The Founder Book Club #13

Hosted by Julian Jagtenberg, CEO of Somnox

“Let’s start with some yoga and neck stretching”, the first thing that our host Julian Jagtenberg says to today’s participants. The Founder Book Club does not only have an intellectual purpose but also serves as an evening of relaxation with fellow founders. Calming down after a full day of work and have a nice discussion with people who are in the same situation as you are.

What’s the secret of Netflix’ success? It might be their company culture. This blog summarizes The Founder Book Club discussion about No Rules Rules by Reed Hastings (CEO of Netflix) and Erin Meyer (author of The Culture Map and professor at INSEAD Business School).

This month our founders discussed the following:

  • What did you think about the book?
  • What’s important for your company culture?
  • How to retain talent and achieve a high talent density?
  • Any thoughts about financial matters?
  • What did you learn?

What did you think about the book?

Robert was very enthusiastic. He already distributed several versions of this book to others and implemented some principles of the book within his company: “The part about candor is already in our work statement.”

Peter commented: “The storytelling makes you buy the message. It depends on what stage you are with your company whether the principles apply.”

According to Nick one should read the full book to understand its principles: “Some parts only work if the other principles are already in place. If you just read one chapter out of the book, it’s dangerous. The system only works as a whole.”

Paul commented on the way the book was written. “The writers are opposites. The way the book is structured works very well. Everyone can actually identify with parts of it, which is very rare in business books.”

Paul managed to get a LinkedIn share by Erin Meyer herself! It’s not going to get more exciting!

What’s important for your company culture?

Julian Jagtenberg, our host for tonight, shared his opinion on giving feedback. For his company, feedback is very valuable and can be considered as a gift. However, sometimes people might interpret it in the wrong way. Julian’s advice: “If the feedback you receive brings you down, try to act like a stoic. The intent of the other person might be different than your perception.

Whistle success and scream mistakes

Reed Hastings

Ruben knows how to make his employees happy. “If our employees become a fan of the company, they become better people. For most people, a fun skiing holiday with colleagues is more important than a high salary.”

As for core values, all founders agree that “we are a family” is not a great core value. Julian: You can’t fire your aunt, so we changed it into “we are a pro sports team”. It boosts our talent density.”

How to retain talent and achieve a high talent density?

As a startup you cannot pay your employees the highest salaries, but you can have lots of fun! Nick: “You have to be creative as a startup. Make sure you’ll have great Christmas parties or ski holidays. That’s what people actually talk about. Create an environment where people can grow and learn with freedom and responsibility.

Ruben: “In a small company, you know all your colleagues. Have conversations with them about what they are interested in and give them personal gifts. It’s also important to celebrate small victories.”

Any thoughts about financial matters?

Corien questions full-transparency. She asks: “In what detail should we share salaries?” Nick replies: “Do not share every individual salary, unless you pay like Netflix.

Parul talks about the top-of-market salaries at Netflix: “Netflix does that to keep people at their positions, but I think they only pay people top-of-market who are hard to replace.

Reid Hastings explains the difference between operational and creative roles in an article by Consumer News and Business Channel: “For an operational role, the best employee might deliver double the value of an average employee. You can pay an average salary and your company will do very well. In creative roles, the best employee is easily 10 times better than the average. Thus, for a creative role, it is best to pay one incredible employee at the top of the market, instead of using the same money to hire a dozen of average performers.”

As talent density and paying top-of-market are core principles of Netflix, do you think employees at Netflix will live in fear of losing their job? Jufe: “No one at Netflix gets fired by surprise. Netflix fires good people to get the best. You can be good enough and be worth the money, but also get fired at Netflix.”

What did you learn?

According to Jufe it’s very scary to be fully transparent, but still he says: If in doubt, be more transparent. Show your confidence even when things are going bad.”

Frans: “Asking for feedback. You can’t do it enough.”

Paul: “Once in a while sit down with the founding team and write down how you do things and how you hire new people. Also, I’m inspired to write a book myself with an outsider similar to Erin.”

Peter: “The book inspired me to do a 360 session and face my fragile ego.”

Nick: “Keep talent motivated and interested.”

Virginia is questioning the diversity of employees at Netflix: “How does Netflix make sure that they have a diverse group of people working there?”

Corien: “Feedback is important: both employee to employer and employee to employee. Also I need to make more effort to create a fun work environment.”

Conclusion

We can agree that being more transparent and giving feedback is necessary. It’s scary at first, but will surely have a positive outcome. Furthermore, to retain talent within a startup, make sure to organize fun activities to remember.

Thank you for reading this month’s Founder Book Club summary. To conclude this article, our favorite quote of this edition:

There is nothing scarier than a founder that just read a book.

Paul kunneman