EPISODE 017 : 07/02/2021
Matt Blumberg, author of Startup CXO: A Field Guide to Scaling Up Your Company’s Critical Functions and Teams (part 2)
The new book Startup CXO is designed to help each functional leader understand how their function scales, what to anticipate as they scale, and what things to avoid. In this second part of our two-part interview with Matt Blumberg, he describes product, finance, diversity, and engineering as critical functions that any startup team can learn to improve. Read more about his team’s hard-won wisdom in the new book Startup CXO.
(Part 2 of 2)
Host: Ned Hayes and Ashley Coates
Guest: Matt Blumberg
Listen to every episode
Topics discussed in this episode
- Business creation booming during the pandemic
- Leadership roles within a startup
- Diversity, Equity, and Inclusion
- Importance of company culture leading to success
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Ned Hayes [00:00:01] Welcome to SparkPlug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe making mobile location smarter. This is the second part of a two part conversation with Matt Blumberg, the author of Startup CXO, a field guide to scaling up your company’s critical functions and teams.
Ashley Coates [00:00:27] 2020 really saw a huge increase in startups. What how do you think 2020 affected the number of people starting startups, and how do you think that trajectory will look going forward? Do you think 2020 had a big impact on that trajectory?
Matt Blumberg [00:00:45] I don’t know. It’s an interesting question. I did read somewhere that in the US in 2020, there were 4.1 million businesses that got started. Now that’s obviously not all VC tech type businesses, right? That’s a lot of small businesses. But it was a huge year for business creation, which is really interesting given how disruptive the year was for life in so many different ways. But, you know, I think the culture of entrepreneurship has always been strong in this country. The availability of capital and the ease of getting things going has never been more prevalent. And in a disruptive year, you know, more people have ideas, more people have more time and there probably more needs that appeared in society. So I don’t know if 2021 is going to be less or, you know, will say that it was even more at the end of it, but tremendous amount of startup activity last year. And I think twenty twenty, I said this on our first day of working on Bolster that I think it’s going to be a great year to start a business. And then I said, I think is going to be great year to start this business. But um, but I think in general, it’s going to prove to have been a great year to start a business.
Ned Hayes [00:02:00] Right? So I was I was entranced by a number of pieces of writing in the book. The one piece that caught my attention was that somewhere close to the beginning, it said, “Remember that in a startup, this is likely the first executive role for many on your leadership team. They’re learning about the art of being and being an executive, so you should help them understand how critical communication and listening are to being successful.” So I’d love if you could spell out a little bit more of your learnings on the importance of listening and communication.
Matt Blumberg [00:02:37] Yeah, the I think the more, but those those are important life skills. It doesn’t matter what job you do and what level you’re at. I find that the more senior you get, the more important outbound communication gets for sure because you are setting the tone for an organization, you’re explaining strategy, you’re helping people connect the dots, you’re sharing your vision, you’re sharing your enthusiasm. So you know, there’s a lot about outbound communication and in particular, really developing a connection with the audience, whether your audience is one person or a video camera, or whether it’s an auditorium full of people. But, you know, I think listening is probably the underappreciated of the two communication skills. And, you know, in some ways is even more important. The Anita Apsey, who wrote the sales section of the book and is another longtime long term colleague has many great expressions, but one of them is God gave you two ears and one mouth for a reason. And the, you know, the more senior you get in an organization, the more you actually need to be listening to people and and observing what’s going on and not just hearing them, but truly listening to them. Because you the bigger the company gets, the further away you are from the front lines, the further away you are from the action and from what any individual is doing. And the only way you can really find out what’s going on is by listening, by asking smart questions and then listening very carefully to the to the responses, particularly because if you’re the CEO or CXO, you may get very guarded answers even in an open culture, an open, honest culture. So you really have to listen carefully to understand what’s going on in the company.
Ashley Coates [00:04:34] Absolutely. And if I can zoom in on another section, what was interesting is that for the COO section, which Jack Sinclair wrote, if you intentionally chose to keep that section short because you believe that function is applied across multiple individuals and in an organization, can you walk us through that decision, that process?
Matt Blumberg [00:04:58] Yeah, it’s it is interesting that that’s where we ended up. So COO was going to be a section just like all the other sections, and it was the one we struggled with the most. We couldn’t even get past outline. And the reason we couldn’t get past outline is because no two companies have the same definition of a COO. And, you know, we had worked at enough companies and knew enough companies where we we saw that role that we said, You know what, there is no how to on being a COO because sometimes your technical operations person or back office person, sometimes you’re the CEO’s number two and you have a whole bunch of functions reporting into you and sometimes you’re effectively the head of go to market. And we sort of felt like all those things, almost all those things are covered somewhere else in this book, and someone who got a CEO job could probably go through the book and say, All right, my role is this chapter in this chapter, in this chapter. And then over here, this chapter, in this chapter, in this chapter, and it didn’t really need its own, its own section in quite the same way.
