Before even looking up, I responded: “WHY DON’T YOU GO F*** YOURSELF?” Then I saw my neighbor, still so stunned he hadn’t quite erased the jolly, just-joking expression from his face, sitting behind the wheel.

My wife later reminded me that since our street diverts cars one block to the north and two to the south, I didn’t even have to look up to know that the only possible target for my bizarre spasm of aggression was someone I’d see every week for the next decade.

When you think about it, your whole life is like that street, much shorter than you once imagined, almost entirely populated by people you’ll meet over and over again.

But for a long time, I didn’t think about it. Until I was 15, my twin brother and I began every fall term by apologizing to our assembled friends for the way we were the year before, as if the coming year could make everyone forget the fleas we occasionally picked up from our dogs, or our tendency to yank on one another’s headgear in tussles.

It wasn’t until I was a hiring manager who called job applicants’ references that I considered how long people would remember all the ways you act up as an adult. I began to reflect on my greatest hits. It was like hearing your own voice on an answering machine, except instead of taking 30 seconds it seemed to take 30 years.

I now see amazing job candidates, some better qualified to run a business than I am, dismissed with the slightest gesture by some dude we dug up from LinkedIn. “Can you send us a few thoughts about working with Jerry?” we ask in a note. The message back makes the rest a formality: “Can I call you instead?”

When you’re younger, you never wonder what would be said about you in such a phone call. The whole world is a vast frontier, a life without consequences. You rage through it like an instinctive animal. If you think you’re good at something, especially at a software start-up, you let everyone know it.

But then you get to the end of the street and have to double back again.

The post Life on a Short Street appeared first on Redfin Real Estate Blog.

Running a lemonade stand, you don’t need to analyze gross margins or survey customers because you squeeze the lemonade yourself, and hand it to every customer. But once you have employees and customers you’ve barely met, numbers become more important.

For example, Redfin folks just finished reviewing a multi-million dollar business that wasn’t as profitable as it should be. We decided to get numeric on the problem, asking one of our number-crunchers to analyze tour costs and abandon rates in that market.

This was a necessary and good action to take, typical of an approach that we believe creates enormous economies of scale for Redfin and other online businesses: we store data on a wide range of customer interactions, so we can be more analytical than most brokerages. But running the numbers has two shortcomings:

• It isn’t actually an action. It’s a study, which will take weeks to complete, which may or may not result in a decision. Especially as a business grows, you need a bias for action.
• It encourages learned helplessness: the person running that business isn’t the number-cruncher. So now you have two people screwing in a light-bulb instead of one, and less accountability.

There’s an alternative, often championed by one of the best consumer investors I’ve ever met, Marc Singer. Marc doesn’t look for math wizards to run a business. He looks for lemonade-standers, people who even in large organizations find a way to make every problem small.

Marc is always talking to me about somebody who ran a restaurant, a chain of movie theaters, a lawn-spraying service, a maker of gizmos that deafen the deer who wander onto your yard. Rather than analyzing all the data from an under-performing business, Marc often digs into the customer experience. Why is the food cold or the popcorn-line too long?

Marc has a word for this way of thinking. He calls it a “merchant sensibility.” In its classic sense, merchant sensibility is the ability for someone to guess which of two similar products a small store should stock. “You still measure whether the product the guy chose actually sells better,” Marc once explained to me, “But someone with merchant sensibility gets it right more often than other people.”

People aren’t born with this ability, and the ones who think they are just don’t recognize their own mistakes. People learn it, leaning back against the men’s magazines with eyes narrowed while customers walk into the store, watching carefully where customers pause and where they move on.

If Marc were in that review of our multi-million-dollar business, he might have recommended a similar approach: get in a car and go tour houses with customers, to find out first-hand what’s broken in the business.

