Scaling Through Chaos
JC's Newsletter #217
Dear friends,
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Index Ventures recently published its Scaling Through Chaos book and TeamPlan app to help founders scale teams. Scaling Through Chaos presents the most extensive research ever performed into the growth of VC-backed businesses—incorporating analysis of 200,000 career profiles at 210 companies, in and beyond the Index portfolio.
Jan Hammer from Index has been one of our earliest investors and we discussed the book and our learnings with Alan. I’m happy to share it here and to welcome your feedback!
Q&A
JH: Index has launched Scaling Through Chaos and TeamPlan, our latest guide and app to help founders navigate a new era of innovation. It’s the most extensive research ever performed into the growth of VC-backed businesses – analysis of 200,000 career profiles at 200 companies including Airbnb, Datadog, Figma, Stripe and Alan! JC, I’d love to learn more about your ‘scaling through chaos’ journey now that Alan covers more than 500k members! One of our key findings is that in high growth companies, a degree of chaos is a feature, not a bug. Does this resonate with your experience building Alan?
JC: Since the beginning at Alan, we've had a mantra: a healthy mind in a healthy body and vice versa. Meaning, to achieve great things, one must think about their culture and their operating system.
And so, at Alan, we have very clear, very formalized leadership principles and we operate within a strong framework.
Within this operating system and framework, which are shared rules, we allow a lot of freedom.
It's a framework serving freedom, serving “distributed ownership”, allowing a bit of chaos, fostering creativity, and enabling excellent time management for each Alaners.
Thus, one does not spend their days in meetings but has time for deep work through asynchronous work, leading by context not control, with radical transparency and access to all information.
It's this tension between being highly structured to have unstructured time that makes a difference at Alan.
JH: Building an outlier business is all about people. We find that the most successful founders spend 50% of their time on people-related matters. How has your time spent on people-related activities changed as Alan has scaled?
JC: Indeed, people matters have always been very important and I see them on several levels.
One, continue recruiting. Recruit for today, and also nurture talents for tomorrow. So, have a pool of people we stay in touch with and want to attract because we know they will shape Alan's future.
The second point is coaching. Coaching people within the company to be their best selves. I have 12 to 13 coaches I help grow, whom I develop, seeing them every two to three weeks. We really help to develop skills, to better manage situations, to reinforce the culture.
Mentoring and pairing too, with team members, regardless of their seniority level to help them unlock issues, be really innovative, and maximise risk taking.
And then, it's continuously iterating on the operating system, culture, and internal communication, to ensure the context is very clear within the company and people can operate at their best.
JH: How has your own role evolved over this time? Scaling Through Chaos talks about how the founder role shifts from Chief Building Officer, to Chief Decision Officer, to Chief Inspiration Officer… What do you enjoy most?
JC: From my side, I feel very lucky because I've always loved all the roles that come with being a CEO.
In fact, even if we say they change a bit, I find there's a lot of similarity between the stages, and it's always the same buckets, even if the details among them may change. I've always organized my time around three main things.
The first is strategy and vision, thinking longer term than the rest of the organization.
The second is helping execute this year's plan and delivering it. It's this part that evolves more and really needs to adapt to needs. The question to constantly ask is, where am I a bottleneck, and can I remove myself? Where do I have the most leverage to make a significant impact, and should I continue doing it? This constant tension is very interesting.
The third is building culture, the operating system, and talents. This is what we discussed in the previous question.
Then, the time allocated to each depends on the period. You have to make some trade-offs on what matters the most during a cycle.
At the very start of the company, at the very beginning, one must think a lot about what our vision is, what we aim to achieve. We spend a lot of time recruiting already as we build the team and a lot of time in execution. Afterward, the typology of execution changes a bit over time because we increasingly leverage within the organization. For a while, you can also freeze strategy and only execute. As you evolve, you spend more time crafting the strategy, iterating on it, and communicating it (and its nuances).
JH: I’d love to unpack learnings from how Alan’s team and leadership composition has changed over time. You started with a simple proposition for startups and this has evolved into a deeper, more expansive offering for larger companies internationally. What learnings about talent and leadership hiring do you wish you knew when you were first starting out?
JC: Alan was my second startup, and one of the things we did very well was to recruit extraordinary people into the initial team, both in terms of their leadership level and their willingness and desire to go very deep and roll up their sleeves.
That has served us enormously because most of them are still here and are incredible leaders of the organization who are for me like co-founders, who carry the company and build it.
In addition, one of the virtues of this is that A-players want to work with A-players, and having in this initial pool of very strong people, it allowed us to maintain this recruitment momentum at the best level.
