Editor’s Note: In the new podcast Masters of Scale, LinkedIn co-founder and Greylock partner Reid Hoffman explores his philosophy on how to scale a business -- and at Entrepreneur.com, entrepreneurs are responding with their own ideas and experiences on our hub. This week, we’re discussing Hoffman’s theory: to succeed, entrepreneurs need a good idea, good timing, money and luck. But more than that — they need grit.
Grit is more than than pluck or spirit, according to Reid Hoffman, LinkedIn co-founder and Greylock partner. Where entrepreneurs are concerned, Hoffman believes grit is a way of working, a perfect storm of determination, innovation and efficiency.
Entrepreneur Nancy Lublin has this perfect combination, according to Hoffman. Lublin used her grit to find success in non-profits, founding Dress for Success, an organization that provides low-income women professional attire; running teen-volunteer nonprofit DoSomething; and later founding Crisis Text Line, a text line for those struggling with depression, stress or even suicide. The organizations have achieved major milestones, including being in 100 cities (Dress for Success), having 5 million members (DoSomething) and exchanging 30 million messages (Crisis Text Line).
These groups reached these milestones thanks to the special way Lublin works, organizes and mobilizes her resources. In this week’s Masters of Scale, a podcast series examining counterintuitive theories to growing a company, Hoffman and Lublin chat about how she puts ideas into action.
Of course, not every anecdote could be used for the final episode. As the podcast’s official media partner, Entrepreneur has access to lessons and takeaways that won’t be heard first anywhere else. We’re pleased to offer you these additional insights on scale as you consider this week’s theory.
Method to the madness
“One of your strengths as an entrepreneur is that you think in systems,” says Hoffman.
For Lublin to make Dress for Success, a well success, she had to get people on board with not only donating their high-end clothes to the organization, but also figure out an intake strategy that scaled and didn’t require a huge investment. (It is a nonprofit, after all.)
So, she’d reach out to local nonprofits – domestic abuse shelters, job-screening, agencies and homeless shelters --and approve which organizations could send women to shop at their stores (not everyone is a fit). The caveat was the community programs would also be required to send someone to work at the shop once a month.
“We got free labor, and high quality referrals, and didn't ever have to pass judgment on any individual,” she says. “Everybody who came to us was worth dressing—because one of our employees, essentially, had referred them.”
Find the win-win
Every startup needs to be scrappy, but since non-profit monies are allocated to specific causes, founders have to be even more careful.
For Lublin, she focused on getting corporations to sponsor campaigns.
The first one she launched for Dress for Success was “Clean your closet week,” where people donated clothing during spring cleaning in March. She ended up bring in 400,000 of unrestricted funding.
“This is way better than taking an ad in a magazine that someone's going to flip past, or an ad on MTV, which is when you go take a bathroom break.”
Using the three-question rule to hire the right people
To run a national organization with locations all over the country, Lublin needed to hire the right people. Taking a page from data scientist DJ Patil’s pamphlet Data Jujitsu, she uses three rules for hiring:
1. “Would I want to be in a bunker with you, because I'm going to spend more time with you than my friends and family?” she says. “ I'm looking for, ‘Are you either boring or an asshole?’ To me, those are the same thing. I don't want either.”
2. “Can you hit a homerun in 90 days? I move in fast-paced environments. I don’t have time to hold your hand. I want you to come here and swing for the fence immediately.”
3. "Are you capable of doing something amazing in four to six years?" Don't come and coast.”
Thoughtful feedback can transform your culture
Nonprofits don’t have the luxury of offering big salaries, ridiculous perks or equity to lure talent. So, Lublin had to spend a lot of time on culture – a lot. “I spend probably 60 percent to 70 percent of my time on culture,” she says.
One thing she really focuses on is feedback. She uses the SBI model: situation, behavior, impact.
So, instead of someone just saying a meeting was productive, she hits every one of those three categories. For example, “Hey, yesterday, in that meeting"—behavior—"You brought an agenda and ran the whole meeting, and the impact was, it went fast, and we were all on the same page, it was awesome,” Lublin explains.
For best results, this feedback has to be delivered in a certain way, says Lublin. The feedback must be presented within 48 hours, feedback must be more positive than negative (to a 6-to-1 ratio) and the words “like,” “love” or “hate,” can’t be used. Those are useless, says Lublin, in giving specific positive feedback that builds a culture to scale.