When Mike Brown touched down in Southeast Asia in 2013 — newly tasked with overseeing the growth of Uber’s business in the region — he was struck by how similar his situation was to that of a growth-stage startup founder. Working with a skeleton crew of 7, it would be up to them to figure out the four categories of company-building that define strong growth:
- How to build a high-functioning organization of managers and reports.
- How to create a feedback loop with customers so that your product keeps getting better.
- How to generate brand awareness in a new, challenging market.
- How to strategize and plan ahead for a healthy financial future.
Much like at a startup entering rapid scale, all of this seemed equally important and urgent. But Brown and his small squad were able to triage and sprint in a way that allowed them to build out a high-performance team of thousands spread across 15 countries. Along the way, they created systems to help both their people and product constantly scale and improve.
Today, Brown is back in the States, ready for his next adventure. But first, he’s taking a moment to pause and reflect — very candidly — about what he learned during his experience at Uber that can benefit entrepreneurs who are entering growth (and early stage founders who want to be prepared for what's coming). This is the second part of a 2-part series. The first, here, focused on management, organizational effectiveness and culture. Now, Brown will turn his attention to each of the four pillars that startups need to shore up to build big businesses capable of transforming markets: people development, product development, marketing, and strategic planning. What follows is only the most impactful advice he picked up in each of these areas, told from Brown's first-person perspective.
PEOPLE DEVELOPMENT
Over-index on front-line morale.
The happiest people at your company should be the people that interface with your customers daily. The interactions and experience these people deliver determine how each customer they reach will feel about your company. So, if you’re not investing in your front-line people — and believe me, they’re often overlooked to maximize the happiness of more senior personnel — make a meaningful effort to ensure their happiness and genuine satisfaction.
Make sure they get the compensation, professional development, work-life balance, resources and support they need to be thrilled to go to work every day. If you don’t, you’ll see the consequences show up in your customers’ lack of satisfaction and loyalty. It’s like the old TV commercial for Isotoner gloves where the football player buys gloves for all his teammates and says “I take care of the hands that take care of me.” In this case, make sure you take care of the hands that take care of your customers.
Define clear competencies for each role on your team.
You must do this so that your team members' performance is evaluated on an objective set of criteria and can’t be perceived as arbitrary. This makes performance management much better and more productive because both manager and direct report can discuss performance against measurable and concrete goals, as well as how a report measures up against defined competences for their role. Reports should always walk away from performance conversations knowing which competencies they’re meeting, and which ones they aren’t currently achieving fully. This is how you create the foundation of a go-forward development plan for each report that actually allows you to track progress against areas for development. In my experience, you want to lay this foundation early.
Make promotions about scope of role.
Promotions should be based partially on how well someone is meeting their competencies, but it should also be about scope of their role. You can be a high performer and still not get promoted if the scope of your role has not expanded to justify that promotion. Ideally, each role on your team has a set of competencies associated with it as well as a scope definition so that there’s a clear and measurable way to determine if promotion is warranted. Clarity of role competencies and scope removes the ambiguity among employees as to who got promoted or given new opportunities and why. It makes performance management feel more objective and less arbitrary.
Calibrate!
Promotions on your team should come out of a cross-functional deliberation process because the higher someone moves in your org, the more they'll have to work with everyone else. If someone is smart but doesn’t work well across teams, then they shouldn’t be moved into a managerial role where working cross-functionally will be a core skill set. Make sure all of the leaders of cross-functional teams that a person will interact with are involved in the promotion decision. This is how you properly calibrate. It also exposes your own potential blindspot to how effectively your reports are working to build bridges across the organization.
Manager training will make or break your org.
You can’t expect first-time managers to be good at their jobs without teaching them what it means to be good.
