great engineering KPI:</p><ul><li><strong>Can be measured and has a believable source of truth.</strong> If capturing and viewing KPIs is not an easy and repeatable task, it’s bound to stop happening. Invest in the infrastructure to reliably capture KPIs in a format that can be easily queried.</li><li><strong>Clearly ladders up to a top-level business metric.</strong> If there isn’t a clear connection to a top-level business metric, you’ll have a hard time convincing stakeholders to take action based on the data. For example, we’ve started tracking pager volume for our critical services: High pager volume contributes to tired and distracted engineers which leads to less code output, which leads to fewer features delivered, which ultimately means less customer value.</li><li><strong>Is independent of other KPIs.</strong> When viewing and sharing KPIs, give appropriate relative weight to each one depending on your priorities. If you’re showing two highly correlated KPIs (e.g., cycle time and PR throughput), then you’re not leaving room for something that’s less correlated (e.g., uptime). You might want to capture some correlated KPIs so that you can quickly diagnose a worrying trend, but you should present non-duplicative KPIs when crafting the overall scorecard that you share with stakeholders.</li><li><strong>Is normalized in a meaningful way.</strong> Looking at absolute numbers can be misleading in a high-growth environment, which makes it hard to compare performance across teams. For example, we initially tracked growth of overall infrastructure cost. The numbers more than doubled every year, which was concerning. When we later normalized this KPI by the amount of revenue a product was producing, we observed the KPI was flat over time. Now we have a clear KPI of “amount spent on infrastructure to generate $1 in revenue.” This resulted in us being comfortable with our rate of spend, whereas previously we were considering staffing a team to address growing infrastructure costs.</li></ul><p>We plan to keep investing in this area as we grow. KPIs allow us to work and build with confidence, knowing that we’re focusing on the right problems to continue serving our customers.</p><h2 id=\"4-keep-teams-small-and-independent\">4. Keep teams small and independent</h2><p>When we were a company of 25 employees, we had a single engineering team. Eventually, we split into two teams in order to prioritize multiple areas simultaneously and ship faster. When you split into multiple teams, things can break because people lose context. To navigate this, we developed a pod structure to ensure that every team was able to operate independently but with all the context and resources they needed. </p><p>When you first create a pod structure, here are some rules of thumb:</p><ul><li><strong>Pods should operate like small startups.</strong> Give them a mission, goals, and the resources they need. It’s up to them to figure out the strategy to achieve those goals. Pods at Faire typically do an in-person offsite to brainstorm ideas and come up with a prioritized roadmap and expected business results, which they then present for feedback and approval.</li><li><strong><strong><strong>Each pod should have no more than 8 to 10 employees. </strong></strong></strong>For us, pods generally include 5 to 7 engineers (including an engineering manager), a product manager, a designer, and a data scientist.</li><li><strong>Each pod should have a clear leader. </strong>We have an engineering manager and a product manager co-lead each pod. We designed it this way to give engineering a voice and more ownership in the planning process.</li><li><strong>Expect people to be members of multiple pods. </strong>While this isn’t ideal, there isn’t any other way to do it early on. Resources are constrained, and you need a combination of seasoned employees and new hires on each pod (otherwise they’ll lack context). Pick one or two people who have lots of context to seed the pod, then add new members. When we first did this, pods shared backend engineers, designers, and data analysts, and had their own product manager and frontend engineer.</li><li><strong>If you only have one product, assign a pod to each well-defined part of the product.</strong> If there’s not an obvious way to split up your product surface area, try to break it out into large features and assign a pod to each.</li><li><strong><strong><strong>Keep reporting lines and performance management within functional teams. </strong></strong></strong>This makes it easier to maintain:</li></ul><p>\t\t(1) Standardized tooling/processes across the engineering team and balanced \t\tleadership between functions</p><p>\t\t(2) Standardized career frameworks and performance calibration. We give our \t\tmanagers guidance and tools to make sure this is happening. For example, I \t\thave a spreadsheet for every manager that I expect them to update on a \t \t\tmonthly basis with a scorecard and brief summary of their direct reports’ \t\t \t\tperformance.