At my last startup, Plumtree, we had number-crunchers and lemonade-standers. At one extreme there was a guy known as Master Blaster, who hired a number-cruncher to sit on his shoulder all the time and tell him what to do. And at the other was my friend Ken Lowe, who ran our East Coast business.

Like almost everyone from New Jersey, Ken was a lot smarter than he pretended to be; he founded his college’s Chaucer club because each new club got a stipend for beer. A large man, Ken often greeted me by asking “How much you benching these days?” In a meeting where a dozen bigshots reeled off their titles, Ken would wrap up the intros by saying, “Ken Lowe, Emperor of Japan.” A colleague once penetrated the inner sanctum of his home-office and reported back that it consisted of an absolutely bare desk, and a shrine of Yankees’ insufferabilia.

When the time came for Ken to present to the executive team, I didn’t think he’d do well. For seven years at Plumtree, I sat petrified in these meetings as our CEO, John Kunze, tried to figure out if the presenter really knew her stuff.

People started over-preparing, learning a script or memorizing formulae to describe a business that they lived and breathed 12 hours a day, six days a week. This prompted John to ask, “OK, but what’s really going on in your business?”

This was exactly the question that Ken Lowe hit out of the park, because he spent most of his time meeting customers and prospects, saying little, listening a lot. He could tell you when a deal that hadn’t closed was going to close, and when a customer who’d bought our software was going to fail. He probably had lots of numbers but the only one he talked about was his “blood number,” a bottom-line the business would hit or else, as Ken would say, “there will be blood… MINE. HA HA HA!”

Now as Ken realized, you need data and first-hand experience. Without a broad data set, you can lurch from problem to problem, and anecdote to anecdote, based on whatever you just saw in the field, so that every week a new problem is the most important problem in the world to solve.

But as a business grows, you tend to get more number-crunchers and fewer lemonade-standers; in looking at the numbers you can forget the lemonade even exists. You need to work the spreadsheets and squeeze the lemons too.

The post Merchant Sensibility appeared first on Redfin Real Estate Blog.

*~*~*~*

In the laundry room, I picked up Peter Biskind’s book on Miramax and the Weinstein brothers. The dust jacket has a blurb from Matt Damon comparing Harvey Weinstein to the scorpion who stings the frog that helped him cross the river — “it’s his nature.” This lured me in….

The script sessions, which took place in the cramped conference room at the Tribeca offices, were like nothing she had ever experienced before. There were five or so writers. The participants… were picked up by a car service at, say, 9 am and delivered to the Miramax offices at 9:30, where they cool their heels in the tiny reception area for a couple of hours until Bob and Harvey waltzed in at 11 or 11:30. …. Harvey, who only attended occasionally, smoked cigarette after cigarette, filling the room with smoke and stubbing the butts out in the lox. If he was all out, he would pick up butts and relight them.

The food sat around for hours because very time an assistant appeared to take it away, he or she got screamed at. When the platter was finally removed, Harvey began eyeing the leftovers on people’s plates. Are you gonna finish that? No? [process repeated for lunch, dinner]…

Rack continues: ‘As soon as they got something they didn’t know, they’d scream, some minion would come in, and they’d yell, Go get Alien and give me a catalogue of the scares and at what minute in the film they come. And then twenty minutes later they’d go, You don’t have it? Why not? Get ten tapes of Alien, get ten people to take different parts, have ten more people type memos, and 45 mins later it would be in front of them: Alien, every single scare, bump #1, bump #2, bump #3. It’s kind of impressive.

Because for all the antics, all the craziness, they have a lot of resources and they use them,  and they just keep going, on to the next page, pounding on every detail.
(Many thanks to an old Redfin friend, Leo Shklovskii, for correcting our spelling of the author’s name)

The post Are You Gonna Finish That? appeared first on Redfin Real Estate Blog.

I think she was the one who came up with the “People Love Us on Yelp” stickers that you see in restaurant windows all over town. And she has also the hard-nosed discipline of an old-school marketer from a company like The Gap. She’s funny and smart, so it should be a great talk.

