How to build a great company

Great companies have a great reason to exist

You need to be able to convince people why a company is worth joining, so there needs to be a compelling reason for the company to exist. Whether that’s being the best hair cutting company in the world or helping solve climate change, a big part of the draw to a company is having great reasons to justify its own existence.

Have a great mission

Why you should put a lot of effort into building a great mission for your company

Great missions help attract talent. People need reasons to “get up in the morning”, and reasons to do the things that make life worth living. So an attractive mission that contributes to things that help benefit the world

How to build a great mission

• The mission contributes to a meaningful, larger goal that will benefit the world. The mission needs to be concrete enough that it can be stated to be solving a specific problem (e.g solving world poverty is too broad and vague, solving poverty for veterans is better), but also large enough in scope that the company can keep kicking the goalpost of its completion so the team stays ambitious and has a much larger direction to point towards.
• The mission is actionable. Meaning you can take actions that contribute towards the larger goal of the company
• Implicitly ties back to the ability of individuals to make personal profit and career progress. “Implicit” is stated here because if you explicitly state it in the mission, it’s easy for a company to seem greedy, and for someone to feel greedy for being a part of the mission. It’s better to focus on the ideals and problem that it’s trying to solve. Nobody wants to feel like
• The mission should be stated simply (2-3 sentences max). Otherwise it becomes too difficult to remember or too convoluted.
• The mission needs to be structured in a way that allows for large product pivots: large product pivots are an absolute necessity for most companies as the business landscape changes. So the mission needs to be vague enough that it can be tackled from multiple angles without changing over time. Which means the mission can skimp on the “how”

Hire a great team

The “team” is the core group of individuals that ensure the company’s goals get fulfilled. They have great character

Note: not everyone at the company needs to be “great”. You can differentiate this by whether the person or people you need can have their roles standardized or not. If you can lay out a job with specific operational and project activities, and have them do it, then they don’t need to be great. But if you need someone to figure things out on their own to achieve a goal

Build great products

Great products make people happy. And it makes people so happy that they think about it even when they’re not using it. And since it makes them happy, they want to tell people about it.

Great products are hard to leave. Whether it’s because someone has an emotional connection, or it’s just simply difficult to leave (maybe data is stored on a particular product and difficult to port over), it’s important for a product

Ensure the team can execute well

Great organizations execute well, which means their people are able to execute well. Great execution means that a team is getting very close to the theoretical limit on productivity. Meaning that there is some calculation you can do on how much you think someone can theoretically be producing given their resource constraints, then determine how much progress is being made, and see how much of a big gap there is.

For example, if you have a project that has a large labour component such as writing a lot of lines of code, you can have a project manager give you the sum of total hours you think it will take to complete specific milestones. Then you take the total sum of hours that you think the team staffed on the project can do in a week. See how much progress is being made in a week towards the milestone compared to the theoretical limit on the team. If the team is getting to 50% of what you’d expect, then there is an execution problem on the team.

Great organisations continually measure progress and make adjustments

Great organisations define key performance indicators that measure the most important results they are trying to achieve, and have their organisation aligned towards these goals.