</p><h3 id=\"how-we-stay-on-top-of-resource-allocation-census-and-horsepower\">How we stay on top of resource allocation: Census and Horsepower</h3><p>Our engineering priorities change often. We need to be able to move engineers around and create, merge, split, or sunset pods. In order to keep track of who is on which team—taking into account where that person is located, their skill set, tenure at the company, and more—we built a tool called Census.</p><p>Census is a real-time visualization of our team’s structure. It automatically updates with data from our ATS and HR system. The visual aspect is crucial and makes it easier for leadership to make decisions around resource allocation and pod changes as priorities shift. Alongside Census, we also built an algorithm to evaluate the “horsepower” of a pod. If horsepower is showing up as yellow or red, that pod either needs more senior engineers, has a disproportionate number of new employees, or both.</p><figure class=\"kg-card kg-image-card kg-card-hascaption\"><img src=https://www.ycombinator.com/"https://lh3.googleusercontent.com/pJk7SUqsmeQLU_dYU3BrN5wMnzyHwVySmydpuiNbHgDddt_FzwwQzCQ_pQH75FX-InduoRGg5hSVhcfXZxRC3FztBZ3aF_2JnwIFMBOhjSey2cgRQEqs38oORhgZgrtwrmgO7CM-WSU_34oeyp15hdzHOrH_FAXTlFlJOt-A87J4Brce_ri3MER8RA/" class=\"kg-image\" alt loading=\"lazy\"><figcaption>.</figcaption></figure><p><em>Census.</em></p><figure class=\"kg-card kg-image-card\"><img src=https://www.ycombinator.com/"https://lh3.googleusercontent.com/N7btbx4GDkomhZp8wj0CMlTiGywqDffV6qCakK6aZEILScjRiIqjhwjV1q2AlT6bmrzU9vqo_pa1ggXn8j_C0CWsO4BEQdHoq5EcPfOhZwhe8tg1oMmmmDeYQXNrjF99WOdM5AKVTT5GAisZM_idtecOsjdXH_qQ2ezvEVRLltbkMfmk1j3qouwt7g/" class=\"kg-image\" alt loading=\"lazy\"></figure><p><em>Pods are colored either green, yellow, or red depending on their horsepower.</em><br><br>One of the most common questions that founders have is how to balance speed with everything else: product quality, architecture debt, team culture. Too often, startups stall out and sacrifice their early momentum in order to correct technical debt. In building Faire, we set out to both establish a unified foundation <em>and</em> continue shipping fast. These four guiding principles are how we did it, and I hope they help others do the same.</p>","comment_id":"6357f9044557ad0001018040","feature_image":"/blog/content/images/2022/10/BlogTwitter-Image-Template-2.jpeg","featured":true,"visibility":"public","email_recipient_filter":"none","created_at":"2022-10-25T07:56:04.000-07:00","updated_at":"2022-10-26T12:38:29.000-07:00","published_at":"2022-10-25T09:00:00.000-07:00","custom_excerpt":"Faire’s engineering team grew from five to over 100 engineers in three years. 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Cortes","slug":"marcelo-cortes","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/10/Instagram-Image-Template--Square---7-.jpg","cover_image":null,"bio":"Marcelo Cortes is a co-founder and the CTO of Faire, an online wholesale marketplace connecting mostly small brands to independent, local retailers.","website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/marcelo-cortes/"},"primary_tag":{"id":"61fe29efc7139e0001a7116d","name":"Essay","slug":"essay","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/essay/"},"url":"https://ghost.prod.ycinside.com/how-to-maintain-engineering-velocity-as-you-scale/","excerpt":"Faire’s engineering team grew from five to over 100 engineers in three years. Throughout this growth, we were able to sustain our pace of engineering execution by adhering to four guiding principles.","reading_time":16,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"6335e2416c330f000113fac3","uuid":"35201943-5292-4030-906c-00e0478b0141","title":"First Five Launches with Whatnot","slug":"first-five-launches-with-whatnot","html":"<p>Today <a href=https://www.ycombinator.com/"https://www.whatnot.com//">Whatnot (<a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/whatnot/">W20) is a lively platform where collectors can buy, sell, go live, and geek out with other like-minded people across a wide variety of product categories. But, like every startup, the founders of Whatnot began with only an idea. YC’s <a href=https://www.ycombinator.com/"https://twitter.com/anuhariharan/">Anu Hariharan</a> sat down with the co-founder and CEO of Whatnot <a href=https://www.ycombinator.com/"https://twitter.com/grantlafontaine?lang=en\%22>Grant LaFontaine</a> to discuss their first five launches.</p><p>The takeaways are below, and the interview can be watched on <a href=https://www.ycombinator.com/"https://www.youtube.com/watch?v=OKD0IAcwMig\%22>Youtube.