She is speaking on Wednesday, April 28 at noon here in Redfin’s headquarters.  We’ll provide lunch for anyone who signs up, and happily host anyone who drops by. To add your name to the list, just leave a comment on the original brown-bag post…

Thanks to Michelle for pitching in, and hope to see you all soon!

The post Michelle Broderick Comes to Redfin This Wednesday appeared first on Redfin Real Estate Blog.

Brian has worked with and for all sorts of leaders in his career which, in addition to his time at aQuantive, has included stints at General Mills, Capital Cities/ABC, Disney and Microsoft. His advice is based on the great bosses he’s worked for and the bad bosses, and from his own experience as a CEO. As he laid out seven best practices, we did our best to keep up with what he said. Below is not a transcript – no one at Redfin is a stenographer, and I don’t take much time to clean these notes up later — but some of the useful bits and pieces of what he said, in as close to his own voice as we could get:

Set clear objectives, hold people accountable and get out of the way: if I had to sum up my management philosophy, this would be it. You want objectives to be aggressive but achievable. Push decision-making down and out in the organization, essentially closer to the customer. At aQuantive, we tried to empower people in sales and support. That means you have to have the right incentives, the right objectives and parameters. But within that framework, the more you can push P&L responsibility out, the better. This will help you attract and retain the best people. Do you want to be the only leader in your company? No…

One of the fundamental responsibilities that a manager has is building a team. Who is on their team is their call. That’s the most important decision a manager makes. I interviewed candidates for managers who reported to me, but this was only to give input and of course to help in recruiting the candidate. I once met a candidate who one of my direct reports wanted to hire who didn’t really do it for me. He hired the candidate anyway, and about six months later he fired that person. We hurt ourselves over that six months, but the manager who hired him also hired five or six good people too. That not’s a terrible batting average. I used to tell my own board, “If you don’t like the team I’m hiring, then fire me.” I held that manager to the same standard.

Micromanagement does not scale. Founders can be micromanagers. Sometimes micromanagement comes from a vision, sometimes it comes from a manager just being insecure. Micromanagement results in the loss of talented executives. Do you want people working for you who just take direction? Or do you want people who are going to lead, who are going to push back? We all know of some visionary founder or “celebrity CEO” who may have a reputation for micromanagent and so we ask: what about him? Doesn’t he prove you wrong? My answer is “no.” First of all, if the company is truly successful, my bet is their micromanagement is seriously overrated. Or if not, they are an extreme exception — and they’ll be in deep trouble when that person leaves since the people below him or her have not been trained to lead themselves. To support the “exception” point, look at lists of the top companies: best-run companies, best-managed companies, best places to work. The vast majority of these companies – if not all of them – are not led by these “celebrity CEOs” with micromanagement tendencies. In fact, the best companies to work for are led by CEOs you couldn’t name.

The way to get job security isn’t to own every decision, but to hire smart people. The board may say, wow, this person is better than you are. That’s a risk I’m willing to take. I often tell people who work for me: “The more you tell me, the less I will bother you.” Tell me what’s going on in our one-on-ones and I’ll stay out of your hair.

Micromanagement is a virus: the time and energy wasted by people down in the organization modeling that behavior is huge. When I have to present to a micromanager, I’m expected to know everything just as he would, which is a waste of time. As CEO at aQuantive, I was once asked at a board meeting what I thought of an executive’s presentation, and I said you already heard what I think. That executive knew more about the topic than I did, and he represented my point of view. Maybe the Board wanted me to have some special insight, but my insight was hiring him.

It is far more important to be respected than liked: act with integrity, be honest and transparent, treat people with respect and dignity. Being direct and honest often can mean delivering difficult news, news that people don’t want to hear. Some people don’t get that. A senior HR person I worked with viewed his job as what might be called a union leader, to lobby for whatever the employees wanted. Yes, your job is to represent employee needs to management, but it’s also to represent management to the employees.