Yet in tech, we often recruit and promote young and highly talented people who are inexperienced managers. Now, I'm a huge fan of hiring high-octane, highly motivated people to take on new projects and to step up into leadership roles. But, I’ve learned that management is a critical skill, and an organization must provide training to new managers to set them and the broader organization up for success. Key areas of new manager education include (at a minimum):
- How to give and receive feedback
- How to set goals
- How to run a great 1:1 meeting
- How and when to run a team meeting
- How to create a development plan for direct reports
- How managers contribute to and help define the company culture
- How to understand inclusiveness and what actions and language create an inclusive culture
- How to identify one’s personal blindspots and grow in those areas
To help new managers find their way in Asia, we piloted a training program called the Uber Manager Experience. We aimed to have all new managers go through the program — taught by more senior managers — soon after their promotion to manager to equip them with healthy and quality management habits. Having a formal program like this serves as an important rite of passage. It provides good fundamentals, but also helps the new manager recognize that her relationship with former peers (some of whom might now be direct reports) needs to change. I’ve seen how it can be very hard for people to make that transition without help or coaching from more experienced managers.
Ensure healthy power dynamics.
Inexperienced managers often don’t know how to behave differently now that they have authority. They may have just been someone’s coworker or even friend, and now they’re the boss or a peer to their boss. To build a successful organization, you need to help these managers understand how relationships need to change. If they aren’t comfortable with this type of evolution, let them know that management might not be the right step for them. Don’t pull punches.
To help with this transition, set up training time to focus specifically on this aspect of leadership. Give a new manager some scenarios and ask how she would react as a peer and how she would react as a new manager. An example scenario might be, “After a long night of work, one of your reports (previously a peer) suggests the team go out drinking at a bar.” As a manager, she should know that she’s now responsible for ensuring a safe and respectful environment for the team. If she decides to go and enthusiastically participate, she might find out later that someone felt pressured to drink. You can’t expect new managers to think through every eventuality on their own. Help them envision what they might encounter, how to navigate these situations, and how to create an environment that is actually inclusive.
Support young managers to address underperformance.
I remember the first person I fired many years ago. I dragged my heels for probably six months before I actually let the person go. I knew they weren’t performing at a level that the team needed, but I just couldn’t muster the courage to have the tough conversation. Once I finally did it, I hired someone much stronger and I kicked myself for having waited as long as I did to make the personnel change.
I’ve learned that young managers tend to move too slowly to address underperformers on their teams. They hope something will change, and they want to avoid uncomfortable conversations — so they let low performance fester. More senior or experienced managers must recognize when this is happening and give their younger or less seasoned colleagues the push they need to proactively deal with these situations. (To be clear, termination doesn’t have to be the answer in every case; a proactive role change could be another outcome if the individual has some great skills to harness in a different role.)
If you’re a senior manager, make a point of talking to your reports about each of their reports at the end of every performance review cycle. Go through each employee one by one and discuss the individual’s strengths, development areas and recent performance review score.
For top performers, you want managers to have a clear plan for how to develop, challenge and grow these individuals so that stars stay with the organization for a long time. Your business will disproportionately thrive based on the success and happiness of these top performers.
For low performers, managers must have specific plans with set timelines to help these people improve. To me, a development plan consists of a clear discussion with the underperforming employee that clearly highlights how they’re not meeting expectations and why. The manager must include specific examples. The plan should also include a fixed timeline for the employee to demonstrate improvement, with clear KPIs that the employee understands must be met. The plan must also articulate consequences so that if the employee does not meet the mutually agreed upon KPIs, they know what will happen (termination, demotion, etc.).
Your organization must have plans for both top and bottom performers. At Uber, as we matured and developed our HR function, we started formalizing individual plans like this every six months and it made a big difference in our team’s effectiveness.
Keep a running file for each report to track accomplishments.
Create a Google Doc, file or worksheet (I use the Todoist app) for each of your direct reports. Use it to quickly jot down their accomplishments and the feedback you’ve given them in real time — both positive and developmental. A dossier like this (when kept consistently) makes it much easier to write performance reviews at the end of every quarter. It lets you reference specific examples, which will make the evaluation much more valuable and actionable. At Uber, we did formal performance reviews every six months, which felt good to me because it gave people enough time to make strides in their development areas. This doesn’t mean you shouldn’t do something informal every quarter. Performance should be kept top of mind.
The results of performance reviews should never be a surprise to the recipients.
If a manager is doing their job well, feedback is so frequent that performance reviews are more of a two-way discussion of known issues rather than a “big reveal.”
PRODUCT DEVELOPMENT
Product planning should be both bottom-up and top-down.