00:40) Launch #1 Takeaway</strong></p><p>Build the buyer side of the marketplace – even if you have to hack your way there.</p><p>To build a great marketplace experience, both sides of the Whatnot marketplace had to be built out. Buyers would come, but only if sellers listed inventory. In the early days, the founders would list products on Whatnot that they didn’t have (i.e. fake listing), and when the item would sell, they’d purchase it on eBay.</p><p><strong>(<a href=https://www.ycombinator.com/"https://youtu.be/OKD0IAcwMig?t=266\%22>04:26) Launch #2 Takeaway</strong></p><p>Increase your returning visitor rate through creative marketing campaigns.</p><p>Whatnot launched with only a website and found it was not engaging enough for consumers to visit frequently. To solve this, they developed an app and a growth channel to push traffic to the app, called <a href=https://www.ycombinator.com/"https://www.facebook.com/watch/?v=2488270838055833\%22>Whatnot Drop</a>. Whatnot Drop was a raffle for Funko Grail, and consumers could load up on raffle tickets by sharing referral code and content assets that would draw people back to Whatnot.</p><p><strong>(<a href=https://www.ycombinator.com/"https://youtu.be/OKD0IAcwMig?t=377\%22>06:17) Launch #3 Takeaway</strong></p><p>Work with trusted influencers in the community.</p><p>Whatnot worked with a Funko Pop influencer who was trusted by the Funko Pop fanbase. The influencer created a Youtube video talking about their experience on Whatnot, which helped the audience trust Whatnot as a reputable marketplace for collectibles.</p><p><strong>(<a href=https://www.ycombinator.com/"https://youtu.be/OKD0IAcwMig?t=439\%22>07:19) Launch #4 Takeaway</strong></p><p>Build the seller side of the marketplace by encouraging high sell-through rates.</p><p>Whatnot delivered more sales to sellers by building a cross listing tool. Every seller on Whatnot could easily have their inventory cross listed to their eBay account – delivering more sales for sellers. </p><p><strong>(<a href=https://www.ycombinator.com/"https://youtu.be/OKD0IAcwMig?t=626\%22>10:26) Launch #5 Takeaway</strong></p><p>Experiment with new content formats to drive traffic.</p><p>Whatnot built and launched a live shop feature – a first in the collections industry. The seller tool was built into the product, so it was simple for sellers to go live on Whatnot and talk about their products to the community.</p>","comment_id":"6335e2416c330f000113fac3","feature_image":"/blog/content/images/2022/09/Screen-Shot-2022-09-29-at-1.06.17-PM.png","featured":true,"visibility":"public","email_recipient_filter":"none","created_at":"2022-09-29T11:21:53.000-07:00","updated_at":"2022-10-06T08:59:59.000-07:00","published_at":"2022-09-29T13:43:30.000-07:00","custom_excerpt":"Like every startup, the founders of Whatnot began with only an idea. YC’s Anu Hariharan sat down with the co-founder and CEO of Whatnot Grant LaFontaine to discuss their first five launches, and how they helped shape the company into a billion dollar marketplace today.","codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a7106f","name":"Y Combinator","slug":"yc","profile_image":"/blog/content/images/2022/02/yc.png","cover_image":null,"bio":null,"website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/yc/"}],"tags":[{"id":"61fe29efc7139e0001a71172","name":"Video","slug":"video","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/video/"},{"id":"61fe29efc7139e0001a71170","name":"Startups","slug":"startups","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/startups/"},{"id":"61fe29efc7139e0001a7114c","name":"Company Building","slug":"company-building","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/company-building/"},{"id":"61fe29efc7139e0001a71152","name":"Founder Stories","slug":"founder-stories","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/founder-stories/"},{"id":"6228d9671c7f270001e3c0e0","name":"#13208","slug":"hash-13208","description":null,"feature_image":null,"visibility":"internal","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/404/"}],"primary_author":{"id":"61fe29e3c7139e0001a7106f","name":"Y Combinator","slug":"yc","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/yc.png","cover_image":null,"bio":null,"website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/yc/"},"primary_tag":{"id":"61fe29efc7139e0001a71172","name":"Video","slug":"video","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/video/"},"url":"https://ghost.prod.ycinside.com/first-five-launches-with-whatnot/","excerpt":"Like every startup, the founders of Whatnot began with only an