Some decisions employees won’t like. My standard was: “Could I be ok with a decision that showed up in the New York Times, could I defend it?” For example, a compensation decision: could I defend to this manager why I was paying his or her peer more than her based on their performance. Of course in a public company, the New York Times rule comes true, as many executives’ compensation is public.

That can create some interesting dynamics. At aQuantive we said we had no politics, and certainly we had very little politics. We could be direct and transparent, where people said what they felt in the meeting. In my view, for someone on my executive team, the worst thing you can do is not say anything in a meeting, then come in my office afterwards and tell me what you really thought. When people tried to do that, I’d say, “I don’t want to be a middle-man. Say what you think in the meeting.”

Give employees the right to be wrong: if we’re not making mistakes, we’re not taking enough risks. Just don’t make the same mistake twice. Make a mistake for the right reasons, for a client, for the business. Learn from your mistakes, and teach everyone. There are exceptions: mistakes of integrity are one-strike-and-you’re-out. Otherwise, mistakes can be good. One of my colleagues used to say: “The reason we’re better than other companies is because we’ve made more mistakes than they have.” Encourage a culture of admitting mistakes. No excuses, but explanations are fine. It’s great when a senior leader says in front of her boss that she made a mistake, it’s critical for others to see that, to see that it’s accepted, and not punished. It’s great to ask what might be considered “dumb” questions, and it’s great for other folks to see you ask dumb questions; you should model that behavior as an executive.

No jerks: no matter how smart someone is, if someone can’t get along with others, if somebody treats others badly, they’re out. Sometimes you worry that somebody is too smart to fire, too valuable to fire. That’s never true. The collateral damage that is being done to the morale and effectiveness of the people that “jerk” is interacting with is enormous, even if it is often hidden from his or her direct boss. When you do make the decision to fire someone who is a “jerk”, you often hear that the whole team will quit. That never happens either. Hire slowly, fire quickly. It’s right for the team, it’s right for the company, it’s right for the person leaving.

Have a bias for action: gather the data you reasonably can and make a decision. What people don’t realize is that sometimes doing nothing is a decision. You can get bogged down with consultants, meetings, PowerPoints. You want an organization where it’s always clear who is supposed to make a decision. This lets some people give input and others make the decision rather than having two people both posturing, because they’re vying to make a decision. And always align authority and responsibilty. You don’t want to be in a situation where you have no authority but you’re still accountable, where you can get blamed for something you didn’t do; or conversely, where someone who does make the decisions is not held accountable for them.

As CEO, I always felt the fewer decisions I was making, the better we were doing.

Live or die by your values: most companies have values but they often have too many. Who can remember 13 values? aQuantive only had four values, and everyone knew them. It was hard to pick just four; someone, for example, would say excellence has to be a value, I mean, don’t we want to be excellent? My job as CEO was to pick just four. What other decisions did I have to own? Well certainly picking the team was the most important. Acquisitions were a big part of our strategy. I had to make the final decision on compensation and budgets.

And that was it. What was interesting about Brian is that on the one hand he’s such an indelible figure – tall, with a deep voice uninflected by many doubts – and yet he stood in front of us for an hour trying to do the impossible, erasing himself bit by bit so you could see all the other great leaders at aQuantive more clearly. Many thanks to Brian for coming by, and to Madrona for hooking us up with him. We had a lot of people at Redfin buzzing about it, and already one meeting on Friday night giving someone authority over a problem he’d previously had to helplessly take the blame for — so it was definitely a big hit.

Any comments or questions for Brian, just post ‘em below and we’ll make sure he takes a peek.

(Photo credit: Jeff Louella on Flickr)

The post The Self-Erasing CEO, Brian McAndrews, on Pushing Decision-Making Closer to the Customer & Making the Most Mistakes appeared first on Redfin Real Estate Blog.