One point, however, because not everyone has grown at the speed of the company, and this has been inspired by Netflix, is to do the Keeper Test for my leadership every six months. I ask myself the question "If this person came to announce they were leaving tomorrow, would I fight to keep them or would I actually be a bit relieved? If I were to create a new company tomorrow, would I fight for them to come on the new adventure with me?"
This allows me to constantly challenge myself "Do I have the best people in each position? Do I think each of my leaders is the person who will carry the company in the next year, but who also has the potential to grow in the 3 to 5 year horizon?"
I also always project myself and ask myself "Do I have in the organization more junior people but who are growing in skills and whose potential is infinite and I believe they can be future leaders?"
Finally, I tend to prefer, especially in a context where our culture is very strong, to recruit people with extremely high potential and to grow them in the company and groom them, rather than very senior executives who don't necessarily fit with the culture or whose success parameters are not extremely adapted to the way we do things at Alan.
JH: Let’s shift focus onto technical talent specifically. Rewinding back to the early days of Alan, how important was early technical DNA? And how have you thought about scaling product leadership over time?
JC: At Alan, we are two founders who are quite technical, and I spend a lot of time on the product, so that has been extremely important for us.
We also spend a lot of time constantly renewing ourselves, that's why we have invested in artificial intelligence ahead of phase, that we contributed to the foundation of Mistral with Charles, my co-founder, and that we constantly question the technological trends, the waves we are undergoing and how they can impact our business.
We remain very present on these topics, myself particularly on the product strategy and where we are going, accompanied by what we call Product Community Leads who lead each of the product communities, Product Manager, Designer, Engineers, Data Scientists, Operations, and who contribute enormously to building the roadmap together.
At Alan, it's leadership by context, so my job is to give a lot of strategic visions on what's important, why the direction of the company, our commitment to our model, and then give independence to the team to build within this plan, very aligned all together.
We are all going in one direction, we have one roadmap, and the teams have a lot of power to build it on these topics, and our Product Lead and our Product Community Leaders manage these processes, and make the trade-offS.
JH: Scaling through chaos means running a different company every year, with different leadership and different teams. The ‘messy middle' stage demands a choice between expertise over loyalty. Has Alan had a messy middle?
JC: Our vision is that initiative, intelligence, and grit are always superior to expertise and that in fact, loyalty can have a lot of positive impact over time if we have the best people.
Because the longer we work on problems together, the more we're ready to take risks, the more we know each other, the more we have respect for each other's opinions while having the ability to challenge each other a lot, and it works very well.
It's a bit like Amazon's S-Team, which had about a 20-year average work together time at the moment of Bezos's departure.
In our case, the company is eight years old, but the most senior people in the company have an average tenure of more than five years, so we're really working on this.
Once again, we continue to renew leadership, to grow people a lot while knowing we can have extraordinary talents and grow them.
JH: We find that the most successful founders surf the edge of chaos, introducing their ‘cultural operating system' deliberately and gradually. From the start, how intentional were you about Alan’s Leadership Principles? How fixed has that been over the years?
JC: Indeed, we continue to live our leadership principles continuously.
It's a document that was formalized a few years ago. We wrote our culture from the first day of the company, then we gradually evolved the "how we work" and then we consolidated everything in our leadership principles.
We are still reworking them, improving them because the mechanisms that translate our values and the way we work must change as we grow. So we continue to edit them even if the overall direction remains the same, the details can change. It's an ongoing job.
Some good articles I have read this week
👉How AI Will Change Our Relationship With Computers (The Information)
I've been saying it for months: “voice—already the most natural interface for human interaction—will become a dominant interface.”
I’m excited about “Technologies to detect such “silent speech” will allow one to privately dictate in public places without anyone else being able to listen.”
Apps will adapt to us.
👉How to Generate Good Ideas (Nightview Capital)
The best ideas require a multidisciplinary understanding of the world.
The importance of walking (again) for creativity!
We should take wandering outdoor walks, so that the mind might be nourished and refreshed by the open air and deep breathing.” - Seneca
One Stanford study found that walking can boost creative thinking and idea generation by an average of 60 percent.
👉 Enhanced Reasoning with Quiet-STaR: Applied to Mistral 7B, an open-source LLM, Quiet-STaR increased its reasoning test score from 36.3% to 47.2%.
👉An Interview with Nat Friedman and Daniel Gross Reasoning About AI (Stratechery)
The direction of AI this year is likely to be “ very large context combined with active reasoning and thinking” and better latency so we could do live conversations
Building great products around them is required more than ever.
👉 @levelsio on X on AI therapy (X) + (X)
AI x therapy is interesting.
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En parlant d'IA et thérapie, j'ai découvert ce tool très intéressant : https://deepwander.com
À tester !