idea. YC’s Anu Hariharan sat down with the co-founder and CEO of Whatnot Grant LaFontaine to discuss their first five launches, and how they helped shape the company into a billion dollar marketplace today.","reading_time":2,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"62fbab82b9e394000104de02","uuid":"552299c1-0f04-4779-945a-aa5d584a0d29","title":"First Five Hires with PostHog","slug":"first-five-hires-with-posthog","html":"<p><a href=https://www.ycombinator.com/"https://posthog.com//">PostHog (<a href=https://www.ycombinator.com/"https://www.ycombinator.com/companies/posthog/">YC W20</a>) is a suite of open source product analytic tools that companies can host themselves. YC’s <a href=https://www.ycombinator.com/"https://twitter.com/anuhariharan/">Anu Hariharan</a> sat down with the co-founder and CEO of PostHog <a href=https://www.ycombinator.com/"https://twitter.com/james406/">James Hawkins</a> to discuss hiring their first five employees: </p><ol><li>A full-stack engineer</li><li>Software engineer</li><li>Data engineer</li><li>Graphic designer</li><li>Software engineer</li></ol><p>James discusses each hire and dives into the unique ways they found their earliest employees, the importance of writing a company handbook, and lessons learned along the way. Today, PostHog has a <a href=https://www.ycombinator.com/"http://posthog.com/careers/">team of 30</a>. <br><br>You can watch the interview <a href=https://www.ycombinator.com/"https://youtu.be/gF1NGUsjxLU/">on Youtube</a>.</p><figure class=\"kg-card kg-embed-card\"><iframe width=\"200\" height=\"113\" src=https://www.ycombinator.com/"https://www.youtube.com/embed/gF1NGUsjxLU?feature=oembed\%22 frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen title=\"Most Transparent Startup Ever? Here’s Its First Five Hires\"></iframe></figure>","comment_id":"62fbab82b9e394000104de02","feature_image":"/blog/content/images/2022/08/S05E02_Thumbnail.png","featured":true,"visibility":"public","email_recipient_filter":"none","created_at":"2022-08-16T07:36:50.000-07:00","updated_at":"2022-08-22T03:49:32.000-07:00","published_at":"2022-08-16T07:41:30.000-07:00","custom_excerpt":"PostHog (YC W20) is a suite of open source product analytic tools that companies can host themselves. YC’s Anu Hariharan sat down with the co-founder and CEO of PostHog James Hawkins to discuss hiring their first five employees.","codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a7106f","name":"Y Combinator","slug":"yc","profile_image":"/blog/content/images/2022/02/yc.png","cover_image":null,"bio":null,"website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/yc/"}],"tags":[{"id":"62fbabbeb9e394000104de06","name":"#13312","slug":"hash-13312","description":null,"feature_image":null,"visibility":"internal","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/404/"},{"id":"61fe29efc7139e0001a71172","name":"Video","slug":"video","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/video/"},{"id":"61fe29efc7139e0001a71170","name":"Startups","slug":"startups","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/startups/"},{"id":"61fe29efc7139e0001a71152","name":"Founder Stories","slug":"founder-stories","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/founder-stories/"},{"id":"61fe29efc7139e0001a7114c","name":"Company Building","slug":"company-building","description":null,"feature_image":null,"visibility":"public","og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"codeinjection_head":null,"codeinjection_foot":null,"canonical_url":null,"accent_color":null,"url":"https://ghost.prod.ycinside.com/tag/company-building/"}],"primary_author":{"id":"61fe29e3c7139e0001a7106f","name":"Y Combinator","slug":"yc","profile_image":"https://ghost.prod.ycinside.com/content/images/2022/02/yc.png","cover_image":null,"bio":null,"website":null,"location":null,"facebook":null,"twitter":null,"meta_title":null,"meta_description":null,"url":"https://ghost.prod.ycinside.com/author/yc/"},"primary_tag":null,"url":"https://ghost.prod.ycinside.com/first-five-hires-with-posthog/","excerpt":"PostHog (YC W20) is a suite of open source product analytic tools that companies can host themselves. YC’s Anu Hariharan sat down with the co-founder and CEO of PostHog James Hawkins to discuss hiring their first five employees.","reading_time":1,"access":true,"og_image":null,"og_title":null,"og_description":null,"twitter_image":null,"twitter_title":null,"twitter_description":null,"meta_title":null,"meta_description":null,"email_subject":null,"frontmatter":null,"feature_image_alt":null,"feature_image_caption":null},{"id":"61fe29f1c7139e0001a7191b","uuid":"395e6c97-7acc-49bb-9d6d-f833e439e99b","title":"What’s the Second Job of a Startup CEO?","slug":"the-second-job-of-a-startup-ceo","html":"<!