Monday, January 3, 2011

Peer reviews in a 4 month old, 3 person startup?

Even though Adku is only 4 months old, part of our company culture involves doing periodic NxN peer reviews. Everyone reviews everyone else and provides hard, candid feedback on strengths and weaknesses. But are peer reviews necessary for a 3 person startup that's only 4 months old you ask? Yes, it's critical, and I'll tell you why.

Company culture is very hard to change

Company culture is one of those things you need to engrain as early as you can. What you do in the beginning months of your startup will permeate through it's entire life and it's very hard to change. That's why we decided to have regular retrospective meetings to improve how we work, that's why we work on puzzles together every week, and that's why we take trips together and drink together.

Conflict resolution is critical to company success

The most common reason for company dissolution in the early stages is some kind of personal conflict. If the early team can not discuss issues like product direction options or annoying work habits openly and resolve them, then they are doomed to fail. I've seen this time and again. Peer reviews help make sure issues get raised, discussed, and resolved.

Deep insight into team strengths will help shape team responsibilities

Typically, engineering teams inside companies have managers. This is because managers add value. Don't get me wrong, there are certainly managers out there who decrease value, but in general, they exist because they can assign responsibilities intelligently and make adjustments based on team dynamics and individual strengths. Without a manager, the founding team has to do this collaboratively. Peer reviews are essential to make this happen.

Each individual's personal growth creates shareholder value

The output you create at your company today may be worth $500,000/year. If peer reviews end up making you more productive resulting in an increased output worth $600,000/year, then you've just increased the value of the company. To be fair, chances are you will also get a raise, but it won't be equal to your increase in output. This is because you yourself do not actually produce $600,000/year. You are leveraged by the rest of the company. An engineer at Google may output $10,000,000/year, but may only output $100,000/year at Microsoft for equivalent work.