Product development should have a bottom-up component so that the product function on your team gets the appropriate feedback from the field in terms of what’s working, what’s not, and what customers are saying. But there must also be a top-down component where product is leading customers with a vision. Creating processes to do both in parallel on a semi-annual basis will help your company strike the right balance between responding to product shortcomings and requests and leading the customer toward an awesome future they might not see for themselves yet.
To do this at Uber, we would ask the business owner for each region to create a prioritized list of product wants and asks based on reported customer issues, competitive analysis, emerging trends, and more. This set bottom-up prioritization in motion. We then weighed that against a top-down vision created by leadership to guide the customer toward a certain experience.
Bottom-up product wish lists tend to address “broken windows” and fairly small improvements that will make the product work better. Top-down priorities are blue sky, transformative goals that reflect a longer-term view of how the company wants to reimagine the way customers do something.
You need to assemble the right stakeholders in the room to do the appropriate horse trading it takes to arrive at one prioritized list that incorporates wants and needs from both approaches. And once the prioritization is completed, it’s extremely helpful to the business for product leadership to communicate the results, the rationale for the emerging plan (including why certain requests were omitted from the plan), and a timeline of product deliverables to unify the company.
Product development starts with your customer journey.
A teammate of mine named Lucia ran a killer workshop for our region not long ago. She had us stick butcher paper on the walls and write down all the stages of an Uber driver’s relationship with our company. Here’s where we netted out:
- Person considering becoming an Uber driver (0 trips on the platform)
- New driver stage (less than 50 trips)
- Experienced driver stage (50-500 trips)
- Expert driver stage (>500 trips)
For each of these stages, we identified the critical experiences — like going online, receiving a trip, driving to pick someone up, navigating to a destination, getting paid, and seeking customer support. We then audited what the current version of all these experiences looked like and compared it to the “ideal experience” we hoped to create for drivers at each stage. We supported the work with operational and product data from driver focus groups.
The gaps we identified between the current customer experience and our desired customer experience throughout their journey were shared with members of the product team so they could develop an action plan to close these gaps one by one. The Operations and Customer Support teams also studied these gaps to develop their own plans for how to bring us closer to achieving the ideal experience.
I learned that by bringing together teammates from different functions to map out the customer journey and to identify gaps between reality and our vision for the ideal journey, we could keep everyone aligned around how to make customer experience better. We all saw clearly how our day-to-day work could contribute to that. This exercise prompted more empathy for the customer, and it helped me think about how my teams were organized, and how work is divvied up among them.
MARKETING & COMMUNICATIONS
Prioritize creating an emotional connection with your brand.
Customers make strong emotional connections to brands and products (both positive and negative) — and that’s what leads them to make purchasing decisions. Your marketing efforts must forge an emotional connection to the product or brand. It’s critical and not measurable through short-term metrics we often track. But that doesn’t mean it's not important.
Your whole team should have the same answers for “What do we want people to say about our company when our name is mentioned? What do we want them to feel? What qualities do we want to come to mind for consumers when they think of our company?” If you don’t have common answers to these questions, it’s important to develop responses and then build these themes into your internal and external messaging to reinforce them at every turn.
Tailor all marketing efforts to specific cohorts of customers.
You have to invest enough time and effort to create cohorts and segment your customer base. Base this on the different personas of your customers. Why do they like or engage with your company? What are their motivations? This will allow you to create campaigns and tailor your marketing and communications strategies to specific customer lifecycles. This pays off tremendously. You can introduce new occasions for product usage for specific cohorts. You can design resonant calls to action for different segments at different stages of their purchase consideration. It gives you so much power and so many more levers to pull.
For Uber, for example, drivers decide to drive for different reasons. Some are full-time drivers. Some are augmenting their income on a regular basis or driving to save up for something specific like a wedding or vacation. Collecting market-specific customer insights data helped us understand the demographics of our customers as well as the psychographics — and segment based on motivation. This influenced the channels we used for marketing and the messages we sent through those channels.
Reaching the right segment with the right message at the right time has a profound and measurable impact on conversion and retention.
Fewer, bigger campaigns are usually better.
Plan your marketing calendar at the same time you create your annual plan for your business. Base your plan of acquisition, brand and lifecycle campaigns off of a few well-defined business goals. This lets you leverage far more resources and time against activities that will really and truly matter in the long run.