--kg-card-begin: html--><p>Successful startups go through three broad phases as they scale, and a startup CEO’s job changes dramatically in each phase. A CEO’s first job is to build a product users love; the second job is to build a company to maximize the opportunity that the product has surfaced; and the third is to harvest the profits of the core business to invest in transformative new product ideas. This blog post describes how to become a great Phase 2 CEO by focusing on the highest leverage tasks that only the CEO can accomplish. As YC’s Continuity team, we’ve seen many Phase 1 CEOs transition successfully into Phase 2, and some who have not. The future of your startup depends on which kind you are.</p>\n<p><strong>Your First Creation is a Product, Your Second Creation is a Company</strong></p>\n<p>A CEO’s first job is to build a great product and find a small group of people who love it and use it enthusiastically.<sup id=\"footnoteid1\"><a href=https://www.ycombinator.com/"#footnote1\">1</a></sup> A Phase 1 startup CEO is the Doer-in-Chief. You must be deeply involved in both building the product (observing/interacting with users, writing code, designing product specs) and acquiring users/customers. Delegation should not be a word in your vocabulary. If you succeed, it’s because your deep involvement and unique vision give the company a perspective and drive that few others have. The other imperative for a Phase 1 CEO is to conserve money in order to extend the time to iterate and improve the product.</p>\n<p>Most startups fail because they are not able to create a product that users love enough to abandon existing alternatives. Success in this first phase means discovering more demand for your product than your small team can handle. When this happens, you have to shift your focus as CEO to building a company that can capture and maximize the demand that your product has surfaced. Company-building becomes the CEO’s primary job in a Phase 2 startup. The company you build is your second creation and will be your lasting legacy as a founder.</p>\n<p>As a Phase 2 CEO, you need to transition from “Doer-in-Chief” to “Company-Builder-in-Chief.” This is how you scale as a CEO, and CEO scaling is the first step in company-building. For most founders, this is very difficult. When you’ve been a successful Doer-in-Chief, it’s hard to stop. It’s hard to stop coding, designing product specs, and interacting with customers on a daily basis. It’s hard to stop answering support tickets, doing all the product demos, and debugging the latest build. It’s even hard to delegate the random and sometimes menial tasks that you’ve accumulated over the years because they were “no one’s job.” But you have to stop doing all of these things so that you can safeguard your time for high leverage tasks that only CEOs can do.</p>\n<p>This transition can cause confusion and even friction with your team, who can suddenly wonder what you are doing if you’re no longer committing code or why you’re suddenly delegating a bunch of menial tasks that you’d been doing for years. But once your startup reaches 20-30 people, you’ll have to spend more time leading (i.e., directing the activities of others). And since time is finite, the only way to lead more is do less. Without delegating, you simply won’t have time to focus on company-building and you’ll end up slowing everyone else down.</p>\n<p>It may seem impossible at first, but you can eventually delegate day-to-day responsibility for everything you did in Phase 1, even Product. You obviously can’t drop everything overnight, but your job is to replace yourself by hiring people better than you into leadership positions. As David Rusenko, the co-founder and CEO of Weebly has said, “Often, the first time I find out about a product feature is reading about it on our blog. It shocks most founders to hear this, but I know I’ve done my job well because I’ve yet to see a feature that was built poorly. You should aspire to build a team that’s so good that you don’t have to be involved in the product details.”