Ned Hayes [00:06:02] Right? Well, another section that you have that’s fascinating to me is the CFO section, and that’s near the very beginning. Something I loved about this section is that instead of just saying do all the things, it actually zooms in to high impact areas where you can make the most difference in terms of revenue operations in terms of other critical functions. So did you help shape that section or was that all Jack in terms of choosing which things are really, really key?
Matt Blumberg [00:06:31] Jack and I have worked together for over 20 years, so it kind of it was all him, but it was the product of a lot of work we did. But I think what hopefully the readers of any sections will take away. One thing is that any leadership function in the company can be strategic. They can also be tactical, right, everything you do to run a company and manage people is like, execute one thing after the next, after the next but every function should be strategic can be strategic. It just needs to be thought of that way. And some of that is figuring out the high impact things to do, but something that’s also in your approach to it. And, you know, Jack talks about that is his sort of theme in the finance section is finance as partner. And how do you help the business make good decisions? How do you be the no guy in the corner saying, No, you can’t have this, you can’t have that? Cathy’s section about H.R., you know, very similar. You know, even her definition and the beginning of it of, you know, let’s talk about the difference between H.R. and people. And you know, yeah, you’ve got to be good at the transactional because if people don’t get payroll and benefits taken care of, they’re very unhappy. But how do you think they’ll figure? Yeah. But how do you think about the people? How do you how are you as an executive, a good partner to the rest of the organization and making everybody’s people more effective?
Ashley Coates [00:07:58] There was one section in Cathy’s section chief blocks section that really struck me. I’m just going to read this quickly. “Diversity, equity and inclusion won’t just happen on its own. Even with the best intentions, there is systemic and individual bias. To overcome these, you must be intentional about adapting traditional methods of sourcing or recruiting compensation, promotions and performance management. You need to counter the biases in our systems and help people understand how to proactively engage in inclusive behaviors.” Can you tell us about at Return Path, your experience with diversity, equity and inclusion?
Matt Blumberg [00:08:38] Yeah, we had as most companies who are thoughtful about the topic. It’s a journey. There is not a right way to do it. There are probably some wrong ways to do it. But no, I don’t think anyone ever gets to a place where they said, we have this perfect. I will certainly say we cared about that topic a lot more at the end than we did at the beginning, right? Twenty years is a long time in those 20 years in American business culture. We’re very evolutionary on the topic. And I give Cathy a lot of credit for, you know, sort of leading that charge with us. We spend a lot of time on unconscious bias training. Unconscious bias training was really cool. The first time I went into the room, I was kind of scratching my head. I was like, All right, well, you know, Cathy says, it’s important. I’m going to trust that it’s important and I kind of get it. I, you know, I read Malcolm Gladwell Blank. So I kind of I kind of know what she’s talking about, but you get into the, you know, into the weeds on some of those trainings. You really can start to be thoughtful about it. So the reason I bring that out as an example is, you know, there are lots of companies where they start. Their approach to DEI is to start by saying, Well, you know, we need to hire more women, right? Or we need to hire a more diverse workforce, and that’s probably a good goal. But if you start at that place and then you start by saying, Look, we only have 17 percent women in our product organization, like we must fix that. You’re in some ways treating a symptom and not treating a problem. So I think Cathy did a great job leading our organization to think about the underlying challenges that might be preventing us from achieving everything we could achieve as an organization in terms of diversity and in terms of being a truly inclusive workplace. And the result of that was a lot of things bloomed out of that, and a lot of different employees took up the mantle of inclusivity in the organization, which again, is very different from how I’m going to hire a chief diversity officer and that person is going to tell us what to do. You know, I look, I think chief diversity officers do great work and very hard work and a lot of cases. We have a lot of them as members of Bolster. That’s actually one of the roles in Bolster, and we place them at companies all over the place. I think they can be very valuable as advisors and consultants, and there may be some organizations where the culture is such that they need someone who owns it or no one owns it. I think our philosophy, at Return Path and Bolster is everyone has to own it. Not just one person.
Ned Hayes [00:11:04] This ties into what I read in the product development section. So what you said about diversity, equity and inclusion spoke to culture where everybody owns it. And in the product and technology section of the book, culture is also a big theme over engineering culture under engineering culture. Getting that culture that right is really important. Can you tell me more about how culture leads to success and equity across an organization?
Matt Blumberg [00:11:30] Yeah. The product section that my, my colleague Sean Nuspon wrote is is great, and his full description of proportional engineering has a great graphic in there that helps you visualize it. You know, I think is, is is is really impactful. I just think culture is everything in a business, and if you have a culture, a way of doing things. As a way of approaching work that is understood by everyone, whether it’s written on the wall or it’s not written on the wall, but there’s there’s a way that things get done and that way is, you know, is inclusive and everything kind of fits into that. And if the way of getting things done isn’t, it’s really difficult. So engineering is actually an interesting place to talk about that because inclusivity within engineering, I think, is a couple of things. One is certainly the people and the practices, right? The the the way the way seems to work. But I think having an inclusive product organization also means that the people working in product are included in the business. They’re connected to the business. So it has two very different meanings. And I think what you find in high performing engineering organizations is that the engineers aren’t sitting around waiting for a product manager to hand them a requirements document. So then they go build what’s on the sheet. The engineers are engaged in the business and they show up for all hands meetings and they ask the tough questions and they look at the product and they understand how users are using it, and they come up with ways of solving the problem. They come up with things to build as well. If you hand the developer a roadmap, they’ll follow the roadmap even if it’s wrong. If you tell the developer a problem you need solved, they’re going to find the most efficient way to solve the problem.