Look for patterns in the data to predict when customers become likely to churn — then develop strategies to prevent it.
Running correlation studies to point to early signals of churn can be a helpful predictive tool. They can indicate where you need to change your service delivery or proactively reach out to customers with a tailored communication so you can change the customer experience and intervene before you lose more people.
Great marketing requires attribution modeling.
You have to have visibility into your ROI on marketing spend. It’s worth it to have the right technology in place to know which channels are producing the most impact. Now, I’m not in a position to recommend which third-party tool or technology is best (I’ll leave that to the marketing experts), but I know that without the right instrumentation and tooling, you’re going to be making spend decisions based on bad data or in the dark entirely. You won’t know where to double down or when.
During my time at Uber, I developed a real appreciation for understanding the cost curves for different marketing acquisition channels. This allowed us to determine when we had over-saturated a particular channel (e.g., promotions of discounted rides) and when we could extract more incremental growth by moving promotional budget to another customer acquisition channel (e.g., social or out of home advertising).
However, to build acquisition channel cost curves accurately, you have to have decent attribution tracking, know how different channels are performing, and calculate the relative customer acquisition cost by channel.
If you don’t have cost curves — or your attribution modelling is incorrect because you’re tracking everything to last click attribution — you’re wasting money and leaving growth on the table.
Marketing must bring Comms, Legal and Policy to the table from the outset.
Marketing campaigns should be closely coupled to your PR strategy so the different functions work together as a force multiplier. Involving legal advice can also save you an incredible amount of time, energy and pain by heading off potential issues at the pass, steering you around pitfalls you didn’t know were there, and generally protecting you from yourself.
Don’t fall into the trap of assuming these other functions will slow you down. They’ll actually speed you up. Comms, Legal and (if relevant) Policy should also have a seat at the table during marketing planning so that there’s alignment on the campaign calendar and the handful of key messages you aim to communicate internally and externally. This way, each function has the information it needs to do the work required in advance to make campaigns successful and to avoid unanticipated problems.
Track customer quality carefully (and tailor your service delivery and support accordingly).
Not all customers are created equal. Tracking all customers to ‘first visit’ or ‘first trip’ (in Uber’s case) is insufficient. It’s better to assess your customer acquisition cost at the 50th purchase or 50th trip to get a better sense for effectiveness of different acquisition channels. Buying low quality users is useless. You need to differentiate high-quality and high-value value customer segments from low-value when developing your acquisition strategy. If you’re running a marketplace, this is true of both sides of the equation.
As a corollary, low-value and high-value customers can and should be handled differently from a support and lifecycle management perspective. The first step is to build the data foundation so you know who these better performing customers are and where and how you acquired them.
Forge relationships with reporters when things are good and nothing is urgent.
As Rachel Whetstone, former Uber PR and Government Affairs Chief, used to say: “To use a friend, you have to have one first.” This is really important in the context of media relationships. Don't wait until you need something or for something bad to happen to try and develop a relationship. By then it's too late.
Good PR takes constant practice.
Dealing with media is an art. Founders and executives should find a trained media professional to coach them before interviews. Remember that you own the narrative and you have every right (obligation, in fact) to stick to the narrative.
A journalist’s job is to get you to say something on the record that creates a story — and often that story is not in your best interest or necessarily true. No matter how many times a reporter asks you the same leading question, you don't need to answer it. If the reporter gets frustrated, that's not your problem. You must own the interview and never assume you have to answer all (or any) questions. There’s nothing better than role playing with a friend or colleague before a media appearance to work out the kinks and prepare for the hardball questions.
Get a good social listening tool.
Rule of thumb: If it doesn't happen on Facebook or Twitter or WeChat, it didn't happen. Make sure you have a good social listening tool. It's one thing if an issue at your company is being discussed on social, and another if it's just in the mass media. If an incident or issue is not being discussed on social, the impact is probably much lower to the company. After all, mass media does not make or break a company or its reputation. Customers and their experience using your product or service are king in terms of making or breaking a company and its reputation. Social media is where your customers are spending their time and sharing their thoughts. If they’re there, you should be too, and you should have good analytics on who is saying what and at what volume or degree of intensity.
STRATEGY, PLANNING & FINANCIAL MANAGEMENT
Get a great financial planning and analysis (FP&A) person to help you run the business.