</p>\n<p>In practice, Phase 2 usually begins when a startup has around 20-25 employees and ends when it reaches 400-500 employees. At the end of Phase 2, you’ll have a leadership team that you’ve “road tested” to the point that you can confidently delegate everything you did in Phase 1. Your direct reports should be experienced leaders who can perform at a high level with minimal involvement from you, provided that you have set direction well. You can then shift the burden of company building to your leadership team so that you can start working on Phase 3: taking profits from the core business and investing them in new, transformative products. As an example, Facebook built its senior management team in Phase 2 while running the business at roughly breakeven. In Phase 3, it began to generate huge profits in its core business thanks to more lucrative in-stream ads, so it could allocate significant resources towards Messenger as a separate product and buy Instagram, WhatsApp, and Oculus.</p>\n<p><strong>Three Tasks That CEOs Can’t Delegate</strong></p>\n<p>Stated simply, your job as a Phase 2 startup CEO is to delegate everything you did in Phase 1 in order to create time to focus on three critical operational tasks that only the CEO can do <sup id=\"footnoteid2\"><a href=https://www.ycombinator.com/"#footnote2\">2</a></sup>:</p>\n<p><strong>1&#46; Hiring a Leadership Team and Making Sure They Work Well Together</strong></p>\n<p>Only the CEO can hire the company’s senior leadership team and make sure that they work well together. You can get help and feedback from others as you hire, but when you bring leaders like a VP of Engineering, VP of Sales, and CFO on board, the ultimate hiring decisions must be yours. You can’t hire by compromise, looking for someone who everyone around you likes. The choice has to be yours because the consequences are yours as well.</p>\n<p>Recruiting senior executives takes an extraordinary amount of time. If you are doing it for the first time, meet lots of people so that you can develop good judgment about the skills, experiences, and personality traits that you need. Patrick Collison, co-founder and CEO of Stripe, made it a point to meet with the “best-in-the-world” in each field so he could get a sense of what a great candidate looks like. Because executive hiring takes so much time, you should stage these hires rather than trying to hire everyone at once. Our recommendation is to hire a good executive search firm to help you run your first couple of searches. It will cost you an arm and a leg, but if it helps you hire the right person, it’s worth every penny.</p>\n<p>YC teaches founders to manage their startups using weekly milestones to ensure rapid iteration and progress. That’s great for a small company trying to find product-market fit, but it’s not the way to manage senior executives. You manage senior people to longer term outputs rather than week-to-week tasks. To do this well, you first have to set the right quarterly and annual milestones for the company and for each executive. It’s also your job to acclimate new executives to the culture of the company. As you build your senior team, expect to spend extra time with new executives individually and as a team on culture and teamwork. You should insist that new executives take the time to build relationships across the organization rather than pressuring them to come in and start changing things immediately.</p>\n<p>Learning how to evaluate the performance of senior executives is also a challenge, partly because your face-to-face interactions do not provide much of the information you need. You have to evaluate how well they are building their organizations, how productive and happy their employees are, and how well they are working with other teams and executives. You should expect that at least 25% of your leadership hires don’t work out. For most startup CEOs, it’s very difficult to fire their first executive, and most CEOs take too long to do it. But it’s better to act quickly and leave a void in the organization than to leave an ineffective senior executive in place for too long. The longer you leave an under-performing executive in place, the more credibility you lose with everyone else on your team.</p>\n<p>Your job is done when your entire leadership team has been hired, you’ve coached them to work well together, and they can operate at a high level with minimal involvement from you. Don’t be surprised if 50% of your time goes to hiring and managing your senior team; it’s time well spent.</p>\n<div id=\"creating-purpose-and-alignment\">\n</div>\n<p><strong>2&#46; Creating Purpose and Alignment</strong></p>\n<p>The second task that CEOs cannot delegate is creating purpose and alignment at the company. When your startup has less than 10 people who all sit together, you don’t need to work very hard to keep people aligned. Everyone can easily hear what’s going on, understand how their work fits into the broader goals, and have a say in every decision. Communication is simple and creating alignment is easy.