Ashley Coates [00:13:20] Right. They’re problem solvers, it’s what they do.
Matt Blumberg [00:13:22] Exactly.
Ashley Coates [00:13:24] So let’s talk now about the chief marketing officer function, which is my personal favorite function. You in the book, you state that the marketing that marketing has three primary responsibilities to build and maintain the company brands generate demand for sales and support the company culture. Tell us about how this played out at Return Path and now how this function is playing out for you at Bolster.
Matt Blumberg [00:13:50] You know, I think those are those are three great pillars that Nick and Holly wrote about, and I think the thing that’s really unique. You know, you ask 10 people in business their definition of marketing, and they’re probably going to tell you branding and sales or something to that effect, right? It’s the third one right of support for the company culture. And you know, I think we did a very good job at Return Path and are trying to do the same and Bolster of having the the marketing department and the people team in lockstep on things. You know, we we paid a lot of attention to all three pillars at both companies. And the biggest challenge that that I’ve seen with marketing over the years isn’t about any of that, though. It’s about the connection to sales. The marketing department that sends out the big monthly report at the end of the month, listing all the great things they did, all the activities that they did and declaring that they got 100 percent of their goals met when the company missed their sales targets by 20 percent. And that sort of measurement of activity, as opposed to measurement of impact and the I own what I own, but sales of the number is a really difficult setup. I think Nick and Holly and then Anita in the sales section, I think both did a good job of talking about the partnership between those two functions and how everyone’s got to own the number. And marketing didn’t didn’t meet its goals. If sales doesn’t meet its goals.
Ned Hayes [00:15:24] Right, well, this brings me to something that’s changed over the last 25 years of tech, which is having a chief privacy officer and a chief security officer are absolutely essential for companies, especially SAS company. And so that’s a measurement of impact and a new KPI that we measure every day. Can you speak to what you see changing in the work Bolster in terms of placing people who have those skill sets?
Matt Blumberg [00:15:49] Yeah, for sure. And it’s one of the reasons that we have a chief privacy officer section in the book. It’s not necessarily not necessarily one of the big aix functions are big eight functions that you normally think about when you think about sales marketing products. But it but it is and you know, it’s become central for any certainly any technology business or any business that really uses a lot of technology because data and information is is is a currency form now. In our different roles, when you when you sign up to be a member Bolster, you have to identify yourself with one or more roles. We have, I think we have over two hundred chief privacy and or security officers. And the thing that’s kind of interesting about that role, it’s actually the perfect role to be a fractional role because early stage companies don’t necessarily need a full time industrial strength, seasoned chief information security officer or Chief Privacy Officer, but, they’ve got to get the basics right. And it’s not always obvious how to get the basics right. So we’re seeing a lot of activity in that space as well.
Ned Hayes [00:17:00] If you could give our audience a final pitch for CXO, what would that be? Who should buy this? Why should they buy it and why does it matter?
Matt Blumberg [00:17:10] Startup CXO was written for three different audiences. If you’re a CEO, startup CXO, we’ll give you a window into how you should manage each of the individuals on your executive team and orchestrate their activities as a team together. If you are a department head, you’re a CXO. So the book gives you a roadmap for your own role, but also gives you an opportunity to look at the roadmap of the adjacent roles so you understand really effectively how to connect the pieces and parts between your department and other departments. And finally, if you were earlier in your career and you aspire to run a function to be so someday, it gives you a career guide.
Ashley Coates [00:17:51] That’s fantastic Matt I know our listeners will be excited to run out and get your book and read it. My last question for you is what’s your personal mission and what do you want to be remembered for?
Matt Blumberg [00:18:02] I believe very strongly in having a positive impact and in leaving the world in better shape than I found it any, any piece of it. And whether that’s building companies that have products that change an industry or change the world, building companies that have a positive impact on, you know, tens or hundreds or thousands of people who work there, being a great husband, being a great dad, being a great son. You know, I, you know, I just I love making things work better and leaving a smile on people’s face.
Ned Hayes [00:18:40] Thanks so much for your time, Matt.
Ashley Coates [00:18:41] Thank you Matt.
Matt Blumberg [00:18:42] Thanks. I appreciate you guys having me.
Ned Hayes [00:19:05] Thanks for listening today to the SparkPlug podcast hosted by me, Ned Hayes, and brought to you by SnowShoes Snow.sh for smarter mobile location, Smart Plug is a wholly owned property of SnowShoe all content. Copyright 2021 SparkPlug Media.