In my org, the FP&A lead ran a cross-functional financial planning process so we could develop detailed operational plans on a six month rolling basis. He would act as an early warning system to identify when individual markets were straying from the plan, and he would help problem solve with me and the team to get back on track. He’d also re-forecast to set a new plan if circumstances in the market changed or new information about our business came to light; he’d help with some pro forma financial planning as we considered major strategic initiatives like M&A, potential partnerships and the like; and he’d play a leadership role in working with individual markets to identify opportunities to run a leaner, more efficient business.
I was fortunate enough to work with an excellent FP&A exec in this capacity at Uber. He deeply understood the business and the nuances of our different products and markets so that he could make tradeoffs in line with our overall strategy in the region.
It goes without saying that you want your FP&A person to be highly analytical and detail-oriented. But a real superstar FP& lead will intimately understand how to tie budget allocations and trade-offs to what's good for the business — not just what looks good on a spredsheet. As a founder, you should work with this person to review monthly vs. actual budget reports to identify efficiencies and areas where you can reduce spend. Do this every month.
To find a great FP&A point like I had, test for operational knowledge a candidate displayed in a prior role. In past positions, how did they know where to cut spend or make tradeoffs in budgeting? Were they told or did they have enough knowledge themselves based on their understanding of the various spend levers that impact the business? Ask about how they would plan for a variety of scenarios. How would they run a rebase process when the plan no longer made sense? When a shock to the industry occurred? When new information about the competitive landscape came to light?
Watch out for expense recognition timing issues.
P&L owners always need to make sure they’re managing actual revenues and expenses to match their plans. If you get off plan — especially if you under-deliver on revenue or over-deliver on expenses — you’ll miss your cash flow and cash consumption targets. This hurts your organization. Often, you’ll incur expenses (or book revenues) at different times than when those expenses (or revenues) are recognized. You have to keep close track of this fact so that you don’t create a false sense of how the company is performing relative to budget.
At Uber, my FP&A guy played the role of tracking bookings versus actuals and helped coach me on where these numbers might not tell the full story due to accrued one-off expenses. You need color commentary from FP&A to make sure you’re reading the data correctly.
Build a target net profit margin model — then work backwards to understand how you need to change expenses.
At Uber, we developed a financial model starting from the bottom up. We assigned what we thought a realistic and a “stretch” net income margin for the business might be. Then we assigned a percentage of revenue to each expense line item to make the model tie. We then compared our “target” future profit model against today’s financial model by looking at today’s net income margin and today’s expenses as a percentage of revenue. This fostered discussion about how we could take the business from where we were today to where we needed to go to achieve our target (or even the stretch) profit margin down the road.
This exercise inspired lots of conversation and hard decision making about which expenses on the P&L we needed to streamline, and how we were going to do it. We agreed we didn’t have to make major cuts on every line item immediately, but we did need to start proactively guiding the business in the right direction. That meant presenting the target P&L to each line manager so he/she could understand where we needed to reduce cost or achieve significant operating leverage to make the profit model work over the medium to long term.
Pick one: top-line growth, bottom-line profitability (cash spend) or market share?
While everybody always wants all three, it’s helpful to know which metric is your No. 1 priority. And it’s super helpful for all downstream managers to align around that one. Depending on which you choose, it helps create a forcing function for decisions around spend, i.e. “If we’re ahead of budget, do we bankroll the incremental dollars or do we invest the incremental dollars to capture more growth? How do we respond to unwise or seemingly chaotic market share capture moves made by our competitor?” It also helps with product feature prioritization during planning cycles because different features or product improvements will differentially impact growth, profitability and/or marketshare. Investing in the products and features that best align with the growth/profit/marketshare strategy you’re leaning into ensures product strategy aligns with overall company strategy. You can all ask the same questions and make sure you’re devoting all your brainpower to generating answers.
This is the conclusion of an exclusive series of interviews with Mike Brown, who led all of Uber’s business operations in the Asian region between 2013 and 2017. You can read part 1 on management, organizational thinking and culture here. Let us know if you enjoyed this series and would like to see more content like this — drop us a line at [email protected].
Image courtesy of SAM YEH/AFP/Getty Images.