</p>\n<p>But when you start hiring more people, soon in different offices and from broader backgrounds and functions (e.g., sales, finance, etc.), creating alignment becomes a lot harder. Your team no longer sits within earshot. You aren’t able to interview or even meet everyone who joins the company. And you may not even able to attend employee onboarding sessions. As an example, there was an 18-month period at Twitter where the company was hiring 50 people per month in offices all around the world. There was no way the CEO or any one executive could meet everyone who was joining the company.</p>\n<p>As a Phase 1 CEO, you are the lead rower on the boat. But in a Phase 2 startup, your job is no longer to row. Instead, it’s to define the purpose of the voyage, set the direction of the boat, and measure the pace and performance of a much larger number of rowers. In business speak, the CEO’s job is to define the Mission (purpose), Strategy (direction), and Metrics (pace and performance). These three elements provide the essential context that a growing company needs to be able to perform.</p>\n<p>One of the best examples of “Mission-to-Metrics” alignment comes from a friend who visited the manufacturing floor at SpaceX. Seeing a SpaceX employee assembling a large part, he stopped to ask him, “What is your job at SpaceX?” He answered, “The mission of SpaceX is to colonize Mars. In order to colonize Mars, we need to build reusable rockets because it will otherwise be unaffordable for humans to travel to Mars and back. My job is to help design the steering system that enables our rockets to land back on earth. You’ll know if I’ve succeeded if our rockets land on our platform in the Atlantic after launch.” The employee could have simply said he was building a steering system for landing rockets. Instead, he recited the company’s entire “Mission-to-Metrics” framework. That is alignment.</p>\n<p>Can you define the Mission, Strategy, and Metrics for your startup in a way that’s clear, simple, and inspiring? Most Phase 2 CEOs can’t readily do this. And, when they sit down to define it, they find it harder than they thought. The diagram below captures the task at hand:</p>\n<p><a href=https://www.ycombinator.com/"https://ycombinator.wpengine.com/wp-content/uploads/2016/11/Artboard-2white_wborder.png/">\"Mission-to-Metrics\"How To Start A Startup</a> and <a href=https://www.ycombinator.com/"http://www.paulgraham.com/ds.html/">Do Things That Don’t Scale</a>.<a href=https://www.ycombinator.com/"#footnoteid1\">↩</a></p>\n<p><b id=\"footnote2\">2</b> The focus of this essay is on a CEO’s operational responsibilities. There are certain non-operational responsibilities such as building/managing a Board, raising money, interacting with the press, etc., that are also part of a CEO’s job, especially when a startup is small. Generally speaking, the less time a Phase 2 CEO spends on these types of non-operational tasks, the better, because they come at the cost of running the company.<a href=https://www.ycombinator.com/"#footnoteid2\">↩</a></p>\n<p><em>Thanks to Daniel Yanisse, Patrick Collison, David Rusenko, Ben Holzman, Michael Seibel, Ed Catmull, Sam Altman, Leore Avidar, Tyler Bosmeny, and the YC Continuity team for reading drafts of this essay.</em></p>\n<!--kg-card-end: html-->","comment_id":"1096555","feature_image":"/blog/content/images/wordpress/2016/11/businessman-standing-in-office-looking-out-picture-id150220735__1024%C3%97768_.jpg","featured":false,"visibility":"public","email_recipient_filter":"none","created_at":"2016-11-29T00:00:11.000-08:00","updated_at":"2021-10-20T13:17:53.000-07:00","published_at":"2016-11-29T00:00:11.000-08:00","custom_excerpt":null,"codeinjection_head":null,"codeinjection_foot":null,"custom_template":null,"canonical_url":null,"authors":[{"id":"61fe29e3c7139e0001a71078","name":"Ali Rowghani","slug":"ali-rowghani","profile_image":"/blog/content/images/2022/02/Ali.jpg","cover_image":null,"bio":"Ali is Managing Director of YC Continuity, where he invests in & advises growth-stage startups. 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What’s the Second Job of a Startup CEO?

by Ali Rowghani11/29/2016

Successful startups go through three broad phases as they scale, and a startupCEO’s job changes dramatically in each phase. A CEO’s first job is to build aproduct users love; the second job is to build a company to maximize theopportunity that the product has surfaced; and the third is to harvest theprofits of the core business to invest in transformative new product ideas.