Insightful takes on scaling your business

3 lessons for tech startups I learned from working in construction

Talking about a solid foundation

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Tom Sagi
Story by
Tom Sagi

CEO, HourlyTom Sagi is the CEO of Hourly, the only platform for small businesses that seamlessly connects the dots between time cards, payroll and workers compensation. Tom Sagi is the CEO of Hourly, the only platform for small businesses that seamlessly connects the dots between time cards, payroll and workers compensation.

Before I moved into the world of startups, I had a less glamorous position of a builder, running a construction company. The job was demanding, but prepared me well for – and even inspired the creation of – my new company Hourly.

I always encourage people who have spent their lives in the world of tech to have empathy and understanding of those who have jobs in physical labor, and I wanted to pass on a few lessons I learned from my time in construction.

Plan ahead meticulously

As the global crisis around COVID-19 grows, it’s becoming obvious which companies planned ahead for unexpected chaos and those that assumed things would always be positive. In construction, you very rarely have the luxury of the expected actually happening, with constant small (and large) problems that evolve and terrorize you over the course of a project. 

The result is that the best foremen and construction business owners plan for the worst and are pleasantly surprised when things go smoothly. When you’re building, say, a house, you are without fail going to have something go wrong, be it something you find in the ground, materials that are late, or unexpectedly large costs – and you should be prepared for it.

The same goes for a technology  startup – while I don’t want to give anyone unnecessary anxiety, it’s always worth considering, even when things are good, how you’ll deal with a downturn, or a chaotic event like significant client churn. Prepare for these things as meticulously as possible – run scenarios numerically, and prepare for the 100% certain event when things will go wrong. 

Never forget what real work looks like

When you become a manager or a CEO, it’s easy to get disconnected from the work that actually makes your business function. On an actual construction site, it’s easy to say that something can happen in X time, because you’ve done it yourself… at some point, but unless you’ve physically done that work, or had a direct hand in doing that work, you’re going to be overworking your labor and mistreating them.

Having a real, physical understanding of the actual work being done also makes you appreciate your workers – and makes them appreciate that you know their struggle. The same goes for every startup. Even if you’re not multidisciplinary – a non-technical founder for example – you must take part in something that’s a core function of the business on a regular basis. 

Jason Lemkin of SaaStr has a great suggestion to keep people connected with your product – at the very least, every single person at your company has to do a 2+ hour stint on customer support (chat or phone) once a quarter, minimum. 

This is a great way to keep your people mentally engaged with the product on some level. Another way may be insanely simple – they also have to go through product training once a quarter to see exactly how the product works and what it’s actually for. It’s simple but incredibly effective.

Evaluate people’s work, not their personality 

When you’re manning a construction site, personality very rarely comes into play. If someone’s doing the work, you can physically see the output, you can see the costs, you can see what they’re actually doing. You know when things are done, or not done, and you can evaluate how they respond when things don’t go the way they should, and deal with them on a pragmatic, direct basis. 

In managing and growing a startup, you’re increasingly running into the need to manage people’s personalities and moods, and you continually hear how positive, nice and friendly people are as an evaluation of their work. This is fine, in the sense that company culture is a necessary garden to grow, but this too often is evaluated over their actual output. 

What I’d suggest is setting strong KPIs for every worker to evaluate performance, and at the very least have your managers set deadlines and milestones for them to reach. You’re all working toward the same goal – and that goal should be creating and growing a great company, not just a group of friends.

Published April 27, 2020 — 10:30 UTC